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EXHIBIT 10.29
LETTER OF AGREEMENT
HEALTHSTREAM INC. AND HEALTHEON/WEBMD CORPORATION
The purpose of this letter agreement (this "Agreement") is to set forth
certain agreements regarding a strategic alliance between HealthStream, Inc.
("HealthStream") and Healtheon/WebMD Corporation ("Healtheon/WebMD").
1. Healtheon/WebMD grants HealthStream the right to be the exclusive
provider of education, continuing education and training services for
all healthcare organizations, healthcare professionals and healthcare
workers on xxxxx.xxx and all other web sites owned or operated by
Healtheon/WebMD for a term of five (5) years. The parties acknowledge
that Healtheon/WebMD's "Just in Time CME" which delivers daily CME
credits based on that day's medical news, may continue to be presented,
provided that participants in "Just in Time CME" are registered in
HealthStream's system and there is a promotional HealthStream logo and
hyperlink to related HealthStream online courseware.
2. HealthStream pays Healtheon/WebMD $6.0 million per year for five (5)
years paid on a quarterly basis as guaranteed minimum royalties (and in
the first year, mutually agreed upon branding and promotion services),
with the first quarterly payment due and payable to Healtheon/WebMD
ninety (90) days after the execution of this Agreement. In the first
year, $2 million of these amounts shall be applied toward mutually
agreed upon branding, promotion and other services surrounding the
launch of the strategic alliance and the remaining $4 million shall be
applied toward guaranteed minimum royalties. In partial consideration
of those payments, HealthStream receives 100% of the revenues derived
from the sale of HealthStream's products and services through this
Agreement until it recovers 100% of its payments to Healtheon/WebMD
hereunder, and thereafter HealthStream receives 75% and Healtheon/WebMD
receives 25% of such revenues.
3. If the revenues recognized by HealthStream through this Agreement prior
to the end of the initial five (5) year term are less than $30 million
HealthStream, at its option, may extend the initial term hereof for one
(1) additional year upon payment of $1.00 to Healtheon/WebMD.
4. Healtheon/WebMD will purchase a total of $10 million worth of
HealthStream's common stock contemporaneous with the closing of its
initial public offering, subject to a lockup of one year on one-half of
those shares and a lockup of two years on the remaining half of those
shares.
5. Healtheon/WebMD shall prominently display HealthStream's trademark and
logo whenever and wherever continuing education or training is promoted
by Healtheon/WebMD.
6. Healtheon/WebMD will make reasonable efforts to arrange sales or
business development meetings between HealthStream and Healtheon/WebMD
customers and partners, including, but not limited to, HealthSouth and
CVS Pharmacy.
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7. HealthStream, at its option, may terminate this Agreement in its
entirety if it has not closed an initial public offering of its common
stock or a private offering of equity securities raising at least $40
million in the aggregate within six (6) months of the execution of this
Agreement.
Xxxxxx and accepted this 29th day of February 2000.
HEALTHSTREAM, INC.
/s/ Xxxxxx X. Xxxxx, Xx 2/29/00
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Xxxxxx X. Xxxxx, Xx. Date
Chief Executive Officer
HEALTHEON/WEBMD
/s/ X. Xxxxxxx Xxxxxx 2/29/00
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X. Xxxxxxx Xxxxxx Date
Executive Vice President,
Strategic Relations
Letter of Agreement 2
HealthStream and Healtheon/WebMD
