Document:

<PAGE>   1
                                                                   EXHIBIT 10.11

We have omitted certain portions of this document and filed them separately
with the commission. These portions are marked with an asterisk (*).

                     JOINT MARKETING AND LICENSING AGREEMENT

         This Joint Marketing and Licensing Agreement ("Agreement") is made by
and between HealthStream, Inc., a Tennessee corporation having its principal
place of business at 209 10th Avenue South, Suite 450, Nashville, Tennessee
37203 ("HealthStream") and The Cleveland Clinic Center for Continuing Education
("CFCE"), a component of the Cleveland Clinic Educational Foundation, an Ohio
Not-for-Profit corporation having its principal place of business at 9500 Euclid
Avenue, Cleveland, Ohio 44195.

                                   BACKGROUND

         WHEREAS, CFCE has developed and marketed and continues to develop and
market a line of products known as the 1998 Cleveland Clinic Intensive Review of
Internal Medicine, a CD-ROM based course providing continuing education to
physicians;

         WHEREAS, HealthStream has developed and marketed and continues to
develop and market a computer-based education system known as the Training
Navigator(TM) ("T.NAV(R)") that delivers and monitors World Wide Web based
content;

         WHEREAS, CFCE and HealthStream wish to enter into a cooperative effort
to deploy CFCE's educational offerings utilizing HealthStream's T.NAV technology
on the World Wide Web;

         WHEREAS, HealthStream wishes to acquire a license and CFCE has agreed
to grant a license to HealthStream for the delivery of the 1998 Cleveland Clinic
Intensive Review of Internal Medicine product, whether now existing or developed
by CFCE during the term of this Agreement, by HealthStream's T.NAV;

         WHEREAS, CFCE and HealthStream wish to provide appropriate
consideration for those efforts that each party has agreed to undertake;

         WHEREAS, CFCE and HealthStream each acknowledge the sufficiency and
adequacy of the value, concessions, and recitations set forth herein;

         NOW THEREFORE, CFCE and HealthStream agree as follows:

                                    ARTICLE 1

                                   DEFINITIONS

For purposes of this Agreement, the terms below shall have the following
meanings:

1.1.     "CFCE" means The Cleveland Clinic's Center for Continuing Education, a
         component of the Cleveland Clinic Educational Foundation. For the
         purposes of this agreement, components of that Center include the
         Continuing Medical Education Department, The Media Services Department,
         and UNITECH Communications.

1.2.     "Educational Content" means the information contained in the entire
         library of the CD-ROM version of the 1998 Cleveland Clinic Intensive
         Review of Internal Medicine product and its incorporated modules
         including, but not limited to, text and images that are the proprietary
         property of CFCE that consist of continuing medical education ("CME")
         in the modules listed in Exhibit A hereto.

1.3.     "Educational Activity" means a single module of the Education Product,
         specifically, a self-contained lesson consisting of Educational
         Content, learning objectives, a post test, and an evaluation. Each
         individual Educational Activity, when properly completed, is eligible
         for CME credit.

1.4.     "Educational Product" means the adaptation of the Educational Content
         into Educational Activities contained in the 1998 Cleveland Clinic
         Intensive Review of Internal Medicine CD-ROM, including but not limited
         to conversion to a format appropriate for delivery over the World Wide
         Web,

                                                                    Page 1 of 12
<PAGE>   2

         definition of education objective, a post test and an evaluation form
         for each segment in accordance with CFCE policies and the Accreditation
         Council for Continuing Medical Education's ("ACCME") Essentials and
         Guidelines for Accreditation of Sponsors of Continuing Medical
         Education and Standards for Commercial Support and Enduring Materials
         attached as Exhibit B hereto.

1.5.     "Effective Date" means _____________, 1999, the date on which both
         parties to this Agreement have executed same.

1.6.     "HealthStream" means HealthStream, Inc. and any Subsidiary of
         HealthStream, Inc.

1.7.     "Internet" means the international network of computers and computer
         networks accessible by the public at large of which the World Wide Web
         is a subset.

1.8.     "Net Revenue" means gross revenue derived by HealthStream from
         Transactions Fees.

1.9.     "Subsidiary" means a company in which, on a class-by-class basis, more
         than fifty percent (50%) of the stock entitled to vote for the election
         of directors is owned or controlled by another company, but only so
         long as such ownership or control exists.

1.10.    "T.NAV" is a branded trademark of HealthStream and is a computer based
         training product that delivers and monitors World Wide Web based
         Content.

1.11.    "T.NAV Commerce" means HealthStream's proprietary computer based
         training product that is a derivative product of T.NAV with additional
         features added by HealthStream in its sole discretion and designated by
         HealthStream in its sole discretion as "T.NAV v.x.x.c."

                                    ARTICLE 2

                                 LICENSE GRANTS

2.1      Subject to the payment of the consideration set forth in Article 3,
         CFCE grants to HealthStream an exclusive worldwide license to deliver
         the Educational Product on the World Wide Web.

2.2      Upon notice from CFCE that an Educational Activity is no longer
         appropriate for use because, for example, it contains erroneous or
         outdated information, or in other ways is no longer appropriate for the
         awarding of CME credit, HealthStream shall cease to represent that the
         Educational Activity being so delivered is CME accredited. During the
         term of this agreement, CFCE shall restructure the CFCE Educational
         Activity for CME accreditation at its own expense or shall provide an
         equivalent number of CME hours of content at no expense to
         HealthStream. After this Agreement terminates, HealthStream may, at its
         option and expense, seek to have CFCE update the Educational Activity.
         HealthStream may also seek permission from CFCE to continue to
         broadcast the Educational Activity without CME credit.

2.3      CFCE shall retain the ownership to all Educational Content, including
         but not limited to, text, images, and audio that have been copyrighted
         by the CFCE under permissions and releases granted by the authors.

2.4      HealthStream shall retain the copyright to the Educational Activities
         it produces under this agreement.

2.5      Any and all rights not expressly granted by either of the parties to
         the other are reserved by the respective party claiming reservation of
         that right.

                                                                    Page 2 of 12
<PAGE>   3
                                    ARTICLE 3

                      CFCE RESPONSIBILITIES TO HEALTHSTREAM

3.1      CFCE will designate a project manager with sufficient experience and
         training to resolve issues related to the production, review and
         credentialling issues required by this project.

3.2      CFCE agrees to accredit each Educational Activity produced under this
         Agreement if, in its sole judgment, CFCE policies and the ACCME's
         Essentials and Guidelines for Accreditation of Sponsors Of Continuing
         Medical Education And Standards For Commercial Support and Enduring
         Materials as set forth in Exhibit B hereto have been complied with in
         all material aspects.

3.3      CFCE agrees to provide initial accreditation for each Educational
         Activity for two (2) years, with one (1) year extensions possible as
         long as, in CFCE's judgment, the material is still current. At its sole
         discretion, in accordance with its responsibilities to the ACCME's
         Essentials and Guidelines for Accreditation of Sponsors Of Continuing
         Medical Education And Standards For Commercial Support and Enduring
         Materials as set forth in Exhibit B hereto, CFCE may determine at any
         time that one or more Educational Activity is no longer appropriate for
         CME accreditation. In the event the Center for Continuing Education
         finds one or more Educational Activities of this Educational Product no
         longer appropriate for CME accreditation, HealthStream agrees to
         withdraw the Educational Activities, in accordance with Article 2.2.

3.4      For each Educational Activity, CFCE shall provide a title, objectives,
         post test, and an evaluation form in a timely fashion. These components
         for the first ten (10) Educational Activities shall be provided no
         later than July 15, 1999; the second ten (10) components shall be
         provided no later than September 15, 1999, and the remaining components
         shall be provided no later than October 15, 1999.

                                    ARTICLE 4

                      HEALTHSTREAM RESPONSIBILITIES TO CFCE

4.1      HealthStream will designate a project manager with sufficient
         experience and training to resolve issues related to the production,
         review and credentialling issues required by this project.

4.2      HealthStream will submit to CFCE a draft paper based version of each
         Educational Activity it has converted to the Web for review and
         approval by CFCE. CFCE will have twenty (20) working days to conduct
         its reviews. Any approvals shall not be unreasonably withheld by CFCE.

4.3      HealthStream agrees to make all changes requested by CFCE in a timely
         manner.

4.4      HealthStream will incorporate into each Educational Activity:

         4.4.1    an accreditation statement to be provided by CFCE;

         4.4.2    objectives to be created and provided by CFCE;

         4.4.3    faculty disclosure information about actual or potential
                  conflicts of interest to be provided by CFCE;

         4.4.4    Educational Activity evaluation to be provided by CFCE; and

         4.4.5    a post test to be provided by CFCE.

4.5      HealthStream shall be responsible for issuing to qualified physicians a
         document recognizing the attainment of CME credit. HealthStream shall
         develop a system to bar issuance of such documentation unless the
         participating physician has answered seventy-five percent (75%) of the
         post test questions correctly.

4.6      HealthStream shall maintain a database of all users of the Educational
         Activity and shall provide the following information quarterly to CFCE:

                                                                    Page 3 of 12
<PAGE>   4

         4.6.1    number of users of each Educational Activity;

         4.6.2    demographic information;

         4.6.3    names of physicians who were issued letters of CME
                  accreditation for each Educational Activity; and

         4.6.4    results of evaluations.

4.7      HealthStream shall submit for CFCE approval the format and content of
         advertising, if any, so that CFCE can assure the requirements of ACCME
         Standards For Commercial Support are met. CFCE will have ten (10)
         working days to review and approve the format and content of such
         advertising.

4.8      HealthStream shall submit for CFCE approval all promotional activities
         related to this project. CFCE will have ten (10) working days to review
         and approve such promotional activities.

4.9      HealthStream agrees to allow CFCE to acknowledge within each
         Educational Activity the unrestricted educational grant provided by
         Novartis Pharmaceutical.

                                    ARTICLE 5

                                PRICE AND PAYMENT

5.1.     During the term of this Agreement, HealthStream shall pay to CFCE (Tax
         ID #: 34 - 0714553):

         5.1.1.   * in Licensing Fees according to the following terms;

         5.1.2.   * upon execution of this Agreement;

         5.1.3.   * on August 15, 1999; and

         5.1.4.   * on the earlier of September 15, 1999 or within thirty (30)
                  days after the delivery by CFCE of the final milestone.

5.2.     HealthStream will pay a penalty of one percent (1%) per month for any
         payment more than thirty (30) days past due. Failure of payment more
         than ninety (90) days past due will be grounds for CFCE to withdraw the
         license granted in Article 2 herein; in this event, CFCE will retain
         all paid fees to that date.

5.3.     Failure by CFCE to deliver the milestones in Section 3.4 herein within
         ninety (90) days of the specified date will be grounds for HealthStream
         to rescind this Agreement and CFCE refund the fees paid by HealthStream
         for any undelivered milestones.

                                                                    Page 4 of 12
<PAGE>   5

                                    ARTICLE 6

                           WARRANTIES AND INDEMNITIES

6.1.     CFCE represents and warrants that:

         6.1.1    Educational Content meets ACCME accreditation standards;

         6.1.2.   To the best of its knowledge Educational Content does not
                  infringe any copyright or patent enforceable under the laws of
                  any country;

         6.1.3.   To the best of its knowledge Educational Content does not
                  violate the trade secret rights of any third party; and

         6.1.4.   To the best of its knowledge Educational Content represents
                  the then existing reasonable standards of care.

6.2.     Each party agrees to indemnify, hold harmless, and defend the other
         from any and all damages, costs, and expenses, including reasonable
         attorneys' fees, incurred in connection with a claim which constitutes
         a breach of the warranties set forth in Section 4.1 provided, the
         charged party is notified promptly in writing of a claim and has sole
         control over its defense or settlement, and the party not charged
         provides reasonable assistance in the defense of the same.

6.3.     CFCE shall have no liability for any claim based on HealthStream's:

         6.3.1.   use or distribution of Educational Content after CFCE's
                  written notice that HealthStream should cease use or
                  distribution of Educational Content due to a claim, or

         6.3.2.   combination of Educational Content with a non-CFCE program or
                  data if such claim would have been avoided by the exclusive
                  use of Educational Content.

6.4.     For all claims arising under Section 4.3, HealthStream agrees to
         indemnify and defend CFCE from and against all damages, costs, and
         expenses, including reasonable attorneys' fees. In the event CFCE
         notifies HealthStream that it should cease distribution of Educational
         Content due to a claim, HealthStream may terminate this Agreement.

                                    ARTICLE 7

                        INTELLECTUAL PROPERTY PROVISIONS

7.1.     HealthStream will cause to appear on all marketing or promotional
         materials concerning the Educational Content, CFCE's copyright,
         trademark, or patent notices.

7.2.     The parties agree that ownership for any invention conceived or
         developed during the course of this Agreement shall vest in accordance
         with the patent rules governing inventorship.

7.3.     To the extent that source code is written by either party title shall
         vest in the party who has written such code.

7.4.     Each party is responsible for protecting, documenting, and maintaining
         its own intellectual property. Except as expressly set forth herein,
         this Agreement does not grant either party any proprietary rights of
         any type in the other party's materials, services or Content.

7.5.     Both parties acknowledge that, except as otherwise provided herein,
         each party owns and retains all right, title and interest in and to its
         own Content provided to the other party.

7.6.     HealthStream acknowledges that CFCE owns and retains all right, title
         and interest in and to Educational Content and all CFCE's products and
         services arising from the performance of this Agreement.

7.7.     CFCE acknowledges that HealthStream owns and retains all right, title
         and interest in and to

                                                                    Page 5 of 12
<PAGE>   6

         T.NAV Commerce, the T.NAV Commerce source code, the T.NAV Commerce
         object code, any derivatives of T.NAV Commerce and the interface
         templates designed by HealthStream used to present and deliver the
         Educational Content.

                                    ARTICLE 8

                  PROHIBITION AGAINST ASSIGNMENT AND SUBLICENSE

This Agreement, and any rights or obligations hereunder, shall not be assigned
or sublicensed (except as permitted in this Article 6) by either party.
Notwithstanding the foregoing, this Agreement may be assigned to a successor in
interest to all of a party's assets or substantially all of a party's assets and
shall inure to the benefit of and be binding upon successors or purchasers of
substantially all of either party's assets. CFCE may , at its sole discretion,
enter into an agreement with any vendor, including UNITECH Communications, to
fulfill the terms of this agreement. The costs, if any, of such agreements will
be borne by CFCE.

                                    ARTICLE 9

                                TERM OF AGREEMENT

Provided this Agreement has been properly executed by an authorized
representative of CFCE and by an officer of HealthStream, the term of this
Agreement ("Term") shall run from the Effective Date until three (3) year(s)
after the Effective Date, and thereafter be automatically extended for
additional one (1) year periods unless either party provides thirty (30) days
written notice to the non-terminating party. Nothing in this article prohibits
CFCE from exercising its responsibilities under the terms of its
responsibilities to the ACCME which calls for timely review for accuracy and
relevance of all educational activities and for termination of granting CME
credit for those activities. (See Section 3.3 herein).

                                   ARTICLE 10

                             DEFAULT AND TERMINATION

10.1     The non-defaulting party may terminate this Agreement in its entirety
         if any of the following events of default occur:

         10.1.1   if the defaulting party materially fails to perform or comply
                  with this Agreement or any provision hereof;

         10.1.2   if the defaulting party fails to strictly comply with the
                  provisions of Article 11, or makes an assignment in violation
                  of Article 6;

         10.1.3   if a party becomes insolvent or admits in writing its
                  inability to pay its debts as they mature, or makes an
                  assignment for the benefit of creditors;

         10.1.4   if a petition under any foreign, state, or United States
                  bankruptcy act, receivership statute, or the like, as they now
                  exist, or as they may be amended, is filed by a party; or

         10.1.5   if such a petition is filed by any third party, or an
                  application for a receiver of a party is made by anyone and
                  such petition or application is not resolved favorably or
                  discharged to such party within ninety (90) days.

                                                                    Page 6 of 12
<PAGE>   7

10.2     Termination due to a breach of Articles 6 or 11 shall be effective upon
         notice. In all other cases termination shall be effective sixty (60)
         days after notice of termination to the defaulting party if the
         defaults have not been cured within such sixty (60) day period. The
         rights and remedies of the parties provided herein shall not be
         exclusive and are in addition to any other rights and remedies provided
         by law or this Agreement.

                                   ARTICLE 11

                          OBLIGATIONS UPON TERMINATION

11.1.    From and after termination or expiration of this Agreement,
         HealthStream shall not employ Educational Content or portions thereof
         which is owned by CFCE, as part or portion of any product that
         HealthStream may use, sell, assign, lease, license, or transfer to
         third parties. Both parties shall cease and desist from all use of the
         other party's name(s) and associated trademark(s) and, upon request,
         deliver to the other party or its authorized representatives or destroy
         all material upon which those name(s) and the associated trademarks
         appear.

11.2.    Articles 4, 5, 9, 10, 11, 12, 13, Section 14.1, and Article 15 shall
         survive termination or expiration of this Agreement.

                                   ARTICLE 12

                WARRANTIES, LIMITATION OF LIABILITY AND REMEDIES

EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY OTHER
WARRANTIES. ANY AND ALL OTHER IMPLIED WARRANTIES OF ANY KIND WHATSOEVER,
INCLUDING THOSE FOR MERCHANTABILITY AND/OR FITNESS FOR A PARTICULAR PURPOSE, ARE
EXPRESSLY EXCLUDED. NEITHER PARTY SHALL BE LIABLE FOR ANY CONSEQUENTIAL
(INCLUDING WITHOUT LIMITATION LOST PROFITS, UNLIQUIDATED INVENTORY, ETC.),
INCIDENTAL, INDIRECT, ECONOMIC, OR PUNITIVE DAMAGES EVEN IF THE OTHER PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

                                   ARTICLE 13

                             NONDISCLOSURE AGREEMENT

13.1.    HealthStream expressly undertakes to retain in confidence all
         information and know-how transmitted to HealthStream by CFCE that CFCE
         has identified as being proprietary and/or confidential or that, by the
         nature of the circumstances surrounding the disclosure, ought in good
         faith to be treated as proprietary and/or confidential, and will make
         no use of such information and know-how except under the terms and
         during the existence of this Agreement. HealthStream shall not
         disclose, disseminate or distribute any such confidential information
         or know how to any third party without CFCE's prior written consent.
         HealthStream agrees to use the same degree of care to protect CFCE
         confidential information as HealthStream takes to protect its own
         confidential information of like importance. However, HealthStream
         shall have no obligation to maintain the confidentiality of information
         that:

         13.1.1.  it received rightfully from another party prior to its receipt
                  from CFCE;

         13.1.2.  CFCE has disclosed to a third party without any obligation to
                  maintain such information in confidence; or

         13.1.3.  has been or is independently developed by HealthStream.

                                                                    Page 7 of 12
<PAGE>   8

13.2.    Further, HealthStream may disclose confidential information as required
         by governmental or judicial order, provided HealthStream gives CFCE
         prompt notice of such order and complies with any confidentiality or
         protective order (or equivalent) imposed on such disclosure.
         HealthStream shall treat the terms and conditions of this Agreement as
         confidential; however, HealthStream may disclose such information in
         confidence to its immediate legal and financial consultants as required
         in the ordinary course of HealthStream's business. HealthStream's
         obligation under this Article 12 shall extend to the earlier of such
         time as the information protected hereby is in the public domain
         through no fault of HealthStream or five (5) years following
         termination or expiration of this Agreement. HealthStream shall not
         disclose any information on CFCE's unannounced products to
         HealthStream's employees or any third party.

13.3.    CFCE shall have the same obligations in Sections 11.1 and 11.2 above
         with respect to HealthStream's information and know-how.

13.4.    Both parties shall prepare a mutually acceptable press release, if any,
         to announce this Agreement.

                                   ARTICLE 14

                              NOTICES AND REQUESTS

All notices, authorizations, and requests in connection with this Agreement
shall be deemed given three (3)days after they are deposited in the U.S. mails,
postage prepaid, certified or registered, return receipt requested, or sent by
air express courier, charges prepaid; and addressed as follows:

CFCE:                      The Cleveland Clinic Center for Continuing Education
                           William D. Carey, MD, Director
                           TT-31
                           9500 Euclid Avenue
                           Cleveland, Ohio 44195

                           With a copy to:

                           Office of General Counsel
                           9500 Euclid Avenue, Mail Code H-18
                           Cleveland, OH 44195

HEALTHSTREAM:              HealthStream, Inc.
                           Robert H. Laird, Jr.
                           General Counsel
                           209 10th Avenue South
                           Suite 450
                           Nashville, Tennessee 37203

or to such other address as the party to receive the notice or request so
designates by written notice to the other.

                                                                    Page 8 of 12
<PAGE>   9
                                   ARTICLE 15

                                 CONTROLLING LAW

14.1.    This Agreement shall be construed and controlled by the laws of the
         State of Ohio.

14.2.    Neither this Agreement, nor any terms and conditions contained herein,
         shall be construed as creating a partnership, joint venture or agency
         relationship or as granting a franchise as defined in 16 CFR Section
         436.2(a). The price and payment described in Article 3 of this
         Agreement shall be construed as a royalty fee for the rights granted in
         Article 2 of this Agreement, and not as a franchise fee.

                                   ARTICLE 16

                                 ATTORNEYS' FEES

If either HealthStream or CFCE employs attorneys to enforce any rights arising
out of or relating to this Agreement, the prevailing party in any proceeding
shall be entitled to recover its reasonable attorneys' fees, costs and other
expenses.

                                   ARTICLE 17

                                     GENERAL

17.1.    This Agreement does not constitute an offer by HealthStream and it
         shall not be effective until signed by both parties. Upon execution by
         both parties, this Agreement shall constitute the entire agreement
         between the parties with respect to the subject matter hereof and
         replaces and supplants all prior and contemporaneous communications
         including the Letter of Intent signed by the parties March 28, 1999. It
         shall not be modified except by a written agreement signed on behalf of
         CFCE and HealthStream by their respective duly authorized
         representatives. Unless agreed to in a separate writing signed by both
         parties, any statement appearing as a restrictive endorsement on a
         check or other document which purports to modify a right, obligation or
         liability of either party shall be of no force and effect.

17.2.    If any provision of this Agreement shall be held by a court of
         competent jurisdiction to be illegal, invalid, or unenforceable, the
         remaining provisions shall remain in full force and effect. If this
         Agreement as it relates to any product(s) licensed hereunder shall be
         held by a court of competent jurisdiction to be invalid, illegal, or
         unenforceable or if this Agreement is terminated as to particular
         product(s), this Agreement shall remain in full force and effect as to
         the remaining product(s).

17.3.    No waiver of any breach of any provision of this Agreement shall
         constitute a waiver of any prior, concurrent or subsequent breach of
         the same or any other provisions hereof, and no waiver shall be
         effective unless made in writing and signed by an authorized
         representative of the waiving party.

17.4.    The Article headings used in this Agreement and the attached Exhibits
         are intended for convenience only and shall not be deemed to supersede
         or modify any provisions.

17.5.    Change in Law and Compliance.

         17.5.1.  Change in Law. By entering into this Agreement, the parties
                  specifically intend to comply with all applicable laws, rules
                  and regulations, including (I) the federal anti-kickback
                  statute (42 U.S.C. 1320a-7(b)) and the related safe harbor
                  regulations; and (ii) the Limitation on Certain Physician
                  Referrals, also referred to as the "Stark Law" (42 U.S.C.

                                                                    Page 9 of 12
<PAGE>   10

                  1395nn). Accordingly, no part of any consideration paid
                  hereunder is a prohibited payment for the recommending or
                  arranging for the referral of business or the ordering of
                  items or services; nor are the payments intended to induce
                  illegal referrals of business. In the event that any part of
                  this Agreement is determined to violate federal, state, or
                  local laws, rules, or regulations, the parties agree to
                  negotiate in good faith revisions to the provision or
                  provisions which are in violation. In the event the parties
                  are unable to agree to new or modified terms as required to
                  bring the entire Agreement into compliance, either party may
                  terminate this Agreement on sixty (60) days written notice to
                  the other party.

         17.5.2.  Compliance. By executing this Agreement, to the extent
                  applicable, HealthStream agrees that Cleveland Clinic shall
                  have the right to automatically terminate this Agreement in
                  the event that HealthStream is debarred, excluded, suspended
                  or otherwise determined to be ineligible to participate in
                  federal health care programs (collectively, "Debarred" or
                  "Debarment"). Accordingly, HealthStream shall provide
                  Cleveland Clinic with immediate notice if HealthStream (i)
                  receives notice of action or threat of action with respect to
                  its Debarment during the term of this Agreement; or (ii)
                  becomes Debarred. Upon receipt of such notice from
                  HealthStream, this Agreement shall automatically terminate
                  without further action or notice.

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth in Section 1.5 above. All signed copies of this Agreement shall
be deemed originals.

         /S/  William D. Carey                       /S/ Robert Frist, Jr.
         ---------------------------------      -------------------------------
         The Cleveland Clinic Foundation             HealthStream, Inc
         William D. Carey, MD                        Robert Frist
         Vice Chair, Division of Education           Chief Executive Officer.

        APPROVED AS TO FORM
            OFFICE OF
         GENERAL COUNSEL

       By   /s/ CCF Office of General Counsel
         ------------------------------------

       Date            6/8/99
           ----------------------------------

                                                                   Page 10 of 12
<PAGE>   11

                                    EXHIBIT A

                  INFORMATION BASE FOR THE EDUCATIONAL PRODUCT

The 1998 Cleveland Clinic Intensive Review of Internal Medicine on CD-ROM

                                                                   Page 11 of 12

<PAGE>   12

                                    EXHIBIT B

      ACCREDITATION COUNCIL FOR CONTINUING MEDICAL EDUCATION ESSENTIALS AND
         GUIDELINES FOR ACCREDITATION OF SPONSORS OF CONTINUING MEDICAL
      EDUCATION AND STANDARDS FOR COMMERCIAL SUPPORT AND ENDURING MATERIALS

                                                                   Page 12 of 12<PAGE>   1
                                                                   EXHIBIT 10.12

We have omitted certain portions of this document and filed them separately
with the Commission. These portions are marked with an asterisk(*).

December 31, 1998                                  [CHALLENGER CORPORATION logo]
Bob Sweeney
Challenger Corporation
5530 Summer Avenue
Memphis, Tennessee 38134

RE: Terms for Strategic Alliance

Dear Bob:

HealthStream, Inc. ("HealthStream") and Challenger Corporation ("Challenger")
desire to enter into a Strategic Alliance ("Agreement") whereby the parties
will:

1)  enter into good faith negotiations to merge or otherwise consolidate the
    corporations between now and April 30, 1999; and

2)  enter into a distribution and marketing arrangement whereby Challenger
    grants HealthStream an exclusive worldwide license to all Challenger
    products for deployment through HealthStream's Web based (Internet or
    Intranet) distribution channels.

In accordance with the exclusive worldwide license granted by Challenger to
HealthStream, Challenger will provide HealthStream with all of its existing
products and any new products developed or marketed by Challenger during the
license term, including but not limited to:

-   Med-Challenger EM for Emergency Physicians (7 modules; 200 CME hours)
-   Med-Challenger FP for Family Physicians (7 modules; 192 CME hours)
-   Med-Challenger Peds for Pediatricians (6 modules; 159 CME hours)
-   Med-Challenger IM for Internists (5 modules; 143 CME hours)
-   ECG-Challenger (31.25 CME hours)
-   Derm-Challenger (25.5 CME hours)
-   Rad-Challenger (10.25 CME hours)

In consideration for the exclusive worldwide license granted by Challenger to
HealthStream, HealthStream shall pay to Challenger * in 3 installments. The
first installment of * shall be due and payable to Challenger on January 4,
1999. The second installment of * shall be due and payable to Challenger on
February 5, 1999. The third installment of * shall be due and payable to
Challenger on March 5, 1999. These amounts shall be non-refundable advances to
Challenger on the royalties outlined below. In the event that the terms of a
merger or other consolidation between the parties are definitively determined by
April 30, 1999, this amount shall be credited toward the purchase price in the
event of an acquisition of Challenger by HealthStream or any amounts payable by
HealthStream to Challenger in the event of a merger.

Challenger and HealthStream will share the revenue ("Revenue") from this
strategic alliance according to the following royalty rates:

-   Individual Transactions - HealthStream shall pay Challenger * of the net
    Revenue received for each individual transaction paid for by the end user.
    In any case, the royalty paid shall be
<PAGE>   2
         at least * of Challenger's most favored per unit pricing structure on
         the effective date of this Agreement for its products regardless of the
         prices HealthStream charges for these products;

-        Sponsorships - HealthStream shall pay Challenger * of the net Revenue
         received from transactions paid for by a third party and purchased in
         bulk. In any case, the royalty paid shall be at least * of Challenger's
         most favored per unit pricing structure on the effective date of this
         Agreement for its products regardless of the prices HealthStream
         charges for these products; and

-        Notwithstanding the above, HealthStream may allow users to view
         portions of any Challenger products* through January 31, 1999. No
         continuing medical education (CME) credits, however, will be given * .

In the event that a merger or other consolidation between the firms is not
consummated by April 30, 1999, the term of this exclusive worldwide license
shall be two (2) years with a second-year licensing fee of * paid in twelve (12)
equal monthly installments. The first installment of * shall be due and payable
to Challenger on January 4, 2000, with subsequent payments due upon the fourth
of each month thereafter. Any amounts paid to Challenger under the second year
license shall be a non-refundable advance to Challenger on the royalties as
outlined above. If the accrued royalties due to Challenger are less than *
through November 15, 1999, then HealthStream shall have the unilateral right to
cancel the second year license by providing a written notice of intent not to
renew prior to December 1, 1999.

This Agreement shall supercede and replace the Joint Marketing Agreement signed
between the parties dated October 16, 1998.

Notwithstanding this Agreement, nothing shall interfere with Challenger's
agreement with Medical Directions of Tucson, Arizona for Med-Challenger for
Internists. Challenger, however, shall not extend this agreement beyond its
initial term or otherwise expand the rights granted under this agreement.

If the terms and conditions of this letter are acceptable, please sign and
return a copy of this letter so that we can move forward with our discussions.

                                         Sincerely,

                                         HEALTHSTREAM, INC.
                                         By: /s/ Robert A. Frist
                                            -------------------------
                                         Title: Chief Executive
Acknowledged and agreed to this 31st day of December, 1998.

CHALLENGER CORPORATION

/s/ Robert Sweeney
------------------
Robert Sweeney
Contracts Officer
Secretary to the Board of Directors
Chief Operating Officer and Executive Vice-President

                                       2

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