1
EXHIBIT 10.4

CORPORATE GOVERNANCE AGREEMENT

This Agreement is entered into as of November 12, 1999 by Stericycle,
Inc., a Delaware corporation (the "Company"), and the Persons whose names are
set forth on the attached Schedule I (collectively, the "Investors").

A. The Company and the Investors are concurrently closing an Amended and
Restated Series A Convertible Preferred Stock Purchase Agreement, dated
September 26, 1999 (the "Purchase Agreement"), pursuant to the terms and
conditions of which the Company is issuing and selling to the Investors, and the
Investors are purchasing from the Company, 75,000 of Series A Convertible
Preferred Stock (the "Preferred Shares").

B. The Parties' execution and delivery of this Agreement is a condition
of their respective obligations to close the Purchase Agreement.

The Parties agree as follows:

1. DEFINITIONS. Capitalized terms which are used in this Agreement
without being defined have the same meanings that they are given in the Purchase
Agreement. In addition, the following terms have these meanings.

BOARD OF DIRECTORS or BOARD means the Company's board of directors.

CONVERTED SHARES means the shares of Common Stock actually received by an
Investor or a Permitted Transferee upon conversion of some or all of the
Preferred Shares.

INITIAL INTEREST means the aggregate number of shares of Common Stock
into which the Preferred Shares may be converted as of Closing.

INVESTOR NOMINEE means any person nominated by the Permitted Owners to
serve as a director of the Company pursuant to this Agreement.

PERMITTED OWNER means (i) an Investor, for as long as the Investor
continues to be the beneficial owner of Shares, and (ii) each Permitted
Transferee, for as long as the Permitted Transferee continues to be the
beneficial owner of Shares.

PERMITTED TRANSFEREE means (i) any other Investor, (ii) any Affiliate
(including any partner) of any Investor to whom an Investor or another Affiliate
of any Investor Transfers Preferred Shares or Converted Shares, (iii) any other
Person to whom an Investor or an Affiliate of any Investor Transfers Preferred
Shares or Converted Shares with the prior written consent of the Board of
Directors and (iv) any Person to whom a transferee described in clause (iii)
Transfers Preferred or Converted Shares with the prior written consent of the
Board of Directors. In no event shall any Person who acquires Converted Shares
pursuant to a Rule 144 Sale or an offering registered under the Securities Act
be considered a Permitted Transferee. No Transfer otherwise permissible shall be
effective unless the transferee agrees in writing expressly for the Company's
benefit to be bound by the provisions of this Agreement, and in this event, the
transferor shall not be liable for the transferee's performance of its
obligations under this Agreement.

RULE 144 SALE means a transaction exempt from registration pursuant to
Rule 144 under the Securities Act.

-73-
2
SHARES means, at any time, the aggregate number of (i) Converted Shares
then held by the Investor and Permitted Transferees, (ii) Converted Shares that
the Investors and Permitted Transferees then have the right to receive upon a
conversion of all Preferred Shares then held by them and (iii) any other shares
of Common Stock then held by the Investors and Permitted Transferees.

TRANSFER means to sell, assign, transfer (voluntarily or involuntarily),
exchange (by merger or otherwise) or otherwise dispose of or to grant a lien,
encumbrance, pledge or other form of security interest.

2. CORPORATE GOVERNANCE.

2A. APPOINTMENT OF INVESTOR NOMINEES. Effective as of Closing, the
Company shall increase the size of its Board of Directors from seven directors
to nine directors, and the Board shall appoint two Investor Nominees designated
by the Investors to fill the vacancies created. An Investor Nominee shall serve
on each committee of the Board.

2B. MAINTENANCE OF DIRECTORSHIPS.

(a) For as long as Shares representing at least 50% in the aggregate of
the Initial Interest are beneficially owned by Permitted Owners, Permitted
Owners shall continue to have the right to designate two persons who shall be
the Company's nominees for election to the Company's Board of Directors. The
Company shall nominate each person so designated and shall use reasonable
efforts to have the two nominees of the Permitted Owners elected to its Board of
Directors. (The Company's obligations under this Section 2B(a) shall be deemed
satisfied if two persons are elected to the Board by holders of Preferred Shares
pursuant to the Certificate of Designation).

(b) If Shares representing at least 50% in the aggregate of the Initial
Interest cease to be beneficially owned by Permitted Owners, one of the two
Investor Nominees (as specified by the Permitted Owners) shall immediately
resign as a director upon the Company's written request. For as long as Shares
representing at least 25% in the aggregate of the Initial Interest are
beneficially owned by Permitted Owners, Permitted Owners shall continue to have
the right to designate one person who shall be the Company's nominee for
election to the Company's Board of Directors. The Company shall nominate the
person so designated and shall use reasonable efforts to have the nominee of the
Permitted Owners elected to its Board of Directors. (The Company's obligations
under this Section 2B(b) shall be deemed satisfied if one person is elected to
the Board by holders of Preferred Shares pursuant to the Certificate of
Designation).

(c) If at any time Shares representing at least 25% in the aggregate of
the Initial Interest cease to be beneficially owned by Permitted Owners,
Permitted Owners shall cease to be entitled to designate any person for
nomination by the Company for election to its Board of Directors, and the
Investor Nominee currently serving as a director (or both Investor Nominees
currently serving as directors, as the case may be) shall immediately resign
upon the Company's written request.

2C. REMOVAL AND REPLACEMENT.

(a) If at any time Permitted Owners notify the Board of Directors of
their wish to remove any incumbent Investor Nominee as a director, the Board
shall vote to remove the Investor Nominee (if his or her removal is permitted
under the Company's by-laws and the Delaware General Corporation Law). Removal
of an incumbent Investor Nominee by the Board otherwise than at the request of
the Permitted Owners shall require their prior written consent unless the
removal is based upon the Investor Nominee's willful misconduct.

-74-
3
(b) If at any time a vacancy is created on Board of Directors by reason
of the incapacity, death, removal or resignation of an incumbent Investor
Nominee, the Permitted Owners shall designate a person to fill the vacancy (who
promptly shall be appointed by the incumbent directors). If the Permitted Owners
nominate an Investor Nominee for election to the Board of Directors and the
Company's stockholders fail to elect him or her to office, the Board of
Directors shall increase the number of directors on the Board of Directors by
one (if necessary to permit the appointment of a substitute Investor Nominee),
and the Investor and its Permitted Transferees shall be entitled to designate a
substitute Investor Nominee to fill the resulting vacancy. The incumbent
directors shall promptly appoint the substitute Investor Nominee as a director.

(c) At each meeting of stockholders of the Company at which directors are
elected, the nominees for directors proposed by the Company shall include the
Investor Nominee or Nominees required pursuant to this Agreement.

2D. INVESTOR NOMINEE.

Each incumbent Investor Nominee shall receive notice of each meeting of
the Board of Directors at the same time and in the same manner as other members
of the Board. Each incumbent Investor Nominee shall be entitled to
indemnification rights, travel and expense reimbursement and compensation
substantially similar to those of other non-employee directors of the Company.
The Company shall at all times maintain a directors' and officer' insurance
policy covering each incumbent Investor Nominee that provides in the aggregate
substantially the same coverage as the policy covering the current directors of
the Company as of the date of this Agreement.

2E. OBSERVER

If under Section 2B the Permitted Owners are entitled to designate only
one person as the Company's nominee for election to its Board of Directors, the
following provisions shall apply:

(1) if the Permitted Owners' designee was selected by the Bain
Investors, the MDP Investors shall be entitled to designate one other
person to attend meetings of the Company's Board of Directors as an
observer (but not as a participant) for as long as Shares representing at
least 25% in the aggregate of the MDP Investors' Initial Interest
continue to be beneficially owned by the MDP Investors; and

(2) if the Permitted Owners' designee was selected by the MDP
Investors, the Bain Investors shall be entitled to designate one other
person to attend meetings of the Company's Board of Directors as an
observer (but not as a participant) for as long as Shares representing at
least 25% in the aggregate of the Bain Investors' Initial Interest
continue to be beneficially owned by the Bain Investors.

The observer designated by the MDP Investors or the Bain Investors, as the case
may be, shall receive notice of each meeting of the Board of Directors at the
same time and in the same manner as the members of the Board. The Company shall
have the right to approve the observer designated by the MDP Investors or the
Bain Investors, as the case may be, (but shall not unreasonably withhold or
delay its approval).

2F. ACTIONS BY PERMITTED OWNERS.

Any action by Permitted Owners under this Section 2 shall be by majority
vote of the Permitted Owners, with each Preferred Share having a number of votes
equal to the number of Converted Shares into which it may then be converted, and
each Converted Share having one vote.

3. CERTAIN ACTIONS OF THE COMPANY.

-75-
4
3A. ACTIONS. Subject to Section 3B, the Company shall not do any of the
following (whether in one or a series of related actions or transactions)
without the approval of holders of a majority of the Shares then beneficially
owned by Permitted Owners:

(1) declare or pay any dividend or other payment to holders of Common
Stock or any other securities junior in right of payment to the Preferred
Shares;

(2) increase the size of the Company's Board (other than pursuant to
Sections 2A and 2C(b));

(3) merge or consolidate with, or permit any Subsidiary to merge or
consolidate with, any Person (other than a merger or consolidation
between the Company and a wholly-owned Subsidiary or between one
wholly-owned Subsidiary and another), or acquire, or permit any
Subsidiary to acquire, any interest in any Person or business (whether by
purchase of assets, purchase of stock, merger or otherwise), involving an
aggregate consideration (including assumed liabilities) exceeding
$20,000,000 in any one transaction or series of related transactions or
exceeding $50,000,000 in any 12-month period;

(4) divest or dispose of, or permit any Subsidiary to divest or
dispose of, any business or other assets (other than obsolete or worn-out
assets), whether by sale of assets, sale of stock, merger or otherwise,
involving an aggregate consideration exceeding $20,000,000 in any one
transaction or series of related transactions or exceeding $50,000,000 in
any 12-month period;

(5) become subject to or permit any Subsidiary to become subject to,
or amend, any Contract which by its terms would restrict the Company's
right to perform the provisions of this Agreement, the Registration
Agreement, the Certificate of Designation, the Company's certificate of
incorporation and the Company's bylaws that benefit the Investors;

(6) enter into or amend, or permit any Subsidiary to enter into or
amend, any Contract, transaction or arrangement with any of its or any
Subsidiary's officers, directors, employees, stockholders or Affiliates,
except for (i) customary employment and director arrangements consistent
with past practice, (ii) benefit programs on reasonable terms consistent
with past practice, (iii) transactions or arrangements between the
Company and any wholly-owned Subsidiary or between one wholly-owned
Subsidiary and another (treating 3CI Complete Compliance Corporation as a
wholly-owned Subsidiary for purposes of this clause (iii)), and (iv)
transactions with an Affiliate that arise solely as a result of owning an
equity interest in the Affiliate; or

(7) directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or
otherwise, with respect to (collectively, "incur"), or permit any
Subsidiary to incur, any Indebtedness (including Acquired Debt), and the
Company shall not issue any Disqualified Stock and will not permit any
Subsidiary to issue any shares of preferred stock; provided, however,
that the Company may incur Indebtedness (including Acquired Debt) or
issue Disqualified Stock, and the Company's Subsidiaries may incur
Indebtedness or issue preferred stock, if the Fixed Charge Coverage Ratio
for the Company's most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding the
date on which such additional Indebtedness is incurred or such
Disqualified Stock or preferred stock is issued would have been at least
1.75 to 1.0 in the case of any such incurrence or issuance occurring on
or prior to the second anniversary of the date of Closing and 2.0 to 1.0
in the case of any such incurrence or issuance that occurs thereafter, in
each case determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred or the preferred stock or Disqualified
Stock had been issued, as the case may be, at the beginning of such
four-quarter period.

-76-
5
Capitalized terms used in Section 3A(7) which are not defined elsewhere in this
Agreement have the same meanings that the same or corresponding terms are given
in the trust indenture to be entered into by the Company in connection with its
offering of the Subordinated Notes (the "Trust Indenture"). The restriction in
Section 3A(7) shall not prohibit the incurrence of any Permitted Debt (as
"Permitted Debt" is defined in connection with the corresponding covenant by the
Company under the Trust Indenture), but only to the extent that the actual
definitions in the Trust Indenture of "Permitted Debt" and the other capitalized
terms used in Section 3A(7) which are not defined elsewhere in this Agreement
are no more permissive or otherwise favorable to the Company than the
definitions used in the description of the Subordinated Notes that the Company
has provided to the Investors (being a draft prepared by Latham & Watkins dated
July 16, 1999, bearing the following footer on each page: NY_DOCS\356862[W97]).

3B. TERMINATION. The restriction in Section 3A(1) shall terminate when
Permitted Owners cease beneficially to own Preferred Shares representing at
least 25% in the aggregate of the Initial Interest. The restriction in Section
3A(2) shall terminate when Permitted Owners cease to be entitled under both this
Agreement and the Certificate of Designation to nominate any person for election
to the Company's Board of Directors. The restrictions in each of Sections 3A(3),
(4), (5), (6) and (7) shall terminate when Permitted Owners cease beneficially
to own Shares representing at least 20% in the aggregate of the Initial
Interest.

4. STANDSTILL AND RESTRICTIONS ON TRANSFER.

4A. STANDSTILL. Unless previously agreed to in writing by the Company,
until the earliest to occur of (x) the date on which the Investors and Permitted
Transferees cease beneficially to own any Shares, (y) the Investors have
completed a distribution of all Shares to their partners, or (z) the first
anniversary of the date of this Agreement, Permitted Owners shall not: (i)
acquire any securities of the Company (other than upon conversion of Preferred
Shares) if, after the acquisition, they would beneficially own more than 30% of
the voting power of the Company's outstanding securities; or (ii) acquire, or
attempt to acquire, directly or indirectly, control of the Company (through a
proxy contest or otherwise) or any of the Company's businesses or assets,
except, in each case, (a) in response to a proposal that has been made to the
Company's stockholders that would materially and adversely affect the Investors
or their investment in the Company or the Shares or (b) pursuant to the exercise
of preemptive or purchase rights under the Purchase Agreement or the Certificate
of Designation.

4B. RESTRICTIONS ON TRANSFER. Prior to the fifth anniversary of the date
of this Agreement, except for Transfers to a Permitted Transferee, no Permitted
Owner shall Transfer any Preferred Shares. This restriction shall not apply to
(i) the Transfer of any Preferred Shares which a Permitted Owner has a right to
have redeemed pursuant to Section 5A of the Certificate of Designation but which
for any reason the Company has failed to redeem within 30 days after the
Permitted Owner's exercise of his or its redemption right (ii) or to the
Transfer of any securities other than Preferred Shares. The right of a Permitted
Owner under the preceding sentence shall be in addition to any other rights and
remedies available to the Permitted Owner at law or in equity.

5. MISCELLANEOUS.

5A. NOTICES. All Notices under this Agreement shall be in writing and
sent by certified or registered mail, overnight messenger service, telecopier or
personal delivery, as follows:

(a) if to Stericycle, to:

Stericycle, Inc.
28161 North Keith Drive
Lake Forest, Illinois 60045

-77-
6
Attention: Mr. Mark C. Miller
President and Chief Executive Officer
Telecopier: (847) 367-9493

with a required copy to:

Johnson and Colmar
300 South Wacker Drive
Suite 1000
Chicago, Illinois 60606
Attention: Craig P. Colmar, Esq.
Telecopier: (312) 922-9283

(b) if to the Bain Investors, in care of:

Bain Capital, Inc.
Two Copley Place
Boston, Massachusetts 02116
Attention: Mr. Stephen G. Pagliuca
Mr. Robert Gay
Mr. John P. Connaughton
Mr. Joe Pretlow
Telecopier: (617) 572-3274

with a required copy to:

Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attention: Jeffrey C. Hammes, P.C.
Telecopier: (312) 861-2200

Madison Dearborn Partners, Inc.
Three First National Plaza
Suite 3800
Chicago, Illinois 60602
Attention: Mr. Thomas R. Reusche
Telecopier: (312) 895-1001

with a required copy to:

Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attention: Michael H. Kerr, P.C.
Telecopier: (312) 861-2200

All Notices sent by certified or registered mail shall be considered to have
been given three business days after being deposited in the mail. All Notices
sent by overnight courier service, telecopier or personal delivery shall be
considered to have been given when actually received by the intended recipient.
A Party may change its address for purposes of this Agreement by Notice in
accordance with this Section 5A.

-78-
7
5B. WAIVER. The rights and remedies of the Parties are cumulative and
not alternative. Neither the failure nor any delay by any Party in exercising
any right, power or privilege under this Agreement or the documents referred to
in this Agreement shall operate as a waiver of that right, power or privilege,
and no single or partial exercise of any right, power or privilege shall
preclude any other or further exercise of that right, power or privilege or the
exercise of any other right, power or privilege. All waivers shall be in writing
signed by the Party to be charged with the waiver, and no waiver that may be
given by a Party shall be applicable except in the specific instance for which
it is given.

5C. ENTIRE AGREEMENT. This Agreement supersedes all prior agreements
between the Parties with respect to its subject matter (including the standstill
provision of any confidentiality agreement between the Parties) and constitutes
a complete and exclusive statement of the terms of the agreement between the
Parties with respect to its subject matter. This Agreement may not be amended
except by a written agreement signed by the Party to be charged with the
amendment.

5D. NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement shall be
considered to give any Person other than the Parties (and Permitted Transferees)
any legal or equitable right, claim or remedy under or in respect of this
Agreement or any provision of this Agreement. This Agreement and all of its
provisions are for the sole and exclusive benefit of the Parties and their
respective successors and permitted assigns.

5E. EQUITABLE RELIEF. In addition to any other remedies which may be
available, the Company and each Permitted Owner shall be entitled to equitable
relief, including injunctive relief and specific performance, in the event of
any breach of the provisions of this Agreement, the Purchase Agreement, the
Registration Rights Agreement or the Certificate of Designation by another
Party, and neither the Company nor any Permitted Owner nor the Investor Nominee
or Nominees shall oppose the granting of such relief.

5F. SEVERABILITY. If any provision of this Agreement is held invalid or
unenforceable by a court of competent jurisdiction, the other provisions of this
Agreement shall remain in full force and effect. Any provision of this Agreement
which is held invalid or unenforceable only in part shall remain in full force
and effect to the extent not held invalid or unenforceable.

5G. CAPTIONS. The captions of sections of this Agreement are for
convenience only and shall not affect this the construction or interpretation of
this Agreement.

5H. CONSTRUCTION. All references in this Agreement to "Section" or
"Sections" refer to the corresponding section or sections of this Agreement. All
words used in this Agreement shall be construed to be of the appropriate gender
or number as the context requires. Unless otherwise expressly provided, the word
"including" does not limit the preceding words or terms.

5I. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be considered an original copy of this
Agreement and all of which, when taken together, shall be considered to
constitute one and the same agreement.

5J. GOVERNING LAW. This Agreement shall be governed by the Laws of the
State of Illinois without regard to conflicts of laws principles.

5K. BINDING EFFECT. This Agreement shall apply to, be binding in all
respects upon and inure to the benefit of Parties and their respective
successors and permitted assigns.

-79-
8
In witness, the Parties have executed this Agreement.

STERICYCLE, INC.

By: /s/ Frank J.M. ten Brink
---------------------------------
Name: Frank J.M. ten Brink
Title: CFO

BAIN CAPITAL FUND VI, L.P.

By: Bain Capital Partners VI, L.P.
Its: General Partner

By: Bain Capital Investors VI, Inc.
Its: General Partner

By: /s/ John P. Connaughton
---------------------------------
A Managing Director

BCIP ASSOCIATES II