10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2015

Commission file number 001-36088

Covisint Corporation

(Exact name of registrant as specified in its charter)

MICHIGAN (State or other jurisdiction of incorporation or organization) 26-2318591 (I.R.S. Employer Identification Number)

26533 Evergreen Road, Suite 500, Southfield, Michigan 48076

(Address of registrant’s principal executive offices, including zip code)

Registrant's telephone number, including area code: (248) 483-2000

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act of 1933. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934. Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.          Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).             Yes x No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.                  Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o		Accelerated filer  o
Non-accelerated filer    x	(Do not check if a smaller reporting company)	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

The aggregate market value of the voting stock held by non-affiliates of the registrant as of September 30, 2014, was $ 27.8 million, based upon the closing sales price of the common stock on that date of $4.15 as reported on The NASDAQ Global Select Market. For purposes of this computation, all executive officers, directors and 10% beneficial owners of the registrant are assumed to be affiliates. Such determination should not be deemed an admission that such officers, directors and beneficial owners are, in fact, affiliates of the registrant.

Indicate the number of shares outstanding of each of the issuer's class of common stock, as of the latest practicable date:

As of May 19, 2015, there were outstanding 39,030,000 shares of Common Stock, no par value, of the registrant.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive Proxy Statement for the registrant's 2015 Annual Meeting of Shareholders (the “Proxy Statement”) filed pursuant to Regulation 14A are incorporated by reference in Part III.

Covisint Corporation

Form 10-K

Table of Contents

	Page
PART I.
Item 1. Business	2
Item 1A. Risk Factors	8
Item 1B. Unresolved Staff Comments	20
Item 2. Properties	20
Item 3. Legal Proceedings	20
Item 4. Mine Safety Disclosures	20
Part II.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters	21
Item 6. Selected Financial Data and Non-GAAP Financial Measures	22
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations	24
Item 7A. Quantitative and Qualitative Disclosure About Market Risk	38
Item 8. Financial Statements and Supplementary Data	39
Item 9. Changes in Disagreements with Accountants on Accounting and Financial Disclosure	61
Item 9A. Controls and Procedures	61
Item 9B. Other Information	62
Part III.
Item 10. Directors, Executive Officers and Corporate Governance	62
Item 11. Executive Compensation	62
Item 12. Security Ownership of Certain Beneficial Owners and Management Related Stockholder Matters	62
Item 13. Certain Relationships and Related Transactions, and Director Independence	62
Item 14. Principal Accountant Fees and Services	62
Part IV.
Item 15. Exhibits and Financial Statement Schedules	62
	64

In this Annual Report on Form 10-K, the terms “Covisint”, “the Company”, “we”, “us”, or “our”, mean Covisint Corporation and its subsidiaries on a consolidated basis unless otherwise expressly stated or the context otherwise requires.

This Annual Report on Form 10-K and the documents incorporated herein by reference contain forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933 (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”), based on expectations, estimates, and projections as of the date of this filing. Actual results may differ materially from those expressed in forward-looking statements. See Item 1A -“Risk Factors” of this Annual Report.

PART I

ITEM 1. BUSINESS

Covisint was incorporated in April 2008 in the State of Michigan. Our predecessor, Covisint LLC, was founded in February 2000 by a consortium of global automotive manufacturers to collaborate and transact with thousands of suppliers worldwide and reduce the cost of procuring components and materials. The consortium made a significant investment in the development of a robust, highly-secure cloud-based business-to-business ("B2B") network for automotive supply chains. In March 2004, Compuware Corporation (“Compuware”) purchased substantially all of the assets of Covisint LLC including its name and technology. In January 2013, Compuware contributed the Covisint business assets to Covisint in preparation for our initial public offering, which was completed in October 2013 ("IPO"). On October 31, 2014, Compuware completed its distribution of 31,384,920 shares of Covisint stock to Compuware shareholders ("October 2014 Distribution"). Our principal corporate offices are located in Southfield, Michigan. Our common stock is listed on the Nasdaq Global Select Market under the symbol “COVS.”

Overview

Covisint provides an open, developer friendly, enterprise class cloud Platform enabling organizations to build solutions that quickly and securely identify, authenticate and connect users, devices, applications and information (“Platform”). Our Platform has been successfully operating globally on an enterprise scale for over 12 years, and is the technology behind innovative industry solutions such as Hyundai Motor Company's Blue Link^TM and Cisco System, Inc.'s Services Exchange Platform^TM.

The initial focus of the Platform was to develop a robust, and highly-secure cloud-based B2B exchange for automotive supply chains, providing the right information and access to the right person at the right time. This resulted in the development of unique and tightly-integrated technologies for identity management, messaging and portal services, which we offer as a Platform-as-a-Service ("PaaS").

Over the last decade, ubiquitous connectivity and exponential growth in computing power at very low cost has unlocked the ability to securely connect people, processes, and information, with the things around us, an opportunity commonly referred to as the Internet of Things (“IoT”). Recognizing the transformational potential of IoT, in fiscal 2015, Covisint made the strategic shift to focus our future Platform research and development and sales on IoT and identity-centric solutions. As with all platforms, the value of our Platform to the end customer is in the solution that is ultimately developed upon it. Consequently, we have also invested to transform our Platform into a PaaS of choice for developers, by (a) creating a robust third-party developer environment using application programming interfaces ("APIs") and micro services to enable partners and third-parties to easily build on and extend the Platform; (b) making the Platform infrastructure agnostic and readily deployable in any data center globally to satisfy data privacy and geographic regulatory requirements; and (c) automating the build and deploy activities to facilitate the deployment of the Platform in seconds. Consistent with this shift in strategy and direction, we significantly reduced the size of our services business and implemented a partner-led delivery model where the partners perform services required to implement a solution for a customer. We believe this will result in more rapid adoption of our Platform, and faster delivery of unique and innovative IoT solutions to market.

We believe there is a large and rapidly growing available market for our technologies. We believe the use of our PaaS and the markets it serves are at early stages of development. As such, it is important that we build brand awareness, develop key technology and go-to-market partnerships, and invest in our Platform and sales and marketing to extend our leadership in the marketplace.

The Company operates in a single reportable segment.

Our Platform

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Our Platform is delivered as an enterprise grade cloud solution, offering superior levels of security, scalability and reliability to meet the needs of our customers. Key technologies of the core Platform include:

• Data Integration & Exchange Services - services for secure connectivity, multi-protocol support, robust and resilient extraction, mapping, transformation of multiple data elements, and any to any messaging;

• Identity Management Services - a full suite of identity and access management capabilities, including identity lifecycle management, provisioning, access governance, authentication, federation, and identity intelligence; and

• Presentation Services - full enterprise portal capabilities including personalization, integration and aggregation, content management, search and navigation, mobile, and collaboration services.

Our Platform development roadmap is focused on expanding and enhancing these additional aspects of the Platform:

• Analytics Services - services for intelligent, automated if-this-then-that decision-making, data feeds for operational monitoring and health, as well as data feeds for use with third-party big data and security analytics;

• IoT Services - services to identify, connect and manage various network devices;

• Orchestration Services - services to define and execute business rules and workflows, and provide notifications;

• Device Connectivity Services - services to connect to connected devices via various industry standard protocols;

• Data Integration & Exchange Services -adding scalability to millions of messages per second, automated event triggers, and the ability to securely subscribe to event publication;

• Identity Management Services - adding complex identity relationship management and entitlement management capabilities for people and things; and

• Presentation Services - adding accelerators to provide access to content anywhere, anytime and on any device.

Our Differentiation

We believe IoT is in its infancy. Organizations - in particular, product manufacturers - are actively looking for ways to quickly benefit from the promise of connecting people, process, data and things. We believe our tightly integrated, enterprise-proven Platform provides these organizations and their partners the ability to rapidly develop and deploy applications faster and more cost-effectively than the alternatives.

Our Growth Strategies

Elements of our growth strategy include:

• Continued innovation and enhancement of our Platform. We believe the comprehensive nature of our Platform provides us with significant competitive advantages, particularly as it relates to addressing the unique security, identity and access management, data exchange and compliance needs of IoT solutions. We will continue to invest in research and development to expand the functionality and capabilities of our Platform, particularly in mobility and analytics, to make it the PaaS of choice for developers. We may also pursue acquisitions of complementary businesses or technologies to accelerate these initiatives.

• Expand channels & strategic alliances. We are actively developing strategic alliances with partners, similar to our alliance with Cisco Systems, Inc. (“Cisco”), where our Platform is used as the base of the partner’s IoT technology solution strategy. We believe these alliances will improve our access to and ability to support new industry vertical, geographic markets and prospective customers.

• Expand within our current customer base. We believe there is a significant opportunity to expand the adoption of our Platform within our current customer base by expanding usage of already-deployed solutions and selling additional business solutions. As our existing customers derive value from our Platform, we believe they will expand their use of our Platform from a single business initiative within a specific business unit or geography to new business initiatives.

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• Acquire new customers. We believe the IoT holds the potential to drive disruptive digital transformation across a wide range of industries. We also believe that the ever-increasing security and threat landscape will drive substantial need for the identity-centric solutions our Platform can enable. Furthermore, we believe the tight integration of our services, coupled with our cloud delivery model will allow us to rapidly capitalize on both opportunities.

• Expand delivery partnerships. Our Platform provides core functional capabilities that are required for all IoT solutions, and our partners are key to creating the solutions that use these capabilities on behalf of the end customer. We will continue to invest in our relationships with partners like Lochbridge, Perficient, TechMahindra and VisionIT.

Customers

Our customers include large, globally-distributed organizations and mid-sized organizations with complex external business relationships, as well as the participants in their business relationships. While we have over 2,000 customers, we have approximately 150 core Platform customers, representing 92%, 93% and 93% of our total revenue for the years ended March 31, 2015, 2014 and 2013, respectively. Our core Platform customers include large, globally distributed organizations in the automotive, energy, travel, life sciences, consumer goods and national and regional insurance industries. Our remaining customers include a variety of organizations that pay us a relatively nominal fee to either connect to one of our core Platform customers or use one of our industry-specific solutions.

The automotive industry accounted for 45%, 47% and 56% of our total revenue for the years ended March 31, 2015, 2014 and 2013, respectively. The healthcare industry accounted for 32%, 34% and 31% of our total revenue for the years ended March 31, 2015, 2014 and 2013, respectively. Revenue from outside of the U.S. accounted for 14%, 14% and 15% of our total revenue for the years ended March 31, 2015, 2014 and 2013, respectively. We intend to continue expanding our business into additional vertical markets and geographies and expect our revenue to diversify accordingly.

For the year ended March 31, 2015, General Motors Company and its subsidiaries and/or business segments (collectively “General Motors” or "GM") provided over 10% of our revenue, derived from multiple, separate business initiatives for different business segments within GM, including supply chain, marketing and OnStar. During fiscal 2015, we were presented with an opportunity to utilize our relationships with GM and Cisco and Cisco’s relationship with GM to (a) secure a five year, non-cancelable contract for GM to continue to utilize the Platform for its electronic data interchange (“EDI”); and (b) prime our growing strategic alliance with Cisco by providing our Platform to GM as subcontractor to Cisco. In April 2015, we expanded this approach with GM and Cisco by agreeing to continue providing GM with our Platform for its OnStar business as a subcontractor to Cisco under a five year, non-cancelable contract. We have also entered into multiple other statements of work with Cisco under our Software License and Hosting Services Agreement with Cisco, dated November 19, 2013, under which we provide, among other things, our Platform to server as an important part of Cisco's Secure Exchange Platform. Accordingly, in fiscal 2016, we expect Cisco to replace GM as our largest customer. Notwithstanding any contractual changes, we remain actively engaged in further expanding our deep relationship with GM. Losing all or a significant portion of our business with General Motors or Cisco could have a material impact on our business, liquidity and results of operations. See “Risk Factors-We derive a significant percentage of our total revenue from our largest customer, General Motors Company, as well as our ten largest customers” in Item 1A of this Annual Report.

Services

We provide implementation, consulting, training and integration services to our customers. Over the course of fiscal 2015, as a result of our focus on making the Platform the IoT backbone of choice, we have significantly reduced our services business. We moved from delivering service based solutions through our own resources to creating a network of certified service partners who are able to create and deploy solutions on our Platform. However, in certain circumstances, we continue to perform implementation services, which typically consist of user migration, content migration, branding and configuration to support customer-specific workflows. Our services engagements typically occur in phases and can vary from a few weeks to several months depending on the scope and complexity of the solution. Our customers may choose to do much of this work in-house, through a third party or with Covisint. We currently subcontract, and expect to continue to subcontract, portions of our consulting engagements to our third-party implementation partners. We support our customers and partners as they implement solutions independently using API and our developer portal.

Sales and Marketing

We sell our Platform through our direct sales team and channel partners. Our direct sales team includes field sales and solution engineering personnel, and we are moving aggressively to ensure we have the right team in place to take our PaaS to market. In

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the past year, we have had substantial success in growing both our strategic partnerships as well as our based of certified delivery partners, and we will continue to invest in these relationship to enhance our access to and ability to support new industry vertical, geographic markets and prospective customers.

Our marketing and lead generation activities consist primarily of high-touch IoT and identity-targeted industry and technology events, and analyst and customer referrals. We principally target line of business decision makers, as well as senior business and IT executives seeking to drive digital business transformation.

Customer Support

Our customer support services are available 24x7x365 globally and include live-agent telephonic support as well as web-based and self-help options. Our customer support team is staffed by highly-skilled and experienced personnel who receive extensive training on the deployment and maintenance of our services and on the operation of our data centers. A standard deployment includes level-two support. Customers may contract for optional level-one support services to augment our standard support offering, which entitles them to single point of contact, issue resolution and escalation services and more stringent service level agreements (“SLAs”).

Technology and Operations

Covisint’s Platform is designed to support mission-critical business processes of large organizations. It is (a) highly-scalable and designed to process millions of transactions, manage terabytes of data and provide access for millions of users every day, and (b) enterprise-grade, continuously available across the globe and addresses our customers’ most demanding uptime requirements.

The core Platform is written in Java and is optimized for scalability and performance. To expand the value of our Platform, we have developed our software development kit including a broad set of APIs that enable our strategic partners and customers to use our PaaS to develop custom applications and integrations. Our solutions often combine proprietary and open source technologies. Open source technology reduces the overall cost to our customers and allows us to bring innovations and enhancements to market in a more expedient and efficient manner.

For our existing customers, we operate both multi-instance and multi-tenant architectures depending on their customers’ need for dedicated applications and databases. Most Covisint solutions are hosted on a shared infrastructure although some organizations request dedicated servers. Going forward, our new customers will utilize our multi-tenant, next generation public cloud instance of our PaaS.

We work with CenturyLink, Inc. and AT&T to host our enterprise-class hardware. We currently utilize facilities located in Chicago, Illinois, Detroit, Michigan, Tokyo, Japan, Frankfurt, Germany, and Shanghai, China. This allows us to ensure reliability, redundancy and performance for all our customer solutions. We also maintain and operate a disaster recovery facility in Detroit, Michigan.

Research and Development

Our engineering efforts support product development of our cloud-based Platform. We are investing substantially to grow our product management team to accelerate our ability to deliver IoT capabilities, and drive continued innovation in our Platform. We work closely with our customers, strategic and delivery partners to continually improve and enhance our Platform and develop new products and features. By leveraging the cloud architecture of our Platform, we are able to deploy new features and functions across our entire customer community. This allows us to rapidly react to customer support issues, new compliance regulations and customer feature and functionality requests. We plan to continue investing in enhancing our Platform and expect the fiscal 2016 research and development expenditures to be in excess of $14 million.

Our Competition

We sell our Platform in an extremely competitive environment characterized by rapid technological change, new and emerging use cases, such as IoT, shifting customer needs and significant investment by large organizations to be a cloud Platform of choice. We expect the rate of change to continue to be rapid with additional competition in the future. We believe that the key competitive factors in our market include:

Security - we believe it is imperative that all aspects of security are managed from securing what can connect, to providing encryption services for the data in motion and at rest, to what systems and devices can access what data.

Scalability - we believe that the ability to scale to massive ecosystems and ecosystems of ecosystems that can have millions of connected identities, exchanging millions of messages an hour, and consuming massive amounts of bandwidth and storage is significantly important for a Platform to provide.

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Speed of implementation - we believe that speed is paramount, particularly with speed to enable a proof of concept to allow businesses to prove out their IoT ideas using a production grade environment.

Openness of Platform - we believe that there will not be a single Platform that manages all facets of an IoT ecosystem and provide all services. Only IoT vendors that facilitate interoperability with other vendors for services and integrating data across a plethora of sources will succeed.

Ability to enable users to maintain regulatory compliance - we believe that large enterprises will continue to demand regulatory and industry standard audit compliance factors and that the push towards managing more and more consumer data and the continued fears of governmental access to data will increase demands in this area.

Strength and stability of infrastructure - we believe that providing an enterprise-class Platform requires providing enterprise-grade SLA’s that are acceptable for mission critical systems.

Comprehensiveness of Platform features and functionality - we believe that Platform vendors are measured on how full featured their offering is particularly in how easily the various services offered operate together, as well as the ease of interoperating to external systems necessary to build a comprehensive IoT solution.

Price - we believe that price competitiveness will continue to be an important factor in buying decisions particularly as computing and storage costs continue to decline with infrastructure as a service vendors.

The overall market for enterprise cloud-based Platforms and solutions is maturing. We expect that the competitive landscape will continue to mature as the market evolves and IoT centric solutions become more common place. We believe that our competition fits into two key categories:

Cloud based vendors for IoT centric solutions - in this category we see our competition coming from vendors such as Microsoft with their Azure Platform, IBM with BlueMix, Salesforce with Force.com, and PTC with Thingworx.

Cloud based vendors for Identity centric solutions - in this category we see our primary competition coming from vendors such IBM with BlueMix and CA’s Identity Manager SaaS.

Systems integrators, such as IBM, Accenture, and PWC will also be competition in both categories as they will look to build custom solutions for customers using their large services organizations. These vendors will license their own or third party software and will require a significant investment in customizations to build the solutions that solves specific business problem and generates a competitive advantage for the customer. These vendors will have an advantage with customers that are still cloud adverse but we believe this advantage will continue to decline because cloud-based Platforms are rapidly becoming more accepted, trusted and prove true return on investment and time to value.

We believe that we are in a good competitive position as our Platform is pre-built with industry recognized services including our Identity Management Services, Data Integration and Exchange Services, and Presentation Services.  These services come pre-integrated, saving our customers months of effort and the significant costs to buy each service individually and integrate together themselves or with system integrators.  We continuously update our Platform with new innovations and as new regulations, data types, and technology standards emerge.  While we are able to leverage these investments across our customer base, internal IT groups and system integrators that develop custom Platforms are challenged with building cost-effective solutions that compete favorably over time.

Intellectual Property

We protect our intellectual property rights by relying on federal, state and common law rights, as well as contractual restrictions. We manage ownership of and access to our proprietary technology by requiring the execution of confidentiality and invention assignment agreements by our employees, contractors and consultants, and confidentiality agreements with third parties. We also rely on a combination of trade secret, copyright, trademark, trade dress and domain name protections to maintain our intellectual property rights, including the registration of our domain names, trademarks and service marks in the United States and in certain locations outside the United States.

We hold a patent in the U.S. on our core technology in the context of an industry-wide B2B exchange. This patent will expire in 2028.

Circumstances outside our control could pose a threat to our intellectual property rights. Effective intellectual property protection may not be available in the United States or other countries in which our solutions are distributed. In addition, the efforts we have taken to protect our proprietary rights may not be sufficient or effective. Any impairment of our intellectual property rights could harm our business or our ability to compete and harm our operating results. See “Risk Factors-We may not be able to adequately protect our intellectual property rights and efforts to protect them may be costly and may substantially harm our business” in Item 1A of this Annual Report.

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Employees

As of March 31, 2015, we had 382 full-time employees, including 199 in services and ongoing support, 54 in research and development, 82 in sales and marketing and 47 in general and administrative roles. None of our employees are represented by a labor union or covered by a collective bargaining agreement. We have not experienced any work stoppages, and we consider our relations with our employees to be good.

Legal Proceedings

Beginning on May 30, 2014, two putative class actions were filed in the U.S. District Court for the Southern District of New York against us, our directors and former directors, and certain of our officers and former officers alleging violation of securities laws in connection with our IPO and seeking unspecified damages. These lawsuits have been consolidated. We believe they are without merit, and we intend to continue to vigorously defend them. The results of legal proceedings, however, cannot be predicted with certainty. Should we fail to prevail in this legal matter, our financial condition and results of operations could be materially adversely affected. We currently have no other pending litigation. 

Facilities

We maintain our principal offices at 26533 Evergreen Road, Suite 500, Southfield, Michigan, which is leased under an 11 year lease of 33,786 square feet of space. We have also entered into stand-alone operating lease agreements for office space in Shanghai, China, Frankfurt, Germany, London, England and San Francisco, California. Pursuant to third-party hosting agreements, we also have access to facilities in Chicago, Illinois and Tokyo, Japan.

We believe that our existing facilities and offices are adequate to meet our current requirements and that suitable additional or substitute space will be available as needed to accommodate expansion of our operations.

Backlog

We consider our backlog balance to be future years of contractually committed arrangements, of which only the billed amounts are included in deferred revenue. As of March 31, 2015 and 2014, our backlog balance was $97.3 million and $94.2 million, respectively, of which $21.9 million and $27.8 million, respectively, was billed and included in deferred revenue. Of the March 31, 2015 backlog, approximately $49.9 million is not expected to be recognized in fiscal 2016.

Executive Officers of the Registrant

The following tables set forth certain information regarding our Executive Officers as of May 22, 2015:

Name	Age	Position
Samuel M. Inman, III	64	President, Chief Executive Officer, and Director
Enrico Digirolamo	60	Chief Financial Officer
Steven R. Asam	41	Senior Vice President, Delivery, Operations and Engineering
Michael K. Keddington	55	Senior Vice President of Worldwide Sales

Samuel M. Inman, III. Mr. Inman has served as a director of Covisint since January 2014, and as Interim President and Chief Executive Officer of Covisint since March 2014. Effective May 22, 2014, Mr. Inman became the permanent President and Chief Executive Officer of Covisint. From April 2011 to May 22, 2014, Mr. Inman served as an independent consultant providing advice to the management and boards of directors of technology companies.  From April 2008 through April 2011, Mr. Inman was President and CEO of Comarco Wireless Technologies, Inc. a technology company with extensive intellectual property for power adapter products.  Mr. Inman has extensive experience in the management of technology companies, including being CEO of Viking Components, Inc. and Centura Software Corporation.  Mr. Inman has been a director of Comarco Wireless Technologies, Inc. (CMRO); Centura Software Corporation (CNTR); and Objectshare, Inc. (OBJS).

Enrico Digirolamo. Mr. Digirolamo has served as Chief Financial Officer since July 2013. From 2010 until July 2013, he served as Senior Vice President - Sales & Marketing and Finance at Allstate Insurance. Mr. Digirolamo served as the Chief Financial Officer and Vice President of General Motors Europe AG from 2008 to 2010. Mr. Digirolamo also served as the Chief Financial Officer and acting Chief Executive Officer of Covisint LLC (our predecessor) at the time of its formation. He currently serves on the board of directors of Metromedia International Group LLC, a privately held owner of interests in communications and media businesses operating in the Republic of Georgia. Mr. Digirolamo has served as a member of the GM European Strategy Board,

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Opel Supervisory Board and the board of directors of Saab Automobile, GM Russia and Allstate New Jersey. Mr. Digirolamo has a Bachelor of Science degree in mathematics and accounting from Central Michigan University, a Master of Business Administration from Eastern Michigan University and has completed the International Executive Program at the International Institute for Management Development in Lausanne, Switzerland.

Steven R. Asam.  Mr. Asam has been with Covisint since it was originally founded in 2000. Since 2012, Mr. Asam has served as Covisint’s Senior Vice President of Delivery, Operations and Engineering. In this position, he oversees all research and development of the Covisint Platform and vertical specific solutions. In addition, Mr. Asam manages our customer support, implementation, solution deployment, on-boarding and data center operations for all industry sectors. Prior to joining Covisint, Mr. Asam provided technology leadership at Ford Motor Company on several large scale business-to-business and business-to-consumer projects. Mr. Asam earned both his Bachelor of Science degree in computer engineering and a Master of Science degree in computer information systems from the University of Michigan.

Michael K. Keddington. Mr. Keddington has served as Senior Vice President of Worldwide Sales since April 7, 2014. Mr. Keddington was a principal consultant with McDermott & Bull, a retained executive search firm, from June 2013 through April 4, 2014. From August 2011 through April 2013, Mr. Keddington was Chief Executive Officer and a director of Lunera Lighting, Inc., a LED lighting products company. From July 2010 until August 2011, Mr. Keddington was Chief Executive Officer and director of RNA Networks, Inc. a data center infrastructure software company. From April 2008 through June 2010, he was Chief Executive Officer and director of Permlight Products, Inc. Mr. Keddington has extensive experience building and leading sales organizations and driving revenue growth for leading technology firms, including Intel Corporation, Sanmina-SCI, Symantec Corporation, Gupta Technologies, Pure Software and Oracle.

ITEM 1A. RISK FACTORS

We have a history of losses, we expect to continue to incur losses and we may not achieve or sustain profitability in the future.

We have incurred losses in each fiscal year since 2011, including fiscal 2015. These losses were mainly due to the investments we made, and continue to make, to build our Platform, grow and maintain our business and acquire customers. Key elements of our growth strategy include (1) innovating to continue to enhance and optimize our Platform for the IoT age through active product management strategies; (2) acquiring new customers through active direct sales enablement; and (3) and continuing to develop our channel partnerships. Furthermore, to the extent that we are successful in increasing our customer base, we will incur increased expenses, as costs associated with generating and supporting customer agreements are generally incurred up front, while revenue is generally recognized ratably over the term of the agreement. As set forth, we cannot predict our revenue growth, and you should not rely upon our revenue performance in prior fiscal years as indicative of our future performance. Accordingly, we cannot assure you that we will reach profitability in the future or at any specific time in the future or that, if and when we do become profitable, we will sustain profitability. If we are ultimately unable to meet our financial targets to create sufficient revenue to become profitable and have sustainable positive cash flows, investors could lose all or part of their investment.

During fiscal 2015, we made strategic decisions to shift our focus away from providing services to our customers and to stop selling our Platform as a part of a set of healthcare applications, and, accordingly we expect to lose additional revenue from the healthcare vertical and services business, which we may not be able to replace.

In fiscal years 2014 and 2015, over 30% of our revenue was generated from the healthcare industries. Our services revenue for these periods was 25% and 31% respectively. During fiscal 2015, we made a strategic decision to stop providing applications to the healthcare industry, and shift from being a services business to being an enterprise-grade Platform company. As a result of these decisions, our revenue from healthcare and services declined over fiscal 2015. We expect revenue from healthcare and services during fiscal 2016 to decline significantly from fiscal 2015 levels. If we are unable to replace this revenue, it could have a material adverse effect on our results of operations.

We derive a significant percentage of our total revenue from a few customers, and the loss of revenue from these customers could have a material impact on our results of operations.

In January 2015 and April 2015, we completed negotiations with Cisco and GM, pursuant to which we: (a) terminated our existing agreements with GM under which we provided our Platform and various services to GM to support GM’s EDI process and its OnStar services (“Prior GM Agreements”); (2) enabled Cisco to provide our Platform and those services to GM under non-cancelable five-year agreements; and (3) entered into two five-year agreements with Cisco under which we will continue to provide the Platform to GM as a subcontractor to Cisco. Unlike the Prior GM Agreements, which were terminable by GM for convenience with six months’ prior notice, the agreements with Cisco are non-cancelable, and therefore, we have secured our GM business through April 2020. While we maintain strong relationships within GM, we are no longer the prime contractor, and we may lose ability over time to influence GM’s decisions regarding the extended use of the Platform.

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Our revenue from General Motors (including that revenue that we received as a subcontractor of Cisco) during fiscal 2015 was $26.3 million or 30% of our total revenue. Our revenue from General Motors increased in fiscal 2015 as a percentage of our total revenue from 26% in fiscal 2014. We expect our services revenue from General Motors to decrease in fiscal year 2016, due to two factors: 1) we have completed much of the service work for which we were contracted in the past, and 2) we understand that General Motors may be building its information technology capabilities to reduce its reliance on outsourced IT services. As a result, losing all or a significant portion of our services business with General Motors could have a material impact on results of operations.

Our relationship with Cisco continues to grow in importance. In addition to the GM agreements noted above, we have entered into multiple statements of work, through which Cisco has access to our Platform for the purpose of selling its functionality into its customer base. In fiscal 2016, we expect the revenue from the relationship to increase as a percent of our subscription revenue. Accordingly, loss of Cisco revenue could adversely affect our financial condition, operating results and cash flows. 

We cannot accurately predict subscription rates, and negative impact to these rates may have on our future revenue and operating results.

Our customers have no obligation to renew their subscriptions for our solution after the expiration of their initial subscription period, which is typically 36 months, and some customers have elected not to renew. In addition, our customers may renew at a lower contract value or renew for shorter contract lengths. Moreover, many of our contracts are terminable for convenience with as little as 30 days’ prior notice, and some of our customers have elected to terminate all or part of their subscription service contract for convenience. Accordingly, we cannot predict our subscription rates as they may decline or fluctuate as a result of a number of factors, including decreases in usage by our customers, competitive offerings, customer dissatisfaction with our service, customer ability to continue their operations and spending levels, and deteriorating general economic conditions. If our customers terminate our contract for convenience, do not renew their subscriptions for our solutions or reduce the value of their subscription at the time of renewal, our revenue may grow more slowly than expected or decline, and our results of operations could be adversely affected.

If the prices we charge for our services are unacceptable to our customers, our operating results will be harmed.

As the market for our services matures, or as new or existing competitors introduce new products or services that compete with ours, we may experience pricing pressure and be unable to renew our agreements with existing customers or attract new customers at prices that are consistent with our pricing model and operating budget. If this were to occur, it is possible that we would have to change our pricing model or reduce our prices, which could harm our revenue, gross margin and operating results.

Because we recognize revenue from subscriptions over the term of the subscription, downturns or upturns in sales may not be immediately reflected in our operating results.

We generally recognize subscription revenue from customers ratably over the terms of their subscription agreements, which are typically 36 months. As a result, most of the subscription revenue we report in each quarter is related to subscription agreements entered into during previous quarters. Consequently, a decline in new or renewed subscriptions in any one quarter will not be fully reflected in our subscription revenue results for that quarter and will negatively affect our subscription revenue growth rate or subscription revenue in future quarters. As our annualized subscription revenue ("ASR") bookings in fiscal 2014 and 2015 was lower than expected, we anticipate that the growth in our subscription revenue in 2016 will be slower, at least during the first half of 2016. Our subscription model also makes it difficult for us to rapidly increase our subscription revenue through additional sales in any period, as subscription revenue from new customers must be recognized over the applicable subscription term. In addition, despite our efforts to increase our ability to have variable costs for the implementation of our Platform, we may be unable to adjust our cost structure to reflect unanticipated changes in revenue.

Our sales cycle can be long and unpredictable, particularly with respect to large enterprises. As a result, our sales are difficult to predict and may vary from quarter to quarter, which may cause our operating results to fluctuate significantly.

The timing of our sales is difficult to predict. Due to the nature, scope and complexity of the technology solution that we provide, our sales efforts require a consultative sale educating our customers about the use, technical capabilities and benefits of our Platform. It may be challenging to find the correct sales approach to foster significant adoption of our Platform. Our Platform provides solutions to business problems in a distributed environment of customers and partners. The buyers of these solutions may differ in different organizations, with IT professionals being the buyer in some cases and a consultant to the business being the buyer in others. As a result, customers often undertake a prolonged evaluation process, which frequently involves not only our solutions, but also those of our competitors. New sales opportunities may require us to devote significant sales support to individual customers and, thus, to incur substantial costs. In addition, decisions to purchase our services are frequently subject to budget constraints, multiple approvals and unplanned administrative, processing and other delays. If sales expected from a specific customer for a particular period are not realized in that period or at all, our results could fall short of public expectations and our business, operating results and financial condition could be materially adversely affected.

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Our Platform solutions can be complex and include multiple dependencies that may cause our customers difficulty in implementing our service, which could negatively impact our future revenue and financial results.

Due to the scope and complexity of the solutions built on the Platform, the implementation cycle can be lengthy. Implementation of these solutions requires customization and integration with the customer and its partners’ existing computer systems, software programs and databases. This process can be time-consuming and expensive for our customers and can result in delays in implementation and deployment of the solution. As a result, some of our customers have had, and may in the future have, difficulty implementing their solutions successfully or otherwise achieving their expected benefits. Additionally, while a customer may decide to purchase our Platform, the customer or its partners may require us to delay the implementation of our solutions due to their scheduling, resource or budgetary constraints.

Delayed or ineffective implementation of our solutions may limit our future sales opportunities, reduce revenue and net income, cause customer dissatisfaction, harm our reputation or cause non-payment issues due to any of the following events:

The withholding of cash payments or cancellation of contracts if we fail to meet our commitments;

The cancellation or scaling back of one or more of our larger projects which could have a material adverse impact on our reputation and future revenue; or

An inability to recognize subscription revenue due to delays in the launch date of the customer’s access to our production environment.

Competition from current competitors and new market entrants, as well as from internally-developed technologies, could adversely affect our ability to sell our solutions and related services.

We sell our Platform in an extremely competitive environment characterized by rapid technological change, shifting customer needs and frequent introductions of new products and services. We believe that the key competitive factors in our market include: security, scalability, speed of implementation, ability to enable users to maintain regulatory compliance, features and functionality, ability to meet customer service level requirements and price. If we are less successful at addressing one or more of these factors than our competitors, we may lose market share which could have a material adverse effect on our business, financial condition and operating results.

We compete with a wide range of established companies in a variety of different markets. In certain markets we compete with system integrators, such as IBM, Hewlett-Packard Company and Dell, Inc. cloud-based Platform vendors, such as Salesforce.com and Microsoft Azure, and business-to-business integration and data exchange vendors, such as Open Text Corporation and Sterling Commerce, a division of IBM, all of which have substantially greater name recognition and resources than we do. Our competition often subscribe to or license other cloud-based Platforms and third-party solutions to solve their customers’ specific business problems. Certain cloud-based Platform vendors also offer development resources and consulting services that allow them to customize their platform to the customer’s requirements. We face other specialized competitors in our current vertical markets and may face new competitors as we expand into new vertical markets. These competitors may be more efficient and successful in penetrating the market for cloud-based services then we are. We also encounter competition from technologies developed by the in-house information technology departments of our customers and potential customers. If we fail to compete successfully, our operating results and financial condition will be materially adversely affected.

If we do not effectively hire, expand and train our sales force, we may be unable to grow as quickly as expected, and our business may be harmed.

We are dependent on our sales force to obtain new customers and to sell additional solutions to our existing customers. Due in part to our shift away from the healthcare application business, we have had significant turnover in our sales force. Our ability to achieve significant revenue growth will depend, in large part, on our success in recruiting, training and retaining sufficient numbers of sales personnel to support our growth. There is significant competition for sales personnel with the skills and technical knowledge that we require. When hired, it generally takes significant time before they achieve full productivity. Our recent hires and planned hires may not become as productive as we expect, and, if they do not, we will need to hire new sales personnel, who will require the same training and time to become effective. Moreover, we may be unable to hire or retain sufficient numbers of qualified individuals in the markets where we do business or plan to do business. These individuals may also have difficulty implementing our go-to-market strategy on repeatable, platform-based sales. If we are unable to hire and train sufficient numbers of effective sales personnel who can effectively sell our Platform, our revenue may grow at a slower rate than we anticipate and our financial condition could suffer.

If we fail to manage our sales and distribution channels effectively or if our partners choose not to market and sell our solutions to their customers, our operating results could be adversely affected.

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We derived approximately 7%, 6% and 3% of our revenue for the years ended March 31, 2015, 2014 and 2013, respectively, from sales of our Platform to and through our strategic partners, and we anticipate that percentage will increase significantly in 2016. Accordingly, our strategic partners will be responsible for a significant portion of our sales now and in the future. In order to scale our channel program to support growth in our business, it is important that we help our partners enhance their ability to independently sell and deploy the Platforms. Accordingly, we have invested and continue to invest in enhancements to our Platform to facilitate the sale and implementation of our Platform by our partners. Moreover, we are investing significant time and resources into our strategic partners to educate them on the Platform to accelerate their ability to become productive in selling our Platform. Despite these investments and efforts, we may be unable to successfully expand and improve the effectiveness of our channel sales program.

We expect that agreements with strategic partners will be generally non-exclusive and that strategic partners may enter into strategic relationships with our competitors or may be competitors themselves. Further, we expect that many strategic partners will have multiple strategic relationships and may not regard us as significant for their businesses. Strategic partners may terminate their respective relationships with us with limited or no notice and with limited or no penalty, pursue other partnerships or relationships, or attempt to develop or acquire technologies or services that compete with our solutions. Strategic partners may also impair our ability to enter into other desirable strategic relationships or sell additional business.

If strategic partners do not effectively market and sell our solutions, if they choose to place greater emphasis on technologies of their own or those offered by our competitors, or if they fail to meet the needs of our customers, our ability to grow our business and sell our solutions may be adversely affected. The loss of Cisco, or a substantial number of other strategic partners, and our possible inability to replace them, the failure to recruit additional strategic partners, any reduction or delay in their sales of our solutions, or any conflicts between channel sales and our direct sales and marketing activities could materially and adversely affect our results of operations.

We operate in an emerging and evolving market which may lead to period to period variability in our revenue and make it difficult to evaluate our future prospects.

We believe our Platform is unique in the marketplace as it flexibly provides the framework to improve business processes involving a user's extended enterprise ranging from customers, suppliers and other stakeholders. However, the markets for our Platform are in an early stage of development, and it is uncertain how rapidly these markets will develop. Even if they do develop, it is not certain our Platform will achieve and sustain high levels of demand and acceptance. Because our Platform has a significant number of uses across many industries, our ability to grow revenue will be dependent upon our ability to determine which industries are most likely to be ready to utilize our technologies to solve their business issues. If we do not select wisely, we may incur costs and lose the opportunities to secure our position in the marketplace.

If companies do not perceive or value the benefits of our solutions, or if companies are unwilling to accept our Platform as an alternative to the traditional approach to solving business process problems in their extended enterprise, the market for our Platform might not continue to develop or might develop more slowly than we expect, either of which could significantly affect our revenue and growth prospects.

We provide service level commitments to our customers, and our failure to meet the stated service levels could significantly harm our financial results and our reputation.

Our customer agreements require that we maintain certain service level commitments to our customers relating primarily to functionality, network uptime and critical infrastructure availability. For example, our service level agreements generally require that our solutions are available up to 99.5% of the time. If we are unable to meet the stated service level commitments, we may be contractually obligated to provide customers with credits. Additionally, if we fail to meet our service level commitments a specified number of times within a given time frame or for a specified duration, our customers may terminate their agreement with us. As a result, a failure to deliver services for a relatively short duration could cause us to issue credits to a large number of affected customers or result in the loss of customers. In addition, we cannot assure you that our customers will accept these credits or termination rights in lieu of other legal remedies that may be available to them, and, therefore, we could be liable for other related damages incurred by our customers. Our failure to meet our commitments could also result in substantial customer dissatisfaction or loss. If we fail to meet our service level commitments to our customers, the resulting issuance of credits, loss of customers or other potential liabilities could significantly and adversely impact our financial results.

If our security measures are breached or unauthorized access to data is otherwise obtained, our solutions may be perceived as not being secure, customers may reduce the use of, or stop using, our solutions and we may incur significant liabilities.

Our operations enable the exchange of, and access to, sensitive information, and security breaches could result in the loss of this information, litigation, indemnity obligations and other liability. While we have security measures in place, if our security measures are breached as a result of third-party action, employee error or otherwise, our reputation could be significantly damaged,

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our business may suffer and we could incur substantial liability. Because techniques used to obtain unauthorized access to or sabotage systems change frequently and generally are not identified until they are launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. Any or all of these issues could negatively impact our ability to attract new customers and increase engagement by existing customers, cause existing customers to elect not to renew their subscriptions or subject us to third-party lawsuits, regulatory fines or other action or liability, thereby harming our operating results.

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Because our Platform is often used to collect and store personal information, privacy concerns could result in additional cost and liability to us or inhibit sales of our solutions.

Many federal, state and foreign government bodies and agencies have adopted or are considering adopting laws and regulations regarding the collection, use and disclosure of personal information. In the U.S., these include rules and regulations promulgated under the authority of the Federal Trade Commission, the Health Insurance Portability and Accountability Act of 1996 (HIPAA), the Health Information Technology for Economic and Clinical Health Act (HITECH), state breach notification laws and other state privacy and data security laws. Outside of the U.S., these privacy and data security requirements include rules and regulations promulgated under the European Union data protection directive. Virtually every jurisdiction in which we operate has established its own data security and privacy legal framework with which we or our customers must comply.

In addition to government regulation, privacy advocacy and industry groups may propose new and different self-regulatory standards that either legally or contractually apply to us. Because the interpretation and application of privacy and data protection laws are still complex, evolving and uncertain, it is possible that these laws may be interpreted and applied in a manner that is inconsistent with our existing data management practices or the features of our solutions. If so, in addition to the possibility of fines, lawsuits and other claims, we could be required to fundamentally change our business activities and practices or modify our solutions, which could have an adverse effect on our business. Any inability to adequately address privacy concerns, even if unfounded, or comply with applicable privacy or data protection laws, regulations and policies, could result in additional cost and liability to us, damage our reputation, inhibit sales and harm our business.

Furthermore, the costs of compliance with, and other burdens imposed by, the laws, regulations and policies that are applicable to the businesses of our customers may limit the use and adoption of, and reduce the overall demand for, our solutions. Privacy concerns, whether or not valid, may inhibit market adoption of our solutions particularly in certain industries and foreign countries.

Our solutions are hosted at multiple data centers around the world. Any disruption of service at our facilities or our third-party hosting providers could interrupt or delay our customers’ access to our solutions, which could harm our operating results.

The ability of our customers to access our solutions is critical to our business. We currently serve customers from data centers located in Chicago, Illinois, Tokyo, Japan, Frankfurt, Germany, and Shanghai, China and maintain a backup data recovery center in Detroit. We cannot assure you that the measures we have taken to eliminate single points of failure in our data centers located in Chicago and Frankfurt, and our data recovery center located in Detroit, will be effective to prevent or minimize interruptions to our operations. Our facilities are vulnerable to interruption or damage from a number of sources, many of which are beyond our control, including, without limitation:

Extended power loss;

Telecommunications failures from multiple telecommunication providers;

Natural disaster or an act of terrorism;

Software and hardware errors, or failures in our own systems or in other systems;

Network environment disruptions such as computer viruses, hacking and similar problems in our own systems and in other systems;

Theft and vandalism of equipment; and

Actions or events caused by or related to third parties.

We attempt to mitigate these risks through various business continuity efforts, including redundant infrastructure, 24x7x365 system activity monitoring, backup and recovery procedures, use of a secure off-site storage facility for backup media, separate test systems and change management and system security measures, but our precautions may not protect against all potential problems. Our data recovery centers are equipped with physical space, power, storage and networking infrastructure and Internet connectivity to support the solutions we provide in the event of the interruption of services at our primary data center. Even with this data recovery center, however, our operations would be interrupted during the transition process should our primary data center experience a failure.

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Disruptions at our data centers could cause disruptions in our services and data loss or corruption. This could damage our reputation, cause us to issue credits to customers, subject us to potential liability or costs related to defending against claims or cause customers to terminate or elect not to renew their agreements, any of which could negatively impact our revenue.

CenturyLink, and AT&T currently hosts the majority of our solutions. We cannot guarantee that we will be able to continue to receive reasonable pricing and terms from CenturyLink, AT&T or our other hosting providers in the future. Failure to negotiate reasonable terms could result in increased costs, which could negatively impact our financial condition. If our providers stop providing services or we fail to negotiate terms on an acceptable basis, we could be required to move our solutions to other third-party hosting providers, which would be a distraction to our business, could increase costs and could cause a disruption in our services.

We could be sued for contract claims, and such lawsuits, if successful, may have an adverse effect on our financial results.

Our Platform performs significant volume of transactions in mission-critical systems for our customers. General errors, defects, inaccuracies or other performance problems in our solutions or inaccuracies in or loss of the data we provide to our customers could result in financial or other damages to our customers, which damages could prompt them to make claims for damages against us. We cannot assure you that the limitations of liability set forth in our contracts would be enforceable or would otherwise protect us from liability for damages. We maintain liability insurance coverage, including coverage for errors and omissions, in amounts and under terms that we believe are appropriate. We cannot assure you that this coverage will continue to be available on terms acceptable to us, or at all, or in sufficient amounts to cover one or more large contract claims, or that the insurer will not deny coverage for any future claim. The successful assertion of one or more large contract claims against us that exceeds available insurance coverage, could have a material adverse effect on our business, prospects, financial condition and results of operations.

Changes in federal law or regulation could adversely impact our Physician Quality Reporting System offering.

Revenue from our Physician Quality Reporting System ("PQRS") offering represented approximately 4%, 2% and 1% of our total revenue for the years ended March 31, 2015, 2014 and 2013, respectively. PQRS revenue is recognized as performed at the time of the annual submission to the government during our fourth quarter ended March 31, 2015. PQRS is a voluntary federal program that incentivizes certain quality care data reporting by healthcare professionals. As a federal program, a change in federal law or regulation could alter or eliminate PQRS, which, in turn, could adversely impact our revenue.

Our Platform must integrate with a variety of operating systems, software applications and hardware that are developed by others. If we are unable to devote the necessary resources to ensure that our solutions interoperate with such software and hardware, we may fail to increase, or we may lose, market share and we may experience reduced demand for our offerings.

Our Platform must integrate with a variety of network, hardware and software Platforms, and we will need to continuously modify and enhance our Platform to adapt to changes in mobility, Internet-related hardware, software, communication, browser and database technologies. The cost to make our Platform broadly interoperable may be significant. Any failure of our solutions to operate effectively with future Platforms and technologies could reduce the demand for our Platform, result in customer dissatisfaction and harm our business. If we are unable to respond to these changes in a timely, cost-effective manner, our solutions may become less marketable and less competitive or obsolete and our operating results may be negatively impacted. If we cannot effectively make our Platform available on mobile devices, we may experience difficulty attracting and retaining customers.

We rely on third-party software that may be difficult to replace or which could cause errors or failures of our service that could lead to lost customers or harm to our reputation.

We rely on software licensed from third parties to offer our solutions. This software may not continue to be available to us at all or on commercially reasonable terms. Any loss of the right to use any of this software could result in delays in the provisioning of our service until equivalent technology is either developed by us, or, if available, is identified, obtained and integrated, which could harm our business. Any errors or defects in third-party software could result in errors or a failure of our solutions, which could harm our business.

The loss of certain key employees and technical personnel or our inability to hire additional qualified personnel could have a material adverse effect on our business.

Our success depends in part upon the continued service of our key senior management and technical personnel. Such personnel are employed at-will and may leave Covisint at any time. Our success also depends on our continuing ability to attract and retain highly-qualified technical, managerial and sales personnel. The market for professional services and software development personnel has historically been, and we expect that it will continue to be, intensely competitive. We cannot assure you that we will continue to be successful in attracting or retaining such personnel. The loss of certain key employees or our inability to attract and retain other qualified employees could have a material adverse effect on our business.

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We could incur substantial costs as a result of any claim of infringement of another party’s intellectual property rights.

In recent years, there has been significant litigation in the U.S. and elsewhere involving patents and other intellectual property rights. Companies providing Internet-related products and services are increasingly bringing and becoming subject to suits alleging infringement, misappropriation or other violations of patents, copyrights, trademarks, trade secrets or other intellectual property rights. These risks have been amplified by an increase in the number of third parties whose sole or primary business is to assert such claims. We could incur substantial costs in prosecuting or defending any intellectual property litigation. Additionally, the defense or prosecution of claims could be time-consuming and could divert our management’s attention away from the execution of our business plan.

We cannot be certain that our solutions and services do not infringe the intellectual property rights of third parties. Claims of alleged infringement or misappropriation could be asserted against us by third parties in the future, and if made, we cannot be certain that we would prevail. In addition to possible claims with respect to our solutions, some of our solutions contain technology developed by and licensed from third parties, and we may likewise be susceptible to infringement or misappropriation claims with respect to these third-party technologies.

Moreover, any settlement or adverse judgment resulting from a claim could require us to pay substantial amounts or obtain a license to continue to use the technology that is the subject of the claim, or otherwise restrict or prohibit our use of the technology. We cannot assure you that we would be able to obtain a license from the third party asserting the claim at all or on commercially reasonable terms, that we would be able to develop alternative technology on a timely basis, or that we would be able to obtain a license to use a suitable alternative technology to permit us to continue offering, and our customers to continue using, our affected solution or service. In addition, we may be required to indemnify our customers for third-party intellectual property infringement claims, which would increase the cost to us. An adverse determination could also prevent us from offering our products or services to others. Infringement claims asserted with or without merit against us may have an adverse effect on our business, financial condition and results of operations.

Our contracts with customers include contractual obligations to indemnify them against claims that our solutions infringe the intellectual property rights of third parties. The results of any intellectual property litigation to which we might become a party, or for which we are required to provide indemnification, may force us to do one or more of the following:

Participate in or pay the costs of the defense of such litigation;

Cease selling or using solutions or services that incorporate the challenged technology;

Make substantial payments for costs or damages;

Obtain a license, which may not be available on reasonable terms, to sell or use the relevant technology; or

Redesign those solutions or services to avoid infringement.

If we are required to make substantial payments or undertake any of the other actions noted above as a result of any intellectual property infringement claims against us or any obligation to indemnify our customers for such claims, such payments or costs could have a material adverse effect upon our business and financial results. Even if we are not a party to any litigation between a customer and a third party, an adverse outcome in any such litigation could make it more difficult for us to defend our technology in any subsequent litigation in which we are a named party. Moreover, such infringement claims with or without merit may harm our relationships with our existing customers and may deter future customers from subscribing to our solutions and related services on acceptable terms, if at all.

We may not be able to adequately protect our intellectual property rights and efforts to protect them may be costly and may substantially harm our business.

Our ability to compete effectively is dependent in part upon our ability to protect our intellectual property rights. While we hold an issued patent and a pending patent application covering certain elements of our technology, this patent and patent application, and, more generally, existing patent laws, may not provide adequate protection for portions of the technology that are important to our business. In addition, our pending patent application may not result in an issued patent. We have largely relied on copyright, trade secret and trademark laws, as well as generally relying on confidentiality procedures and agreements with our employees, consultants, customers and vendors, to control access to, and distribution of, technology, software, documentation and other confidential information. Despite these precautions, it may be possible for a third party to copy or otherwise obtain, use or distribute our technology without authorization. If this were to occur, we could lose revenue as a result of competition from products infringing or misappropriating our technology and intellectual property and we may be required to initiate litigation to protect our proprietary rights and market position.

U.S. patent, copyright, trademark and trade secret laws offer us only limited protection and the laws of some foreign countries do not protect proprietary rights to the same extent. Accordingly, defense of our trademarks and proprietary technology may become

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an increasingly important issue as we continue to expand our operations and solution development into countries that provide a lower level of intellectual property protection than the U.S. Policing unauthorized use of our trademarks and technology is difficult and the steps we take may not prevent misappropriation of the trademarks or technology on which we rely. If competitors are able to use our trademarks or technology without recourse, our ability to compete would be harmed and our business could be materially and adversely affected.

We may elect to initiate litigation in the future to enforce or protect our proprietary rights or to determine the validity and scope of the rights of others. That litigation may not be ultimately successful and could result in substantial costs to us, the reduction or loss in intellectual property protection for our technology, the diversion of our management’s attention and harm to our reputation, any of which could materially and adversely affect our business and results of operations.

Confidentiality arrangements with employees and others may not adequately prevent disclosure of trade secrets and other proprietary information.

We have devoted substantial resources to the development of our technology, business operations and business plans. In order to protect our trade secrets and proprietary information, we rely in significant part on confidentiality arrangements with our employees, licensees, independent contractors, advisers and customers. These arrangements, some of which were acquired through acquisitions, may not be effective to prevent disclosure of confidential information, including trade secrets, and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. Laws regarding trade secret rights in certain markets in which we operate may afford little or no protection to our trade secrets. The loss of trade secret protection could make it easier for third parties to compete with our solutions by copying functionality. In addition, any changes in, or unexpected interpretations of, the trade secret and other intellectual property laws in any country in which we operate may compromise our ability to enforce our trade secret and intellectual property rights. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our competitive business position.

We may be subject to damages resulting from claims that we, our employees or contractors, have wrongfully used or disclosed alleged trade secrets of their former employers or other parties.

We could in the future be subject to claims that our employees or contractors, or we, have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of their former employers or other parties. Litigation may be necessary to defend against these claims. If we fail in defending against such claims, a court could order us to pay substantial damages and prohibit us from using technologies or features that are essential to our solutions, if such technologies or features are found to incorporate or be derived from the trade secrets or other proprietary information of these parties. In addition, we may lose valuable intellectual property rights or personnel. A loss of key personnel or their work product could hamper or prevent our ability to develop, market and support potential solutions or enhancements, which could severely harm our business. Even if we are successful in defending against these claims, such litigation could result in substantial costs and be a distraction to management.

Our use of “open source” software could negatively affect our ability to sell our services and solutions or protect our intellectual property and subject us to possible litigation.

A portion of the technology licensed from others by us and that we use to make our solutions available currently incorporates “open source” software, and we may incorporate open source software into our solutions in the future. Such open source software is generally licensed by its authors or other third parties under various open source licenses. Terms of many source licenses have not been interpreted by U.S. or foreign courts, and there is a risk that such licenses could be construed in a manner that could impose unanticipated conditions or restrictions on our ability to offer our solutions. In that event, we could be required to seek licenses from third parties in order to continue offering our services, to re-engineer our products or to discontinue sales of our affected solutions, any of which could materially adversely affect our business. In addition, if we fail to comply with these licenses, we may be subject to certain conditions, including requirements that we make available source code for modifications or derivative works we create based upon, incorporating or using the open source software or source code of our proprietary software and that we license such modifications, alterations or source code under the terms of the particular open source license. If a third party were to allege that we had not complied with the conditions of one or more of these licenses, we could be:

Required to defend against such allegations;

Subject to significant damages;

Enjoined from the sale of our solutions that contained the open source software;

Required to comply with the conditions described above; or

Required to discontinue our use of such open source software or the sale of our affected solutions in the event we could not maintain compliance with such licenses.

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Any of the foregoing events could disrupt the distribution and sale of some of our solutions while forcing us to incur significant legal expenses.

Additionally, the use of open source software can lead to greater risks than the use of third-party commercial software, as open source software does not come with warranties or other contractual protections regarding infringement claims or the quality of the code. From time to time, parties have asserted claims against companies that use open source software in their products and services, asserting that open source software infringes their intellectual property rights. We could be subject to suits by parties claiming infringement of intellectual property rights with respect to what we believe to be open source software. In such event, we could be required to seek licenses from third parties in order to continue using such software or offering certain of our solutions and services or to discontinue the use of such software or the sale of our affected solutions and services in the event we could not obtain such licenses, any of which could adversely affect our business, operating results and financial condition.

Our success depends in part on our ability to develop or acquire solution enhancements and new solutions, and we may not be able to timely develop or acquire new and enhanced solutions to satisfy changes in demand.

Our success depends in part on our ability to develop and market solution enhancements and new solutions that keep pace with continuing changes in technology and customer preferences. We may not be able to develop and market new or enhanced solutions in a timely or cost-effective manner or to develop and introduce solutions that satisfy customer requirements. Our solutions also may not achieve market acceptance or correctly anticipate technological changes. Our failure to develop technological improvements or to adapt our solutions to technological change may, over time, have a material adverse effect on our business.

We may expand our business by acquiring or investing in other products, services, technologies or businesses, which may divert our management’s attention, result in dilution to our shareholders and consume resources that are necessary to sustain our business.

We may in the future acquire complementary products, services, technologies or businesses. We also may enter into relationships with other businesses to expand our portfolio of solutions or our ability to provide our solutions in foreign jurisdictions. Negotiating these transactions can be time-consuming, difficult and expensive, and our ability to complete these transactions may often be subject to conditions or approvals that are beyond our control. Consequently, these transactions, even if undertaken and announced, may not close.

An acquisition, investment or new business relationship may result in unforeseen operating difficulties and expenditures. In particular, we may encounter difficulties assimilating or integrating the businesses, technologies, products, personnel, or operations of acquired companies, particularly if the key personnel of the acquired company choose not to work for us, the acquired company’s technology is not easily adapted to be compatible with ours, or we have difficulty retaining the customers of any acquired business due to changes in management or other concerns. Acquisitions may also disrupt our business, divert our resources and require significant management attention that would otherwise be available for the development of our business. Moreover, the anticipated benefits of any acquisition, investment or business relationship may not be realized or we may be exposed to unknown liabilities, including litigation against the companies we may acquire. For one or more of those transactions, we may:

Issue additional equity securities that would dilute our shareholders;

Use cash that we may need in the future to operate our business;

Incur debt on terms unfavorable to us or that we are unable to repay or that may place burdensome restrictions on our operations;

Incur significant charges or substantial liabilities; or

Become subject to adverse tax consequences, or substantial depreciation, deferred compensation or other acquisition-related accounting charges.

Any of these risks could harm our business and operating results.

We may be exposed to liabilities if it is determined that we have not complied with Section 409A of the Code.

We have attempted to structure the compensation arrangements with our employees so that they either comply with, or are exempt from, Section 409A of the Code, which sets forth the rules governing deferred compensation arrangements, including by amending certain option award agreements. If it is determined that these arrangements are neither compliant with, nor exempt from, Section 409A of the Code, we may be subject to liabilities and costs, including penalties for failing to report deferred compensation arrangements under Section 409A of the Code and to withhold taxes payable by our employees, and we may be required to pay the amount of taxes we should have withheld and related interest. We have also committed to reimburse those of our employees who have made certain amendments to their compensation arrangements for certain personal negative tax implications if the amended compensation arrangements are determined to be neither compliant with, nor exempt from, Section 409A of the Code. Any amounts so payable by us could adversely impact our financial condition.

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Unanticipated changes in our effective tax rate or exposure to additional income tax liabilities could have a material impact on our financial results and could increase the volatility of those results.

Due to the global nature of our business, we are subject to income taxes in both the United States and several foreign jurisdictions. In the event we generate net income in certain jurisdictions but incur net losses in other jurisdictions, we generally cannot offset the income from one jurisdiction with the loss from another, which could increase our effective tax rate. Furthermore, significant judgment is required in determining our worldwide provision for income taxes. In the ordinary course of our business there are many transactions and calculations for which the ultimate tax determination is uncertain. Although we believe our tax positions are reasonable, we are subject to routine corporate income tax audits in the jurisdictions in which we operate. Our provision for income taxes includes amounts intended to satisfy income tax assessments that are likely to result from the examination of our tax returns that have been filed in these jurisdictions. The amounts ultimately paid upon resolution of such examinations could be materially different from the amounts included in the provision for income taxes and could have a material impact on our financial position, results of operations or cash flows in the period or periods for which that determination is made.

We recognize reserves for uncertain tax positions through tax expense for estimated exposures related to our current and historical tax positions. We evaluate the need for reserves for uncertain tax positions on a quarterly basis and any change in the amount is recorded in our results of operations, as appropriate. It could take several years to resolve certain of these reserves for uncertain tax positions.

Additionally, one of the components that we evaluate in establishing the provision for income taxes is the realization of our deferred tax assets. We must assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent we believe that recovery is not likely, we must establish a valuation allowance. Changes in estimates of projected future operating results or in assumptions regarding our ability to generate future taxable income could result in increases to our total valuation allowance and tax expense that would reduce net income.

We earn a portion of our income, and accumulate a portion of cash flow, in foreign jurisdictions. Any repatriation of funds currently held in foreign jurisdictions may result in a higher effective tax rate and larger incremental cash tax payments. In addition, there have been proposals to amend U.S. tax laws that would significantly impact the manner in which U.S. companies are taxed on foreign earnings. Although we cannot predict whether or in what form any legislation will pass, if enacted, such legislation could have an adverse impact on our U.S. tax expense and cash flows.

We are exposed to exchange rate risks on foreign currencies and to other international risks that may adversely affect our business and results of operations.

Approximately 14%, 14% and 15% of our total revenue for the years ended March 31, 2015, 2014 and 2013, respectively, was derived from foreign operations. We currently have foreign sales denominated in the local currency of approximately fifteen foreign countries, and our solutions and services may be priced in the currency of the country in which they are sold. Changes in the exchange rates of foreign currencies or exchange controls may adversely affect our results of operations. We have not previously engaged in foreign currency hedging. If we decide to hedge our foreign currency exposure, we may not be able to hedge effectively due to lack of experience, unreasonable costs or illiquid markets.

The international business environment is also subject to other risks, including the need to comply with foreign and U.S. laws and the greater difficulty of managing business operations overseas. In addition, our foreign operations are affected by general economic conditions in the international markets in which we do business. A worsening of economic conditions in these markets could cause customers to delay or forego decisions to acquire or renew subscriptions or to reduce their requirements for services.

We face many risks associated with our plans to expand our international presence, which could harm our business, financial condition and operating results.

We currently operate internationally and intend to expand into additional international markets. In some international markets, customer preferences and buying behaviors may be different, and we may use business or pricing models that are different from our traditional subscription model to provide our Platform to customers in those markets or we may be unsuccessful in implementing the appropriate business model. Our revenue from new foreign markets may not exceed the costs of establishing, marketing and maintaining our offerings in those markets. In addition, the current instability in the euro zone could have many adverse consequences on our international operations, including sovereign default, liquidity and capital pressures on euro zone financial institutions, reducing the availability of credit and increasing the risk of financial sector failures and the risk of one or more euro zone member states leaving the euro, resulting in the possibility of capital and exchange controls and uncertainty about the impact of contracts and currency exchange rates.

In addition, conducting our operations in a new international market may subject us to new risks. These risks include:

Localization of our solutions, including the addition of the local language and adaptation to new local practices;

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Strong local competitors;

The cost and burden of complying with, lack of familiarity with, and unexpected changes in, local legal and regulatory requirements;

Fluctuations in local currency exchange rates or restrictions on local currency;

Potentially adverse tax consequences, including the complexities of transfer pricing, value-added or other tax systems, double taxation and restrictions and/or taxes on the repatriation of earnings;

Hiring and training a local sales force;

Development of a local marketing strategy;

Dependence on third parties, including commercial partners with whom we do not have extensive experience;

Increased financial accounting and reporting burdens and complexities;

Political, social and economic instability, terrorist attacks and security concerns in general; and

Reduced or varied protection for intellectual property rights in some countries.

Operating in new international markets also requires significant management attention and financial resources. The investment and additional resources required to establish operations and manage growth in other countries may not produce desired levels of revenue or profitability.

Our solutions contain encryption technologies, certain types of which are subject to U.S. and foreign export control regulations and, in some foreign countries, restrictions on importation and/or use. Any failure on our part to comply with encryption or other applicable export control requirements could result in financial penalties or other sanctions under the U.S. export regulations, including restrictions on future export activities, which could harm our business and operating results. Regulatory restrictions could impair our access to technologies needed to improve our solutions and may also limit or reduce the demand for our solutions outside of the U.S.

Our operating results may be harmed if we are required to collect sales, services or other related taxes for our solutions in jurisdictions where we have not historically done so.

We do not believe that we are required to collect sales, use, services or other similar taxes from our customers in certain jurisdictions. However, one or more countries or states may seek to impose sales, use, services, or other tax collection obligations on us, including for past sales. A successful assertion by one or more jurisdictions that we should collect sales or other taxes on the sale of our solutions could result in substantial tax liabilities for past sales and decrease our ability to compete for future sales. Each country and each state has different rules and regulations governing such taxes and these rules and regulations are subject to varying interpretations that may change over time. We review these rules and regulations periodically and, when we believe such taxes apply in a particular jurisdiction, we comply with their rules and regulations. We cannot assure you that we will not be subject to such taxes or related interest and penalties for past sales in jurisdictions where we presently believe such taxes are not due. We reserve estimated amounts with respect to such taxes on our financial statements but we cannot be certain that we have made sufficient reserves to cover such tax liabilities or such taxes.

Providers of goods or services are typically held responsible by taxing authorities for the collection and payment of any applicable sales and similar taxes. If one or more taxing authorities determines that taxes should have, but have not, been paid with respect to our solutions, we may be liable for past taxes in addition to being required to collect sales or similar taxes in respect of our solutions going forward. Liability for past taxes may also include very substantial interest and penalty charges. Our customer contracts generally provide that our customers must pay all applicable sales and similar taxes. Nevertheless, customers may be reluctant to pay back taxes and may refuse responsibility for interest or penalties associated with those taxes or we may determine that it would not be feasible to seek reimbursement. If we are required to collect and pay back taxes and the associated interest and penalties and if our customers do not reimburse us for all or a portion of these amounts, we will have incurred unplanned expenses that may be substantial. Moreover, imposition of such taxes on our solutions going forward may effectively increase the cost of such solutions to our customers.

Many states are also pursuing legislative expansion of the scope of goods and services that are subject to sales and similar taxes as well as the circumstances in which a vendor of goods and services must collect such taxes. Furthermore, legislative proposals have been introduced in the U.S. Congress that would provide states with additional authority to impose such taxes. The tax laws of foreign jurisdictions may also change. Accordingly, it is possible that either federal or state legislative changes or foreign tax law changes may require us to collect additional sales and similar taxes from our customers in the future.

Acts of terrorism, acts of war and other unforeseen events may cause damage or disruption to us or our customers, which could materially and adversely affect our business, financial condition and operating results.

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Natural disasters, acts of war, terrorist attacks and the escalation of military activity in response to such attacks or otherwise may have negative and significant effects, such as imposition of increased security measures, changes in applicable laws, market disruptions and job losses. Such events may have an adverse effect on the economy in general. Moreover, the potential for future terrorist attacks and the national and international responses to such threats could affect the business in ways that cannot be predicted. The effect of any of these events or threats could have a material adverse effect on our business, financial condition and results of operations.

Although we have entered into a tax sharing agreement with Compuware under which our tax liabilities effectively will be determined as if we were not part of any consolidated, combined or unitary tax group of Compuware and/or its subsidiaries, we nonetheless could be held liable for the tax liabilities of other members of these groups.

Until December 31, 2012, the Covisint business operated as a division of Compuware and, as a division, our operations were included in the tax returns filed by Compuware’s consolidated group ("Consolidated Group"), for U.S. federal income tax purposes, as well as in certain consolidated, combined or unitary groups that include Compuware and/or certain of its subsidiaries, or Combined Group, for taxes other than U.S. federal income taxes. Effective January 1, 2013, Compuware made a contribution to us of substantially all of the assets and liabilities relating to our business and, as a member of the Consolidated Group, our operations have been included in the Consolidated Group. Effective that date, we also entered into a tax sharing agreement with Compuware. Pursuant to the tax sharing agreement, we and Compuware generally will make payments to each other such that, with respect to tax returns for any taxable period in which we or any of our subsidiaries were included in the Consolidated Group or any Combined Group, the amount of taxes to be paid by us will be determined, subject to certain adjustments, as if we and each of our subsidiaries included in such Consolidated Group or Combined Group filed our own consolidated, combined, unitary or separate tax return. Following Compuware’s complete disposition of their Covisint shares on October 31, 2014, the tax sharing agreement should effectively end following the actual filing of Covisint’s final tax returns as a member of the Compuware Consolidated Group. However, until the various statutes of limitations of expire on all the periods in which Covisint was a member of the Compuware Consolidated Group the tax sharing agreement remains relevant.

Our inability to resolve favorably any disputes that arise between us and Compuware with respect to our past relationships may adversely affect our operating results.

Disputes may arise between Compuware and us in a number of areas relating to our past relationships, including labor, tax, employee benefit, indemnification and other matters arising from our separation from Compuware. We may not be able to resolve potential conflicts, on favorable terms.

Risks Related to Our Common Stock

We are an “emerging growth company” within the meaning of the Securities Act, and as such, we will take advantage of certain modified disclosure requirements.

As a public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of The NASDAQ Stock Market and other applicable securities rules and regulations. The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and operating results. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.

However, we are an “emerging growth company” within the meaning of the rules under the Securities Act. For as long as we remain an emerging growth company, we may take advantage of certain exemptions from various reporting requirements that are applicable to public companies that are not emerging growth companies, including not being required to comply with the independent auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We intend to take advantage of these reporting exemptions until we are no longer an emerging growth company. We will remain an “emerging growth company” for up to five years, although we would cease to be an “emerging growth company” upon the earliest of (i) the first fiscal year following the fifth anniversary of the IPO, (ii) the first fiscal year after our annual gross revenues are $1 billion or more, (iii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt securities, and (iv) the date on which we are deemed to be a “large accelerated filer” as defined in the Exchange Act. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies-JOBS Act” in Item 7 of this Annual Report.

We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock.

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The share price of our common stock is likely to be volatile and could decline.

Prior to the IPO, there had been no public market for our common stock. An active public market for these shares may never develop or be sustained, which could affect your ability to sell your shares and could depress the market price of your shares. The IPO price for the shares of our common stock was determined by negotiations between us and the representatives of the underwriters and has not been indicative of prices that have since prevailed in the trading market. The market price of our common stock, has been, and could continue to be subject to wide fluctuations in response to many risk factors described in this report, and others beyond our control, including:

Actual or anticipated fluctuations in our condition and operating results;

Changes in projected operational and financial results;

Addition or loss of significant customers;

Changes in laws or regulations applicable to our business;

Actual or anticipated changes in our growth rate relative to our competitors;

Announcements of technological innovations or new offerings by us or our competitors;

Additions or departures of key personnel;

Issuance of new or updated research or reports by securities analysts;

Fluctuations in the valuation of companies perceived by investors to be comparable to us;

The expiration of contractual lock-up agreements; and

General economic, legal, regulatory and market conditions unrelated to our performance.

In addition, if the general stock market experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, financial condition or results of operations.

In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could harm our business.

We have a securities class action lawsuit against us that may result in an adverse outcome.   

We are currently subject to a securities class action lawsuit. Adverse outcomes in this lawsuit may result in significant monetary damages or injunctive relief that could adversely affect our ability to conduct our business. The litigation and other claims are subject to inherent uncertainties and management’s view of these matters may change in the future. A material adverse impact on our consolidated financial statements could occur for the period in which the effect of an unfavorable final outcome becomes probable and reasonably estimable.

We do not anticipate paying any dividends on our common stock.

We do not anticipate paying any cash dividends on our common stock in the foreseeable future. If we do not pay cash dividends, you could receive a return on your investment in our common stock only if the market price of our common stock has increased when you sell your shares.

If securities or industry analysts do not publish research or reports about our business, or publish inaccurate or unfavorable research reports about our business, our share price and trading volume could decline.

The trading market for our common stock will, to some extent, depend on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade our shares or change their opinion of our shares, our share price would likely decline. If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.

Our articles of incorporation and bylaws as well as certain provisions of Michigan law may have an anti-takeover effect.

Provisions of our articles of incorporation and bylaws and Michigan law could make it more difficult for a third party to acquire us, even if doing so would be perceived to be beneficial to shareholders. The combination of these provisions inhibits a non-negotiated acquisition, merger or other business combination involving our company, which, in turn, could adversely affect the market price of our common stock.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

We maintain our principal offices at 26533 Evergreen Road, Suite 500, Southfield, Michigan, which is leased under an 11 year lease of 33,786 square feet of space. We have also entered into stand-alone operating lease agreements for office space in Shanghai, China, Frankfurt, Germany, London, England and San Francisco, California.

ITEM 3. LEGAL PROCEEDINGS

Beginning on May 30, 2014, two putative class actions were filed in the U.S. District Court for the Southern District of New York against us, our directors and former directors, and certain of our officers and former officers alleging violation of securities laws in connection with our IPO and seeking unspecified damages. These lawsuits have been consolidated. On October 14, 2014, the lead plaintiff filed a consolidated class action complaint (the “Complaint”) alleging violations of Regulation S-K and Sections 11 and 15 of the Securities Act. The Complaint alleges, among other things that the IPO’s registration statement contained (1) untrue statements and omissions of material facts related to the Company’s projected revenues for fiscal 2014, (2) materially inaccurate statements regarding the Company’s revenue recognition policy, and (3) omissions of known trends, uncertainties and significant risk factors as required to be disclosed by Regulation S-K. The Company has filed a motion to dismiss the Complaint. We believe the Complaint is without merit, and we intend to continue to vigorously defend it.  The results of legal proceedings, however, cannot be predicted with certainty. Should we fail to prevail in this legal matter, our financial condition and results of operations could be materially adversely affected. We currently have no other pending litigation.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS

Our common stock is traded on The NASDAQ Global Select Market (“NASDAQ”) under the symbol COVS. As of May 12, 2015, there were 2,982 shareholders of record and approximately 2,396 beneficial holders of our common stock. The following table sets forth the range of high and low sale prices for our common stock for the periods indicated, all as reported by NASDAQ.

Fiscal Year Ended March 31, 2015	High		Low
Fourth quarter	$	2.65	$	1.92
Third quarter	4.46		2.06
Second quarter	5.29		3.78
First quarter	7.39		4.31

There were no repurchases of common stock for the year ended March 31, 2015.

Dividends

We have never paid any cash dividends on our common stock and have no current intention to do so.

Unregistered Sales of Equity Securities

None.

Issuer Purchases of Equity Securities

There were no repurchases of common stock for the year ended March 31, 2015.

Stock Performance Graph - Comparison of Cumulative Total Return

The following line graph compares the yearly percentage change in the cumulative total shareholder return on our common stock with the cumulative total return of each of the NASDAQ Market Index and the NASDAQ Computer and Data Processing Index for the period from September 26, 2013, the first day of trading in connection with our IPO, through March 31, 2015. The graph assumes the investment of $100 in our common stock and each of the two NASDAQ indices on September 26, 2013 and the reinvestment of all dividends.

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The comparisons in the graph are required by applicable rules promulgated by the Securities and Exchange Commission (“SEC”). You should be careful about drawing any conclusions from the data contained in the graph, because past results do not necessarily indicate future performance. The information contained in this graph shall not be deemed to be "soliciting material" or "filed" with the SEC or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that we specifically incorporate it by reference into a document filed under the Securities Act or the Exchange Act.

ITEM 6. SELECTED FINANCIAL DATA AND NON-U.S. GAAP FINANCIAL MEASURES

The following combined and consolidated financial data should be read together with our financial statements and related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” at Item 8 and 7, respectively, of this Annual Report. The historical results presented here are not necessarily indicative of future results.

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	YEAR ENDED MARCH 31,
	2015			2014			2013			2012			2011
REVENUE	$88,534			$97,135			$90,732			$	74,675		$	54,154
COST OF REVENUE (1)	66,404			56,374			47,575			41,477			27,501
GROSS PROFIT	22,130			40,761			43,157			33,198			26,653
OPERATING EXPENSES:
Research and development	10,416			12,408			3,799			1,341			1,687
Sales and marketing (2)	32,593			35,250			26,593			22,544			16,571
Administrative and general	17,640			28,676			18,315			12,583			10,288
Total operating expenses	60,649			76,334			48,707			36,468			28,546
OPERATING LOSS	(38,519		)	(35,573		)	(5,550		)	(3,270		)	(1,893		)
Other Income	69			—			—			—			750
INCOME (LOSS) BEFORE INCOME TAX PROVISION	(38,450		)	(35,573		)	(5,550		)	(3,270		)	(1,143		)
INCOME TAX PROVISION	112			85			98			57			132
NET INCOME (LOSS)	($38,562)			($35,658)			($5,648)			$	(3,327	)	$	(1,275	)
Basic and diluted earnings (loss) per share	$	(1.01	)	$	(1.06	)	$	(0.19	)	$	(3.33	)	$	1.27

(1) Cost of revenue in FY15 includes an $8.3 million impairment of capitalized software costs.

(2) Sales and marketing expense in FY15 includes a $0.5 million impairment of healthcare customer relationships.

Consolidated Balance Sheet Data

	March 31, 2015		March 31, 2014
Cash		$50,077		$49,536
Working Capital	38,851		55,296
Total Assets	121,842		141,448
Due to/(from) parent and affiliates	—		(2,813		)
Total Shareholders' Equity	81,347		101,610

In addition to reporting financial results in accordance with accounting principles generally accepted in the United States (”U.S. GAAP"), we monitor the following other metrics to evaluate our business, measure our performance, identify trends affecting our business, allocate capital and make strategic decisions.

Adjusted Gross Profit and Adjusted Gross Margin

Adjusted gross profit represents gross profit, adjusted for amortization and impairment of capitalized software associated with our research and development expense classified within cost of revenue as well as the stock based compensation associated with certain of our professional services and operations employees. Adjusted gross margin is adjusted gross profit as a percentage of revenue.

We have historically capitalized a significant portion of our research and development costs. Our total research and development costs incurred were $13.9 million, $18.1 million and $17.4 million during the years ended March 31, 2015, 2014 and 2013, respectively. Of our total research and development costs incurred, we capitalized 25%, 31% and 78% during the years ended March 31, 2015, 2014 and 2013, respectively. The decreased capitalization of our research and development costs during fiscal 2014 and fiscal 2015, as compared to fiscal 2013, was a result of a change to the agile delivery methodology for Platform enhancements, which resulted in significantly shorter development cycles thereby reducing our capitalized costs. This change increased the proportion of our research and development costs expensed relative to our research and development costs incurred.

We believe that adjusted gross margin, when viewed with our results under U.S. GAAP and the accompanying reconciliations, provides additional information that is useful for evaluating our operating performance. Additionally, we believe that adjusted

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gross margin provides a more meaningful comparison of our operating results against those of other companies in our industry. We believe that including these omitted costs in our results of operations results in a lack of comparability between our operating results and those of our peers in the industry, the majority of which do not have comparable amortization costs related to capitalized software. However, adjusted gross margin is not a measure of financial performance under U.S. GAAP and, accordingly, should not be considered as an alternative to gross margin as an indicator of operating performance.

In the periods presented, the amortization of capitalized software increased in absolute dollars and as a percentage of revenue. We expect this trend to continue in fiscal 2016 and to have a negative impact on our gross profit and margin as reported under U.S. GAAP. In the future, we expect to continue to capitalize a smaller portion of our research and development costs due to the change to the agile delivery methodology for Platform enhancements.

The table below provides reconciliations between the non-U.S. GAAP financial measures discussed above to the comparable U.S. GAAP measures of gross profit:

	YEAR ENDED MARCH 31,
	2015			2014			2013
Gross profit	$	22,130		$	40,761		$	43,157
Gross margin	25		%	42		%	48		%
Adjustments:
Stock compensation expense—cost of revenue	613			829			6
% of total revenue	1		%	1		%	—		%
Amortization and impairment of capitalized software—cost of revenue	15,079			6,753			4,950
% of total revenue	17		%	7		%	5		%
Non-U.S. GAAP gross profit	37,822			48,343			48,113
Non-U.S. GAAP gross margin	43		%	50		%	53		%

New Annualized Subscription Revenue ("ASR")

Due to the nature of the subscription-based revenue model, a significant portion of the revenue we report in each quarter is generated from customer agreements entered into during previous periods. Therefore, since changes in business momentum are not immediately reflected in our results of operations, we look towards additional metrics such as new ASR that includes recently added or expanded customer subscription revenue to assess progress within our business.

We define new ASR as the annualized value of new committed subscription revenue for new contracts and incremental committed subscription revenue for renewed contracts signed within the given period. We calculate new ASR for each new contract signed within a given period by dividing the total committed subscription revenue by the number of months under contract and multiplying that figure by the lesser of twelve or the number of months included in the agreement. We then add to this amount any long-term increase in committed subscription revenue under existing contracts renewed during that period.

New ASR is presented in the table below:

	YEAR ENDED MARCH 31,
	2015		2014		2013
			(In thousands)
New ASR	$	14,374	$	8,149	$	15,011

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes that appear in Item 8 in this Annual Report. In addition to historical financial information, the information we provide or statements made by our employees contains forward-looking statements that reflect our plans, estimates, assumptions and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and Item 1A of this Annual Report under "Risk Factors." Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies and operations, financing plans, potential growth opportunities, potential market

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opportunities and the effects of competition. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “anticipates,” “believes,” “could,” “seeks,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions and the negatives of those terms. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management’s plans, estimates, assumptions and beliefs only as of the date of this report. Except as required by law, we assume no obligation to update these forward-looking statements publicly or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

Overview

Covisint provides an open, developer friendly, enterprise class cloud platform (“Platform”) enabling organizations to build solutions that quickly and securely identify, authenticate and connect users, devices, applications and information. Our Platform has been successfully operating globally on an enterprise scale for over 12 years, and is the technology behind innovative industry solutions such as Hyundai's Blue Link^TM and Cisco's Services Exchange Platform^TM.

Our Platform provides a robust, and highly-secure cloud-based business-to-business ("B2B") exchange for automotive supply chains, providing the right information and access to the right person at the right time. This resulted in the development of unique and tightly-integrated technologies for identity management, messaging and portal services, which we offer as a Platform-as-a-Service ("PaaS"). We believe that we are well positioned in the PaaS marketplace to deliver on IoT and identity-centric solutions.

Fiscal 2015 was a transformational year for Covisint. During fiscal 2015, Covisint executed on a number of strategic initiatives to enhance its long-term outlook. First, it applied its research and development investment toward to enabling our enterprise-grade, cloud-based PaaS to be easily deployed, in any data center globally, with a robust third-party developer environment for partners and third-parties to easily build on and extend the Platform. Next, we significantly reduced our services business by developing relationships with service partners who are qualified to set up, develop and implement solutions based upon the Platform’s technology. As a result of the shift away from providing services, Covisint’s services revenue declined from $30.4 million or 31% of fiscal 2014 revenue to $22.2 million or 25% of fiscal 2015 revenue.

Further, Covisint reevaluated its underperforming healthcare portfolio and decided to stop selling its DocSite application to new customers and not to renew existing customers. Moreover, we understand that AT&T has shifted the strategy of its healthcare business, and accordingly, AT&T is no longer reselling the Company’s Platform or application-based products.

As a result of these strategic decisions, revenue from the Company’s healthcare business gradually decreased during fiscal 2015, and we expect our healthcare revenue to account for less than 20% of the Company’s revenue in fiscal 2016. In addition, the Company determined that its previously capitalized software development costs related to segments of the healthcare business and an intangible asset related to acquired DocSite customer relationships were impaired and recorded an $8.8 million impairment in fiscal 2015. In conformity with these strategic initiatives, we reorganized our expense structure. The reduction in service revenue enabled the Company to reduce its employee count by approximately 200 as compared to fiscal 2014 and the Company recorded $0.3 million as severance as of March 31, 2015.

Moreover, in fiscal 2015, we significantly advanced our strategic partnership with Cisco. Following entry into our Software License and Hosting Agreement in November 2013, we have worked with Cisco to integrate our Platform with Cisco applications to build the Cisco Service Exchange Platform (“SPX”). In January and April 2015, we enabled Cisco to enter into the prime contract with GM to provide most of the service that we historically provided to GM. With Cisco’s involvement, we were able to extend the terms of each contract through April 2020 and eliminate GM’s ability to terminate these agreements for convenience. We retain our deep relationships with GM, and we are actively working to sell additional business to GM.

Finally, on October 31, 2014, our former parent, Compuware, completed its spinoff of its 31,384,920 shares of Covisint common stock to Compuware shareholders, making Covisint a fully publicly-traded company. In October 2014, Covisint and Compuware amended their tax sharing agreement to provide that Covisint agree in writing to make a joint election under §336(e) of the Internal Revenue Code with Compuware. Under §336(e) for federal income tax purposes, Covisint is treated as if it sold all of its assets at fair market value. As a result of the §336(e) election, Covisint will receive a step up in its tax basis in its assets to fair market value as of October 31, 2014, the day Covisint ceased to be a member of the Compuware Consolidated Group. Covisint will amortize its new basis to provide future tax deductions that would offset any future taxable income. Given Covisint’s historical loss position, there is a full valuation allowance preventing the recognition of any potential deferred tax asset.

We generate the majority of our revenue through subscription fees that enable our customers to access our Platform. Subscription and support revenue accounted for $66.3 million, $66.7 million and $57.0 million, or 75%, 69% and 63% of our total revenue, during the years ended March 31, 2015, 2014 and 2013, respectively. We also generate revenue from the provision of services related to implementation, solution deployment and on-boarding of new customers onto our Platform. Services revenue

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accounted for $22.2 million, $30.4 million and $33.8 million, or 25%, 31% and 37% of our total revenue, during the years ended March 31, 2015, 2014 and 2013, respectively.

The automotive industry accounted for 45%, 47% and 56% of our total revenue for the years ended March 31, 2015, 2014 and 2013, respectively, of which approximately 30%, 26% and 33% of our total revenue for such periods was derived from General Motors. The healthcare industry accounted for 32%, 34% and 31% of our total revenue in the years ended March 31, 2015, 2014 and 2013, respectively. Our remaining revenue resides in the enterprise business unit that services the energy, financial services, travel and other non-automotive and non-healthcare industries. Revenue from outside of the U.S. accounted for 14%, 14% and 15% of our total revenue in the years ended March 31, 2015, 2014 and 2013, respectively. Our subscription and support revenue was $66.3 million in the year ended March 31, 2015 compared to $66.7 million in the year ended March 31, 2014, representing an annual decline of 1%.

To support our growth strategies and capitalize on current technology trends, we are actively investing in our business and do not expect to be profitable during fiscal 2016. We experienced net (losses) of $(38.6) million, $(35.7) million and $(5.6) million in the years ended March 31, 2015, 2014 and 2013, respectively. As presented in "Note 7. Benefit Plans" in the accompanying notes to the combined and consolidated financial statements, our loss in fiscal 2014 was due in part to stock compensation expense of $17.5 million in the year ended March 31, 2014, which primarily resulted from our IPO. In addition, we made, and continue to make, substantial investments to build our solutions and services, grow and maintain our business and acquire customers.

COMPONENTS OF OUR RESULTS OF OPERATIONS

Revenue

Our revenue is primarily comprised of fees related to subscription and support and services performed. Subscription and support revenue includes fees for our customers and their users to access our Platform. Our services revenue is generated from implementation, solution deployment and on-boarding. Implementation services typically consist of user migration, content migration, branding and configuration to support customer-specific workflows. Our services engagements typically occur in phases and can vary from a few weeks to several months depending on the scope and complexity of the solution. Our customers may choose to do much of this work in-house, through a third party or with Covisint. We currently subcontract portions of our service engagements to third-party service partners to supplement our staffing needs within this area of the business.

Services contract value varies significantly for each customer agreement. It is affected by a number of trends which make the prediction of our future services revenue difficult. These trends include, but are not necessarily limited to improvements in our Platform that make it easier for our customers to build and launch new business process innovations on the Platform, and a reduction in the effort required to launch the customer. Furthermore, since the recognition of services revenue may require acceptance by the customer, the timing of the revenue recognition may shift between fiscal periods.

Our revenue generally fluctuates, and we expect it to continue to fluctuate, between periods due to inconsistent timing of sales, revenue recognition requirements (e.g., acceptance), changes in customer requirements and other factors. As a result, transactions that were expected to be recognized in one period may be recognized in a different period, which may materially affect our financial performance in a reporting period.

Cost of Revenue

Our cost of revenue is primarily comprised of salaries and personnel-related expenses related to our customer support, implementation, solution deployment, on-boarding and data center operations, the cost of professional services provided by third-party contractors, depreciation, amortization and impairment expenses related to capitalized research and development, acquisitions and capital expenditures, third-party hosting fees, third-party software license fees and outside services related to our call center. Where we have established third-party evidence of the stand-alone value of our services, we recognize expense with the associated revenue recognition as services are delivered. Costs associated with deferred services revenue are recognized ratably, generally over five years, beginning upon customer acceptance of the deliverable consistent with the associated revenue.

We expect our cost of revenue may fluctuate as a percentage of total revenue due to relative changes in our services revenue, changes in the percentage of services recognized using the proportional performance method, the amount and timing of depreciation and amortization, changes in the amount of services performed by our customers or other vendors and the mix of subscription and support revenue relative to services revenue.

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Research and Development

Research and development costs are primarily comprised of salaries and personnel-related expenses, services provided by third-party contractors related to software development, software license and hardware fees and depreciation and amortization related to acquisitions and capital expenditures.

We focus our research and development on new and expanded features of our Platform and vertical-specific solutions. Since February 2010, when we implemented additional tracking related to the time spent on approved research and development projects, we have capitalized an increasing portion of our research and development costs. We capitalized a smaller portion of our research and development costs in fiscal 2014 and 2015 as a result of the change to the agile delivery methodology for our Platform enhancements, which resulted in significantly shorter development cycles thereby reducing our capitalized costs. Our capitalized research and development costs are amortized as a cost of revenue ratably over 60 months upon completion of the project. We expect research and development costs incurred to decrease in the future as a percentage of revenue.

Sales and Marketing

Sales and marketing costs are primarily comprised of salaries and personnel-related expenses, commissions, travel expense, marketing program fees, services provided by third-party contractors related to our marketing campaigns and amortization related to customer relationship agreements acquired as a result of various acquisitions. We plan to invest further in sales and marketing to create brand awareness, expand the scope and scale of our global operations, develop our sales channel and increase revenue from existing customers. We expect sales and marketing costs to increase in fiscal 2016 as a percentage of total revenue.

General and Administrative

Prior to fiscal 2015, general and administrative costs were primarily comprised of the allocated costs related to the services provided by our former parent Compuware for facilities, information technology, tax, internal audit, accounting, finance, human resources, legal and other services, as well as salaries and personnel-related expenses including stock and cash incentive compensation. Effective April 1, 2014, we completed our general and administrative separation from Compuware by assuming stand-alone finance, information technology, human resources, legal, and internal audit functions.

Income Taxes

Provision for income taxes is comprised of federal and state taxes in the United States as well as certain foreign tax jurisdictions. Income taxes are accounted for using the asset and liability approach. Deferred income taxes are provided for the differences between the tax bases of assets or liabilities and their reported amounts in our financial statements and net operating loss and tax credit carryforwards.

RESULTS OF OPERATIONS

The following table is a summary of our combined and consolidated statements of loss data:

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	YEAR ENDED MARCH 31,
	2015		2014		2013
Combined and Consolidated Statements of Comprehensive Loss Data:
Subscription and support	$66,283		$66,688		$56,978
Services	22,251		30,447		33,754
Total revenue	88,534		97,135		90,732
Cost of revenue(1)	66,404		56,374		47,575
Gross profit	$22,130		$40,761		$43,157
Operating expenses:
Research and development(1)	10,416		12,408		3,799
Sales and marketing(1)	32,593		35,250		26,593
General and administrative(1)	17,640		28,676		18,315
Total operating expenses	$60,649		$76,334		$48,707
Other Income	69		—		—
Loss from operations before income tax provision	(38,450	)	(35,573	)	(5,550	)
Income tax provision	112		85		98
Net loss	($38,562)		($35,658)		($5,648)
Basic and diluted loss per share(2)	($1.01)		($1.06)		($0.19)
Weighted-average shares outstanding, Basic and diluted(2)	38,217		33,774		30,003

(1) All future stock compensation is expected to be granted in the form of Covisint stock awards and recorded as a non-cash expense. The statements and line items above include stock compensation as detailed in the table below. Cost of revenue in FY15 includes an $8.3 million impairment of capitalized software costs. Sales and marketing in FY15 includes a $0.5 million impairment of healthcare customer relationships.

(2) Please see Note 3 of our combined and consolidated financial statements and related disclosures for an explanation of the method used to calculate the historical net income (loss) per share attributable to common shareholders and the number of shares used in computation of the per share amounts.

	YEAR ENDED MARCH 31,
	2015		2014		2013
Stock awards compensation classified as:
Cost of revenue		$613		$829		$6
Research and development	175		722		1
Sales and marketing	1,570		5,594		360
General and administrative	3,874		10,330		1,262
Total stock awards compensation expense before income taxes		$6,232		$17,475		$1,629

The following table sets forth a summary of our combined and consolidated statements of comprehensive loss as a percentage of our total revenue:

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	YEAR ENDED MARCH 31,
	2015		2014		2013
Combined and Consolidated Statements of Comprehensive Loss Data:
Subscription and support	75	%	69	%	63	%
Services	25		31		37
Total revenue	100	%	100	%	100	%
Cost of revenue(1)	75		58		52
Gross profit	25	%	42	%	48	%
Operating expenses:
Research and development(1)	12		13		4
Sales and marketing(1)	37		36		30
General and administrative(1)	20		30		20
Total operating expenses	69	%	79	%	54	%
Loss from operations before for income tax provision	(43	)	(37	)	5
Income tax provision	0		0		0
Net loss	(43	)%	(37	)%	5	%

________________________________________________ 

(1) All future stock compensation is expected to be granted in the form of Covisint stock awards and recorded as a non-cash expense. Refer to the table above for the breakdown of stock compensation included in these line item percentages.

YEARS ENDED MARCH 31, 2015, 2014 and 2013

Revenue

Revenue derived from our subscription and support and services is presented in the table below:

	YEAR ENDED MARCH 31,						2014 to 2015		2013 to 2014
	2015		2014		2013		%		%
	(In thousands)
Subscription and support		$66,283		$66,688		$56,978	(1	%)	17	%
Services	22,251		30,447		33,754		(27	)%	(10	)%
Total revenue		$88,534		$97,135		$90,732	(9	%)	7	%

Our total revenue decreased to $88.5 million for the year ended March 31, 2015 from $97.1 million and $90.7 million in the years ended March 31, 2014 and 2013, respectively, representing a 9% decline in revenue from 2014 to 2015 and a 7% increase from 2013 to 2014.

Subscription revenue was $66.3 million for the year ended March 31, 2015 as compared to $66.7 million and $57.0 million for the years ended March 31, 2014 and 2013, respectively, representing an annual decrease of 1% in fiscal 2015 and an increase of 17% in fiscal year 2014, respectively. There was a decline in our healthcare subscription revenue of approximately $7 million in fiscal year 2015 as compared to fiscal year 2014 due to our strategy of shifting away from developing and selling applications that require significant amounts of services to implement. The impact of this decline in fiscal year 2015 was partially offset by new subscription revenue from a strategic channel partner and other new business. The increase in subscription revenue in fiscal year 2014 from fiscal year 2013 was primarily due to an increase in revenues with existing customers and an increase in PQRS revenue.

Our services revenue declined to $22.2 million for the year ended March 31, 2015, as compared to $30.4 million and $33.8 million for the years ended March 31, 2014 and 2013, respectively, representing an annual decline of 27% in fiscal year 2015, and a decrease of 10% in fiscal year 2014, respectively. For the year ended March 31, 2015 the decline in services revenue are attributed to: 1) our decision to shift away from developing and selling applications that require significant amounts of services to implement; 2) a natural reduction in the deferred revenue recognized in the current period compared to last year due to a diminished balance remaining from the establishment of stand-alone value for many of our services; 3) a reduction in ad hoc service projects with major subscription customers; 4) an improvement in the ease of implementation of our Platform that results

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in quicker, less costly installations; and 5) improvements in our Platform that allow customers to perform portions of the implementation themselves.

Our services revenue declined to $30.4 million for the year ended March 31, 2014, as compared to $33.8 million for the year ended March 31, 2013 representing an annual decline of 10% from fiscal 2013 to fiscal 2014. For the year ended March 31, 2014, the services revenue decline can be attributed to: (1) a natural reduction in the deferred revenue recognized in the current period versus last year due to a diminished balance remaining from the establishment of stand-alone value for many of our services, (2) a reduction in ad hoc services projects with major subscription customers, (3) an improvement in the ease of implementation of our Platform that results in quicker/less costly installations, (4) improvements in our Platform that allow customers to perform portions of the implementation themselves, and, to a lesser extent, (5) our relatively low subscription bookings in fiscal 2014.

Cost of Revenue

Cost of revenue is presented in the table below:

	YEAR ENDED MARCH 31,									2014 to 2015		2013 to 2014
	2015			2014			2013			%		%
	(In thousands)
Cost of revenue		$66,404			$56,374			$47,575		18	%	18	%
Gross margin	25		%	42		%	48		%

Cost of revenue increased $10.0 million for the year ended March 31, 2015 as compared to the same period in 2014, largely as the result of an $8.3 million impairment of previously capitalized software costs related to software projects associated with our healthcare customer service offering, which we decided to gradually exit in 2015. Our gross margin decreased for the year ended March 31, 2015 as compared with the same period in 2014 primarily due to the aforementioned impairment charge.

Cost of revenue increased $8.8 million for the year ended March 31, 2014, as compared to the year ended March 31, 2013, primarily due to an increase in revenue. Cost increases included an increase of $13.3 million in salaries and personnel-related expenses in connection with our customer support, implementation, solution deployment, on-boarding and data center operations fees. This increase was offset by a decrease of $8.8 million paid to Compuware and other third-party contractors to perform services on our behalf, primarily as a result of the transition of most Compuware personnel to Covisint during the year ended March 31, 2013. Cost increases also included an increase of $0.8 million in stock compensation expense.

Research and Development

Research and development costs incurred, expensed and capitalized are presented in the table below:

	YEAR ENDED MARCH 31,									2014 to 2015		2013 to 2014
	2015			2014			2013			%		%
	(In thousands)
Research and development costs incurred		$13,925			$18,104			$17,378		(23	%)	4	%
Capitalized internal software costs	(3,509		)	(5,696		)	(13,579		)	(58	)	(58	)
Research and development costs expensed		$10,416			$12,408			$3,799		(16	%)	227	%
Percentage of total revenue:
Research and development costs incurred	16		%	19		%	19		%
Research and development costs expensed	12		%	13		%	4		%

Research and development costs incurred declined for the year ended March 31, 2015, as compared to the same period in 2014, primarily due to a $4.9 million decrease in development costs as a result of our decision to cease significant investment in our healthcare application business, which required a high level of customized research and development investment. Expense declines also include a decrease of $0.5 million in stock compensation expense. We capitalized $3.5 million and $5.7 million of

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research and development costs for the years ended March 31, 2015 and 2014, respectively. The decreased capitalization of our research and development costs for the year ended March 31, 2015 as compared to the same period in 2014 was due to continued reduction in development cycle times which reduced our capitalized costs. This change increased the proportion of our research and development costs expensed relative to our research and development costs incurred.

Research and development costs incurred increased for the year ended March 31, 2014, as compared to the same period in 2013, primarily due to a $4.6 million increase in salaries and personnel-related expenses offset by a $5.4 million decrease in fees paid to Compuware and other third-party contractors for software development activities. The decline in fees paid to Compuware and other third-party contractors and increase in salaries and personnel-related expenses was primarily the result of the transition of most Compuware personnel to Covisint during the year ended March 31, 2013. Cost increases also include an increase of $0.7 million in stock compensation expense. We capitalized $5.7 million and $13.6 million of research and development costs during the years ended March 31, 2014 and 2013, respectively.

We decreased capitalization of our research and development costs for the year ended March 31, 2014 as compared to the same period in 2013 due to a recent change to the agile delivery methodology for Platform enhancements, which resulted in significantly shorter development cycles thereby reducing our capitalized costs. This change increased the proportion of our research and development costs expensed relative to our research and development costs incurred.

Sales and Marketing

Sales and marketing costs are presented in the table below:

	YEAR ENDED MARCH 31,									2014 to 2015		2013 to 2014
	2015			2014			2013			%		%
	(In thousands)
Sales and marketing		$32,593			$35,250			$26,593		(8	%)	33	%
Percentage of total revenue	37		%	36		%	30		%

Sales and marketing costs decreased for the year ended March 31, 2015, as compared to the same period in 2014, primarily due to a $4.0 million decrease in stock compensation expense, partially offset by a $0.7 million increase in depreciation and amortization expense. Depreciation and amortization expense in the year ended March 31, 2015 was affected by the impairment of customer relationship intangibles related to the DocSite business resulting in an increase to expense of $0.5 million.

Sales and marketing costs increased for the year ended March 31, 2014 as compared to the same period in 2013 due to a $5.2 million increase in stock compensation expense and a $2.5 million increase in salaries and personnel-related expenses.

General and Administrative

General and administrative costs are presented in the table below:

	YEAR ENDED MARCH 31,									2014 to 2015		2013 to 2014
	2015			2014			2013			%		%
	(In thousands)
General and administrative		$17,640			$28,676			$18,315		(38	%)	57	%
Percentage of total revenue	20		%	30		%	20		%

General and administrative costs decreased by $11 million for the year ended March 31, 2015, as compared to the same period in 2014. There was a decline in costs in fiscal year 2015 as a result of the company successfully building our own legal, finance and human resources functions, which was complete as of April 1, 2014. Prior to April 1, 2014 general and administrative costs included allocated expenses from Compuware, while the current fiscal year reflect general and administrative costs incurred as a stand-alone company. In addition there was a $6.5 million decrease in stock compensation expense in fiscal 2015.

General and administrative costs increased for the year ended March 31, 2014, as compared to same period in 2013, primarily due to an increase of $9.1 million increase in stock compensation expense in correlation with the Company's IPO.

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CRITICAL ACCOUNTING POLICIES

Basis of Presentation

The financial statements included in Item 8 of this Annual Report do not reflect any changes that may occur in our future financing and operations. Our financial statements have been prepared in conformity with U.S. GAAP, which requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, shareholders' equity and the disclosure of contingencies at the applicable balance sheet date and the results of operations for all periods presented. While we have based our assumptions and estimates on the facts and circumstances existing at March 31, 2015, 2014 and 2013, respectively, final amounts may differ from estimates. Note 1 of the consolidated financial statements included in this report contains a summary of our significant accounting policies.

Effective January 1, 2013, Compuware contributed substantially all of the assets and liabilities related to the Covisint business to us (the “January 2013 Contribution”). Prior to the contribution, we operated as a division within Compuware. Our financial statements reflect the assets, liabilities, revenue and expenses that were directly attributable to us as we operated within Compuware prior to January 1, 2013 and have been derived from the consolidated financial statements and accounting records of Compuware using the historical results of operations and historical basis of assets and liabilities for the Covisint operations of Compuware and as if the contribution had occurred at the commencement of Covisint operations. The historical financial results may not be indicative of the results that would have been achieved had we operated as a separate, stand-alone entity.

Prior to January 1, 2013, “group equity” was shown in lieu of shareholders' equity in our audited financial statements. All significant transactions between Compuware and the Company were included in our financial statements and were deemed settled in cash. The net effect of the settlement of these intercompany transactions is reflected in the combined and consolidated statements of cash flows as a financing activity and in the “group equity” in the combined and consolidated balance sheets. From January 1, 2013 until the IPO, Compuware provided Covisint with short-term, non-interest bearing operating cash advances. The net effect of these intercompany transactions is reflected in the statements of cash flows as financing activity and in “due to/from parent and affiliates” in the consolidated balance sheets.

Prior to fiscal 2015, our financial statements include an allocation of certain corporate expenses including costs for facilities, information technology, tax, internal audit, accounting, finance, human resources, legal and executive management functions provided by Compuware. These allocations were primarily based on headcount, revenue and space occupied as a proportion of those in all Compuware operating units. We believe the allocations are reasonable. However, the expenses allocated to us for these services are not necessarily indicative of the expense that would have been incurred if we had been a separate, independent entity and had otherwise managed these functions. Corporate expenses charged to the Company are included in the “administrative and general” line item in the statements of comprehensive loss. The increase in allocation costs in fiscal 2014 was primarily due to costs associated with establishing Covisint as an independent entity. All such costs and expenses have, prior to January 1, 2013, been deemed to have been contributed by Compuware to us in the period in which the costs were recorded. Prior to January 1, 2013, allocations of current income taxes are deemed to have been remitted, in cash, to Compuware in the period the related income taxes were recorded. In connection with the contribution, Compuware and the Company have entered into a tax sharing agreement. Pursuant to this agreement the amount of taxes to be paid by us were determined, subject to certain adjustments, as if we and each of our subsidiaries included in such Consolidated Group or Combined Group filed our own consolidated, combined, unitary or separate tax return. We reimbursed Compuware, or were reimbursed by Compuware, for intercompany transactions subsequent to January 1, 2013 through the October 2014 Distribution. These costs and expenses have been deemed advances and have been recorded within the due from or due to parent and affiliates balance within the balance sheets.

JOBS Act

On April 5, 2012, the Jumpstart Our Business Startups ("JOBS") Act was signed into law. The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for an “emerging growth company.” As an “emerging growth company,” we are electing to not take advantage of the extended transition period afforded by the JOBS Act for the implementation of new or revised accounting standards, and, as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that our decision to not take advantage of the extended transition period for complying with new or revised accounting standards is irrevocable. In addition, we are in the process of evaluating the benefits of relying on the other exemptions and reduced reporting requirements provided by the JOBS Act.

Subject to certain conditions set forth in the JOBS Act, if as an “emerging growth company” we choose to rely on such exemptions, we may not be required to, among other things: (1) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (2) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Act, (3) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board ("PCAOB") regarding mandatory audit firm rotation or a

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supplement to the auditor’s report providing additional information about the audit and our audited financial statements (auditor discussion and analysis) and (4) disclose certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of the Chief Executive Officer’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our IPO or until we no longer meet the requirements of being an “emerging growth company,” upon the earlier of (i) the first fiscal year after our annual gross revenues are $1 billion or more, (ii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt securities, and (iii) the date on which we are deemed to be a “large accelerated filer” as defined in the Exchange Act.

Revenue Recognition

We derive revenue through contracts under which we provide customers services including access to and support of our Platform and services related to implementation, solution deployment and on-boarding. The arrangements do not provide customers the right to take possession of the software at any time, nor do the arrangements contain rights of return. In order for a transaction to be eligible for revenue recognition, the following revenue criteria must be met: persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed and determinable, and collectibility is reasonably assured.

Signed agreements and binding purchase orders are used as evidence of an arrangement. For customers where a purchase order is used as evidence of an arrangement, master terms and conditions exist that govern such arrangements. We assess likelihood of cash collectibility based on a number of factors including past collection history with the customer. If we determine that collectibility is not reasonably assured, we defer the revenue until collectibility becomes reasonably assured, generally upon receipt of cash. We assess whether the fee is fixed and determinable based on the payment terms associated with the transaction and whether the sales price is subject to refund or adjustment. Customers typically have the right to terminate their agreement if we fail to perform.

Our contracts may include subscription fees for ongoing PaaS operations and a project (services) fee. For subscription arrangements that contain multiple elements, in accordance with Accounting Standards Codification ("ASC") Section 605 “Revenue Recognition,” the arrangement consideration is allocated based on relative selling price using the following hierarchy: vendor specific objective evidence ("VSOE"), which represents the price when sold separately, if available; third-party evidence if VSOE is not available; or estimated selling price if neither VSOE nor third-party evidence is available. We are currently unable to establish VSOE or third-party evidence of selling price for our deliverables. Therefore, we determine our best estimate of selling price by evaluating renewal amounts included in a contract, if any, and estimated costs to deliver each element.

Our subscription and support fees are recognized ratably over the applicable service period. Revenue recognition commences on the later of the start date specified in the subscription arrangement, the launch date of the customer’s access to our production environment or when all of the revenue recognition criteria have been met. We consider delivery to have occurred on the launch date, which is the point in time that a customer is provided access to use our Platform.

For projects that do not have stand-alone value, the revenue is deferred and recognized over the longer of the committed term of the subscription agreement (generally one to five years) or the expected period over which the customer will receive benefit (generally five years). Services fees that have stand-alone value are recognized as delivered generally using a proportional performance methodology based on dependable estimates of hours incurred and expected hours to complete since these services are primarily performed on a fixed fee basis. Hours or costs incurred represent a reasonable surrogate for output measures of contract performance, including the presentation of deliverables to the client; therefore, hours or costs incurred are used as the basis for revenue recognition. If it is determined that costs will exceed revenue, the expected loss is recorded at the time the loss becomes apparent.

Deferred Costs

Deferred costs consist of the incremental direct personnel and outside contractor costs incurred in delivering implementation and solutions deployment services that do not have stand-alone value. Revenue from these services, as described above, is deferred and recognized over the longer of the committed term of the subscription agreement or the expected period over which the customer will receive benefit. Therefore, the costs are recognized over the same period as the associated revenue. In the event a customer contract with deferred cost is terminated in whole, or part, the Company recognizes the remainder of the amount recorded in deferred cost attributable to the terminated component of the contract.

Sales commission costs that directly relate to revenue transactions that are deferred are recorded as “prepaid expenses and other current assets” or non-current “other assets”, as applicable, in the balance sheets and recognized as “sales and marketing” expenses in the statements of comprehensive loss over the revenue recognition period of the related transaction.

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Deferred Revenue

Deferred revenue consists of the billed but unearned portion of existing contracts for subscription and services provided and is recognized as services are delivered or over the expected period during which the customer will receive benefit. The Company generally invoices its customers’ subscription fees in annual, quarterly or monthly installments. Contractual time periods often exceed the invoicing period and accordingly, the deferred revenue balance does not represent the total contract value of committed subscription agreements. The portion of deferred revenue that the Company anticipates will be recognized during the succeeding 12-month period is recorded as current deferred revenue and the remaining portion is recorded as non-current deferred revenue. The Company has generally received payment for the services for which the revenue has been deferred. Deferred revenue also includes contracts for which we have a contractually executed agreement and have invoiced the customer under the terms of the executed agreement but have not met all the revenue recognition criteria and/or have concluded that revenue should be recognized on cash basis, as collectibility of the invoiced amounts is not reasonably assured. In the event a customer contract with deferred revenue is terminated in whole, or part, the Company recognizes the remainder of the amount recorded in deferred revenue attributable to the terminated component of the contract.

Capitalized Software

Capitalized software includes the costs of purchased and internally developed software products capitalized in accordance with ASC 350-40, “Internal Use Software,” and software technology purchased through acquisitions and is stated at unamortized cost. In fiscal year 2015, we capitalized a smaller portion of our research and development costs as compared to prior periods as a result of a change to the agile delivery methodology for our Platform enhancements, which is expected to result in significantly shorter development cycles thereby reducing our capitalized costs.

Capitalized and purchased software costs are amortized on a straight-line basis over the expected useful life of the software, which is generally five years. Amortization begins when the software technology is ready for its intended use. Refer to Note 3. Goodwill, Capitalized Software and Intangible Assets for further information.

Capitalized software is reviewed for impairment when events and circumstances indicate such asset may be impaired. If estimated future undiscounted cash flows are not sufficient to recover the carrying value of the capitalized software, an impairment charge is recorded in the amount by which the present value of future cash flows is less than the carrying value of these assets.

Research and Development

For development costs related to our PaaS offering, we follow the guidance set forth in ASC350-40 which requires companies to capitalize qualifying computer software costs, which are incurred during the application development stage. Costs related to preliminary project activities and post-implementation activities are expensed as incurred.

Goodwill and Other Intangible Assets

We are required to assess goodwill and other intangible assets with indefinite lives for impairment annually, or more frequently if events or changes in circumstances indicate that the carrying value may exceed the fair value.

The performance test involves a two-step process. Step 1 of the impairment test involves comparing the fair value of the reporting unit with its aggregate carrying value, including goodwill. Application of the goodwill and other intangibles impairment test requires judgment, including the determination of the fair value of the reporting unit. The fair value of the reporting unit is computed using our market capitalization. If the carrying amount of the reporting unit exceeds its fair value, the Company performs Step 2 of the goodwill and other intangibles impairment test to determine the amount of impairment loss by comparing the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. Under such evaluation, if the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of the goodwill, the impairment loss is recognized as an operating expense in an amount equal to that excess.

The estimates used to calculate the fair value of the reporting unit change from year to year based on operating results, market conditions and estimated future cash flows. While we believe that the assumptions and estimates used to determine the estimated fair values of our reporting unit are reasonable, a change in assumptions underlying these estimates could materially affect the determination of fair value and goodwill impairment.

Given the decline in our stock price during the year ended March 31, 2015, the Company further evaluated whether or not it was more-likely-than-not that goodwill was impaired during the quarter ended December 31, 2014 and again for the year ended March 31, 2015. We have one reporting unit and thus all goodwill is evaluated for impairment at the consolidated Company level. After considering the minimum effect of a control premium, the fair value exceeded the carrying value by 12% as of March 31, 2015. The analysis considered comparable premiums paid in controlling interests acquisitions of the equities of public companies operating in the software and service industries during the three-year period ending as of the testing date and concluded that the

34

low end and median guideline range of 15-35% control premium was reasonable. The Company concluded there was no impairment of goodwill during the year ended March 31, 2015.

Income Taxes

Income taxes are presented on a separate return basis. Prior to January 1, 2013, the Covisint results of operations were included in the consolidated, combined, unitary or separate income tax returns of Compuware. Income tax expense, deferred tax assets and liabilities and reserves for uncertain tax positions reflect management’s best assessment of estimated future taxes to be paid. Following the October 2014 Distribution, Covisint ceased to be a member of the Compuware tax group. Compuware and Covisint made a joint election to treat the distribution as taxable to Compuware and at the same time increase Covisint’s tax basis in its assets to fair market value. We are subject to income taxes in both the U.S. and numerous foreign jurisdictions. Significant judgments and estimates are required in determining the consolidated income tax expense.

Deferred income taxes arise from temporary differences between the tax and financial statement recognition of revenue and expense. In evaluating our ability to recover our deferred tax assets, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations. In projecting future taxable income, we develop assumptions including the amount of future state, federal and foreign pretax operating income, the reversal of temporary differences, and the implementation of feasible and prudent tax planning strategies. These assumptions require significant judgment about the forecasts of future taxable income and are consistent with the plans and estimates we are using to manage the underlying business. Changes in estimates of projected future operating results or in assumptions regarding our ability to generate future taxable income during the periods in which temporary differences are deductible could result in significant changes to these tax liabilities and, therefore, to our net income.

The calculation of our tax liabilities involves evaluating uncertainties in the application of complex tax laws and regulations in a variety of jurisdictions across our global operations.

We recognize tax benefits from an uncertain tax position when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits.

We recognize tax liabilities in accordance with ASC 740 “Income Taxes” and we adjust these liabilities when our judgment changes as a result of the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of such tax liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which they are determined.

For additional information regarding these matters, refer to Note 5. Income Taxes of the audited combined and consolidated financial statements.

STOCK-BASED COMPENSATION

Stock award compensation expense is recognized, net of an estimated forfeiture rate, on a straight-line basis over the requisite service period of the award.

Covisint Corporation Stock Compensation

We calculate the fair value of our stock option awards using the Black-Scholes option pricing model, which incorporates various assumptions including volatility, expected term, risk-free interest rates and dividend yields. Because we have limited historical stock price data, the expected volatility assumption is based on an average of the historical volatility of comparable companies, or peer group companies. For peer group companies that have not been publicly traded long enough to have sufficient historical data, the volatility figures included in these companies’ most recent Form 10-Qs or Form 10-Ks were used. The risk-free interest rate assumption is based upon observed interest rates appropriate for the expected life of the stock option awarded. The expected life of the stock option is based on management’s best estimates considering the terms of the options granted. Dividend yields have not been a factor in determining fair value of stock options granted, as we have never issued cash dividends and do not anticipate issuing cash dividends in the future.

Prior to the IPO, our stock was not traded on a stock exchange, and thus the exercise price for Covisint stock options at the date of grant was determined by calculating the estimated fair market value of our Company divided by the total shares outstanding, including outstanding stock options that had not yet vested. The estimated fair market value of our Company was measured using an equal combination of discounted cash flow and market comparable valuations and was discounted due to a lack of marketability at the grant date. Previous valuation estimates placed a greater emphasis on the discounted cash flow model. The discounted cash flow model uses significant assumptions, including projected future cash flows, a discount rate reflecting the risk inherent in future

35

cash flows and a terminal growth rate. The key assumptions in the market comparable value analysis are the selection of peer group companies and application of these peer group companies’ data to Covisint.

Compuware Corporation Stock Compensation

Under the Amended and Restated Employee Benefits Agreement between the Company and Compuware, Covisint recorded compensation expense for the Compuware stock compensation granted Covisint employees, including the stock options in Compuware’s common stock. Compuware calculated the fair value of its stock option awards using the Black-Scholes option pricing model, which incorporates various assumptions including volatility, expected term, risk-free interest rates and dividend yields. The expected volatility assumption was based on historical volatility of Compuware’s common stock over the most recent period commensurate with the expected life of the stock option granted. Compuware used historical volatility because its management believes such volatility is representative of prospective trends. The risk-free interest rate assumption was based upon observed interest rates appropriate for the expected life of the stock option awarded.

As of the October 2014 Distribution, all Covisint employees ceased to be members of the Compuware group, thereby triggering the termination provisions of their stock option and restricted stock unit awards.

The following was the average fair value per share of Compuware stock compensation awards estimated on the date of grant and the assumptions used for each option granted to Compuware employees, including those providing services to Covisint, during the years ended March 31, 2014 and 2013. No options were granted for the year ended March 31, 2015.

	YEAR ENDED MARCH 31,
		2014	2013
Expected volatility		39.11%	40.97%
Risk-free interest rate		1.67%	0.96%
Expected lives at date of grant (in years)		6.20	6.30
Weighted average fair value of the options granted		$2.63	$4.08
Dividend Yield Assumption		4.46%	0.00%

(1) In January 2013, the Compuware Board of Directors announced its intention to begin paying cash dividends totaling $0.50 per share annually, to be paid quarterly beginning in the first quarter of fiscal 2014. Prior to that, Compuware had never paid a dividend or announced any intentions to pay a dividend.

LIQUIDITY AND CAPITAL RESOURCES

Net proceeds received from the IPO were $68.4 million. This cash inflow was partially offset by the related party balance due Compuware at September 30, 2013 of $10.9 million and $0.7 million increase in cash paid for IPO costs. We used, and intend to continue to use, net proceeds, together with the cash generated from operations, to fund our current operations, implement our growth strategies, and fund capital expenditures.

In summary, our cash flows were:

	YEAR ENDED MARCH 31,
	2015			2014			2013
Combined and Consolidated Statement of Cash Flows Data:
Net cash used in operating activities		($4,695	)		($8,336	)		($5,202	)
Net cash used in investing activities	(7,462		)	(9,237		)	(14,525		)
Net cash provided by financing activities	12,985			66,111			20,705
Effect of exchange rate	(287		)	32			(12		)
Net change in cash		$541			$48,570			$966

36

The consolidated statements of cash flows included in this report compute net cash from operating activities using the indirect cash flow method. Therefore, non-cash adjustments and net changes in assets and liabilities (net of effects from acquisitions and currency fluctuations) are adjusted from net income to derive net cash from operating activities.

Cash Flows from Operating Activities

Cash used in operating activities decreased $3.6 million for the year ended March 31, 2015, as compared to the same period in 2014, primarily due to positive working capital fluctuations. Working capital fluctuations included accounts receivable decreasing $2.7 million and accounts payable increasing $1.3 million period over period, respectively.

Cash used in operating activities decreased for the year ended March 31, 2014, as compared to the same period in 2013, as a result of a $7.9 million increase to the our research and development costs during the year ended March 31, 2014 as compared to the same period in 2013 due to a recent change to the agile delivery methodology for Platform enhancements, which resulted in significantly shorter development cycles thereby reducing our capitalized costs. These costs were historically capitalized and recorded as cash used in investing activities.

Cash Flows from Investing Activities

Cash used in investing activities typically consists of the purchase of property and equipment associated with our infrastructure and the capitalization of software research and development costs related to expanding our cloud-based Platform.

Cash used in investing activities decreased $1.8 million for the year ended March 31, 2015, as compared with the same period in 2014, primarily due to a $2.2 million decrease in cash paid for capitalized research and development, as we no longer incur expenditures on healthcare research and development projects. This was partially offset by an increase in capital expenditures of $0.4 million.

Cash used in investing activities decreased for the year ended March 31, 2014, as compared with the same period in 2013, primarily due to a $7.9 million decrease in cash paid for capitalized research and development.

Cash Flows from Financing Activities

On October 1, 2013, we completed our IPO resulting in net proceeds of approximately $68.4 million.  Of that amount, approximately $10.9 million was used to repay short-term intercompany payables owed to our parent at the time, Compuware, which resulted from Compuware’s contribution of assets and liabilities to us as of January 31, 2013.  A portion of the IPO net proceeds, together with cash generated from our operations, has been used to fund current operations, implement our growth strategies and fund capital expenditures.  While we may pursue the acquisition of companies with complementary products and technologies that we believe will enhance our suite of offerings, we do not have agreements or commitments for any specific acquisitions at this time.

Prior to January 1, 2013, as an operating unit within Compuware, we did not maintain separate cash accounts. All cash receipts and payments were reported on a net basis as “Net investment from parent company" presented within financing activities. Since the January 2013 Contribution, all significant transactions between Compuware and us were included in the combined and consolidated financial statements and were or are expected to be settled in cash. The gross activity of these cash transactions with our parent is reflected in the combined and consolidated statements of cash flows as a financing activity presented as "Cash payments from/to parent company."

Cash provided by financing activities decreased to $13.0 million for the year ended March 31, 2015, from $66.1 million for the year ended March 31, 2014 primarily due to the net proceeds received from the IPO of $68.4 million in fiscal 2014. This reduction in cash from financing activities in fiscal year 2015 was partially offset by cash payments received from Compuware related its use of the Covisint's net operating losses. Following our separation from Compuware on October 31, 2014, Compuware will no longer reimburse us for our tax losses, as Compuware will no longer benefit from such losses. We expect cash generated from operations and the remaining net proceeds of our IPO will be sufficient to meet our working capital needs and support general corporate purposes for at least the twelve months following March 31, 2015.

Cash provided by financing activities increased to $66.1 million for the year ended March 31, 2014, from $20.7 million for the year ended March 31, 2013, primarily due to the net proceeds received from the IPO of $68.4 million. This cash inflow was partially offset by the related party cash transactions with our parent and $0.7 million increase in cash paid for IPO costs.

RECENTLY ISSUED ACCOUNTING PRONOUCEMENTS

37

New accounting guidance that we have recently adopted, as well as accounting guidance that has been recently issued, but not yet adopted by us, is included in Note 1 of the notes to the combined and consolidated financial statements appearing in Item 8 of this Annual Report.

CONTRACTUAL OBLIGATIONS

The Company conducts its business in leased facilities which, based on the lease terms, are considered to be operating leases. In addition, the Company entered into a third-party service agreement for helpdesk services to be provided through October 31, 2017.

The following table outlines the Company’s minimum contractual obligations under the lease and service agreements as of March 31, 2015 (presented in thousands):

	Year Ending March 31,
	Total		2016			2017			2018			2019			2020		Thereafter
Leases	$	8,643	$	710		$	1,241		$	865		$	848		$	873	$	4,106
Service Agreement	1,512		955			557			—			—			—		—
Total	10,155		1,665		1	1,798		2	865		3	848		4	873		4,106

OFF-BALANCE SHEET ARRANGEMENTS

We currently do not have any off balance sheet or non-consolidated special purpose entity arrangements as defined by the applicable SEC rules.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed primarily to market risks associated with foreign currency exchange rates. We do not use derivative financial instruments or forward foreign exchange contracts for investment, speculative or trading purposes. We believe our foreign currency risk is minimal as 86%, 86%, and 85% of our revenue was based in U.S. dollars for the years ended March 31, 2015, 2014 and 2013, respectively. In addition, we have no long-term assets or liabilities in foreign currencies. We do not have a material exposure to market risk with respect to investments.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

Covisint Corporation

Southfield, Michigan

We have audited the accompanying consolidated balance sheets of Covisint Corporation and subsidiaries (the "Company") as of March 31, 2015 and 2014, and the related combined and consolidated statements of comprehensive loss, shareholders’ and group equity, and cash flows for each of the three years in the period ended March 31, 2015. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such combined and consolidated financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2015 and 2014, and the results of their operations and their cash flows for each of the three years in the period ended March 31, 2015, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 1 to the financial statements, prior to January 1, 2013, the accompanying combined and consolidated financial statements have been prepared from separate records maintained by Compuware Corporation and may not necessarily be indicative of the financial condition, or results of operations and cash flows that would have existed had the Company been operated as a stand-alone company during the periods presented prior to January 1, 2013.

/s/ DELOITTE & TOUCHE LLP

Detroit, Michigan

May 26, 2015

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COVISINT CORPORATION

CONSOLIDATED BALANCE SHEETS

(In Thousands, Except per Share Data)

	March 31, 2015			March 31, 2014
ASSETS
CURRENT ASSETS:
Cash		$50,077			$49,536
Accounts receivable, net	15,348			21,838
Deferred tax asset, net	16			1,017
Due from parent and affiliates	—			2,813
Prepaid expenses	3,160			1,686
Other current assets	4,209			4,297
Total current assets	72,810			81,187
PROPERTY AND EQUIPMENT, LESS ACCUMULATED DEPRECIATION AND AMORTIZATION	8,809			4,751
CAPITALIZED SOFTWARE AND OTHER INTANGIBLE ASSETS, NET	10,646			23,040
OTHER:
Goodwill	25,385			25,385
Deferred costs	1,736			6,188
Deferred tax asset, net	1,528			131
Other assets	928			766
Total other assets	29,577			32,470
TOTAL ASSETS		$121,842			$141,448
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable		$7,703			$3,893
Accrued commissions	3,286			1,640
Deferred revenue	18,029			16,606
Accrued expenses	3,344			3,752
Deferred tax liability, net	1,597			—
Total current liabilities	33,959			25,891
DEFERRED REVENUE	3,914			11,223
ACCRUED LIABILITIES AND OTHER	2,622			56
DEFERRED TAX LIABILITY, NET	—			2,668
Total liabilities	40,495			39,838
COMMITMENTS AND CONTINGENCIES				—
SHAREHOLDERS' EQUITY:
Preferred stock, no par value - authorized 5,000,000 shares; none issued and outstanding	—			—
Common stock, no par value - authorized 50,000,000 shares; issued and outstanding 39,033,900 (37,490,500 issued and outstanding as of March 31, 2014)	—			—
Additional paid-in capital	157,004			140,569
Retained deficit	(75,633		)	(38,947		)
Accumulated other comprehensive income (loss)	(24		)	(12		)
Total shareholders' equity	81,347			101,610
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$121,842			$141,448

40

See notes to combined and consolidated financial statements.

41

COVISINT CORPORATION

COMBINED AND CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In Thousands, Except Per Share Data)

	YEAR ENDED MARCH 31,
	2015			2014			2013
REVENUE		$88,534			$97,135			$90,732
COST OF REVENUE	66,404			56,374			47,575
GROSS PROFIT	22,130			40,761			43,157
OPERATING EXPENSES:
Research and development	10,416			12,408			3,799
Sales and marketing	32,593			35,250			26,593
General and administrative	17,640			28,676			18,315
Total operating expenses	60,649			76,334			48,707
OPERATING LOSS	(38,519		)	(35,573		)	(5,550		)
Other Income	69			—			—
LOSS BEFORE INCOME TAX PROVISION	(38,450		)	(35,573		)	(5,550		)
INCOME TAX PROVISION	112			85			98
NET LOSS		($38,562	)		($35,658	)		($5,648	)
Basic and diluted loss per share		($1.01	)		($1.06	)		($0.19	)
OTHER COMPREHENSIVE LOSS, NET OF TAX
Foreign currency translation adjustments		($12	)		($9	)		($3	)
TAX ATTRIBUTES OF ITEMS IN OTHER COMPREHENSIVE LOSS
Foreign currency translation adjustments	—			—			—
OTHER COMPREHENSIVE LOSS, NET OF TAX	(12		)	(9		)	(3		)
COMPREHENSIVE LOSS		($38,574	)		($35,667	)		($5,651	)

See notes to combined and consolidated financial statements.

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COVISINT CORPORATION

COMBINED AND CONSOLIDATED STATEMENTS OF SHAREHOLDERS' AND GROUP EQUITY

YEAR ENDED MARCH 31, 2015, 2014, and 2013

(In Thousands, Except Share Data)

	Common Stock			Group Equity			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income(Loss)			Total Shareholders' Equity
	Shares	Amount
BALANCE AT MARCH 31, 2012	30,003,000		$—		$33,065			$—			$—			$—			$33,065
Net loss				(2,359		)				(3,289		)				(5,648		)
Investment by Parent Company				12,881												12,881
Transfers from Parent Company							970									970
Parent contribution of stock awards				1,105			524									1,629
Foreign currency translation													(3		)	(3		)
Parent contribution of business operations, net				(44,692		)	44,692									—
BALANCE AT MARCH 31, 2013	30,003,000	—		—			46,186			(3,289		)	(3		)	42,894
Net loss										(35,658		)				(35,658		)
Parent contribution of stock awards and related taxes, net (Note 5)							(1,589		)							(1,589		)
Covisint stock option expense (Note 5)							18,996									18,996
Covisint stock option exercise	127,500						332									332
Income taxes							10,322									10,322
Foreign currency translation													(9		)	(9		)
IPO proceeds receivable, net of offering costs	7,360,000						66,322									66,322
BALANCE AT MARCH 31, 2014	37,490,500	—		—			140,569			(38,947		)	(12		)	101,610
Net loss										(38,562		)				(38,562		)
Parent contribution of stock awards (Note 7)							127									127
Covisint stock option expense (Note 7)							6,105									6,105
Covisint stock option exercise	1,543,400						2,865									2,865
Income tax items (Note 5)							7,338			1,876						9,214
Foreign currency translation													(12		)	(12		)
BALANCE AT MARCH 31, 2015	39,033,900		$—		$—			$157,004			($75,633	)		($24	)		$81,347

See notes to combined and consolidated financial statements.

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COVISINT CORPORATION

COMBINED AND CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

	YEAR ENDED MARCH 31,
	2015			2014			2013
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Net loss		($38,562	)		($35,658	)		($5,648	)
Adjustments to reconcile net income (loss) to cash provided by (used in) operations:
Depreciation and amortization	9,574			8,678			6,617
Capitalized software and other intangible asset impairment	8,751			—			—
Deferred income taxes	11			4			(613		)
Stock award compensation	6,232			17,475			1,629
Other	307			—			60
Net change in assets and liabilities:
Accounts receivable	6,377			3,618			(4,676		)
Other assets	3,306			3,414			3,386
Accounts payable and accrued expenses (1)	4,919			1,543			881
Deferred revenue	(5,610		)	(7,410		)	(6,838		)
Net cash used in operating activities	(4,695		)	(8,336		)	(5,202		)
CASH FLOWS USED IN INVESTING ACTIVITIES:
Purchase of:
Property and equipment (1)	(3,953		)	(3,541		)	(946		)
Capitalized software	(3,509		)	(5,696		)	(13,579		)
Net cash used in investing activities	(7,462		)	(9,237		)	(14,525		)
CASH FLOWS PROVIDED BY FINANCING ACTIVITES:
Net investment from parent company	—			—			12,881
Cash payments from parent company	23,999			65,746			29,135
Cash payments to parent company	(13,879		)	(67,003		)	(20,597		)
Proceeds from initial public offering	—			68,448			—
Initial public offering costs, net	—			(1,412		)	(714		)
Net proceeds from exercise of stock awards	2,865			332			—
Net cash provided by financing activities	12,985			66,111			20,705
EFFECT OF EXCHANGE RATE CHANGES ON CASH	(287		)	32			(12		)
NET CHANGE IN CASH	541			48,570			966
CASH AT BEGINNING OF YEAR	49,536			966			—
CASH AT END OF YEAR		$50,077			$49,536			$966

(1) Accounts payable and accrued expenses as of March 31, 2015 includes $3.0 million associated with purchases of property and equipment, which are non-cash acquisitions of fixed assets as of March 31, 2015.

See notes to combined and consolidated financial statements.

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COVISINT CORPORATION

NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS

1.        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business

Covisint Corporation (the “Company”, “Covisint”, “we”, “our” and “us”) provides an open, developer friendly, enterprise class cloud Platform (“Platform”) enabling organizations to build solutions that quickly and securely identify, authenticate and connect users, devices, applications and information. Our Platform has been successfully operating globally on an enterprise scale for over 12 years, and is the technology behind innovative industry solutions such as Hyundai's Blue Link^TM and Cisco's Services Exchange Platform^TM.

Basis of Presentation

The accompanying combined and consolidated financial statements (“financial statements”) include the accounts of Covisint Corporation, a Michigan corporation, and the Covisint segment of Compuware Corporation ("Compuware" or "Parent") (combined operations are referred to as the “Company” or “Covisint”). Effective January 1, 2013, Compuware contributed substantially all of the assets and liabilities of the Covisint segment to Covisint Corporation (“January 2013 Contribution”). The financial statements reflect the assets, liabilities, revenues and expenses that were directly attributable to the Company as it operated within Compuware prior to the January 2013 Contribution, and they have been derived from the consolidated financial statements and accounting records of Compuware using the historical results of operations and historical basis of assets and liabilities for the Covisint operations of Compuware. The historical financial results may not be indicative of the results that would have been achieved had Covisint operated as a separate, stand-alone entity. These financial statements, prior to the January 2013 Contribution, were prepared on a combined basis because the operations were under common control.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which require management to make estimates and assumptions that affect the reported amounts of assets, liabilities, shareholders’ equity and the disclosure of contingencies at March 31, 2015 and 2014 and the results of operations for the years ended March 31, 2015, 2014 and 2013. While management has based their assumptions and estimates on the facts and circumstances existing at March 31, 2015, final amounts may differ from estimates.

In September 2013, the Company completed its initial public offering (“IPO”) in which it issued and sold 7.4 million shares of its common stock at a public offering price of $10.00 per share. The Company received net proceeds of $68.4 million after deducting underwriting discounts and commissions of $5.2 million.

Prior to the January 2013 Contribution, “group equity” was shown in lieu of shareholders' equity in the combined and consolidated financial statements. All significant transactions between Compuware and the Company were included in the combined and consolidated financial statements and were deemed settled in cash. The net effect of the settlement of these intercompany transactions is reflected in the combined and consolidated statements of cash flows as a financing activity and in the “group equity” in the combined and consolidated balance sheets. From the January 2013 Contribution to the IPO, Compuware provided Covisint with short-term, non-interest bearing operating cash advances. The net effect of these intercompany transactions is reflected in the combined and consolidated statements of cash flows as financing activity and in “due to/from Parent and affiliates” in the consolidated balance sheets.

Prior to fiscal 2015, the financial statements included an allocation of certain corporate expenses including costs for facilities, information technology, tax, internal audit, accounting, finance, human resources, legal and executive management functions provided to the Company by Compuware. These allocations were primarily based on headcount, revenue and space occupied as a proportion of those in all Compuware operating units. Management believes the allocations are reasonable. However, the expenses allocated to the Company for these services are not necessarily indicative of the expense that would have been incurred if the Company had been a separate, independent entity and had otherwise managed these functions. Corporate expenses charged to the Company by Compuware totaled $0 million, $10.6 million and $10.8 million for the years ended March 31, 2015, 2014 and 2013, respectively. Through December 31, 2012, such costs and expenses were deemed to have been contributed by Compuware to Covisint in the period in which the costs were recorded. Since January 1, 2013, these expenses have been included in the net amount due to parent and affiliates.

On October 31, 2014, Covisint ceased being a subsidiary of Compuware Corporation as a result of Compuware's distribution of its holdings of Covisint common stock to Compuware shareholders ("the October 2014 Distribution").

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Revenue Recognition

The Company derives revenue through contracts under which it provides customers services including access to and support of the Covisint Platform (“subscription”) and services related to implementation, solution deployment and on-boarding (“services”). The arrangements do not provide customers the right to take possession of the software at any time, nor do the arrangements contain rights of return. In order for a transaction to be eligible for revenue recognition, the following revenue criteria must be met: persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectibility is reasonably assured.

Signed agreements and binding purchase orders are used as evidence of an arrangement. For customers where a purchase order is used as evidence of an arrangement, master terms and conditions exist that govern such arrangements. The Company assesses cash collectibility based on a number of factors including past collection history with the customer. If the Company determines that collectibility is not reasonably assured, the Company defers the revenue until collectibility becomes reasonably assured, generally upon receipt of cash. The Company assesses whether the fee is fixed or determinable based on the payment terms associated with the transaction and whether the sales price is subject to refund or adjustment. Customers typically have the right to terminate their agreement if the Company fails to perform.

The Company’s contracts may include a subscription fee for ongoing PaaS operations and project (services) fees. For subscription arrangements that contain multiple elements, in accordance with Accounting Standards Codification (“ASC”) 605, “Revenue Recognition,” the arrangement consideration is allocated based on relative selling price using the following hierarchy: vendor specific objective evidence (“VSOE” which represents the price when sold separately) if available; third-party evidence if VSOE is not available; or estimated selling price if neither VSOE nor third-party evidence is available. The Company is currently unable to establish VSOE or third-party evidence of selling price for its deliverables. Therefore, the Company determines its best estimate of selling price by evaluating renewal amounts included in a contract, if any, and estimated costs to deliver each element.

The subscription fees are recognized ratably over the applicable service period. Revenue recognition commences on the later of the start date specified in the subscription arrangement, the “launch date” of the customers’ access to the Company’s production environment or when all of the revenue recognition criteria have been met. The Company considers delivery to have occurred on the “launch date”, which is the point in time that a customer is provided access to use the Company’s Platform.

For those projects that do not currently have stand-alone value, the revenue is deferred and recognized over the longer of the committed term of the subscription agreement (generally one to five years) or the expected period over which the customer will receive benefit (generally five years). Services that have stand-alone value are recognized as delivered generally using a proportional performance methodology based on dependable estimates of hours incurred and expected hours to complete since these services are primarily performed on a fixed fee basis. Hours or costs incurred represent a reasonable surrogate for output measures of contract performance, including the presentation of deliverables to the client; therefore, hours or costs incurred are used as the basis for revenue recognition. If it is determined that costs will exceed revenue, the expected loss is recorded at the time the loss becomes apparent.

Deferred Costs

Deferred costs consist of the incremental direct personnel and outside contractor costs incurred in delivering implementation and solutions deployment services that do not have stand-alone value. Revenue from these services, as described above, is deferred and recognized over the longer of the committed term of the subscription agreement or the expected period over which the customer will receive benefit. Therefore, the costs are recognized over the same period as the associated revenue. In the event a customer contract with deferred cost is terminated, the Company recognizes the remainder of the amount recorded in deferred cost attributable to the terminated contract.

Sales commission costs that directly relate to revenue transactions that are deferred are recorded as “prepaid expenses and other current assets” or non-current “other assets” as applicable in the condensed and consolidated balance sheets and recognized as “sales and marketing” expenses in the financial statements over the revenue recognition period of the related transaction.

Deferred Revenue

Deferred revenue consists of the billed but unearned portion of existing contracts for subscription and services provided and is recognized as services are delivered or over the expected period during which the customer will receive benefit. The Company generally invoices its customers’ subscription fees in annual, quarterly or monthly installments. Contractual time periods often exceed the invoicing period and accordingly, the deferred revenue balance does not represent the total contract value of committed subscription agreements. The portion of deferred revenue that the Company anticipates will be recognized during the succeeding 12-month period is recorded as current deferred revenue and the remaining portion is recorded as non-current deferred revenue. The Company has generally received payment for the services for which the revenue has been deferred. Deferred revenue also

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includes contracts for which we have a contractually executed agreement and have invoiced the customer under the terms of the executed agreement but have not met all the revenue recognition criteria and/or have concluded that revenue should be recognized on cash basis, as collectibility of the invoiced amounts is not reasonably assured. In the event a customer contract with deferred revenue is terminated, the Company recognizes the remainder of the amount recorded in deferred revenue attributable to the terminated contract.

Collection and Remittance of Taxes

The Company records the collection of taxes from customers and the remittance of these taxes to governmental authorities on a net basis in its financial statements.

Cash and Cash Equivalents

The Company considers all investments with an original maturity of three months or less to be cash equivalents.

Cost of Revenue

Consists of compensation and related expenses for infrastructure and operations staff, payments to outside service providers, data center costs related to hosting the Company’s software and amortization and impairment of capitalized software.

Allowance for Doubtful Accounts

The Company considers historical loss experience, including the need to adjust for current conditions, the aging of outstanding accounts receivable and information available related to specific customers when estimating the allowance for doubtful accounts. The allowance is reviewed and adjusted based on the Company’s best estimates of collectibility.

The following table summarizes the allowance for doubtful accounts and changes to the allowance during the years ended March 31, 2015, 2014 and 2013 (in thousands):

Allowance for Doubtful Accounts:	Balance at Beginning of Period	Charged to Income	Accounts Charged Against the Allowance	Balance at End of Period
Year ended March 31, 2015	$164	$7	$101	$70
Year ended March 31, 2014	$58	$108	$2	$164
Year ended March 31, 2013	$97	$0	$39	$58

Property and Equipment

Property and equipment is stated at cost. Depreciation is recorded using the straight-line method over the estimated useful lives of the related assets, which are generally estimated to be three to ten years for furniture and fixtures, computer equipment and software. Leasehold improvements are amortized over the term of the lease.

Capitalized Software

Includes the costs of purchased and internally developed software products capitalized in accordance with ASC 350-40, “Internal Use Software” and software technology purchased through acquisitions and is stated at unamortized cost. Net purchased software included in capitalized software was $0.2 million and $0.6 million as of March 31, 2015 and 2014, respectively.

Capitalized and purchased software costs are amortized on a straight line basis over the expected useful life of the software, which is generally five years. Amortization begins when the software technology is ready for its intended use. Amortization expense was $6.8 million, $6.8 million and $4.9 million for the years ended March 31, 2015, 2014 and 2013, respectively. Amortization expenses are included in “cost of revenue” in the financial statements.

For development costs related to the Company’s PaaS offering, the Company follows the guidance set forth in ASC 350-40 which requires companies to capitalize qualifying computer software development costs, which are incurred during the application development stage. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. Research and development costs include primarily the cost of programming personnel and amounted to $13.9 million, $18.1 million and $17.4 million for the years ended March 31, 2015, 2014 and 2013, respectively, of which $3.5 million, $5.7 million and $13.6 million respectively was capitalized as internally-developed software technology.

Capitalized research and development and capitalized software costs are reviewed for impairment when events and circumstances indicate such asset may be impaired. If estimated future undiscounted cash flows are not sufficient to recover the

47

carrying value of the capitalized research and development, an impairment charge is recorded in the amount by which the present value of future cash flows is less than the carrying value of these assets. Cost of revenue expense for the year ended March 31, 2015 included an impairment charge of $8.3 million related to software costs for healthcare specific projects resulting from the Company's decision in fiscal 2015 to exit the healthcare application business (see Note 3 for further information).

Goodwill and Other Intangible Assets

Goodwill and intangible assets with indefinite lives are tested for impairment annually at March 31 or more frequently if management believes indicators of impairment exist. With respect to goodwill, the carrying value of the Company's single reporting unit is compared to its fair value, and when the carrying value exceeds the fair value, the carrying value of the goodwill is reduced to implied fair value. The impairment test involves a two-step process with Step 1 comparing the fair value of the reporting unit with its aggregate carrying value, including goodwill. If the carrying amount of the reporting unit exceeds the reporting unit’s fair value, the Company performs Step 2 of the goodwill impairment test to determine the amount of impairment loss by comparing the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. All operations of the Company are in a single reporting unit that was evaluated in the annual impairment assessment.

The Company's goodwill balance as of March 31, 2015 was $25.4 million. The Company concluded there was no impairment of goodwill during the year ended March 31, 2015.

Sales and marketing expenses for the year ended March 31, 2015, included a $0.5 million impairment of customer relationship intangibles related to DocSite, as the intangibles specifically related to healthcare customer relationships.

Income Taxes

The Covisint business was operated as a division of Compuware prior to the January 2013 Contribution. As a member of Compuware’s consolidated group (“Consolidated Group”), the Company’s operations were included in the Consolidated Group for tax periods or portions thereof commencing after the January 2013 Contribution through the October 2014 Distribution.

Income taxes are presented herein on a separate return basis even though the Company’s results of operations have historically been included in the consolidated, combined, unitary or separate income tax returns of Compuware until the October 2014 Distribution. The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax bases of assets and liabilities and net operating losses and tax credits using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period that includes the enactment date.

The Company records net deferred tax assets to the extent it believes these assets will more likely than not be realized. These deferred tax assets are subject to periodic assessments as to recoverability. If it is determined that it is more likely than not that the benefits will not be realized, valuation allowances are recorded which would increase the provision for income taxes. In making such determinations, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations.

Certain net operating losses ("NOL") and tax credits generated by the Company prior to the date of our spin-off from Compuware have been utilized by our former parent, Compuware, and are not available to reduce future taxable income of Covisint. Therefore, the deferred tax assets presented above do not include the NOL or tax credits generated by Covisint and utilized by Compuware. In as much as Compuware has paid cash for these NOL and tax credits, the Company has already realized the economic benefit. Covisint has received the economic benefit of these NOL and tax credits through a reduction of the due to parent and affiliates (for the amount of benefit realized by Compuware) which is reported as an equity contribution from Compuware to Covisint in the accompanying balance sheets and a cash flow from financing activities in the accompany cash flow statements. Following the Company's spin-off from Compuware on October 31, 2014, Compuware will no longer receive the tax benefit of these NOLs and tax credits, and, therefore, will no longer compensate the Company for these items.

Interest and penalties related to uncertain tax positions are included in the income tax expense.

Foreign Currency Translation

The Company’s foreign operations use their respective local currency as their functional currency. Assets and liabilities of foreign subsidiaries are minimal and are generally short term in nature. Such assets and liabilities in the financial statements have been translated at the rate of exchange at the respective balance sheet dates, and revenues and expenses have been translated at

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average exchange rates prevailing during the period the transactions occurred. Translation adjustments have been excluded from the results of operations.

Stock-Based Compensation

Stock award compensation expense is recognized, net of an estimated forfeiture rate, on a straight-line basis over the requisite service period of the award, for awards that vest strictly based on time, and on a straight-line basis over the requisite service period of the individual tranches of the award for awards with performance conditions.

Compuware Corporation Stock Compensation Awards

Certain Covisint employees have been granted stock options to purchase Compuware common stock, and under the agreements between the Company and Compuware, Covisint records the compensation expense relating to these stock options to purchase Compuware common stock. Compuware calculates the fair value of its stock option awards using the Black-Scholes option pricing model, which incorporates various assumptions including volatility, expected term, risk-free interest rates and dividend yields. The expected volatility assumption is based on historical volatility of Compuware’s common stock over the most recent period commensurate with the expected life of the stock option granted. Compuware uses historical volatility because management believes such volatility is representative of prospective trends. The risk-free interest rate assumption is based upon observed interest rates appropriate for the expected life of the stock option awarded.

The following is the average fair value per share of Compuware stock compensation awards estimated on the date of grant and the assumptions used for each option granted to Compuware employees, including those providing services to Covisint, during the years ended March 31, 2014 and 2013. No grants of Compuware stock compensation were awarded to Covisint employees for the year ended March 31, 2015.

	YEAR ENDED MARCH 31,
		2014	2013
Expected volatility		39.11%	40.97%
Risk-free interest rate		1.67%	0.96%
Expected lives at date of grant (in years)		6.20	6.30
Weighted average fair value of the options granted		$2.63	$4.08
Dividend Yield Assumption (1)		4.46%	0.00%

(1) In January 2013, the Compuware Board of Directors announced its intention to begin paying cash dividends totaling $0.50 per share annually, to be paid quarterly beginning in the first quarter of fiscal 2014. Prior to that, Compuware had never paid a dividend or announced any intentions to pay a dividend.

Covisint Corporation Stock Compensation Awards

Covisint calculates the fair value of stock option awards granted using the Black-Scholes option pricing model, which incorporates various assumptions including volatility, expected term, risk-free interest rates and dividend yields. Despite the Company's IPO in September 2013, the Company does not yet have historical stock price data covering a historical period commensurate with the expected life of stock options granted. Therefore, the expected volatility assumption is based on an average of the historical volatility of comparable companies (“peer group companies”). The risk-free interest rate assumption is based upon observed interest rates appropriate for the expected life of the stock option awarded. The expected life of the stock option is based on management’s best estimates considering the terms of the options granted. Dividend yields have not been a factor in determining fair value of stock options granted as Covisint has never issued cash dividends and does not anticipate issuing cash dividends in the future.

Prior to the IPO, Covisint stock was not traded on a stock exchange and thus the exercise price of Covisint stock options at the date of grant was determined by calculating the estimated fair market value of the Company divided by the total shares outstanding, including outstanding stock options that had not yet vested. The estimated fair market value of the Company was measured using an equal combination of discounted cash flow and market comparable valuations and was discounted due to a lack of marketability at the grant date. Previous valuation estimates placed a greater emphasis on the discounted cash flow model. The discounted cash flow model uses significant assumptions, including projected future cash flows, a discount rate reflecting the risk inherent in future cash flows and a terminal growth rate. The key assumptions in the market comparable value analysis are the selection of peer group companies and application of these peer group companies’ data to Covisint.

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Assumptions used in measuring Covisint options granted, and the weighted average fair value of options granted, in fiscal 2015, 2014 and 2013 were:

	YEAR ENDED MARCH 31,
	2015	2014	2013
Expected volatility	46.12%	49.99%	53.64%
Risk-free interest rate	2.05%	1.85%	1.02%
Expected lives at date of grant (in years)	6.14	6.01	5.60
Weighted average fair value of the options granted	$1.89	$5.86	$4.47

Business Segments— The Company operates in a single reportable segment. Sales are heavily weighted toward North American automotive companies.

Significant Customers – A single customer, in the automotive industry, comprised 30 percent, 26 percent and 33 percent of total revenue during the years ended March 31, 2015, 2014 and 2013, respectively. The same automotive customer comprised 21 percent and 18 percent of outstanding accounts receivable as of March 31, 2015 and 2014, respectively. A second customer, which was a reseller to customers in the healthcare industry, comprised 6 percent, 12 percent, and 12 percent of total revenue during the years ended March 31, 2015, 2014 and 2013, respectively, and less than 10 percent of outstanding accounts receivables for the year ended March 31, 2015 and for all prior years. The reseller arrangement with this customer was terminated in fiscal 2015.

Geographical Information— Financial information regarding geographic operations is presented in the table below (in thousands):

	YEAR ENDED MARCH 31,
	2015	2014	2013
Revenue:
United States	$75,919	$83,308	$77,499
International operations	12,615	13,827	13,233
Total	$88,534	$97,135	$90,732

	YEAR ENDED MARCH 31,
Long-lived assets:	2015	2014
United States	$43,573	$51,552
International operations	909	505
Total	$44,482	$52,057

Long-lived assets are comprised of property, plant and equipment, goodwill and capitalized software.

Recently Issued Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)," a new comprehensive revenue recognition standard that will supersede all existing revenue recognition guidance under U.S. GAAP. The standard's core principle is that revenue should be recognized as goods or services are transferred to a customer in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This ASU is effective for annual and interim periods beginning on or after December 15, 2016, and early adoption is not permitted, although the FASB is currently considering a one year deferral of the effective date of this ASU. Entities will have the option of using either a full retrospective approach or a modified approach to adopt the guidance in the ASU. The Company is currently evaluating the impact of adopting this guidance.

2.     PROPERTY AND EQUIPMENT

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Property and equipment, summarized by major classification, is as follows (in thousands):

	MARCH 31,
	2015		2014
Computer equipment and software		$18,877		$14,368
Furniture and fixtures	687		641
Leasehold improvements	1,323		—
		$20,887		$15,009
Less accumulated depreciation and amortization	12,078		10,258
Net property and equipment		$8,809		$4,751

Depreciation of property and equipment totaled $2.7 million, $1.6 million and $1.2 million for the years ended March 31, 2015, 2014 and 2013, respectively. The company recorded a loss on disposal of fixed assets for the year ended March 31, 2015 of $0.3 million which is recorded within sales and marketing expense.

Operating Leases

The Company conducts its business in leased facilities which based on the lease terms are considered to be operating leases. The following table outlines the Company’s minimum contractual lease obligations under the lease agreements as of March 31, 2015 (presented in thousands):

	Year Ending March 31,
	Total		2016		2017		2018		2019		2020		Thereafter
Leases	$	8,643	$	710	$	1,241	$	865	$	848	$	873	$	4,106

3.        GOODWILL, CAPITALIZED SOFTWARE AND OTHER INTANGIBLE ASSETS

The components of the Company’s intangible assets are as follows (in thousands):

	MARCH 31, 2015
	Gross  Carrying Amount		Accumulated Amortization			Net Carrying Amount
Indefinite-lived intangible assets:
Trademarks(1)		$358					$358
Amortizing intangible assets:
Capitalized software(2)		$34,340		($24,052	)		$10,288
Customer relationship agreements(3)	2,585		(2,585		)	—
Trademarks(4)	80		(80		)	—
Total amortizing intangible assets		$37,005		($26,717	)		$10,288

	MARCH 31, 2014
	Gross  Carrying Amount		Accumulated Amortization			Net Carrying Amount
Indefinite-lived intangible assets:
Trademarks(1)		$358					$358
Amortizing intangible assets:
Capitalized software(2)		$48,989		($27,067	)		$21,922
Customer relationship agreements(3)	4,715		(3,955		)	760
Trademarks(4)	340		(340		)	—
Total amortizing intangible assets		$54,044		($31,362	)		$22,682

_____________________________________________________

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(1) The Covisint trademarks were acquired by Compuware in an acquisition in March 2004. These trademarks are deemed to have an indefinite life and therefore are not being amortized.

(2) Amortization of capitalized software is included in “cost of revenue” in the financial statements. Capitalized software is generally amortized over five years.

(3) Amortization of customer relationship agreements is included in “sales and marketing” in the financial statements. Customer relationship agreements were acquired as part of acquisitions and are fully amortized as of March 31, 2015.

(4) Amortization of trademarks is included in “general and administrative” in the financial statements. Trademarks were acquired as part of acquisitions and are fully amortized as of March 31, 2015.

Amortization of intangible assets was $7.2 million, $7.1 million and $5.4 million for the years ended March 31, 2015, 2014, and 2013, respectively. Estimated future amortization, based on recorded intangible assets at March 31, 2015, is expected to be as follows (in thousands):

	AT MARCH 31, 2015 FOR THE YEAR ENDING MARCH 31,
	2016		2017		2018		2019		2020
Capitalized software		$3,395		$3,014		$2,316		$966		$597
Total		$3,395		$3,014		$2,316		$966		$597

Impairment Evaluation

The Company evaluated its goodwill and other indefinite-lived intangible assets for impairments as of March 31, 2015 and 2014. For the year ended March 31, 2015 the company evaluated its capitalized software and other amortized intangibles for impairment and recorded an impairment of $8.3 million related to capitalized software related to healthcare specific projects and $0.5 million of impairment expense related to healthcare customer relationships. Specific to capitalized software and the customer relationships, the Company first evaluated undiscounted cash flows associated with the asset groups, and concluded that the carrying value of the assets was not recoverable from projected future undiscounted cash flows. In measuring the impairment, the Company performed a discounted cash flow analysis, and determined that the fair value of these assets was zero, and, therefore, the assets were fully impaired as of March 31, 2015. The fair value measurements were prepared using level 3 fair value inputs. There was no capitalized software or other amortized intangible asset impairment recorded during fiscal years 2014 or 2013. There was no goodwill or other indefinite-lived intangible impairments recorded during any year presented within the financial statements.

.

4.        LOSS PER COMMON SHARE

Basic earnings per common share (“EPS”) is computed by dividing earnings available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted EPS assumes the issuance of common stock for all potentially dilutive equivalent shares outstanding using the treasury method. Earnings per share are presented below as if Covisint Corporation and the Covisint Operations of Compuware had been combined for all periods presented.

EPS data were computed as follows (in thousands, except for per share data):

	YEAR ENDED MARCH 31,
	2015			2014			2013
Basic loss per share:
Numerator: Net loss		($38,562	)		($35,658	)		($5,648	)
Denominator:
Weighted-average common shares outstanding	38,217			33,774			30,003
Basic loss per share		($1.01	)		($1.06	)		($0.19	)
Diluted loss per share:
Numerator: Net loss		($38,562	)		($35,658	)		($5,648	)
Denominator:
Weighted-average common shares outstanding	38,217			33,774			30,003
Dilutive effect of stock awards	—			—			—
Total shares	38,217			33,774			30,003
Diluted loss per share		($1.01	)		($1.06	)		($0.19	)

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Stock awards to purchase approximately 4,774,000, 4,350,000 and 3,630,000 shares for the years ended March 31, 2015, 2014 and 2013 respectively, were excluded from the diluted EPS calculation because they were anti-dilutive.

5.     INCOME TAXES

From the January 2013 Contribution until the Covisint business was operated as a division of Compuware. As a member of the Compuware Consolidated Group, the Company’s operations were included in the Consolidated Group for tax periods or portions thereof commencing after the January 2013 Contribution. Following the October 2014 Distribution, Covisint became its own separate group for tax purposes, and will file separate stand-alone tax returns.

Prior to the October 2014 Distribution, taxable income and/or loss generated by the Company was included in the consolidated, combined, or unitary income tax returns of Compuware. Income taxes prior to the October 2014 Distribution in the accompanying financial statements have been allocated as if the Covisint business were held in a separate corporation which filed separate income tax returns. The Company believes these assumptions underlying its allocation of income taxes on a separate return basis were reasonable. However, the amounts allocated for income taxes prior to the October 2014 Distribution in the accompanying financial statements are not necessarily indicative of the actual amount of income taxes that would have been recorded had Covisint been a separate stand-alone tax paying entity. Following the October 2014 Distribution the Company will file its own tax returns separate from Compuware.

Income tax provision

(Loss) before income tax provision includes the following (in thousands):

	YEAR ENDED MARCH 31,
	2015			2014			2013
(Loss) before income tax provision:
U.S.		($38,586	)		($35,961	)		($5,853	)
Foreign	136			388			303
Total (loss) before income tax provision		($38,450	)		($35,573	)		($5,550	)
	YEAR ENDED MARCH 31,
	2015			2014			2013
Income tax provision:
Current:
U.S. Federal		$—			$—			$—
Foreign	17			86			97
U.S. State	—			—			—
Total current tax provision		$17			$86			$97
Deferred:
U.S. Federal		$—			$—			$—
Foreign	95			(1		)	1
U.S. State	—			—			—
Total deferred tax provision (benefit)		$95			($1	)		$1
Total income tax provision		$112			$85			$98

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The Company’s income tax provision differed from the amount computed on pre-tax income at the U.S. federal income tax rate of 35 percent for the following reasons (in thousands):

	YEAR ENDED MARCH 31,
	2015			2014			2013
Federal income tax at statutory rates		($13,458	)		($12,451	)		($1,942	)
Increase (decrease) in taxes:
State income taxes, net	(1,675		)	(1,314		)	(213		)
Foreign tax rate differential	(24		)	(37		)	(26		)
Taxes relating to foreign operations	102			26			(19		)
Tax credits	—			(483		)	(1,389		)
Valuation allowance (1)	12,958			14,355			3,771
Share based compensation	2,303			—			—
Non-deductible expenses, net	72			(11		)	—
Other, net	(166		)	—			(84		)
Income tax provision (benefit)	$112			$85			$98

(1) Prior to the October 2014 Distribution, the valuation allowance represented losses and tax credits not benefited for operating losses and tax credits generated by the Company that were not benefited. These losses and credits are not included in the tabular presentation of deferred tax assets as they have been utilized by Compuware and will not provide future economic benefits to Covisint.

Deferred tax assets and liabilities

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Temporary differences and carryforwards which give rise to a significant portion of deferred tax assets and liabilities are as follows (in thousands):

	March 31,
	2015			2014
Deferred tax assets:
Deferred revenue		$3,455			$5,660
Intangible assets	9,152			1,827
Fixed assets	69			—
Accrued expenses	640			708
Stock-based compensation	5,914			7,612
Net operating loss and other tax credit carryforwards	7,878			153
Other	130			280
Total deferred tax assets before valuation allowance	27,238			16,240
Less: valuation allowance	20,470			4,389
Net deferred tax assets		$6,768			$11,851
Deferred tax liabilities:
Intangible assets	—			1,489
Capitalized research and development costs	5,509			10,911
Fixed Assets	—			745
Other	1,312			226
Total deferred tax liabilities	6,821			13,371
Net deferred tax (liabilities)		($53	)		($1,520	)
Current deferred tax assets		$—			$1,017
Current deferred tax liabilities	(1,581		)	—
Long-term deferred tax assets	1,528			131
Long-term deferred tax liabilities	—			(2,668		)
Net deferred tax liabilities		($53	)		($1,520	)

.Prior to the October 2014 Distribution, net operating losses ("NOL") and tax credits generated by the Company were substantially utilized by the Company’s former parent, Compuware, and are not available to reduce future taxable income of Covisint. Therefore, the deferred tax assets presented above do not include the NOL or tax credits generated by Covisint and utilized by Compuware before the October 2014 Distribution. In as much as Compuware has paid cash for these NOL and tax credits prior to October 31, 2014, the Company has already realized the economic benefit. Covisint has received the economic benefit of these pre-distribution NOL and tax credits through a reduction of the due to parent and affiliates (for the amount of benefit realized by Compuware) which is reported as an equity contribution from Compuware to Covisint in the accompanying balance sheets. For periods following the October 2014 Distribution, any NOL’s and tax credits generated would be available to offset future taxable income.

As a result of the Distribution from our former parent Compuware, the spinoff was deemed taxable to Compuware. Through a tax sharing agreement between Compuware and Covisint, Compuware has agreed to bear any tax costs associated with the spinoff. Also, Covisint and Compuware have agreed to make an election under §336(e) of the Internal Revenue Code that results in a step-up in the tax basis of our assets to fair market value. The actual benefit that Covisint will realize depends on multiple things, including generating taxable income over time to fully utilize deductions associated with any increased tax basis from the election. The step up in tax basis is primarily associated with goodwill that will be deducted over the 15 years for tax purposes.

ASC 740, Income Taxes, provides for the recognition of deferred tax assets only when realization is more likely than not. In assessing the valuation allowance, the Company considers all available positive and negative evidence, including historical financial results and forecasted financial results. As a result of the Company’s analysis, it has been determined that it is more likely than not the Company will not realize the benefits of its deferred tax assets in the U.S., thus reducing the carrying value of the above deferred tax assets. The deferred tax asset "Net operating loss and other tax credit carryforwards" represents only those amounts that have been generated by Covisint following the October 2014 Distribution, and are not available to be included in the taxable results of Compuware.

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These financial statements reflect the position of the Company as not permanently reinvesting any earnings in its foreign subsidiaries and recognizing all deferred tax liabilities that arise from outside basis differences in its investments in subsidiaries.

At March 31, 2015, the Company had NOL’s and tax credit carryforwards for income tax purposes of $7.9 million which expire in the tax years as follows (in thousands):

	March 31, 2015
	Balance		Expiration
U.S. federal net operating losses		$6,731	2035
U.S. state net operating losses		$1,142	2018-2035
U.S. state tax credit carryforwards	5		2028-2029
Total		$7,878

Uncertain tax positions

The amount of gross unrecognized tax benefits ("UTBs") was $0, $0.4 million and $0 as of March 31, 2015, 2014 and 2013, respectively, all of which, net of federal benefit, would favorably affect the Company’s effective tax rate if recognized in future periods.

The following is a tabular reconciliation of the total amounts of UTBs for the years ended March 31, 2015, 2014 and 2013 (in thousands):

	March 31,
	2015			2014		2013
Gross unrecognized tax benefit for beginning of period		$354			$—		$475
Gross increases to tax positions for prior periods	—			—		—
Gross decreases to tax positions for prior periods	(354		)	—		(475		)
Gross increases to tax positions for current period	—			354		—
Settlements	—			—		—
Gross unrecognized tax benefit for period ended		$—			$354		$—

The Company recognizes interest and penalties related to UTBs within the income tax expense line in the accompanying consolidated statement of operations. As of March 31, 2015, no interest and penalties were accrued.

The Covisint business was operated as a division of Compuware until December 31, 2012 and, as a division, our operations were included in the tax returns filed by Compuware’s consolidated group, or Consolidated Group, for U.S. federal income tax purposes, as well as in certain consolidated, combined or unitary groups that include Compuware and/or certain of its subsidiaries, or Combined Group, for taxes other than U.S. federal income taxes. Effective January 1, 2013, Compuware contributed to us substantially all of the assets and liabilities related to our business and, as a member of the Consolidated Group, our operations have been included in the Consolidated Group since that date for tax periods or portions thereof commencing after such contribution.

In connection with the January 2013 Contribution, Compuware and the Company have entered into a tax sharing agreement. Pursuant to this agreement, the Company and Compuware generally made payments to each other such that, with respect to tax returns for any taxable period in which the Company or any of the Company’s subsidiaries are included in the Consolidated Group or any Combined Group, the amount of taxes to be paid by the Company will be determined, subject to certain adjustments, as if the Company and each of its subsidiaries included in such Consolidated Group or Combined Group filed the Company’s own consolidated, combined, unitary or separate tax return. Each member of a consolidated group during any part of a consolidated return year is severally liable for tax on the consolidated return of such year and for any subsequently determined deficiency thereon. Similarly, in some jurisdictions, each member of a consolidated, combined or unitary group for state, local or foreign tax purposes is jointly and severally liable for the state, local or foreign tax liability of each other member of the consolidated, combined or unitary group. Accordingly, for any period in which it is included in the Consolidated Group or any Combined Group, the Company could be liable in the event that any income or other tax liability was incurred, but not discharged, by any other member of any such group even if the Company is no longer a member of such Consolidated Group or Combined Group. Compuware has paid through a reduction in the amount due to Compuware $7.2 million and $9.1 million for tax loss and credit benefits provided by the Company to the Consolidated Group for the years ended March 31, 2015 and 2014, respectively. For the year ended March 31, 2015, Covisint was a member of the Consolidated Group only until the October 2014 Distribution. Following the October 2014 Distribution, the tax sharing agreement benefits provided to the Company will generally and prospectively cease.

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Cash paid for income taxes

Cash paid by the Company for income taxes was $28,000 and $0 for the years ended March 31, 2015 and 2014, respectively.

6.        COMMITMENTS AND CONTINGENCIES

Contractual Obligations

During fiscal 2015, the Company entered into a third-party service agreement for helpdesk services to be provided through October 31, 2017.

The following tables summarize our payments under contractual obligations as of March 31, 2015 (in thousands):

	Year Ending March 31,
	Total	2016	2017
Service Agreement	1,512	955	557

Legal Matters

The Company is subject to legal proceedings, claims, investigations and proceedings in the ordinary course of business. In accordance with U.S. GAAP, the Company makes a provision for a liability when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case.

Beginning on May 30, 2014, two putative class actions were filed in the U.S. District Court for the Southern District of New York against the Company, directors and certain officers at the time of the Company's initial public offering ("IPO") alleging violation of securities laws in connection with the Company's IPO and seeking unspecified damages. On August 15, 2014, the cases were consolidated with Charles Rankin appointed lead plaintiff. On October 14, 2014, the lead plaintiff filed a consolidated class action complaint (the “Complaint”) alleging violations of Regulation S-K and Sections 11 and 15 of the Securities Act. The Complaint alleges, among other things that the IPO’s registration statement contained (1) untrue statements and omissions of material facts related to the Company’s projected revenues for fiscal 2014, (2) materially inaccurate statements regarding the Company’s revenue recognition policy, and (3) omissions of known trends, uncertainties and significant risk factors as required to be disclosed by Regulation S-K. The Company has filed a motion to dismiss the Complaint. We believe the Complaint is without merit, and we intend to vigorously defend it. The Company currently has no other outstanding material litigation.

7.        BENEFIT PLANS

Prior to fiscal year 2014, while the Company was a majority-owned subsidiary of Compuware, certain Covisint employees were granted Compuware stock compensation awards. In accordance with the provisions of Staff Accounting Bulletin (“SAB”) 1.B.1, “Costs Reflected in Historical Financial Statements,” the expense for these awards is included within the condensed consolidated statements of comprehensive loss.

Effective April 1, 2012, Compuware began providing a matching program for the 401(k). The Company matches 33 percent of employees’ 401(k) contributions up to 2 percent of eligible earnings. Matching contributions vest 100 percent when an employee attains three years of service. For the years ended March 31, 2014, and 2013, the Company expensed $0.7 million and $0.5 million, respectively, related to this program.

Effective April 8, 2014, the Company effectively transitioned all Covisint employees from the Compuware 401(k) program to a newly established Covisint 401(k) program. All balances were transferred to the new plan. Under the new plan, the Company matches 33 percent of employees’ 401(k) contributions up to 2 percent of eligible earnings. Matching contributions vest 100 percent when an employee reaches one year of service. For the year ended March 31, 2015, the Company expensed $0.5 million related to this program.

Compuware Stock-Based Compensation Plans

Compuware Stock Option Activity

A summary of option activity for Covisint employees under Compuware’s stock-based compensation plans as of March 31, 2015, and changes during the year then ended is presented below. Due to the spin-off of Covisint from Compuware, all Compuware

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options held by Covisint employees had to be exercised or they would be terminated 30 days after the completion of the spin-off. All vested options were exercised. All non-vested Compuware options terminated in the third quarter of fiscal 2015.

Shares and intrinsic value are presented in thousands.

	YEAR ENDED MARCH 31, 2015
	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term in Years	Aggregate Intrinsic Value
Options outstanding as of April 1, 2014	472			$9.23
Granted	—
Exercised	(301	)		$8.28			$627
Forfeited/Cancelled	(171	)
Options outstanding as of March 31, 2015	—			$—
Options vested and expected to vest, net of estimated forfeitures, as of March 31, 2015	—			$—
Options exercisable as of March 31, 2015	—			$—

The vesting schedule of options has varied over the years with the following vesting terms being the most common: (1) 50 percent of shares vest on the third anniversary date and 25 percent on the fourth and fifth anniversary dates; (2) 25 percent of shares vest on each annual anniversary date over four years; or (3) 30 percent of shares vest on the first and second anniversary dates and 40 percent vest on the third anniversary date.

All options were granted with exercise prices at or above fair market value on the date of grant and expire ten years from the date of grant. Option expense is recognized on a straight-line basis over the vesting period unless the options vest more quickly than the expense would be recognized. In this case, additional expense is taken to ensure the expense is proportionate to the percent of options vested at any point in time.

Compuware Restricted Stock Units

Due to the spin-off of Covisint from Compuware, all non-vested Compuware restricted stock units ("RSU's") terminated on October 31, 2014. A summary of non-vested RSUs activity for Covisint employees and directors under the Compuware Long-Term Incentive Plan ("LTIP") for the year ended March 31, 2015, is presented below. 

Shares and intrinsic value are presented in thousands.

	YEAR ENDED MARCH 31, 2015
	Shares		Weighted Average Grant-Date Fair Value	Aggregate Intrinsic Value
Non-vested RSU outstanding at April 1, 2014	182
Granted	—
Released	(156	)			$1,514
Forfeited	(26	)
Dividend equivalents, net	—
Non-vested RSU outstanding at March 31, 2015	—

RSUs have various vesting terms related to the purpose of the award. The most common vesting term is 25 percent of shares vesting on each annual anniversary date over four years. The awards are settled by the issuance of one common share of Compuware stock for each unit upon vesting and vesting accelerates upon death, disability or a change in control of Compuware.

Covisint Stock-Based Compensation Plan

In August 2009, Covisint established a 2009 Long-Term Incentive Plan (“2009 Covisint LTIP”) allowing the Board of Directors of Covisint to grant stock options, stock appreciation rights, restricted stock, restricted stock units, performance-based cash or restricted stock unit awards and annual cash incentive awards to employees and directors of Covisint and its affiliates. The

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2009 Covisint LTIP reserves 4.5 million common shares of Covisint common stock for issuance under this plan. On December 30, 2013, the Board of Directors of Covisint adopted the First Amendment to the 2009 Covisint LTIP ("Amendment"), subject to shareholder approval. The Amendment increased the number of shares of Covisint’s common stock available for issuance pursuant to stock-based awards granted under the LTIP by 3.0 million shares (increasing the number of shares available for issuance under the LTIP from 4.5 million to 7.5 million). On January 2, 2014, Compuware, as the holder of the majority of the outstanding shares of the Company’s common stock at that time, approved the Amendment to increase the shares available. The increase in shares set forth in the Amendment became effective on February 13, 2014, twenty (20) days after the date of mailing of the Company’s Schedule 14C Information Statement to the Company's public shareholders.

As of March 31, 2015, there were 4.3 million stock options outstanding and 0.3 million RSUs outstanding from the 2009 Covisint LTIP. No options issued subsequent to the IPO contain a performance condition.

For the years ended March 31, 2015 and 2014, 1.54 million options and 0.13 million options, respectively, were exercised by participants of the 2009 Covisint LTIP.

Stock Option Activity

A summary of option activity under the Company’s stock-based compensation plans as of March 31, 2015, and changes during the year then ended is presented below (shares and intrinsic value in thousands):

	YEAR ENDED MARCH 31, 2015
	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term in Years	Aggregate Intrinsic Value
Options outstanding as of April 1, 2014	4,458			$3.48
Granted	1,695			$4.04
Exercised	(1,543	)		$1.86
Forfeited and Expired	(304	)		$8.41
Options outstanding as of March 31, 2015	4,306			$3.93	5.46		$458
Options vested and expected to vest, net of estimated forfeitures, as of March 31, 2015	4,112			$3.91	5.30		$458
Options exercisable as of March 31, 2015	1,718			$3.47	2.69		$296

All options were originally granted at estimated fair market value for those granted prior to IPO, and at fair market value for those granted post IPO. Options expire ten years from the date of grant unless expiration has been otherwise accelerated in accordance with a termination and/or separation agreement.

On April 7, 2014, 140,000 stock options with an estimated fair market value of $3.58 per option were granted to an employee. On July 1, 2014, 750,000 stock options with an estimated fair market value of $2.25 per option were granted to an employee. During November, 2014, 685,000 stock options with an estimated fair market value of $1.30 per option were granted to employees and directors. On December 1, 2014, 120,000 stock options with an estimated fair market value of $1.08 per option were granted to one employee.

Restricted Stock Unit Activity

A summary of non-vested RSUs activity as of March 31, 2015, and changes during the year ended March 31, 2015 is presented below. Shares and intrinsic value are presented in thousands.

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	YEAR ENDED MARCH 31, 2015
	Shares	Weighted Average Grant-Date Fair Value		Aggregate Intrinsic Value
Non-vested RSU outstanding at April 1, 2014	—
Granted	338	$	3.91
Released	—
Forfeited	—
Dividend equivalents, net	—
Non-vested RSU outstanding at March 31, 2015	338			$	686

On July 1, 2014, 182,193 restricted stock units with a fair market value as of the grant date of $4.86 were granted to an employee. The restricted stock instruments granted on July 1, 2014 vest at 33.3% on each the first, second and third anniversary of the grant date. On November 17, 2014 a total 155,795 restricted stock units with a fair market value as of the grant date of $2.79 were granted to five directors. The restricted stock instruments granted November 17, 2014 fully vest on August 25, 2015. There are no other outstanding Covisint RSUs as of March 31, 2015.

Stock Awards Compensation

For the years ended March 31, 2015, 2014 and 2013, respectively, net stock awards compensation expense was recorded as follows in thousands:

	YEAR ENDED MARCH 31,
	2015		2014		2013
Stock awards compensation classified as:
Cost of revenue		$613		$829		$6
Research and development	175		722		1
Sales and marketing	1,570		5,594		360
General and administrative	3,874		10,330		1,262
Total stock awards compensation expense before income taxes		$6,232		$17,475		$1,629

Total stock awards compensation expense before income taxes of $17.5 million for the year ended March 31, 2014, was primarily comprised of $12.5 million recorded for the cumulative expense of stock options which had a performance condition related to the Company's completion of its IPO, the reversal of $2.9 million recorded in conjunction with the cancellation of Compuware PSAs, and $7.9 million of additional stock compensation expense that was recognized since the IPO. Since the IPO, the performance condition of these options was satisfied and the Company has recognized stock compensation expense of$6.2 million for the year ended March 31, 2015.

As of March 31, 2015, total unrecognized compensation cost of $5.1 million, net of estimated forfeitures, related to nonvested equity awards granted is expected to be recognized over a weighted-average period of approximately 2.4 years. The following table summarizes the Company’s estimated future recognition of its unrecognized compensation cost related to stock awards as of March 31, 2015 (in thousands).

	YEAR ENDING MARCH 31,
Covisint Stock-Based Compensation Plan:	Total		2016		2017		2018		2019
Stock Based Compensation		$5,052		$2,569		$1,517		$800		$166

8.        RELATED PARTY TRANSACTIONS

Up until January 31, 2014, when Compuware divested its services business, the Company utilized services staff of Compuware to provide certain services to customers and to provide additional resources for research and development activities. These costs were included in “cost of revenue” and “research and development” as applicable. Compuware provided these services substantially at cost to Covisint through March 31, 2013 and at market rates effective April 1, 2013. Many of the Compuware employees

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providing these services transferred to Covisint effective March 1, 2013. Charges for those services totaled $0.0 million, $1.4 million and $17.4 million for the years ended March 31, 2015, 2014 and 2013, respectively.

On October 31, 2014, Covisint ceased being a subsidiary of Compuware Corporation as a result of October 2014 Distribution.

Prior to October 31, 2014, Covisint was a member of the Compuware Consolidated Group for tax purposes. Compuware Corporation, under a tax sharing agreement, used Covisint's tax losses and paid Covisint in cash for the tax losses utilized by the Compuware Consolidated Group. For fiscal 2015, Covisint was paid by Compuware based upon estimates of the losses utilized, which are subject to a true-up based upon filing actual federal and state income tax returns.

Certain transactions with Compuware were settled in cash and were reflected as due to or due from parent and affiliates within the condensed consolidated balance sheet, prior to Covisint's spin-off from Compuware on October 31, 2014. At March 31, 2015, the Company had a net receivable due from parent of $0.0 as compared to a net receivable of $2.8 million at March 31, 2014. The activity in the year ended March 31, 2015 was primarily comprised of Compuware’s payment of the net due from amount of approximately $2.8 million as of March 31, 2014, and additional payments from Compuware of approximately $7.6 million related to Compuware’s utilization of the Company’s tax loss and other tax attributes through the October 2014 Distribution, offset by payments from the Company to Compuware of approximately $13.9 million.

9.       QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

Quarterly financial information for the years ended March 31, 2015 and 2014 was as follows (in thousands, except for per share data):

	Fiscal 2015
	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Year
Revenues		$21,587			$21,735			$21,755			$23,457			$88,534
Gross profit	6,321			7,409			7,371			1,029			22,130
Operating loss (2)	(12,113		)	(7,288		)	(6,955		)	(12,163		)	(38,519		)
Pre-tax loss	(12,091		)	(7,271		)	(6,940		)	(12,148		)	(38,450		)
Net loss	(12,116		)	(7,304		)	(6,961		)	(12,181		)	(38,562		)
Basic loss per share (1)	(0.32		)	(0.19		)	(0.18		)	(0.32		)	(1.01		)
Diluted loss per share (1)	(0.32		)	(0.19		)	(0.18		)	(0.32		)	(1.01		)

_____________________________________________________

(1) Full year basic and diluted loss per share may not agree to the sum of the four quarters because each quarter is a separate calculation.

(2) Q4 2015 results include an $8.8 million impairment of capitalized software and customer relationship intangibles.

	Fiscal 2014
	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Year
Revenues		$24,101			$24,525			$24,109			$24,400			$97,135
Gross profit	10,791			10,399			10,449			9,122			40,761
Operating income (loss)	(4,667		)	(12,712		)	(8,292		)	(9,902		)	(35,573		)
Pre-tax income (loss)	(4,667		)	(12,712		)	(8,292		)	(9,902		)	(35,573		)
Net income (loss)	(4,670		)	(12,746		)	(8,314		)	(9,928		)	(35,658		)
Basic loss per share (1)	(0.16		)	(0.42		)	(0.22		)	(0.27		)	(1.06		)
Diluted loss per share (1)	(0.16		)	(0.42		)	(0.22		)	(0.27		)	(1.06		)

_____________________________________________________

(1) Full year basic and diluted loss per share may not agree to the sum of the four quarters because each quarter is a separate calculation.

ITEM 9. CHANGES IN DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSURE

Not Applicable.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer (our principal executive officer and principal financial officer, respectively), evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act, as of the end of the period covered by this report. Our disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in our reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving their objectives. Based upon the evaluation of our disclosure controls and procedures as of March 31, 2015, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Management’s Report on Internal Controls over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act. Our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements. All internal control systems, no matter how well designed and operated, have inherent limitations. Therefore, even those internal control systems determined to be effective may not prevent or detect misstatements, and can provide only reasonable assurance with respect to financial statement preparation and presentation.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of March 31, 2015 based on the framework described in Internal Control - Integrated Framework(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based upon this evaluation, management concluded that our internal control over financial reporting was effective as of March 31, 2015.

Changes in Internal Control over Financial Reporting

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No change in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, occurred during the fiscal quarter ended March 31, 2015 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

Not Applicable.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this item with respect to our executive officer is included in Item 1, “Business,” of this Annual Report. The remainder of the information required by this Item will be contained in our Proxy Statement under the captions “Corporate Governance” (excluding the Report of the Audit Committee), “Election of Directors” and “Other Matters - Section 16(a) Beneficial Ownership Reporting Compliance” and is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this Item will be contained in our Proxy Statement under the caption “Compensation of Executive Officers” and “Corporate Governance” and is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT RELATED STOCKHOLDER MATTERS

The information required by this Item will be contained in our Proxy Statement under the caption “Security Ownership of Management and Major Shareholders” and is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this Item is contained in the Proxy Statement under the caption “Other Matters - Related Party Transactions,” “Corporate Governance” and “Compensation of Executive Officers - Compensation Committee Interlocks and Insider Participation” and is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this Item will be contained in our Proxy Statement under the caption “Item No. 2 - Ratification of Appointment of the Independent Registered Public Accounting Firm” and is incorporated herein by reference.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)Documents filed as part of this report.

1.    Combined and Consolidated Financial Statements

The following combined and consolidated financial statements of the Company and its subsidiaries are filed herewith:

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	Page
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of March 31, 2015 and 2014	47
Combined and Consolidated Statements of Comprehensive Loss for each of the years ended March 31, 2015, 2014 and 2013	48
Combined and Consolidated Statements of Shareholders’ Equity for each of the years ended March 31, 2015, 2014 and 2013	49
Combined and Consolidated Statements of Cash Flows for each of the years ended March 31, 2015, 2014 and 2013	50
Notes to Combined and Consolidated Financial Statements	52

2.Financial Statement Schedules

All financial statement schedules are omitted as the required information is not applicable or the information is presented in the combined and consolidated financial statements or related notes.

3. Exhibits

The exhibits filed in response to Item 601 of Regulation S-K are listed in the Exhibit Index attached to this Annual Report.

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SIGNATURES

Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Southfield, State of Michigan, on May 26, 2015.

		COVISINT CORPORATION
Date:	May 26, 2015	By:/s/ Samuel M. Inman, III
		Samuel M. Inman, III
		Chief Executive Officer
		Principal Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Samuel M. Inman, III	President and Chief Executive	May 26, 2015
Samuel M. Inman, III	Officer and Director (Principal Executive Officer)
/s/ Enrico Digirolamo	Chief Financial Officer	May 26, 2015
Enrico Digirolamo	(Principal Financial Officer and Principal Accounting Officer)
/s/ Homaira Akbari	Director	May 26, 2015
Homaira Akbari
/s/ Bernard M. Goldsmith	Director	May 26, 2015
Bernard M. Goldsmith
/s/ William O. Grabe	Director	May 26, 2015
William O. Grabe
/s/ Lawrence David Hansen	Director	May 26, 2015
Lawrence David Hansen
/s/ Philip F. Lay	Director	May 26, 2015
Philip F. Lay

EXHIBIT INDEX

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Exhibit Number	Description of Document
3.1	Amended and Restated Articles of Incorporation (1)
3.2	Amended and Restated Bylaws (1)
3.3	Amendment to Covisint Corporation Bylaws, dated July 29, 2014 (2)
10.1	Second Amended and Restated Master Separation Agreement (3)
10.2	Termination of Intercompany Agreements (3)
10.3	Amended and Restated Employee Benefits Agreement (1)
10.4	Compuware Services Agreement (1)
10.5	Amended and Restated Intellectual Property Agreement (1)
10.6	Registration Rights Agreement (1)
10.7	Amended and Restated Shared Services Agreement (1)
10.8	Second Amended and Restated Tax Sharing Agreement (3)
10.9	Contribution Agreement (1)
*10.10	2009 Long Term Incentive Plan (1)
*10.11	First Amendment to 2009 Long-Term Incentive Plan (4)
*10.12	Second Amendment to 2009 Long-Term Incentive Plan (5)
*10.13	Form of Option Agreement (1)
*10.14	Amendment No. 1 to Option Agreement (1)
*10.15	Corporate Short-Term Incentive Plan
*10.15	Corporate Short-Term Incentive Plan
*10.16	Severance Agreement between Covisint Corporation and Samuel M. Inman, III (6)
*10.17	Stock Option Agreement between Covisint Corporation and Samuel M. Inman, III (6)
*10.18	Restricted Stock Unit Award Agreement between Covisint Corporation and Samuel M. Inman, III (6)
*10.19	Separation Agreement and General Release between Covisint Corporation and David A. McGuffie (3)
*10.20	Director Compensation (7)
*10.21	Form Restricted Stock Unit Award Agreement for Directors (7)
*10.22	Form Severance Agreement
10.23	Lease - Travelers Tower II, Southfield, Michigan, dated December 18, 2014 (7)
10.24	Standard Multi-Tenant Office Lease, San Francisco, dated February 19, 2015
21.1	Subsidiaries (1)
23.1	Consent of Independent Registered Public Accounting Firm
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act
32.1	Certification pursuant to 18 U.S.C. Section 1350 and Rule 13a-14(b) of the Securities Exchange Act
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

*A management contract or compensatory plan or arrangement.

**Incorporated herein by reference to the Registrant’s Registration Statement on Form S-1, as amended (Registration No. 333-188603).

***Incorporated herein by reference to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2013.

****Incorporated herein by reference to the Registrant’s Current Report on Form 8-K, filed on January 6, 2014.

*****Incorporated herein by reference to the Registrant’s Current Report on Form 8-K, as amended, filed on May 13, 2014.

65

EX-10.15

Corporate Short-Term Incentive Plan

At the discretion of executive management and the Board of Directors, you have been selected to participate in Covisint’s Fiscal Year (FY) 201_ Short-Term Incentive Plan (“Plan”). The purpose of this Plan is to provide you with additional incentives to achieve our annual business goals while positioning Covisint for long-term results, and to provide an opportunity to share in Covisint’s success. If there is any conflict between this Plan and the Covisint Corporation’s 2009 Long Term Incentive Plan, as amended, (“LTIP”), the LTIP shall control.

This Plan is non-negotiable.

Short-Term Incentive Opportunity

As set forth on your Short-Term Incentive Summary attached hereto, you are eligible for a Short-Term Incentive Opportunity (“Annual Opportunity”) equal to the Short-Term Target Incentive Percentage multiplied by your base salary. Your Short-Term Incentive Opportunity is based on the year-end company performance against the following objective targets approved by the Compensation Committee of the Board of Directors (“Committee”)

• Fiscal Year 201_ Subscription Revenue (“Subscription Revenue”) - 50%

• Annualized Subscription Revenue (“ASR”) - 50%

• There is no bonus payable on either of the above targets unless achievement of the Company is greater than the Subscription Revenue Minimum and the ASR Minimum set forth on Short-Term Incentive Summary.

• As set forth in the example on the Short-Term Incentive Summary, your bonus potential will increase when the Company achieves Subscription Revenue Maximum and ASR Exceeds and ASR Maximum are achieved.

Plan Administration

Proration

Short-Term Incentive Awards are payable in cash only. Short-Term Target Incentive Awards will be prorated between performance levels and will be paid no later than 2 ½ months following the close of Fiscal Year 201_. Performance levels/targets for company objectives will not be prorated for partial time in a position Short-Term Incentive Awards will be prorated for partial time in a position for each full month of eligibility under the Plan for new hires, transfers, promotions and other changes in tier assignments.

Plan Governance

This Plan is administered by the Committee. The decision to make payouts under this Plan is at the Committee’s discretion or the discretion of the CEO as provided in Section 1.5(c) of the LTIP, which states:

Notwithstanding anything in this Plan to the contrary to the extent permitted by applicable law, the Committee may delegate to Chief Executive Officer of the Corporation the authority, subject to such terms and limitations as the Committee shall determine by resolution, to grant Awards to, cancel, modify, or waive rights with respect to, alter, discontinue or terminate Awards held by and otherwise exercise the Committee’s authority under this Plan with respect to Awards held by, Participants who are not persons subject to Section 16 of the Exchange Act. The acts of the Chief Executive Officer pursuant to such delegated authority shall be treated hereunder as acts of the Committee and the Chief Executive Officer shall report regularly to the Committee regarding any Award so granted or other actions taken by the Chief Executive Officer pursuant to such delegated authority.

The Committee intends that the Annual Award be exempt from Code Section 162(m) as “performance-based compensation” (as defined in Internal Revenue Code Section 162(m) and the regulations there under).

Definitions and Calculations

The employee’s Annual Opportunity under this Plan will be derived from the individual’s base salary and target incentive percent as of July 1, 201_.

“ASR” means the annualized value of new or incremental committed subscription revenue for new or renewed contracts signed within Fiscal Year 201_.

The independent objective targets and calculations will be determined based on United States Generally Accepted Account Principles (“US GAAP”) and exclude unusual items such as restructuring costs and divestitures. Any questions regarding the calculations will be resolved by the Chief Financial Officer.

Termination of Employment

In the event that your employment with Covisint terminates (either voluntarily or involuntarily) prior to the payment of the Short-Term Incentive Award you will not receive any portion of the Award unless termination is due to death or Disability, as defined in the LTIP.

Miscellaneous

This Plan, together with the associated LTIP and any subsequent correspondence issued by the Committee, shall constitute the entire agreement between you and Covisint regarding the awards and supersedes all contradictory terms, representations or claims, whether written or oral. Covisint reserves the right to change or discontinue this Plan for business or economic reasons at any time without prior notice. Nothing in the Plan is intended to confer upon you any right to continued employment.

If any dispute arises concerning payments to you under the terms of this Plan, you agree not to initiate legal action until you have first presented such concerns directly to the Committee or the CEO in writing, and until the Committee or CEO has had a reasonable time in which to review and address those concerns. No legal action arising out of this Plan may be brought by either party more than one year after the cause of action has occurred. This Plan shall be construed, interpreted, and governed by the local laws and regulations where you are employed. In the event of legal action, the prevailing party shall be entitled to receive from the opposing party the costs incurred in such legal action, including but not limited to reasonable attorney's fees.

Corporate Short-Term Incentive Summary

The below calculations are for illustrative purposes only. Actual results may vary based on your July 1, 201_ base salary and the attainment of annual targets.

Plan Participant Name:		Plan Effective Dates:	April 1, 201_ to March 31, 201_
		Salary:
Manager:		STI Percentage:	__%
Location:	Detroit	STI Value:	USD____________

Performance Targets

Subscription Revenue Target:$__________

Subscription Revenue Minimum$__________

Subscription Revenue Maximum$__________

ASR Target:$__________

ASR Minimum:$__________

ASR Exceed$__________

ASR Maximum$__________

Short-Term Incentive Calculation (Example)

A. Short-Term Incentive Calculation - 50% of bonus amount earned based upon a salary of $200,000.

The below calculations for your Short-Term Incentive are for illustrative purposes only based on your June 1, 201_ salary. Actual Short-Term Incentive calculations will be derived using your base salary as of July 1, 201_.

	Minimum		Target		Maximum
Payout %	50	%	100	%	150	%
Company Subscription Revenue	USD _______		USD________		USD ________
Cash Payout	USD 35,000		USD 70,000		USD 105,000

	Minimum		Target		Exceeds		Maximum
Payout %	50	%	100	%	150	%	200	%
ASR Revenue	USD_________		USD_______		USD _______		USD _______
Cash Payout	USD 15,000		USD 30,000		USD 45,000		USD 60,000

EX-10.22

10

SEVERANCE AGREEMENT

THIS AGREEMENT, dated , 201, is made by and between Covisint Corporation, a Michigan corporation (the "Company"), a subsidiary of Compuware Corporation (“Parent” or “Stockholder”), and (the "Employee").

WHEREAS, the Company and Parent consider it essential to the best interests of their respective businesses to foster the continued employment of key personnel; and

WHEREAS, the Board of Directors of the Company (“Company Board”) and the Board of Directors of Parent (“Parent Board”) recognize that, as is the case with many publicly held corporations, the possibility of a Change in Control exists and that such possibility, and the uncertainty and questions which it may raise among employees, may result in the departure or distraction of key personnel to the detriment of the Company and Parent; and

WHEREAS, the Company Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of the Company's key personnel, including the Employee, to their assigned duties without distraction in the face of potentially disturbing circumstances arising from the possibility of a Change in Control of the Company and/or the Parent;

WHEREAS, the Company Board intends that this Agreement survive after the Parent no longer is a majority owner of the Company.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Company and the Employee hereby agree as follows:

1.Defined Terms. The definitions of capitalized terms used in this Agreement are provided in the last Section hereof.

2.Term of Agreement. The Term of this Agreement shall commence on the date hereof and shall continue in effect through December 31, 2017.

3.Severance Payments.

1.Subject to Section 3.2 hereof, if the Employee's employ-ment is terminated within one (1) year following a Change in Control, other than (A) by the Company for Cause, (B) by reason of death or Disability, or (C) by the Employee without Good Reason, then the Company shall pay the Employee the amounts, and provide the Employee the benefits, described in this Section 3.1 ("Severance Payments"), in addition to any payments and benefits to which the Employee is entitled with respect to employment prior to the Date of Termination.

(A)In lieu of any further salary payments to the Employee for periods subsequent to the Date of Termination and in lieu of any severance benefit otherwise payable to the Employee, the Company shall pay to the Employee a lump sum severance payment, in cash, equal to 1 times the sum of (i) the Employee's base salary as in effect immediately prior to the Date of Termination, and (ii) the Employee’s target annual bonus under any annual bonus or incentive plan maintained by the Company in respect of the fiscal year in which occurs the Date of Termination.

(B)For the 12 month period immediately following the Date of Termination (the “COBRA Reimbursement Period”), the Company will reimburse Employee for Employee’s payments of premiums for COBRA continuation coverage as elected by Employee (the “COBRA coverage”), provided that Employee timely elects such COBRA coverage through the Company’s COBRA administrator and such COBRA coverage remains in effect during the COBRA Reimbursement Period.  Invoices for the COBRA coverage premiums will be mailed to Employee on a monthly basis. Within 30 days of receiving verification that Employee has paid the COBRA premiums, the Company will reimburse Employee in the amount of such premiums paid by the Employee during the COBRA Reimbursement Period.

(C)Notwithstanding any provision of any annual incentive plan to the contrary, the Company shall pay to the Employee an amount, in cash, equal to the sum of any unpaid incentive compensation which has been allocated or awarded to the Employee for a completed fiscal year preceding the Date of Termination under any such plan and which, as of the Date of Termination, is contingent only upon the continued employment of the Employee to a subsequent date.

(D) Unless otherwise vested under the 2009 Long Term Incentive Plan or the applicable stock option agreement, Employee’s unvested options will immediately vest, and the Employee may exercise the options as if he were still employed.

3.2(A)Notwithstanding any other provisions of this Agree-ment, in the event that any payment or benefit received or to be received by the Employee (including any payment or benefit received in connection with a Change in Control or the termination of the Employee's employment, whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement) (all such payments and benefits, including the Severance Payments, being hereinafter referred to as the "Total Payments") would be subject (in whole or part), to the Excise Tax, then, after taking into account any reduction in the Total Payments provided by reason of section 280G of the Code in such other plan, arrangement or agreement, the portion of the Total Payments that does not constitute deferred compensation within the meaning of section 409A of the Code shall first be reduced and the portion of the Total Payments that does constitute deferred compensation within the meaning of section 409A of the Code shall thereafter be reduced, to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax but only if (A) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state and local income taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments) is greater than or equal to (B) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state and local income taxes on such Total Payments and the amount of Excise Tax to which the Employee would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments).

(B)For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax, (i) no portion of the Total Payments the receipt or enjoyment of which the Employee shall have waived at such time and in such manner as not to constitute a "payment" within the meaning of section 280G(b) of the Code shall be taken into account, (ii) no portion of the Total Payments shall be taken into account which, in the opinion of tax counsel ("Tax Counsel") reasonably acceptable to the Employee, does not constitute a "parachute payment" within the meaning of section 280G(b)(2) of the Code (including by reason of section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, no portion of such Total Payments shall be taken into account which, in the opinion of Tax Counsel, constitutes reasonable compensation for services actually rendered, within the meaning of

section 280G(b)(4)(B) of the Code, in excess of the Base Amount allocable to such reasonable compensation, and (iii) the value of any non‑cash benefit or any deferred payment or benefit included in the Total Payments shall be determined in accordance with the principles of sections 280G(d)(3) and (4) of the Code.

(C)At the time that payments are made under this Agree-ment, the Company shall provide the Employee with a written statement setting forth the manner in which such payments were calculated and the basis for such calcula-tions including, without limitation, any opinions or other advice the Company has received from Tax Counsel or other advisors or consultants (and any such opinions or advice which are in writing shall be attached to the statement). If the Employee objects to the Company's calculations, the Company shall pay to the Employee such portion of the Severance Payments (up to 100% thereof) as the Employee determines is necessary to result in the proper application of subsection A of this Section 3.2.

3.3Subject to the provisions of Section 12 hereof, the payment provided in subsections (A) and (C) of Section 3.1 hereof shall be made not later than the fifth business day following the Date of Termination.

4.Termination Procedures and Compensation During Dispute.

1.Notice of Termination. After a Change in Control and during the Term, any purported termination of the Employee's employment (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto in accordance with Section 7 hereof. For purposes of this Agreement, a "Notice of Termination" shall mean a notice which shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Employee's employment.

2.Date of Termination. "Date of Termination," with respect to any purported termination of the Employee's employment after a Change in Control and during the Term, shall mean (i) if the Employee's employment is terminated by the Company, thirty (30) days after Notice of Termination is given, or such earlier date as is specified in the Notice of Termination and (ii) if the Employee's employment is terminated by the Employee, fifteen (15) days after Notice of Termination is given.

5.No Mitigation. The Company agrees that, if the Employee's employment with the Company terminates during the Term, the Employee is not required to seek other employment or to attempt in any way to reduce any amounts payable to the Employee by the Company pursuant to Section 3 hereof. Further, except as specifically provided in Section 3.1(B) hereof, no payment or benefit provided for in this Agreement shall be reduced by any compensation earned by the Employee as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by the Employee to the Company, or otherwise.

6.Successors; Binding Agreement.

1.In addition to any obligations imposed by law upon any successor to the Company, the Company will require any 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 to expressly assume 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.

2.This Agreement shall inure to the benefit of and be enforceable by the Employee's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Employee shall die while any amount would still be payable to the Employee hereunder (other than amounts which, by their terms, terminate upon the death of the Employee) if the Employee had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the executors, personal representatives or administrators of the Employee's estate.

7.Notices. For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States regis-tered mail, return receipt requested, postage prepaid, addressed, if to the Employee, to the most recent address shown in the personnel records of the Company and, if to the Company, to the address set forth below, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon actual receipt:

To the Company:

Covisint Corporation

One Campus Martius, Suite 700

Detroit, MI 48226

Attention: Chief Executive Officer

8.Miscellaneous. No provision of this Agreement may be modi-fied, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Employee and such officer as may be specifically designated by the Company Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or of any lack of compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. This Agreement supersedes any other agreements or representa-tions, oral or otherwise, express or implied, with respect to the subject matter hereof which have been made by either party. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Michigan. All references to sections of the Exchange Act or the Code shall be deemed also to refer to any successor provisions to such sections. Any payments provided for hereunder shall be paid net of any applicable withholding required under federal, state or local law and any additional withholding to which the Employee has agreed. The obligations of the Company and the Employee under this Agreement which by their nature may require either partial or total performance after the expiration of the Term (including, without limitation, those under Sections 3 hereof) shall survive such expiration.

9.Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

10.Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

11.Settlement of Disputes; Arbitration.

1.All claims by the Employee for benefits under this Agreement shall be in writing. Any denial of a claim for benefits under this Agreement shall be delivered to the Employee in writing and shall set forth the specific reasons for the denial and the specific provisions of this Agreement relied upon. The Company shall afford a reasonable opportunity to the Employee for a review of the decision denying a claim.

11.2Any further dispute or controversy arising under or in connec-tion with this Agreement shall be settled exclusively by arbitration in the city and state of the Employee's principal residence as of the date of the Change in Control, in accordance with the rules of the American Arbitration Association then in effect; provided, however, that the evidentiary standards set forth in this Agreement shall apply. Judgment may be entered on the arbitrator's award in any court having jurisdiction.

12.Section 409A. The intent of the parties is that payments and benefits under this Agreement comply with section 409A of the Code to the extent subject thereto or be exempt therefrom, and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted and administered to be in compliance therewith. Notwithstanding anything contained herein to the contrary, to the extent required to avoid the application of an accelerated or additional tax under section 409A of the Code, the Employee shall not be considered to have terminated employment with the Company for purposes of this Agreement until such time as the Employee is considered to have incurred a “separation from service” from the Company within the meaning of section 409A of the Code. Each amount to be paid or benefit to be provided under this Agreement shall be construed as a separately identified payment for purposes of section 409A of the Code, and any payments that are due within the "short term deferral period" as defined in section 409A of the Code shall not be treated as deferred compensation unless applicable law requires otherwise. To the extent required to avoid the application of an accelerated or additional tax under section 409A of the Code, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the three-month period immediately following the Employee’s termination of employment shall instead be paid on the first business day after the date that is six months following the Employee’s termination of employment (or upon the Employee’s death, if earlier). To the extent required to avoid an accelerated or additional tax under section 409A of the Code, amounts reimbursable to Employee under this Agreement shall be paid to Employee on or before the last day of the year following the year in which the expense was incurred and the amount of expenses eligible for reimbursement (and in-kind benefits provided to Employee) during any one year may not affect amounts reimbursable or provided in any subsequent year.

13.Definitions. For purposes of this Agreement, the following terms shall have the meanings indicated below:

(A)"Affiliate" shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act.

(B)"Base Amount" shall have the meaning set forth in section 280G(b)(3) of the Code.

(C)"Beneficial Owner" shall have the meaning set forth in Rule 13d‑3 under the Exchange Act.

(D)"Cause" for termination by the Company of the Employee's employment shall mean (i) the failure by the Employee to substantially perform the Employee's duties with the

Company (other than any such failure resulting from the Employee's incapacity due to physical or mental illness or any such actual or anticipated failure after the issuance of a Notice of Termination for Good Reason by the Employee pursuant to Section 4.1 hereof), or (ii) the engaging by the Employee in conduct which is demonstrably and materially injurious to the Company or its subsidiaries, monetarily or otherwise.

(E)A "Change in Control" shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred:

(I)any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of Parent (not including in the securities beneficially owned by such Person any securities ac-quired directly from Parent or its Affiliates) representing 35% or more of the combined voting power of Parent’s then out-standing securities, excluding any Person who becomes such a Bene-ficial Owner in connection with a transaction described in clause (i) of paragraph (V) below; or

(II)any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of Company representing 50% or more of the combined voting power of Company’s then out-standing securities, excluding any Person who becomes such a Bene-ficial Owner in connection with a transaction described in clause (i) of paragraph (V) below; or

(III)the following individuals cease for any reason to constitute a majority of the number of directors then serving: individ-uals who, on the date hereof, constitute the Parent Board and any new direc-tor (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of direc-tors of Parent) whose appointment or election by the Parent Board or nomination for election by Parent's stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the date hereof or whose appointment, election or nomination for election was previ-ously so approved or recommended; or

(IV)the following individuals cease for any reason to constitute a majority of the number of directors then serving: individ-uals who, on the date hereof, constitute the Company Board and any new direc-tor (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of direc-tors of Company) whose appointment or election by the Company Board or nomination for election by Company's stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the date hereof or whose appointment, election or nomination for election was previ-ously so approved or recommended; or

(V)there is consummated a merger or consolidation of Parent or any direct or indirect subsidiary of Parent with any other corporation, other than (i) a merger or consolidation immediately following which the individuals who comprise the Parent Board immediately prior thereto constitute at least a majority of the board of directors of Parent, the entity surviv-ing such merger or consolidation or, if Parent or the entity surviving such merger is then a subsidiary, the ultimate parent thereof, or (ii) a merger or consolidation

effected to implement a recapitalization of Parent (or similar transaction) in which no Person is or be-comes the Beneficial Owner, directly or indirectly, of securities of Parent (not including in the securities Beneficially Owned by such Person any securities acquired directly from Parent or its Affiliates) representing 35% or more of the combined voting power of Parent's then outstanding securities; or

(VI)there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation, other than (i) a merger or consolidation immediately following which the voting securities of the Company outstanding immediately prior to such merger or consolidation contin-ue to represent (either by remaining outstanding or by being con-verted into voting securities of the surviving entity or any parent thereof), in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any subsidiary of the Company, more than 50% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or be-comes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates) representing 50% or more of the combined voting power of the Company's then outstanding securities; or

(VII)the stockholders of Parent approve a plan of complete liquidation or dissolution of Parent or there is consummated an agreement for the sale or disposition by Parent of all or substantially all of Parent's assets, other than a sale or disposition by Parent of all or substantially all of Parent's assets immediately following which the individuals who comprise the Parent Board immediately prior thereto constitute at least a majority of the board of directors of the entity to which such assets are sold or disposed or any parent thereof.; or

(VIII)the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets, other than a sale or disposition by the Company of all or substantially all of the Company's assets immediately following which the individuals who comprise the Company Board immediately prior thereto constitute at least a majority of the board of directors of the entity to which such assets are sold or disposed or any parent thereof.

Notwithstanding the foregoing, (i) a "Change in Control" shall not be deemed to have occurred under clauses (I), (III), (V) or (VII) above by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the common stock of Parent immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of Parent immediately following such transaction or series of transactions, and (ii) a "Change in Control" shall not be deemed to have occurred under clauses (II), (IV), (VI) or (VIII) above by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the common stock of the Company immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions.

(E)"Code" shall mean the Internal Revenue Code of 1986, as amended from time to time.

(F)"Date of Termination" shall have the meaning set forth in Section 4.2 hereof.

(G)"Disability" shall be deemed the reason for the termination by the Company of the Employee's employment, if, as a result of the Employee's incapacity due to physical or mental illness, the Employee shall have been absent from the full‑time performance of the Employee's duties with the Company for a period of six (6) consecutive months, the Company shall have given the Employee a Notice of Termination for Disability, and, within thirty (30) days after such Notice of Termina-tion is given, the Employee shall not have returned to the full‑time performance of the Employee's duties.

(H)"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time.

(I)"Excise Tax" shall mean any excise tax imposed under section 4999 of the Code.

(I)"Employee" shall mean the individual named in the first para-graph of this Agreement.

(J)"Good Reason" for termination by the Employee of the Employee's employment shall mean the occurrence (without the Employee's express written consent which specifically references this Agreement) after any Change in Control, of any one of the following acts by the Company, or failures by the Company to act, unless, in the case of any act or failure to act described in paragraph (I) or (IV) below, such act or failure to act is corrected prior to the Date of Termination specified in the Notice of Termination given in respect thereof:

(I)a substantial adverse alteration in the nature or status of the Employee's responsibilities from those in effect immediately prior to the Change in Control;

(II)a reduction by the Company in the Employee's annual base salary as in effect on the date hereof or as the same may be increased from time to time;

(III)the relocation of the Employee's principal place of employment to a location more than 25 miles from the Employee's principal place of employment immediately prior to the Change in Control or the Company's requiring the Employee to be based anywhere other than such principal place of employment (or permit-ted relocation thereof) except for required travel on the Company's business to an extent substantially consistent with the Employee's present business travel obligations;

(IV)Failure of Parent to obtain assumption and agreement by a successor of Parent to perform this Agreement as provided in Section 6.1.

The Employee's continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder; provided that the Employee provides the Company with a written Notice of Termination within ninety (90) days following the occurrence of the event constituting Good Reason. In no event will the Employee have Good Reason to terminate employment unless such act or failure to act results in a material negative change to the

Employee's employment that has not been cured within 15 days after a Notice of Termination is delivered by the Employee to the Company.

(K)"Notice of Termination" shall have the meaning set forth in Section 4.1 hereof.

(L)"Person" shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) Parent or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of Parent or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the stockholders of Parent in substantially the same proportions as their owner-ship of stock of Parent.

(M)"Severance Payments" shall have the meaning set forth in Section 3.2 hereof.

(N)"Tax Counsel" shall have the meaning set forth in Section 3.2 hereof.

(O)"Term" shall mean the period of time described in Section 2 hereof (including any extension, continuation or termination described therein).

(P)"Total Payments" shall mean those payments so described in Section 3.2 hereof.

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

COVISINT CORPORATION

By:___________________________________    

Its: Chief Executive Officer

______________________________

EX-10.23

Exhibit 10.3

TRAVELERS TOWER II

26533 EVERGREEN ROAD

SOUTHFIELD, MICHIGAN

LEASE

This Lease is made between Landlord and Tenant hereinafter identified in Sections 1(b) and 1(c) hereof, respectively, and constitutes a Lease between the parties of the “Demised Premises” in the “Building” or “Property”,” as defined in Sections 2.2 and 2.1 hereof, respectively, on the terms and conditions and with and subject to the covenants and agreements of the parties hereinafter set forth.

W I T N E S S E T H :

1.    Basic Lease Provisions.

The following are certain basic lease provisions, which are part of, and in certain instances referred to in subsequent provisions of, this Lease:

(a) Date of this Lease:     December 18, 2014

(b)    Landlord:        Southfield HS Development LLC and

Southfield HS RK LLC as tenants-in-common and each a Michigan limited liability company

(c)    Tenant:        Covisint Corp., a Michigan corporation

(d)    Demised Premises:    33,786 rentable square feet located in Suite 500 which is comprised of the entire fifth (5^th) floor of the building known as Travelers Tower II, located at 26533 Evergreen Road, Southfield, Michigan, as more particularly identified in Exhibit “B-1” attached hereto and made a part hereof.

(e) Commencement

Date:             The Lease shall commence upon the later of (i) May 15, 2015, or (ii) the earlier of (a) 120 days following the date of this Lease or delivery of the Demised Premises to Tenant vacant, free of tenants and in broom clean condition, whichever is later, or (b) Tenant’s occupancy of the Demised Premises for the purpose of conducting Tenant’s business in accordance with Tenant’s Use, as hereinafter defined. The above notwithstanding, the Commencement Date shall not occur prior to the date upon which Landlord’s Work is Substantially Complete in accordance with Section 4 hereof, subject to Tenant Delays.

(f)    Expiration Date:    The last day of the one hundred thirty second (132^nd) month             following the Commencement Date

(g) Basic Rental:    Commencing upon the Commencement Date, Tenant shall pay     Basic Rental in accordance with Section 5 of this Lease and in     amounts set forth in the following schedule:

Lease Year	Annual Basic Rental	Monthly Basic Rental
1*	$565,915.50	$47,159.63
2	$565,915.50	$47,159.63
3	$582,808.50	$48,567.38
4	$599,701.50	$49,975.13
5	$616,594.50	$51,382.88
6	$633,487.50	$52,790.63
7	$650,380.50	$54,198.38
8	$667,273.50	$55,606.13
9	$684,166.50	$57,013.88
10	$701,059.50	$58,421.63
11	$717,952.50	$59,829.38

*Provided Tenant is not in an Event of Default (as hereinafter defined) of this Lease beyond applicable notice, grace and cure periods, Basic Rental shall be abated during the first twelve (12) full calendar months following the Commencement Date.

(h)    Tenant’s Share:     Ten Percent (10%)

(i)    Tenant’s Use:        Office, general administrative offices and all other legal ancillary or related uses incidental thereto.    

(j) Deposit:        Forty Seven Thousand One Hundred Fifty Nine and 63/100 Dollars ($47,159.63)

(k)    Tenant’s Address

for Notices:        

Prior to Commencement Date:

One Campus Martius, Suite 700

Detroit, Michigan 48226

Attn:    General Counsel

After Commencement Date:

26533 Evergreen Road, Suite 500

Southfield, Michigan 48076

Attn: General Counsel

(l) Landlord’s Address

for Notices: Southfield HS Development LLC and

Southfield HS RK LLC, as tenants-in Common

c/o Newmark Grubb Knight Frank

26555 Evergreen Road, Suite 102

Southfield, Michigan, 48076

With a copy to:

Director of Asset Management

Time Equities, Inc.

55 Fifth Avenue, 15^th floor

New York, New York 10003

(m) Brokers:        Advocate commercial Real Estate Advisors of Michigan, LLC, Newmark Grubb Knight Frank, and

Time Equities, Inc.

(n) Holidays:         New Year’s Day, Martin Luther King Day, President’s Day,     Memorial Day, Fourth of July, Labor Day, Thanksgiving,     Christmas.

(o)    The following Exhibits are attached to this Lease and made a part hereof:

“A”    Description of Land and Improvements

“B-1”    Demised Premises

“B-2”    Sixth Floor Refusal Space

“B-3”    Fourth Floor Refusal Space

“C”    Janitorial Services

“D”    Building Rules & Regulations

“E”    Contractor Rules & Regulations

“F”    Intentionally Omitted

“G”     Heating, Ventilation & Air Conditioning Specifications

“H”    Tenant’s Work

“I”    Landlord’s Work

“J”    Reserved Parking Plan

“K”    Form of Non-Disturbance Agreement

“L”    List of Exclusivities

2.    Building and Demised Premises.

2.1    Landlord is the owner of certain land and improvements, more particularly described on Exhibit “A” hereto, at 26533 Evergreen Road, Southfield, Michigan, including a building (hereinafter referred to as the “Building”), consisting of thirteen (13) stories, together with certain interior and exterior common and public areas and facilities, including the parking facilities (hereinafter referred to as the “Common Areas”) as may be designated by Landlord for the use in common by tenants of the Building. The Building and appurtenant Common Areas are hereinafter referred to as the “Development.”

2.2    Subject to the terms, covenants, agreements and conditions herein set forth, Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, those certain premises (herein referred to as the “Demised Premises”) designated in Section 1(d) hereof, as shown on the floor plan(s) attached hereto as Exhibit “B-1,” together with the nonexclusive right to use the Common Areas. The square foot area of the Demised Premises, as well as the Building, shall be computed by Landlord’s architect based on the BOMA‑American National Standard Z65.1‑1996.

2.3    Landlord reserves (a) the right from time to time to make changes, alterations, additions, improvements, repairs or replacements in or to the Building (including the Demised Premises) and the Development and the fixtures and equipment thereof, as well as in or to the street entrances, halls, passages, elevators, escalators and stairways and other parts of the Building, and to erect, maintain, and use pipes, ducts and conduits in and through the Demised Premises, all as Landlord may reasonably deem necessary or desirable, (b) the right to eliminate, substitute and/or rearrange the Common Areas (which may theretofore have been so designated) as Landlord deems appropriate in its discretion and (c) the right from time to time to construct additional stories onto the Building. Tenant’s nonexclusive right to utilize the Common Areas shall be in common with Landlord, other tenants and occupants of the Building and others to whom Landlord grants such rights from time to time. Except in case of emergency repairs, Landlord’s exercise of its rights under this Section shall not unreasonably interfere with Tenant’s use of or access, ingress or egress to the Demised Premises. Landlord shall give Tenant reasonable advance notice (no less than twenty-four (24) hours except in cases of emergency) before exercising such rights that impact Tenant’s use of the Demised Premises.

2.4    Intentionally Omitted.

2.5    Subject to the terms of this Lease, Landlord grants Tenant rights to utilize any parking areas within the parking deck in the Development on a first come, first served basis for those parking areas not reserved for another tenant. Tenant shall have the non-exclusive right to utilize parking spaces at the Development based upon a ratio of approximately six (6) parking spaces for each one thousand (1,000) square feet of rentable area leased in the Demised Premises, subject to change based on casualty and eminent domain. In no event shall Tenant, its employees, contractors, invitees and/or guests utilize parking spaces in excess of such ratio. Tenant shall also have the exclusive right to utilize fifteen (15) parking spaces at the Development, in the locations identified and more particularly described in Exhibit “J” attached hereto and made a part hereof, subject to reasonable relocation based on casualty or eminent domain.

2.6    Tenant’s use of parking spaces and Common Areas at the Development shall at all times be subject to the rules and regulations annexed to this Lease as Exhibit “D” including modifications thereto from time to time promulgated in writing by Landlord.

2.7    Tenant shall have access to the Demised Premises and parking facilities twenty-four (24) hours per day, seven (7) days per week, fifty-two (52) weeks per year, including Holidays, except as otherwise provided for herein.

2.8    Landlord represents and warrants to Tenant, as of the date hereof, which representations and warranties are a material inducement to Tenant to enter into this Lease:

(a)    Landlord holds fee simple title to the Demised Premises, the Building and the Development subject to no exceptions or encumbrances which, to the best of Landlord’s knowledge, would impair the Tenant’s use and enjoyment for Tenant’s Use as provided for herein.

(b)    To the best of Landlord’s knowledge, neither Landlord nor the Development is in violation of any deed restrictions, easements or deed covenants of record;

(c)    To the best of Landlord’s knowledge, Tenant’s Use is a legal permitted use at the Development within the applicable zoning code without requirement of a special use permit or other action of the applicable zoning authority;

(d)    The party executing this Lease on behalf of the Landlord has the limited liability company power and authority to do so;

(e)    There is no mortgage or other indebtedness currently encumbering the Development except that certain Mortgage in favor of Goldman Sachs Bank USA;

(f)    To the best of Landlord’s knowledge, all Base Building Systems, as hereinafter defined, serving the Common Areas or the Demised Premises, are in good working order, reasonable wear and tear excepted, and free of material defects and of sufficient capacity to service the Building for its intended use. For the purpose of this Lease, the term “Base Building Systems” shall mean: (i) boilers, hot water piping, hot water pumps and associated equipment, (ii) chillers, chilled water piping, and associated equipment, (iii) supply and return air handling units and associated equipment, (iv) cooling towers, condenser water piping, and associated equipment, (v) Exhaust fans, (vi) domestic water pumps, domestic water risers, domestic hot water heaters (located in penthouse level of the Building), and associated equipment, (vii) sanitary sewer piping serving the Common Areas and the restrooms within the Demised Premises, (viii) fire alarm panel, devices and wiring, (ix) fire sprinkler pumps, piping and heads, (x) electrical switchgear, feeders, and transformers, lighting (including emergency lighting) in the Common Areas, and (xi) elevators.

3.    Term.

3.1    The “Term” of this Lease shall commence on the Commencement Date designated in Section 1(e) hereof and, unless sooner terminated as hereinafter provided, shall end on the “Expiration Date” designated in Section 1(f).

3.2    Landlord shall deliver the Demised Premises to Tenant in accordance with the terms of this Lease within forty-eight (48) hours of the date hereof, subject to Unavoidable Delays, as hereinafter defined. If Landlord, as a result of Unavoidable Delays, cannot deliver possession of the Demised Premises to Tenant as provided for herein, this Lease shall not be void or voidable, nor shall Landlord be liable to Tenant for any loss or damage resulting therefrom, and the Expiration Date shall be extended one day for each day after the Commencement Date that Landlord is unable to deliver possession of the Demised Premises. If Landlord is unable to deliver the Demised Premises to Tenant within ninety (90) days of the date hereof, Tenant shall have the option to terminate this Lease upon ten (10) business days’ notice to Landlord, unless Landlord delivers the Demised Premises to Tenant during such ten (10) business day period.

4.    Tenant’s Work.

(a)Landlord shall provide Tenant with an allowance equal to Fifty and 00/100 Dollars ($50.00) per square foot of space in the Demised Premises, currently estimated to be approximately One Million Six Hundred Eighty-Nine Thousand Three Hundred Dollars ($1,689,300) (the “Tenant Improvement Allowance”) to be applied towards the Cost, as hereinafter defined, of the initial improvements to be completed within the Demised Premises by Tenant, as more particularly described in Exhibit “H” (hereinafter referred to as “Tenant’s Work”). For the purposes hereof, “Costs” shall be defined as the hard and soft costs of construction including materials, labor, reasonable general conditions, reasonable contractor’s profit and overhead, architect and engineering design fees, permitting fees and project management fees. Any amount by which the Cost of Tenant’s Work exceeds the Tenant Improvement Allowance shall be borne by Tenant. Notwithstanding the above, Tenant, at Tenant’s sole option, may apply any unused portion of the Tenant Allowance, if applicable, as a credit against Basic Rental by providing written notice to Landlord.

(b)Prior to the performance of Tenant’s Work, Tenant shall submit to Landlord for Landlord’s review and approval detailed plans and specifications therefor (“Tenant’s Plans and Specifications”) created by Tenant’s architect Kraemer Design Group (“Tenant’s Architect”) and substantially in accordance with Exhibit “H”. Tenant agrees that any mechanical, engineering or plumbing design services shall be provided by Landlord’s engineer Peter Basso Associates (“Landlord’s MEP Engineer”) and any structural engineering design services shall be provided by Landlord’s structural engineer (“Landlord’s Structural Engineer”). Tenant shall not proceed with Tenant’s Work until it obtains Landlord’s written approval, which approval shall not be unreasonably withheld or delayed. Landlord shall notify Tenant in writing of any comments or objections to Tenant’s Plans and Specifications within ten (10) business days following receipt, and Tenant shall respond to Landlord’s comments and objections with a revised version of Tenant’s Plans and Specifications which incorporate or otherwise address Landlord’s comments within ten (10) business days of receipt. Tenant shall pay to Landlord, upon demand, all reasonable out-of-pocket costs actually incurred by Landlord in connection with review and approval of Tenant’s Plans and Specifications.

(c)Upon notice to Tenant no later than ten (10) business days after receipt of Tenant’s Plans and Specifications, Landlord may require, as part Landlord’s approval, that Tenant will remove all or part of any fixtures, data & telephone cabling and/or personal property installed as part of Tenant’s Work and attached to or built into the Demised Premises during the term of this Lease. Tenant shall remove any such items required by Landlord pursuant to the preceding sentence from the Demised Premises prior to the expiration of this Lease or surrender of the Demised Premises at Tenant’s sole cost and expense. Upon such removal Tenant shall immediately, and at its expense, repair and restore the Demised Premises to the condition existing prior to installation, reasonable wear and tear excepted, and repair any damage to the Demised Premises due to such removal.

(d)Tenant shall engage Oliver/Hatcher Construction and Development, Inc. (“Oliver/Hatcher”) as its general contractor (“Tenant’s Contractor”) to perform Tenant’s Work. Provided Oliver/Hatcher remains licensed in the State of Michigan as a general contractor and otherwise complies with the requirements imposed by this Lease on Tenant’s contractors, Landlord hereby approves of Oliver/Hatcher as Tenant’s Contractor. Should Tenant elect to use a different general contractor as Tenant’s Contractor, such general contractor shall be subject to Landlord’s approval, which approval shall not be unreasonably withheld or delayed. The selection of any subcontractors working under Tenant’s Contractor shall also be subject to Landlord’s approval, which shall not be unreasonably withheld or delayed. The above notwithstanding, Tenant’s Contractor shall engage Landlord’s subcontractors for any work related to the fire alarm system or HVAC controls.

(e)In performing Tenant’s Work, Tenant agrees to (i) obtain all required permits; (ii) supply Landlord with certificates of insurance from Tenant’s Contractor and all subcontractors performing Tenant’s Work listing Landlord as certificate holder and additional insured and further listing such other additional insured parties as Landlord may designate in its reasonable discretion; (iii) coordinate work with Landlord; (iv) obtain Landlord’s consent, which shall not be unreasonably withheld or delayed at least twenty four (24) hours in advance prior to performing any structural work or work impacting the Building’s operation of base building fire alarm, fire sprinkler, plumbing, façade, roof, or mechanical systems; (v) performing work on the roof of the Building only under the supervision of Building personnel and Landlord’s roofing contractor (and further contracting with Landlord’s roofing contractor for any work or repairs to the roof required in connection with Tenant’s Work); and (vi) perform all Tenant’s Work in a good and workmanlike manner, in compliance with all applicable code requirements which govern the construction of Tenant’s Work, and also in compliance with the Building’s Contractor Rules & Regulations, attached hereto as Exhibit “F”.

(f)Landlord shall deliver the Demised Premises to Tenant, and Tenant shall accept delivery of the same from Landlord, in its “as-is” condition, broom clean, free of tenants and otherwise in accordance with this Lease, except that Landlord shall, at its own cost, perform certain demolition and new work detailed in Exhibit “I” attached hereto and made a part hereof (“Landlord’s Work”). Landlord and Tenant shall agree upon a reasonable schedule for Landlord’s Work which provides for the timely completion of any portions of such Landlord’s Work which must be completed prior to the commencement of any portions of Tenant’s Work, and further provides for the performance of the balance of Landlord’s Work at times and in such a manner as to not unreasonably interfere with Tenant’s Work. Landlord shall not be required to incur overtime costs and expenses in performing such construction and/or installation.

(g)Landlord’s Work shall be deemed completed when Landlord has Substantially Completed the improvements set forth on Exhibit “I” subject only to the completion of details of construction, decorations and mechanical adjustments which do not materially interfere with Tenant’s Work or use of the Demised Premises (“Punch List Items”), and Tenant shall accept the same upon notice from Landlord that such improvements have been completed, subject to completion of the Punch List Items (“Substantial Completion”). As soon as reasonably practicable following Landlord issuing notice of Substantial Completion, but prior to the date upon which Tenant occupies the Demised Premises, Landlord and Tenant shall conduct a walkthrough of the Demised Premises for the purpose of documenting Punch List Items, and Landlord shall thereafter diligently pursue the completion of all Punch List Items.

(h)At Tenant’s sole election, Landlord shall make payments under the Tenant Improvement Allowance either (x) directly to Tenant; or (y) to Tenant’s General Contractor, Tenant’s Architect, or Landlord’s MEP Engineer (collectively, “Tenant’s Representative”). If payment is request directly to Tenant, then such payment will be made within thirty (30) days after Tenant delivers to Landlord a receipt of the paid invoice(s) for any qualifying Costs along with unconditional lien waivers for the work performed to the Demised Premises, provided that at the time of such request, (i) Landlord is able to confirm upon inspection of the Demised Premises, that Tenant’s Work has progressed to a point commensurate with the amount being requested to be disbursed from the Tenant Improvement Allowance, in its reasonable judgment, and (ii) Tenant is in compliance with all terms and conditions of this paragraph and Tenant shall not be in default of any of Tenant’s obligations under this Lease beyond any applicable notice and cure periods contained herein.

(i)The following shall be conditions precedent to Landlord making any payment directly to a Tenant Representative:

1. Tenant shall deliver to Landlord a true and complete copy of the fully executed contract between Tenant and such Tenant Representative setting forth the scope of work or services, terms and conditions governing payment, and other terms and conditions which are customarily included in agreements with architects, engineers or general contractors (as the case may be) for the renovation of office space on behalf of a Tenant;

2. Landlord, Tenant and such Tenant Representative, shall have mutually agreed upon and executed a tri-party agreement acknowledging that any payment by Landlord to such Tenant Representative constitutes a payment by Tenant required under its contract with such Tenant Representative in each instance and that such payment by Landlord to such Tenant Representative in no way creates any liability for Landlord with respect to any of the terms and conditions contained in the contract between Tenant and such Tenant Representative. Such tri-party agreement shall further provide that Tenant and Tenant’s Representative each release Landlord from any liability arising out of the terms and conditions of the contract between Tenant and Tenant’s Representative.

3. Tenant shall make request for each payment by Landlord to a Tenant Representative in writing, which request shall acknowledge that such payment by Landlord, when paid, shall constitutes a disbursement under the Tenant Improvement Allowance.

4. Any individual request by Tenant that Landlord pay Tenant’s General Contractor directly shall be accompanied by a signed and notarized payment application from Tenant’s General Contractor in the AIA G702 format, which payment application must also be signed and and sealed by Tenant’s Architect and Landlord’s MEP Engineer (if the payment application involves progress payments for work put in place which falls under their respective scopes of design work). Such payment applications shall be accompanied by appropriate lien waivers, backup for general conditions, and subcontractor payment applications in reasonably sufficient detail along with each subcontractor's lien waiver.

5. Any individual request by Tenant that Landlord pay Tenant’s Architect or Landlord’s MEP Engineer directly shall be accompanied by a reasonably detailed invoice from Tenant’s Architect or Landlord’s MEP Engineer, as the case may be, and in each instance Tenant’s request shall include an acknowledgement that services were rendered as detailed on such invoice in a manner satisfactory to Tenant and in accordance with the requirements of Tenant’s contract with such Tenant Representative.

(j)The above notwithstanding, Landlord shall not be required to make payments to Tenant or any Tenant Representative from the Tenant Improvement Allowance each more than once per thirty (30) days. Further, as condition precedent to paying to Tenant or any Tenant Representative any amount, which, together with amounts previously paid to Tenant or any Tenant Representative, equals the entire Tenant Improvement Allowance, Tenant shall provide copies of all required inspections having been passed and a certificate of occupancy having been issued by the City of Southfield. As additional conditions precedent to Landlord making any payment to Tenant’s General Contractor, which, together with amounts previously paid to Tenant’s General Contractor by Tenant or Landlord under Tenant’s contract with Tenant’s General Contractor to perform Tenant’s Work, equals the entire value of such contract (adjusted to account for any change orders executed between Tenant and Tenant’s General Contractor), Tenant’s General Contractor shall not be in violation of any of the Contractor Rules & Regulations included in Exhibit “E” and Tenant shall provide Landlord with copies of the final unconditional lien waiver from Tenant’s General Contractor and each of its subcontractors.

(k)As compensation for Landlord’s oversight of Tenant’s Work, Tenant shall pay to Landlord, upon demand, a fee in an amount equal to two percent (2%) of the total hard cost of such Tenant Work. Additionally, Tenant shall pay to Landlord, upon demand, amounts to reimburse Landlord for its actual cost related to the provision of Building personnel to operate elevators or otherwise to facilitate Tenant’s Work during times other than Building Hours provided such Building personnel would not otherwise have been working during such times as part of their normal working hours. Tenant shall, upon request, provide Landlord with reasonable evidence of all amounts expended by it for Tenant’s Work (including any “soft costs”).     

(l)At Landlord’s option, Landlord shall have the right to deduct any amounts due to Landlord in connection with Tenant’s Work, pursuant to Section 4(b) and Section 4(h) hereof, from the Tenant Improvement Allowance, or the portion then remaining, by providing written notice to Tenant along with reasonable supporting documentation for the amounts being deducted and the impact on the amount of the Tenant Improvement Allowance remaining and available to Tenant thereafter.

5.    Rental.

5.1    Tenant shall pay to Landlord as rental for the Demised Premises the Basic Rental set forth in Section 1(g) hereof, which shall be payable in equal monthly installments in advance, together with the rentals provided for in Section 5.3 hereof.

5.2    The following terms shall have the following meanings.

(a)The term “Expenses” shall mean the actual cost, on an accrual basis, incurred by Landlord with respect to the operation, maintenance, repair and replacement and administration of the Development, including, without limitation or duplication, (1) the costs incurred for air conditioning; mechanical ventilation; heating; cleaning (including janitorial services); rubbish removal; snow removal; plumbing and fixtures; fire protection and suppression, caulking and painting the exterior; roof repairs; Building/Development signage; asphalt and striping and parking deck concrete; general landscaping and maintenance; window washing, elevators, porter and matron services, electric current for the Common Areas; management fees; protection and security services; repairs, replacement, and maintenance; fire, extended coverage, boiler, sprinkler, apparatus, public liability and property damage insurance (including loss of rental income insurance); supplies; wages, salaries, disability benefits, pensions, hospitalization, retirement plans and group insurance respecting service and maintenance employees and management staff; accounting and administrative staff; uniforms and working clothes for such employees and the cleaning thereof; expenses imposed pursuant to any collective bargaining agreement with respect to such employees; payroll, social security, unemployment and other similar taxes with respect to such employees and staff; sales, use and other similar taxes; Landlord’s Michigan Business Tax (if applicable), water rates and sewer charges and personal property taxes; public relations and promotions; depreciation of movable equipment and personal property, which is, or should be, capitalized on the books of Landlord, and the cost of movable equipment and personal property, which need not be so capitalized, as well as the cost of maintaining all such movable equipment, and any other costs, charges and expenses which, under generally accepted accounting principles and practices, would be regarded as maintenance and operating expenses, and (2) the cost of any capital improvements made to the Development by Landlord after the 2014 calendar year that reduce other Expenses or made to the Development by Landlord after the 2014 calendar year that are required under any governmental law or regulation that was not applicable to the Development at the time it was constructed, such cost to be amortized over such reasonable period as Landlord shall determine, together with interest on the unamortized balance at the rate of two percent (2%) in excess of the then current “prime rate” published in The Wall Street Journal or such higher rate as may have been paid by Landlord on funds borrowed for the purpose of constructing such capital improvements. Notwithstanding anything to the contrary contained herein, Expenses shall not include the following:

1.Taxes, as defined in Section 5.2(d) hereof;

2.Costs incurred by Landlord to repair damage to the Building or Development or loss resulting from any casualty which Landlord has insured against, to the extent Landlord is reimbursed by insurance proceeds net of applicable deductible, provided the maximum deductible shall not exceed Twenty Five Thousand Dollars ($25,000);

3.Costs incurred by Landlord occasioned by the exercise of right of condemnation or eminent domain to the extent such costs are actually reimbursed by the authority exercising such rights;

4.Leasing commissions, space-planning costs, improvement and renovation costs, allowances, relocation expenses, permitting fees, attorney fees and costs, disbursements, and other expenses incurred in connection with leasing or negotiating with tenants, occupants, prospective tenants, or other prospective occupants of the Development;

5.Legal fees and costs associated arising from violation by Landlord or any tenant of the terms and conditions of any lease for space in the Development excepting actions taken by Landlord related to preserving Tenant’s rights in and to the Common Areas;

6.Income taxes, including Michigan corporate income tax, franchise taxes, transfer taxes, change of ownership taxes, estate taxes, inheritance taxes and capital stock taxes;

7.The cost of initial construction of the Development or of correcting defects relating to the initial construction of the Development, except that conditions (not occasioned by construction defects) resulting from ordinary wear and tear will not be deemed defects for the purpose of this category;

8.Notwithstanding any contrary provision of this Lease, costs arising from the presence of hazardous materials or substances (as defined by applicable laws in effect on the date of this Lease) in or about the Building or Development, unless the presence of such hazardous materials or substances was introduced or otherwise caused by Tenant or its employees, agents, contractors or invitees;

9.Renovating or otherwise improving, decorating, painting or redecorating leasable or leased space for other tenants or other occupants or vacant leasable space at the Development, other than ordinary maintenance otherwise provided to all tenants or emergency repairs, provided the foregoing shall in no event apply to Common Areas;

10.Costs for which Tenant or tenants reimburse Landlord or pay third parties;

11.Interest, principal, depreciation, and other lender costs and closing costs on any mortgage or mortgages, ground lease payments, or other debt instrument encumbering the Development;

12.Costs incurred to provide services to other tenants of the Development which are not available to Tenant without additional charge;

13.Fees paid to any affiliate or party related to Landlord to the extent the same exceeds the charges for comparable services rendered by unaffiliated third parties of comparable skill, stature and reputation in the same market (it being agreed upon by the parties that only the portion of such fees paid to any affiliate or party related to Landlord in excess of charges for comparable services rendered by unaffiliated third parties of comparable skill, stature and reputation in the same market shall be excluded from Expenses).

14.Costs associated with operation of the business of the ownership of the Development or entity that constitutes Landlord or Landlord’s property manager, as distinguished from the cost of Development operations, including the costs of partnership or corporate accounting and legal matters; defending or prosecuting any lawsuit with any mortgagee, lender, ground landlord, broker, tenant, occupant, or prospective tenant or occupant; selling or syndicating any of Landlord’s interest in the Building; and disputes between Landlord and Landlord’s property manager;

15.Landlord’s general corporate or partnership overhead and general administrative expenses, except as provided for in Section 5.2(a) of the Lease;

16.Compensation paid to clerks, attendants or other persons in any commercial concessions operated by or for Landlord;

17.Advertising and promotional expenditures for the purpose of leasing space at the Development, with the exception of reasonable holiday lighting;

18.The cost of acquiring or leasing any sculpture, painting, or other work of art, in excess of Ten Thousand Dollars ($10,000) during any given Lease Year (it being agreed that the foregoing exclusion from Expenses shall not apply to lobby plants and other reasonable decorations in the Common Areas of the Development);

19.The cost of capital improvements, except as set forth in Section 5.2(a) of the Lease;

20.Any fines or penalties incurred due to violation by Landlord of any governmental rule or authority applicable to the Development;

21.Depreciation and amortization except as otherwise provided for herein;

(b)For any period of time during which the Building is less than one hundred percent (100%) occupied, the Expenses attributable to that period shall be adjusted to equal Landlord’s reasonable estimate of such Expenses had the total Building been occupied and had the total Building been furnished all services.

(c)Landlord shall have the right to aggregate the Expenses relating to the exterior Common Areas serving the Building and the exterior common areas serving the building located at 26555 Evergreen Road, Southfield, Michigan, and allocate such Expenses between the Building and said other building on a reasonable and equitable basis.

(d)The term “Base Expenses” shall mean the Expenses for the 2015 calendar year.

(e)The term “Additional Expenses” shall mean the total dollar increase, if any, over the Base Expenses paid or incurred by Landlord for Expenses in the respective calendar year. Notwithstanding the above, all Controllable Direct Expenses, as hereinafter defined, shall not increase by more than five percent (5%) per annum on a cumulative and compounding basis during the Term of this Lease. For the purposes hereof, Controllable Direct Expenses shall be defined as all Expenses other than:

1. Utilities (including, but not limited to, natural gas, electric current, water, and sewer charges);

2. Insurance;

3. Snow removal;

4. Disability benefits, pensions, hospitalization, retirement plans and group insurance respecting service and maintenance employees and management staff; expenses imposed pursuant to any collective bargaining agreement with respect to such employees; payroll, social security, unemployment and other similar taxes with respect to such employees and staff;

5. Sales, use and other similar taxes;

6. Landlord’s Michigan Business Tax (if applicable);

7. Personal property taxes; and

8. The cost of those capital improvements identified in Section 5.2.(a)(2) hereof.

(f)The term “Taxes” shall mean the amount incurred by Landlord of all ad valorem real property taxes and assessments, special or otherwise, levied upon or with respect to the Development, or the rent and additional charges payable hereunder, imposed by any taxing authority having jurisdiction. Taxes shall also include all taxes, levies and charges which may be assessed, levied or imposed in replacement of, or in addition to, all or any part of ad valorem real property taxes as revenue sources, and which in whole or in part are measured or calculated by or based upon the Development, the freehold and/or leasehold estate of Landlord or Tenant, or the rent and other charges payable hereunder. Taxes shall include any expenses incurred by Landlord in determining or attempting to obtain a reduction of Taxes.

(g)The term “Base Taxes” shall mean the 2015 real estate tax rate applicable to the Development multiplied by the taxable value of the Development determined by the City of Southfield, Michigan as of December 31, 2014, or as finally determined in the event Landlord appeals such assessment.

(h)The term “Additional Taxes” shall mean the total dollar increase, if any, over the Base Taxes paid or incurred by Landlord for Taxes in the respective calendar year.

(i)The term “Tenant’s Share” shall mean the percentage set forth in Section 1(h) hereof. Tenant’s Share has been computed on the basis of the fraction whose numerator equals the product obtained by multiplying the square foot area of the Demised Premises measured in accordance with Section 2.2 hereof by1.075 with respect to any full floors of the Building included within the Demised Premises and by 1.135 for any partial floors of the Building included within the Demised Premises (such factors being applied in lieu of the square foot area of the Demised Premises containing a proportionate share of the Common Areas) and whose denominator equals the total leasable square foot area of the Building (including the Demised Premises), which equals 337,897 square feet as of the date hereof. In the event the square foot area of the Demised Premises or the leasable square foot area of the Building shall be determined to differ from that utilized in computing Tenant’s Share, Tenant’s Share shall be adjusted accordingly, it being agreed upon by the parties that the square foot area of the Demised Premises identified in Section 1(d) hereof shall not be subject to re-measurement during the Term of this Lease unless there is an expansion or contraction of the Demised Premises pursuant to Sections 11, 13, 36.2 or 43 of this Lease or pursuant to a separate written agreement between the parties providing for such expansion or contraction of the Demised Premises.

5.3    (a)    Tenant shall pay to Landlord as additional rental Tenant’s Share of Additional Expenses and Additional Taxes in the manner and at the times herein provided.

(b)    With respect to Additional Expenses and Additional Taxes, prior to the Commencement Date and prior to the beginning of each calendar year thereafter, or as soon thereafter as practicable, Landlord shall give Tenant notice of Landlord’s estimate of Tenant’s Share of Additional Expenses and Additional Taxes for the ensuing calendar year. On or before the first day of each month during the ensuing calendar year, Tenant shall pay to Landlord one-twelfth (1/12th) of such estimated amounts, provided that until such notice is given with respect to the ensuing calendar year, Tenant shall continue to pay the amount currently payable pursuant hereto until after the month such notice is given. If at any time or times (including, without limitation, upon Tenant taking occupancy of the Demised Premises) it appears to Landlord that Tenant’s Share of Additional Expenses or Tenant’s Share of Additional Taxes for the then current calendar year will vary from Landlord’s estimate by more than five percent (5%), Landlord may, by notice to Tenant, revise its estimate for such year and subsequent payments by Tenant for such year shall be based upon such revised estimate.

(c)    If the Commencement Date of the Lease shall occur on a day other than the first day of a calendar year or if the Expiration Date shall occur on a day other than the last day of a calendar year, Tenant’s Share of Additional Expenses and/or Additional Taxes that is applicable to the calendar year in which such Commencement Date or Expiration Date shall occur shall be prorated on the basis of the number of calendar days within such calendar year as are within the Term.

(d)    Within ninety (90) days after the close of each calendar year, or as soon after such ninety (90) day period as practicable Landlord shall deliver to Tenant a statement prepared by Landlord of Tenant’s Share of Additional Expenses and Additional Taxes, respectively, for such calendar year and such statements shall be final and binding upon Landlord and Tenant, subject to Section 5.3(e) hereof. If on the basis of either of such statements, Tenant owes an amount that is less than the estimated payments for such calendar year previously made by Tenant, Landlord shall credit such excess amount against the next payment(s) due from Tenant to Landlord of Additional Expenses or Additional Taxes, as the case may be or, upon request by Tenant, Landlord shall refund such overpayment to Tenant. If on the basis of such statement, Tenant owes an amount that is more than the estimated payments for such calendar year previously made by Tenant, Tenant shall pay the deficiency to Landlord within thirty (30) days after delivery of such statement. Tenant’s obligation to pay Tenant’s Share of Additional Expenses and Additional Taxes and Landlord’s obligation to reimburse Tenant for any over payment of same, shall survive the Expiration Date or sooner termination of this Lease.

(e)    Notwithstanding anything to the contrary contained in this Lease, Tenant may, within thirty (30) days after receiving Landlord's statement of Additional Expenses and Additional Taxes, give Landlord written notice ("Review Notice") that Tenant intends to review Landlord's records of the of Additional Expenses and Additional Taxes for that calendar year. Within a reasonable time after receipt of the Review Notice, Landlord shall make all pertinent records available for inspection that are reasonably necessary for Tenant to conduct its review. If any records are maintained at a location other than the office of the Building, Tenant may either inspect the records at such other location or pay for the reasonable cost of copying and shipping the records. If Tenant retains an agent to review Landlord’s records, such agent must have expertise in and familiarity with general industry practice with respect to the operation of and accounting for a first class office building. Tenant shall be solely responsible for all costs, expenses and fees incurred for the audit. Within thirty (30) days after the records are made available to Tenant, Tenant shall have the right to give Landlord written notice (an "Objection Notice") stating in reasonable detail any objection to Landlord's statement of Operating Expenses for that year. If Tenant fails to give Landlord an Objection Notice within the thirty (30) day period or fails to provide Landlord with a Review Notice within the thirty (30) day period described above, Tenant shall be deemed to have approved Landlord's statement of Additional Expenses and Additional Taxes. If Tenant provides Landlord with a timely Objection Notice, Landlord and Tenant shall work together in good faith to resolve any issues raised in Tenant's Objection Notice. If Landlord and Tenant determine that Additional Expenses and Additional Taxes, for the calendar year are less than reported, Landlord shall provide Tenant with a credit against the next installment of Rent in the amount of the overpayment by Tenant or Tenant may demand a refund of such overpayment. Likewise, if Landlord and Tenant determine that Additional Expenses and Additional Taxes for the calendar year are greater than reported, Tenant shall pay Landlord the amount of any underpayment within thirty (30) days.

5.4    The installment of the Basic Rental provided for in Section 5.1 hereof for the first full month of the Term during which Basic Rental is due shall be paid by Tenant to Landlord upon execution of this Lease. Basic Rental shall be paid to Landlord on or before the first day of each and every successive calendar month in advance after the first month during the Term. In the event the Commencement Date is other than the first day of a calendar month, or the Expiration Date is other than the last day of the calendar month, then the monthly rental for the first and last fractional months of the Term shall be appropriately prorated.

5.5    Tenant shall pay as additional rental any money and charges required to be paid by Tenant pursuant to the terms of this Lease, whether or not the same may be designated “additional rent.”

5.6    Except as above provided, Basic Rental and additional rental shall be paid to Landlord without notice or demand and without deduction or offset, in lawful money of the United States of America at Landlord’s address for notices hereunder or to such other person or at such other place as Landlord may from time to time designate in writing. All amounts payable by Tenant to Landlord hereunder, if not paid within ten (10) calendar days of when due, shall be subject to an administrative late charge of Five Hundred Dollars ($500.00) and shall bear interest from the due date until paid at the rate equal to two percent (2%) in excess of the then current “prime rate” published in The Wall Street Journal. If no such prime rate is published, the prime rate shall be deemed to be ten percent (10%) for all purposes under this Lease.

6.    Other Taxes Payable by Tenant.

In addition to the Basic Rental and other charges to be paid by Tenant hereunder, Tenant shall reimburse Landlord upon demand for any and all taxes payable by Landlord (other than income taxes and taxes included within Taxes) whether or not now customary or within the contemplation of the parties hereto: (a) upon, measured by or reasonably attributable to the cost or value of Tenant’s equipment, furniture, fixtures and other personal property located in the Demised Premises or by the cost or value of any leasehold improvements made in or to the Demised Premises by or for Tenant, other than the Improvements, regardless of whether title to such improvements shall be in Tenant or Landlord; (b) upon or with respect to the possession, leasing, operation, management, maintenance, alteration, repair, use or occupancy by Tenant of the Demised Premises or any portion thereof; and (c) upon this transaction or any document to which Tenant is a party creating or transferring an interest or an estate in the Demised Premises. In the event that it shall not be lawful for Tenant so to reimburse Landlord, the monthly rental payable to Landlord under this Lease shall be revised to net to Landlord the same rental after imposition of any such tax upon Landlord as would have been payable to Landlord prior to the imposition of any such tax.

7.    Use.

7.1    The Demised Premises shall be used only for the purposes of “Tenant’s Use” as set forth in Section 1(i) hereof, and for no other purpose or purposes whatsoever.

7.2    Tenant shall not do or permit to be done in or about the Demised Premises, nor bring or keep or permit to be brought or kept therein, anything which is prohibited by or will in any way conflict with any law, statute, ordinance or governmental rule or regulation now in force or which may hereafter be enacted or promulgated, or which is prohibited by the standard form of fire insurance policy, or cause a cancellation of any insurance policy covering the Building or the Development or any part thereof or any of its contents, or adversely affect or interfere with any services required to be furnished by Landlord to Tenant, or to any other tenants or occupants of the Building or the Development, or with the proper and economical rendition of any such service. Tenant shall not do or permit anything to be done in or about the Demised Premises which will in any way obstruct or interfere with the rights of other tenants of the Building or the Development, or injure them, or use or allow the Demised Premises to be used for any unlawful purpose, nor shall Tenant cause, maintain or permit any nuisance in, on or about the Demised Premises or commit or suffer to be committed any waste in, on or about the Demised Premises. If anything done, omitted to be done or suffered to be done by Tenant, or kept or suffered by Tenant to be kept in, upon or about the Demised Premises shall cause the rate of fire or other insurance on the Building or the Development in companies acceptable to Landlord to be increased beyond the minimum rate from time to time applicable to the Building or the Development, Tenant shall pay the amount of any such increases. Except for substances in quantities that are customarily used for office purposes, Tenant shall not cause or permit the use, generation, storage or disposal in or about the Demised Premises or the Building or the Development of any substances, materials or wastes subject to regulation under federal, state or local laws from time to time in effect concerning hazardous, toxic or radioactive materials, unless Tenant shall have received Landlord’s prior written consent, which Landlord may withhold or at any time revoke in its sole discretion.

8.    Services.

8.1    Landlord shall maintain the Common Areas including any lobbies, stairs, elevators, corridors and restrooms, together with the windows and exterior walls, roofs, foundations and structure itself of the Building and the mechanical, plumbing and electrical equipment servicing the Building, in good order and condition and in a manner consistent with first class office buildings in the Southfield, Michigan market and, to the extent permitted under Section 5, the cost shall be included in Expenses, except for the repairs due to fire and other casualties (to the extent the cost of such repairs are covered by insurance proceeds) and for the repair of damages occasioned by the intentional acts of Tenant, which Tenant shall pay to Landlord in full.

8.2     Tenant agrees to purchase from Landlord or from a meter company designated by Landlord, all electric current consumed, used or to be used in the Demised Premises, and to pay to Landlord or to a meter company designated by Landlord as Additional Rent therefor pursuant to the terms of this Lease for the supply of electric service at the General Service Rate No. D3 that was published February 6, 2013 (the "Rate") pursuant to which Landlord then purchased electric current from the Public Utility ("Public Utility") supplying a portion of the Building of which the Demised Premises are a part, or if any increase in rates becomes effective during the term of this Lease for similar service by any Public Utility servicing the part of the City where the Building is located; if the Rate or charge (including any adjustments and all applicable taxes) to be paid by Landlord is increased, at any time after, such increase or increases shall be paid by Tenant to Landlord or meter company designated by Landlord, when billed. The amount to be paid by Tenant for current consumed shall be determined by the submeter or submeters on the Demised Premises or to be installed by Landlord at Landlord’s sole costs and billed according to the consumption and demand shown on the submeters which shall be billed based on the Rate. Bills for current consumed shall be rendered by Landlord, or the meter company, to Tenant at such times as Landlord may elect. In the event Tenant is late in the payment of electricity pursuant to this paragraph, beyond any applicable grace period, in any two (2) months out of a twelve month period, Tenant shall deposit with Landlord, or the meter company designated by Landlord, security equal to one month's electricity charges for the Demised Premises as determined by the greatest electricity charge for any one month during the twelve month period immediately preceding the date that the second payment is not made on time in any twelve (12) month period multiplied by three (3) (the “Electric Deposit”). Landlord may, but shall have no obligation to, use, apply or retain all or any portion of the Electric Deposit for payments required under this Section 8.2 or for the payment of any other sum to which Landlord may become obligated by reason of Tenant’s default of its obligations under this Section 8.2, or to compensate Landlord for any loss or damage which Landlord may suffer thereby under this Section 8.2. If Landlord so uses or applies all or any portion of the Electric Deposit, Tenant shall within ten (10) days after demand therefor deposit cash with Landlord in an amount sufficient to restore the Electric Deposit to the full amount thereof. Landlord shall not be required to keep the Electric Deposit separate from its general accounts. If Tenant performs all of Tenant’s obligations hereunder, the Electric Deposit or so much thereof as has not theretofore been applied by Landlord, shall be returned, without payment of interest or other increment for its use, to Tenant (or, at Landlord’s option, to the last assignee, if any, of Tenant’s interest hereunder) within forty-five (45) days following the Expiration Date, and after Tenant has vacated the Demised Premises in the condition required hereby. No trust relationship is created herein between Landlord and Tenant with respect to the Deposit.

In the event Tenant is late in the payment of electricity pursuant to this Section 8.2, beyond any applicable notice grace or cure period, in an amount representing such cumulative charges for any four (4) months (indicating that, at the time, Tenant has consumed and been billed for electricity pursuant to this Section 8.2 corresponding to three (3) prior months and, at the time, Tenant has failed to pay these amounts despite being provided notice as required under this Lease, and, at the time, all grace and cure periods applicable to all such amounts have expired), Landlord and the meter company designated by Landlord shall have the right, without incurring any liability of any kind, to terminate providing and furnishing electricity to the Demised Premises upon five (5) days prior written notice.

Any tax now in effect or hereinafter imposed upon Landlord's receipts from the sale or resale of electrical energy to Tenant by any Municipal, State or Federal agency shall be passed on to Tenant and included in the bills of and paid by Tenant to Landlord or meter company designated by Landlord.

In the event that the "submetering" of electric current in the Building containing the Demised Premises is hereafter prohibited by any law hereinafter enacted, or by any order or ruling of the State of Michigan or the City of Southfield, or by any judicial decision of any appropriate court, Tenant will, at the written request of Landlord, apply within twenty (20) days to the appropriate Public Utility servicing the Building containing the Demised Premises for direct electric service, and comply with all rules and regulations of such Public Utility pertinent thereto. Until the Public Utility begins serving the Demised Premises directly, Landlord shall continue to supply such services pursuant to the terms of this Section 8.2. Upon commencement of services directly from the Public Utility, Landlord and/or the meter company theretofore designated by Landlord shall be relieved of any further obligation to furnish electric current to Tenant pursuant to this Section 8.2.

In the event that "submetering" is discontinued and in the event Tenant obtains direct service from the Public Utility servicing the Building containing the Demised Premises, Landlord will at its own cost and expense, furnish and install all risers, service wiring, switches, meter equipment and meters that may be necessary for such installation, and will at its own cost and expense maintain and keep in good repair all such riser, risers, wiring and/or switch or switches, meter equipment and/or meter or meters.

In the event any legislature, or order of the Public Service Commission or any judicial body enacts any law, ruling or regulation to effect the service classification or rate under which Tenant now purchases electric current from Landlord, then and in that event, Tenant will pay as Additional Rent to Landlord or Landlord's designated agent for the use and maintenance of the Building's electric distribution system an amount equal to the Rates or charges hereinabove described and that Rate or charge as set forth by any legislature, order of any government body or any judicial body after the date hereof.

Landlord shall not in any way be liable or responsible to Tenant for any loss or damage or expense which Tenant may sustain or incur if either the quantity or character of electric services is changed or is no longer available or suitable for Tenant’s requirements. In no event shall Tenant use or install any fixtures, equipment or machines, the use of which in conjunction with other fixtures, equipment and machines in the Demised Premises, would result in an overload of the electric circuits servicing the Demised Premises or the Building. Tenant covenants and agrees that at all times its use of electric current shall never exceed the capacity of the then existing feeders to the Building or the risers or wiring installations serving the Demised Premises. Landlord shall furnish, install and replace, as required, all lighting tubes, lamps, bulbs and ballasts required in the Demised Premises, at Tenant’s sole cost and expense. All lighting tubes, lamps, bulbs and ballasts so installed shall become Landlord’s property upon the Expiration Date or sooner termination of this Lease.

8.3    Landlord shall furnish the Demised Premises with (a) heat, ventilation and air conditioning to the extent required for the occupancy of the Demised Premises to standards of comfort and during such hours in each case as reasonably determined by Landlord for the Building (which hours, until Landlord shall otherwise designate, shall be from 7:00 a.m. to 6:00 p.m. on weekdays and from 7:00 a.m. to 12:00 p.m. on Saturdays; in each case except Holidays (collectively “Business Hours”) or as may be prescribed by any applicable policies or regulations adopted by any utility or governmental agency, (b) elevator service during Business Hours, and (c) janitorial service in accordance with Exhibit ”C” hereto only to the areas of the Demised Premises used for office purposes Monday through Friday, Holidays excepted , and in the manner that services are furnished in comparable first class office buildings in the area, provided that Landlord shall not provide janitorial services to any portion of the Demised Premises used for other than office purposes such as preparing, dispensing or consumption of food or beverages or as an exhibition area or for storage, shipping room, washroom or similar purposes, or as private restrooms or a shop or for the operation of computer data processing, reproduction, duplicating or similar equipment. In addition, Landlord shall replace all burned out fluorescent (only) tubes, ballasts and starters, and Tenant shall be billed therefor. Landlord shall not be in default hereunder or be liable for any damages directly or indirectly resulting from, nor shall the rental herein reserved by abated by reason of: (1) the installation, use or interruption of use of any equipment in connection with the furnishing of any of the foregoing services, (2) failure to furnish or delay in furnishing any such services when such failure or delay is caused by accident or any condition beyond the reasonable control of Landlord or by the making of necessary repairs or improvements to the Demised Premises or to the Building or the Development, or (3) any limitation, curtailment, rationing or restriction on use of water, electricity, steam, gas or any other form of energy serving the Demised Premises or the Building or the Development. Landlord shall use reasonable efforts diligently to remedy any interruption in the furnishing of such services. Notwithstanding the provisions of this Section 8.3, Landlord shall not be required to provide ventilation and air conditioning to the Demised Premises as herein provided if Tenant shall utilize in the Demised Premises heat generating equipment or lighting other than building standard lights which affect the temperature otherwise maintained by the air conditioning system or if the Demised Premises are occupied by a number of persons in excess of the design criteria of the air conditioning system, as set forth Exhibit “G” attached hereto and made a part hereof. Tenant shall do nothing in the Demised Premises which is in violation of Exhibit “G.”

8.4    Tenant shall pay as additional rent the cost of providing all heating, ventilating and air conditioning, including all costs associated with the installation of meters for measuring the same, to the Demised Premises in excess of that required for normal office use or during hours requested by Tenant when heating, ventilating and air conditioning is not otherwise furnished by Landlord. Tenant shall notify Landlord in writing at least twenty‑four (24) hours prior to the time it requires heating, ventilating and air conditioning during periods the same are not otherwise furnished by Landlord. Notwithstanding the foregoing, Landlord shall only be required to provide heating, ventilating and air conditioning to the extent available utilizing the existing equipment servicing the Building and to the extent that Tenant’s load is equal to or greater than the minimum requirement of the Building’s heating or air conditioning systems, as the case may be. The current hourly rate for this service is $90.00, which shall only be subject to change based on the actual increase in utility or labor costs to provide such services.

8.5    Landlord reserves the right to suspend any service when necessary, by reason of Unavoidable Delays (as defined in Section 37 below), accidents or emergencies or for repairs or alterations (“Restorative Work”) which, in Landlord’s reasonable judgment, are necessary or appropriate until such Unavoidable Delay, accident or emergency shall cease or such Restorative Work is completed and Landlord shall not be liable for any interruption, curtailment or failure to supply services. Landlord shall use reasonable efforts to minimize interference with Tenant’s use and occupancy of the Demised Premises as a result of any such interruption, curtailment or failure of or defect in such service, or change in the supply, character and/or quantity of electrical service, and to restore any such services, remedy such situation and minimize any unreasonable interference with Tenant’s business. The exercise of any such right or the occurrence of any such failure by Landlord shall not constitute an actual or constructive eviction, in whole or in part, entitle Tenant to any compensation, abatement or diminution of Basic Rental and additional rent, relieve Tenant from any of its obligations under this Lease, or impose any liability upon Landlord or any Indemnitee (as defined in Section 41 below) by reason of inconvenience to Tenant, or interruption of Tenant’s business, or otherwise. Landlord shall not be liable in any way to Tenant for any failure, defect or interruption of, or change in the supply, character and/or quantity of electric service furnished to the Demised Premises for any reason except if attributable to the gross negligence or willful misconduct of Landlord. The above notwithstanding, if any suspension of services not caused by the negligence or willful misconduct of Tenant or its agents, contractors or invitees materially interferes with Tenant’s Use of the Demised Premises for more than ten (10) consecutive business days, Annual Basic Rental and Additional Expenses shall abate until such services are restored.

8.6    The above notwithstanding, Landlord represents and warrants that the minimum electrical service available to the Demised Premises for lighting and power for receptacles and Tenant’s equipment shall be no less than five (5) watts per square foot.

8.7    Landlord shall provide guard service including a security guard to be stationed in the main lobby of the Building, twenty-four (24) hours a day, seven (7) days per week and a security guard that patrols the parking lot and parking deck during the hours of 5:00 p.m. to 12:00 a.m. Monday through Friday. Additionally, Landlord shall at all times maintain security cameras in quantity and installed at locations reasonably required to monitor the first floor Common Areas and exterior entrances to the Building.

8.8    Landlord shall be obligated to correct any latenet defects in the original design and construction of the Development.

8.9    All services to be provided by Landlord under this Lease shall be performed to a standard consistent with that of other first class office buildings in the Southfield, Michigan market.

9.    Alterations and Repairs. This Article 9 shall not apply to Tenant’s Work to be made by Tenant within the Demised Premises in connection with Tenant’s initial occupancy of the Demised Premises, which are governed by Section 4 hereof.

9.1    Tenant shall not make or suffer to be made any alterations, additions or improvements (collectively “Alterations”) to or of the Demised Premises or any part thereof, or attach any fixtures or equipment thereto, without first obtaining Landlord’s consent. In all cases, Tenant shall, at its sole cost and expense, use Landlord’s HVAC controls and fire alarm contractors for any applicable Alterations and if such Alterations require the services of a professional engineering consultant, Tenant shall engage Landlord’s engineer for such services. All such Alterations shall be performed by contractors and subject to conditions approved by Landlord, which approval shall not be unreasonably withheld or delayed. All such Alterations shall become the property of Landlord upon their installation and/or completion and shall remain on the Demised Premises upon the expiration or termination of this Lease without compensation to Tenant unless Landlord elects by notice to Tenant at the time of approval to have Tenant remove the same, in which event Tenant shall restore the Demised Premises to their condition prior to the installation of such Alterations promptly after surrendering the Demised Premises at the termination of the Lease. Notwithstanding anything herein contained to the contrary, upon the Expiration Date or sooner termination of this Lease, Tenant shall remove all of Tenant’s computer and telecommunications cabling and wires used or installed by Tenant within and servicing the Demised Premises, unless Landlord in its sole discretion, consents to the surrender of all or any portion of such computer and telecommunications cabling and wires as part of the Demised Premises. Tenant shall repair and restore any damage to the Demised Premises or any part of the Building caused by such removal by Tenant.

9.2    Subject to the provisions of Section 9.1 hereof, Tenant shall keep the Demised Premises and every part thereof in good order, condition, and repair, and shall make replacements as needed to maintain the Demised Premises in good order, condition and repair (collectively “Repairs”). All repairs and replacements made by or on behalf of Tenant shall be made and performed in such manner as Landlord may designate, by contractors or mechanics approved by Landlord, such approval not to be unreasonably withheld or delayed, and in accordance with the rules relating thereto annexed to this Lease as Exhibit ”E” and all applicable laws and regulations of governmental authorities having jurisdiction. Tenant shall, subject to the provisions of Section 9.1 hereof, at the end of the term hereof surrender to Landlord the Demised Premises in the same condition as when received, ordinary wear and tear and damage by fire, earthquake, act of God or the elements excepted. Landlord has no obligation and has made no promise to alter, remodel, improve, repair, decorate or paint the Demised Premises or any part thereof and no representations respecting the condition of the Demised Premises or the Building have been made by Landlord to Tenant except as expressly set forth in this Lease.

9.3    Tenant shall not employ, or permit the employment of, any contractor, mechanic or laborer, or permit any materials to be delivered to or used in the Building, if, in Landlord’s reasonable judgment, such employment, delivery or use will interfere or cause any conflict with other contractors, mechanics or laborers engaged in the construction, maintenance or operation of the Building or the Development by Landlord, Tenant or others. If such interference or conflict occurs, upon Landlord’s request, Tenant shall cause all contractors, mechanics or laborers causing such interference or conflict to leave the Building and the Development immediately. Tenant shall require that any of its contractors comply with the rules and regulations as set forth in Exhibit “E” attached hereto and made a part hereof.

9.4    Tenant shall pay to Landlord, upon demand, all out-of-pocket costs actually incurred by Landlord in connection with Tenant’s Alterations, including costs incurred in connection with (a) Landlord’s review of the Alterations (including review of requests for approval thereof) and (b) the provision of Building personnel during the performance of any alteration, to operate elevators or otherwise to facilitate Tenant’s Alterations during non-Business Hours provided such Building personnel would not have otherwise been working during such times as part of their normal working hours.

If any such Alterations to the Demised Premises consented to by Landlord shall, at Tenant’s request, be made by Landlord for Tenant’s account, Tenant shall reimburse Landlord for the actual cost thereof (including an administrative/supervision charge equal to three percent (3%) of the total hard and soft cost of the Alterations) as the work proceeds within thirty (30) days after receipt of statements therefor. If any such Alternations to the Demised Premises consented to by Landlord shall be made by Tenant’s contractors as provided for in this Section 9, and such Alterations cost more than Twenty Five Thousand Dollars ($25,000), Tenant shall pay to Landlord, upon demand, an administrative fee in an amount equal to three percent (3%) of the total cost of such Alterations. Tenant shall, upon request, provide Landlord with reasonable evidence of all amounts expended by it for Alterations (including any “soft costs”).

9.6    Notwithstanding anything to the contrary contained in this Lease, Tenant shall have the right to perform any Alterations the cost of which is Twenty Five Thousand Dollars ($25,000) or less and any minor decorating improvements without the approval of Landlord provided such Alterations do not impact the Building’s mechanical, electrical, plumbing, fire and life safety, structural, façade or roof systems, do not adversely impact other tenants at the Development, and do not include modifications to the Common Areas.

10.    Liens.

Any construction and/or mechanic’s lien filed against the Demised Premises or the Building for work claimed to have been done or materials claimed to have been furnished to Tenant shall be discharged by Tenant within fifteen (15) days after written notice from Landlord. For the purposes hereof, the bonding of such lien by a reputable casualty or insurance company reasonably satisfactory to Landlord shall be deemed the equivalent of a discharge of any such lien. Should any action, suit, or proceeding be brought upon any such lien for the enforcement or foreclosure of the same, Tenant shall defend Landlord therein, by counsel satisfactory to Landlord, and pay any damages and satisfy and discharge any judgment entered therein against Landlord.

11.    Destruction or Damage.

11.1    In the event the Demised Premises or any portion of the Building or the Development necessary for Tenant’s occupancy are damaged by fire, earthquake, act of God, the elements or other casualty in each case insured against by Landlord’s fire and extended coverage insurance policy covering the Building and the Development and, if Landlord’s reasonable estimate of the cost of making such repairs does not exceed the proceeds of such insurance by more than One Hundred Thousand Dollars ($100,000), Landlord shall forthwith repair the same if such repairs can, in Landlord’s opinion, be completed within one hundred twenty (120) days after commencement of such repairs. This Lease shall remain in full force and effect except all Basic rent and other sums due hereunder from Tenant, including Basic Rental, shall be abated for such part of the Demised Premises as shall be rendered unusable by Tenant in the conduct of its business during the time such part is so unusable to the extent Landlord is reimbursed therefor by loss of rental income or other insurance. If such repairs cannot, in Landlord’s opinion, be made within one hundred twenty (120) days, or if such damage or destruction is not insured against by Landlord’s fire and extended coverage insurance policy covering the Building or the Development or if Landlord’s reasonable estimate of the cost of making such repairs exceeds the proceeds of such insurance by more than Two Hundred Thousand Dollars ($200,000), Landlord may elect, upon notice to Tenant within thirty (30) days after the date of such fire or other casualty, to repair or restore such damage, in which event this Lease shall continue in full force and effect, but all rent and other sums due hereunder from Tenant, including Basic Rental shall be partially abated as provided in this Section 11.1. If Landlord elects not to make such repairs, this Lease shall terminate as of the date of such election by Landlord. If the estimated time to repair such damage or destruction exceeds one hundred eighty (180) days then Tenant shall have the right to terminate this Lease be providing Landlord at least thirty (30) days prior written notice of such election provided such damage or destruction was not caused by Tenant or its agents, employees, or contractors and provided Tenant is not in Default of this Lease beyond applicable notice, grace or cure periods at the time of the giving of such notice of termination.

11.2    A total destruction of the Building, as determined by Landlord’s architect shall automatically terminate this Lease as of the date of the fire, earthquake, act of God, or other casualty.

11.3    If the Demised Premises are to be repaired under this Section 11, Landlord shall repair at its cost any injury or damage to the Building itself and building standard tenant improvements in the Demised Premises to be constructed or installed by Landlord as set forth in Exhibit ”H.” Tenant shall perform and pay the cost of repairing any other improvement in the Demised Premises and shall be responsible for carrying such casualty insurance as it deems appropriate with respect to such other tenant improvements and contents.

11.4    Landlord’s obligations to restore the Demised Premises, the Building, and the Development as set forth in this Section 11 shall be subject to the consent of the mortgagee, if any.

12.    Subrogation.

Landlord and Tenant shall each obtain from their respective insurers under all policies of fire insurance maintained by either of them at any time during the Term insuring or covering the Building or the Development or any portion thereof or operations therein, a waiver of all rights of subrogation which the insurer of one party might have against the other party, and Landlord and Tenant shall each indemnify the other against any loss or expense, including reasonable attorneys’ fees, resulting from the failure to obtain such waiver and, so long as such waiver is outstanding, each party waives, to the extent of the proceeds received under such policy, any right of recovery against the other party for any loss covered by the policy containing such waiver; provided, however, that if at any time their respective insurers shall refuse to permit waivers of subrogation, Landlord or Tenant, in each instance, may revoke said waiver of subrogation effective thirty (30) days from the date of such notice, unless within such thirty (30) day period, the other is able to secure and furnish (without additional expense) equivalent insurance with such waivers with other companies satisfactory to the other party.

13.    Eminent Domain.

If all or any part of the Demised Premises or the Building or the Development shall be taken as a result of the exercise of the power of eminent domain, this Lease shall terminate as to the part so taken as of the date of taking, and, in the case of partial taking of the Demised Premises, either Landlord or Tenant shall have the right to terminate this Lease as to the balance of the Demised Premises by notice to the other within thirty (30) days after such date; provided, however, that a condition to the exercise by Tenant of such right to terminate shall be that the portion of the Demised Premises taken shall be of such extent and nature as substantially to handicap, impede or impair Tenant’s use of the balance of the Demised Premises. In the event of any taking, Landlord shall be entitled to any and all compensation, damages, income, rent, awards, or any interest therein whatsoever which may be paid or made in connection therewith, and Tenant shall have no claim against Landlord for the value of any unexpired term of this Lease or otherwise, provided that Tenant, shall have the right, to the extent that the same shall not reduce or prejudice Landlord’s award, to claim and receive from the condemning authority such compensation as may be recoverable by Tenant in its own right for moving expenses, damage to Tenant’s property and business, the cost of leasehold improvements paid by Tenant, and value of Tenant’s leasehold. . In the event of a partial taking of the Demised Premises which does not result in a termination of this Lease, the rental thereafter to be paid shall be reduced on a per square foot basis; provided, however, if more than 25% of the Demised Premises are taken, Tenant shall have the right to terminate this Lease by providing written notice to Landlord within thirty (30) days of the date of such taking.

14.    Landlord’s Insurance.

Landlord shall, during the Term, provide and keep in force or cause to be provided or kept in force:

(a)    Commercial general liability insurance with respect to Landlord’s operation of the Development for bodily injury or death and damage to property of others;

(b)    “All risks” (also known as “special form - cause of loss”, including theft and leakage from fire protective devices) property insurance in respect of the Building and the Development, excluding Tenant’s trade fixtures, equipment and personal property;

(c)    Loss of rental income insurance;

together with such other insurance as Landlord, in its sole discretion, elects to obtain. Insurance effected by Landlord shall be in amounts which Landlord shall from time to time determine reasonable and sufficient, shall be subject to such deductibles and exclusions which Landlord may deem reasonable and shall otherwise be on such terms and conditions as Landlord shall from time to time determine reasonable and sufficient. Tenant acknowledges that Landlord’s loss of rental income insurance may provide that (i) payments thereunder by the insurer will be limited to a period of one year following the date of any destruction and damage, and (ii) no insurance proceeds will be payable thereunder in the case of destruction or damage caused by any occurrence other than fire and other risks included in the standard extended coverage endorsement perils of a fire insurance policy. Landlord hereby waives all claims against Tenant for damage to any property or injury or death of any person in, upon or about the Development arising at any time and from any cause whatsoever unless caused by Tenant’s negligence or willful acts.

15.    Tenant’s Insurance.

15.1    Tenant hereby waives all claims against Landlord for damage to any property or injury or death of any person in, upon or about the Demised Premises arising at any time and from any cause whatsoever unless caused by Landlord’s negligence or willful acts. The provisions of this Section 15.1 shall survive the termination of this Lease with respect to any damage, injury or death occurring prior to such termination.

15.2    Tenant shall procure and keep in effect commercial general liability insurance, including blanket contractual liability, with minimum limits of liability of One Million Dollars ($1,000,000) combined single limit (per occurrence and annual aggregate) for bodily injury or death, and property damage. From time to time, Tenant shall increase the limits of such policies to such higher limits as Landlord shall reasonably require provided such increases are consistent with the insurance requirements for similar office buildings in the Southfield, Michigan office market. Such insurance and the insurance set forth in Section 15.3 below shall name Landlord, Landlord’s agents as “additional insureds”, shall specifically include the liability assumed hereunder by Tenant, and shall provide that it is primary insurance and not excess over or contributory with any other valid, existing and applicable insurance in force for or on behalf of Landlord, and shall provide that Landlord shall receive thirty (30) days’ notice from the insurer prior to any cancellation or change of coverage.

15.3    Tenant shall procure and keep in effect excess (umbrella), liability coverage, including contractual liability coverage, providing a total limit per occurrence of not less than Four Million Dollars ($4,000,000) in excess of primary coverage and Four Million Dollars ($4,000,000) in aggregate for one annual policy period. This policy shall provide excess limits over Tenant’s commercial general liability described in Section 15.2.

15.4    Tenant shall procure and keep in effect “all risk” (also known as “special form - cause of loss” including theft, and leakage from fire protective devices) property insurance for the full replacement cost of Tenant’s trade fixtures, equipment, personal property, contents, and leasehold improvements.

15.5    Tenant shall procure business interruption insurance covering a minimum of one (1) year of anticipated gross income.

15.6    Tenant shall procure worker’s compensation insurance as required by law.

15.7    Automobile liability insurance coverage of not less than One Million Dollars ($1,000,000) million per occurrence.

15.8    Tenant shall deliver policies of the insurance required pursuant to Sections 15.2 - 15.6 hereof or certificates thereof to Landlord on or before the Commencement Date, and thereafter at least thirty (30) days before the expiration dates of expiring policies. The policy or a certificate thereof shall be delivered to Landlord prior to the earlier of (i) commencement of the Term, or (ii) Tenant’s possession prior thereto. In the event that Tenant fails to obtain and keep in full force and effect throughout the Term, insurance of every kind which is required pursuant to the terms of the Lease and deliver to Landlord the policy or certificate of insurance evidencing said coverage with the required additional insureds (hereinafter collectively called “the Certificate”) then Landlord shall provide Tenant with a five (5) day written notice (“First 5 Day Notice Period”) informing Tenant of its failure to provide insurance or its failure to deliver to Landlord the Certificate. If Tenant fails to provide Landlord with the Certificate evidencing that the required insurance has been obtained during the First 5 Day Notice Period, then Landlord shall provide Tenant with a second five (5) day written notice (“Second 5 Day Notice Period”) informing Tenant of its continued failure to provide insurance and/or the Certificate pursuant to the Lease.

If Tenant should fail to provide the required insurance and/or the Certificate prior to the expiration of the Second 5 Day Notice Period, Tenant shall pay as Additional Rent to Landlord a Five Hundred Dollar ($500) fee to reimburse Landlord for its administrative costs incurred in connection with Tenant’s default hereunder for such failure. If the required insurance and/or the Certificate is not provided to Landlord within thirty (30) days after the expiration of the Second 5 Day Notice Period then Tenant shall pay as Additional Rent the sum of One Thousand Dollars ($1,000) per month for each month Tenant fails to provide the required insurance and/or Certificate.

15.9        Prior to performing any Alterations or Repairs in the Demised Premises, Tenant shall cause its contractor(s) to provide to Landlord a certificate of insurance, naming Landlord and its agents as additional insureds and setting forth all of the insurance coverages as set forth in this Section 15 that Tenant is required to maintain, except those insurance coverages set forth in Section 15.4 and 15.5.

16.    Compliance with Legal Requirements.

Tenant shall promptly comply with all laws, statutes, ordinances and governmental rules, regulations or requirements now in force or which may hereafter be in force, with the requirements of any board of fire underwriters or other similar body now or hereafter constituted, with any occupancy certificate or directive issued pursuant to any law by any public officer or officers, as well as the provisions of all recorded documents affecting the Demised Premises, insofar as any thereof relate to or affect the condition, use or occupancy of the Demised Premises, excluding requirements of structural changes not related to or affected by improvements made by or for Tenant or not necessitated by Tenant’s act.

Landlord represents and warrants to Tenant that, to the best of Landlord’s knowledge, the Building, including the Common Areas, on the Commencement Date, will comply with the Americans With Disabilities Act, 42 U.S.C. § 12101 et seq. and all other applicable laws, rules and regulations governing the Building and the Common Areas in effect on the Commencement Date (the “Applicable Laws”) including all Applicable Laws governing hazardous substances. Landlord shall also be responsible for assuring that Landlord’s Work shall be in compliance with all Applicable Laws.

Notwithstanding the foregoing, Tenant shall be responsible for assuring that Tenant’s Work within the Demised Premises and any affected appurtenant portions of the Common Areas are in compliance with all Applicable Laws in effect on the Commencement Date, and Landlord shall not be responsible for correcting any instances of non-compliance with Applicable Laws in effect on the Commencement Date if caused by Tenant’s Work.

17.    Assignment and Subletting.

17.1    Except as expressly permitted pursuant to this Section 17, Tenant shall not, without the prior written consent of Landlord, which shall not be unreasonably withheld or delayed, assign, encumber or hypothecate this Lease or any interest herein or sublet the Demised Premises or any part thereof, or permit the use of the Demised Premises by any party other than Tenant. This Lease shall not, nor shall any interest herein, be assignable as to the interest of Tenant by operation of law without the consent of Landlord. Transfers aggregating fifty percent (50%) or more of the capital or voting stock of Tenant (if Tenant is a nonpublic corporation) or transfers aggregating fifty percent (50%) or more of Tenant’s partnership interest (if Tenant is a partnership) or transfers aggregating fifty percent (50%) or more of the other ownership interests of Tenant (if Tenant shall be a limited liability company or other legal entity) shall be deemed to be an assignment of this Lease.

17.2    (a) If at any time or from time to time during the Term of this Lease, Tenant desires to sublet all or any part of the Demised Premises or to assign this Lease, Tenant shall give notice to Landlord setting forth the proposed subtenant or assignee, the terms of the proposed subletting and the space so proposed to be sublet or the terms of the proposed assignment, as the case may be. Landlord shall have the option, exercisable by notice given to Tenant within five (5) business days after Tenant’s notice is received, (a) if Tenant’s request relates to a subletting of all or a portion of the Demised Premises for the balance of the Term then remaining, either to sublet from Tenant such space at the rental and other terms set forth in Tenant’s notice or at the fixed rent and additional rent payable hereunder on a square foot basis for the space covered by the sublease or assignment, whichever is less, or, if the proposed subletting is for the entire Demised Premises for the balance of the Term, to terminate this Lease or (b) if Tenant’s request relates to an assignment, either to have this Lease assigned to Landlord or to terminate this Lease. If Landlord does not exercise such option, Tenant shall be free for a period of one hundred eighty (180) days thereafter to sublet such space or to assign this Lease to such third party, provided that the sublease or assignment shall be on the same terms set forth in the notice given to Landlord, that the rental to such subtenant or assignee shall not be less than the then market rate for such premises, taking into account term of the sublease, concessions, timing of the commencement of the sublease, and other reasonable considerations which may cause such premises to command a different rental rate that it would if offered for lease directly by Landlord (the “Fair Market Sublease Rental Value”) except that such minimum rental amount shall only apply if, at that time, (i) Landlord is marketing office space available for lease at the Development reasonably similar in size as the portion of the Demised Premises which Tenant desires to assign or sublease (including larger spaces which are being marketed as divisible), and (ii) Landlord is engaged in meaningful discussions with such proposed subtenant to lease office space from Landlord at the Development at the time Tenant issues such notice to Landlord (for the purposes of this Section 17.2, meaningful discussions shall consist of the issuance or receipt of a solicited written proposal within the sixty (60) days preceding the issuance of Tenant’s notice) or such proposed subtenant is an existing tenant leasing space at the Development, and shall exclude instances where Tenant is seeking to sublease a portion of the Demised Premises comprising less than a full floor which portion is not separately demised from the Demised Premises (i.e. is not or will not be physically separated from the balance of the Demised Premises as applicable code would require for a separately demised suite and does not or will not have its own entrance and egress from or to the Common Areas as applicable code would require for a separately demised suite), and that Tenant shall provide Landlord with a true and complete copy of any fully executed sublease or assignment.

(b)    In the event that Landlord’s determination of the Fair Market Sublease Rental Value associated with any proposed subleasing of all or a portion of the Demised Premises by Tenant exceeds the rental rate included in Tenant’s notice to Landlord seeking consent of such proposed sublease, and provided such proposed sublease is subject to the minimum rental amount as provided for in the preceding paragraph, then Landlord shall, within five (5) business days of receipt of Tenant’s notice, notify Tenant of its determination that the rental rate included in Tenant’s notice is less than its determination of Fair Market Sublease Rental Value for the proposed premises to be subleased, and Landlord shall include in such notice to Tenant its own determination of Fair Market Sublease Rental Value for the proposed premises to be subleased. Within five (5) business days of receipt of Landlord’s notice, Tenant shall, by written notice to Landlord, either confirm that it agrees with Landlord’s determination of Fair Market Sublease Rental Value, in which event Tenant shall be free to sublease such space in accordance with the preceding paragraph provided the fully executed sublease includes a rental rate which equals or exceeds Landlord’s determination of Fair Market Sublease Rental Value, or dispute Landlord’s determination of Fair Market Sublease Rental Value.

(c)    In the event Tenant disputes Landlord’s determination of Fair Market Sublease Rental Value, then Landlord and Tenant shall then mutually designate an arbitrator whose determination of the Fair Market Sublease Rental Value shall be final and binding upon Landlord and Tenant. If Landlord and Tenant cannot agree on an arbitrator in such instance within five (5) business days, Landlord and Tenant shall apply to the American Arbitration Association or any successor thereto having jurisdiction to designate an arbitrator. The arbitrator shall be an impartial real estate broker or consultant who is MAI certified by the Appraisal Institute and who shall have had at least fifteen (15) years' continuous experience in the business of appraising or managing commercial real estate or acting as a real estate agent or broker in the Detroit metropolitan area.

(d)    The arbitrator shall conduct such hearings and investigations as he may deem appropriate and shall, within ten (10) business days after his designation, determine the Fair Market Sublease Rental Value for such proposed sublease, which shall be no less than the rental amount included in Tenant’s original notice of its intent to so sublease, and no greater than Landlord’s determination of Fair Market Sublease Rental Value, as detailed in its notice to Tenant. In the event the Fair Market Sublease Rental Value, as determined by the arbitrator as provided for herein, is less than the rental amount which is one hundred ten percent (110%) of the rental amount included in Tenant’s original notice of its intent to so sublease, Tenant shall be free to sublease such space in accordance with Section 17.2(a) hereof provided the executed sublease includes a rental amount equal to the rental amount set forth in Tenant’s original notice to Landlord. In the event the Fair Market Sublease Rental Value, as determined by the arbitrator as provided for herein, is equal to or greater than the rental amount which is one hundred ten percent (110%) of the rental amount included in Tenant’s original notice of its intent to so sublease, Tenant shall be free to sublease such space in accordance with Section 17.2(a) hereof provided the executed sublease includes a rental amount which is equal to or greater than the arbitrator’s determination of Fair Market Sublease Rental Value. The arbitrator’s determination of Fair Market Sublease Rental Value shall be final and binding upon Landlord and Tenant and may be enforced according to the laws of Michigan, provided that the arbitrator shall not have the power to add to, modify, or change any of the provisions of the proposed sublease or this Lease. Each party shall pay its own counsel fees and expenses, if any, in connection with any arbitration under this Clause, and the parties shall share equally all other expenses and fees of any such arbitration.

(e)    In the event Tenant shall so sublet a portion of the Demised Premises, or assign this Lease, fifty percent (50%) of all of the sums or other economic consideration received by Tenant as a result of such subletting or assignment whether denominated rentals or otherwise, under the sublease or assignment, which exceed in the aggregate, the total sums which Tenant is obligated to pay Landlord under this Lease (prorated to reflect obligations allocable to that portion of the Demised Premises subject to such sublease), shall be payable to Landlord as additional rental under this Lease without affecting or reducing any other obligation of Tenant hereunder (“Tenant’s Sublease/Assignment obligation”). Tenant’s Sublease/Assignment obligation shall be reduced by the reasonable out-of-pocket expenses incurred by Tenant for marketing, legal, leasing commissions and tenant improvements.

(f)    The limitations set forth in this Section 17.2 shall apply to Transferee(s) and guarantor(s) of this Lease, if any, and any transfer by any such entity in violation of this Section 17.3 shall be a transfer in violation of Section 17.1.

(g)    Any modification, amendment or extension of a sublease and/or any other agreement by which a landlord of a building other than the Building (or its affiliate) agrees to assume the obligations of Tenant under this Lease shall be deemed a sublease for the purposes of Section 17.1 hereof.

17.3    If Tenant is a legal entity, the transfer (by one or more transfers), directly or indirectly, by operation of law or otherwise, of a majority of the stock or other beneficial ownership interest in Tenant or of all or substantially all of the assets of Tenant (collectively “Ownership Interests”) shall be deemed a voluntary assignment of this Lease; provided, however, that the provisions of this Section 17 shall not apply to the transfer of Ownership Interests in Tenant if and so long as Tenant is publicly traded on a nationally recognized stock exchange. For purposes of this Section, the term “transfers” shall be deemed to include (x) the issuance of new Ownership Interests which results in a majority of the Ownership Interests in Tenant being held by a person or entity which does not hold a majority of the Ownership Interests in Tenant on the Commencement Date, (y) the sale or mortgage of more than fifty percent (50%) of Tenant’s net assets, and (z) except as provided below, the sale or transfer of all or substantially all of the assets of Tenant in one or more transactions and the merger or consolidation or conversion of Tenant into or with another business entity.

17.4    The provisions of this Section 17 shall not apply to transactions with a business entity into or with which Tenant is merged or consolidated or converted or to which all or substantially all of Tenant’s assets are transferred so long as (i) such transfer was made for a legitimate independent business purpose and not for the purpose of transferring this Lease, (ii) the successor to Tenant has a tangible net worth computed in accordance with generally accepted accounting principles consistently applied that is sufficient to meet the obligations of Tenant under this Lease and is at least equal to the net worth of Tenant as of the date of this Lease, and (iii) proof (consisting of certified financial statements) reasonably satisfactory to Landlord of such net worth is delivered to Landlord at least 10 days prior to the effective date of any such transaction, (iv) any such transfer shall be subject and subordinate to all of the terms and provisions of this Lease, and the transferee shall assume, in a written document reasonably satisfactory to Landlord and delivered to Landlord upon or prior to the effective date of such transfer, all the obligations of Tenant under this Lease, and (v) Tenant shall remain fully liable for all obligations to be performed by Tenant under this Lease, and (vi) such transferee is not an entity that would cause the Landlord to be in violations of any of the exclusivities set forth in Exhibit “L” attached hereto and made a part hereof. Notwithstanding anything to the contrary contained in this Lease, Tenant may also, upon prior notice to Landlord, permit any business entity which controls, is controlled by, or is under common control with the original named Tenant (a “Related Entity”) to sublet all or part of the Demised Premises for Tenant’s Use, provided the Related Entity is in Landlord’s reasonable judgment of a character and engaged in a business which is in keeping with the standards for the Building and for so long as such entity remains a Related Entity. Such sublease shall not be deemed to vest in any such Related Entity any right or interest in this Lease nor shall it relieve, release, impair or discharge any of Tenant’s obligations hereunder. For the purposes hereof, “control” shall be deemed to mean ownership of not less than fifty percent (50%) of all of the Ownership Interests of such corporation or other business entity. Notwithstanding the foregoing, Tenant shall have no right to assign this Lease or sublease all or any portion of the Demised Premises without Landlord’s consent pursuant to this Section 17.3 if Tenant is not the initial Tenant herein named or a person or entity who acquired Tenant’s interest in this Lease in a transaction approved by Landlord, or if an Event of Default (as defined in Section 20 below) exists under this Lease, beyond any applicable grace or cure period.

17.5    Regardless of Landlord’s consent, no subletting or assignment shall release Tenant of Tenant’s obligation or alter the primary liability of Tenant to pay the rental and to perform all other obligations to be performed by Tenant hereunder. The acceptance of rental by Landlord from any other person shall not be deemed to be a waiver by Landlord or any provision hereof. Consent to one assignment or subletting shall not be deemed consent to any subsequent assignment or subletting. In the event of default of any of the terms hereof, Landlord may proceed directly against Tenant without the necessity of exhausting remedies against such assignee or successor. Landlord may consent to subsequent assignments or subletting of this Lease or amendments or modifications to this Lease with assignees of Tenant, without notifying Tenant, or any successor of Tenant, and without obtaining its or their consent thereto and such action shall not relieve Tenant of liability under this Lease.

17.5    In the event Tenant shall assign this Lease or sublet the Demised Premises or request the consent of Landlord to any assignment or subletting or if Tenant shall request the consent of Landlord for any act that Tenant proposes to do, then Tenant shall pay Landlord’s reasonable costs and processing fees incurred in connection therewith, except that such costs shall not exceed two thousand ($2,000) dollars, except that such maximum amount shall be subject to annual adjustment reflecting the percentage change over that same period in the Consumer Price Index for All Urban Consumers published by the United States Bureau of Labor Statistics for all items excluding food and energy and seasonally adjusted (“CPI”).

17.6    In no event shall Tenant sublet the Demised Premises or assign the Lease to any entity that would cause the Landlord to be in violations of any of the exclusivities set forth in Exhibit “L” attached hereto and made a part hereof.

18.    Rules.

Tenant shall faithfully observe and comply with the rules and regulations annexed to this Lease as Exhibit “D” and, after notice thereof, all reasonable modifications thereof and additions thereto from time to time promulgated in writing by Landlord. Landlord shall not be responsible to Tenant for the nonperformance by any other tenant or occupant of the Building of any of such rules and regulations.

19.    Entry by Landlord.

19.1    Upon reasonable prior notice (except in case of emergency), Landlord and its designees may enter the Demised Premises at reasonable hours to (a) inspect the same, (b) exhibit the same to prospective purchasers, lenders or tenants, (c) determine whether Tenant is complying with all of its obligations hereunder, (d) supply janitor service and any other services to be provided by Landlord to Tenant hereunder, (e) post notices of non-responsibility, and (f) make repairs required of Landlord under the terms hereof or repairs to any adjoining space or utility services or make repairs, alterations or improvements to any other portion of the Building; provided, however, that all such work shall be done as promptly as reasonably possible Tenant hereby waives any claim for damages for any injury or inconvenience to or interference with Tenant’s business, any loss of occupancy or quiet enjoyment of the Demised Premises or any other loss occasioned by such entry.

19.2    Landlord shall at all times have and retain a key with which to unlock all of the doors in, on or about the Demised Premises (excluding Tenant’s vaults, safes and similar areas designated in writing by Tenant in advance); and Landlord shall have the right to use any and all means which Landlord may deem proper to open said doors in any emergency in order to obtain entry to the Demised Premises, and any entry to the Demised Premises obtained by Landlord by any of said means, or otherwise, shall not under any circumstances be construed or deemed to be a forcible or unlawful entry into or a detainer of the Demised Premises or an eviction, actual or constructive, of Tenant from the Demised Premises, or any portion thereof.

20.    Events of Default.

20.1    The occurrence of any one or more of the following events (hereinafter referred to as “Events of Default”) shall constitute a breach of this Lease by Tenant: (a) if Tenant shall fail to pay Basic Rental when and as the same becomes due and payable, unless the same is paid within the five (5) business days of prior written notice from Landlord that Tenant has failed to pay the same; or (b) if Tenant shall fail to pay any other sum when and as the same becomes due and payable and such failure shall continue for more than ten (10) days after written notice from Landlord; or (c) if Tenant shall fail to perform or observe any other term hereof or of the rules and regulations referred to in Section 18 hereof to be performed or observed by Tenant, such failure shall continue for more than two (2) business days following written notice thereof from Landlord in the case of emergencies involving imminent harm to human life or property and in all other instances such failure shall continue for more than thirty (30) days after notice thereof from Landlord and Tenant shall not within such thirty (30) day period commence with due diligence and dispatch the curing of such default, or, having so commenced, shall thereafter fail or neglect to prosecute or complete with due diligence and dispatch the curing of such default; or (d) if Tenant shall fail to perform or observe any provision of Section 4 hereof or Exhibit “D” hereto either prior or subsequent to the Commencement Date subject to the same notice and cure periods as set forth in the preceding sub-section (c); or (e) if Tenant shall make a general assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts as they become due or shall file a petition in bankruptcy, or shall be adjudicated as insolvent or shall file a petition in any proceeding seeking any reorganization, arrangements, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation, or shall file an answer admitting or fail timely to contest or acquiesce in the appointment of any trustee, receiver or liquidator of Tenant or any material part of its properties; or (f) if within ninety (90) days after the commencement of any proceeding against Tenant seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation, such proceeding shall not have been dismissed, or if, within ninety (90) days after the appointment without the consent of acquiescence of Tenant, of any trustee, receiver or liquidator of Tenant or of any material part of its properties, such appointment shall not have been vacated; or (g) if this Lease or any estate of Tenant hereunder shall be levied upon under any attachment or execution and such attachment or execution is not vacated within fifteen (15) business days.

20.2    If, as a matter of law, Landlord has no right on the bankruptcy of Tenant to terminate this Lease, then, if Tenant, as debtor, or its trustee wishes to assume or assign this Lease, in addition to curing or adequately assuring the cure of all defaults existing under this Lease on Tenant’s part on the date of filing of the proceeding (such assurances being defined below), Tenant, as debtor, or the trustee or assignee must also furnish adequate assurances of future performance under this Lease (as defined below). Adequate assurance of curing defaults means the posting with Landlord of a sum in cash sufficient to defray the cost of such a cure. Adequate assurance of future performance under this Lease means posting a deposit equal to three (3) months’ rent, including all other charges payable by Tenant hereunder, such as the amounts payable pursuant to Section 5 hereof, and, in the case of an assignee, assuring Landlord that the assignee is financially capable of assuming this Lease, and that its use of the Demised Premises will not be detrimental to the other tenants in the Building or Landlord. In a reorganization under Chapter 11 of the Bankruptcy Code, the debtor or trustee must assume this Lease or assign it within one hundred twenty (120) days from the filing of the proceeding, or he shall be deemed to have rejected and terminated this Lease.

21.    Remedies.

21.1 If any of the Events of Default shall occur, then Landlord shall have the following remedies:

(a)    Landlord at any time after the Event of Default, at Landlord’s option, may give to Tenant fifteen (15) days’ notice of termination of this Lease, and in the event such notice is given, this Lease shall come to an end and expire (whether or not the Term shall have commenced) upon the expiration of such fifteen (15) days, but Tenant shall remain liable for damages as provided in Section 22 of this Lease.

(b)    Subject only to applicable law, either with or without terminating this Lease, Landlord may immediately or at any time after the Event of Default or after the date upon which this Lease shall expire, reenter the Demised Premises or any part thereof, either by summary proceedings or by any other applicable action or proceeding, or otherwise (without being liable to indictment, prosecution or damages therefor), and may repossess the Demised Premises and remove any and all of Tenant’s property and effects from the Demised Premises.

(c)    Either with or without terminating this Lease, Landlord may relet the whole or any part of the Demised Premises from time to time, either in the name of Landlord or otherwise, to such tenant or tenants, for such term or terms ending before, on or after the Expiration Date, at such rental or rentals and upon such other conditions, which may include concessions and free rent periods, as Landlord, in its sole discretion, may determine. In the event of any such reletting, Landlord shall not be liable for the failure to collect any rental due upon any such reletting, and no such failure shall operate to relieve Tenant of any liability under this Lease or otherwise to affect any such liability; and Landlord may make such repairs, replacements, alterations, additions, improvements, decorations and other physical changes in and to the Demised Premises as Landlord, in its sole discretion, considers advisable or necessary in connection with any such reletting or proposed reletting, without relieving Tenant of any liability under this Lease or otherwise affecting such liability.

(d)    Landlord shall have the right to recover the rental and all other amounts payable by Tenant hereunder as they become due (unless and until Landlord has terminated this Lease) and all other damages incurred by Landlord as a result of an Event of Default.

(e)    The remedies provided for in this Lease are in addition to any other remedies available to Landlord at law or in equity by statute or otherwise.

21.2    If Landlord fails to perform any of its covenants or agreements under this Lease, then in any such event or event, after the continuance of any such failure for a period of thirty (30) days after written notice thereof from Tenant and Landlord has not, within such notice period, commenced with due diligence and dispatch the curing of such default, or, having so commenced, shall thereafter fail or neglect to prosecute or complete with due diligence and dispatch the curing of such default provided the period for Landlord to cure such default shall be extended for as long as is reasonably necessary to effectuate such cure, Tenant may, at its option pursue any and all remedies available to it at law or equity.

22.    Termination upon Default.

Upon termination of this Lease by Landlord pursuant to Section 21.1 hereof, Landlord shall be entitled to recover from Tenant the aggregate of: (a) the worth at the time of award of the unpaid rental which had been earned at the time of termination; (b) the worth at the time of award of the amount by which the unpaid rental which would have been earned after termination until the time of award exceeds the then reasonable rental value of the Demised Premises during such period; (c) the worth at the time of the award of the amount by which the unpaid rental for the balance of the Term of this Lease after the time of award exceeds the reasonable rental value of the Demised Premises for such period; and (d) any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant’s failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom. The “worth at the time of award” of the amounts referred to in clauses (a) and (b) above is computed from the date such rent was due or would have been due, as the case may be, by allowing interest at the rate of two percent (2%) in excess of the prime rate as published in The Wall Street Journal or, if a higher rate is legally permissible, at the highest rate legally permitted. The “worth at the time of award” of the amount referred to in clause (c) above is computed by discounting such amount at the discount rate of the Federal Reserve Bank of Chicago at the time of award, plus one percent (1%). .

23.    Landlord’s Right to Cure Defaults.

All covenants, terms and conditions to be performed by Tenant under any of the terms of this Lease shall be at its sole cost and expense and without any abatement of rental. If Tenant shall fail to pay any sum of money, other than Basic Rental, required to be paid by it hereunder or shall fail to perform any other act on its part to be performed hereunder and such failure shall continue for two (2) business days in the case of emergencies involving imminent harm to human life or property and in all other instances such failure shall continue for more than thirty (30) days after notice thereof by Landlord, Landlord may, but shall not be obligated so to do, and without waiving or releasing Tenant from any obligations of Tenant, make any such payment or perform any such other act on Tenant’s part to be made or performed as in this Lease provided. All sums so paid by Landlord and all necessary incidental costs shall be deemed additional rental hereunder and shall be payable to Landlord on demand, and Landlord shall have (in addition to any other right or remedy of Landlord) the same rights and remedies in the event of the nonpayment thereof by Tenant as in the case of default by Tenant in the payment thereof by Tenant as in the case of default by Tenant in the payment of Basic Rental.

24.    Attorneys’ Fees.

If Landlord or Tenant institutes any suit against the other in connection with the enforcement of their respective rights under this Lease, the violation of any term of this Lease, the declaration of their rights hereunder, or the protection of Landlord’s or Tenant’s interests under this Lease, the non-prevailing party shall reimburse the prevailing party for its reasonable expenses incurred as a result thereof including court costs and reasonable attorneys’ fees actually incurred.

25.    Subordination.

25.1    This Lease is and shall be subject and subordinate, at all times, to (a) the lien of any mortgage or mortgages which may now or hereafter affect the Building, and to all advances made or hereafter to be made upon the security thereof and to the interest thereon, and to any agreements at any time made modifying, supplementing, extending or replacing any such mortgages, and (b) any ground or underlying lease which may now or hereafter affect the Building, including all amendments, renewals, modifications, consolidation, replacements and extensions thereof Tenant shall attorn to any such mortgagee and/or ground or underlying lessor upon the date it acquires title to the Building. Tenant shall not have the right or option to terminate this Lease in the event title to the Building is acquired by such mortgagee or lessor. Any such mortgagee acquiring title to the Building through foreclosure, exercise of a power of sale or deed in lieu of foreclosure may, upon so acquiring title to the Building, at its sole option, accept this Lease on all of its terms and conditions or, if and as permitted under Michigan law and at all times subject to the Non-Disturbance Agreement (as hereinafter defined) executed by and between Tenant and such mortgagee, terminate this Lease and exercise the rights of foreclosure which are accorded the purchaser or foreclosing mortgagee pursuant to Michigan law. Tenant shall, upon such purchaser’s or mortgagee’s request, execute a new lease with such purchaser or mortgagee upon materially identical terms as this Lease. Notwithstanding the foregoing, at the request of the holder of any of the aforesaid mortgage or mortgages or the lessor under the aforesaid ground or underlying lease, this Lease may be made prior and superior to such mortgage or mortgages and/or such ground or underlying lease.

25.2    At the request of Landlord, Tenant shall execute and deliver such further instruments as may be reasonably required to implement the provisions of this Section 25.

25.3    If, as a condition of approving this Lease, Landlord’s mortgagee shall request reasonable modifications of this Lease, Tenant shall not unreasonably withhold or delay its agreement to such modifications, provided that such modifications do not increase the obligations or materially and adversely affect the rights of Tenant under this Lease.

25.4    Notwithstanding any provision of this Lease to the contrary, in order for the subordination of this Lease Agreement as provided above to be effective, and as a condition precedent to Tenant’s obligation to attorn to any successor to Landlord, Landlord must deliver to Tenant a separate instrument (a “Non-Disturbance Agreement”) in form and substance reasonably acceptable to Tenant which may be recorded by Tenant at Tenant’s cost in the same place as the applicable Mortgage and which shall contain language similar in substance to the following: (a) Tenant will not be named or joined in any proceeding to enforce the Mortgage unless required by law in order to perfect the proceeding; (b) enforcement of the Mortgage shall not terminate the Lease or disturb Tenant in the possession and use of the Demised Premises, provided that at the time of the commencement of any such action or proceeding (i) the term of the Lease shall have commenced pursuant to Section 1(e) hereof (unless the date of such Non-Disturbance Agreement is prior to the Commencement Date), (ii) Tenant shall be in possession of the Demised Premises (unless the date of such Non-Disturbance Agreement is prior to the date upon which Landlord delivers the Demised Premises to Tenant in accordance with Section 3.2 hereof), (iii) the Lease shall be in full force and effect and (iv) no Event of Default has occurred and is continuing; and (c) any party succeeding to the interest of Landlord as a result of the enforcement of the Mortgage shall honor the terms, conditions and covenants of this Lease for the balance of the Term (including, without limitation, all renewal, extension or expansion options contained in this Lease that are then or thereafter timely exercised and all of Landlord’s obligations with respect to any security deposit), with the same force and effect as if such party were the original Landlord under this Lease.

25.5    Notwithstanding the preceding paragraph, Landlord represents that the Building is currently encumbered by a mortgage (the “Current Mortgage”) in favor of Goldman Sachs Bank USA (“Goldman”). The parties acknowledge that Landlord has provided Tenant with a Non-Disturbance Agreement from Goldman in Goldman’s standard form attached hereto as Exhibit “J” and made a part hereof. Tenant shall reimburse Landlord for its reasonable out-of-pocket legal fees, if any, incurred by Goldman and charged to Landlord in connection with such Non-Disturbance Agreement, the total of such costs shall not exceed Two Thousand Dollars ($2,000), except that such maximum amount shall be subject to annual adjustment reflecting the percentage change over that same period in CPI.

26.    Merger.

The voluntary or other surrender of this Lease by Tenant, or a mutual cancellation hereof, shall not work a merger, and shall, at the option of Landlord, terminate all or any existing subleases or subtenancies, or may, at the option of Landlord, operate as an assignment to it of any or all such subleases or subtenancies.

27.    Nonliability of Landlord.

27.1    Subject to Section 27.3, in the event Landlord hereunder or any successor owner of the Building shall sell or convey the Building, all liabilities and obligations on the part of the original Landlord or such successor owner under this Lease accruing thereafter shall terminate, and thereupon all such liabilities and obligations shall be binding upon the new owner. Tenant shall attorn to such new owner.

27.2    Landlord shall not be responsible or liable to Tenant for any loss or damage that may be occasioned by or through the acts or omissions of persons occupying adjoining areas or any part of the area adjacent to or connected with the Demised Premises or any part of the Building or for any loss or damage resulting to Tenant or his property from theft or a failure of the security systems in the Building or in the Development, or for any damage or loss of property within the Demised Premises from any cause other than solely by reason of the gross negligence or willful act of Landlord, and no such occurrence shall be deemed to be an actual or constructive eviction from the Demised Premises or result in an abatement of rental.

27.3    If Landlord shall fail to perform any covenant, term or condition of this Lease upon Landlord’s part to be performed, and, if as a consequence of such default, Tenant shall recover a money judgment against Landlord, such judgment shall be satisfied only against the right, title and interest of Landlord in the Building and out of rents or other income from the Building receivable by Landlord, or out of the consideration received by Landlord from the sale or other disposition of all or any part of Landlord’s right, title and interest in the Building, and neither Landlord nor any of the members or partners of Landlord shall be liable for any deficiency.

27.4    Any Building employee to whom any property shall be entrusted by or on behalf of Tenant shall be deemed to be acting as Tenant’s agent with respect to such property and neither Landlord nor its agents shall be liable for any damage to such property, or for the loss of or damage to any property of Tenant by theft or otherwise. For the purpose of this Section 27.4, Building employees accessing the Demised Premises to perform janitorial services, maintenance or repairs shall not be considered to have been entrusted with any of Tenant’s property unless Tenant or its employees or agents specifically requests from such Building employee that they be entrusted with Tenant’s property outside of such employee’s normal scope of services.

27.5    Except as otherwise specifically set forth in this Lease, none of the Indemnitees (as hereinafter defined) shall be liable for any injury or damage to persons or property or interruption of Tenant’s business resulting from fire or other casualty, any damage caused by other tenants or persons in the Building or by construction of any private, public or quasi-public work, or any latent defect in the Demised Premises or in the Building or in the Development (except that Landlord shall be required to repair the same to the extent provided in Section 11). No penalty shall accrue for delays which may arise by reason of adjustment of fire insurance on the part of Landlord or Tenant, or for any Unavoidable Delays arising from any repair or restoration of any portion of the Building or the Development, provided that Landlord shall use reasonable efforts to minimize unreasonable interference with Tenant’s use and occupancy of the Demised Premises during the performance of any such repair or restoration.

28.    Estoppel Certificate.

At any time and from time to time upon ten (10) business days’ prior request by Landlord, Tenant will promptly execute, acknowledge and deliver to Landlord, a certificate indicating (a) that this Lease is unmodified and in full force and effect (or, if there have been modifications, that this Lease is in full force and effect, as modified, and stating the date and nature of each modification), (b) the date, if any, to which rental and other sums payable hereunder have been paid, (c) that no notice has been received by Tenant of any default which has not been cured, except as to defaults specified in said certificate, and (d) such other matters as may be reasonably requested by Landlord. Any such certificate may be relied upon by any prospective purchaser, mortgagee or beneficiary under any deed of trust of the Building or any part thereof.

29.    No Light, Air or View Easement.

Any diminution or shutting off of light, air or view by any structure which may be erected on lands adjacent to the Building shall in no way affect this Lease or impose any liability on Landlord.

30.    Holding Over.

It is hereby agreed that in the event of Tenant holding over after the Expiration Date or sooner termination of this Lease, thereafter the tenancy shall be from month to month in the absence of a written agreement to the contrary, and Tenant shall pay to Landlord monthly rent equal to one hundred twenty five percent (125%) of the monthly Basic Rental last in effect under this Lease (plus all other charges payable by Tenant under this Lease) for each day from the Expiration Date or sooner termination of this Lease until the date the Demised Premises are delivered in the condition required in this Lease during the first three (3) months of such holdover period and one hundred fifty percent (150%) of the monthly Basic Rental for all periods thereafter, and Landlord’s right to damages for such holdover occupancy shall survive.

31.    Abandonment.

If Tenant shall abandon or surrender the Demised Premises, or be dispossessed by process of law or otherwise, any personal property belonging to Tenant and left on the Demised Premises shall be deemed to be abandoned if not removed within ten (10) days of written notice to Tenant, or, at the option of Landlord after reasonable prior written notice to Tenant, may be removed by Landlord at Tenant’s expense.

32.    Security Deposit.

Upon the execution of this Lease, Tenant has deposited with Landlord the “Deposit” in the amount set forth in Section 1(j) hereof. The Deposit shall be held by Landlord as security for the faithful performance by Tenant of all of the terms and conditions of this Lease. If Tenant fails to pay Basic Rental or other charges due under this Lease, or otherwise defaults with respect to any provision of this Lease, Landlord may, but shall have no obligation to, use, apply or retain all or any portion of the Deposit for the payment of any Basic Rental or other charge in default or for the payment of any other sum to which Landlord may become obligated by reason of Tenant’s default, or to compensate Landlord for any loss or damage which Landlord may suffer thereby. If Landlord so uses or applies all or any portion of the Deposit, Tenant shall within ten (10) days after demand therefor deposit cash with Landlord in an amount sufficient to restore the Deposit to the full amount thereof. Landlord shall not be required to keep the Deposit separate from its general accounts. If Tenant performs all of Tenant’s obligations hereunder, the Deposit or so much thereof as has not theretofore been applied by Landlord, shall be returned, without payment of interest or other increment for its use, to Tenant (or, at Landlord’s option, to the last assignee, if any, of Tenant’s interest hereunder) within forty-five (45) days following the Expiration Date, and after Tenant has vacated the Demised Premises in the condition required hereby. No trust relationship is created herein between Landlord and Tenant with respect to the Deposit.

33.    Waiver.

33.1    The waiver by Landlord of any agreement, condition or provision herein contained shall not be deemed to be a waiver of any subsequent breach of the same or any other agreement, condition or provision herein contained, nor shall any custom or practice which may grow up between the parties in the administration of the terms hereof be construed to waive or to lessen the right of Landlord to insist upon the performance by Tenant of the terms hereof in strict accordance with said terms. The subsequent acceptance of rental hereunder by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of any agreement, condition or provision of this Lease, other than the failure of Tenant to pay the particular rental so accepted, regardless of Landlord’s knowledge of such preceding breach at the time of acceptance of such rental.

33.2    Landlord and Tenant hereby waive trial by jury in any action, proceeding, or counterclaim brought by Landlord or Tenant against the other on any matter whatsoever arising out of or in any way connected with this Lease, the relationship of Landlord to Tenant, the use or occupancy of the Demised Premises by Tenant or any person claiming through or under Tenant, any claim of injury or damage, and any emergency or other statutory remedy; provided, however, the foregoing waiver shall not apply to any action for personal injury or property damage. If Landlord commences any summary or other proceeding for nonpayment of rent or the recovery of possession of the Demised Premises, Tenant shall not interpose any counterclaim of whatever nature or description in any such proceeding, unless the failure to raise the same would constitute a waiver thereof.

34.    Notices.

All notices, consents, requests, demands, designations or other communications which may or are required to be given by either party to the other hereunder shall be in writing and shall be deemed to have been duly given when personally delivered or deposited in the United States mail, certified or registered, postage prepaid, and addressed as follows: to Tenant at the address set forth in section 1(k) hereof, or to such other place as Tenant may from time to time designate in a written notice to Landlord; to Landlord at the address set forth in Section 1(l) hereof, or to such other place as Landlord may from time to time designate in a written notice to Tenant; or, in the case of Tenant, delivered to Tenant at the Demised Premises. In the event a Guarantor is listed in Section 1(m) hereof and such Guarantor executes this Lease, Landlord shall forward copies of all notice of default hereunder to the Guarantor at the address set forth in Section 1(n) hereof. Tenant hereby appoints as its agent to receive the service of all dispossessory or distraint proceedings and notices thereunder the person in charge of or occupying the Demised Premises at the time, and, if no person shall be in charge of or occupying the Demised Premises at the time, then such service may be made by attaching the same on the main entrance of the Demised Premises.

35.    Option to Extend.

35.1    Tenant shall have the personal and non-transferrable right to extend the Term of this Lease for two (2) consecutive periods of five (5) years (the “First Option” and “Second Option” respectively, and collectively the “Option to Extend”). In the event Tenant is, or has been, in an Event of Default (beyond any applicable notice and grace or cure periods) at the time of the start of the First or Second Option Period, as hereinafter defined, or upon receipt of the First Option Notice or Second Option Notice, as hereinafter defined, from Landlord, then Tenant’s Option to Extend shall be void and of no further force or effect. The following terms shall apply to Tenant’s Option to Extend the Term of this Lease:

(a)In order for Tenant to exercise the First Option to extend the lease for an additional five (5) year period (the “First Option Period”), Tenant mustprovide Landlord with written notice of its intention to so extend the Lease Term, with notice to be delivered in accordance with Section 34 hereof at any time after the commencement of the eighteenth (18^th) month preceding the expiration of the initial Term of this Lease and prior to the beginning of the twelfth (12^th) month preceding the expiration of the initial Term of the Lease (the “First Option Notice”), time being of the essence. If Tenant fails to timely exercise the First Option to Extend in accordance with this paragraph, the exercise of the First and Second Options shall be deemed to have been waived by Tenant.

(b)The First Option, if exercised, shall be upon, and subject to, all of the terms, covenants and conditions provided in the Lease for the original Term hereof, except that the Basic Rental shall be modified as provided below and that any terms, covenants or conditions hereof that are expressly or by their nature inapplicable to the First Option shall not apply.

(c)The initial Basic Rental as of the commencement of the First Option Period shall be an amount equal to the fair market rental value of the Demised Premises (“FMV”) multiplied by a factor of ninety five percent (95%) (the “Option FMV”). The Option FMV shall be determined pursuant to the following:

i. The parties shall attempt, during the three (3) month period following the date of the First Option Notice to mutually agree upon the Option FMV of the Demised Premises for the First Option Period.

ii. If Landlord and Tenant shall fail to agree upon a final and binding Option FMV within such three (3) month period, Landlord shall, within the thirty (30) day period following, submit base rental figures to Tenant in writing which Landlord believe represents the Option FMV (“Landlord’s Notice”). Tenant shall, within fifteen (15) business days after receipt of Landlord’s Notice, either (A) confirm that Tenant agrees with Landlord’s determination of the Option FMV, in which event such Option FMV shall then automatically become the Annual Basic Rental as of the commencement of the First Option Period, or (B) notify Landlord that Tenant disagrees with Landlord’s determination of the Option FMV. If Landlord does not receive written notice from Tenant within fifteen (15) business days of Tenant’s receipt of Landlord’s Notice, then the Option FMV contained in Landlord’s Notice shall be deemed to be the Annual Basic Rental as of the commencement of the First Option Period. In the event Tenant disagrees with Landlord’s determination of the Option FMV contained in Landlord’s Notice then Tenant may commence arbitration by making written demand to Landlord (“Tenant’s Notice”) within fifteen (15) business days of Tenant’s receipt of Landlord’s Notice. Tenant’s Notice shall contain a statement of the question to be arbitrated i.e. what is the Option FMV as of the commencement of the First Option Period and shall state Tenant’s determination of the Option FMV. Landlord and Tenant shall then mutually designate an arbitrator whose determination of the Option FMV (which shall be either the Option FMV contained in Landlord’s Notice or the Option FMV proposed by Tenant in Tenant’s Notice, but no other amount) shall be final and binding upon Landlord and Tenant.

iii. If Landlord and Tenant shall fail to agree upon the choice of such arbitrator within ten (10)days after Landlord shall have received Tenant’s Notice, then either party may apply to the American Arbitration Association or any successor thereto having jurisdiction to designate an arbitrator. The arbitrator shall be a real estate broker or consultant who is MAI certified by the Appraisal Institute and who shall have had at least fifteen (15)years’ continuous experience in the business of appraising or managing real estate or acting as a real estate agent or broker in the Market.

iv. The arbitrator shall conduct such hearings and investigations as he may deem appropriate and shall, within thirty (30)days after his designation, determine which of the two (2) proposals shall be the FMV, and that choice by the arbitrator shall be binding upon Landlord and Tenant, provided that the arbitrator shall not have the power to add to, modify, or change any of the other provisions of this Lease. Each party shall pay its own counsel fees and expenses, if any, in connection with any arbitration under this Clause, and the parties shall share equally all other expenses and fees of any such arbitration.

v. If for any reason the FMV shall not have been determined prior to the commencement of the First Option Period, then Tenant shall continue to pay Landlord the Basic Rental payable for the Demised Premises during the period immediately preceding the expiration of the initial Term of the Lease. Upon final determination of the FMV, it shall have been determined that the Basic Rental payable for and during the First Option Period shall be equal to the FMV, then an appropriate adjustment to the Basic Rental shall be made reflecting such final determination, and either (i) Landlord shall refund to Tenant any overpayment in Tenant’s payment of Basic Rental, or (ii) Tenant shall pay to Landlord any underpayment of Basic Rental, in each such instance for the period from commencement of the First Option Period to the date of such final determination.

vi. The decision of the arbitrator will be final and non-appealable, and may be enforced according to the laws of the State of Michigan.

(d)In order for Tenant to exercise the Second Option to extend the lease for an additional five (5) year period (the “Second Option Period”), Tenant mustprovide Landlord with written notice of its intention to so extend the Lease Term, with notice to be delivered in accordance with Section 34 hereof at any time after the commencement of the eighteenth (18^th) month preceding the expiration of the First Option Period of this Lease and prior to the beginning of the twelfth (12^th) month preceding the expiration of the First Option Period of the Lease (the “Second Option Notice”), time being of the essence. If Tenant fails to timely exercise the Second Option in accordance with this paragraph, the exercise of the Second Option shall be deemed to have been waived by Tenant.

(e)The Second Option, if exercised, shall be upon, and subject to, all of the terms, covenants and conditions provided in the Lease for the original Term hereof, except that the Base Rent shall be modified as provided below and that any terms, covenants or conditions hereof that are expressly or by their nature inapplicable to the Second Option shall not apply.

(f)The initial Basic Rental as of the commencement of the Second Option Period shall be an amount equal to the fair market rental value of the Option FMV. The Option FMV shall be determined pursuant to the following:

i. The parties shall attempt, during the three (3) month period following the date of the Second Option Notice to mutually agree upon the Option FMV of the Demised Premises for the Second Option Period.

ii. If Landlord and Tenant shall fail to agree upon a final and binding Option FMV within such three (3) month period, Landlord shall, within the thirty (30) day period following, submit base rental figures to Tenant in writing which Landlord believe represents the Option FMV (“Landlord’s Notice”). Tenant shall, within fifteen (15) business days after receipt of Landlord’s Notice, either (A) confirm that Tenant agrees with Landlord’s determination of the Option FMV, in which event such Option FMV shall then automatically become the Annual Basic Rental as of the commencement of the Second Option Period, or (B) notify Landlord that Tenant disagrees with Landlord’s determination of the Option FMV. If Landlord does not receive written notice from Tenant within fifteen (15) business days of Tenant’s receipt of Landlord’s Notice, then the Option FMV contained in Landlord’s Notice shall be deemed to be the Annual Basic Rental as of the commencement of the Second Option Period. In the event Tenant disagrees with Landlord’s determination of the Option FMV contained in Landlord’s Notice then Tenant may commence arbitration by making written demand to Landlord (“Tenant’s Notice”) within fifteen (15) business days of Tenant’s receipt of Landlord’s Notice. Tenant’s Notice shall contain a statement of the question to be arbitrated i.e. what is the Option FMV as of the commencement of the Second Option Period and shall state Tenant’s determination of the Option FMV. Landlord and Tenant shall then mutually designate an arbitrator whose determination of the Option FMV (which shall be either the Option FMV contained in Landlord’s Notice or the Option FMV proposed by Tenant in Tenant’s Notice, but no other amount) shall be final and binding upon Landlord and Tenant.

iii. If Landlord and Tenant shall fail to agree upon the choice of such arbitrator within ten (10)days after Landlord shall have received Tenant’s Notice, then either party may apply to the American Arbitration Association or any successor thereto having jurisdiction to designate an arbitrator. The arbitrator shall be a real estate broker or consultant who is MAI certified by the Appraisal Institute and who shall have had at least fifteen (15)years’ continuous experience in the business of appraising or managing real estate or acting as a real estate agent or broker in the Market.

iv. The arbitrator shall conduct such hearings and investigations as he may deem appropriate and shall, within thirty (30)days after his designation, determine which of the two (2) proposals shall be the FMV, and that choice by the arbitrator shall be binding upon Landlord and Tenant, provided that the arbitrator shall not have the power to add to, modify, or change any of the other provisions of this Lease. Each party shall pay its own counsel fees and expenses, if any, in connection with any arbitration under this Clause, and the parties shall share equally all other expenses and fees of any such arbitration.

v. If for any reason the FMV shall not have been determined prior to the commencement of the Second Option Period, then Tenant shall continue to pay Landlord the Basic Rental payable for the Demised Premises during the period immediately preceding the expiration of the First Option Period of the Lease. Upon final determination of the FMV, it shall have been determined that the Basic Rental payable for and during the Second Option Period shall be equal to the FMV, then an appropriate adjustment to the Basic Rental shall be made reflecting such final determination, and either (i) Landlord shall refund to Tenant any overpayment in Tenant’s payment of Basic Rental, or (ii) Tenant shall pay to Landlord any underpayment of Basic Rental, in each such instance for the period from commencement of the Second Option Period to the date of such final determination.

vi. The decision of the arbitrator will be final and non-appealable, and may be enforced according to the laws of the State of Michigan.

(g)Under no circumstances whatsoever can the initial Basic Rental for the First Option Period or Second Option Period which is set via arbitration be equal to an amount which is less than the Basic Rental in effect immediately preceding the Expiration Date of the initial Term of the Lease or the First Option Period, as the case may be.

36.    Termination & Contraction Options.

36.1    Termination Option

(a)    Tenant shall have the one-time right, at its sole option, to terminate this Lease with respect to the entire Demised Premises (but not less than the entire Demised Premises) (the “Termination Option”) effective upon the conclusion of the sixth (6^th) Lease Year (the “Termination Option Date”) provided, however, that the effectiveness of the exercise of the Termination Option shall be conditioned upon (i) Tenant delivering a Notice to Landlord exercising the Termination Option (the “Termination Option Notice”) not later than the conclusion of the fifth (5^th) lease year and (ii) Tenant’s payment to Landlord, at the same time as the delivery of the Termination Option Notice, of the “Termination Payment” (as hereinafter defined) equal to the sum of the unamortized portion of the Lease Costs, as hereinafter defined, calculated using an eight percent (8%) interest rate, plus the amount which is equal to four (4) months of Basic Rental payable for the Demised Premises at the time of the Termination Option Date (the “Termination Payment”). For the purposes hereof, Lease Costs shall be defined as the sum of: (w) the Tenant Improvement Allowance, as hereinafter defined, or the portion thereof so utilized by Tenant, (x) the aggregate dollar value of the rental abatement granted to Tenant for the Demised Premises pursuant to Section 1(g) hereof, plus (z) the aggregate dollar amount of all commissions paid to the Brokers in connection with this Lease. Time is of the essence of delivery of the Termination Option Notice and the Termination Payment.

(b)    In the event that Tenant shall give the Termination Option Notice and shall otherwise comply with the conditions of the exercise of Tenant’s right to terminate this Lease as provided hereunder, including, but not limited to, the payment of the Termination Payment, this Lease shall come to an end and expire on the Termination Option Date, with the same force and effect as if said date were the Expiration Date set forth in this Lease, unless sooner terminated pursuant to any other term, covenant or condition of this Lease or pursuant to law.

(c)    Notwithstanding anything to the contrary contained herein, any exercise by Tenant of its Termination Option under this Section 36.1 shall be void and of no effect unless on the date Tenant issues the Termination Option Notice to Landlord and on the Termination Option Date: (i) this Lease is in full force and effect, (ii) no Event of Default has occurred under this Lease and remains continuing beyond any applicable notice grace or cure periods, (iii) Tenant has not assigned this Lease or sublet the Premises other than to a Tenant Affiliate, and (iv) Tenant has not exercised its Right of First Refusal for any First Refusal Space pursuant to Section 42 hereof (any of which conditions described in clauses (i), (ii), (iii), or (iv) above may be waived by Landlord at any time in Landlord’s sole discretion).

(d)    Tenant shall indemnify and hold Landlord harmless from and against, any and all liabilities, losses, claims, reasonable costs and expenses (including reasonable attorneys’ fees and other reasonable out-of-pocket costs) incurred in connection with any real property transfer tax that will or may become, or may be asserted to be or become due, owing or imposed in connection with the Termination Option at any time by the City of Southfield or State of Michigan or any agency or instrumentality of such City of Southfield or State of Michigan, including, without limitation any penalties and interest imposed or to be imposed in connection therewith. Tenant, at Landlord’s request, shall promptly prepare, execute and file such returns, affidavits and other documentation as may be required in connection with such taxes. The provisions of this Section 36.3 shall survive the Expiration Date or earlier termination of this Lease.

36.2    Contraction Option

(a)    Tenant shall have the one-time right, at its sole option, to surrender to Landlord a portion of the Demised Premises (the “Contraction Option”) up to but not exceeding 10,135 rentable square feet (measured in accordance with Section 2.2 hereof), comprised of a portion of the Demised Premises provided that such portion shall be contiguous and of a configuration so that is reasonably marketable and shall have reasonable and code compliant access and egress (the “Surrender Premises”) effective at the end of the sixth (6^th) full Lease Year, (the “Contraction Option Date”) provided, however, that the effectiveness of the exercise of the Contraction Option shall be conditioned upon (i) Tenant delivering a Notice to Landlord exercising the Contraction Option (the “Contraction Option Notice”) not later than the conclusion of the fifth (5^th) Lease Year of the initial Term, together with a floor plan identifying the portion of the Demised Premises which shall comprise the Surrender Premises; and (ii) Tenant’s payment to Landlord, on or prior to the Contraction Option Date, of the “Contraction Payment” (as hereinafter defined) equal to the sum of the unamortized portion of the Lease Costs, as hereinafter defined, calculated using an eight percent (8%) interest rate, and multiplied by the fraction where the numerator is the rentable area of the Surrender Premises and the denominator is the rentable area of the Demised Premises (including the Surrender Premises), plus the amount which is equal to three (3) months of Basic Rental payable for the Surrender Premises at the time of the Contraction Option Date (the “Contraction Payment”). For the purposes hereof, Lease Costs shall be defined as the sum of: (w) the Tenant Improvement Allowance, as hereinafter defined, or the portion thereof so utilized by Tenant, (x) the aggregate dollar value of the rental abatement granted to Tenant for the Demised Premises pursuant to Section 1(g) hereof, plus (z) the aggregate dollar amount of all commissions paid to the Brokers in connection with this Lease. Failure of Tenant to make the Contraction Payment in accordance with this paragraph shall render this Contraction Option void and of no effect. Time is of the essence of delivery of the Contraction Option Notice and the Contraction Payment.

(b)    In the event that Tenant shall give the Contraction Option Notice and shall otherwise comply with the conditions of the exercise of Tenant’s right to contract the Demised Premises as provided hereunder, including, but not limited to, the payment of the Contraction Payment when due, Tenant shall surrender the Surrender Premises to Landlord on the Contraction Option Date in broom clean condition and otherwise in the condition required by the Lease for the surrender of the Demised Premises upon the Expiration Date and Tenant acknowledges and recognizes that Time is Of the Essence with respect to Tenant’s obligation to vacate the Surrender Premises on the Contraction Option Date.

(c)    Upon such surrender of the Surrender Premises, Landlord shall perform all work necessary to separate the Surrender Premises from the balance of the Demised Premises including, but not limited to, the construction of demising walls, public corridors to service the Surrender Premises as required by code (including lighting, HVAC, electric, wall finishes, ceiling finishes, and floor finishes using building standard materials), and the separation of electrical circuiting, fire alarm wiring & devices, sprinkler systems, and ventilation and air conditioning systems. Tenant shall reimburse Landlord for the reasonable cost thereof within thirty (30) days after receipt of an invoice therefor, together with reasonable supporting documentation.

(d)    In the event that Tenant shall give the Contraction Option Notice and shall otherwise comply with the conditions of the exercise of Tenant’s right to contract the Demised Premises as provided hereunder, Landlord and Tenant shall promptly execute an amendment to this Lease reflecting the surrender of the Surrender Premises and the associated proportionate reduction in Basic Rental and Tenant’s Share, which shall become effective immediately following the Contraction Option Date (provided Tenant has otherwise complied with the terms of this Section 36).

(e)    Notwithstanding anything to the contrary contained herein, any exercise by Tenant of its Contraction Option under this Section 36 shall be void and of no effect unless on the date Tenant issues the Contraction Option Notice to Landlord and on the Contraction Option Date: (i) this Lease is in full force and effect, (ii) no Event of Default has occurred under this Lease and remains continuing beyond any applicable notice grace or cure periods, (iii) Tenant has not assigned this Lease or sublet the Premises other than to a Tenant Affiliate, and (iv) Tenant has not exercised its Right of First Refusal for any First Refusal Space pursuant to Section 42 hereof (any of which conditions described in clauses (i), (ii), (iii), or (iv) above may be waived by Landlord at any time in Landlord’s sole discretion).

37.    Inability to Perform.

If, by reason of the occurrence of unavoidable delays due to acts of God, governmental restrictions, strikes, labor disturbances, shortages of materials or supplies or for any other cause or event beyond Landlord’s reasonable control (“Unavoidable Delays”), Landlord is unable to furnish or is delayed in furnishing any utility or service required to be furnished by Landlord under the provisions of Section 8 hereof or any other provisions of this Lease or any collateral instrument, or is unable to perform or make or is delayed in performing or making any installations, decorations, repairs, alterations, additions, or improvements, whether required to be performed or made under this Lease or under any collateral instrument, or is unable to fulfill or is delayed in fulfilling any of Landlord’s other obligations under this Lease or any collateral instrument, no such inability or delay shall constitute an actual or constructive eviction in whole or in part, or entitle Tenant to any abatement or diminution of Basic Rental or other charges due hereunder or relieve Tenant from any of its obligations under this Lease, or impose any liability upon Landlord or its agents by reason of inconvenience or annoyance to Tenant, or injury to or interruption of Tenant’s business, or otherwise.

38.    Covenant of Quiet Enjoyment.

Upon Tenant paying the Basic Rental and other charges due hereunder and performing all of Tenant’s obligations under this Lease, Tenant may peacefully and quietly enjoy the Demised Premises during the Term of this Lease; subject, however, to the provisions of this Lease and to any mortgages or ground or underlying leases referred to in Section 25 hereof.

39.    Broker.

Tenant’s represents and warrants to Landlord that it neither consulted nor negotiated with any broker or finder with regard to the Demised Premises other than the Brokers. Tenant agrees to indemnify, defend and save Landlord harmless from and against any claims for fees or commissions from anyone other than the Brokers claiming to have dealt with Tenant in connection with the Demised Premises or this Lease. Landlord agrees to pay any commission or fee owing to the Brokers pursuant to separate agreement or agreements with them. Nothing contained in this Section 39 shall be construed to be a third-party beneficiary contract.

40.    Indemnity. Landlord or Tenant, as applicable, is referred to in this Article 40 as “Indemnitor”) with respect to each such party’s obligations under Sections 40.1 and 40.2 below.

40.1    Except for the negligence or willful misconduct of Landlord or Landlord’s employees, officers, principals, contractors, property managers, and agents (collectively, “Landlord’s Indemnitees”), and to the extent not otherwise prohibited by law, Tenant agrees to hold Landlord and the other Landlord Indemnitees harmless and to indemnify each of them against claims and liabilities, including reasonable attorneys’ fees, for injuries to all persons and damage to or theft or misappropriation or loss of property occurring in or about the Demised Premises to the extent arising from Tenant’s occupancy of the Demised Premises or the conduct of its business or from any activity, work, or thing done, permitted or suffered by Tenant in or about the Demised Premises or from any breach or default on the part of Tenant in the performance of any covenant or agreement on the part of Tenant to be performed pursuant to the terms of this Lease. Notwithstanding the foregoing sentence, (i) Tenant shall only be liable for the cost of any damage to or theft or misappropriation or loss of property to the extent such cost is in excess of amounts, if any, recoverable under any property insurance policy carried or required to be carried by Landlord hereunder, and (ii) Tenant shall not be required to indemnify any Landlord Indemnitee to the extent of any loss caused by such Landlord Indemnitee’s negligence or willful misconduct.

40.2    Except for the negligence or willful misconduct of Tenant or Tenant’s employees, officers, principals, contractors, and agents (collectively, “Tenant Indemnitees,” and together with Landlord Indemnitees, “Indemnitees”), and to the extent not otherwise prohibited by law, Landlord agrees to hold Tenant and the Tenant Indemnitees harmless and to indemnify each of them against claims and liabilities, including reasonable attorneys’ fees, for injuries to all persons and damage to or theft or misappropriation or loss of property occurring in or about the Development (other than in or about the Demised Premises) to the extent arising from Landlord’s or any other Landlord Indemnitee’s negligent or willful act in or about the Development, or from any breach or default on the part of Landlord in the performance of any covenant or agreement on the part of Landlord to be performed pursuant to the terms of this Lease. Notwithstanding the foregoing sentence, (i) Landlord shall only be liable for the cost of any damage to or theft or misappropriation or loss of property to the extent such cost is in excess of amounts, if any, recovered under any property insurance policy carried or required to be carried by Tenant hereunder, and (ii) Landlord shall not be required to indemnify any Tenant Indemnitees to the extent of any loss caused by such Tenant Indemnitees’ negligence or willful misconduct.

40.3    If any claim, action or proceeding is made or brought against any Indemnitee, then upon demand by an Indemnitee, Indemnitor, at its sole cost and expense, shall resist or defend such claim, action or proceeding in the Indemnitee’s name (if necessary), by attorneys approved by the Indemnitee, which approval shall not be unreasonably withheld, conditioned or delayed (attorneys for Indemnitor’s insurer shall be deemed approved for purposes of this Section 40.3). Notwithstanding the foregoing, an Indemnitee may retain its own attorneys to participate or assist in defending any claim, action or proceeding involving potential liability in excess of the amount available under Indemnitor’s liability insurance carried under Articles 14 or 15 for such claim and Indemnitor shall pay the reasonable fees and disbursements of such attorneys. If Indemnitor fails to diligently defend or if there is a legal conflict or other conflict of interest, then Indemnitee may retain separate counsel at Indemnitee’s expense. Notwithstanding anything herein contained to the contrary, Indemnitor may direct the Indemnitee to settle any claim, suit or other proceeding provided that (a) such settlement shall involve no obligation on the part of the Indemnitee other than the payment of money, (b) any payments to be made pursuant to such settlement shall be paid in full exclusively by Indemnitor at the time such settlement is reached, (c) such settlement shall not require the Indemnitee to admit any liability, and (d) the Indemnitee shall have received an unconditional release from the other parties to such claim, suit or other proceeding.

41.    Miscellaneous.

41.1    The words “Landlord” and “Tenant” as used herein shall include the plural as well as the singular. If there be more than one Tenant, the obligations hereunder imposed upon Tenant shall be joint and several.

41.2    Submission of this instrument for examination or signature by Tenant does not constitute a reservation of or option for lease, and it is not effective as a lease or otherwise until execution and delivery by both Landlord and Tenant.

41.3    The agreements, conditions and provisions herein contained shall, subject to the provisions as to assignment, set forth in Section 17 of this Lease, apply to and bind the heirs, executors, administrators, successors and assigns of the parties hereto.

41.4    Tenant shall not without the consent of Landlord, use the name of the Building for any purpose other than as the address of the business to be conducted by Tenant in the Demised Premises. Landlord reserves the right to select the name of the Building and to make such changes of name as it deems appropriate from time to time.

41.5    If any provisions of this Lease shall be determined to be illegal or unenforceable, such determination shall not affect any other provisions of this Lease and all such other provisions shall remain in full force and effect.

41.6    This Lease shall be governed by and construed pursuant to the laws of the State of Michigan.

41.7    In the event Tenant is no longer a publicly traded corporation whose financial statements are filed with the United States Securities and Exchange Commission and available to the public, upon Landlord’s written request, Tenant shall promptly furnish Landlord, from time to time, but not more frequently than once per calendar year, financial statements (including a balance sheet, profit and loss schedule, and a statement of cash flows) reflecting Tenant’s current financial condition.

41.8    Except as expressly set forth herein, Landlord and Landlord’s agents have made no warranties, representations, statements or promises with respect to the Building or the Demised Premises or the Development and no rights, easements or licenses are acquired by Tenant by implication or otherwise Tenant is entering into this Lease after full investigation and is not relying upon any statement or representation made by Landlord not embodied in this Lease.

41.9    Wherever in this Lease Landlord’s consent or approval is required, if Landlord refuses to grant such consent or approval, whether or not Landlord expressly agreed that such consent or approval would not be unreasonably withheld, Tenant shall not make or exercise, and Tenant hereby waives, any claim for money damages (including any claim by way of set-off, counterclaim or defense) and/or any right to terminate this Lease based upon Tenant’s claim or assertion that Landlord unreasonably withheld or delayed its consent or approval. Tenant’s sole remedy shall be an action or proceeding to enforce such provision, by specific performance, injunction or declaratory judgment. In no event shall Landlord be liable for, and Tenant hereby waives any claim for, any indirect, consequential or punitive damages, including loss of profits or business opportunity, arising under or in connection with this Lease.

41.10    For purposes of this Lease, “reasonable efforts” by Landlord shall not include an obligation to employ contractors or labor at overtime or other premium pay rates or to incur any other overtime costs or additional expenses whatsoever.

41.11    No act or thing done by Landlord or Landlord’s agents or employees during the Term shall be deemed an acceptance of a surrender of the Demised Premises, and no provision of this Lease shall be deemed to have been waived by Landlord, unless such waiver is in writing and is signed by Landlord.

41.12    The failure of Landlord to seek redress for violation of, or to insist upon the strict performance of, any covenant or condition of this Lease, or any of the Rules and Regulations, shall not be construed as a waiver or relinquishment for the future performance of such obligations of this Lease or the Rules and Regulations, or of the right to exercise such election but the same shall continue and remain in full force and effect with respect to any subsequent breach, act or omission. The receipt by Landlord of any Basic Rental or additional rent payable pursuant to this Lease or any other sums with knowledge of the breach of any covenant of this Lease shall not be deemed a waiver of such breach. No payment by Tenant or receipt by Landlord of a lesser amount than the monthly Basic Rental or additional rent herein stipulated shall be deemed to be other than a payment on account of the earliest stipulated Basic Rental or additional rent, or as Landlord may elect to apply such payment, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as Basic Rental or additional rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such Basic Rental or additional rent or pursue any other remedy provided in this Lease.

41.13    CAPTIONS. The captions and section numbers appearing in this Lease are inserted only as a matter of convenience and in no way define, limit, construe or describe the scope or intent of each section of this Lease.

41.14    DRAFTING OF LEASE. Notwithstanding anything contained to the contrary contained herein or presumed at law or otherwise, the parties and signatories hereto hereby agree and acknowledge that, for the purposes of the interpretation or construction of this Lease and its riders, etc., neither party/signatory shall be deemed or considered to be the drafter of the Lease, it riders, etc., it being the intention of the parties that any interpretation and/or construction of the same be made by a court of competent jurisdiction without regard to the history of the drafting, or to the drafter(s), of the same.

41.15    THIS LEASE. The term “this Lease” shall mean the Preamble, Sections 1 through 42, and Exhibits A through H.

41.16    PREVAILING LANGUAGE.To the extent there is any conflict between (a) the Preamble and Sections 1 through 42; and, (b) Exhibits A through H, the Preamble and Sections 1 through 42 shall prevail.

41.17    TREASURY CLAUSE.

(a) Tenant warrants and represents to Landlord that Tenant does not operate under any other name and that Tenant does not have any affiliates or subsidiaries except as follows: (1) Covisint GmbH, and (2) Covisint Software Services (Shanghai) Ltd..

(b) Tenant warrants and represents to Landlord that Tenant and each of Tenants’ subsidiaries or affiliates are not listed on The United States Treasury Department’s Office of Foreign Assets Control’s list of specially Designated Nationals and Blocked Persons.

41.18    AUTHORITY. Tenant and Landlord represent and warrant that the persons signing this Lease are duly authorized to execute and deliver this Lease on behalf of the respective parties to the Lease and that all required corporate or partnership actions, if any, necessary to authorize such execution and delivery have taken place.

41.19    GENERAL MERGER. All understandings and agreements heretofore made between the parties hereto are merged in this Lease, which alone fully and completely expresses the agreement between Landlord and Tenant and any executory agreement hereafter made shall be ineffective to change, modify, discharge or effect an abandonment of it in whole or in part, unless such executory agreement is in writing and signed by the party against whom enforcement of the change, modification, discharge or abandonment is sought.

41.20    ENTIRE AGREEMENT. All understandings and agreements heretofore made between the parties hereto are merged in this Lease, which alone fully and completely expresses the agreement between Landlord and Tenant, and any executory agreement hereafter made shall be ineffective to change, modify, discharge or effect an abandonment of it in whole or in part unless such agreement is in writing and signed by both parties.

41.21    BILLS. Tenant agrees to make all checks for Basic Rental and Additional Rent payable to “Southfield HS Development LLC and Southfield HS RK LLC”. Landlord reserves the right to require Tenant to make all checks for Basic Rental and Additional Rent payable to an entity other than the entity set forth in the immediately preceding sentence; which right Landlord shall exercise by sending to Tenant a written notice.

41.22 WI-FI ACCESS: Tenant shall have the right to install a wireless intranet, Internet, and communications network (also known as “Wi-Fi”) within the Demised Premises for the use of Tenant and its employees and clients (the “Network”) subject to this clause and all the other clauses of this Lease as are applicable.

Tenant shall not solicit, suffer, or permit other tenants or occupants of the Building to use the Network or any other communications service, including, without limitation, any wired or wireless Internet service that passes through, is transmitted through, or emanates from the Demised Premises.

Tenant agrees that Tenant’s communications equipment and the communications equipment of Tenant’s service providers and contractors located in or about the Demised Premises or installed in the Building to service the Demised Premises including, without limitation, any antennas, switches, or other equipment (collectively, “Tenant’s Communications Equipment”) shall be of a type and, if applicable, a frequency that will not cause radio frequency, electromagnetic, or other interference to any other party or any equipment of any other party including, without limitation, Landlord, other tenants, or occupants of the Building or any other party. In the event that Tenant’s Communications Equipment causes or is believed to cause any such interference, upon receipt of notice from Landlord of such interference, Tenant will take all steps necessary to correct and eliminate the interference. If the interference is not eliminated within seventy two (72) hours, then, upon request from Landlord, Tenant shall shut down Tenant’s Communications Equipment pending resolution of the interference, with the exception of intermittent testing, upon prior notice to and with the approval of Landlord.

Tenant acknowledges that Landlord has granted and/or may grant lease rights, licenses, and other rights to various other tenants and occupants of the Building and to telecommunications service providers.

42.    Intentionally Omitted.

43.    Right of First Refusal.

(a)If Landlord shall receive an offer from a third party to lease all or a portion of the space then available for lease and contiguous to the Demised Premises on the sixth (6^th) floor of the Building, as more particularly set forth in the attached Exhibit B-2 (the “Sixth Floor Refusal Space”) or on the fourth (4^th) floor of the Building, as more particularly set forth in the attached Exhibit B-3 (the “Fourth Floor Refusal Space” together with the “Sixth Floor Refusal Space” shall collectively be referred to as the “First Refusal Space”), which Landlord intends to accept, prior to leasing the same pursuant to such offer, Tenant shall have the one-time right of first refusal to lease such space upon the terms and conditions hereinafter set forth (the “Right of First Refusal”).

(b)In the event such third party offer to lease such First Refusal Space includes a commencement date which occurs anytime following the Commencement Date of this Lease but prior to the conclusion of the third (3^rd) Lease Year following the Commencement Date of this Lease, Tenant’s Right of First Refusal to lease such First Refusal Space shall be upon the same terms and condition as the Lease, except that:

i. The commencement date with respect to the First Refusal Space (the “First Refusal Space Commencement Date”) shall occur one hundred twenty (120) days following delivery of the First Refusal Space to Tenant vacant and free of tenants.

ii. Commencing upon the First Refusal Space Commencement Date, Tenant shall pay Annual Basic Rental for the First Refusal Space equal to the product obtained by multiplying (x) the quotient obtained by dividing the Annual Basic Rental payable with respect to the Demised Premises (in accordance with Section 1(g) hereof) by the rentable square foot area of the Demised Premises (in accordance with Section 1(d) hereof), by (y) the rentable square foot area of the First Refusal Space, as measured by Landlord’s architect in accordance with Section 2.2 hereof. The above notwithstanding, provided Tenant is not in an Event of Default beyond applicable notice, grace or cure periods, Basic Rental for the First Refusal Space shall be abated for the number of months following the First Refusal Space Commencement Date obtained by multiplying twelve (12) by the fraction which has a denominator equal to one hundred thirty two (132) and a numerator equal to the number of months remaining in the Term of the Lease as of the First Refusal Space Commencement Date (as such date is reasonably estimated by Landlord at that time).

iii. In the event that the First Refusal Space is vacant at the time of the execution of the First Refusal Amendment, as hereinafter defined, Landlord shall deliver vacant possession of the First Refusal Space in its “as-is” condition, broom clean, to Tenant so Tenant can perform improvements within the First Refusal Space (“Tenant’s First Refusal Space Work”) within two (2) business days of execution of the First Refusal Amendment. In the event that the Expansion Premises is occupied by another tenant at the time of the execution of the Expansion Amendment, Landlord shall deliver possession of the Expansion Space in its as-is condition, broom clean, as soon as reasonably practical.

iv. Landlord shall provide Tenant with an allowance to be applied towards the Cost of Tenant’s improvements to the First Refusal Space of the amount which is obtained by multiplying the rentable square foot area of the First Refusal Space (as measured by Landlord’s architect in accordance with Section 2.2 hereof) by the product obtained by multiplying: (a) the fraction where the denominator is one hundred thirty two (132) and the numerator is the number of months remaining in the Lease Term as of the First Refusal Space Commencement Date (as such date is reasonably estimated by Landlord at that time), and (b) Fifty Dollars ($50.00) (the “First Refusal Space Improvement Allowance”).

v. Tenant’s improvements to the First Refusal Space and the First Refusal Space Improvement Allowance shall be subject to the same terms and conditions imposed on Tenant and Landlord with respect to Tenant’s Work in the Original Premises and the Tenant Improvement Allowance, as defined in and in accordance with Section 4 except that Landlord’s obligation to perform Landlord’s Work in the Demised Premises shall not create any obligation on behalf of Landlord to perform any work in the First Refusal Space except that, in the event the First Refusal Space comprises less than a full floor of the Building but more than half of the rentable area included in the floor of the Building on which the First Refusal Space is located, Landlord shall perform such work as is reasonably necessary to construct a public corridor to service the First Refusal Space as required by code (including associated lighting, HVAC, electric, wall finishes, ceiling finishes, and floor finishes using building standard materials).

(c)In the event such third party offer to lease such First Refusal Space includes a commencement date which occurs anytime after the conclusion of the third (3^rd) Lease Year following the Commencement Date of this Lease, Tenant’s Right of First Refusal to lease such First Refusal Space shall be upon the same terms being offered by such third party pursuant to such offer.

(d)Landlord shall notify Tenant in writing of its intent to accept an offer to lease all or a portion of the First Refusal Space (“Landlord’s First Refusal Notice”). In the event the third party offer to lease such First Refusal Space includes a commencement date which occurs anytime after the conclusion of the third (3^rd) Lease Year following the Commencement Date of this Lease, Landlord’s First Refusal Notice shall contain the terms and conditions of such third party offer (including the Basic Rental therefor and Landlord’s construction obligations, if any, thereto). Tenant shall have five (5) business days from receipt of Landlord’s First Refusal Notice to notify Landlord in writing that Tenant desires to lease the First Refusal Space upon the terms and conditions set forth in Landlord’s notice, which shall be issued in accordance with this paragraph and Sections 43(b) or 43(c), as applicable.

(e)If Tenant exercises its right to lease such First Offer Space in accordance with this Section 43, Landlord will prepare and deliver to Tenant an amendment (“First Refusal Amendment”) containing the above referenced terms and conditions upon which Tenant shall lease the First Offer Space. Tenant’s lease of the First Refusal Space shall otherwise be upon the same terms and conditions of this Lease. Tenant shall have twenty (20) days to execute and deliver the First Refusal Amendment to Landlord. If Tenant fails to execute and deliver the First Refusal Amendment to Landlord within twenty (20) days of receipt of the First Refusal Amendment, Tenant will be have conclusively deemed to have declined its Right of First Refusal as to that particular First Refusal Space, and Landlord shall be free to lease the space to a third party.

(f)If Tenant does not exercise its right to lease a First Refusal Space and Landlord leases such space to a third party and the Term of the lease with the third party expires prior to the Term of this Lease causing the same First Refusal Space to become available again and Landlord shall again receive an offer to lease the same First Refusal Space from a third party (or an offer to renew the lease with the existing tenant), Landlord shall not be obligated to re-offer such First Refusal Space to Tenant. The parties hereto acknowledge and agree that Tenant’s Right of First Refusal shall apply one time only with respect to any portion of the First Refusal Space.

(g)Tenant’s Right of First Refusal shall be subject to the right of The Albrecht Companies, Inc. to renew its lease for the Fourth Floor Refusal Space.

(h)Notwithstanding any contrary provision of this Section 41 or any other provision of this Lease, any exercise by Tenant of its right to lease First Refusal Space shall be void and of no effect unless on the date Tenant notifies Landlord that it elects to lease First Refusal Space and on the commencement date of the First Refusal Amendment: (i) this Lease is in full force and effect, (ii) no Event of Default has occurred under this Lease which remains continuing and uncured after expiration of any applicable notice and opportunity to cure, (iii) Tenant is then occupying the entire Demised Premises for the conduct of its business and Tenant has not assigned this Lease or sublet the Demised Premises other than to a Related Entity or pursuant to a permitted transfer under Section 17 and (iv) Tenant has not exercised its Contraction Option pursuant to paragraph 36 above (any of which conditions described in clauses (i), (ii), (iii), and (iv) may be waived by Landlord at any time in Landlord’s sole discretion).

44.    Signs.

(a)Tenant shall have the right to erect, at Tenant’s sole cost and expense, a non-neon panel sign on the monument sign adjacent to the Building on Central Park Boulevard in accordance with plans and specifications (specifying in reasonable detail, amongst other things, the dimensions, layout, color(s), and construction type of such signage as well as the manner in which such signage will be attached to the monument sign) submitted to Landlord by Tenant and approved by Landlord, which approval shall not be unreasonably withheld or delayed. All Tenant signs shall conform to and comply with applicable Law and local codes. Landlord shall either provide space on the existing monument sign adjacent to the Building on Central Park Boulevard for Tenant’s sign or shall provide space on a separate monument sign to be constructed adjacent to Central Park Boulevard reasonably similar to the existing monument sign in terms of visibility.

(b)Landlord shall, at its sole cost and expense, (i) install a building standard suite sign at the entrance to the Demised Premises, and (ii) provide Tenant with building standard signage on the Building directory located on the first floor of the Building.

45.Generator.

(b)    Landlord will grant to Tenant, for Tenant’s own use and not for resale purposes, a non-exclusive license of sufficient space at the Development, as reasonably determined by Landlord, for the construction, installation, replacement, operation and use by Tenant of an electric generator, and other related equipment, including mountings and supports (collectively, “Tenant’s Generator”). Provided Tenant has submitted to Landlord plans and specifications for Tenant’s Generator and any necessary structural support signed and sealed by Tenant’s electrical and structural engineers together with evidence Tenant has obtained all necessary permits required to install Tenant’s Generator, and Landlord has approved the same (which approval shall not be unreasonably withheld or delayed), Landlord shall make available to Tenant reasonable access for the construction, installation, maintenance, repair, replacement, operation and use of Tenant’s Generator, all at Tenant’s sole cost and expense. Tenant shall have the right to test Tenant’s Generator on a monthly basis at reasonable times during non-business hours (but not on Sundays or between the hours of 10:00 p.m. and 6:00 a.m. daily) in accordance with Exhibit E, provided the scheduling of such test is arranged in advance with Landlord. Tenant shall be responsible for maintaining and repairing the Tenant’s Generator in good working order and maintaining all necessary licenses and permits required to operate Tenant’s Generator. Tenant covenants and agrees that Tenant shall not overuse or misuse the Tenant’s Generator, and that Tenant’s use of the Tenant’s Generator shall comply with all Applicable Laws, Legal Requirements, and all Rules and Regulations issued by Landlord with respect thereto. Landlord shall have the right, in Landlord’s sole discretion, at any time and from time to time during the Term, upon reasonable notice to Tenant, to relocate the Tenant’s Generator to another area of the Building. Tenant shall cooperate with Landlord to effectuate any such relocation. All costs involved in such relocation shall be borne by Landlord. Upon expiration or earlier termination of this Lease, Tenant shall remove Tenant’s Generator installed pursuant to this Section and shall restore the area where it was previously located to substantially its condition prior to installation of Tenant’s Generator described herein, reasonable wear and tear and casualty damage excepted. In the event that Landlord reasonably determines that Tenant’s Generator has not been properly maintained to an extent that its operation would present a risk to human health and safety or the integrity of the Development, or Tenant has failed to maintain any license or permit required under applicable law or code to operate Tenant’s Generator, then Landlord shall notify Tenant in writing of the same and Tenant shall, in instances involving risk to human health or safety, perform such repairs or maintenance which are reasonably necessary to eliminate such risk to human health or safety within two (2) business days of Landlord’s notice, or, in instances where Tenant has failed to maintain any license or permit required under applicable law or code to operate Tenant’s Generator, commence such corrective action which is reasonably required to restore such license or permit within two (2) business days of Landlord’s notice and thereafter shall diligently pursue the restoration of such license or permit until such license or permit is obtained as required by law. In the event Tenant fails to comply with the terms of the preceding sentence, Landlord shall have the right, in addition to other remedies afforded to it under this Lease, to render Tenant’s Generator temporarily inoperable until such time that Tenant provides reasonable evidence to Landlord that it has restored Tenant’s Generator to good working order or has renewed such applicable permits or licenses, as the case may be, and Tenant shall promptly reimburse Landlord for any associated reasonable out-of-pocket expenses incurred by Landlord upon receipt of an invoice accompanied by reasonable supporting documentation including invoices for work performed to render Tenant’s Generator temporarily inoperable. Except as otherwise provided for in this Section 43, Tenant’s installation of Tenant’s Generator shall be considered an Alteration in accordance with Section 9.1 of this Lease.

[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the date set forth in Section 1(a).

WITNESS:	LANDLORD:
	SOUTHFIELD HS DEVELOPMENT LLC AND SOUTHFIELD HS RK LLC, AS TENANTS-IN-COMMON             By: TIME EQUITIES, INC., AS AGENT By: /s/ Richard Perry Name: Richard Perry_____________ Title: Director of Asset Management
WITNESS:	TENANT:
	COVISINT CORP.
/s/ Sam Munaco	By: /s/ Enrico Dirigolamo
	Name: Enrico Dirigolamo
	Title: Chief Financial Officer

EXHIBIT “A”

Description of Land and Improvements

Parcel 2 (West):
Part of the Northeast 1/4 of Section 22, Town 1 North, Range 10 East, City of Southfield, Oakland County, Michigan, described as follows: Beginning at a point located distant North 1060.94 feet and South 87 degrees 00 minutes 00 seconds West 922.48 feet from the East 1/4 corner of said Section 22: thence proceeding thence South 87 degrees 00 minutes 00 seconds West 522.61 feet; thence North 01 degree 15 minutes 36 seconds East 732.82 feet; thence South 89 degrees 55 minutes 45 seconds East 489.23 feet; thence South 361.32 feet; thence 54.98 feet along an arc of a curve to the left, radius 1050.00 feet and chord bearing South 01 degree 30 minutes 00 seconds East 54.97 feet; thence South 03 degrees 00 minutes 00 seconds East 288.81 feet to the Point of Beginning.

Parcel 3 (Elevated Parcel):
Perpetual Easement Estate established by that certain Grant of Easement and Agreement for Maintenance executed between the City of Southfield and Teachers Insurance and Annuity Association of America, dated August 11, 1981 recorded in Liber 8086, Page 642, Oakland County Records and re-recorded in Liber 8132, Page 218, Oakland County Records, said easement being described as an expanse of space located in the City of Southfield, County of Oakland, State of Michigan, the centerline of which is described as follows: the centerline of a 150.00 foot wide expanse of space whose horizontal plane is defined as follows: Commencing at the East 1/4 corner of Section 22, Town 1 North, Range 10 East, City of Southfield, Oakland County, Michigan; thence along the East line of said Section 22, due North a distance of 1060.94 feet; thence South 87 degrees 00 minutes 00 seconds West 822.48 feet; thence North 03 degrees 00 minutes 00 seconds West 288.81 feet; thence along a curve to the right, a distance of 49.74 feet, radius of 950.00 feet, chord bearing of North 01 degree 30 minutes 00 seconds West 49.74 feet; thence due North 72.27 feet to the Point of Beginning; thence North 89 degrees 59 minutes 48 seconds West 100.00 feet to the Point of Ending and whose vertical plane is defined as lying above elevation 692.00 feet from mean sea level, as established by the United States Coast and Geodetic Survey, along with a 10.00 foot wide easement for supporting columns centered on the 100.00 foot width and running in a North-South direction the full 150.00 foot long length, said easement to run below the plane of 692.00 elevation to sufficient depths to adequately support the structure above.
Parking Easement:
Easement for parking as created, limited and defined in Declaration of Easement recorded in Liber 8326, Page 803, Oakland County Records.

EXHIBIT “B-1”

Demised Premises

EXHIBIT “B-2”

Sixth Floor Refusal Space

EXHIBIT “B-3”

Fourth Floor Refusal Space

EXHIBIT “C”

Janitorial Services

DAILY SERVICES:(Five Times Per Week)

l. Empty waste baskets.

2. Empty and clean ash trays, including those in public areas.

3. Dust desk tops which are clear of working papers.

4. Sweep or vacuum traffic areas – public and private.

5. Toilet rooms:

(a) Empty all waste receptacles.

(b) Sweep and wet mop floors.

(c) Clean and disinfect all fixtures and clean mirrors and shelves.

6. Clean and disinfect drinking fountains and water coolers.

7. Police parking areas for rubbish and trash.

8. Day porter services for Common Areas and restrooms

WEEKLY SERVICES:

1. Damp mop floors, stairways, lobbies and corridors.

2. Sweep or vacuum entire floor area – public and private.

MONTHLY SERVICES:

1. Strip, wax and polish floor in lobby area and isles.

2. Dust window blinds.

3. Wash all glass in office partitions.

4. Wash outside and inside building entry mats.

SEMI-ANNUAL SERVICES:

1. Power scrub tile areas and wax or apply floor treatment.

2. Wash windows.

EXHIBIT “D”

Building Rules and Regulations

1. The Common Areas of the Building and the Development shall not be obstructed or used for any purpose other than coming to and from the Demised Premises.

2. Landlord has the right to control access to the Building and the Development and refuse admittance to any person or persons without satisfactory identification or a pass issued by Tenant during hours determined by Landlord.

3. Landlord shall upon reasonable notice have the right to enter upon the Demised Premises at reasonable hours for the purpose of inspecting the same.

4. Landlord shall upon reasonable notice have the right to enter the Demised Premises at hours convenient to Tenant for the purpose of exhibiting the same to prospective tenants within one hundred eighty (180) day period prior the expiration of the Lease.

5. No person shall disturb other occupants of the Building by making loud or disturbing notices.

6. Soliciting, peddling and canvassing is prohibited in the Building and the Development and Tenant shall cooperate to prevent the same. Tenant shall not operate any vending machines in the Demised Premises without the prior written approval from Landlord.

7. All deliveries and removal of furniture, equipment or other bulky items must take place after notification to Landlord, during such hours and in such manner as Landlord shall determine. (After-hours deliveries must be after 5:00 p.m. and before 8:00 a.m.). Upon arrival at the Building, check-in with security is mandatory. Tenant shall be responsible for all damage or injury resulting from the delivery or removal of all articles into or out of the Building, or the Development, or the Demised Premises by or on behalf of Tenant. No load shall be placed on the floors or in elevators in excess of the limits which shall be established by Landlord. Tenant cannot use the elevator for moving in or out of the Building without specific arrangements with Landlord (use of freight elevator only).

8. Tenant shall not use any equipment emitting noxious fumes unless they are properly vented at Tenant’s expense.

9. Nothing shall be attached to the interior or exterior of the Building without the prior written consent of Landlord. However, Tenant shall have the right to install and remove, within the Demised Premises (subject to the terms of the Lease), all of Tenant’s furniture and normal business equipment. Building standard levelor-style venetian blinds shall be used in windows provided by, and designated by, Landlord at Landlord’s sole cost. No other window treatments or objects shall be attached to, hung in or used in connection with any exterior of any door or window or from outside the Building. No article shall be placed on any window sill.

10. No sign or other representation shall be placed on the interior or exterior of the Building without prior written consent of Landlord.

11. No hazardous articles shall be brought into or kept in the Building at any time. No bicycles (except in designated areas), vehicles or animals, except seeing eye and aide dogs, of any kind shall be brought into or kept in or about the Building.

12. No marking, painting, drilling, boring, cutting, defacing of the walls, floors, ceilings of the Building shall be permitted without the prior written consent of Landlord.

13. The electrical system and lighting fixtures in the Building and the Demised Premises shall not be altered or disturbed in any manner without the prior written consent of Landlord. Any such alterations or additions must be performed by licensed personnel authorized by Landlord.

14. The toilets and other plumbing fixtures shall not be used for any other purpose than those for which they are designed. No sweepings, rubbish or other similar materials or substances shall be deposited therein.

15. Smoking is prohibited in the elevator(s), hallways, corridors, stairs, lobbies and other Common Areas of the Building as well as the Demised Premises. Smoking to only occur outside in designated smoking areas at least 50 feet away from the entrances. No smoking allowed at the South Building entrance.

16. Tenant shall not waste electricity, water or air conditioning and shall cooperate fully with Landlord to assure the most effective and efficient operation of the heating and/or air conditioning system of the Building.

17. Tenant assumes full responsibility for protecting the Demised Premises from theft, robbery and pilferage. Except during Tenant’s normal business hours, Tenant shall keep all doors to the Demised Premises locked and other means of entry to the Demised Premises closed and secured.

18. All cleaning, repairing, janitorial, decorating, painting, or other services and work in and about the Demised Premises shall be done only by authorized Building personnel.

19. Tenant or Tenant’s employees shall not distribute literature, flyers, handouts or pamphlets of any type in any of the Common Areas without the prior written consent of Landlord.

20. Tenant shall not cook, otherwise prepare or sell, any food or beverages in or form the Demised Premises. However, Tenant shall have the right to prepare food for the exclusive use of Tenant’s employees.

21. Tenant shall not permit the use of any apparatus for sound production or transmission or otherwise in such manner that the sound so transmitted or produced shall be audible or vibrations shall be detectable beyond the Demised Premises.

22. Tenant shall keep all electrical and mechanical apparatus free of vibration, noise and air waves which may be transmitted beyond the Demised Premises.

23. No floor covering shall be affixed to any floor in the Demised premises by means of glue or other adhesive, unless the installation procedure is approved by Landlord.

24. Tenant shall comply with all rules and regulations established by Landlord pursuant to other applicable provisions of the Lease.

25. Landlord shall initially supply Tenant with two (2) keys to each entry door to the Demised Premises as well as access cards for each outside door to the Building in an initial quantity as may be reasonably required by Tenant for its expected population of employees who Tenant desires be granted after-hours access to the Building. Replacement access cards or keys are also at Tenant’s expense. Landlord currently charges $10 for each replacement card, subject to modification from time to time as reasonably determined by Landlord.

26. Landlord shall not be responsible for the violation of any of the foregoing rules and regulations by other tenants of the Building and shall not be obligated to enforce the same against other tenants. But Landlord shall enforce and apply the rules and regulations in a non-discriminatory manner. Landlord shall have the right to amend these rules and regulations from time to time.

EXHIBIT “E”

CONTRACTOR RULES AND REGULATIONS

Contractor agrees for itself, its employees, agents, clients, Landlords, licensees, invitees and guests, to comply fully with the following rules and regulations and with such reasonable modifications thereof and additions thereto as Landlord may make for the Property.

1.    The Common Areas of the Property shall not be used by Contractor for any purpose other than those for which they are intended or designated.

2.    Landlord has the right to control access to the Property and refuse admittance to any person or persons without satisfactory identification or a pass issued by Contractor during hours reasonably determined by Landlord.

3.    Soliciting, peddling and canvassing are prohibited in or on the Property and Contractor shall cooperate to prevent the same. Contractor or Contractor’s employees shall not distribute literature, flyers, handouts or pamphlets of any kind on the Property without prior written consent from Landlord. Contractor shall not make any room-to-room canvass to solicit business from other occupants of the Property.

4.    No signs, advertisements, or notices shall be painted or affixed on or to any windows or doors or other parts of the Property visible from the exterior or any common area or public areas of the Property. No part of the Property may be defaced or damaged by Contractor.

5.    Contractor shall not use the name of the Property for any purpose and shall not use any picture or likeness of the Property in any circulars, notices, advertisements or correspondence.

6.    Sidewalks, doorways, vestibules, entrances, corridors, stairways, passages, courts, elevators, and other similar areas shall not be obstructed by Contractor or used for any purpose other than ingress and egress to and from the Property and for going from one part of the Property to another. Contractors shall not place objects against glass partitions, doors or windows which would be unsightly from the Property’s corridors or other areas of the Property.

7.    Corridor doors, when not in use, shall be kept closed. Corridor doors should not be propped open without prior approval by Landlord. If doors are damaged as a result of propping, Contractor at Contractors sole cost shall be responsible for the cost to repair said doors.

8.    Contractor assumes responsibility for not compromising the protection of the Property from theft, burglary, robbery and pilferage. Except during normal business hours, Contractor shall keep all doors to the Property locked and other means of entry to the Property closed and secured.

9.    Each Contractor shall cooperate with Landlord in keeping its work area neat and clean.

10.    Landlord shall be in no way responsible to the Contractor, their agents, employees, or invitees for any loss of material goods from the premises or public areas or for any damages to any property therein from any cause whatsoever.

11.    A list of Landlord’s names and telephone numbers to use in the event of an emergency will be made available to the Contractor; Contractor is required to provide the same to Landlord.

12.    Contractor shall not hinder the work of other Contractors working in the Property at any time. Contractor shall provide adequate waste and rubbish receptacles to prevent unreasonable cost to Landlord in discharging its obligation regarding any services provided by Contractor.

13.    Landlord and Landlord’s agents shall at all times have the right to enter the work area to inspect and examine the same and to show the same to persons wishing to lease, purchase, or mortgage the Property or any part thereof.

14.    Contractor shall not place any additional locks or similar devices on any door and no locks shall be changed in its leased area of the Property without Landlord’s written consent. Additional keys can only be obtained through the Office of the Property or Landlord’s agent. Upon termination of the Contract or termination of Contractor’s possession of any portion of the Property, Contractor shall surrender all keys for door locks and other locks in or about the Property and shall make known to Landlord the combination of all locks, safes, cabinets and vaults. Should Contractor not surrender all keys with twenty-four (24) hours of completion or termination of the Contract, Contractor, at Contractors sole cost will be responsible for all costs related to re-keying a portion or all of the Property if required by Landlord.

15.    Demolition and removal of trash must be done after normal Property hours, i.e., between 5:30 p.m. and 7:30 a.m. Monday through Friday. Exceptions to this rule must be approved by Landlord.

16.    Any large dumpsters for the removal of construction debris are the responsibility of the Contractor and must be scheduled with Landlord, dumpsters shall be placed at the loading dock or approved designated areas. All dumpster areas must be kept neat and orderly. Dumpsters shall be removed promptly upon request. If dumpsters are to be placed directly on asphalt, the Contractor must supply wood to go under the wheels to protect the area. The Contractor shall be responsible to all damages caused by the dumpster.

17.    The Contractor and all Subcontractors will use rubber wheeled cars when moving material through the Property or removing trash from the Property. If metal wheeled moving devices are used, floors must be protected.

18.    Protection of all public corridor and elevator surfaces is the responsibility of the Contractor. Masonite floor protection and cardboard protection will be required throughout the job. Protection devices must be removed daily to facilitate cleaning.

19.    The Contractor is responsible for storing and securing all Contractor’s tools and materials. Storage space may be leased through the Office of the Property (if available).

20.    Contractors shall not make or permit any improper noises in the Property or otherwise interfere in any way with other tenants or persons having business with them.

21.    No portion of any area of the Property shall at any time be used or occupied as housing, sleeping or lodging quarters.

22.    Professional behavior is expected in the Property at all times. A professional manner is expected in all public areas and inappropriate language or comments will not be tolerated. Any Contractor (or its employee or subcontractor) caught drinking alcohol or under the influence of any illegal substance will be banned from the Property.

23.    While on site, contract workers will be confined to the designated work areas. Property security guards and property management will periodically inspect all areas of the Property. Any contract workers found in an unauthorized place may be subject to dismissal from the job site.

24.    Radios and other noise will be kept to a reasonable level so as not to disturb tenants and their guests.

25. The Property is a non-smoking facility. Smoking is prohibited in the elevator(s), hallways, corridors, stairs, lobbies, suites, and other common areas of the Property unless clearly designated to the contrary by Landlord.

26. Contractor shall not sell or prepare any food or beverages except from Landlord approved vending machines installed within the Property without Landlord’s prior written consent. Consumption of food and beverages on the job site must be supervised by the appropriate Contractor. The restaurants and convenience stores are open to Contractors and their employees during their respective operating hours.

27.    To insure orderly operation of the Property, no ice, bottled water, towels, newspapers, etc. shall be delivered to any lease area except by person appointed or approved by Landlord in writing.

28.    All Contractors will refer all representatives and installation technicians tendering any service to Landlord for Landlord’s agent supervision, prior approval, and control before the performance of any Contractors’ services. Contractors may not make any modifications, alterations, additions or repairs to the Property and may not install any furniture, fixtures or equipment in the Property which is in violation of any applicable building and/or fire code governing the Property. All Contractors shall provide working drawings and permits to the Office of Landlord’s agent prior to the performance of any work. The Contractor conducting the modifications must be a licensed Contractor, must obtain all necessary permits and approvals prior to commencing the modifications, and is subject to all rules and regulations of Landlord while performing work in the Property.

29.    All extraordinary costs associated with specification or plan review, such as consultant fees, shall be billed to Tenant as provided for in the Lease.

30.    Before any contract work begins, it must be determined whether such work will affect the Life Safety System, Building Management System, air balance, delivery of utilities, delivery of communications or other Property system. If it is determined that such contract work may adversely affect any system, it will be necessary for the Contractor to modify the plans to meet Property specifications.

31.    Unless prior arrangement are made with Landlord, movement of all equipment, dispatch, or receipt by Contractor of any material or merchandise including Contractor’s employees shall be restricted to the use of the freight deliver/dock area and freight elevators only. No materials may be delivered or removed through the main entrance doors, through the Property lobby or through the passenger elevator. All Contractors must use the service elevator for all vertical transportation. Movement into or out of the Property, by Contractor, of any merchandise or materials other than hand-delivered packages, which requires the use of elevators or stairways or movement through the Property entrances or lobby, shall be restricted to the hours designated by Landlord or its agent. Management will determine the method and routing of the movement of such items so as to ensure the safety of all persons and property concerned and Contractor shall be responsible for all costs and expenses associated therewith. Advance written notice of intent to move such items must be made to Landlord well before the time of such move. Contractor assumes all risk of damage to any and all articles so moved, as well as injury to any person or property in such movement, and hereby agrees to indemnify Landlord against any loss resulting there from. The Contractor must have its own supervisor on-site at any time material is delivered or moved. Landlord’s agent will not coordinate any deliveries or be responsible for signing or accepting any materials.

32.    Deliveries and movement of materials into and through the Property must be done after normal Property hours, i.e., between 5:30 p.m. and 7:30 a.m. Monday through Friday. Exceptions to this rule must be approved by Landlord or its agent.

33.    Should a Contractor require a telegraphic, telephonic, enunciator or other communication service, Landlord will direct electricians where and how wires are to be introduced and placed and none shall be introduced or placed except as Landlord shall approve, which approval will not be unreasonably withheld. Electric current shall not be used for power or heating without Landlord’s prior written permission.

34.    Contractor shall not use any equipment emitting noxious fumes or offensive odors unless they are properly vented at Contractor’s expense.

35.    No machinery of any kind, other than normal office equipment, shall be operated by any Contractor on its leased area without the prior written consent of Landlord’s agent, nor shall any Contractor use or keep in the Property, any flammable or explosive fluid or substance, such as gasoline, kerosene, naphtha, benzene or others explosives or any other articles of intrinsically dangerous nature, except in accordance with local fire codes and procedures approved by Landlord or its agent.

36.    Contractor will not tamper with or attempt to adjust temperature control thermostats anywhere in the Property.

37.    Plumbing fixtures and appliances shall be used only for the purpose for which designated. No sweeping, rubbish, rags, or other unsuitable material including toxic or flammable products shall be placed therein. Damage resulting from any such fixtures or machines from misuse by a Contractor shall be paid for by the Contractor, and Landlord shall not be responsible therefore.

38.    The electrical system and lighting fixtures in the Property shall not be altered or disturbed in any manner without the prior written consent from Landlord or its agent. Any such alterations or additions must be performed by licensed personnel authorized by Landlord or its agent. No marking, painting, drilling, boring, cutting or defacing of the walls, floors or ceilings of the Property, other than that which is reasonably necessary for the hanging of art work, diplomas and similar objects which do not require any material alteration to any wall, floor or ceiling, shall be permitted without the prior written consent of Landlord or its agent.

39.    Contractor shall not waste electricity, water or air-conditioning, and shall cooperate fully with Landlord to assure the most effective operation of the Property’s heating and air conditioning. Contractor shall not adjust any controls. Contractor shall not tie, wedge or otherwise fasten open any water faucet or outlet. Contractor shall ascertain from Landlord’s agent the maximum amount of electrical current, which can safely be used in the work area, taking into account the capacity of the electric wiring in the Property and the needs of other occupants, and shall not use more than such safe capacity. Landlord’s agent’s consent to the installation of electric equipment shall not relieve Contractor from the obligation not to use more electricity than such safe capacity.

40. No floor covering or other material shall be affixed to any floor in the Property by means of glue or other adhesive without Landlord’s prior written consent.

41. All hot-work including but not limited to: brazing, cutting, grinding , soldering, thawing pipe, torch applied roofing and welding must be approved by Landlord or its agent in advance. All approved hot work must be accompanied by hot work permit.

42. The Contractor must shut off all lights upon completion of the day’s activities.

43. Parking Regulations:

a. Cars shall not park in the spaces designated as reserved for any tenant other than Tenant. There will be no parking in any area other than those areas clearly marked and defined for parking.

b. Parking will be on the basis of first-come, first-served except for reserved spaces.

c. All cars are to be parked in an orderly manner within the marked stalls provided.

d. It is recommended that cars be left with their emergency brakes engaged and doors locked at all times.

e. No car will be allowed to park in any driveway area or in any manner, which will interfere with the normal flow of traffic.

f. Cars parked illegally will be towed at the car owner’s expense.

g. Contractor agrees that all of its employees have been fully informed as to the content of these regulations.

h. Landlord or Landlord’s agents and employees shall not be liable for and Contractor waives all claims resulting from any accident or occurrence in and upon the parking area.

i. All automobiles parked in the parking areas shall be in good condition and repair.

j. Automobile owner or owner’s agents shall not wash, wax or otherwise clean or prep the interior/exterior of vehicles or perform any maintenance whatsoever on vehicles within the parking area or on any part of the parking lot servicing the Property.

k. In the event that automobile owner’s use of the parking area violates any local, county or state law, regulation or ordinance, automobile owner’s right to utilize the parking area shall immediately cease.

l. Parking areas shall not be used for overnight parking, extended parking, to store vehicles or for parking large recreational vehicles.

44. Management reserves the right to rescind any of these rules and regulations and to make such other and further rules and regulations as its judgment shall, from time to time, be needful for the safety, protection, care and cleanliness of the Property, the operation thereof, the preservation of good order therein and the protection and comfort of Tenants and their agents, employees, and invitees, which rules and regulations, when made and written notice thereof is given to a Contractor, shall be binding upon it in like manner as if originally herein prescribed.

EXHIBIT “F”

INTENTIONALLY OMITTED

EXHIBIT “G”

HEATING, VENTILATION AND AIR‑CONDITIONING SPECIFICATIONS

The heating, ventilation and air conditioning system shall be designed to be capable of maintaining inside conditions of not more than seventy eight (78) degrees Fahrenheit and fifty percent (50%) relative humidity when outside conditions are not more than ninety (90) degrees Fahrenheit dry bulb and seventy five (75) degrees Fahrenheit wet bulb and a temperature of seventy (70) degrees Fahrenheit when the outside temperature is ten (10) degrees Fahrenheit.

The design capabilities of the system are based upon and limited to the following conditions:

1. Tenant’s occupancy does not exceed one (1) person for each two hundred (200) square feet of area within the Demised Premises.

2. The total connected electrical load does not exceed four (4) watts per square foot of installed ceiling area for all purposes, including lighting and power.

3. Proper use of window blinds to control sun load.

The system shall provide fresh air as per code requirements and is designed to provide a sound level of N.C. 40 plus or minus two decibels.

EXHIBIT “H”

Tenant’s Work

EXHIBIT “I”

Landlord’s Work

EXHIBIT “J”

Reserved Parking Plan

EXHIBIT “K”

First Floor Plan

Parking Structure

26533 Evergreen Road

Southfield, Michigan 48076

Fifteen (15) parking spaces reserved for Tenant’s exclusive use

15

14

13

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11

10

9

8

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5

4

3

2

1

Form of Non-Disturbance Agreement

SUBORDINATION, NON‑DISTURBANCE AND ATTORNMENT AGREEMENT

THIS SUBORDINATION, NON‑DISTURBANCE AND ATTORNMENT AGREEMENT (this "Agreement") is made as of the ____ day of __________, 2014, by and between GOLDMAN SACHS BANK USA, having an address at 222 South Main Street, Salt Lake City, UT 84101, its successors and assigns ("Lender") and COVISINT CORP., having an address at One Campus Martius, Suite 700, Detroit, Michigan 48226 ("Tenant").

RECITALS:

A.    Lender is the present owner and holder of that certain deed of trust dated October 25, 2013 (the "Security Instrument"), given by SOUTHFIELD HS DEVELOPMENT, LLC and SOUTHFIELD HS RK, LLC, as tenants-in-common ("Landlord") to Lender, which encumbers Landlord's interests in those certain premises described in Exhibit A attached hereto (the "Property");

B.    Tenant shall occupy a portion of the Property under and pursuant to the provisions of a certain lease dated __________, 2014 between Landlord, as landlord, and Tenant, as tenant (the "Lease"); and

C.    Tenant has agreed to subordinate the Lease to the Security Instrument and to the lien thereof and Lender has agreed to grant non-disturbance to Tenant under the Lease on the terms and conditions hereinafter set forth.

AGREEMENT:

For good and valuable consideration, Tenant and Lender agree as follows:

1.    Subordination. Tenant agrees that the Lease and all of the terms, covenants and provisions thereof and all rights, remedies and options of Tenant thereunder are and shall at all times continue to be subject and subordinate in all respects to the Security Instrument and to the lien thereof and all terms, covenants and conditions set forth in the Security Instrument including, without limitation, all renewals, increases, modifications, spreaders, consolidations, replacements and extensions thereof and to all sums secured thereby with the same force and effect as if the Security Instrument had been executed, delivered and recorded prior to the execution and delivery of the Lease.

2.    Non-Disturbance. Lender agrees that if any action or proceeding is commenced by Lender for the foreclosure of the Security Instrument or the sale of the Property, Tenant shall not be named as a party therein unless such joinder shall be required by law; provided, however, that such joinder shall not result in the termination of the Lease or disturb Tenant's possession or use of the premises demised thereunder, and the sale of the Property in any such action or proceeding and the exercise by Lender of any of its other rights under the Security Instrument shall be made subject to all rights of Tenant under the Lease; provided, further, however, that at the time of the commencement of any such action or proceeding or at the time of any such sale or exercise of any such other rights (a) the Lease shall be in full force and effect and (b) Tenant shall not be in default under any of the terms, covenants or conditions of the Lease or of this Agreement on Tenant's part to be observed or performed beyond the expiration of any applicable notice or grace periods.

3.    Attornment. Lender and Tenant agree that, subject to Section 2 above, upon the conveyance of the Property to Lender or any other transferee (the "Transferee") by reason of the foreclosure of the Security Instrument or the acceptance of a deed or assignment in lieu of foreclosure or otherwise, the Lease shall not be terminated or affected thereby but shall continue in full force and effect as a direct lease between the Transferee and Tenant upon all of the terms, covenants and conditions set forth in the Lease and in that event, Tenant agrees to attorn to the Transferee and the Transferee shall accept such attornment; provided, however, that the provisions of the Security Instrument shall govern with respect to the disposition of any casualty insurance proceeds or condemnation awards and the Transferee shall not be (a) obligated to complete any construction work required to be done by Landlord pursuant to the provisions of the Lease or to reimburse Tenant for any construction work done by Tenant other than with respect to the Tenant Improvement Allowance (as defined in the Lease), to the extent that such allowance, or portion thereof, remains unpaid after the date upon which the Transferee became the owner of the Property, which Tenant agrees that it shall receive all portions of monies in connection with any such allowance as a credit against the Basic Rental (as defined in the Lease) and the Lender shall not be required to pay any monies out-of-pocket to the Tenant, (b) liable (i) for Landlord's failure to perform any of its obligations under the Lease which have accrued prior to the date on which the Transferee shall become the owner of the Property, or (ii) for any act or omission of Landlord, whether prior to or after such foreclosure or sale (Provided, however, the foregoing Sections 3(b)(i) and 3(b)(ii) shall not limit (except for matters subject to Sections 3(a) and Sections 3(d) herein) either Tenant’s rights to claims against Lender because of events occurring after the date of attornment, or Lender’s obligations to correct any conditions that existed as of the date of attornment and that violate Lender’s obligations as Landlord under the Lease), (c) required to make any repairs to the Property or to the premises demised under the Lease required as a result of fire, or other casualty or by reason of condemnation unless the Transferee shall be obligated under the Lease to make such repairs and shall have received sufficient casualty insurance proceeds or condemnation awards to finance the completion of such repairs, (d) required to make any capital improvements to the Property or to the premises demised under the Lease which Landlord may have agreed to make, but had not completed, or to perform or provide any services not related to possession or quiet enjoyment of the premises demised under the Lease, (e) subject to any offsets, defenses, abatements or counterclaims which shall have accrued to Tenant against Landlord prior to the date upon which the Transferee shall become the owner of the Property, except for the abatement of Basic Rental (as defined in the Lease) provided for in Sections 1(g), 8.5, 11.1 and 43 of the Lease, if any, and Tenant’s right to apply unused portions of the Tenant Improvement Allowance (as defined in the Lease) as a credit against payments of Basic Rental (as defined in the Lease), in both instances only as applicable to periods following the date upon which the Transferee shall become owner of the Property, (f) liable for the return of rental security deposits, if any, paid by Tenant to Landlord in accordance with the Lease unless such sums are actually received by the Transferee, (g) bound by any payment of rents, additional rents or other sums which Tenant may have paid more than one (1) month in advance to any prior Landlord unless (i) such sums are actually received by the Transferee or (ii) such prepayment shall have been expressly approved of by the Transferee, (h) bound to make any payment to Tenant which was required under the Lease, or otherwise, to be made prior to the time the Transferee succeeded to Landlord's interest, except for any portion of the Tenant Improvement Allowance (as defined in the Lease), if any, which remains unpaid but is owed to Tenant as of the date upon which the Transferee shall become owner of the Property, which Tenant agrees that it shall receive all portions of monies in connection with such allowance as a credit against the Basic Rental (as defined in the Lease) and the Lender shall not be required to pay any monies out-of-pocket to the Tenant, (i) bound by any agreement materially amending or modifying the economic terms of the Lease or terminating the Lease (except a termination as specifically set forth in the Lease) made without the Lender's prior written consent prior to the time the Transferee succeeded to Landlord's interest, or (j) bound by any assignment of the Lease or sublease of the Property, or any portion thereof, made prior to the time the Transferee succeeded to Landlord's interest other than if permitted pursuant to the provisions of the Lease.

4.    Notice to Tenant. After notice is given to Tenant by Lender that the Landlord is in default under the Security Instrument and that the rental payments due under the Lease should be paid to Lender pursuant to the terms of the assignment of leases and rents executed and delivered by Landlord to Lender in connection therewith, Tenant shall thereafter pay to Lender or as directed by the Lender, all rentals and all other monies due or to become due to Landlord under the Lease and Landlord hereby expressly authorizes Tenant to make such payments to Lender and hereby releases and discharges Tenant from any liability to Landlord on account of any such payments.

5.    Lender's Consent. Tenant shall not, without obtaining the prior written consent of Lender, (a) enter into any agreement materially amending or modifying the economic terms of the Lease or terminating the Lease (except a termination as specifically set forth in the Lease), (b) prepay any of the rents, additional rents or other sums due under the Lease for more than one (1) month in advance of the due dates thereof, (c) voluntarily surrender the premises demised under the Lease or terminate the Lease without cause or shorten the term thereof, or (d) assign the Lease or sublet the premises demised under the Lease or any part thereof other than as permitted pursuant to the provisions of the Lease; and any such amendment, modification, termination, prepayment, voluntary surrender, assignment or subletting, without Lender's prior consent, shall not be binding upon Lender.

6.    Lender to Receive Notices. Tenant shall provide Lender with copies of all written notices sent to Landlord pursuant to the Lease simultaneously with the transmission of such notices to the Landlord. Tenant shall notify Lender of any default by Landlord under the Lease which would entitle Tenant to cancel the Lease or to an abatement of the rents, additional rents or other sums payable thereunder, and agrees that, notwithstanding any provisions of the Lease to the contrary, no notice of cancellation thereof or of such an abatement shall be effective unless Lender shall have received notice of default giving rise to such cancellation or abatement and shall have failed within sixty (60) days after receipt of such notice to cure such default, or if such default cannot be cured within sixty (60) days, shall have failed within sixty (60) days after receipt of such notice to commence and thereafter diligently pursue any action necessary to cure such default.

7.    Notices. All notices, requests, demands, statements, authorizations, approvals, directions, consents and other communications provided for herein shall be given or made in writing and shall be deemed sufficiently given or served for all purposes as of the date (a) when hand delivered (provided that delivery shall be evidenced by a receipt executed by or on behalf of the addressee), (b) three (3) days after being sent by postage pre-paid registered or certified mail, return receipt requested, (c) one (1) Business Day after being sent by reputable overnight courier service (with delivery evidenced by written receipt), or (d) with a simultaneous delivery by one of the means in (a), (b) or (c) by facsimile, when sent, with confirmation and a copy sent by first class mail, in each case addressed to the intended recipient at the following address, or, as to any party, at such other address as shall be designated by such party in a notice to each other party:

If to Tenant:             

Prior to the Commencement Date of the Lease:

One Campus Martius, Suite 700

Detroit, Michigan 48226

Attn:    General Counsel

After the Commencement Date of the Lease:

26533 Evergreen Road, Suite 500

Southfield, Michigan 48076

Attn: General Counsel

If to Lender: Goldman Sachs Bank USA
222 South Main Street
Salt Lake City, UT 84101
Facsimile No.: (801) 884-1525

With a copy to: Greenberg Traurig, LLP
445 Hamilton Avenue
White Plains, NY 10601
Attention: Gregory P. Murphy

Facsimile No.: (914) 206-4563

For purposes of this Section, the term "Business Day" shall mean a day on which commercial banks are not authorized or required by law to close in New York, New York.

8.    Joint and Several Liability. If Tenant consists of more than one person, the obligations and liabilities of each such person hereunder shall be joint and several. This Agreement shall be binding upon and inure to the benefit of Lender and Tenant and their respective successors and assigns.

9.    Definitions. The term "Lender" as used herein shall include the successors and assigns of Lender and any person, party or entity which shall become the owner of Landlord's interest in the Property by reason of foreclosure of the Security Instrument or the acceptance of a deed (or assignment) in lieu of a foreclosure of the Security Instrument or other similar process. The term "Landlord" as used herein shall mean and include the present landlord under the Lease and such landlord's predecessors and successors in interest under the Lease, but shall not mean or include Lender or the Lenders. The term "Property" as used herein shall mean the Property, the improvements now or hereafter located thereon and the estates therein encumbered by the Security Instrument.

10.    No Oral Modifications. This Agreement may not be modified in any manner or terminated except by an instrument in writing executed by the parties hereto.

11.    Governing Law. This Agreement shall be deemed to be a contract entered into pursuant to the laws of the state where the Property is located and shall in all respects be governed, construed, applied and enforced in accordance with the laws of the state where the Property is located.

12.    Inapplicable Provisions. If any term, covenant or condition of this Agreement is held to be invalid, illegal or unenforceable in any respect, this Agreement shall be construed without such provision.

13.    Duplicate Originals; Counterparts. This Agreement may be executed in any number of duplicate originals and each duplicate original shall be deemed to be an original. This Agreement may be executed in several counterparts, each of which counterparts shall be deemed an original instrument and all of which together shall constitute a single Agreement. The failure of any party hereto to execute this Agreement, or any counterpart hereof, shall not relieve the other signatories from their obligations hereunder.

14.    Number and Gender. Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural and vice versa.

15.    Further Acts. Tenant will, at the cost of Tenant, and without expense to Lender, do, execute, acknowledge and deliver all and every such further acts and assurances as Lender shall, from time to time, require, to confirm the rights and the agreements hereunder, or for carrying out the intention or facilitating the performance of the terms of this Agreement or for filing, registering or recording this Agreement, or for complying with all applicable laws.

16.    Limitations on Liability. Tenant acknowledges that it is not a third-party beneficiary under the Security Instrument or the loan documents related thereto. In no event shall Lender or the Lenders or any purchaser of the Property at foreclosure sale or any grantee of the Property named in a deed-in-lieu of foreclosure, nor any heir, legal representative, successor, or assignee of Lender or the Lenders or any such purchaser or grantee (Lender, the Lenders, and any such purchaser, grantee, heir, legal representative, successor or assignee, collectively, the "Subsequent Landlord") have any personal liability for the obligations of Landlord under the Lease and should the Subsequent Landlord succeed to the interests of the Landlord under the Lease, Tenant shall look only to the estate and property of any such Subsequent Landlord in the Property for the satisfaction of Tenant's remedies for the collection of a judgment (or other judicial process) requiring the payment of money in the event of any default by any Subsequent Landlord as landlord under the Lease, and no other property or assets of any Subsequent Landlord shall be subject to levy, execution or other enforcement procedure for the satisfaction of Tenant's remedies under or with respect to the Lease; provided, however, that Tenant may exercise any other right or remedy provided thereby or by law in the event of any failure by Subsequent Landlord to perform any such material obligation.

[Signature page follows.]

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

LENDER:

GOLDMAN SACHS BANK USA

By:

Name:        

Title:        

STATE OF NEW YORK    )

) ss.

COUNTY OF    NEW YORK     )

On the ___ day of _________, in the year 2014 before me, the undersigned, personally appeared _______________, personally known to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.

Notary Public

TENANT:

COVISINT CORP.

a Michigan corporation

By:    

Name:

Title:

STATE OF ___________    )

) ss.

COUNTY OF    ___________     )

On the ___ day of _________, in the year 2014 before me, the undersigned, personally appeared _______________, personally known to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.

Notary Public

The undersigned accepts and agrees to
the provisions of Section 5 hereof:

LANDLORD:

SOUTHFIELD HS DEVELOPMENT, LLC, a
Michigan Limited Liability Company

By:     Time Equities, Inc., its Agent

By:        

Name:

Title:

SOUTHFIELD HS RK, LLC, a

Michigan Limited Liability Company

By:     Time Equities, Inc., its Agent

By:        

Name:

Title:

STATE OF NEW YORK    )

) ss.

COUNTY OF    NEW YORK     )

On the ___ day of _________, in the year 2014 before me, the undersigned, personally appeared _______________, personally known to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.

Notary Public

EXHIBIT A

LEGAL DESCRIPTION OF THE PROPERTY

WITNESSETH, That the Mortgagor mortgages and warrants to the Mortgagee, his/her/their heirs, successors and assigns, lands situated in the Cityof Troy and Southfield, County of Oakland, and State of Michigan, and particularly described as follows:

Parcel 2 (West):
Part of the Northeast 1/4 of Section 22, Town 1 North, Range 10 East, City of Southfield, Oakland County, Michigan, described as follows: Beginning at a point located distant North 1060.94 feet and South 87 degrees 00 minutes 00 seconds West 922.48 feet from the East 1/4 corner of said Section 22: thence proceeding thence South 87 degrees 00 minutes 00 seconds West 522.61 feet; thence North 01 degree 15 minutes 36 seconds East 732.82 feet; thence South 89 degrees 55 minutes 45 seconds East 489.23 feet; thence South 361.32 feet; thence 54.98 feet along an arc of a curve to the left, radius 1050.00 feet and chord bearing South 01 degree 30 minutes 00 seconds East 54.97 feet; thence South 03 degrees 00 minutes 00 seconds East 288.81 feet to the Point of Beginning.

Parcel 3 (Elevated Parcel):
Perpetual Easement Estate established by that certain Grant of Easement and Agreement for Maintenance executed between the City of Southfield and Teachers Insurance and Annuity Association of America, dated August 11, 1981 recorded in Liber 8086, Page 642, Oakland County Records and re-recorded in Liber 8132, Page 218, Oakland County Records, said easement being described as an expanse of space located in the City of Southfield, County of Oakland, State of Michigan, the centerline of which is described as follows: the centerline of a 150.00 foot wide expanse of space whose horizontal plane is defined as follows: Commencing at the East 1/4 corner of Section 22, Town 1 North, Range 10 East, City of Southfield, Oakland County, Michigan; thence along the East line of said Section 22, due North a distance of 1060.94 feet; thence South 87 degrees 00 minutes 00 seconds West 822.48 feet; thence North 03 degrees 00 minutes 00 seconds West 288.81 feet; thence along a curve to the right, a distance of 49.74 feet, radius of 950.00 feet, chord bearing of North 01 degree 30 minutes 00 seconds West 49.74 feet; thence due North 72.27 feet to the Point of Beginning; thence North 89 degrees 59 minutes 48 seconds West 100.00 feet to the Point of Ending and whose vertical plane is defined as lying above elevation 692.00 feet from mean sea level, as established by the United States Coast and Geodetic Survey, along with a 10.00 foot wide easement for supporting columns centered on the 100.00 foot width and running in a North-South direction the full 150.00 foot long length, said easement to run below the plane of 692.00 elevation to sufficient depths to adequately support the structure above.

Parking Easement:
Easement for parking as created, limited and defined in Declaration of Easement recorded in Liber 8326, Page 803, Oakland County Records.

Tax Parcel #76-24-22-276-018, commonly known as 26533 Evergreen Road, Southfield, Michigan 48076

EXHIBIT “L”

List of Exclusivities

As of the date hereof, Landlord is bound to comply with the following exclusivity provisions pursuant to leases with other tenants at the Building:

1. Signs containing the names of the following entities shall not be permitted on the exterior of the Building or inside the lobby of the Building:

a. Acxiom

b. Aspen

c. Chrome

d. Cross Sell Inc.

e. CSM

f. Edmunds

g. Experian

h. Global Insight

i. Harte-Hanks

j. Maritz

k. JATO

l. J.D. Power

m. Peak Performance

n. Reynolds & Reynolds

o. Soler

p. SRC

q. Urban Science, and

r. Ward’s

1

EX-10.24

STANDARD MULTI-TENANT OFFICE LEASE - GROSS

AIR COMMERCIAL REAL ESTATE ASSOCIATION

1.Basic Provisions ("Basic Provisions").

1.1Parties: This Lease ("Lease"), dated for reference purposes only February 19, 2015, is made by and between Fjeld Family LP("Lessor") and Covisint, Inc. (“Lessee”), (collectively the "Parties", or individually a "Party").

1.2(a)Premises: That certain portion of the Project (as defined below), known as Suite Numbers(s) 600,consisting of approximately 4,051 rentable square feet and approximately n/a useable square feet ("Premises"). The Premises are located at: 121 Second Street, in the City of San Francisco, County of San Francisco, State of California, with zip code 94105. In addition to Lessee's rights to use and occupy the Premises as hereinafter specified, Lessee shall have non-exclusive rights to the Common Areas (as defined in Paragraph 2.7 below) as hereinafter specified, but shall not have any rights to the roof, the exterior walls of the building containing the Premises ("Building") or to any other buildings in the Project. The Premises, the Building, the Common Areas, the land upon which they are located, along with all other buildings and improvements thereon, are herein collectively referred to as the "Project." The Project consists of approximately 32,103 rentable square feet. (See also Paragraph 2)

1.3Term: Five years ("Original Term") commencing April 1, 2015 ("Commencement Date") and ending March 31, 2020 ("Expiration Date"). (See also Paragraph 3)

1.4Base Rent: $ see attached Exhibit B per month ("Base Rent)", payable on the 1stday of each month commencing April 1, 2015. (See also Paragraph 4)

If this box is checked, there are provisions in this Lease for the Base Rent to be adjusted. See the attached Exhibit B Base Rent Schedule

1.5Lessee's Share of Operating Expense Increase: twelve and sixty-two hundredths percent (12.62%)

("Lessee's Share"). In the event that that size of the Premises and/or the Project are modified during the term of this Lease, Lessor shall recalculate Lessee's Share to reflect such modification.

1.6Base Rent and Other Monies Paid Upon Execution:

(a)Base Rent: $19,073.46 for the period April 1, 2015 - April 30, 2015.

(b)Security Deposit: $57,220.38 ("Security Deposit"). (See also Paragraph 5)

(c) Total Due Upon Execution of this Lease: $76,293.84.

1.7Agreed Use:

General office and related uses and any other permitted use. (See also Paragraph 6)

1.8Base Year; Insuring Party. The Base Year is 2015, for property taxes and insurance only, thereafter, Lessee shall pay its pro rata share of any property tax or insurance increases. Lessor is the "Insuring Party". (See also Paragraphs 4.2 and 8)

1.9Real Estate Brokers: (See also Paragraph 15)

(a) Representation: The following real estate brokers (the "Brokers") and brokerage relationships exist in this transaction (check applicable boxes):

Colton Commercial & Partners, Inc. represents Lessor exclusively ("Lessor's Broker");

Savills Studley represents Lessee exclusively ("Lessee's Broker"); or

represents both Lessor and Lessee ("Dual Agency").

1.10Business Hours for the Building: 9:30 a.m. to 4:30 p.m., Mondays through Fridays (except Building Holidays) and

n/a a.m. to n/a p.m. on Saturdays (except Building Holidays). "Building Holidays" shall mean the dates of observation of New Year's Day, President's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day, and n/a. Notwithstanding the foregoing, Lessee shall have access to the building 24 hours a day, 7 days a week.

1.11 Lessor Supplied Services. Notwithstanding the provisions of Paragraph 11.1, Lessor is NOT obligated to provide the following within the Premises:

þJanitorial services (Lessee may elect to use and pay for Lessor’s janitorial service)

þElectricity plus Lessee to pay their pro rata share of gas expense (each floor is separately metered for electricity)

þOther (specify): Lessee shall pay taxes and insurance increases over base year 2015. Lessee shall pay all common area expenses, based on Lessee's pro rata share of the building, which shall be billed monthly.

1.12Attachments. Attached hereto are the following, all of which constitute a part of this Lease:

¬an Addendum consisting of Paragraphs through ;

þa plot plan depicting the Premises;

• a current set of the Rules and Regulations;

þother (specify): Attached to and incorporated into this Lease are Exhibit A: Floor Plan; Exhibit B: Base Rent Schedule; Exhibit C: Improvements; Exhibit C-1: Scope of Work; Exhibit D: Rules & Regulations; Exhibit E: Option to Renew; Exhibit F: Disability Access Obligations; Exhibit G: A Guide to Disabled Accessibility Compliance; Exhibit H: Real Estate Commission..

2.Premises.

2.1 Letting. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the Premises, for the term, at the rental, and upon all of the terms, covenants and conditions set forth in this Lease. While the approximate square footage of the Premises may have been used in the marketing of the Premises for purposes of comparison, the Base Rent stated herein is NOT tied to square footage and is not subject to adjustment should the actual size be determined to be different. Note: Lessee is advised to verify the actual size prior to executing this Lease.

2.2 Condition. Lessor shall deliver the Premises to Lessee in a clean condition on the Commencement Date or the Early Possession Date, whichever first occurs ("Start Date"), and warrants that the existing electrical, plumbing, fire sprinkler, lighting, heating, ventilating and air conditioning systems ("HVAC") and elevator and freight elevators, and all other items which the Lessor is obligated to construct pursuant to the Work Letter attached hereto, if any, other than those constructed by Lessee, shall be in good operating condition on said date, that the structural elements of the roof, bearing walls and foundation of the Unit shall be free of material defects, and that the Premises do not contain hazardous levels of any mold or fungi defined as toxic under applicable state or federal law.In the event of the breach of the foregoing warranty within the first year after the Commencement Date, Landlord shall promptly repair such defect and, in the event that the same is not repaired within thirty (30) days after notice from Lessee, Lessee shall have the right of self-help described in Section 13.6(b) hereof. The foregoing shall not limit Lessor's right to pass through the costs contemplated in this Section as Operating Expenses pursuant to Section 4.2.

2.3 Compliance. Lessor warrants to the best of its knowledge that the improvements comprising the Premises and the Common Areas comply with the building codes that were in effect at the time that each such improvement, or portion thereof, was constructed, and also with all applicable laws, covenants or restrictions of record, regulations, and ordinances ("Applicable Requirements") in effect on the Start Date. Said warranty does not apply to the use to which Lessee will put the Premises, modifications which may be required by the Americans with Disabilities Act or any similar laws as a result of Lessee's use (see Paragraph 49), or to any Alterations or Utility Installations (as defined in Paragraph 7.3(a)) made or to be made by Lessee. Notwithstanding the foregoing, Lessor shall be solely responsible, at its sole cost and expense, for causing: (i) all areas outside of the Premises; (ii) all structural elements of the Premises; and (iii) all areas of the Premises due to a change of Applicable Requirements; to comply with Applicable Requirements, unless such change is specifically resultant from Lessee's use of the Premises. NOTE: Lessee is responsible for determining whether or not the zoning and other Applicable Requirements are appropriate for Lessee's intended use, and

acknowledges that past uses of the Premises may no longer be allowed. If the Premises do not comply with said warranty, Lessor shall, except as otherwise provided, promptly after receipt of written notice from Lessee setting forth with specificity the nature and extent of such non-compliance, rectify the same. If the Applicable Requirements are hereafter changed so as to require during the term of this Lease the construction of an addition to or an alteration of the Premises, the remediation of any Hazardous Substance, or the reinforcement or other physical modification of the Premises ("Capital Expenditure"), Lessor and Lessee shall allocate the cost of such work as follows:

(a) Subject to Paragraph 2.3(c) below, if such Capital Expenditures are required as a result of the specific and unique use of the

Premises by Lessee as compared with uses by tenants in general, Lessee shall be fully responsible for the cost thereof, provided, however that if such Capital Expenditure is required during the last 2 years of this Lease and the cost thereof exceeds 6 months' Base Rent, Lessee may instead terminate this Lease unless Lessor notifies Lessee, in writing, within 10 days after receipt of Lessee's termination notice that Lessor has elected to pay the difference between the actual cost thereof and the amount equal to 6 months' Base Rent. If Lessee elects termination, Lessee shall immediately cease the use of the Premises which requires such Capital Expenditure and deliver to Lessor written notice specifying a termination date at least 90 days thereafter. Such termination date shall, however, in no event be earlier than the last day that Lessee could legally utilize the Premises without commencing such Capital Expenditure.

(b) If such Capital Expenditure is not the result of the specific and unique use of the Premises by Lessee (such as, governmentally mandated seismic modifications), then Lessor shall pay for such Capital Expenditure and Lessee shall only be obligated to pay, each month during the remainder of the term of this Lease or any extension thereof, on the date that on which the Base Rent is due, an amount equal to 1/144th of the portion of such costs reasonably attributable to the Premises. Lessee shall pay Interest on the balance but may prepay its obligation at any time. If, however, such Capital Expenditure is required during the last 2 years of this Lease or if Lessor reasonably determines that it is not economically feasible to pay its share thereof, Lessor shall have the option to terminate this Lease upon 90 days prior written notice to Lessee unless Lessee notifies Lessor, in writing, within 10 days after receipt of Lessor's termination notice that Lessee will pay for such Capital Expenditure. If Lessor does not elect to terminate, and fails to tender its share of any such Capital Expenditure, Lessee may advance such funds and deduct same, with Interest, from Rent until Lessor's share of such costs have been fully paid. If Lessee is unable to finance Lessor's share, or if the balance of the Rent due and payable for the remainder of this Lease is not sufficient to fully reimburse Lessee on an offset basis, Lessee shall have the right to terminate this Lease upon 30 days written notice to Lessor.

(c) Notwithstanding the above, the provisions concerning Capital Expenditures are intended to apply only to nonvoluntary, unexpected, and new Applicable Requirements. If the Capital Expenditures are instead triggered by Lessee as a result of an actual or proposed change in use, change in intensity of use, or modification to the Premises then, and in that event, Lessee shall either: (i) immediately cease such changed use or intensity of use and/or take such other steps as may be necessary to eliminate the requirement for such Capital Expenditure, or (ii) complete such Capital Expenditure at its own expense. Lessee shall not have any right to terminate this Lease.

2.4 Acknowledgements. Lessee acknowledges that: (a) it has been given an opportunity to inspect and measure the Premises, (b) Lessee has been advised by Lessor and/or Brokers to satisfy itself with respect to the size and condition of the Premises (including but not limited to the electrical, HVAC and fire sprinkler systems, security, environmental aspects, and compliance with Applicable Requirements), and their suitability for Lessee's intended use, (c) Lessee has made such investigation as it deems necessary with reference to such matters and assumes all responsibility therefor as the same relate to its occupancy of the Premises, (d) it is not relying on any representation as to the size of the Premises made by Brokers or Lessor, (e) the square footage of the Premises was not material to Lessee's decision to lease the Premises and pay the Rent stated herein, and (f) neither Lessor, Lessor's agents, nor Brokers have made any oral or written representations or warranties with respect to said matters other than as set forth in this Lease. In addition, Lessor acknowledges that: (i) Brokers have made no representations, promises or warranties concerning Lessee's ability to honor the Lease or suitability to occupy the Premises, and (ii) it is Lessor's sole responsibility to investigate the financial capability and/or suitability of all proposed tenants.

2.5 Lessee as Prior Owner/Occupant. The warranties made by Lessor in Paragraph 2 shall be of no force or effect if immediately prior to the Start Date, Lessee was the owner or occupant of the Premises. In such event, Lessee shall be responsible for any necessary corrective work.

2.6 Common Areas - Definition. The term "Common Areas" is defined as all areas and facilities outside the Premises and within the exterior boundary line of the Project and interior utility raceways and installations within the Premises that are provided and designated by the Lessor from time to time for the general nonexclusive use of Lessor, Lessee and other tenants of the Project and their respective employees, suppliers, shippers, customers, contractors and invitees, including, but not limited to, common entrances, lobbies, corridors, stairwells, public restrooms, elevators, parking areas, loading and unloading areas, trash areas, roadways, walkways, driveways and landscaped areas.

2.7 Common Areas - Lessee's Rights. Lessor grants to Lessee, for the benefit of Lessee and its employees, suppliers, shippers, contractors, customers and invitees, during the term of this Lease, the nonexclusive right to use, in common with others entitled to such use, the Common Areas as they exist from time to time, subject to any rights, powers, and privileges reserved by Lessor under the terms hereof or under the terms of any rules and regulations or restrictions governing the use of the Project. Under no circumstances shall the right herein granted to use the Common Areas be deemed to include the right to store any property, temporarily or permanently, in the Common Areas. Any such storage shall be permitted only by the prior written consent of Lessor or Lessor's designated agent, which consent may be revoked at any time. In the event that any unauthorized storage shall occur then Lessor shall have the right, without notice, in addition to such other rights and remedies that it may have, to remove the property and charge the cost to Lessee, which cost shall be immediately payable upon demand by Lessor.

2.8 Common Areas - Rules and Regulations. Lessor or such other person(s) as Lessor may appoint shall have the exclusive control and management of the Common Areas and shall have the right, from time to time, to adopt, modify, amend and enforce reasonable rules and regulations ("Rules and Regulations") for the management, safety, care, and cleanliness of the grounds, the parking and unloading of vehicles and the preservation of good order, as well as for the convenience of other occupants or tenants of the Building and the Project and their invitees. The Lessee agrees to abide by and conform to all such Rules and Regulations, and shall use its best efforts to cause its employees, suppliers, shippers, customers, contractors and invitees to so abide and conform. Lessor shall not be responsible to Lessee for the noncompliance with said Rules and Regulations by other tenants of the Project.

2.9Common Areas - Changes. Lessor shall have the right, in Lessor's sole discretion, from time to time:

(a)To make changes to the Common Areas, including, without limitation, changes in the location, size, shape and number of the lobbies, windows, stairways, air shafts, elevators, escalators, restrooms, driveways, entrances, parking spaces, parking areas, loading and unloading areas, ingress, egress, direction of traffic, landscaped areas, walkways and utility raceways;

(b)To close temporarily any of the Common Areas for maintenance purposes so long as reasonable access to the Premises remains available;

(c)To designate other land outside the boundaries of the Project to be a part of the Common Areas;

(d)To add additional buildings and improvements to the Common Areas;

(e)To use the Common Areas while engaged in making additional improvements, repairs or alterations to the Project, or any portion thereof; and

(f)To do and perform such other acts and make such other changes in, to or with respect to the Common Areas and Project as Lessor may, in the exercise of sound business judgment, deem to be appropriate.

3.Term.

3.1Term. The Commencement Date, Expiration Date and Original Term of this Lease are as specified in Paragraph 1.3.

3.2 Early Possession. Any provision herein granting Lessee Early Possession of the Premises is subject to and conditioned upon the Premises being available for such possession prior to the Commencement Date. Any grant of Early Possession only conveys a non-exclusive right to occupy the Premises. If Lessee totally or partially occupies the Premises prior to the Commencement Date, the obligation to pay Base Rent shall be abated for the period of such Early Possession. All other terms of this Lease (including but not limited to the obligations to pay Lessee's Share of the Operating Expense Increase) shall be in effect during such period. Any such Early Possession shall not affect the Expiration Date.

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3.3Delay In Possession. Lessor agrees to use its best commercially reasonable efforts to deliver possession of the Premises to Lessee by the Commencement Date. If, despite said efforts, Lessor is unable to deliver possession by such date, Lessor shall not be subject to any liability therefor, nor shall such failure affect the validity of this Lease. Lessee shall not, however, be obligated to pay Rent or perform its other obligations until Lessor delivers possession of the Premises and any period of rent abatement that Lessee would otherwise have enjoyed shall run from the date of delivery of possession and continue for a period equal to what Lessee would otherwise have enjoyed under the terms hereof, but minus any days of delay caused by the acts or omissions of Lessee. If possession is not delivered within 60 days after the Commencement Date, as the same may be extended under the terms of any Work Letter executed by Parties, Lessee may, at its option, by notice in writing within 10 days after the end of such 60 day period, cancel this Lease, in which event the Parties shall be discharged from all obligations hereunder. If such written notice is not received by Lessor within said 10 day period, Lessee's right to cancel shall terminate. If possession of the Premises is not delivered within 120 days after the Commencement Date, this Lease shall terminate unless other agreements are reached between Lessor and Lessee, in writing.

3.4Lessee Compliance. Lessor shall not be required to deliver possession of the Premises to Lessee until Lessee complies with its obligation to provide evidence of insurance (Paragraph 8.5). Pending delivery of such evidence, Lessee shall be required to perform all of its obligations under this Lease from and after the Start Date, including the payment of Rent, notwithstanding Lessor's election to withhold possession pending receipt of such evidence of insurance. Further, if Lessee is required to perform any other conditions prior to or concurrent with the Start Date, the Start Date shall occur but Lessor may elect to withhold possession until such conditions are satisfied.

4.Rent.

4.1.Rent Defined. All monetary obligations of Lessee to Lessor under the terms of this Lease (except for the Security Deposit) are deemed to be rent ("Rent").

4.2Operating Expenses. Lessee shall pay to Lessoron a monthly basis during the term hereof, in addition to the Base Rent,

Lessee's Share of all Operating Expenses, except taxes and insurance as provided for in paragraph 1.7.

(a)"Base Year" is as specified in Paragraph 1.7.

(b)The following costs relating to the ownership and operation of the Project, calculated as if the Project was at least 95% occupied are defined as “Operating Expenses”:

(i)Costs relating to the operation, repair, and maintenance in neat, clean, safe, good order and condition, but not the replacement (see) subparagraph (g)), of the following:

(aa) The Common Areas, including their surfaces, coverings, decorative items, carpets, drapes and window coverings, and including parking areas, loading and unloading areas, trash areas, roadways, sidewalks, walkways, stairways, parkways, driveways, landscaped areas, striping, bumpers, irrigation systems, Common Area lighting facilities, building exteriors and roofs, fences and gates;

(bb) All heating, air conditioning, plumbing, electrical systems, life safety equipment, communication systems and other equipment used in common by, or for the benefit of, tenants or occupants of the Project, including elevators and escalators, tenant directories, fire detection systems including sprinkler system maintenance and repair.

(cc) All other areas and improvements that are within the exterior boundaries of the Project but outside of the Premises and/or any other space occupied by a tenant.

(ii)The cost of trash disposal, janitorial and security services, pest control services, and the costs of any environmental inspections;

(iii)The cost of any other service to be provided by Lessor that is elsewhere in this Lease stated to be an "Operating Expense";

(iv)The cost of the premiums for the insurance policies maintained by Lessor pursuant to paragraph 8 and any deductible portion of an insured loss concerning the Building or the Common Areas;

(v)The amount of the Real Property Taxes payable by Lessor pursuant to paragraph 10;

(vi)The cost of water, sewer, gas, electricity, and other publicly mandated services not separately metered;

(vii) Labor, salaries, and applicable fringe benefits and costs, materials, supplies and tools, used in maintaining and/or cleaning the Project and accounting and management fees attributable to the operation of the Project;

(viii) The cost of any capital improvement to the Building or the Project not covered under the provisions of

Paragraph 2.3 provided; however, that Lessor shall allocate the cost of any such capital improvement over a 12 year period and Lessee shall not be required to pay more than Lessee's Share of 1/144th of the cost of such Capital Expenditure in any given month;

(ix)The cost to replace equipment or improvements that have a useful life for accounting purposes of 5 years or less

(x)Reserves set aside for maintenance, repair and / or replacement of Common Area improvements and equipment.

(c)Any item of Operating Expense that is specifically attributable to the Premises, the Building or to any other building in the Project or to the operation, repair and maintenance thereof, shall be allocated entirely to such Premises, Building, or other building. However, any such item that is not specifically attributable to the Building or to any other building or to the operation, repair and maintenance thereof, shall be equitably allocated by Lessor to all buildings in the Project.

(d) The inclusion of the improvements, facilities and services set forth in Subparagraph 4.2(c) shall not be deemed to impose an obligation upon Lessor to either have said improvements or facilities or to provide those services unless the Project already has the same, Lessor already provides the services, or Lessor has agreed elsewhere in this Lease to provide the same or some of them.

(e)Lessee's Share of Operating Expense Increase is payable monthly on the same day as the Base Rent is due hereunder. The amount of such payments shall be based on Lessor's estimate of the Operating Expense Expenses. Within 60 days after written request (but not more than once each year) Lessor shall deliver to Lessee a reasonably detailed statement showing Lessee's Share of the actual Common Area Operating Expenses for the preceding year. If Lessee's payments during such Year exceed Lessee's Share, Lessee shall credit the amount of such over-payment against Lessee's future payments. If Lessee's payments during such Year were less than Lessee's Share, Lessee shall pay to Lessor the amount of the deficiency within 10 days after delivery by Lessor to Lessee of said statement. Lessor and Lessee shall forthwith adjust between them by cash payment any balance determined to exist with respect to that portion of the last Comparison Year for which Lessee is responsible as to Operating Expense Increases, notwithstanding that the Lease term may have terminated before the end of such Comparison Year.

(f)Operating Expenses shall not include the costs of replacement for equipment or capital components such as the roof, foundations, exterior walls or a Common Area capital improvement, such as the parking lot paving, elevators, fences that have a useful life for accounting purposes of 5 years or more.

(g)Operating Expenses shall not include any expenses paid by any tenant directly to third parties, or as to which Lessor isentitled to be reimbursed by any third party, other tenant, or by insurance proceeds.

(i)Notwithstanding anything to the contrary contained herein, Operating Expenses shall not include any of the following items:

(a)leasing commissions, costs and disbursements and other expenses incurred in connection with negotiations

or disputes with lessees or prospective lessees or leasing, renovating or improving space for lessees or other occupants or prospective lessees or other occupants of the Building:

(b)costs, including permits, licenses and inspections fees, incurred in renovating or otherwise improving or decorating, painting or redecorating vacant space or space for lessees or other occupants;

(c)any depreciation and amortization on the Building or for any improvements thereto or equipment or personal property therein or used in connection therewith:

(d)costs incurred due to violation by Lessor or any lessees of any of the terms and conditions of any

lease of space in the Building;

(e)overhead and profit increments paid to Lessor or its affiliates for services, supplies or othermaterials to the extent the cost of such services, supplies or other materials exceeds the cost that would have been paid had the services, supplies or materials been provided by unaffiliated parties on a competitive basis;

(f) interest, points or fees on debt or amortization payments on any mortgages and rental under any ground or underlying lease;

(g)repairs, replacements and other work occasioned by fire, windstorm or other casualty;

(h) any costs, fines or penalties incurred due to violations by Lessor of any governmental rule or authority;

(i)legal expense other than related to the operation of the Building;

(j) the costs of cleanup, removal, or other remediation of any hazardous materials;

4.3 Payment. Lessee shall cause payment of Rent to be received by Lessor in lawful money of the United States on or before the day on which it is due, without offset or deduction (except as specifically permitted in this Lease). All monetary amounts shall be rounded to the nearest whole dollar. In the event that any invoice prepared by Lessor is inaccurate such inaccuracy shall not constitute a waiver and Lessee shall be obligated to pay the amount set forth in this Lease. Rent for any period during the term hereof which is for less than one full calendar month shall be prorated based upon the actual number of days of said month. Payment of Rent shall be made to Lessor at its address stated herein or to such other persons or place as Lessor may from time to time designate in writing. Acceptance of a payment which is less than the amount then due shall not be a waiver of Lessor's rights to the balance of such Rent, regardless of Lessor's endorsement of any check so stating. In the event that any check, draft, or other instrument of payment given by Lessee to Lessor is dishonored for any reason, Lessee agrees to pay to Lessor the sum of $25 in addition to any Late Charge and Lessor, at its option, may require all future Rent be paid by cashier's check. Payments will be applied first to accrued late charges and attorney's fees, second to accrued interest, then to Base Rent and Common Area Operating Expenses, and any remaining amount to any other outstanding charges or costs.

5.Security Deposit. Lessee shall deposit with Lessor upon execution hereof the Security Deposit as security for Lessee's faithful performance of its obligations under this Lease. If Lessee fails to pay Rent, or otherwise Defaults under this Lease, Lessor may use, apply or retain all or any portion of said Security Deposit for the payment of any amount already due Lessor, for Rents which will be due in the future, and/ or to reimburse or compensate Lessor for any liability, expense, loss or damage which Lessor may suffer or incur by reason thereof. If Lessor uses or applies all or any portion of the Security Deposit, Lessee shall within 10 days after written request therefor deposit monies with Lessor sufficient to restore said Security Deposit to the full amount required by this Lease. If the Base Rent increases during the term of this Lease, Lessee shall, upon written request from Lessor, deposit additional monies with Lessor so that the total amount of the Security Deposit shall at all times bear the same proportion to the increased Base Rent as the initial Security Deposit bore to the initial Base Rent. Should the Agreed Use be amended to accommodate a material change in the business of Lessee or to accommodate a sublessee or assignee, Lessor shall have the right to increase the Security Deposit to the extent necessary, in Lessor's reasonable judgment, to account for any increased wear and tear that the Premises may suffer as a result thereof. If a change in control of Lessee occurs during this Lease and following such change the financial condition of Lessee is, in Lessor's reasonable judgment, significantly reduced, Lessee shall deposit such additional monies with Lessor as shall be sufficient to cause the Security Deposit to be at a commercially reasonable level based on such change in financial condition.

Lessor shall not be required to keep the Security Deposit separate from its general accounts. Within 90 days after the expiration or termination of this Lease, Lessor shall return that portion of the Security Deposit not used or applied by Lessor. No part of the Security Deposit shall be considered to be held in trust, to bear interest or to be prepayment for any monies to be paid by Lessee under this Lease. Provided Lessee has had no occurrence of monetary or material non-monetary default of its obligations under this Lease, the Security Deposit shall be reduced by $19,073.46 effective upon the occurrence of the twenty-fifth (25th) month of the lease term, and further reduced by $19,073.46 effective upon the occurrence of the thirty-seventh (37th) month of the lease term. In each instance the reduction in Security Deposit shall be effectuated through a credit against Lessee's otherwise due rent obligation 6.Use.

6.1 Use. Lessee shall use and occupy the Premises only for the Agreed Use, or any other legal use which is reasonably comparable thereto, and for no other purpose. Lessee shall not use or permit the use of the Premises in a manner that is unlawful, creates damage, waste or a nuisance, or that disturbs occupants of or causes damage to neighboring

premises or properties. Other than guide, signal and seeing eye dogs, Lessee shall not keep or allow in the Premises any pets, animals, birds, fish, or reptiles. Lessor shall not unreasonably withhold or delay its consent to any written request for a modification of the Agreed Use, so long as the same will not impair the structural integrity of the improvements of the Building, will not adversely affect the mechanical, electrical, HVAC, and other systems of the Building, and/or will not affect the exterior appearance of the Building. If Lessor elects to withhold consent, Lessor shall within 7 days after such request give written notification of same, which notice shall include an explanation of Lessor's objections to the change in the Agreed Use.

6.2Hazardous Substances.

(a) Reportable Uses Require Consent. The term "Hazardous Substance" as used in this Lease shall mean any product, substance, or waste whose presence, use, manufacture, disposal, transportation, or release, either by itself or in combination with other materials expected to be on the Premises, is either: (i) potentially injurious to the public health, safety or welfare, the environment or the Premises, (ii) regulated or monitored by any governmental authority, or (iii) a basis for potential liability of Lessor to any governmental agency or third party under any applicable statute or common law theory. Hazardous Substances shall include, but not be limited to, hydrocarbons, petroleum, gasoline, and/or crude oil or any products, byproducts or fractions thereof. Lessee shall not engage in any activity in or on the Premises which constitutes a Reportable Use of Hazardous Substances without the express prior written consent of Lessor and timely compliance (at Lessee's expense) with all Applicable Requirements. "Reportable Use" shall mean (i) the installation or use of any above or below ground storage tank, (ii) the generation, possession, storage, use, transportation, or disposal of a Hazardous Substance that requires a permit from, or with respect to which a report, notice, registration or business plan is required to be filed with, any governmental authority, and/or (iii) the presence at the Premises of a Hazardous Substance with respect to which any Applicable Requirements requires that a notice be given to persons entering or occupying the Premises or neighboring properties. Notwithstanding the foregoing, Lessee may use any ordinary and customary materials reasonably required to be used in the normal course of the Agreed Use such as ordinary office supplies (copier toner, liquid paper, glue, etc.) and common household cleaning materials, so long as such use is in compliance with all Applicable Requirements, is not a Reportable Use, and does not expose the Premises or neighboring property to any meaningful risk of contamination or damage or expose Lessor to any liability therefor. In addition, Lessor may condition its consent to any Reportable Use upon receiving such additional assurances as Lessor reasonably deems necessary to protect itself, the public, the Premises and/or the environment against damage, contamination, injury and/or liability, including, but not limited to, the installation (and removal on or before Lease expiration or termination) of protective modifications (such as concrete encasements) and/or increasing the Security Deposit.

(b) Duty to Inform Lessor. If Lessee knows, or has reasonable cause to believe, that a Hazardous Substance has come to be located in, on, under or about the Premises, other than as previously consented to by Lessor, Lessee shall immediately give written notice of such fact to Lessor, and provide Lessor with a copy of any report, notice, claim or other documentation which it has concerning the presence of such Hazardous Substance.

(c) Lessee Remediation. Lessee shall not cause or permit any Hazardous Substance to be spilled or released in, on, under, or about the Premises (including through the plumbing or sanitary sewer system) and shall promptly, at Lessee's expense, comply with all Applicable Requirements and take all investigatory and/or remedial action reasonably recommended, whether or not formally ordered or required, for the cleanup of any contamination of, and for the maintenance, security and/or monitoring of the Premises or neighboring properties, that was caused or materially contributed to by Lessee, or pertaining to or involving any Hazardous Substance brought onto the Premises during the term of this Lease, by or for Lessee, or any third party.

(d) Lessee Indemnification. Lessee shall indemnify, defend and hold Lessor, its agents, employees, lenders and ground lessor, if any, harmless from and against any and all loss of rents and/or damages, liabilities, judgments, claims, expenses, penalties, and attorneys' and consultants' fees arising out of or involving any Hazardous Substance brought onto the Premises by or for Lessee, or any third party (provided, however, that Lessee shall have no liability under this Lease with respect to underground migration of any Hazardous Substance under the Premises from areas outside of the Project not caused or contributed to by Lessee). Lessee's obligations shall include, but not be limited to, the effects of any contamination or injury to person, property or the environment created or suffered by Lessee, and the cost of investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease. No termination,

cancellation or release agreement entered into by Lessor and Lessee shall release Lessee from its obligations under this Lease with respect to Hazardous Substances, unless specifically so agreed by Lessor in writing at the time of such agreement.

(e) Lessor Indemnification. Lessor and its successors and assigns shall indemnify, defend, reimburse and hold Lessee, its employees and lenders, harmless from and against any and all environmental damages, including the cost of remediation, which result from Hazardous Substances which existed on the Premises prior to Lessee's occupancy or which are caused by the gross negligence or willful misconduct of Lessor, its agents or employees. Lessor's obligations, as and when required by the Applicable Requirements, shall include, but not be limited to, the cost of investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease.

(f) Investigations and Remediations. Lessor shall retain the responsibility and pay for any investigations or remediation measures required by governmental entities having jurisdiction with respect to the existence of Hazardous Substances on the Premises prior to Lessee's occupancy, unless such remediation measure is required as a result of Lessee's use (including "Alterations", as defined in paragraph 7.3(a) below) of the Premises, in which event Lessee shall be responsible for such payment. Lessee shall cooperate fully in any such activities at the request of Lessor, including allowing Lessor and Lessor's agents to have reasonable access to the Premises at reasonable times in order to carry out Lessor's investigative and remedial responsibilities.

(g) Lessor Termination Option. If a Hazardous Substance Condition (see Paragraph 9.1(e)) occurs during the term of this Lease, unless Lessee is legally responsible therefor (in which case Lessee shall make the investigation and remediation thereof required by the Applicable Requirements and this Lease shall continue in full force and effect, but subject to Lessor's rights under Paragraph 6.2(d) and Paragraph 13), Lessor may, at Lessor's option, either (i) investigate and remediate such Hazardous Substance Condition, if required, as soon as reasonably possible at Lessor's expense, in which event this Lease shall continue in full force and effect, or (ii) if the estimated cost to remediate such condition exceeds 12 times the then monthly Base Rent or $100,000, whichever is greater, give written notice to Lessee, within 30 days after receipt by Lessor of knowledge of the occurrence of such Hazardous Substance Condition, of Lessor's desire to terminate this Lease as of the date 60 days following the date of such notice. In the event Lessor elects to give a termination notice, Lessee may, within 10 days thereafter, give written notice to Lessor of Lessee's commitment to pay the amount by which the cost of the remediation of such Hazardous Substance Condition exceeds an amount equal to 12 times the then monthly Base Rent or $100,000, whichever is greater. Lessee shall provide Lessor with said funds or satisfactory assurance thereof within 30 days following such commitment. In such event, this Lease shall continue in full force and effect, and Lessor shall proceed to make such remediation as soon as reasonably possible after the required funds are available. If Lessee does not give such notice and provide the required funds or assurance thereof within the time provided, this Lease shall terminate as of the date specified in Lessor's notice of termination.

6.3Lessee's Compliance with Applicable Requirements. Except as otherwise provided in this Lease, Lessee shall, at Lessee's sole expense, fully, diligently and in a timely manner, materially comply with all Applicable Requirements,the requirements of any applicable fire insurance underwriter or rating bureau, and the recommendations of Lessor's engineers and/or consultants which relate in any manner to the Premises, without regard to whether said requirements are now in effect or become effective after the Start Date. Lessee shall, within 10 days after receipt of Lessor's written request, provide Lessor with copies of all permits and other documents, and other information evidencing Lessee's compliance with any Applicable Requirements specified by Lessor, and shall immediately upon receipt, notify Lessor in writing (with copies of any documents involved) of any threatened or actual claim, notice, citation, warning, complaint or report pertaining to or involving the failure of Lessee or the Premises to comply with any Applicable Requirements. Likewise, Lessee shall immediately give written notice to Lessor of: (i) any water damage to the Premises and any suspected seepage, pooling, dampness or other condition conducive to the production of mold; or (ii) any mustiness or other odors that might indicate the presence of mold in the Premises.

6.4Inspection; Compliance. Lessor and Lessor's "Lender" (as defined in Paragraph 30) and consultants shall have the right to enter into Premises at any time, in the case of an emergency, and otherwise at reasonable times, after reasonable notice, for the purpose of inspecting the condition of the Premises and for verifying compliance by Lessee with this Lease. The cost of any such inspections shall be paid by Lessor, unless a violation of Applicable Requirements, or a Hazardous Substance Condition (see paragraph 9.1e) is found to exist or be imminent, or the inspection is requested or ordered by a governmental authority.In such

case, Lessee shall upon request reimburse Lessor for the cost of such inspection, so long as such inspection is reasonably related to the violation or contamination. In addition, Lessee shall provide copies of all relevant material safety data sheets (MSDS) to Lessor within 10 days of the receipt of written request therefor.

7.Maintenance; Repairs; Utility Installations; Trade Fixtures and Alterations.

7.1 Lessee's Obligations. Notwithstanding Lessor's obligation to keep the Premises in good condition and repair ordinary wear and tear excepted,Lessee shall be responsible for payment of the cost thereof to Lessor as additional rent for that portion of the cost of any maintenance and repair of the Premises, or any equipment (wherever located) that serves only Lessee or the Premises, to the extent such cost is attributable to abuse or misuse. Lessee shall be responsible for the cost of painting, repairing or replacing wall coverings, and to repair or replace any improvements withinthe Premises. Lessor may, at its option, upon reasonable notice, elect to have Lessee perform any particular such maintenance or repairs the cost of which is otherwise Lessee's responsibility hereunder.

7.2 Lessor's Obligations. Subject to the provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance), 4.2 (Operating Expenses), 6 (Use), 7.1 (Lessee's Obligations), 9 (Damage or Destruction) and 14 (Condemnation), Lessor, subject to reimbursement pursuant to Paragraph 4.2, shall keep in good order, condition and repair the foundations, exterior walls, structural condition of interior bearing walls, exterior roof, fire sprinkler system, fire alarm and/or smoke detection systems, fire hydrants, and the Common Areas. Lessee expressly waives the benefit of any statute now or hereafter in effect to the extent it is inconsistent with the terms of this Lease.

7.3Utility Installations; Trade Fixtures; Alterations.

(a) Definitions. The term "Utility Installations" refers to all floor and window coverings, air lines, vacuum lines, power panels, electrical distribution, security and fire protection systems, communication cabling, lighting fixtures, HVAC equipment, and plumbing in or on the Premises. The term "Trade Fixtures" shall mean Lessee's machinery and equipment that can be removed without doing material damage to the Premises. The term "Alterations" shall mean any modification of the improvements, other than Utility Installations or Trade Fixtures, whether by addition or deletion, specifically excluding repainting of walls, recarpeting, ordinary decorating and the hanging of items on the walls inside the Premises. "Lessee Owned Alterations and/or Utility Installations" are defined as Alterations and/or Utility Installations made by Lessee that are not yet owned by Lessor pursuant to Paragraph 7.4(a).

(b) Consent. Lessee shall not make any Alterations or Utility Installations to the Premises without Lessor's prior written consent. Lessee may, however, make non-structural Alterations or Utility Installations to the interior of the Premises (excluding the roof) without such consent but upon notice to Lessor, as long as they are not visible from the outside, do not involve relocating or removing the roof, ceilings, floors or any existing walls, will not affect the electrical, plumbing, HVAC, and/or life safety systems, and the cumulative cost thereof during this Lease as extended does not exceed $10,000. Notwithstanding the foregoing, Lessee shall not make or permit any roof penetrations and/or install anything on the roof without the prior written approval of Lessor. Lessor may, as a precondition to granting such approval, require Lessee to utilize a contractor chosen and/or approved by Lessor. Any Alterations or Utility Installations that Lessee shall desire to make and which require the consent of the Lessor shall be presented to Lessor in written form with detailed plans. Consent shall be deemed conditioned upon Lessee's: (i) acquiring all applicable governmental permits, (ii) furnishing Lessor with copies of both the permits and the plans and specifications prior to commencement of the work, and (iii) compliance with all conditions of said permits and other Applicable Requirements in a prompt and expeditious manner. Any Alterations or Utility Installations shall be performed in a workmanlike manner with good and sufficient materials. Lessee shall promptly upon completion furnish Lessor with asbuilt plans and specifications. For work which costs an amount in excess of one month's Base Rent, Lessor may condition its consent upon Lessee providing a lien and completion bond in an amount equal to 150% of the estimated cost of such Alteration or Utility Installation and/or upon Lessee's posting an additional Security Deposit with Lessor.

(c) Liens; Bonds. Lessee shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for Lessee at or for use on the Premises, which claims are or may be secured by any mechanic's or materialmen's lien against the Premises or any interest therein. Lessee shall give Lessor not less than 10 days notice prior to the commencement of any work in, on or about the Premises, and Lessor shall have the right to post notices of non-responsibility. If Lessee shall contest the validity of any such lien, claim or demand, then Lessee shall, at its sole expense defend and

protect itself, Lessor and the Premises against the same and shall pay and satisfy any such adverse judgment that may be rendered thereon before the enforcement thereof. If Lessor shall require, Lessee shall furnish a surety bond in an amount equal to 150% of the amount of such contested lien, claim or demand, indemnifying Lessor against liability for the same. If Lessor elects to participate in any such action, Lessee shall pay Lessor's attorneys' fees and costs.

7.4Ownership; Removal; Surrender; and Restoration.

(a) Ownership. Subject to Lessor's right to require removal or elect ownership as hereinafter provided, all Alterations and Utility Installations made by Lessee shall be the property of Lessee, but considered a part of the Premises. Lessor may, at any time, elect in writing to be the owner of all or any specified part of the Lessee Owned Alterations and Utility Installations. Unless otherwise instructed per paragraph 7.4(b) hereof, all Lessee Owned Alterations and Utility Installations shall, at the expiration or termination of this Lease, become the property of Lessor and be surrendered by Lessee with the Premises.

(b) Removal. By delivery to Lessee of written notice from Lessor not earlier than 90 and not later than 30 days prior to the end of the term of this Lease, Lessor may require that any or all Lessee Owned Alterations or Utility Installations be removed by the expiration or termination of this Lease. Lessor may require the removal at any time of all or any part of any Lessee Owned Alterations or Utility Installations made without the required consent.

(c) Surrender; Restoration. Lessee shall surrender the Premises by the Expiration Date or any earlier termination date, with all of the improvements, parts and surfaces thereof clean and free of debris, and in good operating order, condition and state of repair, ordinary wear and tear excepted. "Ordinary wear and tear" shall not include any damage or deterioration that would have been prevented by good maintenance practice. Notwithstanding the foregoing, if this Lease is for 12 months or less, then Lessee shall surrender the Premises in the same condition as delivered to Lessee on the Start Date with NO allowance for ordinary wear and tear. Lessee shall repair any damage occasioned by the installation, maintenance or removal of Trade Fixtures, Lessee owned Alterations and/or Utility Installations, furnishings, and equipment as well as the removal of any storage tank installed by or for Lessee. Lessee shall also completely remove from the Premises any and all Hazardous Substances brought onto the Premises by or for Lessee, or any third party (except Hazardous Substances which were deposited via underground migration from areas outside of the Premises) even if such removal would require Lessee to perform or pay for work that exceeds statutory requirements. Trade Fixtures shall remain the property of Lessee and shall be removed by Lessee. Any personal property of Lessee not removed on or before the Expiration Date or any earlier termination date shall be deemed to have been abandoned by Lessee and may be disposed of or retained by Lessor as Lessor may desire. The failure by Lessee to timely vacate the Premises pursuant to this Paragraph 7.4(c) without the express written consent of Lessor shall constitute a holdover under the provisions of Paragraph 26 below.

8.Insurance; Indemnity.

8.1Insurance Premiums. The cost of the premiums for the insurance policies maintained by Lessor pursuant to paragraph 8 are included as Operating Expenses (see paragraph 4.2 (c) (iv)). Said costs shall include increases in the premiums resulting from additional coverage related to requirements of the holder of a mortgage or deed of trust covering the Premises, Building and/or Project, increased valuation of the Premises, Building and/or Project, and/or a general premium rate increase. Said costs shall not, however, include any premium increases resulting from the nature of the occupancy of any other tenant of the Building. If the Project was not insured for the entirety of the Base Year, then the base premium shall be the lowest annual premium reasonably obtainable for the required insurance as of the Start Date, assuming the most nominal use possible of the Building and/or Project. In no event, however, shall Lessee be responsible for any portion of the premium cost attributable to liability insurance coverage in excess of $2,000,000 procured under Paragraph 8.2(b).

8.2Liability Insurance.

(a) Carried by Lessee. Lessee shall obtain and keep in force a Commercial General Liability policy of insurance protecting Lessee and Lessor as an additional insured against claims for bodily injury, personal injury and property damage based upon or arising out of the ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto. Such insurance shall be on an occurrence basis providing single limit coverage in an amount not less than $1,000,000 per occurrence with an annual aggregate of not less than $2,000,000. Lessee shall add Lessor as an additional insured by means of an endorsement at least as broad as the Insurance Service Organization's "Additional Insured-Managers or Lessors of Premises" Endorsement and coverage shall also be extended to include damage caused by heat, smoke or

fumes from a hostile fire. The policy shall not contain any intra-insured exclusions as between insured persons or organizations, but shall include coverage for liability assumed under this Lease as an "insured contract" for the performance of Lessee's indemnity obligations under this Lease. The limits of said insurance shall not, however, limit the liability of Lessee nor relieve Lessee of any obligation hereunder. Lessee shall provide an endorsement on its liability policy(ies) which provides that its insurance shall be primary to and not contributory with any similar insurance carried by Lessor, whose insurance shall be considered excess insurance only.

(b) Carried by Lessor. Lessor shall maintain liability insurance, in addition to, and not in lieu of, the insurance required to be maintained by Lessee. Lessee shall not be named as an additional insured therein.

8.3Property Insurance - Building, Improvements and Rental Value.

(a) Building and Improvements. Lessor shall obtain and keep in force a policy or policies of insurance in the name of Lessor, with loss payable to Lessor, any ground-lessor, and to any Lender insuring loss or damage to the Building and/or Project. The amount of such insurance shall be equal to the full insurable replacement cost of the Building and/or Project, as the same shall exist from time to time, or the amount required by any Lender, but in no event more than the commercially reasonable and available insurable value thereof. Lessee Owned Alterations and Utility Installations, Trade Fixtures, and Lessee's personal property shall be insured by Lessee not by Lessor. If the coverage is available and commercially appropriate, such policy or policies shall insure against all risks of direct physical loss or damage (except the perils of flood and/or earthquake unless required by a Lender), including coverage for debris removal and the enforcement of any Applicable Requirements requiring the upgrading, demolition, reconstruction or replacement of any portion of the Premises as the result of a covered loss. Said policy or policies shall also contain an agreed valuation provision in lieu of any coinsurance clause, waiver of subrogation, and inflation guard protection causing an increase in the annual property insurance coverage amount by a factor of not less than the adjusted U.S. Department of Labor Consumer Price Index for All Urban Consumers for the city nearest to where the Premises are located. If such insurance coverage has a deductible clause, the deductible amount shall not exceed $5,000 per occurrence.

(c) Adjacent Premises. Lessee shall pay for any increase in the premiums for the property insurance of the Building and for

Common Areas or other buildings in the Project if said increase is caused by Lessee's acts, omissions, use or occupancy of the Premises.

(d) Lessee's Improvements. Since Lessor is the Insuring Party, Lessor shall not be required to insure Lessee Owned Alterations and Utility Installations unless the item in question has become the property of Lessor under the terms of this Lease.

8.4Lessee's Property; Business Interruption Insurance; Worker's Compensation Insurance.

(a) Property Damage. Lessee shall obtain and maintain insurance coverage on all of Lessee's personal property, Trade Fixtures, and Lessee Owned Alterations and Utility Installations. Such insurance shall be full replacement cost coverage with a deductible of not to exceed $1,000 per occurrence. The proceeds from any such insurance shall be used by Lessee for the replacement of personal property, Trade Fixtures and Lessee Owned Alterations and Utility Installations. Lessee shall provide Lessor with written evidence that such insurance is in force.

(b) Worker's Compensation Insurance. Lessee shall obtain and maintain Worker’s Compensation Insurance in such amount as may be required by Applicable Requirements.

(c) Business Interruption. Lessee shall obtain and maintain loss of income and extra expense insurance in amounts as will reimburse Lessee for direct or indirect loss of earnings attributable to all perils commonly insured against by prudent lessees in the business of Lessee or attributable to prevention of access to the Premises as a result of such perils.

(d) No Representation of Adequate Coverage. Lessor makes no representation that the limits or forms of coverage of insurance specified herein are adequate to cover Lessee's property, business operations or obligations under this Lease.

8.5 Insurance Policies. Insurance required herein shall be by companies maintaining during the policy term a "General Policyholders Rating" of at least A-, VII, as set forth in the most current issue of "Best's Insurance Guide", or such other rating as may be required by a Lender. Lessee shall not do or permit to be done anything which invalidates the required insurance policies. Lessee shall, prior to the Start Date, deliver to Lessor certified copies of policies of such insurance or certificates with copies of the required endorsements evidencing the existence and amounts of the required insurance. No such policy shall be cancelable or subject to modification except after 10 days prior written notice to Lessor. Lessee shall, at least 30 days prior to the expiration of such policies, furnish Lessor with evidence of renewals or "insurance binders" evidencing renewal thereof, or Lessor may order such insurance and

charge the cost thereof to Lessee, which amount shall be payable by Lessee to Lessor upon demand. Such policies shall be for a term of at least one year, or the length of the remaining term of this Lease, whichever is less. If either Party shall fail to procure and maintain the insurance required to be carried by it, the other Party may, but shall not be required to, procure and maintain the same.

8.6 Waiver of Subrogation. Without affecting any other rights or remedies, Lessee and Lessor each hereby release and relieve the other, and waive their entire right to recover damages against the other, for loss of or damage to its property arising out of or incident to the perils required to be insured against herein. The effect of such releases and waivers is not limited by the amount of insurance carried or required, or by any deductibles applicable hereto. The Parties agree to have their respective property damage insurance carriers waive any right to subrogation that such companies may have against Lessor or Lessee, as the case may be, so long as the insurance is not invalidated thereby.

8.7Indemnity. Except for Lessor's gross negligence or willful misconduct, Lessee shall indemnify, protect, defend and hold harmless the Premises, Lessor and its agents, Lessor's master or ground lessor, partners and Lenders, from and against any and all claims, loss of rents and/or damages, liens, judgments, penalties, attorneys' and consultants' fees, expenses and/or liabilities arising out of, involving, or in connection with, the use and/or occupancy of the Premises by Lessee. If any action or proceeding is brought against Lessor by reason of any of the foregoing matters, Lessee shall upon notice defend the same at Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor shall cooperate with Lessee in such defense. Lessor need not have first paid any such claim in order to be defended or indemnified.

8.8Exemption of Lessor and its Agents from Liability. Notwithstanding the negligence or breach of this Lease by Lessor or its agents, neither Lessor nor its agents shall be liable under any circumstances for: (i) injury or damage to the person or goods, wares, merchandise or other property of Lessee, Lessee's employees, contractors, invitees, customers, or any other person in or about the Premises, whether such damage or injury is caused by or results from fire, steam, electricity, gas, water or rain, indoor air quality, the presence of mold or from the breakage, leakage, obstruction or other defects of pipes, fire sprinklers, wires, appliances, plumbing, HVAC or lighting fixtures, or from any other cause, whether the said injury or damage results from conditions arising upon the Premises or upon other portions of the Building, or from other sources or places, (ii) any damages arising from any act or neglect of any other tenant of Lessor or from the failure of Lessor or its agents to enforce the provisions of any other lease in the Project, or (iii) injury to Lessee's business or for any loss of income or profit therefrom. Instead, it is intended that Lessee's sole recourse in the event of such damages or injury be to file a claim on the insurance policy(ies) that Lessee is required to maintain pursuant to the provisions of paragraph 8.

8.9Failure to Provide Insurance. Lessee acknowledges that any failure on its part to obtain or maintain the insurance required herein will expose Lessor to risks and potentially cause Lessor to incur costs not contemplated by this Lease, the extent of which will be extremely difficult to ascertain. Accordingly, for any month or portion thereof that Lessee does not maintain the required insurance and/or does not provide Lessor with the required binders or certificates evidencing the existence of the required insurance, the Base Rent shall be automatically increased, without any requirement for notice to Lessee, by an amount equal to 10% of the then existing Base Rent or $100, whichever is greater. The parties agree that such increase in Base Rent represents fair and reasonable compensation for the additional risk/costs that Lessor will incur by reason of Lessee's failure to maintain the required insurance. Such increase in Base Rent shall in no event constitute a waiver of Lessee's Default or Breach with respect to the failure to maintain such insurance, prevent the exercise of any of the other rights and remedies granted hereunder, nor relieve Lessee of its obligation to maintain the insurance specified in this Lease.

9.Damage or Destruction.

9.1Definitions.

(a) "Premises Partial Damage" shall mean damage or destruction to the improvements on the Premises, other than Lessee Owned Alterations and Utility Installations, which can reasonably be repaired in 3 months or less from the date of the damage or destruction, and the cost thereof does not exceed a sum equal to 6 month's Base Rent. Lessor shall notify Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the damage is Partial or Total.

(b) "Premises Total Destruction" shall mean damage or destruction to the improvements on the Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which cannot reasonably be repaired in 3 months or less from the date of the damage or destruction and/or the cost thereof exceeds a sum equal to 6 month's Base Rent. Lessor shall notify Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the

damage is Partial or Total.

(c) "Insured Loss" shall mean damage or destruction to improvements on the Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which was caused by an event required to be covered by the insurance described in Paragraph 8.3(a), irrespective of any deductible amounts or coverage limits involved.

(d) "Replacement Cost" shall mean the cost to repair or rebuild the improvements owned by Lessor at the time of the occurrence to their condition existing immediately prior thereto, including demolition, debris removal and upgrading required by the operation of Applicable Requirements, and without deduction for depreciation.

(e) "Hazardous Substance Condition" shall mean the occurrence or discovery of a condition involving the presence of, or a contamination by, a Hazardous Substance, in, on, or under the Premises which requires restoration.

9.2Partial Damage - Insured Loss. If a Premises Partial Damage that is an Insured Loss occurs, then Lessor shall, at Lessor's expense, repair such damage (but not Lessee's Trade Fixtures or Lessee Owned Alterations and Utility Installations) as soon as reasonably possible and this Lease shall continue in full force and effect; provided, however, that Lessee shall, at Lessor's election, make the repair of any damage or destruction the total cost to repair of which is $5,000 or less, and, in such event, Lessor shall make any applicable insurance proceeds available to Lessee on a reasonable basis for that purpose. Notwithstanding the foregoing, if the required insurance was not in force or the insurance proceeds are not sufficient to effect such repair, the Insuring Party shall promptly contribute the shortage in proceeds as and when required to complete said repairs. In the event, however, such shortage was due to the fact that, by reason of the unique nature of the improvements, full replacement cost insurance coverage was not commercially reasonable and available, Lessor shall have no obligation to pay for the shortage in insurance proceeds or to fully restore the unique aspects of the Premises unless Lessee provides Lessor with the funds to cover same, or adequate assurance thereof, within 10 days following receipt of written notice of such shortage and request therefor. If Lessor receives said funds or adequate assurance thereof within said 10 day period, the party responsible for making the repairs shall complete them as soon as reasonably possible and this Lease shall remain in full force and effect. If such funds or assurance are not received, Lessor may nevertheless elect by written notice to Lessee within 10 days thereafter to: (i) make such restoration and repair as is commercially reasonable with Lessor paying any shortage in proceeds, in which case this Lease shall remain in full force and effect, or (ii) have this Lease terminate 30 days thereafter. Lessee shall not be entitled to reimbursement of any funds contributed by Lessee to repair any such damage or destruction. Premises Partial Damage due to flood or earthquake shall be subject to Paragraph 9.3, notwithstanding that there may be some insurance coverage, but the net proceeds of any such insurance shall be made available for the repairs if made by either Party.

9.3Partial Damage - Uninsured Loss. If a Premises Partial Damage that is not an Insured Loss occurs, unless caused by a negligent or willful act of Lessee (in which event Lessee shall make the repairs at Lessee's expense), Lessor may either: (i) repair such damage as soon as reasonably possible at Lessor's expense, in which event this Lease shall continue in full force and effect, or (ii) terminate this Lease by giving written notice to Lessee within 30 days after receipt by Lessor of knowledge of the occurrence of such damage. Such termination shall be effective 60 days following the date of such notice. In the event Lessor elects to terminate this Lease, Lessee shall have the right within 10 days after receipt of the termination notice to give written notice to Lessor of Lessee's commitment to pay for the repair of such damage without reimbursement from Lessor. Lessee shall provide Lessor with said funds or satisfactory assurance thereof within 30 days after making such commitment. In such event this Lease shall continue in full force and effect, and Lessor shall proceed to make such repairs as soon as reasonably possible after the required funds are available. If Lessee does not make the required commitment, this Lease shall terminate as of the date specified in the termination notice.

9.4Total Destruction. Notwithstanding any other provision hereof, if a Premises Total Destruction occurs, this Lease shall terminate

60 days following such Destruction. If the damage or destruction was caused by the gross negligence or willful misconduct of Lessee, Lessor shall have the right to recover Lessor's damages from Lessee, except as provided in Paragraph 8.6.

9.5Damage Near End of Term. If at any time during the last 6 months of this Lease there is damage for which the cost to repair exceeds one month's Base Rent, whether or not an Insured Loss, Lessor may terminate this Lease effective 60 days following the date of occurrence of such damage by giving a written termination notice to Lessee within 30 days after the date of occurrence of such damage. Notwithstanding the foregoing, if Lessee at that time has an exercisable option to extend this Lease or to purchase the Premises, then Lessee may preserve this Lease by,

(a) exercising such option and (b) providing Lessor with any shortage in insurance proceeds (or adequate assurance thereof) needed to make the repairs on or before the earlier of (i) the date which is 10 days after Lessee's receipt of Lessor's written notice purporting to terminate this Lease, or (ii) the day prior to the date upon which such option expires. If Lessee duly exercises such option during such period and provides Lessor with funds (or adequate assurance thereof) to cover any shortage in insurance proceeds, Lessor shall, at Lessor's commercially reasonable expense, repair such damage as soon as reasonably possible and this Lease shall continue in full force and effect. If Lessee fails to exercise such option and provide such funds or assurance during such period, then this Lease shall terminate on the date specified in the termination notice and Lessee's option shall be extinguished.

9.6Abatement of Rent; Lessee's Remedies.

(a) Abatement. In the event of Premises Partial Damage or Premises Total Destruction or a Hazardous Substance Condition for which Lessee is not responsible under this Lease, the Rent payable by Lessee for the period required for the repair, remediation or restoration of such damage shall be abated in proportion to the degree to which Lessee's use of the Premises is impaired, but not to exceed the proceeds received from the Rental Value insurance. All other obligations of Lessee hereunder shall be performed by Lessee, and Lessor shall have no liability for any such damage, destruction, remediation, repair or restoration except as provided herein.

(b) Remedies. If Lessor is obligated to repair or restore the Premises and does not commence, in a substantial and meaningful way, such repair or restoration within 90 days after such obligation shall accrue, Lessee may, at any time prior to the commencement of such repair or restoration, give written notice to Lessor and to any Lenders of which Lessee has actual notice, of Lessee's election to terminate this Lease on a date not less than 60 days following the giving of such notice. If Lessee gives such notice and such repair or restoration is not commenced within 30 days thereafter, this Lease shall terminate as of the date specified in said notice. If the repair or restoration is commenced within such 30 days, this Lease shall continue in full force and effect. "Commence" shall mean either the unconditional authorization of the preparation of the required plans, or the beginning of the actual work on the Premises, whichever first occurs.

9.7Termination; Advance Payments. Upon termination of this Lease pursuant to Paragraph 6.2(g) or Paragraph 9, an equitable adjustment shall be made concerning advance Base Rent and any other advance payments made by Lessee to Lessor. Lessor shall, in addition, return to Lessee so much of Lessee's Security Deposit as has not been, or is not then required to be, used by Lessor.

10.Real Property Taxes.

10.1Definitions. As used herein, the term "Real Property Taxes" shall include any form of assessment; real estate, general, special, ordinary or extraordinary, or rental levy or tax (other than inheritance, personal income or estate taxes); improvement bond; and/or license fee imposed upon or levied against any legal or equitable interest of Lessor in the Project, Lessor's right to other income therefrom, and/or Lessor's business of leasing, by any authority having the direct or indirect power to tax and where the funds are generated with reference to the Project address and where the proceeds so generated are to be applied by the city, county or other local taxing authority of a jurisdiction within which the Project is located. "Real Property Taxes" shall also include any tax, fee, levy, assessment or charge, or any increase therein: (i) imposed by reason of events occurring during the term of this Lease, including but not limited to, a change in the ownership of the Project, (ii) a change in the improvements thereon, and/or (iii) levied or assessed on machinery or equipment provided by Lessor to Lessee pursuant to this Lease.

10.2Payment of Taxes. Except as otherwise provided in Paragraph 10.3, Lessor shall pay the Real Property Taxes applicable to the

Project, and said payments shall be included in the calculation of Operating Expenses in accordance with the provisions of Paragraph 4.2.

10.3 Additional Improvements. Operating Expenses shall not include Real Property Taxes specified in the tax assessor's records and work sheets as being caused by additional improvements placed upon the Project by other lessees or by Lessor for the exclusive enjoyment of such other lessees. Notwithstanding Paragraph 10.2 hereof, Lessee shall, however, pay to Lessor at the time Operating Expenses are payable under Paragraph 4.2, the entirety of any increase in Real Property Taxes if assessed solely by reason of Alterations, Trade Fixtures or Utility Installations placed upon the Premises by Lessee or at Lessee's request or by reason of any alterations or improvements to the Premises made by Lessor subsequent to the execution of this Lease by the Parties.

10.4 Joint Assessment. If the Building is not separately assessed, Real Property Taxes allocated to the Building shall be an equitable proportion of the Real Property Taxes for all of the land and improvements included within the tax parcel assessed, such

proportion to be determined by Lessor from the respective valuations assigned in the assessor's work sheets or such other information as may be reasonably available. Lessor's reasonable determination thereof, in good faith, shall be conclusive.

10.5 Personal Property Taxes. Lessee shall pay prior to delinquency all taxes assessed against and levied upon Lessee Owned Alterations and Utility Installations, Trade Fixtures, furnishings, equipment and all personal property of Lessee contained in the Premises. When possible, Lessee shall cause its Lessee Owned Alterations and Utility Installations, Trade Fixtures, furnishings, equipment and all other personal property to be assessed and billed separately from the real property of Lessor. If any of Lessee's said property shall be assessed with Lessor's real property, Lessee shall pay Lessor the taxes attributable to Lessee's property within 10 days after receipt of a written statement setting forth the taxes applicable to Lessee's property.

11.Utilities and Services.

11.1Services Provided by Lessor. Lessor shall provide heating, ventilation, air conditioning (tenant shall pay for all maintenance and repairs of air conditioning units after the Lease Commencement Date, reasonable amounts of electricity for normal lighting and office machines, water for reasonable and normal drinking and lavatory use in connection with an office. Lessor shall also provide janitorial services to the Common Areas two (2) times per week, excluding Building Holidays, or pursuant to the attached janitorial schedule, if any. Lessor shall not, however, be required to provide janitorial services to kitchens or storage areas included within the Premises.

11.2Services Exclusive to Lessee. Lessee shall pay for all water, gas, light, power, telephone and other utilities and services specially or exclusively supplied and/or metered exclusively to the Premises or to Lessee, together with any taxes thereon. If a service is deleted by Paragraph 1.13 and such service is not separately metered to the Premises, Lessee shall pay at Lessor's option, either Lessee's Share or a reasonable proportion to be determined by Lessor of all charges for such jointly metered service.

11.3Hours of Service. Said services and utilities shall be provided during times set forth in Paragraph 1.12. Utilities and services required at other times shall be subject to advance request and reimbursement by Lessee to Lessor of the cost thereof.

11.4Excess Usage by Lessee. Lessee shall not make connection to the utilities except by or through existing outlets and shall not install or use machinery or equipment in or about the Premises that uses excess water, lighting or power, or suffer or permit any act that causes extra burden upon the utilities or services, including but not limited to security and trash services, over standard office usage for the Project. Lessor shall require Lessee to reimburse Lessor for any excess expenses or costs that may arise out of a breach of this subparagraph by Lessee. Lessor may, in its sole discretion, install at Lessee's expense supplemental equipment and/or separate metering applicable to Lessee's excess usage or loading.

11.5Interruptions. There shall be no abatement of rent and Lessor shall not be liable in any respect whatsoever for the inadequacy, stoppage, interruption or discontinuance of any utility or service due to riot, strike, labor dispute, breakdown, accident, repair or other cause beyond Lessor's reasonable control or in cooperation with governmental request or directions.

12.Assignment and Subletting.

12.1Lessor's Consent Required.

(a) Lessee shall not voluntarily or by operation of law assign, transfer, mortgage or encumber (collectively, "assign or assignment") or sublet all or any part of Lessee's interest in this Lease or in the Premises without Lessor's prior written consent, except as set forth in paragraph 12.1(c).

(b) Unless Lessee is a corporation and its stock is publicly traded on a national stock exchange, a change in the control of Lessee shall constitute an assignment requiring consent. The transfer, on a cumulative basis, of 25% or more of the voting control of Lessee shall constitute a change in control for this purpose. Notwithstanding anything contained in this Section 12 to the contrary, Lessee shall have the right to assign this Lease or sublease the Premises, or any part thereof, to an "Affiliate" upon at least ten (10) days prior written notice to Lessor. For purposes of this provision, the term "Affiliate" shall mean any corporation or other entity controlling, controlled by, or under common control with (directly or indirectly) Lessee. The term "control", as used herein, shall mean the power to direct or cause the direction of the management and policies of the controlled entity through the ownership of more than fifty percent (50%) of the voting securities in such controlled entity. In addition, Lessee may assign this Lease, with Lessor's consent which will not be unreasonably withheld and with the foregoing notice, to any successor by merger to Lessee or any purchaser of the assets of Lessee (or the line of business

of Lessee doing business from the Premises), or any purchaser of the stock of the Lessee (each a "Permitted Assignee"), whether in a public market or a private transaction.

(c) The involvement of Lessee or its assets in any transaction, or series of transactions (by way of merger, sale, acquisition,

financing, transfer, leveraged buyout or otherwise), whether or not a formal assignment or hypothecation of this Lease or Lessee's assets occurs, which results or will result in a reduction of the Net Worth of Lessee by an amount greater than 25% of such Net Worth as it was represented at the time of the execution of this Lease or at the time of the most recent assignment to which Lessor has consented, or as it exists immediately prior to said transaction or transactions constituting such reduction, whichever was or is greater, shall be considered an assignment of this Lease to which Lessor may withhold its consent. "Net Worth of Lessee" shall mean the net worth of Lessee (excluding any guarantors) established under generally accepted accounting principles.

(d) An assignment or subletting without consent shall, at Lessor's option, be a Default curable after notice per Paragraph 13.1(c), or a noncurable Breach without the necessity of any notice and grace period. If Lessor elects to treat such unapproved assignment or subletting as a noncurable Breach, Lessor may either: (i) terminate this Lease, or (ii) upon 30 days written notice, increase the monthly Base Rent to 110% of the Base Rent then in effect. Further, in the event of such Breach and rental adjustment, (i) the purchase price of any option to purchase the Premises held by Lessee shall be subject to similar adjustment to 110% of the price previously in effect, and (ii) all fixed and non-fixed rental adjustments scheduled during the remainder of the Lease term shall be increased to 110% of the scheduled adjusted rent.

(e) Lessee's remedy for any breach of Paragraph 12.1 by Lessor shall be limited to compensatory damages and/or injunctive relief. (f) Lessor may reasonably withhold consent to a proposed assignment or subletting if Lessee is in Default at the time consent is requested.

(g) Notwithstanding the foregoing, allowing a de minimis portion of the Premises, i.e. 20 square feet or less, to be used by a third party vendor in connection with the installation of a vending machine or payphone shall not constitute a subletting.

12.2Terms and Conditions Applicable to Assignment and Subletting.

(a) Regardless of Lessor's consent, no assignment or subletting shall: (i) be effective without the express written assumption by such assignee or sublessee of the obligations of Lessee under this Lease, (ii) release Lessee of any obligations hereunder, or (iii) alter the primary liability of Lessee for the payment of Rent or for the performance of any other obligations to be performed by Lessee.

(b) Lessor may accept Rent or performance of Lessee's obligations from any person other than Lessee pending approval or disapproval of an assignment. Neither a delay in the approval or disapproval of such assignment nor the acceptance of Rent or performance shall constitute a waiver or estoppel of Lessor's right to exercise its remedies for Lessee's Default or Breach.

(c) Lessor's consent to any assignment or subletting shall not constitute a consent to any subsequent assignment or subletting.

(d) In the event of any Default or Breach by Lessee, Lessor may proceed directly against Lessee, any Guarantors or anyone else responsible for the performance of Lessee's obligations under this Lease, including any assignee or sublessee, without first exhausting Lessor's remedies against any other person or entity responsible therefore to Lessor, or any security held by Lessor.

(e) Each request for consent to an assignment or subletting shall be in writing, accompanied by information relevant to Lessor's determination as to the financial and operational responsibility and appropriateness of the proposed assignee or sublessee, including but not limited to the intended use and/or required modification of the Premises, if any, together with a fee of $500 as consideration for Lessor's considering and processing said request. Lessee agrees to provide Lessor with such other or additional information and/or documentation as may be reasonably requested. (See also Paragraph 36)

(f) Any assignee of, or sublessee under, this Lease shall, by reason of accepting such assignment, entering into such sublease, or entering into possession of the Premises or any portion thereof, be deemed to have assumed and agreed to conform and comply with each and every term, covenant, condition and obligation herein to be observed or performed by Lessee during the term of said assignment or sublease, other than such obligations as are contrary to or inconsistent with provisions of an assignment or sublease to which Lessor has specifically consented to in writing.

(g) Lessor's consent to any assignment or subletting shall not transfer to the assignee or sublessee any Option granted to the original Lessee by this Lease unless such transfer is specifically consented to by Lessor in writing. (See Paragraph 39.2)

12.3Additional Terms and Conditions Applicable to Subletting. The following terms and conditions shall apply to any subletting by Lessee of all or any part of the Premises and shall be deemed included in all subleases under this Lease whether or not expressly incorporated therein:

(a) Lessee hereby assigns and transfers to Lessor all of Lessee's interest in all Rent payable on any sublease, and Lessor may collect such Rent and apply same toward Lessee's obligations under this Lease; provided, however, that until a Breach shall occur in the performance of Lessee's obligations, Lessee may collect said Rent. Lessor shall be entitled to 100% of the profits from any excess rents collected by Lessee. Lessee may recover all reasonable costs from the excess profits associated with Subleasing the Premises (these costs shall be restricted to the following items: advertising, real estate commissions, reasonable legal fees and Tenant Improvements. Lessor shall not, by reason of the foregoing or any assignment of such sublease, nor by reason of the collection of Rent, be deemed liable to the sublessee for any failure of Lessee to perform and comply with any of Lessee's obligations to such sublessee. Lessee hereby irrevocably authorizes and directs any such sublessee, upon receipt of a written notice from Lessor stating that a Breach exists in the performance of Lessee's obligations under this Lease, to pay to Lessor all Rent due and to become due under the sublease. Sublessee shall rely upon any such notice from Lessor and shall pay all Rents to Lessor without any obligation or right to inquire as to whether such Breach exists, notwithstanding any claim from Lessee to the contrary.

(b) In the event of a Breach by Lessee, Lessor may, at its option, require sublessee to attorn to Lessor, in which event Lessor shall

undertake the obligations of the sublessor under such sublease from the time of the exercise of said option to the expiration of such sublease; provided, however, Lessor shall not be liable for any prepaid rents or security deposit paid by such sublessee to such sublessor or for any prior Defaults or Breaches of such sublessor.

(c) Any matter requiring the consent of the sublessor under a sublease shall also require the consent of Lessor.

(d) No sublessee shall further assign or sublet all or any part of the Premises without Lessor's prior written consent.

(e) Lessor shall deliver a copy of any notice of Default or Breach by Lessee to the sublessee, who shall have the right to cure the Default of Lessee within the grace period, if any, specified in such notice. The sublessee shall have a right of reimbursement and offset from and against Lessee for any such Defaults cured by the sublessee. Lessor's consent shall not be unreasonably withheld or delayed.

13.Default; Breach; Remedies.

13.1Default; Breach. A "Default" is defined as a failure by the Lessee to comply with or perform any of the terms, covenants, conditions or Rules and Regulations under this Lease. A "Breach" is defined as the occurrence of one or more of the following Defaults, and the failure of Lessee to cure such Default within any applicable grace period:

(a) The abandonment of the Premises; or the vacating of the Premises without providing a commercially reasonable level of

security, or where the coverage of the property insurance described in Paragraph 8.3 is jeopardized as a result thereof, or without providing reasonable assurances to minimize potential vandalism.

(b) The failure of Lessee to make any payment of Rent or any Security Deposit required to be made by Lessee hereunder, whether to Lessor or to a third party, when due, to provide reasonable evidence of insurance or surety bond, or to fulfill any obligation under this Lease which endangers or threatens life or property, where such failure continues for a period of 5 business days following written notice to Lessee. THE ACCEPTANCE BY LESSOR OF A PARTIAL PAYMENT OF RENT OR SECURITY DEPOSIT SHALL NOT CONSTITUTE A WAIVER OF ANY OF LESSOR'S RIGHTS, INCLUDING LESSOR'S RIGHT TO RECOVER POSSESSION OF THE PREMISES.

(c) The failure of Lessee to allow Lessor and/or its agents access to the Premises or the commission of waste, act or acts constituting public or private nuisance, and/or an illegal activity on the Premises by Lessee, where such actions continue for a period of 3 business days following written notice to Lessee.

(d) The failure by Lessee to provide: (i) reasonable written evidence of compliance with Applicable Requirements, (ii) the service contracts, (iii) the rescission of an unauthorized assignment or subletting, (iv) an Estoppel Certificate or financial statements, (v) a requested subordination, (vi) evidence concerning any guaranty and/or Guarantor, (vii) any document requested under Paragraph 41, (viii) material data safety sheets (MSDS), or (ix) any other documentation or information which Lessor may reasonably require of Lessee under the terms of this Lease, where any such failure

continues for a period of 10 days following written notice to Lessee.

(e) A Default by Lessee as to the terms, covenants, conditions or provisions of this Lease, or of the rules adopted under Paragraph 2.9 hereof, other than those described in subparagraphs 13.1(a), (b) or (c), above, where such Default continues for a period of 30 days after written notice; provided, however, that if the nature of Lessee's Default is such that more than 30 days are reasonably required for its cure, then it shall not be deemed to be a Breach if Lessee commences such cure within said 30 day period and thereafter diligently prosecutes such cure to completion.

(f) The occurrence of any of the following events: (i) the making of any general arrangement or assignment for the benefit of creditors; (ii) becoming a "debtor" as defined in 11 U.S.C. § 101 or any successor statute thereto (unless, in the case of a petition filed against Lessee, the same is dismissed within 60 days); (iii) the appointment of a trustee or receiver to take possession of substantially all of Lessee's assets located at the Premises or of Lessee's interest in this Lease, where possession is not restored to Lessee within 30 days; or (iv) the attachment, execution or other judicial seizure of substantially all of Lessee's assets located at the Premises or of Lessee's interest in this Lease, where such seizure is not discharged within 30 days; provided, however, in the event that any provision of this subparagraph is contrary to any applicable law, such provision shall be of no force or effect, and not affect the validity of the remaining provisions.

(g) The discovery that any financial statement of Lessee or of any Guarantor given to Lessor was materially false.

(h) If the performance of Lessee's obligations under this Lease is guaranteed: (i) the death of a Guarantor, (ii) the termination of a Guarantor's liability with respect to this Lease other than in accordance with the terms of such guaranty, (iii) a Guarantor's becoming insolvent or the subject of a bankruptcy filing, (iv) a Guarantor's refusal to honor the guaranty, or (v) a Guarantor's breach of its guaranty obligation on an anticipatory basis, and Lessee's failure, within 60 days following written notice of any such event, to provide written alternative assurance or security, which, when coupled with the then existing resources of Lessee, equals or exceeds the combined financial resources of Lessee and the Guarantors that existed at the time of execution of this Lease.

13.2 Remedies. If Lessee fails to perform any of its affirmative duties or obligations, within 10 days after written notice (or in case of an emergency, without notice), Lessor may, at its option, perform such duty or obligation on Lessee's behalf, including but not limited to the obtaining of reasonably required bonds, insurance policies, or governmental licenses, permits or approvals. Lessee shall pay to Lessor an amount equal to 115% of the costs and expenses incurred by Lessor in such performance upon receipt of an invoice therefor. In the event of a Breach, Lessor may, with or without further notice or demand, and without limiting Lessor in the exercise of any right or remedy which Lessor may have by reason of such Breach:

(a) Terminate Lessee's right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Lessee shall immediately surrender possession to Lessor. In such event Lessor shall be entitled to recover from Lessee: (i) the unpaid Rent which had been earned at the time of termination; (ii) the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that the Lessee proves could have been reasonably avoided; (iii) the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of such rental loss that the Lessee proves could be reasonably avoided; and (iv) any other amount necessary to compensate Lessor for all the detriment proximately caused by the Lessee's failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom, including but not limited to the cost of recovering possession of the Premises, expenses of reletting, including necessary renovation and alteration of the Premises, reasonable attorneys' fees, and that portion of any leasing commission paid by Lessor in connection with this Lease applicable to the unexpired term of this Lease. The worth at the time of award of the amount referred to in provision (iii) of the immediately preceding sentence shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of the District within which the Premises are located at the time of award plus one percent. Efforts by Lessor to mitigate damages caused by Lessee's Breach of this Lease shall not waive Lessor's right to recover damages under Paragraph 12. If termination of this Lease is obtained through the provisional remedy of unlawful detainer, Lessor shall have the right to recover in such proceeding any unpaid Rent and damages as are recoverable therein, or Lessor may reserve the right to recover all or any part thereof in a separate suit. If a notice and grace period required under Paragraph 13.1 was not previously given, a notice to pay rent or quit, or to perform or quit given to Lessee under the unlawful detainer statute shall also constitute the notice required by Paragraph 13.1. In such case, the applicable grace period required by Paragraph 13.1 and the unlawful detainer statute shall run concurrently, and the failure of Lessee to cure the Default within the greater of the two such grace periods shall constitute both an unlawful detainer and a Breach of this Lease entitling Lessor to the remedies provided for in this Lease

and/or by said statute.Lessor shall make reasonable commercial efforts to mitigate its damages.

(b) Continue the Lease and Lessee's right to possession and recover the Rent as it becomes due, in which event Lessee may sublet or assign, subject only to reasonable limitations. Acts of maintenance, efforts to relet, and/or the appointment of a receiver to protect the Lessor's interests, shall not constitute a termination of the Lessee's right to possession.

(c) Pursue any other remedy now or hereafter available under the laws or judicial decisions of the state wherein the Premises are located. The expiration or termination of this Lease and/or the termination of Lessee's right to possession shall not relieve Lessee from liability under any indemnity provisions of this Lease as to matters occurring or accruing during the term hereof or by reason of Lessee's occupancy of the Premises.

13.3Inducement Recapture. Any agreement for free or abated rent or other charges,including a tenant improvement allowance, or for the giving or paying by Lessor to or for Lessee of any cash or other bonus, inducement or consideration for Lessee's entering into this Lease, all of which concessions are hereinafter referred to as "Inducement Provisions", shall be deemed conditioned upon Lessee's full and faithful performance of all of the terms, covenants and conditions of this Lease. Upon Breach of this Lease by Lessee, any such Inducement Provision shall automatically be deemed deleted from this Lease and of no further force or effect, and any rent, other charge, bonus, inducement or consideration theretofore abated, given or paid by Lessor under such an Inducement Provision shall be immediately due and payable by Lessee to Lessor, notwithstanding any subsequent cure of said Breach by Lessee. The acceptance by Lessor of rent or the cure of the Breach which initiated the operation of this paragraph shall not be deemed a waiver by Lessor of the provisions of this paragraph unless specifically so stated in writing by Lessor at the time of such acceptance.

13.4Late Charges. Lessee hereby acknowledges that late payment by Lessee of Rent will cause Lessor to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges, and late charges which may be imposed upon Lessor by any Lender. Accordingly, if any Rent shall not be received by Lessor within 5 days after such amount shall be due, then, without any requirement for notice to Lessee, Lessee shall immediately pay to Lessor a one-time late charge equal to 10% of each such overdue amount or $100, whichever is greater.The parties hereby agree that such late charge represents a fair and reasonable estimate of the costs Lessor will incur by reason of such late payment. Acceptance of such late charge by Lessor shall in no event constitute a waiver of Lessee's Default or Breach with respect to such overdue amount, nor prevent the exercise of any of the other rights and remedies granted hereunder. In the event that a late charge is payable hereunder, whether or not collected, for 3 consecutive installments of Base Rent, then notwithstanding any provision of this Lease to the contrary, Base Rent shall, at Lessor's option, become due and payable quarterly in advance.

13.5 Interest. Any monetary payment due Lessor hereunder, other than late charges, not received by Lessor, when due as to scheduled payments (such as Base Rent) or within 30 days following the date on which it was due for nonscheduled payment, shall bear interest from the date when due, as to scheduled payments, or the 31st day after it was due as to nonscheduled payments. The interest ("Interest") charged shall be computed at the rate of 10% per annum but shall not exceed the maximum rate allowed by law. Interest is payable in addition to the potential late charge provided for in Paragraph 13.4.

13.6Breach by Lessor.

(a) Notice of Breach. Lessor shall not be deemed in breach of this Lease unless Lessor fails within a reasonable time to perform an obligation required to be performed by Lessor. For purposes of this Paragraph, a reasonable time shall in no event be less than 30 days after receipt by Lessor, and any Lender whose name and address shall have been furnished Lessee in writing for such purpose, of written notice specifying wherein such obligation of Lessor has not been performed; provided, however, that if the nature of Lessor's obligation is such that more than 30 days are reasonably required for its performance, then Lessor shall not be in breach if performance is commenced within such 30 day period and thereafter diligently pursued to completion.

(b) Performance by Lessee on Behalf of Lessor. In the event that neither Lessor nor Lender cures said breach within 30 days after receipt of said notice, or if having commenced said cure they do not diligently pursue it to completion, then Lessee may elect to cure said breach at Lessee's expense and offset from Rent the actual and reasonable cost to perform such cure, provided however, that such offset shall not exceed an amount equal to the greater of one month's Base Rent or the Security Deposit, reserving Lessee's right to seek reimbursement from Lessor for any such expense in excess of such offset. Lessee shall document the cost of said cure and supply said documentation to Lessor.

14.Condemnation. If the Premises or any portion thereof are taken under the power of eminent domain or sold under the threat of the exercise of said power (collectively "Condemnation"), this Lease shall terminate as to the part taken as of the date the condemning authority takes title or possession, whichever first occurs. If more than 10% of the rentable floor area of the Premises, or more than 25% of Lessee's Reserved Parking Spaces, if any, are taken by Condemnation, Lessee may, at Lessee's option, to be exercised in writing within 10 days after Lessor shall have given Lessee written notice of such taking (or in the absence of such notice, within 10 days after the condemning authority shall have taken possession) terminate this Lease as of the date the condemning authority takes such possession. If Lessee does not terminate this Lease in accordance with the foregoing, this Lease shall remain in full force and effect as to the portion of the Premises remaining, except that the Base Rent shall be reduced in proportion to the reduction in utility of the Premises caused by such Condemnation. Condemnation awards and/or payments shall be the property of Lessor, whether such award shall be made as compensation for diminution in value of the leasehold, the value of the part taken, or for severance damages; provided, however, that Lessee shall be entitled to any compensation paid by the condemnor for Lessee's relocation expenses, loss of business goodwill and/or Trade Fixtures, without regard to whether or not this Lease is terminated pursuant to the provisions of this Paragraph. All Alterations and Utility Installations made to the Premises by Lessee, for purposes of Condemnation only, shall be considered the property of the Lessee and Lessee shall be entitled to any and all compensation which is payable therefor. In the event that this Lease is not terminated by reason of the Condemnation, Lessor shall repair any damage to the Premises caused by such Condemnation.

15.Estoppel Certificates.

(a) Each Party (as "Responding Party") shall within 10 days after written notice from the other Party (the "Requesting Party") execute, acknowledge and deliver to the Requesting Party a statement in writing in form similar to the then most current "Estoppel Certificate" form published by the AIRCommercial Real Estate Association, plus such additional information, confirmation and/or statements as may be reasonably requested by the Requesting Party.

(b) If the Responding Party shall fail to execute or deliver the Estoppel Certificate within such 10 day period, the Requesting Party may execute an Estoppel Certificate stating that: (i) the Lease is in full force and effect without modification except as may be represented by the Requesting Party, (ii) there are no uncured defaults in the Requesting Party's performance, and (iii) if Lessor is the Requesting Party, not more than one month's rent has been paid in advance. Prospective purchasers and encumbrancers may rely upon the Requesting Party's Estoppel Certificate, and the Responding Party shall be estopped from denying the truth of the facts contained in said Certificate.

16.Definition of Lessor. The term "Lessor" as used herein shall mean the owner or owners at the time in question of the fee title to the Premises, or, if this is a sublease, of the Lessee's interest in the prior lease. In the event of a transfer of Lessor's title or interest in the Premises or this Lease, Lessor shall deliver to the transferee or assignee (in cash or by credit) any unused Security Deposit held by Lessor. Upon such transfer or assignment and delivery of the Security Deposit, as aforesaid, the prior Lessor shall be relieved of all liability with respect to the obligations and/or covenants under this Lease thereafter to be performed by the Lessor. Subject to the foregoing, the obligations and/or covenants in this Lease to be performed by the Lessor shall be binding only upon the Lessor as hereinabove defined.

17.Severability. The invalidity of any provision of this Lease, as determined by a court of competent jurisdiction, shall in no way affect the validity of any other provision hereof.

18.Days. Unless otherwise specifically indicated to the contrary, the word "days" as used in this Lease shall mean and refer to calendar days.

19.Limitation on Liability. The obligations of Lessor under this Lease shall not constitute personal obligations of Lessor or its partners, members, directors, officers or shareholders, and Lessee shall look to the Project, and to no other assets of Lessor, for the satisfaction of any liability of Lessor with respect to this Lease, and shall not seek recourse against Lessor's partners, members, directors, officers or shareholders, or any of their personal assets for such satisfaction.

20.Time of Essence. Time is of the essence with respect to the performance of all obligations to be performed or observed by the Parties under this Lease.

21.No Prior or Other Agreements; Broker Disclaimer. This Lease contains all agreements between the Parties with respect to any matter mentioned herein, and no other prior or contemporaneous agreement or understanding shall be effective. Lessor and Lessee each represents and warrants to the Brokers that it has made, and is relying solely upon, its own investigation as to the nature, quality, character and financial responsibility of the other Party to this Lease and as to the use, nature, quality and character of the Premises. Brokers have no responsibility with respect thereto or with respect to any default or breach hereof by either Party.

22.Notices.

22.1Notice Requirements. All notices required or permitted by this Lease or applicable law shall be in writing and may be delivered in person (by hand or by courier) or may be sent by regular, certified or registered mail or U.S. Postal Service Express Mail, with postage prepaid, or by facsimile transmission, and shall be deemed sufficiently given if served in a manner specified in this Paragraph 23. The addresses noted adjacent to a Party's signature on this Lease shall be that Party's address for delivery or mailing of notices. Either Party may by written notice to the other specify a different address for notice, except that upon Lessee's taking possession of the Premises, the Premises shall constitute Lessee's address for notice. A copy of all notices to Lessor shall be concurrently transmitted to such party or parties at such addresses as Lessor may from time to time hereafter designate in writing.

22.2Date of Notice. Any notice sent by registered or certified mail, return receipt requested, shall be deemed given on the date of delivery shown on the receipt card, or if no delivery date is shown, the postmark thereon. If sent by regular mail the notice shall be deemed given 72 hours after the same is addressed as required herein and mailed with postage prepaid. Notices delivered by United States Express Mail or overnight courier that guarantees next day delivery shall be deemed given 24 hours after delivery of the same to the Postal Service or courier. Notices transmitted by facsimile transmission or similar means shall be deemed delivered upon telephone confirmation of receipt (confirmation report from fax machine is sufficient), provided a copy is also delivered via delivery or mail. If notice is received on a Saturday, Sunday or legal holiday, it shall be deemed received on the next business day.

23.Waivers.

(a)No waiver by Lessor of the Default or Breach of any term, covenant or condition hereof by Lessee, shall be deemed a waiver of any other term, covenant or condition hereof, or of any subsequent Default or Breach by Lessee of the same or of any other term, covenant or condition hereof. Lessor's consent to, or approval of, any act shall not be deemed to render unnecessary the obtaining of Lessor's consent to, or approval of, any subsequent or similar act by Lessee, or be construed as the basis of an estoppel to enforce the provision or provisions of this Lease requiring such consent.

(b) The acceptance of Rent by Lessor shall not be a waiver of any Default or Breach by Lessee. Any payment by Lessee may be accepted by Lessor on account of moneys or damages due Lessor, notwithstanding any qualifying statements or conditions made by Lessee in connection therewith, which such statements and/or conditions shall be of no force or effect whatsoever unless specifically agreed to in writing by Lessor at or before the time of deposit of such payment.

(c)THE PARTIES AGREE THAT THE TERMS OF THIS LEASE SHALL GOVERN WITH REGARD TO ALL MATTERS RELATED THERETO AND HEREBY WAIVE THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE TO THE EXTENT THAT SUCH STATUTE IS INCONSISTENT WITH THIS LEASE.

24.Disclosures Regarding The Nature of a Real Estate Agency Relationship.

(a) When entering into a discussion with a real estate agent regarding a real estate transaction, a Lessor or Lessee should from the outset understand what type of agency relationship or representation it has with the agent or agents in the transaction. Lessor and Lessee acknowledge being advised by the Brokers in this transaction, as follows:

(i)Lessor's Agent. A Lessor's agent under a listing agreement with the Lessor acts as the agent for the

Lessor only. A Lessor's agent or subagent has the following affirmative obligations: To the Lessor: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Lessor. To the Lessee and the Lessor: (a). Diligent exercise of reasonable skills and care in performance of the agent's duties. (b). A duty of honest and fair dealing and good faith. (c). A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the Parties. An agent is not obligated to reveal to either Party any confidential information obtained from the other Party which does not involve the affirmative duties set forth above.

(ii) Lessee's Agent. An agent can agree to act as agent for the Lessee only. In these situations, the agent is not the Lessor's agent, even if by agreement the agent may receive compensation for services rendered, either in full or in part from the Lessor. An agent acting only for a Lessee has the following affirmative obligations. To the Lessee: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Lessee. To the Lessee and the Lessor: (a). Diligent exercise of reasonable skills and care in performance of the agent's duties. (b). A duty of honest and fair dealing and good faith. (c). A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the Parties. An agent is not obligated to reveal to either Party any confidential information obtained from the other Party which does not involve the affirmative duties set forth above.

(iii) Agent Representing Both Lessor and Lessee. A real estate agent, either acting directly or through one or more associate licenses, can legally be the agent of both the Lessor and the Lessee in a transaction, but only with the knowledge and consent of both the Lessor and the Lessee. In a dual agency situation, the agent has the following affirmative obligations to both the Lessor and the Lessee: (a). A fiduciary duty of utmost care, integrity, honesty and loyalty in the dealings with either Lesser or the Lessee. (b). Other duties to the Lessor and the Lessee as stated above in subparagraphs (i) or (ii). In representing both Lessor and Lessee, the agent may not without the express permission of the respective Party, disclose to the other Party that the Lessor will accept rent in an amount less than that indicated in the listing or that the Lessee is willing to pay a higher rent than that offered. The above duties of the agent in a real estate transaction do not relieve a Lessor or Lessee from the responsibility to protect their own interests. Lessor and Lessee should carefully read all agreements to assure that they adequately express their understanding of the transaction. A real estate agent is a person qualified to advise about real estate. If legal or tax advise is desired, consult a competent professional.

(b)Brokers have no responsibility with respect to any default or breach hereof by either Party. The Parties agree that no lawsuit or other legal proceeding involving any breach of duty, error or omission relating to this Lease may be brought against Broker more than one year after the Start Date and that the liability (including court costs and attorneys' fees), of any Broker with respect to any such lawsuit and/or legal proceeding shall not exceed the fee received by such Broker pursuant to this Lease; provided, however, that the foregoing limitation on each Broker's liability shall not be applicable to any gross negligence or willful misconduct of such Broker.

(c)Lessor and Lessee agree to identify to Brokers as "Confidential" any communication or information given Brokers that is considered by such Party to be confidential.

25.No Right To Holdover. Lessee has no right to retain possession of the Premises or any part thereof beyond the expiration or termination of this Lease. In the event that Lessee holds over, then the Base Rent shall be increased to 150% of the Base Rent applicable immediately preceding the expiration or termination. Nothing contained herein shall be construed as consent by Lessor to any holding over by Lessee.

26.Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity.

27.Covenants and Conditions; Construction of Agreement. All provisions of this Lease to be observed or performed by Lessee are both covenants and conditions. In construing this Lease, all headings and titles are for the convenience of the Parties only and shall not be considered a part of this Lease. Whenever required by the context, the singular shall include the plural and vice versa. This Lease shall not be construed as if prepared by one of the Parties, but rather according to its fair meaning as a whole, as if both Parties had prepared it.

28.Binding Effect; Choice of Law. This Lease shall be binding upon the Parties, their personal representatives, successors and assigns and be governed by the laws of the State in which the Premises are located. Any litigation between the Parties hereto concerning this Lease shall be initiated in the county in which the Premises are located.

29.Subordination; Attornment; Non-Disturbance.

29.1Subordination. This Lease and any Option granted hereby shall be subject and subordinate to any ground lease, mortgage, deed of trust, or other hypothecation or security device (collectively, "Security Device"), now or hereafter placed upon the Premises, to any and all advances made on the security thereof, and to all renewals, modifications, and extensions thereof. Lessee agrees that the holders of any such Security Devices (in this Lease together referred to as "Lender") shall have no liability or obligation to perform any of the obligations of Lessor under this Lease. Any Lender may elect to have this Lease and/or any Option granted hereby superior to the lien of its Security Device by giving written notice thereof to Lessee, whereupon this Lease and such Options shall be deemed prior to such Security Device, notwithstanding the relative dates of the documentation or recordation thereof.

29.2Attornment. In the event that Lessor transfers title to the Premises, or the Premises are acquired by another upon the foreclosure or termination of a Security Devise to which this Lease is subordinated (i) Lessee shall, subject to the non-disturbance provisions of Paragraph 29.3, attorn to such new owner, and upon request, enter into a new lease, containing all of the terms and provisions of this Lease, with such new owner for the remainder of the term hereof, or, at the election of the new owner, this Lease will automatically become a new lease between Lessee and such new owner, and (ii) Lessor shall thereafter be relieved of any further obligations hereunder and such new owner shall assume all of Lessor's obligations, except that such new owner shall not: (a) be liable for any act or omission of any prior lessor or with respect to events occurring prior to acquisition of ownership; (b) be subject to any offsets or defenses which Lessee might have against any prior lessor, (c) be bound by prepayment of more than one month's rent, or (d) be liable for the return of any security deposit paid to any prior lessor which was not paid or credited to such new owner.

29.3Non-Disturbance. With respect to Security Devices entered into by Lessor after the execution of this Lease, Lessee's subordination of this Lease shall be subject to receiving a commercially reasonable non-disturbance agreement (a "Non-Disturbance Agreement") from the Lender which Non-Disturbance Agreement provides that Lessee's possession of the Premises, and this Lease, including any options to extend the term hereof, will not be disturbed so long as Lessee is not in Breach hereof and attorns to the record owner of the Premises. Further, within 60 days after the execution of this Lease, Lessor shall, if requested by Lessee, use its commercially reasonable efforts to obtain a Non-Disturbance Agreement from the holder of any pre-existing Security Device which is secured by the Premises. In the event that Lessor is unable to provide the Non-Disturbance Agreement within said 60 days, then Lessee may, at Lessee's option, directly contact Lender and attempt to negotiate for the execution and delivery of a Non-Disturbance Agreement.

29.4Self-Executing. The agreements contained in this Paragraph 29 shall be effective without the execution of any further documents; provided, however, that, upon written request from Lessor or a Lender in connection with a sale, financing or refinancing of the Premises, Lessee and Lessor shall execute such further writings as may be reasonably required to separately document any subordination, attornment and/or Non-Disturbance Agreement provided for herein.

30.Attorneys' Fees. If any Party or Broker brings an action or proceeding involving the Premises whether founded in tort, contract or equity, or to declare rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys' fees. Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such action or proceeding is pursued to decision or judgment. The term, "Prevailing Party" shall include, without limitation, a Party or Broker who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment, or the abandonment by the other Party or Broker of its claim or defense. The attorneys' fees award shall not be computed in accordance with any court fee schedule, but shall be such as to fully reimburse all attorneys' fees reasonably incurred. In addition, Lessor shall be entitled to attorneys' fees, costs and expenses incurred in the preparation and service of notices of Default and consultations in connection therewith, whether or not a legal action is subsequently commenced in connection with such Default or resulting Breach ($200 is a reasonable minimum per occurrence for such services and consultation).

31.Lessor's Access; Showing Premises; Repairs. Lessor and Lessor's agents shall have the right to enter the Premises at any time, in the case of an emergency, and otherwise at reasonable times after reasonable prior notice for the purpose of showing the same to prospective purchasers, lenders, or tenants, and making such alterations, repairs, improvements or additions to the Premises as Lessor may deem necessary or desirable and the erecting, using and maintaining of utilities, services, pipes and conduits through the Premises and/or other premises as long as there is no material adverse effect on Lessee's use of the Premises. All such activities shall be without abatement of rent or liability to Lessee. Lessor shall be allowed to enter the Premises during the last 180 days of the Term to show the Premises to prospective Tenants.

32.Auctions. Lessee shall not conduct, nor permit to be conducted, any auction upon the Premises without Lessor's prior written consent. Lessor shall not be obligated to exercise any standard of reasonableness in determining whether to permit an auction.

33.Signs. Lessor may place on the Premises ordinary "For Sale" signs at any time and ordinary "For Lease" signs during the last 6 months of the term hereof. Lessor may not place any sign on the exterior of the Building that covers any of the windows of the Premises. Except for ordinary "For Sublease" signs which may be placed only on the Premises, Lessee shall not place any sign upon the Project without Lessor's prior written consent. All signs must comply with all Applicable Requirements. Sixth floor landing signage is atLessee's expense. Lessor to provide building standard lobby signage.

34.Termination; Merger. Unless specifically stated otherwise in writing by Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual termination or cancellation hereof, or a termination hereof by Lessor for Breach by Lessee, shall automatically terminate any sublease or lesser estate in the Premises; provided, however, that Lessor may elect to continue any one or all existing subtenancies. Lessor's failure within 10 days following any such event to elect to the contrary by written notice to the holder of any such lesser interest, shall constitute Lessor's election to have such event constitute the termination of such interest.

35.Consents. Except as otherwise provided herein, wherever in this Lease the consent of a Party is required to an act by or for the other Party, such consent shall not be unreasonably withheld or delayed. Lessor's actual reasonable costs and expenses (including but not limited to architects', attorneys', engineers' and other consultants' fees) incurred in the consideration of, or response to, a request by Lessee for any Lessor consent, including but not limited to consents to an assignment, a subletting or the presence or use of a Hazardous Substance, shall be paid by Lessee upon receipt of an invoice and supporting documentation therefor. Lessor's consent to any act, assignment or subletting shall not constitute an acknowledgment that no Default or Breach by Lessee of this Lease exists, nor shall such consent be deemed a waiver of any then existing Default or Breach, except as may be otherwise specifically stated in writing by Lessor at the time of such consent. The failure to specify herein any particular condition to Lessor's consent shall not preclude the imposition by Lessor at the time of consent of such further or other conditions as are then reasonable with reference to the particular matter for which consent is being given. In the event that either Party disagrees with any determination made by the other hereunder and reasonably requests the reasons for such determination, the determining party shall furnish its reasons in writing and in reasonable detail within 10 business days following such request.

36.Guarantor.

36.1Execution. The Guarantors, if any, shall each execute a guaranty in the form most recently published by the AIR Commercial Real Estate Association.

36.2 Default. It shall constitute a Default of the Lessee if any Guarantor fails or refuses, upon request to provide: (a) evidence of the execution of the guaranty, including the authority of the party signing on Guarantor's behalf to obligate Guarantor, and in the case of a corporate Guarantor, a certified copy of a resolution of its board of directors authorizing the making of such guaranty, (b) current financial statements, (c) an Estoppel Certificate, or (d) written confirmation that the guaranty is still in effect.

37.Quiet Possession. Subject to payment by Lessee of the Rent and performance of all of the covenants, conditions and provisions on Lessee's part to be observed and performed under this Lease, Lessee shall have quiet possession and quiet enjoyment of the Premises during the term hereof.

38.Options. If Lessee is granted an Option, as defined below, then the following provisions shall apply.

38.1Definition. "Option" shall mean: (a) the right to extend or reduce the term of or renew this Lease or to extend or reduce the term of or renew any lease that Lessee has on other property of Lessor; (b) the right of first refusal or first offer to lease either the Premises or other property of Lessor; (c) the right to purchase, the right of first offer to purchase or the right of first refusal to purchase the Premises or other property of Lessor.

38.2Options Personal To Original Lessee.Except for Affiliates and Permitted Assignees, any Option granted to Lessee in this Lease is personal to the original Lessee, and cannot be assigned or exercised by anyone other than said original Lessee and only while the original Lessee is in full possession of the Premises and, if requested by Lessor, with Lessee certifying that Lessee has no intention of thereafter assigning or subletting.

38.3Multiple Options. In the event that Lessee has any multiple Options to extend or renew this Lease, a later Option cannot be exercised unless the prior Options have been validly exercised.

38.4Effect of Default on Options.

(a) Lessee shall have no right to exercise an Option: (i) during the period commencing with the giving of any notice of Default and continuing until said Default is cured, (ii) during the period of time any Rent is unpaid (without regard to whether notice thereof is given Lessee), (iii) during the time Lessee is in Breach of this Lease, or (iv) in the event that Lessee has been given 3 or more notices of separate Default, whether or not the Defaults are cured, during the 12 month period immediately preceding the exercise of the Option.

(b) The period of time within which an Option may be exercised shall not be extended or enlarged by reason of Lessee's inability to exercise an Option because of the provisions of Paragraph 38.4(a).

(c) An Option shall terminate and be of no further force or effect, notwithstanding Lessee's due and timely exercise of the Option, if, after such exercise and prior to the commencement of the extended term or completion of the purchase, (i) Lessee fails to pay Rent for a period of 30 days after such Rent becomes due (without any necessity of Lessor to give notice thereof), or (ii) if Lessee commits a Breach of this Lease.

39. Security Measures. Lessee hereby acknowledges that the Rent payable to Lessor hereunder does not include the cost of guard service or other security measures, and that Lessor shall have no obligation whatsoever to provide same. Lessee assumes all responsibility for the protection of the Premises, Lessee, its agents and invitees and their property from the acts of third parties. In the event, however, that Lessor should elect to provide security services, then the cost thereof shall be an Operating Expense.

40.Reservations.

(a) Lessor reserves the right: (i) to grant, without the consent or joinder of Lessee, such easements, rights and dedications that Lessor deems necessary, (ii) to cause the recordation of parcel maps and restrictions, (iii) to create and/or install new utility raceways, so long as such easements, rights, dedications, maps, restrictions, and utility raceways do not unreasonably interfere with the use of the Premises by Lessee. Lessor may also: change the name, address or title of the Building or Project upon at least 90 days prior written notice; provide and install, at Lessee's expense, Building standard graphics on the door of the Premises and such portions of the Common Areas as Lessor shall reasonably deem appropriate; grant to any lessee the exclusive right to conduct any business as long as such exclusive right does not conflict with any rights expressly given herein; and to place such signs, notices or displays as Lessor reasonably deems necessary or advisable upon the roof, exterior of the Building or the Project or on signs in the Common Areas. Lessee agrees to sign any documents reasonably requested by Lessor to effectuate such rights. The obstruction of Lessee's view, air, or light by any structure erected in the vicinity of the Building, whether by Lessor or third parties, shall in no way affect this Lease or impose any liability upon Lessor.

(b) Lessee shall not: (i) use a representation (photographic or otherwise) of the Building or Project or their name(s) in connection with Lessee's business; or (ii) suffer or permit anyone, except in emergency, to go upon the roof of the Building.

41.Performance Under Protest. If at any time a dispute shall arise as to any amount or sum of money to be paid by one Party to the other under the provisions hereof, the Party against whom the obligation to pay the money is asserted shall have the right to make payment "under protest" and such payment shall not be regarded as a voluntary payment and there shall survive the right on the part of said Party to institute suit for recovery of such sum. If it shall be adjudged that there was no legal obligation on the part of said Party to pay such sum or

any part thereof, said Party shall be entitled to recover such sum or so much thereof as it was not legally required to pay. A Party who does not initiate suit for the recovery of sums paid "under protest" within 6 months shall be deemed to have waived its right to protest such payment.

42.Authority; Multiple Parties; Execution

(a) If either Party hereto is a corporation, trust, limited liability company, partnership, or similar entity, each individual executing this Lease on behalf of such entity represents and warrants that he or she is duly authorized to execute and deliver this Lease on its behalf. Each Party shall, within 30 days after request, deliver to the other Party satisfactory evidence of such authority.

(b) If this Lease is executed by more than one person or entity as "Lessee", each such person or entity shall be jointly and severally liable hereunder. It is agreed that any one of the named Lessees shall be empowered to execute any amendment to this Lease, or other document ancillary thereto and bind all of the named Lessees, and Lessor may rely on the same as if all of the named Lessees had executed such document.

(c) This Lease may be executed by the Parties in counterparts, each of which shall be deemed an original and all of which together

shall constitute one and the same instrument.

43.Conflict. Any conflict between the printed provisions of this Lease and the typewritten or handwritten provisions shall be controlled by the typewritten or handwritten provisions.

44.Offer. Preparation of this Lease by either party or their agent and submission of same to the other Party shall not be deemed an offer to lease to the other Party. This Lease is not intended to be binding until executed and delivered by all Parties hereto.

45.Amendments. This Lease may be modified only in writing, signed by the Parties in interest at the time of the modification. As long as they do not materially change Lessee's obligations hereunder, Lessee agrees to make such reasonable nonmonetary modifications to this Lease as may be reasonably required by a Lender in connection with the obtaining of normal financing or refinancing of the Premises.

46.Waiver of Jury Trial. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT OF THIS AGREEMENT.

47.Arbitration of Disputes. An Addendum requiring the Arbitration of all disputes between the Parties and/or Brokers arising out of this Lease

¬is þis not attached to this Lease.

48.Americans with Disabilities Act. Since compliance with the Americans with Disabilities Act (ADA) is dependent upon Lessee's specific use of the Premises, Lessor makes no warranty or representation as to whether or not the Premises comply with ADA or any similar legislation. In the event that Lessee's use of the Premises requires modifications or additions to the Premises in order to be in ADA compliance, Lessee agrees to make any such necessary modifications and/or additions at Lessee's expense.

LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES.

ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES. THE PARTIES ARE URGED TO:

1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.

2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING AND SIZE OF THE PREMISES, THE STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, COMPLIANCE WITH THE AMERICANS WITH DISABILITIES ACT AND THE SUITABILITY OF THE PREMISES FOR LESSEE'S INTENDED USE.

WARNING: IF THE PREMISES ARE LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PREMISES ARE LOCATED.

The parties hereto have executed this Lease at the place and on the dates specified above their respective signatures.

Executed at: San Francisco, California

On:

Executed at:

On:

By LESSOR:By LESSEE:

Fjeld Family LPCovisint, Inc.

By:/s/ Robert N. Field

Name Printed: Robert N. FieldTitle: President, JNA Fjeld Corporation GeneralPartner

By:

Name Printed: Title:

Address:

By: / s/ Aaron Aubrecht

Name Printed: /s/ Aaron Aubrecht

Title: SVP

By:

Name Printed: Title:

Address:

Telephone:( ) Facsimile:()

Federal ID No.

Telephone:( ) Facsimile:( ) Federal ID No.

LESSOR'S BROKER:LESSEE'S BROKER:

Colton Commercial & Partners, Inc.

Savills Studley

Attn: Bradley L. Colton

Address: 565 Commercial Street, 4th FloorSan Francisco, CA

Attn: Luke Raimondo

Address: 777 South Figueroa StreetSan Francisco, CA 90017

Telephone:(415) 834-1600

Facsimile:(415) 834-1601

Telephone:()

Facsimile:()

Broker/Agent DRE License #: 00805116Broker/Agent DRE License #:

NOTICE: These forms are often modified to meet changing requirements of law and industry needs. Always write or call to make sure you are utilizing the most current form: AIR Commercial Real Estate Association, 800 W 6th Street, Suite 800, Los Angeles, CA 90017. Telephone No. (213) 687-8777. Fax No.: (213) 687-8616.

©Copyright 1999-By AIR Commercial Real Estate Association.

All rights reserved.

No part of these works may be reproduced in any form without permission in writing.

ITEL: (888) 393-6655

Exhibit A - omitted

Exhibit B

121 Second Street, Sixth Floor, San Francisco, California

Base Rent Schedule

		Yearly / PSF rents	Monthly Base Rent
Year 1:	April 1, 2015 - March 31, 2016	$56.50	$19,073.46
Year 2:	April 1, 2016 - March 31, 2017	$58.20	$19,645.66
Year 3:	April 1, 2017 - March 31, 2018	$59.94	$20,235.03
Year 4:	April 1, 2018 - March 31, 2019	$61.74	$20,842.08
Year 5:	April 1, 2019 - March 31, 2020	$63.59	$21,467.35

The above rental rates are net of janitorial and all utility expenses.

Exhibit C

121 Second Street, Sixth Floor, San Francisco, California

Improvements

ALLOWANCE.

Lessor shall provide Lessee with an improvement allowance of $5.00 per rentable square foot ($20,255.00). There will be no oversight fee charged by Lessor for Lessee’s construction. All of Lessee’s improvements will require prior written consent, which shall not be unreasonably withheld or delayed.

DISBURSEMENT OF THE LESSEE IMPROVEMENT ALLOWANCE.

Lessor’s Obligation. There shall be no management or supervisory fee due in connection with the Lessee Improvement Work.

Procedure. Lessor shall not be obligated to make any payment to Lessee unless and until the following conditions are met: (i) Contractor provides invoices to Lessee, with a copy to Lessor, describing the work performed during the applicable week, (ii) Contractor certifies in writing that (a) the work described in such invoices is complete, (b) Contractor is not aware of any basis for the filing of any mechanic’s liens, stop notices or other liens, and (c) all due and payable bills have been paid to date, and (iii) Contractor provides Lessee, with a copy to Lessor, with lien waivers conforming to the requirements of California Civil Code Section 3262 and other applicable laws covering the period thirty (30) to sixty (60) prior to the request for payment. If Lessee has complied with all of the foregoing to Lessor’s satisfaction, Lessor shall pay to Lessee the Lessee Improvement Allowance within thirty (30) days of Lessee’s submission.

Use of Lessee Improvement Allowance. Lessee shall be responsible for obtaining any building permits or government approvals necessary for the Lessee Improvement Work, and such costs shall not be reimbursed to Lessee as part of the Lessee Improvement Allowance. The Lessee Improvement Allowance shall be applied to the actual “hard” costs of the construction of the Lessee Improvement Work, and Lessee shall not receive any credit or payment of funds if the actual cost of the Lessee Improvement Work is less than the Lessee Improvement Allowance. The Lessee Improvement Allowance shall not be used for Lessee’s furniture, fixtures, equipment or other costs not specifically permitted by this Agreement. Lessee shall be solely responsible for any costs for the Lessee Improvement Work that exceed the Lessee Improvement Allowance.

Lessee Improvement Allowance Items. The Lessee Improvement Allowance shall be disbursed by Lessor for only the following items and costs:

“Hard” costs of actual constructions of the Lessee Improvement Work, including testing and inspection costs, cost of materials, trash removal costs, contractor’s fees and general conditions;

Sales and use taxes on construction materials.

The Lessee Improvement Allowance shall not be used for any other costs without the written approval of Lessor, which may be withheld in Lessor’s sole discretion.

Exhibit - D - omitted

Exhibit E

OPTION(S) TO EXTEND

STANDARD LEASE ADDENDUM

Dated February 19, 2015

By and Between (Lessor) Fjeld Family LP

By and Between (Lessee) Covisint, Inc.

Address of Premises: 121 Second Street, 6th Floor

San Francisco, CA 94105

A.OPTION(S) TO EXTEND:

Lessor hereby grants to Lessee the option to extend the term of this Lease for one (1) additional thirty-six (36) month period(s) commencing when the prior term expires upon each and all of the following terms and conditions:

(i) In order to exercise an option to extend, Lessee must give written notice of such election to Lessor and Lessor must receive the same at least six, but not more than nine months prior to the date that the option period would commence, time being of the essence. If proper notification of the exercise of an option is not given and/or received, such option shall automatically expire. Options (if there are more than one) may only be exercised consecutively.

(ii) The provisions of paragraph 39, including those relating to Lessee's Default set forth in paragraph 39.4 of this Lease, are conditions of this Option.

(iii) Except for the provisions of this Lease granting an option or options to extend the term, all of the terms and conditions of this Lease except where specifically modified by this option shall apply.

(iv) This Option is personal to the original Lessee, and cannot be assigned or exercised by anyone other than said original Lessee and only while the original Lessee is in full possession of the Premises and without the intention of thereafter assigning or subletting.

(v) The monthly rent for each month of the option period shall be calculated as follows, using the method(s) indicated below: (Check Method(s) to be Used and Fill in Appropriately)

¬ I.Cost of Living Adjustment(s) (COLA)

a.On (Fill in COLA Dates):

the Base Rent shall be adjusted by the change, if any, from the Base Month specified below, in the Consumer Price Index of the Bureau of Labor Statistics of the U.S. Department of Labor for (select one): ¬CPI W (Urban Wage Earners and Clerical Workers) or ¬CPI U (All Urban Consumers), for (Fill in Urban Area):

All Items (1982-1984 = 100), herein referred to as "CPI".

b. The monthly rent payable in accordance with paragraph A.I.a. of this Addendum shall be calculated as follows: the Base Rent set forth in paragraph 1.5 of the attached Lease, shall be multiplied by a fraction the numerator of which shall be the CPI of the calendar month 2 months prior to the month(s) specified in paragraph A.I.a. above during which the adjustment is to take effect, and the denominator of which shall be the CPI of the calendar month which is 2 months prior to (select one): ¬the first month of the term of this Lease as set forth in paragraph 1.3 ("Base Month") or ¬(Fill in Other "Base Month"):

The sum so calculated shall constitute the new monthly rent hereunder, but in no event, shall any such new monthly rent be less than the rent payable for the month immediately preceding the rent adjustment.

c. In the event the compilation and/or publication of the CPI shall be transferred to any other governmental department or bureau or agency or shall be discontinued, then the index most nearly the same as the CPI shall be used to make such calculation. In the event that the Parties cannot agree on such alternative index, then the matter shall be submitted for decision to the American Arbitration Association in accordance with the then rules of said Association and the decision of the arbitrators shall be binding upon the parties. The cost of said Arbitration shall be paid equally by the Parties.

þ II.Market Rental Value Adjustment(s) (MRV)

The Base Rent shall be adjusted to the "Market Rental Value" of the property as follows:

100% of the then Fair Market Value for comparable office space in the South Financial geographic district. Excluded from this option are any free rent concessions, Landlord improvements, and real estate commissions. Rent shall not be less than the last month of the preceding term. In no event will the rent for the first year of the option period be less than the fifth (5th) year's rent on a per square foot basis.

1) Sixmonths prior to each Market Rental Value Adjustment Date described above, the Parties shall attempt to agree upon what the new MRV will be on the adjustment date. If agreement cannot be reached, within thirty days, then:

(a) Lessor and Lessee shall immediately appoint a mutually acceptable appraiser or broker to establish the new MRV within the next 30 days. Any associated costs will be split equally between the Parties, or

(b) Both Lessor and Lessee shall each immediately make a reasonable determination of the MRV and submit such determination, in writing, to arbitration in accordance with the following provisions:

(i) Within 15 days thereafter, Lessor and Lessee shall each select an ¬appraiser or þbroker ("Consultant" - check one) of their choice to act as an arbitrator. The two arbitrators so appointed shall immediately select a third mutually acceptable Consultant to act as a third arbitrator.

(ii) The 3 arbitrators shall within 30 days of the appointment of the third arbitrator reach a decision as to what the actual MRV for the Premises is, and whether Lessor's or Lessee's submitted MRV is the closest thereto. The decision of a majority of the arbitrators shall be binding on the Parties. The submitted MRV which is determined to be the closest to the actual MRV shall thereafter be used by the Parties.

(iii) If either of the Parties fails to appoint an arbitrator within the specified 15 days, the arbitrator timely appointed by one of them shall reach a decision on his or her own, and said decision shall be binding on the Parties.

(iv) The entire cost of such arbitration shall be paid by the party whose submitted MRV is not selected, ie. the one that is NOT the closest to the actual MRV.

2) Notwithstanding the foregoing, the new MRV shall not be less than the rent payable for the month immediately preceding the rent adjustment.

b.Upon the establishment of each New Market Rental Value:

1) the new MRV will become the new "Base Rent" for the purpose of calculating any further Adjustments, and

2) the first month of each Market Rental Value term shall become the new "Base Month" for the purpose of calculating any further

Adjustments.

¬ III. Fixed Rental Adjustment(s) (FRA)

The Base Rent shall be increased to the following amounts on the dates set forth below:

On (Fill in FRA Adjustment Date(s)):The New Base Rent shall be:

B. NOTICE:

Unless specified otherwise herein, notice of any rental adjustments, other than Fixed Rental Adjustments, shall be made as specified in paragraph 23 of the Lease.

NOTICE: These forms are often modified to meet changing requirements of law and industry needs. Always write or call to make sure you are utilizing the most current form: AIR Commercial Real Estate Association, 800 W 6th Street, Suite 800, Los Angeles, CA 90017. Telephone No.: (213) 687-8777. Fax No.: (213) 687-8616

EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No. 333-192931 on Form S-8 of our report dated May 26, 2015, relating to the combined and consolidated financial statements of Covisint Corporation and subsidiaries (which report expresses an unqualified opinion on the financial statements and includes an explanatory paragraph referring to the financial statements prior to January 1, 2013 being prepared from the records of Compuware Corporation) appearing in this Annual Report on Form 10-K of Covisint Corporation for the year ended March 31, 2015.

/s/ DELOITTE & TOUCHE LLP

Detroit, Michigan

May 26, 2015

EX-31.1

EXHIBIT 31.1

Certification of Chief Executive Officer

Pursuant to 15 U.S.C. Section 10A, as Adopted Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Samuel M. Inman III, certify that:

1.    I have reviewed this annual report on Form 10-K of Covisint Corporation;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

    (a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

    (b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

    (c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

    (d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

    (a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

    (b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

May 26, 2015

By:    /s/ SAMUEL M. INMAN, III

Samuel M. Inman, III

Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

Pursuant to 15 U.S.C. Section 10A, as Adopted Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Enrico Digirolamo, certify that:

1.    I have reviewed this annual report on Form 10-K of Covisint Corporation;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)    designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

    (d)    disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)    all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)    any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

May 26, 2015

By:    /s/ ENRICO DIGIROLAMO

Enrico Digirolamo

Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification of Chief Executive Officer and Chief Financial Officer

Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report of Compuware Corporation (the “Company”) on Form 10-K for the fiscal year ending March 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Samuel M. Inman, III, Chief Executive Officer of the Company, and Enrico Digirolamo, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company

May 26, 2015

By:    /s/ SAMUEL M. INMAN, III

Samuel M. Inman, III

Chief Executive Officer

By:    /s/ ENRICO DIGIROLAMO

Enrico Digirolamo

Chief Financial Officer

XML

BENEFIT PLANS (Details) (USD $)	0 Months Ended						1 Months Ended	12 Months Ended			9 Months Ended	0 Months Ended
	Dec. 01, 2014	Jul. 01, 2014	Apr. 08, 2014	Apr. 07, 2014	Dec. 31, 2013	Apr. 01, 2012	Nov. 30, 2014	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2014	Nov. 17, 2014 employee	Aug. 31, 2009
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Employer matching contribution, percent of match			33.00%			33.00%
Employer matching contribution, percent of employees' gross pay			2.00%			2.00%
Contribution vesting rights, percentage			100.00%			100.00%
Contribution vesting period			1 year			3 years
401(k) cost recognized								$ 500,000	$ 700,000	$ 500,000
Number of Options
Outstanding, beginning balance (in shares)								4,458,000			4,458,000
Granted (in shares)	120,000	750,000		140,000			685,000	1,695,000
Exercised (in shares)								(1,543,000)
Forfeited and Expired (in shares)								(304,000)
Outstanding, ending balance (in shares)								4,306,000	4,458,000
Number of Options vested and expected to vest, net of estimated forfeitures (in shares)								4,112,000
Number of Options exercisable (in shares)								1,718,000
Weighted Average Exercise Price
Outstanding, beginning balance (in dollars per share)								$ 3.48			3.48
Granted (in dollars per share)	$ 1.08	$ 2.25		$ 3.58			$ 1.30	$ 4.04
Exercised (in dollars per share)								$ 1.86
Forfeited and Expired (in dollars per share)								$ 8.41
Outstanding, ending balance (in dollars per share)								$ 3.93	$ 3.48
Options vested and expected to vest, net of estimated forfeitures, Weighted Average Exercise Price (in dollars per share)								$ 3.91
Options exercisable, Weighted Average Exercise Price (in dollars per share)								$ 3.47
Outstanding options, Weighted Average Remaining Contractual Term in Years								5 years 5 months 16 days
Outstanding vested and expected to vest, net of estimated forfeitures, Weighted Average Remaining Contractual Term in Years								5 years 3 months 18 days
Options exercisable, Weighted Average Remaining Contractual Term in Years								2 years 8 months 9 days
Options outstanding, Aggregate Intrinsic Value								458,000
Options vested and expected to vest, net of estimated forfeitures, Aggregate Intrinsic Value								458,000
Options exercisable, Aggregate Intrinsic Value								296,000
Shares
Common shares reserved for issuance (in shares)								7,500,000					4,500,000
Increase in common shares reserved for issuance (in shares)					3,000,000
Share-based compensation expense								6,232,000	17,475,000	1,629,000
2009 Covisint LTIP
Number of Options
Exercised (in shares)								(1,540,000)	(130,000)
Outstanding, ending balance (in shares)								4,300,000
Shares
Unrecognized compensation cost, weighted-average period								2 years 4 months 24 days
Unrecognized compensation cost
Total								5,052,000
2016								2,569,000
2017								1,517,000
2018								800,000
2019								166,000
Cost of revenue
Shares
Share-based compensation expense								613,000	829,000	6,000
Research and development
Shares
Share-based compensation expense								175,000	722,000	1,000
Selling and marketing
Shares
Share-based compensation expense								1,570,000	5,594,000	360,000
Administrative and general
Shares
Share-based compensation expense								3,874,000	10,330,000	1,262,000
IPO related expenses
Shares
Share-based compensation expense									12,500,000
Related to other than IPO
Shares
Share-based compensation expense									7,900,000
Stock options
Weighted Average Exercise Price
Expiration period											10 years
Stock options | Vesting schedule two, fifth anniversary
Weighted Average Exercise Price
Award vesting rights, percentage								25.00%
Stock options | Vesting schedule four, second anniversary
Weighted Average Exercise Price
Award vesting rights, percentage								30.00%
Stock options | IPO
Weighted Average Exercise Price
Award vesting rights, percentage								25.00%
Stock options | First anniversary
Weighted Average Exercise Price
Award vesting rights, percentage								25.00%
Stock options | Second anniversary
Weighted Average Exercise Price
Award vesting rights, percentage								25.00%
Stock options | Third anniversary
Weighted Average Exercise Price
Award vesting rights, percentage								25.00%
Stock options | Upon change of control or termination within 12 months of IPO
Weighted Average Exercise Price
Award vesting rights, percentage								25.00%
Stock options | Upon change of control or termination after 12 months of IPO
Weighted Average Exercise Price
Award vesting rights, percentage								100.00%
Restricted Stock Units (RSUs)
Shares
Non-vested RSU outstanding, beginning balance (in shares)								0			0
Granted (in shares)		182,193						338,000				155,795
Released (in shares)								0
Forfeited (in shares)								0
Dividend equivalents, net (in shares)								0
Non-vested RSU outstanding, ending balance (in shares)								338,000
Granted, Weighted Average Grant-Date Fair Value (in dollars per share)		$ 4.86						$ 3.91				$ 2.79
Non-vested RSU outstanding, Aggregate Intrinsic Value								$ 686,000
Unrecognized compensation cost
Share-based Compensation Arrangement by Share-based Payment Award, Number of Employees Granted Options												5
Restricted Stock Units (RSUs) | 2009 Covisint LTIP
Shares
Non-vested RSU outstanding, ending balance (in shares)								300,000
Restricted Stock Units (RSUs) | First anniversary
Weighted Average Exercise Price
Award vesting rights, percentage											33.30%
Performance-based Stock Awards
Shares
Share-based compensation reversed due to cancellations									(2,900,000)
Compuware
Number of Options
Outstanding, beginning balance (in shares)								472,000			472,000
Granted (in shares)								0
Exercised (in shares)								(301,000)
Forfeited and Expired (in shares)								(171,000)
Outstanding, ending balance (in shares)								0
Number of Options vested and expected to vest, net of estimated forfeitures (in shares)								0
Number of Options exercisable (in shares)								0
Weighted Average Exercise Price
Outstanding, beginning balance (in dollars per share)								$ 9.23			9.23
Exercised (in dollars per share)								$ 8.28
Outstanding, ending balance (in dollars per share)								$ 0.00
Options vested and expected to vest, net of estimated forfeitures, Weighted Average Exercise Price (in dollars per share)								$ 0.00
Options exercisable, Weighted Average Exercise Price (in dollars per share)								$ 0.00
Outstanding options, Weighted Average Remaining Contractual Term in Years
Outstanding vested and expected to vest, net of estimated forfeitures, Weighted Average Remaining Contractual Term in Years
Options exercisable, Weighted Average Remaining Contractual Term in Years
Exercised, Aggregate Intrinsic Value								627,000
Options outstanding, Aggregate Intrinsic Value
Options vested and expected to vest, net of estimated forfeitures, Aggregate Intrinsic Value
Options exercisable, Aggregate Intrinsic Value
Compuware | Stock options
Weighted Average Exercise Price
Expiration period								30 days			10 years
Compuware | Stock options | Vesting schedule one, third anniversary
Weighted Average Exercise Price
Award vesting rights, percentage								30.00%			50.00%
Compuware | Stock options | Vesting schedule one, fourth anniversary
Weighted Average Exercise Price
Award vesting rights, percentage											25.00%
Compuware | Stock options | Vesting schedule two
Weighted Average Exercise Price
Award vesting rights, percentage											25.00%
Award vesting period											4 years
Compuware | Stock options | Vesting schedule three, first anniversary
Weighted Average Exercise Price
Award vesting rights, percentage											30.00%
Compuware | Stock options | Vesting schedule three, third anniversary
Weighted Average Exercise Price
Award vesting rights, percentage											40.00%
Compuware | Restricted Stock Units (RSUs)
Weighted Average Exercise Price
Award vesting rights, percentage								25.00%
Award vesting period								4 years
Shares
Non-vested RSU outstanding, beginning balance (in shares)								182,000			182,000
Granted (in shares)								0
Released (in shares)								(156,000)
Forfeited (in shares)								(26,000)
Dividend equivalents, net (in shares)								0
Non-vested RSU outstanding, ending balance (in shares)								0
Granted, Weighted Average Grant-Date Fair Value (in dollars per share)
Dividend equivalents, net, Weighted Average Grant-Date Fair Value (in dollars per share)
Released, Aggregate Intrinsic Value								$ 1,514,000

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LOSS PER COMMON SHARE (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended																12 Months Ended
	Mar. 31, 2015		Dec. 31, 2014		Sep. 30, 2014		Jun. 30, 2014		Mar. 31, 2014		Dec. 31, 2013		Sep. 30, 2013		Jun. 30, 2013		Mar. 31, 2015		Mar. 31, 2014		Mar. 31, 2013
Basic loss per share:
Numerator: Net income (loss) (in dollars)	$ (12,181)		$ (6,961)		$ (7,304)		$ (12,116)		$ (9,928)		$ (8,314)		$ (12,746)		$ (4,670)		$ (38,562)		$ (35,658)		$ (5,648)
Weighted-average common shares outstanding																	38,217		33,774		30,003
Basic income (loss) per share (in dollars per share)	$ (0.32)	[1]	$ (0.18)	[1]	$ (0.19)	[1]	$ (0.32)	[1]	$ (0.27)	[1]	$ (0.22)	[1]	$ (0.42)	[1]	$ (0.16)	[1]	$ (1.01)	[1]	$ (1.06)	[1]	$ (0.19)
Diluted loss per share:
Numerator: Net income (loss) (in dollars)	$ (12,181)		$ (6,961)		$ (7,304)		$ (12,116)		$ (9,928)		$ (8,314)		$ (12,746)		$ (4,670)		$ (38,562)		$ (35,658)		$ (5,648)
Denominator:
Weighted-average common shares outstanding																	38,217		33,774		30,003
Dilutive effect of stock awards																	0		0		0
Total shares																	38,217		33,774		30,003
Diluted income (loss) per share (in dollars per share)	$ (0.32)	[1]	$ (0.18)	[1]	$ (0.19)	[1]	$ (0.32)	[1]	$ (0.27)	[1]	$ (0.22)	[1]	$ (0.42)	[1]	$ (0.16)	[1]	$ (1.01)	[1]	$ (1.06)	[1]	$ (0.19)
Antidilutive shares																	4,774		4,350		3,630

[1] Full year basic and diluted loss per share may not agree to the sum of the four quarters because each quarter is a separate calculation.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - IPO (Details) (USD $) In Millions, except Share data, unless otherwise specified	1 Months Ended
	Sep. 30, 2013
Class of Stock [Line Items]
Initial public offering proceeds receivable	$ 68.4
Underwriting discounts and commissions	$ 5.2
Class A common stock
Class of Stock [Line Items]
IPO proceeds (in shares)	7,400,000
Shares issued, price per share (in dollars per share)	$ 10.00

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INCOME TAXES - Cash Paid for Income Taxes (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Income Tax Disclosure [Abstract]
Income taxes paid	$ 28	$ 0

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GOODWILL, CAPITALIZED SOFTWARE AND OTHER INTANGIBLE ASSETS

12 Months Ended

Mar. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL, CAPITALIZED SOFTWARE AND OTHER INTANGIBLE ASSETS

GOODWILL, CAPITALIZED SOFTWARE AND OTHER INTANGIBLE ASSETS

The components of the Company’s intangible assets are as follows (in thousands):

	MARCH 31, 2015
	Gross  Carrying Amount		Accumulated Amortization			Net Carrying Amount
Indefinite-lived intangible assets:
Trademarks(1)		$358					$358
Amortizing intangible assets:
Capitalized software(2)		$34,340		($24,052	)		$10,288
Customer relationship agreements(3)	2,585		(2,585		)	—
Trademarks(4)	80		(80		)	—
Total amortizing intangible assets		$37,005		($26,717	)		$10,288

	MARCH 31, 2014
	Gross  Carrying Amount		Accumulated Amortization			Net Carrying Amount
Indefinite-lived intangible assets:
Trademarks(1)		$358					$358
Amortizing intangible assets:
Capitalized software(2)		$48,989		($27,067	)		$21,922
Customer relationship agreements(3)	4,715		(3,955		)	760
Trademarks(4)	340		(340		)	—
Total amortizing intangible assets		$54,044		($31,362	)		$22,682

_____________________________________________________

(1) The Covisint trademarks were acquired by Compuware in an acquisition in March 2004. These trademarks are deemed to have an indefinite life and therefore are not being amortized.

(2) Amortization of capitalized software is included in “cost of revenue” in the financial statements. Capitalized software is generally amortized over five years.

(3) Amortization of customer relationship agreements is included in “sales and marketing” in the financial statements. Customer relationship agreements were acquired as part of acquisitions and are fully amortized as of March 31, 2015.

(4) Amortization of trademarks is included in “general and administrative” in the financial statements. Trademarks were acquired as part of acquisitions and are fully amortized as of March 31, 2015.

Amortization of intangible assets was $7.2 million, $7.1 million and $5.4 million for the years ended March 31, 2015, 2014, and 2013, respectively. Estimated future amortization, based on recorded intangible assets at March 31, 2015, is expected to be as follows (in thousands):

	AT MARCH 31, 2015 FOR THE YEAR ENDING MARCH 31,
	2016		2017		2018		2019		2020
Capitalized software		$3,395		$3,014		$2,316		$966		$597
Total		$3,395		$3,014		$2,316		$966		$597

Impairment Evaluation

The Company evaluated its goodwill and other indefinite-lived intangible assets for impairments as of March 31, 2015 and 2014. For the year ended March 31, 2015 the company evaluated its capitalized software and other amortized intangibles for impairment and recorded an impairment of $8.3 million related to capitalized software related to healthcare specific projects and $0.5 million of impairment expense related to healthcare customer relationships. Specific to capitalized software and the customer relationships, the Company first evaluated undiscounted cash flows associated with the asset groups, and concluded that the carrying value of the assets was not recoverable from projected future undiscounted cash flows. In measuring the impairment, the Company performed a discounted cash flow analysis, and determined that the fair value of these assets was zero, and, therefore, the assets were fully impaired as of March 31, 2015. The fair value measurements were prepared using level 3 fair value inputs. There was no capitalized software or other amortized intangible asset impairment recorded during fiscal years 2014 or 2013. There was no goodwill or other indefinite-lived intangible impairments recorded during any year presented within the financial statements.

.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Significant Customers (Details) (Customer Concentration Risk)	12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013
Sales Revenue, Net | Major Customer One
Concentration Risk [Line Items]
Concentration risk, percentage (less than in 2013 for Major Customer Two revenue and less than in 2015 for Major Customer Two accounts receivable)	30.00%	26.00%	33.00%
Sales Revenue, Net | Major Customer Two
Concentration Risk [Line Items]
Concentration risk, percentage (less than in 2013 for Major Customer Two revenue and less than in 2015 for Major Customer Two accounts receivable)	6.00%	12.00%
Accounts Receivable | Major Customer One
Concentration Risk [Line Items]
Concentration risk, percentage (less than in 2013 for Major Customer Two revenue and less than in 2015 for Major Customer Two accounts receivable)	21.00%	18.00%
Accounts Receivable | Major Customer Two
Concentration Risk [Line Items]
Concentration risk, percentage (less than in 2013 for Major Customer Two revenue and less than in 2015 for Major Customer Two accounts receivable)	10.00%

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Stock-Based Compensation (Details) (USD $)	0 Months Ended			1 Months Ended	12 Months Ended					1 Months Ended
	Dec. 01, 2014	Jul. 01, 2014	Apr. 07, 2014	Nov. 30, 2014	Mar. 31, 2015	Mar. 31, 2014		Mar. 31, 2013		Jan. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	120,000	750,000	140,000	685,000	1,695,000
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Expected volatility					46.12%	49.99%		53.64%
Risk-free interest rate					2.05%	1.85%		1.02%
Expected lives at date of grant (in years)					6 years 1 month 21 days	6 years 0 months 3 days		5 years 7 months 6 days
Weighted average fair value of the options granted					$ 1.89	$ 5.86		$ 4.47
Compuware
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)					0
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Expected volatility						39.11%		40.97%
Risk-free interest rate						1.67%		0.96%
Expected lives at date of grant (in years)						6 years 2 months 12 days		6 years 3 months 18 days
Weighted average fair value of the options granted						$ 2.63		$ 4.08
Dividend Yield Assumption						4.46%	[1]	0.00%	[1]
Intended quarterly dividend (in dollars per share)										$ 0.50

[1] In January 2013, the Compuware Board of Directors announced its intention to begin paying cash dividends totaling $0.50 per share annually, to be paid quarterly beginning in the first quarter of fiscal 2014. Prior to that, Compuware had never paid a dividend or announced any intentions to pay a dividend.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Geographical Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013
Segment Reporting Information [Line Items]
Revenue	$ 23,457	$ 21,755	$ 21,735	$ 21,587	$ 24,400	$ 24,109	$ 24,525	$ 24,101	$ 88,534	$ 97,135	$ 90,732
Long-Lived Assets	44,482				52,057				44,482	52,057
United States
Segment Reporting Information [Line Items]
Revenue									75,919	83,308	77,499
Long-Lived Assets	43,573				51,552				43,573	51,552
International operations
Segment Reporting Information [Line Items]
Revenue									12,615	13,827	13,233
Long-Lived Assets	$ 909				$ 505				$ 909	$ 505

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PROPERTY AND EQUIPMENT (Details) (USD $)	12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013
Property, Plant and Equipment [Line Items]
Gross property and equipment	$ 20,887,000	$ 15,009,000
Less accumulated depreciation and amortization	12,078,000	10,258,000
Net property and equipment	8,809,000	4,751,000
Depreciation	2,700,000	1,600,000	1,200,000
Loss on disposal of fixed assets	300,000
Leases
Total	8,643,000
2016	710,000
2017	1,241,000
2018	865,000
2019	848,000
2020	873,000
Thereafter	4,106,000
Computer equipment and software
Property, Plant and Equipment [Line Items]
Gross property and equipment	18,877,000	14,368,000
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Gross property and equipment	687,000	641,000
Leasehold improvements
Property, Plant and Equipment [Line Items]
Gross property and equipment	$ 1,323,000	$ 0

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PROPERTY AND EQUIPMENT

12 Months Ended

Mar. 31, 2015

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

Property and equipment, summarized by major classification, is as follows (in thousands):

	MARCH 31,
	2015		2014
Computer equipment and software		$18,877		$14,368
Furniture and fixtures	687		641
Leasehold improvements	1,323		—
		$20,887		$15,009
Less accumulated depreciation and amortization	12,078		10,258
Net property and equipment		$8,809		$4,751

Depreciation of property and equipment totaled $2.7 million, $1.6 million and $1.2 million for the years ended March 31, 2015, 2014 and 2013, respectively. The company recorded a loss on disposal of fixed assets for the year ended March 31, 2015 of $0.3 million which is recorded within sales and marketing expense.

Operating Leases

The Company conducts its business in leased facilities which based on the lease terms are considered to be operating leases. The following table outlines the Company’s minimum contractual lease obligations under the lease agreements as of March 31, 2015 (presented in thousands):

	Year Ending March 31,
	Total		2016		2017		2018		2019		2020		Thereafter
Leases	$	8,643	$	710	$	1,241	$	865	$	848	$	873	$	4,106

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GOODWILL, CAPITALIZED SOFTWARE AND OTHER INTANGIBLE ASSETS (Details) (USD $)	12 Months Ended
	Mar. 31, 2015		Mar. 31, 2014		Mar. 31, 2013
Schedule of Intangible Assets [Line Items]
Amortized intangible assets, Gross Carrying Amount	$ 37,005,000		$ 54,044,000
Accumulated Amortization	(26,717,000)		(31,362,000)
Amortized intangible assets, Net Carrying Amount	10,288,000		22,682,000
Amortization expense of intangible assets	7,200,000		7,100,000		5,400,000
Estimated future amortization expense
2016	3,395,000
2017	3,014,000
2018	2,316,000
2019	966,000
2020	597,000
Capitalized software and other intangible asset impairment	8,751,000		0		0
Impairment of goodwill	0		0		0
Capitalized software
Schedule of Intangible Assets [Line Items]
Amortized intangible assets, Gross Carrying Amount	34,340,000	[1]	48,989,000	[1]
Accumulated Amortization	(24,052,000)	[1]	(27,067,000)	[1]
Amortized intangible assets, Net Carrying Amount	10,288,000	[1]	21,922,000	[1]
Finite-lived intangible asset, useful life	5 years
Amortization expense of intangible assets	6,800,000		6,800,000		4,900,000
Estimated future amortization expense
2016	3,395,000
2017	3,014,000
2018	2,316,000
2019	966,000
2020	597,000
Customer relationship agreements
Schedule of Intangible Assets [Line Items]
Amortized intangible assets, Gross Carrying Amount	2,585,000	[2]	4,715,000	[2]
Accumulated Amortization	(2,585,000)	[2]	(3,955,000)	[2]
Amortized intangible assets, Net Carrying Amount	0	[2]	760,000	[2]
Estimated future amortization expense
Capitalized software and other intangible asset impairment	500,000
Trademarks
Schedule of Intangible Assets [Line Items]
Amortized intangible assets, Gross Carrying Amount	80,000	[3]	340,000	[3]
Accumulated Amortization	(80,000)	[3]	(340,000)	[3]
Amortized intangible assets, Net Carrying Amount	0	[3]	0	[3]
In Process Research and Development
Estimated future amortization expense
Capitalized software and other intangible asset impairment	8,300,000
Trademarks
Schedule of Intangible Assets [Line Items]
Unamortized intangible assets	$ 358,000	[4]	$ 358,000	[4]

[1] Amortization of capitalized software is included in “cost of revenue” in the financial statements. Capitalized software is generally amortized over five years.

[2] Amortization of customer relationship agreements is included in “sales and marketing” in the financial statements. Customer relationship agreements were acquired as part of acquisitions and are fully amortized as of March 31, 2015.

[3] Amortization of trademarks is included in “general and administrative” in the financial statements. Trademarks were acquired as part of acquisitions and are fully amortized as of March 31, 2015.

[4] The Covisint trademarks were acquired by Compuware in an acquisition in March 2004. These trademarks are deemed to have an indefinite life and therefore are not being amortized.

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RELATED PARTY TRANSACTIONS (Details) (USD $)	12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013
Related Party Transaction [Line Items]
Due from parent and affiliates	$ 0	$ 2,813,000
Cash payments to parent company	13,879,000	67,003,000	20,597,000
Compuware
Related Party Transaction [Line Items]
Expenses from transactions with Parent	0	1,400,000	17,400,000
Due from parent and affiliates	0	2,800,000
Increase (Decrease) in Due from Related Parties, Current	(2,800,000)
Revenue from Related Parties	$ 7,600,000

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
CURRENT ASSETS:
Cash	$ 50,077	$ 49,536
Accounts receivable, net	15,348	21,838
Deferred tax asset, net	16	1,017
Due from parent and affiliates	0	2,813
Prepaid expenses	3,160	1,686
Other current assets	4,209	4,297
Total current assets	72,810	81,187
PROPERTY AND EQUIPMENT, LESS ACCUMULATED DEPRECIATION AND AMORTIZATION	8,809	4,751
CAPITALIZED SOFTWARE AND OTHER INTANGIBLE ASSETS, NET	10,646	23,040
OTHER:
Goodwill	25,385	25,385
Deferred costs	1,736	6,188
Deferred tax asset, net	1,528	131
Other assets	928	766
Total other assets	29,577	32,470
TOTAL ASSETS	121,842	141,448
CURRENT LIABILITIES:
Accounts payable	7,703	3,893
Accrued commissions	3,286	1,640
Deferred revenue	18,029	16,606
Accrued expenses	3,344	3,752
Deferred tax liability, net	1,597	0
Total current liabilities	33,959	25,891
DEFERRED REVENUE	3,914	11,223
ACCRUED LIABILITIES AND OTHER	2,622	56
DEFERRED TAX LIABILITY, NET	0	2,668
Total liabilities	40,495	39,838
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred stock, no par value - authorized 5,000,000 shares; none issued and outstanding	0	0
Common stock, no par value - authorized 50,000,000 shares; issued and outstanding 39,033,900 (37,490,500 issued and outstanding as of March 31, 2014)	0	0
Additional paid-in capital	157,004	140,569
Retained deficit	(75,633)	(38,947)
Accumulated other comprehensive income (loss)	(24)	(12)
Total shareholders' equity	81,347	101,610
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 121,842	$ 141,448

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COMBINED AND CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	12 Months Ended
	Mar. 31, 2015		Mar. 31, 2014		Mar. 31, 2013
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Net loss	$ (38,562,000)		$ (35,658,000)		$ (5,648,000)
Adjustments to reconcile net income (loss) to cash provided by (used in) operations:
Depreciation and amortization	9,574,000		8,678,000		6,617,000
Capitalized software and other intangible asset impairment	8,751,000		0		0
Deferred income taxes	11,000		4,000		(613,000)
Stock award compensation	6,232,000		17,475,000		1,629,000
Other	307,000		0		60,000
Net change in assets and liabilities:
Accounts receivable	6,377,000		3,618,000		(4,676,000)
Other assets	3,306,000		3,414,000		3,386,000
Accounts payable and accrued expenses	4,919,000	[1]	1,543,000	[1]	881,000	[1]
Deferred revenue	(5,610,000)		(7,410,000)		(6,838,000)
Net cash used in operating activities	(4,695,000)		(8,336,000)		(5,202,000)
CASH FLOWS USED IN INVESTING ACTIVITIES:
Property and equipment	(3,953,000)	[1]	(3,541,000)	[1]	(946,000)	[1]
Capitalized software	(3,509,000)		(5,696,000)		(13,579,000)
Net cash used in investing activities	(7,462,000)		(9,237,000)		(14,525,000)
CASH FLOWS PROVIDED BY FINANCING ACTIVITES:
Net investment from parent company	0		0		12,881,000
Cash payments to parent company	23,999,000		65,746,000		29,135,000
Cash payments to parent company	(13,879,000)		(67,003,000)		(20,597,000)
Proceeds from initial public offering	0		68,448,000		0
Initial public offering costs, net	0		(1,412,000)		(714,000)
Net proceeds from exercise of stock awards	2,865,000		332,000		0
Net cash provided by financing activities	12,985,000		66,111,000		20,705,000
EFFECT OF EXCHANGE RATE CHANGES ON CASH	(287,000)		32,000		(12,000)
NET CHANGE IN CASH	541,000		48,570,000		966,000
CASH AT BEGINNING OF YEAR	49,536,000		966,000		0
CASH AT END OF YEAR	50,077,000		49,536,000		966,000
Accounts Payable and Accrued Liabilities, Purchases Of Property, Plant, and Equipment	$ 3,000,000

[1] Accounts payable and accrued expenses as of March 31, 2015 includes $3.0 million associated with purchases of property and equipment, which are non-cash acquisitions of fixed assets as of March 31, 2015.

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INCOME TAXES - Operating Losses and Tax Credit Carryforwards (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015
Operating Loss And Tax Credit Carryforwards [Line Items]
Total	$ 7,878
U.S. Federal
Operating Loss And Tax Credit Carryforwards [Line Items]
Net operating losses	6,731
U.S. State
Operating Loss And Tax Credit Carryforwards [Line Items]
Net operating losses	1,142
U.S. state tax credit carryforwards	$ 5

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COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Mar. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Contractual obligations

The following tables summarize our payments under contractual obligations as of March 31, 2015 (in thousands):

	Year Ending March 31,
	Total	2016	2017
Service Agreement	1,512	955	557

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INCOME TAXES - Uncertain Tax Positions (Details) (USD $)	12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Gross unrecognized tax benefit for beginning of period	$ 354,000	$ 0	$ 475,000
Gross increases to tax positions for prior periods	0	0	0
Gross decreases to tax positions for prior periods	(354,000)	0	(475,000)
Gross increases to tax positions for current period	0	354,000	0
Settlements	0	0	0
Gross unrecognized tax benefit for period ended	0	354,000	0
Unrecognized tax benefits, income tax penalties and interest accrued	0
Income tax benefits provided from parent company	$ 7,200,000	$ 9,100,000

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QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (Tables)

12 Months Ended

Mar. 31, 2015

Quarterly Financial Information Disclosure [Abstract]

Schedule of Quarterly Financial Information

Quarterly financial information for the years ended March 31, 2015 and 2014 was as follows (in thousands, except for per share data):

	Fiscal 2015
	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Year
Revenues		$21,587			$21,735			$21,755			$23,457			$88,534
Gross profit	6,321			7,409			7,371			1,029			22,130
Operating loss (2)	(12,113		)	(7,288		)	(6,955		)	(12,163		)	(38,519		)
Pre-tax loss	(12,091		)	(7,271		)	(6,940		)	(12,148		)	(38,450		)
Net loss	(12,116		)	(7,304		)	(6,961		)	(12,181		)	(38,562		)
Basic loss per share (1)	(0.32		)	(0.19		)	(0.18		)	(0.32		)	(1.01		)
Diluted loss per share (1)	(0.32		)	(0.19		)	(0.18		)	(0.32		)	(1.01		)

_____________________________________________________

(1) Full year basic and diluted loss per share may not agree to the sum of the four quarters because each quarter is a separate calculation.

(2) Q4 2015 results include an $8.8 million impairment of capitalized software and customer relationship intangibles.

	Fiscal 2014
	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Year
Revenues		$24,101			$24,525			$24,109			$24,400			$97,135
Gross profit	10,791			10,399			10,449			9,122			40,761
Operating income (loss)	(4,667		)	(12,712		)	(8,292		)	(9,902		)	(35,573		)
Pre-tax income (loss)	(4,667		)	(12,712		)	(8,292		)	(9,902		)	(35,573		)
Net income (loss)	(4,670		)	(12,746		)	(8,314		)	(9,928		)	(35,658		)
Basic loss per share (1)	(0.16		)	(0.42		)	(0.22		)	(0.27		)	(1.06		)
Diluted loss per share (1)	(0.16		)	(0.42		)	(0.22		)	(0.27		)	(1.06		)

_____________________________________________________

(1) Full year basic and diluted loss per share may not agree to the sum of the four quarters because each quarter is a separate calculation.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business

Covisint Corporation (the “Company”, “Covisint”, “we”, “our” and “us”) provides an open, developer friendly, enterprise class cloud Platform (“Platform”) enabling organizations to build solutions that quickly and securely identify, authenticate and connect users, devices, applications and information. Our Platform has been successfully operating globally on an enterprise scale for over 12 years, and is the technology behind innovative industry solutions such as Hyundai's Blue Link^TM and Cisco's Services Exchange Platform^TM.

Basis of Presentation

The accompanying combined and consolidated financial statements (“financial statements”) include the accounts of Covisint Corporation, a Michigan corporation, and the Covisint segment of Compuware Corporation ("Compuware" or "Parent") (combined operations are referred to as the “Company” or “Covisint”). Effective January 1, 2013, Compuware contributed substantially all of the assets and liabilities of the Covisint segment to Covisint Corporation (“January 2013 Contribution”). The financial statements reflect the assets, liabilities, revenues and expenses that were directly attributable to the Company as it operated within Compuware prior to the January 2013 Contribution, and they have been derived from the consolidated financial statements and accounting records of Compuware using the historical results of operations and historical basis of assets and liabilities for the Covisint operations of Compuware. The historical financial results may not be indicative of the results that would have been achieved had Covisint operated as a separate, stand-alone entity. These financial statements, prior to the January 2013 Contribution, were prepared on a combined basis because the operations were under common control.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which require management to make estimates and assumptions that affect the reported amounts of assets, liabilities, shareholders’ equity and the disclosure of contingencies at March 31, 2015 and 2014 and the results of operations for the years ended March 31, 2015, 2014 and 2013. While management has based their assumptions and estimates on the facts and circumstances existing at March 31, 2015, final amounts may differ from estimates.

In September 2013, the Company completed its initial public offering (“IPO”) in which it issued and sold 7.4 million shares of its common stock at a public offering price of $10.00 per share. The Company received net proceeds of $68.4 million after deducting underwriting discounts and commissions of $5.2 million.

Prior to the January 2013 Contribution, “group equity” was shown in lieu of shareholders' equity in the combined and consolidated financial statements. All significant transactions between Compuware and the Company were included in the combined and consolidated financial statements and were deemed settled in cash. The net effect of the settlement of these intercompany transactions is reflected in the combined and consolidated statements of cash flows as a financing activity and in the “group equity” in the combined and consolidated balance sheets. From the January 2013 Contribution to the IPO, Compuware provided Covisint with short-term, non-interest bearing operating cash advances. The net effect of these intercompany transactions is reflected in the combined and consolidated statements of cash flows as financing activity and in “due to/from Parent and affiliates” in the consolidated balance sheets.

Prior to fiscal 2015, the financial statements included an allocation of certain corporate expenses including costs for facilities, information technology, tax, internal audit, accounting, finance, human resources, legal and executive management functions provided to the Company by Compuware. These allocations were primarily based on headcount, revenue and space occupied as a proportion of those in all Compuware operating units. Management believes the allocations are reasonable. However, the expenses allocated to the Company for these services are not necessarily indicative of the expense that would have been incurred if the Company had been a separate, independent entity and had otherwise managed these functions. Corporate expenses charged to the Company by Compuware totaled $0 million, $10.6 million and $10.8 million for the years ended March 31, 2015, 2014 and 2013, respectively. Through December 31, 2012, such costs and expenses were deemed to have been contributed by Compuware to Covisint in the period in which the costs were recorded. Since January 1, 2013, these expenses have been included in the net amount due to parent and affiliates.

On October 31, 2014, Covisint ceased being a subsidiary of Compuware Corporation as a result of Compuware's distribution of its holdings of Covisint common stock to Compuware shareholders ("the October 2014 Distribution").

Revenue Recognition

The Company derives revenue through contracts under which it provides customers services including access to and support of the Covisint Platform (“subscription”) and services related to implementation, solution deployment and on-boarding (“services”). The arrangements do not provide customers the right to take possession of the software at any time, nor do the arrangements contain rights of return. In order for a transaction to be eligible for revenue recognition, the following revenue criteria must be met: persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectibility is reasonably assured.

Signed agreements and binding purchase orders are used as evidence of an arrangement. For customers where a purchase order is used as evidence of an arrangement, master terms and conditions exist that govern such arrangements. The Company assesses cash collectibility based on a number of factors including past collection history with the customer. If the Company determines that collectibility is not reasonably assured, the Company defers the revenue until collectibility becomes reasonably assured, generally upon receipt of cash. The Company assesses whether the fee is fixed or determinable based on the payment terms associated with the transaction and whether the sales price is subject to refund or adjustment. Customers typically have the right to terminate their agreement if the Company fails to perform.

The Company’s contracts may include a subscription fee for ongoing PaaS operations and project (services) fees. For subscription arrangements that contain multiple elements, in accordance with Accounting Standards Codification (“ASC”) 605, “Revenue Recognition,” the arrangement consideration is allocated based on relative selling price using the following hierarchy: vendor specific objective evidence (“VSOE” which represents the price when sold separately) if available; third-party evidence if VSOE is not available; or estimated selling price if neither VSOE nor third-party evidence is available. The Company is currently unable to establish VSOE or third-party evidence of selling price for its deliverables. Therefore, the Company determines its best estimate of selling price by evaluating renewal amounts included in a contract, if any, and estimated costs to deliver each element.

The subscription fees are recognized ratably over the applicable service period. Revenue recognition commences on the later of the start date specified in the subscription arrangement, the “launch date” of the customers’ access to the Company’s production environment or when all of the revenue recognition criteria have been met. The Company considers delivery to have occurred on the “launch date”, which is the point in time that a customer is provided access to use the Company’s Platform.

For those projects that do not currently have stand-alone value, the revenue is deferred and recognized over the longer of the committed term of the subscription agreement (generally one to five years) or the expected period over which the customer will receive benefit (generally five years). Services that have stand-alone value are recognized as delivered generally using a proportional performance methodology based on dependable estimates of hours incurred and expected hours to complete since these services are primarily performed on a fixed fee basis. Hours or costs incurred represent a reasonable surrogate for output measures of contract performance, including the presentation of deliverables to the client; therefore, hours or costs incurred are used as the basis for revenue recognition. If it is determined that costs will exceed revenue, the expected loss is recorded at the time the loss becomes apparent.

Deferred Costs

Deferred costs consist of the incremental direct personnel and outside contractor costs incurred in delivering implementation and solutions deployment services that do not have stand-alone value. Revenue from these services, as described above, is deferred and recognized over the longer of the committed term of the subscription agreement or the expected period over which the customer will receive benefit. Therefore, the costs are recognized over the same period as the associated revenue. In the event a customer contract with deferred cost is terminated, the Company recognizes the remainder of the amount recorded in deferred cost attributable to the terminated contract.

Sales commission costs that directly relate to revenue transactions that are deferred are recorded as “prepaid expenses and other current assets” or non-current “other assets” as applicable in the condensed and consolidated balance sheets and recognized as “sales and marketing” expenses in the financial statements over the revenue recognition period of the related transaction.

Deferred Revenue

Deferred revenue consists of the billed but unearned portion of existing contracts for subscription and services provided and is recognized as services are delivered or over the expected period during which the customer will receive benefit. The Company generally invoices its customers’ subscription fees in annual, quarterly or monthly installments. Contractual time periods often exceed the invoicing period and accordingly, the deferred revenue balance does not represent the total contract value of committed subscription agreements. The portion of deferred revenue that the Company anticipates will be recognized during the succeeding 12-month period is recorded as current deferred revenue and the remaining portion is recorded as non-current deferred revenue. The Company has generally received payment for the services for which the revenue has been deferred. Deferred revenue also includes contracts for which we have a contractually executed agreement and have invoiced the customer under the terms of the executed agreement but have not met all the revenue recognition criteria and/or have concluded that revenue should be recognized on cash basis, as collectibility of the invoiced amounts is not reasonably assured. In the event a customer contract with deferred revenue is terminated, the Company recognizes the remainder of the amount recorded in deferred revenue attributable to the terminated contract.

Collection and Remittance of Taxes

The Company records the collection of taxes from customers and the remittance of these taxes to governmental authorities on a net basis in its financial statements.

Cash and Cash Equivalents

The Company considers all investments with an original maturity of three months or less to be cash equivalents.

Cost of Revenue

Consists of compensation and related expenses for infrastructure and operations staff, payments to outside service providers, data center costs related to hosting the Company’s software and amortization and impairment of capitalized software.

Allowance for Doubtful Accounts

The Company considers historical loss experience, including the need to adjust for current conditions, the aging of outstanding accounts receivable and information available related to specific customers when estimating the allowance for doubtful accounts. The allowance is reviewed and adjusted based on the Company’s best estimates of collectibility.

The following table summarizes the allowance for doubtful accounts and changes to the allowance during the years ended March 31, 2015, 2014 and 2013 (in thousands):

Allowance for Doubtful Accounts:	Balance at Beginning of Period	Charged to Income	Accounts Charged Against the Allowance	Balance at End of Period
Year ended March 31, 2015	$164	$7	$101	$70
Year ended March 31, 2014	$58	$108	$2	$164
Year ended March 31, 2013	$97	$0	$39	$58

Property and Equipment

Property and equipment is stated at cost. Depreciation is recorded using the straight-line method over the estimated useful lives of the related assets, which are generally estimated to be three to ten years for furniture and fixtures, computer equipment and software. Leasehold improvements are amortized over the term of the lease.

Capitalized Software

Includes the costs of purchased and internally developed software products capitalized in accordance with ASC 350-40, “Internal Use Software” and software technology purchased through acquisitions and is stated at unamortized cost. Net purchased software included in capitalized software was $0.2 million and $0.6 million as of March 31, 2015 and 2014, respectively.

Capitalized and purchased software costs are amortized on a straight line basis over the expected useful life of the software, which is generally five years. Amortization begins when the software technology is ready for its intended use. Amortization expense was $6.8 million, $6.8 million and $4.9 million for the years ended March 31, 2015, 2014 and 2013, respectively. Amortization expenses are included in “cost of revenue” in the financial statements.

For development costs related to the Company’s PaaS offering, the Company follows the guidance set forth in ASC 350-40 which requires companies to capitalize qualifying computer software development costs, which are incurred during the application development stage. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. Research and development costs include primarily the cost of programming personnel and amounted to $13.9 million, $18.1 million and $17.4 million for the years ended March 31, 2015, 2014 and 2013, respectively, of which $3.5 million, $5.7 million and $13.6 million respectively was capitalized as internally-developed software technology.

Capitalized research and development and capitalized software costs are reviewed for impairment when events and circumstances indicate such asset may be impaired. If estimated future undiscounted cash flows are not sufficient to recover the carrying value of the capitalized research and development, an impairment charge is recorded in the amount by which the present value of future cash flows is less than the carrying value of these assets. Cost of revenue expense for the year ended March 31, 2015 included an impairment charge of $8.3 million related to software costs for healthcare specific projects resulting from the Company's decision in fiscal 2015 to exit the healthcare application business (see Note 3 for further information).

Goodwill and Other Intangible Assets

Goodwill and intangible assets with indefinite lives are tested for impairment annually at March 31 or more frequently if management believes indicators of impairment exist. With respect to goodwill, the carrying value of the Company's single reporting unit is compared to its fair value, and when the carrying value exceeds the fair value, the carrying value of the goodwill is reduced to implied fair value. The impairment test involves a two-step process with Step 1 comparing the fair value of the reporting unit with its aggregate carrying value, including goodwill. If the carrying amount of the reporting unit exceeds the reporting unit’s fair value, the Company performs Step 2 of the goodwill impairment test to determine the amount of impairment loss by comparing the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. All operations of the Company are in a single reporting unit that was evaluated in the annual impairment assessment.

The Company's goodwill balance as of March 31, 2015 was $25.4 million. The Company concluded there was no impairment of goodwill during the year ended March 31, 2015.

Sales and marketing expenses for the year ended March 31, 2015, included a $0.5 million impairment of customer relationship intangibles related to DocSite, as the intangibles specifically related to healthcare customer relationships.

Income Taxes

The Covisint business was operated as a division of Compuware prior to the January 2013 Contribution. As a member of Compuware’s consolidated group (“Consolidated Group”), the Company’s operations were included in the Consolidated Group for tax periods or portions thereof commencing after the January 2013 Contribution through the October 2014 Distribution.

Income taxes are presented herein on a separate return basis even though the Company’s results of operations have historically been included in the consolidated, combined, unitary or separate income tax returns of Compuware until the October 2014 Distribution. The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax bases of assets and liabilities and net operating losses and tax credits using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period that includes the enactment date.

The Company records net deferred tax assets to the extent it believes these assets will more likely than not be realized. These deferred tax assets are subject to periodic assessments as to recoverability. If it is determined that it is more likely than not that the benefits will not be realized, valuation allowances are recorded which would increase the provision for income taxes. In making such determinations, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations.

Certain net operating losses ("NOL") and tax credits generated by the Company prior to the date of our spin-off from Compuware have been utilized by our former parent, Compuware, and are not available to reduce future taxable income of Covisint. Therefore, the deferred tax assets presented above do not include the NOL or tax credits generated by Covisint and utilized by Compuware. In as much as Compuware has paid cash for these NOL and tax credits, the Company has already realized the economic benefit. Covisint has received the economic benefit of these NOL and tax credits through a reduction of the due to parent and affiliates (for the amount of benefit realized by Compuware) which is reported as an equity contribution from Compuware to Covisint in the accompanying balance sheets and a cash flow from financing activities in the accompany cash flow statements. Following the Company's spin-off from Compuware on October 31, 2014, Compuware will no longer receive the tax benefit of these NOLs and tax credits, and, therefore, will no longer compensate the Company for these items.

Interest and penalties related to uncertain tax positions are included in the income tax expense.

Foreign Currency Translation

The Company’s foreign operations use their respective local currency as their functional currency. Assets and liabilities of foreign subsidiaries are minimal and are generally short term in nature. Such assets and liabilities in the financial statements have been translated at the rate of exchange at the respective balance sheet dates, and revenues and expenses have been translated at average exchange rates prevailing during the period the transactions occurred. Translation adjustments have been excluded from the results of operations.

Stock-Based Compensation

Stock award compensation expense is recognized, net of an estimated forfeiture rate, on a straight-line basis over the requisite service period of the award, for awards that vest strictly based on time, and on a straight-line basis over the requisite service period of the individual tranches of the award for awards with performance conditions.

Compuware Corporation Stock Compensation Awards

Certain Covisint employees have been granted stock options to purchase Compuware common stock, and under the agreements between the Company and Compuware, Covisint records the compensation expense relating to these stock options to purchase Compuware common stock. Compuware calculates the fair value of its stock option awards using the Black-Scholes option pricing model, which incorporates various assumptions including volatility, expected term, risk-free interest rates and dividend yields. The expected volatility assumption is based on historical volatility of Compuware’s common stock over the most recent period commensurate with the expected life of the stock option granted. Compuware uses historical volatility because management believes such volatility is representative of prospective trends. The risk-free interest rate assumption is based upon observed interest rates appropriate for the expected life of the stock option awarded.

The following is the average fair value per share of Compuware stock compensation awards estimated on the date of grant and the assumptions used for each option granted to Compuware employees, including those providing services to Covisint, during the years ended March 31, 2014 and 2013. No grants of Compuware stock compensation were awarded to Covisint employees for the year ended March 31, 2015.

	YEAR ENDED MARCH 31,
		2014	2013
Expected volatility		39.11%	40.97%
Risk-free interest rate		1.67%	0.96%
Expected lives at date of grant (in years)		6.20	6.30
Weighted average fair value of the options granted		$2.63	$4.08
Dividend Yield Assumption (1)		4.46%	0.00%

(1) In January 2013, the Compuware Board of Directors announced its intention to begin paying cash dividends totaling $0.50 per share annually, to be paid quarterly beginning in the first quarter of fiscal 2014. Prior to that, Compuware had never paid a dividend or announced any intentions to pay a dividend.

Covisint Corporation Stock Compensation Awards

Covisint calculates the fair value of stock option awards granted using the Black-Scholes option pricing model, which incorporates various assumptions including volatility, expected term, risk-free interest rates and dividend yields. Despite the Company's IPO in September 2013, the Company does not yet have historical stock price data covering a historical period commensurate with the expected life of stock options granted. Therefore, the expected volatility assumption is based on an average of the historical volatility of comparable companies (“peer group companies”). The risk-free interest rate assumption is based upon observed interest rates appropriate for the expected life of the stock option awarded. The expected life of the stock option is based on management’s best estimates considering the terms of the options granted. Dividend yields have not been a factor in determining fair value of stock options granted as Covisint has never issued cash dividends and does not anticipate issuing cash dividends in the future.

Prior to the IPO, Covisint stock was not traded on a stock exchange and thus the exercise price of Covisint stock options at the date of grant was determined by calculating the estimated fair market value of the Company divided by the total shares outstanding, including outstanding stock options that had not yet vested. The estimated fair market value of the Company was measured using an equal combination of discounted cash flow and market comparable valuations and was discounted due to a lack of marketability at the grant date. Previous valuation estimates placed a greater emphasis on the discounted cash flow model. The discounted cash flow model uses significant assumptions, including projected future cash flows, a discount rate reflecting the risk inherent in future cash flows and a terminal growth rate. The key assumptions in the market comparable value analysis are the selection of peer group companies and application of these peer group companies’ data to Covisint.

Assumptions used in measuring Covisint options granted, and the weighted average fair value of options granted, in fiscal 2015, 2014 and 2013 were:

	YEAR ENDED MARCH 31,
	2015	2014	2013
Expected volatility	46.12%	49.99%	53.64%
Risk-free interest rate	2.05%	1.85%	1.02%
Expected lives at date of grant (in years)	6.14	6.01	5.60
Weighted average fair value of the options granted	$1.89	$5.86	$4.47

Business Segments— The Company operates in a single reportable segment. Sales are heavily weighted toward North American automotive companies.

Significant Customers – A single customer, in the automotive industry, comprised 30 percent, 26 percent and 33 percent of total revenue during the years ended March 31, 2015, 2014 and 2013, respectively. The same automotive customer comprised 21 percent and 18 percent of outstanding accounts receivable as of March 31, 2015 and 2014, respectively. A second customer, which was a reseller to customers in the healthcare industry, comprised 6 percent, 12 percent, and 12 percent of total revenue during the years ended March 31, 2015, 2014 and 2013, respectively, and less than 10 percent of outstanding accounts receivables for the year ended March 31, 2015 and for all prior years. The reseller arrangement with this customer was terminated in fiscal 2015.

Geographical Information— Financial information regarding geographic operations is presented in the table below (in thousands):

	YEAR ENDED MARCH 31,
	2015	2014	2013
Revenue:
United States	$75,919	$83,308	$77,499
International operations	12,615	13,827	13,233
Total	$88,534	$97,135	$90,732

	YEAR ENDED MARCH 31,
Long-lived assets:	2015	2014
United States	$43,573	$51,552
International operations	909	505
Total	$44,482	$52,057

Long-lived assets are comprised of property, plant and equipment, goodwill and capitalized software.

Recently Issued Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)," a new comprehensive revenue recognition standard that will supersede all existing revenue recognition guidance under U.S. GAAP. The standard's core principle is that revenue should be recognized as goods or services are transferred to a customer in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This ASU is effective for annual and interim periods beginning on or after December 15, 2016, and early adoption is not permitted, although the FASB is currently considering a one year deferral of the effective date of this ASU. Entities will have the option of using either a full retrospective approach or a modified approach to adopt the guidance in the ASU. The Company is currently evaluating the impact of adopting this guidance.

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CONSOLIDATED BALANCE SHEETS (Parentheticals)	Mar. 31, 2015	Mar. 31, 2014
Statement of Financial Position [Abstract]
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	39,033,900	37,490,500
Common stock, shares outstanding	39,033,900	37,490,500

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

Schedule of allowance for doubtful accounts and changes to the allowance

The following table summarizes the allowance for doubtful accounts and changes to the allowance during the years ended March 31, 2015, 2014 and 2013 (in thousands):

Allowance for Doubtful Accounts:	Balance at Beginning of Period	Charged to Income	Accounts Charged Against the Allowance	Balance at End of Period
Year ended March 31, 2015	$164	$7	$101	$70
Year ended March 31, 2014	$58	$108	$2	$164
Year ended March 31, 2013	$97	$0	$39	$58

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of fair value assumptions

Assumptions used in measuring Covisint options granted, and the weighted average fair value of options granted, in fiscal 2015, 2014 and 2013 were:

	YEAR ENDED MARCH 31,
	2015	2014	2013
Expected volatility	46.12%	49.99%	53.64%
Risk-free interest rate	2.05%	1.85%	1.02%
Expected lives at date of grant (in years)	6.14	6.01	5.60
Weighted average fair value of the options granted	$1.89	$5.86	$4.47

Schedule of revenue and long-lived assets from external customers, by geographical areas

Financial information regarding geographic operations is presented in the table below (in thousands):

	YEAR ENDED MARCH 31,
	2015	2014	2013
Revenue:
United States	$75,919	$83,308	$77,499
International operations	12,615	13,827	13,233
Total	$88,534	$97,135	$90,732

	YEAR ENDED MARCH 31,
Long-lived assets:	2015	2014
United States	$43,573	$51,552
International operations	909	505
Total	$44,482	$52,057

Compuware

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of fair value assumptions

The following is the average fair value per share of Compuware stock compensation awards estimated on the date of grant and the assumptions used for each option granted to Compuware employees, including those providing services to Covisint, during the years ended March 31, 2014 and 2013. No grants of Compuware stock compensation were awarded to Covisint employees for the year ended March 31, 2015.

	YEAR ENDED MARCH 31,
		2014	2013
Expected volatility		39.11%	40.97%
Risk-free interest rate		1.67%	0.96%
Expected lives at date of grant (in years)		6.20	6.30
Weighted average fair value of the options granted		$2.63	$4.08
Dividend Yield Assumption (1)		4.46%	0.00%

(1) In January 2013, the Compuware Board of Directors announced its intention to begin paying cash dividends totaling $0.50 per share annually, to be paid quarterly beginning in the first quarter of fiscal 2014. Prior to that, Compuware had never paid a dividend or announced any intentions to pay a dividend.

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DOCUMENT AND ENTITY INFORMATION (USD $) In Millions, except Share data, unless otherwise specified	12 Months Ended
	Mar. 31, 2015	May 19, 2015	Sep. 30, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	Covisint Corp
Entity Central Index Key	0001563699
Current Fiscal Year End Date	--03-31
Entity Filer Category	Non-accelerated Filer
Document Type	10-K
Document Period End Date	Mar. 31, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Common Stock, Shares Outstanding		39,030,000
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float			$ 28

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PROPERTY AND EQUIPMENT (Tables)

12 Months Ended

Mar. 31, 2015

Property, Plant and Equipment [Abstract]

Schedule of property and equipment

Property and equipment, summarized by major classification, is as follows (in thousands):

	MARCH 31,
	2015		2014
Computer equipment and software		$18,877		$14,368
Furniture and fixtures	687		641
Leasehold improvements	1,323		—
		$20,887		$15,009
Less accumulated depreciation and amortization	12,078		10,258
Net property and equipment		$8,809		$4,751

Schedule of operating leases

The following table outlines the Company’s minimum contractual lease obligations under the lease agreements as of March 31, 2015 (presented in thousands):

	Year Ending March 31,
	Total		2016		2017		2018		2019		2020		Thereafter
Leases	$	8,643	$	710	$	1,241	$	865	$	848	$	873	$	4,106

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COMBINED AND CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Mar. 31, 2015		Mar. 31, 2014	Mar. 31, 2013
Statement of Comprehensive Income [Abstract]
REVENUE	$ 88,534		$ 97,135	$ 90,732
COST OF REVENUE	66,404		56,374	47,575
GROSS PROFIT	22,130		40,761	43,157
OPERATING EXPENSES:
Research and development	10,416		12,408	3,799
Sales and marketing	32,593		35,250	26,593
General and administrative	17,640		28,676	18,315
Total operating expenses	60,649		76,334	48,707
OPERATING LOSS	(38,519)	[1]	(35,573)	(5,550)
Other Income	69		0	0
LOSS BEFORE INCOME TAX PROVISION	(38,450)		(35,573)	(5,550)
INCOME TAX PROVISION	112		85	98
NET LOSS	(38,562)		(35,658)	(5,648)
Basic and diluted loss per share (in dollars per share)	$ (1.01)		$ (1.06)	$ (0.19)
OTHER COMPREHENSIVE LOSS, NET OF TAX
Foreign currency translation adjustments	(12)		(9)	(3)
TAX ATTRIBUTES OF ITEMS IN OTHER COMPREHENSIVE LOSS
Foreign currency translation adjustments	0		0	0
OTHER COMPREHENSIVE LOSS, NET OF TAX	(12)		(9)	(3)
COMPREHENSIVE LOSS	$ (38,574)		$ (35,667)	$ (5,651)

[1] Q4 2015 results include an $8.8 million impairment of capitalized software and customer relationship intangibles.

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COMMITMENTS AND CONTINGENCIES

12 Months Ended

Mar. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Contractual Obligations

During fiscal 2015, the Company entered into a third-party service agreement for helpdesk services to be provided through October 31, 2017.

The following tables summarize our payments under contractual obligations as of March 31, 2015 (in thousands):

	Year Ending March 31,
	Total	2016	2017
Service Agreement	1,512	955	557

Legal Matters

The Company is subject to legal proceedings, claims, investigations and proceedings in the ordinary course of business. In accordance with U.S. GAAP, the Company makes a provision for a liability when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case.

Beginning on May 30, 2014, two putative class actions were filed in the U.S. District Court for the Southern District of New York against the Company, directors and certain officers at the time of the Company's initial public offering ("IPO") alleging violation of securities laws in connection with the Company's IPO and seeking unspecified damages. On August 15, 2014, the cases were consolidated with Charles Rankin appointed lead plaintiff. On October 14, 2014, the lead plaintiff filed a consolidated class action complaint (the “Complaint”) alleging violations of Regulation S-K and Sections 11 and 15 of the Securities Act. The Complaint alleges, among other things that the IPO’s registration statement contained (1) untrue statements and omissions of material facts related to the Company’s projected revenues for fiscal 2014, (2) materially inaccurate statements regarding the Company’s revenue recognition policy, and (3) omissions of known trends, uncertainties and significant risk factors as required to be disclosed by Regulation S-K. The Company has filed a motion to dismiss the Complaint. We believe the Complaint is without merit, and we intend to vigorously defend it. The Company currently has no other outstanding material litigation.

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INCOME TAXES

12 Months Ended

Mar. 31, 2015

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

From the January 2013 Contribution until the Covisint business was operated as a division of Compuware. As a member of the Compuware Consolidated Group, the Company’s operations were included in the Consolidated Group for tax periods or portions thereof commencing after the January 2013 Contribution. Following the October 2014 Distribution, Covisint became its own separate group for tax purposes, and will file separate stand-alone tax returns.

Prior to the October 2014 Distribution, taxable income and/or loss generated by the Company was included in the consolidated, combined, or unitary income tax returns of Compuware. Income taxes prior to the October 2014 Distribution in the accompanying financial statements have been allocated as if the Covisint business were held in a separate corporation which filed separate income tax returns. The Company believes these assumptions underlying its allocation of income taxes on a separate return basis were reasonable. However, the amounts allocated for income taxes prior to the October 2014 Distribution in the accompanying financial statements are not necessarily indicative of the actual amount of income taxes that would have been recorded had Covisint been a separate stand-alone tax paying entity. Following the October 2014 Distribution the Company will file its own tax returns separate from Compuware.

Income tax provision

(Loss) before income tax provision includes the following (in thousands):

	YEAR ENDED MARCH 31,
	2015			2014			2013
(Loss) before income tax provision:
U.S.		($38,586	)		($35,961	)		($5,853	)
Foreign	136			388			303
Total (loss) before income tax provision		($38,450	)		($35,573	)		($5,550	)
	YEAR ENDED MARCH 31,
	2015			2014			2013
Income tax provision:
Current:
U.S. Federal		$—			$—			$—
Foreign	17			86			97
U.S. State	—			—			—
Total current tax provision		$17			$86			$97
Deferred:
U.S. Federal		$—			$—			$—
Foreign	95			(1		)	1
U.S. State	—			—			—
Total deferred tax provision (benefit)		$95			($1	)		$1
Total income tax provision		$112			$85			$98

The Company’s income tax provision differed from the amount computed on pre-tax income at the U.S. federal income tax rate of 35 percent for the following reasons (in thousands):

	YEAR ENDED MARCH 31,
	2015			2014			2013
Federal income tax at statutory rates		($13,458	)		($12,451	)		($1,942	)
Increase (decrease) in taxes:
State income taxes, net	(1,675		)	(1,314		)	(213		)
Foreign tax rate differential	(24		)	(37		)	(26		)
Taxes relating to foreign operations	102			26			(19		)
Tax credits	—			(483		)	(1,389		)
Valuation allowance (1)	12,958			14,355			3,771
Share based compensation	2,303			—			—
Non-deductible expenses, net	72			(11		)	—
Other, net	(166		)	—			(84		)
Income tax provision (benefit)	$112			$85			$98

(1) Prior to the October 2014 Distribution, the valuation allowance represented losses and tax credits not benefited for operating losses and tax credits generated by the Company that were not benefited. These losses and credits are not included in the tabular presentation of deferred tax assets as they have been utilized by Compuware and will not provide future economic benefits to Covisint.

Deferred tax assets and liabilities

Temporary differences and carryforwards which give rise to a significant portion of deferred tax assets and liabilities are as follows (in thousands):

	March 31,
	2015			2014
Deferred tax assets:
Deferred revenue		$3,455			$5,660
Intangible assets	9,152			1,827
Fixed assets	69			—
Accrued expenses	640			708
Stock-based compensation	5,914			7,612
Net operating loss and other tax credit carryforwards	7,878			153
Other	130			280
Total deferred tax assets before valuation allowance	27,238			16,240
Less: valuation allowance	20,470			4,389
Net deferred tax assets		$6,768			$11,851
Deferred tax liabilities:
Intangible assets	—			1,489
Capitalized research and development costs	5,509			10,911
Fixed Assets	—			745
Other	1,312			226
Total deferred tax liabilities	6,821			13,371
Net deferred tax (liabilities)		($53	)		($1,520	)
Current deferred tax assets		$—			$1,017
Current deferred tax liabilities	(1,581		)	—
Long-term deferred tax assets	1,528			131
Long-term deferred tax liabilities	—			(2,668		)
Net deferred tax liabilities		($53	)		($1,520	)

.Prior to the October 2014 Distribution, net operating losses ("NOL") and tax credits generated by the Company were substantially utilized by the Company’s former parent, Compuware, and are not available to reduce future taxable income of Covisint. Therefore, the deferred tax assets presented above do not include the NOL or tax credits generated by Covisint and utilized by Compuware before the October 2014 Distribution. In as much as Compuware has paid cash for these NOL and tax credits prior to October 31, 2014, the Company has already realized the economic benefit. Covisint has received the economic benefit of these pre-distribution NOL and tax credits through a reduction of the due to parent and affiliates (for the amount of benefit realized by Compuware) which is reported as an equity contribution from Compuware to Covisint in the accompanying balance sheets. For periods following the October 2014 Distribution, any NOL’s and tax credits generated would be available to offset future taxable income.

As a result of the Distribution from our former parent Compuware, the spinoff was deemed taxable to Compuware. Through a tax sharing agreement between Compuware and Covisint, Compuware has agreed to bear any tax costs associated with the spinoff. Also, Covisint and Compuware have agreed to make an election under §336(e) of the Internal Revenue Code that results in a step-up in the tax basis of our assets to fair market value. The actual benefit that Covisint will realize depends on multiple things, including generating taxable income over time to fully utilize deductions associated with any increased tax basis from the election. The step up in tax basis is primarily associated with goodwill that will be deducted over the 15 years for tax purposes.

ASC 740, Income Taxes, provides for the recognition of deferred tax assets only when realization is more likely than not. In assessing the valuation allowance, the Company considers all available positive and negative evidence, including historical financial results and forecasted financial results. As a result of the Company’s analysis, it has been determined that it is more likely than not the Company will not realize the benefits of its deferred tax assets in the U.S., thus reducing the carrying value of the above deferred tax assets. The deferred tax asset "Net operating loss and other tax credit carryforwards" represents only those amounts that have been generated by Covisint following the October 2014 Distribution, and are not available to be included in the taxable results of Compuware.

These financial statements reflect the position of the Company as not permanently reinvesting any earnings in its foreign subsidiaries and recognizing all deferred tax liabilities that arise from outside basis differences in its investments in subsidiaries.

At March 31, 2015, the Company had NOL’s and tax credit carryforwards for income tax purposes of $7.9 million which expire in the tax years as follows (in thousands):

	March 31, 2015
	Balance		Expiration
U.S. federal net operating losses		$6,731	2035
U.S. state net operating losses		$1,142	2018-2035
U.S. state tax credit carryforwards	5		2028-2029
Total		$7,878

Uncertain tax positions

The amount of gross unrecognized tax benefits ("UTBs") was $0, $0.4 million and $0 as of March 31, 2015, 2014 and 2013, respectively, all of which, net of federal benefit, would favorably affect the Company’s effective tax rate if recognized in future periods.

The following is a tabular reconciliation of the total amounts of UTBs for the years ended March 31, 2015, 2014 and 2013 (in thousands):

	March 31,
	2015			2014		2013
Gross unrecognized tax benefit for beginning of period		$354			$—		$475
Gross increases to tax positions for prior periods	—			—		—
Gross decreases to tax positions for prior periods	(354		)	—		(475		)
Gross increases to tax positions for current period	—			354		—
Settlements	—			—		—
Gross unrecognized tax benefit for period ended		$—			$354		$—

The Company recognizes interest and penalties related to UTBs within the income tax expense line in the accompanying consolidated statement of operations. As of March 31, 2015, no interest and penalties were accrued.

The Covisint business was operated as a division of Compuware until December 31, 2012 and, as a division, our operations were included in the tax returns filed by Compuware’s consolidated group, or Consolidated Group, for U.S. federal income tax purposes, as well as in certain consolidated, combined or unitary groups that include Compuware and/or certain of its subsidiaries, or Combined Group, for taxes other than U.S. federal income taxes. Effective January 1, 2013, Compuware contributed to us substantially all of the assets and liabilities related to our business and, as a member of the Consolidated Group, our operations have been included in the Consolidated Group since that date for tax periods or portions thereof commencing after such contribution.

In connection with the January 2013 Contribution, Compuware and the Company have entered into a tax sharing agreement. Pursuant to this agreement, the Company and Compuware generally made payments to each other such that, with respect to tax returns for any taxable period in which the Company or any of the Company’s subsidiaries are included in the Consolidated Group or any Combined Group, the amount of taxes to be paid by the Company will be determined, subject to certain adjustments, as if the Company and each of its subsidiaries included in such Consolidated Group or Combined Group filed the Company’s own consolidated, combined, unitary or separate tax return. Each member of a consolidated group during any part of a consolidated return year is severally liable for tax on the consolidated return of such year and for any subsequently determined deficiency thereon. Similarly, in some jurisdictions, each member of a consolidated, combined or unitary group for state, local or foreign tax purposes is jointly and severally liable for the state, local or foreign tax liability of each other member of the consolidated, combined or unitary group. Accordingly, for any period in which it is included in the Consolidated Group or any Combined Group, the Company could be liable in the event that any income or other tax liability was incurred, but not discharged, by any other member of any such group even if the Company is no longer a member of such Consolidated Group or Combined Group. Compuware has paid through a reduction in the amount due to Compuware $7.2 million and $9.1 million for tax loss and credit benefits provided by the Company to the Consolidated Group for the years ended March 31, 2015 and 2014, respectively. For the year ended March 31, 2015, Covisint was a member of the Consolidated Group only until the October 2014 Distribution. Following the October 2014 Distribution, the tax sharing agreement benefits provided to the Company will generally and prospectively cease.

Cash paid for income taxes

Cash paid by the Company for income taxes was $28,000 and $0 for the years ended March 31, 2015 and 2014, respectively.

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BENEFIT PLANS (Tables)

12 Months Ended

Mar. 31, 2015

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of stock option activity

A summary of option activity under the Company’s stock-based compensation plans as of March 31, 2015, and changes during the year then ended is presented below (shares and intrinsic value in thousands):

	YEAR ENDED MARCH 31, 2015
	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term in Years	Aggregate Intrinsic Value
Options outstanding as of April 1, 2014	4,458			$3.48
Granted	1,695			$4.04
Exercised	(1,543	)		$1.86
Forfeited and Expired	(304	)		$8.41
Options outstanding as of March 31, 2015	4,306			$3.93	5.46		$458
Options vested and expected to vest, net of estimated forfeitures, as of March 31, 2015	4,112			$3.91	5.30		$458
Options exercisable as of March 31, 2015	1,718			$3.47	2.69		$296

Schedule of RSU activity

A summary of non-vested RSUs activity as of March 31, 2015, and changes during the year ended March 31, 2015 is presented below. Shares and intrinsic value are presented in thousands.

	YEAR ENDED MARCH 31, 2015
	Shares	Weighted Average Grant-Date Fair Value		Aggregate Intrinsic Value
Non-vested RSU outstanding at April 1, 2014	—
Granted	338	$	3.91
Released	—
Forfeited	—
Dividend equivalents, net	—
Non-vested RSU outstanding at March 31, 2015	338			$	686

Schedule of allocation of award costs

For the years ended March 31, 2015, 2014 and 2013, respectively, net stock awards compensation expense was recorded as follows in thousands:

	YEAR ENDED MARCH 31,
	2015		2014		2013
Stock awards compensation classified as:
Cost of revenue		$613		$829		$6
Research and development	175		722		1
Sales and marketing	1,570		5,594		360
General and administrative	3,874		10,330		1,262
Total stock awards compensation expense before income taxes		$6,232		$17,475		$1,629

Schedule of unrecognized compensation

The following table summarizes the Company’s estimated future recognition of its unrecognized compensation cost related to stock awards as of March 31, 2015 (in thousands).

	YEAR ENDING MARCH 31,
Covisint Stock-Based Compensation Plan:	Total		2016		2017		2018		2019
Stock Based Compensation		$5,052		$2,569		$1,517		$800		$166

Compuware

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of stock option activity

A summary of option activity for Covisint employees under Compuware’s stock-based compensation plans as of March 31, 2015, and changes during the year then ended is presented below. Due to the spin-off of Covisint from Compuware, all Compuware options held by Covisint employees had to be exercised or they would be terminated 30 days after the completion of the spin-off. All vested options were exercised. All non-vested Compuware options terminated in the third quarter of fiscal 2015.

Shares and intrinsic value are presented in thousands.

	YEAR ENDED MARCH 31, 2015
	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term in Years	Aggregate Intrinsic Value
Options outstanding as of April 1, 2014	472			$9.23
Granted	—
Exercised	(301	)		$8.28			$627
Forfeited/Cancelled	(171	)
Options outstanding as of March 31, 2015	—			$—
Options vested and expected to vest, net of estimated forfeitures, as of March 31, 2015	—			$—
Options exercisable as of March 31, 2015	—			$—

Schedule of RSU activity

Shares and intrinsic value are presented in thousands.

	YEAR ENDED MARCH 31, 2015
	Shares		Weighted Average Grant-Date Fair Value	Aggregate Intrinsic Value
Non-vested RSU outstanding at April 1, 2014	182
Granted	—
Released	(156	)			$1,514
Forfeited	(26	)
Dividend equivalents, net	—
Non-vested RSU outstanding at March 31, 2015	—

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GOODWILL, CAPITALIZED SOFTWARE AND OTHER INTANGIBLE ASSETS (Tables)

12 Months Ended

Mar. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of intangible assets

The components of the Company’s intangible assets are as follows (in thousands):

	MARCH 31, 2015
	Gross  Carrying Amount		Accumulated Amortization			Net Carrying Amount
Indefinite-lived intangible assets:
Trademarks(1)		$358					$358
Amortizing intangible assets:
Capitalized software(2)		$34,340		($24,052	)		$10,288
Customer relationship agreements(3)	2,585		(2,585		)	—
Trademarks(4)	80		(80		)	—
Total amortizing intangible assets		$37,005		($26,717	)		$10,288

	MARCH 31, 2014
	Gross  Carrying Amount		Accumulated Amortization			Net Carrying Amount
Indefinite-lived intangible assets:
Trademarks(1)		$358					$358
Amortizing intangible assets:
Capitalized software(2)		$48,989		($27,067	)		$21,922
Customer relationship agreements(3)	4,715		(3,955		)	760
Trademarks(4)	340		(340		)	—
Total amortizing intangible assets		$54,044		($31,362	)		$22,682

_____________________________________________________

(1) The Covisint trademarks were acquired by Compuware in an acquisition in March 2004. These trademarks are deemed to have an indefinite life and therefore are not being amortized.

(2) Amortization of capitalized software is included in “cost of revenue” in the financial statements. Capitalized software is generally amortized over five years.

(3) Amortization of customer relationship agreements is included in “sales and marketing” in the financial statements. Customer relationship agreements were acquired as part of acquisitions and are fully amortized as of March 31, 2015.

(4) Amortization of trademarks is included in “general and administrative” in the financial statements. Trademarks were acquired as part of acquisitions and are fully amortized as of March 31, 2015.

Schedule of intangible assets, future amortization expense

Estimated future amortization, based on recorded intangible assets at March 31, 2015, is expected to be as follows (in thousands):

	AT MARCH 31, 2015 FOR THE YEAR ENDING MARCH 31,
	2016		2017		2018		2019		2020
Capitalized software		$3,395		$3,014		$2,316		$966		$597
Total		$3,395		$3,014		$2,316		$966		$597

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QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (Notes)

12 Months Ended

Mar. 31, 2015

Quarterly Financial Information Disclosure [Abstract]

QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

Quarterly financial information for the years ended March 31, 2015 and 2014 was as follows (in thousands, except for per share data):

	Fiscal 2015
	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Year
Revenues		$21,587			$21,735			$21,755			$23,457			$88,534
Gross profit	6,321			7,409			7,371			1,029			22,130
Operating loss (2)	(12,113		)	(7,288		)	(6,955		)	(12,163		)	(38,519		)
Pre-tax loss	(12,091		)	(7,271		)	(6,940		)	(12,148		)	(38,450		)
Net loss	(12,116		)	(7,304		)	(6,961		)	(12,181		)	(38,562		)
Basic loss per share (1)	(0.32		)	(0.19		)	(0.18		)	(0.32		)	(1.01		)
Diluted loss per share (1)	(0.32		)	(0.19		)	(0.18		)	(0.32		)	(1.01		)

_____________________________________________________

(1) Full year basic and diluted loss per share may not agree to the sum of the four quarters because each quarter is a separate calculation.

(2) Q4 2015 results include an $8.8 million impairment of capitalized software and customer relationship intangibles.

	Fiscal 2014
	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Year
Revenues		$24,101			$24,525			$24,109			$24,400			$97,135
Gross profit	10,791			10,399			10,449			9,122			40,761
Operating income (loss)	(4,667		)	(12,712		)	(8,292		)	(9,902		)	(35,573		)
Pre-tax income (loss)	(4,667		)	(12,712		)	(8,292		)	(9,902		)	(35,573		)
Net income (loss)	(4,670		)	(12,746		)	(8,314		)	(9,928		)	(35,658		)
Basic loss per share (1)	(0.16		)	(0.42		)	(0.22		)	(0.27		)	(1.06		)
Diluted loss per share (1)	(0.16		)	(0.42		)	(0.22		)	(0.27		)	(1.06		)

_____________________________________________________

(1) Full year basic and diluted loss per share may not agree to the sum of the four quarters because each quarter is a separate calculation.

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BENEFIT PLANS

12 Months Ended

Mar. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

BENEFIT PLANS

BENEFIT PLANS

Prior to fiscal year 2014, while the Company was a majority-owned subsidiary of Compuware, certain Covisint employees were granted Compuware stock compensation awards. In accordance with the provisions of Staff Accounting Bulletin (“SAB”) 1.B.1, “Costs Reflected in Historical Financial Statements,” the expense for these awards is included within the condensed consolidated statements of comprehensive loss.

Effective April 1, 2012, Compuware began providing a matching program for the 401(k). The Company matches 33 percent of employees’ 401(k) contributions up to 2 percent of eligible earnings. Matching contributions vest 100 percent when an employee attains three years of service. For the years ended March 31, 2014, and 2013, the Company expensed $0.7 million and $0.5 million, respectively, related to this program.

Effective April 8, 2014, the Company effectively transitioned all Covisint employees from the Compuware 401(k) program to a newly established Covisint 401(k) program. All balances were transferred to the new plan. Under the new plan, the Company matches 33 percent of employees’ 401(k) contributions up to 2 percent of eligible earnings. Matching contributions vest 100 percent when an employee reaches one year of service. For the year ended March 31, 2015, the Company expensed $0.5 million related to this program.

Compuware Stock-Based Compensation Plans

Compuware Stock Option Activity

A summary of option activity for Covisint employees under Compuware’s stock-based compensation plans as of March 31, 2015, and changes during the year then ended is presented below. Due to the spin-off of Covisint from Compuware, all Compuware options held by Covisint employees had to be exercised or they would be terminated 30 days after the completion of the spin-off. All vested options were exercised. All non-vested Compuware options terminated in the third quarter of fiscal 2015.

Shares and intrinsic value are presented in thousands.

	YEAR ENDED MARCH 31, 2015
	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term in Years	Aggregate Intrinsic Value
Options outstanding as of April 1, 2014	472			$9.23
Granted	—
Exercised	(301	)		$8.28			$627
Forfeited/Cancelled	(171	)
Options outstanding as of March 31, 2015	—			$—
Options vested and expected to vest, net of estimated forfeitures, as of March 31, 2015	—			$—
Options exercisable as of March 31, 2015	—			$—

The vesting schedule of options has varied over the years with the following vesting terms being the most common: (1) 50 percent of shares vest on the third anniversary date and 25 percent on the fourth and fifth anniversary dates; (2) 25 percent of shares vest on each annual anniversary date over four years; or (3) 30 percent of shares vest on the first and second anniversary dates and 40 percent vest on the third anniversary date.

All options were granted with exercise prices at or above fair market value on the date of grant and expire ten years from the date of grant. Option expense is recognized on a straight-line basis over the vesting period unless the options vest more quickly than the expense would be recognized. In this case, additional expense is taken to ensure the expense is proportionate to the percent of options vested at any point in time.

Compuware Restricted Stock Units

Due to the spin-off of Covisint from Compuware, all non-vested Compuware restricted stock units ("RSU's") terminated on October 31, 2014. A summary of non-vested RSUs activity for Covisint employees and directors under the Compuware Long-Term Incentive Plan ("LTIP") for the year ended March 31, 2015, is presented below. 

Shares and intrinsic value are presented in thousands.

	YEAR ENDED MARCH 31, 2015
	Shares		Weighted Average Grant-Date Fair Value	Aggregate Intrinsic Value
Non-vested RSU outstanding at April 1, 2014	182
Granted	—
Released	(156	)			$1,514
Forfeited	(26	)
Dividend equivalents, net	—
Non-vested RSU outstanding at March 31, 2015	—

RSUs have various vesting terms related to the purpose of the award. The most common vesting term is 25 percent of shares vesting on each annual anniversary date over four years. The awards are settled by the issuance of one common share of Compuware stock for each unit upon vesting and vesting accelerates upon death, disability or a change in control of Compuware.

Covisint Stock-Based Compensation Plan

In August 2009, Covisint established a 2009 Long-Term Incentive Plan (“2009 Covisint LTIP”) allowing the Board of Directors of Covisint to grant stock options, stock appreciation rights, restricted stock, restricted stock units, performance-based cash or restricted stock unit awards and annual cash incentive awards to employees and directors of Covisint and its affiliates. The 2009 Covisint LTIP reserves 4.5 million common shares of Covisint common stock for issuance under this plan. On December 30, 2013, the Board of Directors of Covisint adopted the First Amendment to the 2009 Covisint LTIP ("Amendment"), subject to shareholder approval. The Amendment increased the number of shares of Covisint’s common stock available for issuance pursuant to stock-based awards granted under the LTIP by 3.0 million shares (increasing the number of shares available for issuance under the LTIP from 4.5 million to 7.5 million). On January 2, 2014, Compuware, as the holder of the majority of the outstanding shares of the Company’s common stock at that time, approved the Amendment to increase the shares available. The increase in shares set forth in the Amendment became effective on February 13, 2014, twenty (20) days after the date of mailing of the Company’s Schedule 14C Information Statement to the Company's public shareholders.

As of March 31, 2015, there were 4.3 million stock options outstanding and 0.3 million RSUs outstanding from the 2009 Covisint LTIP. No options issued subsequent to the IPO contain a performance condition.

For the years ended March 31, 2015 and 2014, 1.54 million options and 0.13 million options, respectively, were exercised by participants of the 2009 Covisint LTIP.

Stock Option Activity

A summary of option activity under the Company’s stock-based compensation plans as of March 31, 2015, and changes during the year then ended is presented below (shares and intrinsic value in thousands):

	YEAR ENDED MARCH 31, 2015
	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term in Years	Aggregate Intrinsic Value
Options outstanding as of April 1, 2014	4,458			$3.48
Granted	1,695			$4.04
Exercised	(1,543	)		$1.86
Forfeited and Expired	(304	)		$8.41
Options outstanding as of March 31, 2015	4,306			$3.93	5.46		$458
Options vested and expected to vest, net of estimated forfeitures, as of March 31, 2015	4,112			$3.91	5.30		$458
Options exercisable as of March 31, 2015	1,718			$3.47	2.69		$296

All options were originally granted at estimated fair market value for those granted prior to IPO, and at fair market value for those granted post IPO. Options expire ten years from the date of grant unless expiration has been otherwise accelerated in accordance with a termination and/or separation agreement.

On April 7, 2014, 140,000 stock options with an estimated fair market value of $3.58 per option were granted to an employee. On July 1, 2014, 750,000 stock options with an estimated fair market value of $2.25 per option were granted to an employee. During November, 2014, 685,000 stock options with an estimated fair market value of $1.30 per option were granted to employees and directors. On December 1, 2014, 120,000 stock options with an estimated fair market value of $1.08 per option were granted to one employee.

Restricted Stock Unit Activity

A summary of non-vested RSUs activity as of March 31, 2015, and changes during the year ended March 31, 2015 is presented below. Shares and intrinsic value are presented in thousands.

	YEAR ENDED MARCH 31, 2015
	Shares	Weighted Average Grant-Date Fair Value		Aggregate Intrinsic Value
Non-vested RSU outstanding at April 1, 2014	—
Granted	338	$	3.91
Released	—
Forfeited	—
Dividend equivalents, net	—
Non-vested RSU outstanding at March 31, 2015	338			$	686

On July 1, 2014, 182,193 restricted stock units with a fair market value as of the grant date of $4.86 were granted to an employee. The restricted stock instruments granted on July 1, 2014 vest at 33.3% on each the first, second and third anniversary of the grant date. On November 17, 2014 a total 155,795 restricted stock units with a fair market value as of the grant date of $2.79 were granted to five directors. The restricted stock instruments granted November 17, 2014 fully vest on August 25, 2015. There are no other outstanding Covisint RSUs as of March 31, 2015.

Stock Awards Compensation

For the years ended March 31, 2015, 2014 and 2013, respectively, net stock awards compensation expense was recorded as follows in thousands:

	YEAR ENDED MARCH 31,
	2015		2014		2013
Stock awards compensation classified as:
Cost of revenue		$613		$829		$6
Research and development	175		722		1
Sales and marketing	1,570		5,594		360
General and administrative	3,874		10,330		1,262
Total stock awards compensation expense before income taxes		$6,232		$17,475		$1,629

Total stock awards compensation expense before income taxes of $17.5 million for the year ended March 31, 2014, was primarily comprised of $12.5 million recorded for the cumulative expense of stock options which had a performance condition related to the Company's completion of its IPO, the reversal of $2.9 million recorded in conjunction with the cancellation of Compuware PSAs, and $7.9 million of additional stock compensation expense that was recognized since the IPO. Since the IPO, the performance condition of these options was satisfied and the Company has recognized stock compensation expense of$6.2 million for the year ended March 31, 2015.

As of March 31, 2015, total unrecognized compensation cost of $5.1 million, net of estimated forfeitures, related to nonvested equity awards granted is expected to be recognized over a weighted-average period of approximately 2.4 years. The following table summarizes the Company’s estimated future recognition of its unrecognized compensation cost related to stock awards as of March 31, 2015 (in thousands).

	YEAR ENDING MARCH 31,
Covisint Stock-Based Compensation Plan:	Total		2016		2017		2018		2019
Stock Based Compensation		$5,052		$2,569		$1,517		$800		$166

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RELATED PARTY TRANSACTIONS

12 Months Ended

Mar. 31, 2015

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

Up until January 31, 2014, when Compuware divested its services business, the Company utilized services staff of Compuware to provide certain services to customers and to provide additional resources for research and development activities. These costs were included in “cost of revenue” and “research and development” as applicable. Compuware provided these services substantially at cost to Covisint through March 31, 2013 and at market rates effective April 1, 2013. Many of the Compuware employees providing these services transferred to Covisint effective March 1, 2013. Charges for those services totaled $0.0 million, $1.4 million and $17.4 million for the years ended March 31, 2015, 2014 and 2013, respectively.

On October 31, 2014, Covisint ceased being a subsidiary of Compuware Corporation as a result of October 2014 Distribution.

Prior to October 31, 2014, Covisint was a member of the Compuware Consolidated Group for tax purposes. Compuware Corporation, under a tax sharing agreement, used Covisint's tax losses and paid Covisint in cash for the tax losses utilized by the Compuware Consolidated Group. For fiscal 2015, Covisint was paid by Compuware based upon estimates of the losses utilized, which are subject to a true-up based upon filing actual federal and state income tax returns.

Certain transactions with Compuware were settled in cash and were reflected as due to or due from parent and affiliates within the condensed consolidated balance sheet, prior to Covisint's spin-off from Compuware on October 31, 2014. At March 31, 2015, the Company had a net receivable due from parent of $0.0 as compared to a net receivable of $2.8 million at March 31, 2014. The activity in the year ended March 31, 2015 was primarily comprised of Compuware’s payment of the net due from amount of approximately $2.8 million as of March 31, 2014, and additional payments from Compuware of approximately $7.6 million related to Compuware’s utilization of the Company’s tax loss and other tax attributes through the October 2014 Distribution, offset by payments from the Company to Compuware of approximately $13.9 million.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying combined and consolidated financial statements (“financial statements”) include the accounts of Covisint Corporation, a Michigan corporation, and the Covisint segment of Compuware Corporation ("Compuware" or "Parent") (combined operations are referred to as the “Company” or “Covisint”). Effective January 1, 2013, Compuware contributed substantially all of the assets and liabilities of the Covisint segment to Covisint Corporation (“January 2013 Contribution”). The financial statements reflect the assets, liabilities, revenues and expenses that were directly attributable to the Company as it operated within Compuware prior to the January 2013 Contribution, and they have been derived from the consolidated financial statements and accounting records of Compuware using the historical results of operations and historical basis of assets and liabilities for the Covisint operations of Compuware. The historical financial results may not be indicative of the results that would have been achieved had Covisint operated as a separate, stand-alone entity. These financial statements, prior to the January 2013 Contribution, were prepared on a combined basis because the operations were under common control.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which require management to make estimates and assumptions that affect the reported amounts of assets, liabilities, shareholders’ equity and the disclosure of contingencies at March 31, 2015 and 2014 and the results of operations for the years ended March 31, 2015, 2014 and 2013. While management has based their assumptions and estimates on the facts and circumstances existing at March 31, 2015, final amounts may differ from estimates.

On October 31, 2014, Covisint ceased being a subsidiary of Compuware Corporation as a result of Compuware's distribution of its holdings of Covisint common stock to Compuware shareholder

Prior to the January 2013 Contribution, “group equity” was shown in lieu of shareholders' equity in the combined and consolidated financial statements. All significant transactions between Compuware and the Company were included in the combined and consolidated financial statements and were deemed settled in cash. The net effect of the settlement of these intercompany transactions is reflected in the combined and consolidated statements of cash flows as a financing activity and in the “group equity” in the combined and consolidated balance sheets. From the January 2013 Contribution to the IPO, Compuware provided Covisint with short-term, non-interest bearing operating cash advances. The net effect of these intercompany transactions is reflected in the combined and consolidated statements of cash flows as financing activity and in “due to/from Parent and affiliates” in the consolidated balance sheets.

Prior to fiscal 2015, the financial statements included an allocation of certain corporate expenses including costs for facilities, information technology, tax, internal audit, accounting, finance, human resources, legal and executive management functions provided to the Company by Compuware. These allocations were primarily based on headcount, revenue and space occupied as a proportion of those in all Compuware operating units. Management believes the allocations are reasonable. However, the expenses allocated to the Company for these services are not necessarily indicative of the expense that would have been incurred if the Company had been a separate, independent entity and had otherwise managed these functions.

Revenue Recognition

Revenue Recognition

The Company derives revenue through contracts under which it provides customers services including access to and support of the Covisint Platform (“subscription”) and services related to implementation, solution deployment and on-boarding (“services”). The arrangements do not provide customers the right to take possession of the software at any time, nor do the arrangements contain rights of return. In order for a transaction to be eligible for revenue recognition, the following revenue criteria must be met: persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectibility is reasonably assured.

Signed agreements and binding purchase orders are used as evidence of an arrangement. For customers where a purchase order is used as evidence of an arrangement, master terms and conditions exist that govern such arrangements. The Company assesses cash collectibility based on a number of factors including past collection history with the customer. If the Company determines that collectibility is not reasonably assured, the Company defers the revenue until collectibility becomes reasonably assured, generally upon receipt of cash. The Company assesses whether the fee is fixed or determinable based on the payment terms associated with the transaction and whether the sales price is subject to refund or adjustment. Customers typically have the right to terminate their agreement if the Company fails to perform.

The Company’s contracts may include a subscription fee for ongoing PaaS operations and project (services) fees. For subscription arrangements that contain multiple elements, in accordance with Accounting Standards Codification (“ASC”) 605, “Revenue Recognition,” the arrangement consideration is allocated based on relative selling price using the following hierarchy: vendor specific objective evidence (“VSOE” which represents the price when sold separately) if available; third-party evidence if VSOE is not available; or estimated selling price if neither VSOE nor third-party evidence is available. The Company is currently unable to establish VSOE or third-party evidence of selling price for its deliverables. Therefore, the Company determines its best estimate of selling price by evaluating renewal amounts included in a contract, if any, and estimated costs to deliver each element.

The subscription fees are recognized ratably over the applicable service period. Revenue recognition commences on the later of the start date specified in the subscription arrangement, the “launch date” of the customers’ access to the Company’s production environment or when all of the revenue recognition criteria have been met. The Company considers delivery to have occurred on the “launch date”, which is the point in time that a customer is provided access to use the Company’s Platform.

For those projects that do not currently have stand-alone value, the revenue is deferred and recognized over the longer of the committed term of the subscription agreement (generally one to five years) or the expected period over which the customer will receive benefit (generally five years). Services that have stand-alone value are recognized as delivered generally using a proportional performance methodology based on dependable estimates of hours incurred and expected hours to complete since these services are primarily performed on a fixed fee basis. Hours or costs incurred represent a reasonable surrogate for output measures of contract performance, including the presentation of deliverables to the client; therefore, hours or costs incurred are used as the basis for revenue recognition. If it is determined that costs will exceed revenue, the expected loss is recorded at the time the loss becomes apparent.

Deferred Costs

Deferred Costs

Deferred costs consist of the incremental direct personnel and outside contractor costs incurred in delivering implementation and solutions deployment services that do not have stand-alone value. Revenue from these services, as described above, is deferred and recognized over the longer of the committed term of the subscription agreement or the expected period over which the customer will receive benefit. Therefore, the costs are recognized over the same period as the associated revenue. In the event a customer contract with deferred cost is terminated, the Company recognizes the remainder of the amount recorded in deferred cost attributable to the terminated contract.

Sales commission costs that directly relate to revenue transactions that are deferred are recorded as “prepaid expenses and other current assets” or non-current “other assets” as applicable in the condensed and consolidated balance sheets and recognized as “sales and marketing” expenses in the financial statements over the revenue recognition period of the related transaction.

Deferred Revenue

Deferred Revenue

Deferred revenue consists of the billed but unearned portion of existing contracts for subscription and services provided and is recognized as services are delivered or over the expected period during which the customer will receive benefit. The Company generally invoices its customers’ subscription fees in annual, quarterly or monthly installments. Contractual time periods often exceed the invoicing period and accordingly, the deferred revenue balance does not represent the total contract value of committed subscription agreements. The portion of deferred revenue that the Company anticipates will be recognized during the succeeding 12-month period is recorded as current deferred revenue and the remaining portion is recorded as non-current deferred revenue. The Company has generally received payment for the services for which the revenue has been deferred. Deferred revenue also includes contracts for which we have a contractually executed agreement and have invoiced the customer under the terms of the executed agreement but have not met all the revenue recognition criteria and/or have concluded that revenue should be recognized on cash basis, as collectibility of the invoiced amounts is not reasonably assured. In the event a customer contract with deferred revenue is terminated, the Company recognizes the remainder of the amount recorded in deferred revenue attributable to the terminated contract.

Collection and Remittance of Taxes

Collection and Remittance of Taxes

The Company records the collection of taxes from customers and the remittance of these taxes to governmental authorities on a net basis in its financial statements.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all investments with an original maturity of three months or less to be cash equivalents.

Cost of Revenue

Cost of Revenue

Consists of compensation and related expenses for infrastructure and operations staff, payments to outside service providers, data center costs related to hosting the Company’s software and amortization and impairment of capitalized software.

Allowance for Doubtful Accounts

Allowance for Doubtful Accounts

The Company considers historical loss experience, including the need to adjust for current conditions, the aging of outstanding accounts receivable and information available related to specific customers when estimating the allowance for doubtful accounts. The allowance is reviewed and adjusted based on the Company’s best estimates of collectibility.

Property and Equipment

Property and Equipment

Property and equipment is stated at cost. Depreciation is recorded using the straight-line method over the estimated useful lives of the related assets, which are generally estimated to be three to ten years for furniture and fixtures, computer equipment and software. Leasehold improvements are amortized over the term of the lease.

Capitalized Software

Amortization expenses are included in “cost of revenue” in the financial statements.

Capitalized Software

Includes the costs of purchased and internally developed software products capitalized in accordance with ASC 350-40, “Internal Use Software” and software technology purchased through acquisitions and is stated at unamortized cost.

Capitalized and purchased software costs are amortized on a straight line basis over the expected useful life of the software, which is generally five years. Amortization begins when the software technology is ready for its intended use.

Research and Development

Capitalized research and development and capitalized software costs are reviewed for impairment when events and circumstances indicate such asset may be impaired. If estimated future undiscounted cash flows are not sufficient to recover the carrying value of the capitalized research and development, an impairment charge is recorded in the amount by which the present value of future cash flows is less than the carrying value of these assets.

For development costs related to the Company’s PaaS offering, the Company follows the guidance set forth in ASC 350-40 which requires companies to capitalize qualifying computer software development costs, which are incurred during the application development stage. Costs related to preliminary project activities and post-implementation activities are expensed as incurred.

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

Goodwill and intangible assets with indefinite lives are tested for impairment annually at March 31 or more frequently if management believes indicators of impairment exist. With respect to goodwill, the carrying value of the Company's single reporting unit is compared to its fair value, and when the carrying value exceeds the fair value, the carrying value of the goodwill is reduced to implied fair value. The impairment test involves a two-step process with Step 1 comparing the fair value of the reporting unit with its aggregate carrying value, including goodwill. If the carrying amount of the reporting unit exceeds the reporting unit’s fair value, the Company performs Step 2 of the goodwill impairment test to determine the amount of impairment loss by comparing the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. All operations of the Company are in a single reporting unit that was evaluated in the annual impairment assessment.

Income Taxes

Income Taxes

The Covisint business was operated as a division of Compuware prior to the January 2013 Contribution. As a member of Compuware’s consolidated group (“Consolidated Group”), the Company’s operations were included in the Consolidated Group for tax periods or portions thereof commencing after the January 2013 Contribution through the October 2014 Distribution.

Income taxes are presented herein on a separate return basis even though the Company’s results of operations have historically been included in the consolidated, combined, unitary or separate income tax returns of Compuware until the October 2014 Distribution. The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax bases of assets and liabilities and net operating losses and tax credits using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period that includes the enactment date.

The Company records net deferred tax assets to the extent it believes these assets will more likely than not be realized. These deferred tax assets are subject to periodic assessments as to recoverability. If it is determined that it is more likely than not that the benefits will not be realized, valuation allowances are recorded which would increase the provision for income taxes. In making such determinations, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations.

Certain net operating losses ("NOL") and tax credits generated by the Company prior to the date of our spin-off from Compuware have been utilized by our former parent, Compuware, and are not available to reduce future taxable income of Covisint. Therefore, the deferred tax assets presented above do not include the NOL or tax credits generated by Covisint and utilized by Compuware. In as much as Compuware has paid cash for these NOL and tax credits, the Company has already realized the economic benefit. Covisint has received the economic benefit of these NOL and tax credits through a reduction of the due to parent and affiliates (for the amount of benefit realized by Compuware) which is reported as an equity contribution from Compuware to Covisint in the accompanying balance sheets and a cash flow from financing activities in the accompany cash flow statements. Following the Company's spin-off from Compuware on October 31, 2014, Compuware will no longer receive the tax benefit of these NOLs and tax credits, and, therefore, will no longer compensate the Company for these items.

Interest and penalties related to uncertain tax positions are included in the income tax expense.

Foreign Currency Translation

Foreign Currency Translation

The Company’s foreign operations use their respective local currency as their functional currency. Assets and liabilities of foreign subsidiaries are minimal and are generally short term in nature. Such assets and liabilities in the financial statements have been translated at the rate of exchange at the respective balance sheet dates, and revenues and expenses have been translated at average exchange rates prevailing during the period the transactions occurred. Translation adjustments have been excluded from the results of operations.

Stock-Based Compensation

Covisint Corporation Stock Compensation Awards

Covisint calculates the fair value of stock option awards granted using the Black-Scholes option pricing model, which incorporates various assumptions including volatility, expected term, risk-free interest rates and dividend yields. Despite the Company's IPO in September 2013, the Company does not yet have historical stock price data covering a historical period commensurate with the expected life of stock options granted. Therefore, the expected volatility assumption is based on an average of the historical volatility of comparable companies (“peer group companies”). The risk-free interest rate assumption is based upon observed interest rates appropriate for the expected life of the stock option awarded. The expected life of the stock option is based on management’s best estimates considering the terms of the options granted. Dividend yields have not been a factor in determining fair value of stock options granted as Covisint has never issued cash dividends and does not anticipate issuing cash dividends in the future.

Prior to the IPO, Covisint stock was not traded on a stock exchange and thus the exercise price of Covisint stock options at the date of grant was determined by calculating the estimated fair market value of the Company divided by the total shares outstanding, including outstanding stock options that had not yet vested. The estimated fair market value of the Company was measured using an equal combination of discounted cash flow and market comparable valuations and was discounted due to a lack of marketability at the grant date. Previous valuation estimates placed a greater emphasis on the discounted cash flow model. The discounted cash flow model uses significant assumptions, including projected future cash flows, a discount rate reflecting the risk inherent in future cash flows and a terminal growth rate. The key assumptions in the market comparable value analysis are the selection of peer group companies and application of these peer group companies’ data to Covisint.

Stock-Based Compensation

Stock award compensation expense is recognized, net of an estimated forfeiture rate, on a straight-line basis over the requisite service period of the award, for awards that vest strictly based on time, and on a straight-line basis over the requisite service period of the individual tranches of the award for awards with performance conditions.

Compuware Corporation Stock Compensation Awards

Certain Covisint employees have been granted stock options to purchase Compuware common stock, and under the agreements between the Company and Compuware, Covisint records the compensation expense relating to these stock options to purchase Compuware common stock. Compuware calculates the fair value of its stock option awards using the Black-Scholes option pricing model, which incorporates various assumptions including volatility, expected term, risk-free interest rates and dividend yields. The expected volatility assumption is based on historical volatility of Compuware’s common stock over the most recent period commensurate with the expected life of the stock option granted. Compuware uses historical volatility because management believes such volatility is representative of prospective trends. The risk-free interest rate assumption is based upon observed interest rates appropriate for the expected life of the stock option awarded.

Business Segments

Business Segments— The Company operates in a single reportable segment. Sales are heavily weighted toward North American automotive companies.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)," a new comprehensive revenue recognition standard that will supersede all existing revenue recognition guidance under U.S. GAAP. The standard's core principle is that revenue should be recognized as goods or services are transferred to a customer in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This ASU is effective for annual and interim periods beginning on or after December 15, 2016, and early adoption is not permitted, although the FASB is currently considering a one year deferral of the effective date of this ASU. Entities will have the option of using either a full retrospective approach or a modified approach to adopt the guidance in the ASU. The Company is currently evaluating the impact of adopting this guidance.

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INCOME TAXES - Income Tax Provision, Reconciliation, and Deferred Tax Assets and Liabilities (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Mar. 31, 2015		Mar. 31, 2014		Mar. 31, 2013
(Loss) before income tax provision:
U.S.	$ (38,586)		$ (35,961)		$ (5,853)
Foreign	136		388		303
Total (loss) before income tax provision	(38,450)		(35,573)		(5,550)
Current:
U.S. Federal	0		0		0
Foreign	17		86		97
U.S. State	0		0		0
Total current tax provision	17		86		97
Deferred:
U.S. Federal	0		0		0
Foreign	95		(1)		1
U.S. State	0		0		0
Total deferred tax provision (benefit)	95		(1)		1
Total income tax provision	112		85		98
Federal statutory rate	35.00%		35.00%		35.00%
Effective Income Tax Rate Reconciliation, Amount [Abstract]
Federal income tax at statutory rates	(13,458)		(12,451)		(1,942)
Increase (decrease) in taxes:
State income taxes, net	(1,675)		(1,314)		(213)
Foreign tax rate differential	(24)		(37)		(26)
Taxes relating to foreign operations	102		26		(19)
Tax credits	0		(483)		(1,389)
Valuation allowance	12,958	[1]	14,355	[1]	3,771	[1]
Share based compensation	2,303		0		0
Non-deductible expenses, net	72		(11)		0
Other, net	(166)		0		(84)
Total income tax provision	112		85		98
Deferred tax assets:
Deferred revenue	3,455		5,660
Intangible assets	9,152		1,827
Fixed assets	69		0
Accrued expenses	640		708
Stock-based compensation	5,914		7,612
Net operating loss and other tax credit carryforwards	7,878		153
Other	130		280
Total deferred tax assets before valuation allowance	27,238		16,240
Less: valuation allowance	20,470		4,389
Net deferred tax assets	6,768		11,851
Deferred tax liabilities:
Intangible assets	0		1,489
Capitalized research and development costs	5,509		10,911
Fixed Assets	0		745
Other	1,312		226
Total deferred tax liabilities	6,821		13,371
Net deferred tax (liabilities)	(53)		(1,520)
Current deferred tax assets	0		1,017
Current deferred tax liabilities	(1,581)		0
Long-term deferred tax assets	1,528		131
Long-term deferred tax liabilities	$ 0		$ (2,668)

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INCOME TAXES (Tables)

12 Months Ended

Mar. 31, 2015

Income Tax Disclosure [Abstract]

Schedule of income before income tax, domestic and foreign

(Loss) before income tax provision includes the following (in thousands):

	YEAR ENDED MARCH 31,
	2015			2014			2013
(Loss) before income tax provision:
U.S.		($38,586	)		($35,961	)		($5,853	)
Foreign	136			388			303
Total (loss) before income tax provision		($38,450	)		($35,573	)		($5,550	)
	YEAR ENDED MARCH 31,
	2015			2014			2013
Income tax provision:
Current:
U.S. Federal		$—			$—			$—
Foreign	17			86			97
U.S. State	—			—			—
Total current tax provision		$17			$86			$97
Deferred:
U.S. Federal		$—			$—			$—
Foreign	95			(1		)	1
U.S. State	—			—			—
Total deferred tax provision (benefit)		$95			($1	)		$1
Total income tax provision		$112			$85			$98

Schedule of components of income tax expense (benefit)

(Loss) before income tax provision includes the following (in thousands):

	YEAR ENDED MARCH 31,
	2015			2014			2013
(Loss) before income tax provision:
U.S.		($38,586	)		($35,961	)		($5,853	)
Foreign	136			388			303
Total (loss) before income tax provision		($38,450	)		($35,573	)		($5,550	)
	YEAR ENDED MARCH 31,
	2015			2014			2013
Income tax provision:
Current:
U.S. Federal		$—			$—			$—
Foreign	17			86			97
U.S. State	—			—			—
Total current tax provision		$17			$86			$97
Deferred:
U.S. Federal		$—			$—			$—
Foreign	95			(1		)	1
U.S. State	—			—			—
Total deferred tax provision (benefit)		$95			($1	)		$1
Total income tax provision		$112			$85			$98

Schedule of effective income tax rate reconciliation

The Company’s income tax provision differed from the amount computed on pre-tax income at the U.S. federal income tax rate of 35 percent for the following reasons (in thousands):

	YEAR ENDED MARCH 31,
	2015			2014			2013
Federal income tax at statutory rates		($13,458	)		($12,451	)		($1,942	)
Increase (decrease) in taxes:
State income taxes, net	(1,675		)	(1,314		)	(213		)
Foreign tax rate differential	(24		)	(37		)	(26		)
Taxes relating to foreign operations	102			26			(19		)
Tax credits	—			(483		)	(1,389		)
Valuation allowance (1)	12,958			14,355			3,771
Share based compensation	2,303			—			—
Non-deductible expenses, net	72			(11		)	—
Other, net	(166		)	—			(84		)
Income tax provision (benefit)	$112			$85			$98

(1) Prior to the October 2014 Distribution, the valuation allowance represented losses and tax credits not benefited for operating losses and tax credits generated by the Company that were not benefited. These losses and credits are not included in the tabular presentation of deferred tax assets as they have been utilized by Compuware and will not provide future economic benefits to Covisint.

Schedule of deferred tax assets and liabilities

Temporary differences and carryforwards which give rise to a significant portion of deferred tax assets and liabilities are as follows (in thousands):

	March 31,
	2015			2014
Deferred tax assets:
Deferred revenue		$3,455			$5,660
Intangible assets	9,152			1,827
Fixed assets	69			—
Accrued expenses	640			708
Stock-based compensation	5,914			7,612
Net operating loss and other tax credit carryforwards	7,878			153
Other	130			280
Total deferred tax assets before valuation allowance	27,238			16,240
Less: valuation allowance	20,470			4,389
Net deferred tax assets		$6,768			$11,851
Deferred tax liabilities:
Intangible assets	—			1,489
Capitalized research and development costs	5,509			10,911
Fixed Assets	—			745
Other	1,312			226
Total deferred tax liabilities	6,821			13,371
Net deferred tax (liabilities)		($53	)		($1,520	)
Current deferred tax assets		$—			$1,017
Current deferred tax liabilities	(1,581		)	—
Long-term deferred tax assets	1,528			131
Long-term deferred tax liabilities	—			(2,668		)
Net deferred tax liabilities		($53	)		($1,520	)

Summary of operating loss and tax credit carryforwards

	March 31, 2015
	Balance		Expiration
U.S. federal net operating losses		$6,731	2035
U.S. state net operating losses		$1,142	2018-2035
U.S. state tax credit carryforwards	5		2028-2029
Total		$7,878

Schedule of unrecognized tax benefits roll forward

The following is a tabular reconciliation of the total amounts of UTBs for the years ended March 31, 2015, 2014 and 2013 (in thousands):

	March 31,
	2015			2014		2013
Gross unrecognized tax benefit for beginning of period		$354			$—		$475
Gross increases to tax positions for prior periods	—			—		—
Gross decreases to tax positions for prior periods	(354		)	—		(475		)
Gross increases to tax positions for current period	—			354		—
Settlements	—			—		—
Gross unrecognized tax benefit for period ended		$—			$354		$—

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Corporate Expenses, Stock Splits, Revenue Recognition, and Allowances (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013
Segment Reporting Information [Line Items]
Operating expenses	$ 60,649	$ 76,334	$ 48,707
Allowance for Doubtful Accounts Receivable [Roll Forward]
Balance at Beginning of Period	164	58	97
Charged to Income	7	108	0
Accounts Charged Against the Allowance	101	2	39
Balance at End of Period	70	164	58
Minimum
Segment Reporting Information [Line Items]
Revenue recognition, service contract period	1 year
Maximum
Segment Reporting Information [Line Items]
Revenue recognition, service contract period	5 years
Corporate, Non-Segment
Segment Reporting Information [Line Items]
Operating expenses	$ 0	$ 10,600	$ 10,800

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QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended																12 Months Ended
	Mar. 31, 2015		Dec. 31, 2014		Sep. 30, 2014		Jun. 30, 2014		Mar. 31, 2014		Dec. 31, 2013		Sep. 30, 2013		Jun. 30, 2013		Mar. 31, 2015		Mar. 31, 2014		Mar. 31, 2013
Quarterly Financial Information Disclosure [Abstract]
Revenues	$ 23,457		$ 21,755		$ 21,735		$ 21,587		$ 24,400		$ 24,109		$ 24,525		$ 24,101		$ 88,534		$ 97,135		$ 90,732
Gross profit	1,029		7,371		7,409		6,321		9,122		10,449		10,399		10,791		22,130		40,761		43,157
Operating loss	(12,163)	[1]	(6,955)	[1]	(7,288)	[1]	(12,113)	[1]	(9,902)		(8,292)		(12,712)		(4,667)		(38,519)	[1]	(35,573)		(5,550)
Pre-tax loss	(12,148)		(6,940)		(7,271)		(12,091)		(9,902)		(8,292)		(12,712)		(4,667)		(38,450)		(35,573)		(5,550)
Net loss	(12,181)		(6,961)		(7,304)		(12,116)		(9,928)		(8,314)		(12,746)		(4,670)		(38,562)		(35,658)		(5,648)
Basic loss per share (in dollars per share)	$ (0.32)	[2]	$ (0.18)	[2]	$ (0.19)	[2]	$ (0.32)	[2]	$ (0.27)	[2]	$ (0.22)	[2]	$ (0.42)	[2]	$ (0.16)	[2]	$ (1.01)	[2]	$ (1.06)	[2]	$ (0.19)
Diluted loss per share (in dollars per share)	$ (0.32)	[2]	$ (0.18)	[2]	$ (0.19)	[2]	$ (0.32)	[2]	$ (0.27)	[2]	$ (0.22)	[2]	$ (0.42)	[2]	$ (0.16)	[2]	$ (1.01)	[2]	$ (1.06)	[2]	$ (0.19)
Capitalized software and other intangible asset impairment																	$ 8,751		$ 0		$ 0

[1] Q4 2015 results include an $8.8 million impairment of capitalized software and customer relationship intangibles.

[2] Full year basic and diluted loss per share may not agree to the sum of the four quarters because each quarter is a separate calculation.

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COMBINED AND CONSOLIDATED STATEMENTS OF SHAREHOLDERS' AND GROUP EQUITY (USD $)	Total	Common Stock	Group Equity	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
Beginning balance at Mar. 31, 2012	$ 33,065,000	$ 0	$ 33,065,000	$ 0	$ 0	$ 0
Beginning balance (in shares) at Mar. 31, 2012		30,003,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(5,648,000)		(2,359,000)		(3,289,000)
Investment by Parent Company	12,881,000		12,881,000
Transfers from Parent Company	970,000			970,000
Parent contribution of stock awards and related taxes, net	1,629,000		1,105,000	524,000
Foreign currency translation	(3,000)					(3,000)
Parent contribution of business operations, net	0		(44,692,000)	44,692,000
Ending balance at Mar. 31, 2013	42,894,000	0	0	46,186,000	(3,289,000)	(3,000)
Beginning balance (in shares) at Mar. 31, 2013		30,003,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(35,658,000)				(35,658,000)
Parent contribution of stock awards and related taxes, net	(1,589,000)			(1,589,000)
Covisint stock option expense	18,996,000			18,996,000
Covisint stock option exercise (in shares)		127,500
Covisint stock option exercise	332,000			332,000
Income taxes	10,322,000			10,322,000
Foreign currency translation	(9,000)					(9,000)
IPO proceeds receivable, net of offering costs (in shares)		7,360,000
IPO proceeds receivable, net of offering costs	66,322,000			66,322,000
Ending balance at Mar. 31, 2014	101,610,000	0	0	140,569,000	(38,947,000)	(12,000)
Ending balance (in shares) at Mar. 31, 2014		37,490,500
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(38,562,000)				(38,562,000)
Parent contribution of stock awards and related taxes, net	127,000			127,000
Covisint stock option expense	6,105,000			6,105,000
Covisint stock option exercise (in shares)	1,543,000	1,543,400
Covisint stock option exercise	2,865,000			2,865,000
Income taxes	9,214,000			7,338,000	1,876,000
Foreign currency translation	(12,000)					(12,000)
Ending balance at Mar. 31, 2015	$ 81,347,000	$ 0	$ 0	$ 157,004,000	$ (75,633,000)	$ (24,000)
Ending balance (in shares) at Mar. 31, 2015		39,033,900

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LOSS PER COMMON SHARE

12 Months Ended

Mar. 31, 2015

Earnings Per Share [Abstract]

LOSS PER COMMON SHARE

LOSS PER COMMON SHARE

Basic earnings per common share (“EPS”) is computed by dividing earnings available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted EPS assumes the issuance of common stock for all potentially dilutive equivalent shares outstanding using the treasury method. Earnings per share are presented below as if Covisint Corporation and the Covisint Operations of Compuware had been combined for all periods presented.

EPS data were computed as follows (in thousands, except for per share data):

	YEAR ENDED MARCH 31,
	2015			2014			2013
Basic loss per share:
Numerator: Net loss		($38,562	)		($35,658	)		($5,648	)
Denominator:
Weighted-average common shares outstanding	38,217			33,774			30,003
Basic loss per share		($1.01	)		($1.06	)		($0.19	)
Diluted loss per share:
Numerator: Net loss		($38,562	)		($35,658	)		($5,648	)
Denominator:
Weighted-average common shares outstanding	38,217			33,774			30,003
Dilutive effect of stock awards	—			—			—
Total shares	38,217			33,774			30,003
Diluted loss per share		($1.01	)		($1.06	)		($0.19	)

Stock awards to purchase approximately 4,774,000, 4,350,000 and 3,630,000 shares for the years ended March 31, 2015, 2014 and 2013 respectively, were excluded from the diluted EPS calculation because they were anti-dilutive.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Capitalized Software, R&D, and Goodwill and Other Intangible Assets (Details) (USD $)	12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013
Accounting Policies [Abstract]
Capitalized computer software, purchased software, net	$ 200,000	$ 600,000
Finite-Lived Intangible Assets [Line Items]
Amortization expense of intangible assets	7,200,000	7,100,000	5,400,000
Research and development	13,900,000	18,100,000	17,400,000
Capitalized computer software, additions	3,500,000	5,700,000	13,600,000
Capitalized software and other intangible asset impairment	8,751,000	0	0
Goodwill	25,385,000	25,385,000
Impairment of goodwill	0	0	0
Capitalized software
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible asset, useful life	5 years
Amortization expense of intangible assets	6,800,000	6,800,000	4,900,000
In Process Research and Development
Finite-Lived Intangible Assets [Line Items]
Capitalized software and other intangible asset impairment	8,300,000
Customer Relationships
Finite-Lived Intangible Assets [Line Items]
Capitalized software and other intangible asset impairment	$ 500,000

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COMMITMENTS AND CONTINGENCIES (Details) (USD $)	0 Months Ended
	May 30, 2014 claim	Mar. 31, 2015
Service Agreement
Total		$ 1,512
2016		955
2017		$ 557
Loss Contingency, New Claims Filed, Number (in claims)	2

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LOSS PER COMMON SHARE (Tables)

12 Months Ended

Mar. 31, 2015

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

EPS data were computed as follows (in thousands, except for per share data):

	YEAR ENDED MARCH 31,
	2015			2014			2013
Basic loss per share:
Numerator: Net loss		($38,562	)		($35,658	)		($5,648	)
Denominator:
Weighted-average common shares outstanding	38,217			33,774			30,003
Basic loss per share		($1.01	)		($1.06	)		($0.19	)
Diluted loss per share:
Numerator: Net loss		($38,562	)		($35,658	)		($5,648	)
Denominator:
Weighted-average common shares outstanding	38,217			33,774			30,003
Dilutive effect of stock awards	—			—			—
Total shares	38,217			33,774			30,003
Diluted loss per share		($1.01	)		($1.06	)		($0.19	)