<PAGE>   1
                                                                     EXHIBIT 4.2




                                TRUST INDENTURE


                                ----------------


                 THE INDUSTRIAL DEVELOPMENT BOARD OF THE COUNTY
                            OF HAMILTON, TENNESSEE,
                                   as Issuer,

                                      and

                           FIRST UNION NATIONAL BANK,
                                   as Trustee


                   -----------------------------------------


                                    securing

                                   $4,500,000


               THE INDUSTRIAL DEVELOPMENT BOARD OF THE COUNTY OF
            HAMILTON, TENNESSEE INDUSTRIAL DEVELOPMENT REVENUE BONDS
            (STERILE RECOVERIES, INC. PROJECT), TAXABLE SERIES 1999


                                ----------------


                          DATED AS OF FEBRUARY 1, 1999


<PAGE>   2




                               TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                                                   Page
                                                                                                   ----
<S>     <C>                                                                                         <C>
                                   ARTICLE I

                     DEFINITIONS AND RULES OF CONSTRUCTION

Section 1.1       Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    5
Section 1.2       Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   17

                                   ARTICLE II

                                   THE BONDS

Section 2.1       Amount, Terms, and Issuance of the Bonds. . . . . . . . . . . . . . . . . . . .   18
Section 2.2       Designation, Denominations, Maturity Date and Interest Rates of the Bonds . . .   19
Section 2.3       Optional Tender Provisions of the Bonds . . . . . . . . . . . . . . . . . . . .   23
Section 2.4       Registered Bonds Required: Bond Registrar and Bond Register . . . . . . . . . .   24
Section 2.5       Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   24
Section 2.6       Execution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   25
Section 2.7       Authentication; Authenticating Agent. . . . . . . . . . . . . . . . . . . . . .   26
Section 2.8       Payment of Principal and Interest; Interest Rights Preserved. . . . . . . . . .   26
Section 2.9       Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   27
Section 2.10      Mutilated, Destroyed, Lost, Stolen or Undelivered Bonds . . . . . . . . . . . .   28
Section 2.11      Temporary Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   28
Section 2.12      Cancellation of Surrendered Bonds . . . . . . . . . . . . . . . . . . . . . . .   29
Section 2.13      Conditions of Issuance. . . . . . . . . . . . . . . . . . . . . . . . . . . . .   29
Section 2.14      Book Entry. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   30

                                  ARTICLE III

                   PURCHASE AND REMARKETING OF TENDERED BONDS

Section 3.1       Remarketing of Tendered Bonds . . . . . . . . . . . . . . . . . . . . . . . . .   32
Section 3.2       Purchase of Bonds Delivered to the Tender Agent . . . . . . . . . . . . . . . .   33
Section 3.3       Delivery of Purchased Bonds . . . . . . . . . . . . . . . . . . . . . . . . . .   34
Section 3.4       Delivery of the Proceeds of the Sale of Remarketed Bonds. . . . . . . . . . . .   35
Section 3.5       No Remarketing After Certain Events . . . . . . . . . . . . . . . . . . . . . .   35
Section 3.6       Conversion of Series 1999 Bonds to Tax-Exempt Series Bonds. . . . . . . . . . .   35
</TABLE>




                                       i

<PAGE>   3

<TABLE>
<S>     <C>                                                                                         <C>
                                   ARTICLE IV

                                  PROJECT FUND

Section 4.1       Creation of and Deposits to the Project Fund. . . . . . . . . . . . . . . . . .   37
Section 4.2       Payments from the Project Fund. . . . . . . . . . . . . . . . . . . . . . . . .   37
Section 4.3       Trustee May Rely on Requisitions. . . . . . . . . . . . . . . . . . . . . . . .   38
Section 4.4       Completion Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   38
Section 4.5       Transfers to the Bond Fund. . . . . . . . . . . . . . . . . . . . . . . . . . .   38
Section 4.6       Trustee's Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   38
Section 4.7       Disposition of Balance in Project Fund. . . . . . . . . . . . . . . . . . . . .   38

                                   ARTICLE V

                        REVENUES AND APPLICATION THEREOF

Section 5.1       Revenues to be Paid Over to Trustee . . . . . . . . . . . . . . . . . . . . . .   39
Section 5.2       The Bond Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   39
Section 5.3       Revenues to Be Held for All Bondholders; Certain Exceptions . . . . . . . . . .   41
Section 5.4       Rebate Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   41

                                   ARTICLE VI

         DEPOSITORIES OF MONEYS; SECURITY FOR DEPOSITS AND INVESTMENT O

Section 6.1       Security for Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   41
Section 6.2       Investment of Moneys. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   42
Section 6.3       The Credit Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   43

                                  ARTICLE VII

                      REDEMPTION OR PURCHASE OF THE BONDS

Section 7.1       Redemption or Purchase Dates and Prices . . . . . . . . . . . . . . . . . . . .   46
Section 7.2       Lessee to Direct Optional Redemption. . . . . . . . . . . . . . . . . . . . . .   48
Section 7.3       Selection of Bonds to be Called for Redemption. . . . . . . . . . . . . . . . .   48
Section 7.4       Notice of Redemption or Purchase. . . . . . . . . . . . . . . . . . . . . . . .   49
Section 7.5       Bonds Redeemed or Purchased in Part . . . . . . . . . . . . . . . . . . . . . .   50

</TABLE>




                                      ii
<PAGE>   4

<TABLE>
<S>     <C>                                                                                         <C>

                                  ARTICLE VIII

                      PARTICULAR COVENANTS AND PROVISIONS

Section 8.1       Covenant to Pay the Bonds; Bonds Limited Obligations of the Issuer. . . . . . .   50
Section 8.2       Covenants to Perform Obligations Under this Indenture . . . . . . . . . . . . .   50
Section 8.3       Covenant to Perform Obligations Under the Lease Agreement . . . . . . . . . . .   51
Section 8.4       Trustee May Enforce the Issuer's Rights Under the Lease Agreement . . . . . . .   51
Section 8.5       Covenant Against Arbitrage. . . . . . . . . . . . . . . . . . . . . . . . . . .   51
Section 8.6       Inspection of the Bond Register . . . . . . . . . . . . . . . . . . . . . . . .   52
Section 8.7       Priority of Pledge and Security Interest. . . . . . . . . . . . . . . . . . . .   52
Section 8.8       Maintenance of Insurance: Payment of Taxes, Charges, Etc. . . . . . . . . . . .   52
Section 8.9       Maintenance and Repair. . . . . . . . . . . . . . . . . . . . . . . . . . . . .   52
Section 8.10      Insurance and Condemnation Proceeds . . . . . . . . . . . . . . . . . . . . . .   52
Section 8.11      Actions on Behalf of the Lessee . . . . . . . . . . . . . . . . . . . . . . . .   53
Section 8.12      No Lien on the Project in Favor of the Trustee or the Issuer;
                  Quitclaim Transfer of Right, Title and Interest in the Project. . . . . . . . .   53

                                   ARTICLE IX

                              DEFAULT AND REMEDIES

Section 9.1       Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   53
Section 9.2       Acceleration and Annulment Thereof. . . . . . . . . . . . . . . . . . . . . . .   54
Section 9.3       Other Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   55
Section 9.4       Legal Proceedings by the Trustee. . . . . . . . . . . . . . . . . . . . . . . .   55
Section 9.5       Discontinuance of Proceedings by the Trustee. . . . . . . . . . . . . . . . . .   56
Section 9.6       Credit Facility Issuer or Bondholders May Direct Proceedings. . . . . . . . . .   56
Section 9.7       Limitations on Actions by the Bondholders . . . . . . . . . . . . . . . . . . .   56
Section 9.8       Trustee May Enforce Rights Without Possession of the Bonds. . . . . . . . . . .   57
Section 9.9       Remedies Not Exclusive. . . . . . . . . . . . . . . . . . . . . . . . . . . . .   57
Section 9.10      Delays and Omissions Not to Impair Rights . . . . . . . . . . . . . . . . . . .   57
Section 9.11      Application of Moneys in the Event of Default . . . . . . . . . . . . . . . . .   57
Section 9.12      Trustee and Bondholders Entitled to All Remedies Under the Act. . . . . . . . .   58
Section 9.13      Trustee May File Claim in Bankruptcy. . . . . . . . . . . . . . . . . . . . . .   58
Section 9.14      Receiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   59
Section 9.15      Subrogation Rights of Credit Facility Issuer. . . . . . . . . . . . . . . . . .   59

</TABLE>




                                      iii

<PAGE>   5

<TABLE>
<S>     <C>                                                                                         <C>

                                   ARTICLE X

                             CONCERNING THE TRUSTEE

Section 10.1      Acceptance of the Trusts. . . . . . . . . . . . . . . . . . . . . . . . . . . .   60
Section 10.2      Trustee to Give Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . .   61
Section 10.3      Trustee Entitled to Indemnity . . . . . . . . . . . . . . . . . . . . . . . . .   62
Section 10.4      Trustee Not Responsible for Insurance, Taxes, Execution
                  of this Indenture, Acts of the Issuer or Application of the
                  Moneys Applied in Accordance with this Indenture. . . . . . . . . . . . . . . .   63
Section 10.5      Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   63
Section 10.6      Trustee to Preserve Records . . . . . . . . . . . . . . . . . . . . . . . . . .   64
Section 10.7      Trustee May Be a Bondholder . . . . . . . . . . . . . . . . . . . . . . . . . .   64
Section 10.8      Trustee Not Responsible for Recitals. . . . . . . . . . . . . . . . . . . . . .   64
Section 10.9      No Responsibility for Recording or Filing . . . . . . . . . . . . . . . . . . .   64
Section 10.10     Trustee May Require Information . . . . . . . . . . . . . . . . . . . . . . . .   64
Section 10.11     Trustee May Rely on Certificates. . . . . . . . . . . . . . . . . . . . . . . .   65
Section 10.12     Trustee Bond. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   65
Section 10.13     Segregation of Funds; Interests . . . . . . . . . . . . . . . . . . . . . . . .   65
Section 10.14     Qualification of the Trustee. . . . . . . . . . . . . . . . . . . . . . . . . .   65
Section 10.15     Resignation and Removal of the Trustee. . . . . . . . . . . . . . . . . . . . .   66
Section 10.16     Successor Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   67
Section 10.17     Co-Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   67
Section 10.18     Notice to Moody's or S&P. . . . . . . . . . . . . . . . . . . . . . . . . . . .   68

                                   ARTICLE XI

                  EXECUTION OF INSTRUMENTS BY THE BONDHOLDERS
                      AND PROOF OF OWNERSHIP OF THE BONDS

Section 11.1      Execution of Instruments by the Bondholders and
                  Proof of Ownership of the Bonds . . . . . . . . . . . . . . . . . . . . . . . .   69
Section 11.2      Preservation of Information . . . . . . . . . . . . . . . . . . . . . . . . . .   70

                                  ARTICLE XII

                           THE REMARKETING AGENT, THE
                      TENDER AGENT AND THE PLACEMENT AGENT

Section 12.1      The Remarketing Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   70
Section 12.2      The Tender Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   71
Section 12.3      The Placement Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   71
Section 12.4      Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   71

</TABLE>



                                      iv

<PAGE>   6

<TABLE>
<S>     <C>                                                                                         <C>

                                  ARTICLE XIII

                           AMENDMENTS AND SUPPLEMENTS

Section 13.1      Amendments and Supplements Without the Bondholders' Consent . . . . . . . . . .   72
Section 13.2      Amendments With the Bondholders' and the Credit
                  Facility Issuer's Consent . . . . . . . . . . . . . . . . . . . . . . . . . . .   73
Section 13.3      Supplemental Indentures Affecting the Rights of the
                  Credit Facility Issuer. . . . . . . . . . . . . . . . . . . . . . . . . . . . .   74
Section 13.4      Amendment of the Lease Agreement. . . . . . . . . . . . . . . . . . . . . . . .   74
Section 13.5      Amendment of the Lease Agreement Requiring the
                  Consent of the Credit Facility Issuer . . . . . . . . . . . . . . . . . . . . .   75
Section 13.6      Amendment of the Credit Facility. . . . . . . . . . . . . . . . . . . . . . . .   75
Section 13.7      Trustee Authorized to Join in Amendments and Supplements;
                  Reliance on Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   75

                                  ARTICLE XIV

                           DEFEASANCE; OTHER PAYMENTS

Section 14.1      Defeasance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   76
Section 14.2      Deposit of Funds for Payment of the Bonds . . . . . . . . . . . . . . . . . . .   77
Section 14.3      Effect of Purchase of the Bonds . . . . . . . . . . . . . . . . . . . . . . . .   78

                                   ARTICLE XV

                            MISCELLANEOUS PROVISIONS

Section 15.1      Covenants of the Issuer to Bind its Successors. . . . . . . . . . . . . . . . .   78
Section 15.2      Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   78
Section 15.3      Trustee as the Paying Agent and the Bond Registrar. . . . . . . . . . . . . . .   80
Section 15.4      Rights Under this Indenture . . . . . . . . . . . . . . . . . . . . . . . . . .   80
Section 15.5      Form of Certificates and Opinions . . . . . . . . . . . . . . . . . . . . . . .   80
Section 15.6      Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   80
Section 15.7      Covenants of Issuer Not Covenants of Officials Individually . . . . . . . . . .   81
Section 15.8      No Personal Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   81
Section 15.9      No Liability of County, Officers, Etc.. . . . . . . . . . . . . . . . . . . . .   82
Section 15.10     Limited Liability of the Issuer . . . . . . . . . . . . . . . . . . . . . . . .   82
Section 15.11     State Law Governs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   83
Section 15.12     Payments Due on Days Other Than Business Days . . . . . . . . . . . . . . . . .   83
Section 15.13     Third-Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . .   83
Section 15.14     Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . .   83

</TABLE>




                                       v

<PAGE>   7

<TABLE>
<S>     <C>                                                                                         <C>

EXHIBIT A:        Form of Notice of Conversion . . . . . . . . . . . . . . . . . . . . . . . . . .  
EXHIBIT B:        DTC Blanket Issuer Letter of Representations . . . . . . . . . . . . . . . . . .  
EXHIBIT C-1:      Form of Taxable Series 1999 Bond . . . . . . . . . . . . . . . . . . . . . . . .  
EXHIBIT C-2:      Form of Tax-Exempt Series Bond . . . . . . . . . . . . . . . . . . . . . . . . .  
EXHIBIT D:        Description of the Project . . . . . . . . . . . . . . . . . . . . . . . . . . .  
EXHIBIT E:        Requisition and Certificate. . . . . . . . . . . . . . . . . . . . . . . . . . .  

</TABLE>



                                      vi

<PAGE>   8


                                TRUST INDENTURE


         This TRUST INDENTURE, dated as of February 1, 1999 (this "INDENTURE"),
by and between THE INDUSTRIAL DEVELOPMENT BOARD OF THE COUNTY OF HAMILTON,
TENNESSEE, a public non-profit corporation, organized and existing under the
laws of the State of Tennessee (the "ISSUER") and FIRST UNION NATIONAL BANK, a
national banking association, having a corporate trust office in Nashville,
Tennessee, as Trustee (the "TRUSTEE").

                              W I T N E S S E T H:

         WHEREAS, the Issuer has been established and created pursuant to the
provisions of Chapter 53 of Title 7 of Tennessee Code Annotated, as amended
(the "ACT") and is authorized to acquire real property and interests therein,
buildings and other improvements thereon, and to sell or lease the same as
herein more particularly described; and

         WHEREAS, in furtherance of the public purpose for which the Issuer was
created, the Issuer proposes to issue $4,500,000 in aggregate principal amount
of its Industrial Development Revenue Bonds (Sterile Recoveries, Inc. Project),
Taxable Series 1999 (the "SERIES 1999 BONDS") pursuant to this Indenture to
finance, in whole or in part, the cost of the acquisition, construction,
installation and equipping of an industrial facility to be used for the
manufacture and reprocessing of medical products (the "PROJECT") to be located
in Hamilton County, Tennessee as more fully set forth in Exhibit D hereto and a
portion of the costs of issuance of the Bonds, and to lease the Project to
First Security Bank, National Association, as the Owner Trustee under SRI
Realty Trust 1998-1 (the "LESSEE"), which will in turn lease the Project to
Sterile Recoveries, Inc., a Florida corporation; and

         WHEREAS, the Lessee shall have the option under the Indenture to
convert the Series 1999 Bonds to the herein defined Tax-Exempt Series Bonds
upon the satisfaction of certain conditions (the Series 1999 Bonds and the
Tax-Exempt Series Bonds are hereinafter referred to as the "Bonds"); and

         WHEREAS, the Issuer and the Lessee will enter into a Lease Agreement,
dated as of February 1, 1999 (the "LEASE AGREEMENT"), pursuant to which the
Lessee will agree to make payments sufficient to pay the principal and Purchase
Price (hereinafter defined) of, redemption premium, if any, and interest on,
the Bonds as the same become due and payable and to pay administrative expenses
in connection with the Bonds, including certain costs of issuance; and

         WHEREAS, it has been determined that the estimated amount necessary to
finance the cost of the acquisition, renovation, construction, installation and
equipping of the Project, including necessary expenses incidental to the
issuance of the Series 1999 Bonds, will require the issuance, sale and delivery
of Bonds in the aggregate principal amount of $4,500,000 as hereinafter
provided; and




<PAGE>   9

         WHEREAS, the Lessee and First Union National Bank, a national banking
association (the "BANK"), have entered into a Credit Agreement, dated as of
February 1, 1999 (the "REIMBURSEMENT AGREEMENT"), pursuant to which the Bank
has agreed, among other things, to issue its irrevocable direct-pay letter of
credit, dated the date of the delivery of the Series 1999 Bonds (the "LETTER OF
CREDIT"), in favor of the Trustee, for the account of the Lessee obligating the
Bank to pay to the Trustee upon draws made by the Trustee in accordance with
the terms thereof up to (i) an amount equal to the aggregate principal amount
of the Bonds then Outstanding (hereinafter defined) to be used by the Trustee
to pay (a) the principal of such Bonds whether at maturity, upon redemption,
acceleration or otherwise and (b) the portion of the Purchase Price equal to
the principal amount of any such Bonds delivered to the Tender Agent
(hereinafter defined) for purchase plus (ii) an amount equal to up to one
hundred twenty (120) days' accrued interest on the Bonds at an assumed interest
rate of fifteen percent (15%) per annum (which is the maximum interest rate to
be borne by the Bonds), to be used by the Trustee to pay (x) accrued interest
on the Bonds and (y) the portion of the Purchase Price of tendered Bonds equal
to the accrued interest, if any, on any such Bonds, and pursuant to which the
Lessee has agreed to reimburse the Bank for all amounts drawn by the Trustee
under the Letter of Credit, together with interest on all such amounts and to
pay to the Bank certain fees and expenses for issuing the Letter of Credit; and

         WHEREAS, as security for the payment of the Bonds, the Issuer has
agreed to assign and pledge to the Trustee, all right, title and interest of
the Issuer in (i) the Lease Agreement (except the Issuer Reserved Rights
(hereinafter defined)), (ii) all money and securities at any time on deposit
in, in transit to or credited to any account or fund created hereunder,
including without limitation the Project Fund and the Bond Fund, but excluding
the Rebate Fund, and (iii) Revenues (as hereinafter defined); and

         WHEREAS, all things necessary to make the Bonds, when authenticated by
the Trustee and issued and delivered as provided in this Indenture, the legal,
valid, binding and enforceable limited obligations of the Issuer, according to
the import thereof, and to create a valid assignment and pledge of the Revenues
to the payment of the principal and Purchase Price of, redemption premium, if
any, and the interest on, the Bonds and a valid assignment of certain of the
rights, title and interest of the Issuer in the Lease Agreement, have been done
and performed, and the execution, issuance and delivery of the Bonds, subject
to the terms hereof, have in all respects been authorized; and

         WHEREAS, the Issuer has determined that the Bonds to be issued
hereunder shall be substantially in the form contained in Exhibit C-1 and that
the Tax-Exempt Series Bonds to issued hereunder shall be substantially in the
form contained in Exhibit C-2, in each case, with such variations, omissions
and insertions as are required or permitted by this Indenture; and

         NOW, THEREFORE, in consideration of the premises, of the acceptance by
the Trustee of the trusts hereby created, and of the purchase and acceptance of
the Bonds by the Bondholders, and also for and in consideration of the sum of
One Dollar to the Issuer in hand paid by the 




                                       2


<PAGE>   10

Trustee at or before the execution and delivery of this Indenture, the receipt
of which is hereby acknowledged, and for the purpose of fixing and declaring
the terms and conditions upon which the Bonds are to be issued, delivered,
secured and accepted by the Bondholders and any and all other persons who shall
from time to time be or become owners thereof, and in order to secure the
payment of the Bonds at any time issued and outstanding hereunder and the
interest thereon according to their tenor, purport and effect, and in order to
secure the performance and observance of all the covenants, agreements and
conditions therein and herein contained:

         THE ISSUER DOES HEREBY PLEDGE AND ASSIGN, and grant a security
interest unto the Trustee and its successors and assigns, forever, to have and
to hold, for the benefit of the owners of the Bonds all right, title and
interest of the Issuer presently owned or hereafter acquired in and to the
following (collectively, the "TRUST ESTATE"):

               (a)  The Lease Agreement (as the same may from time to time be
         supplemented or amended), including, but not limited to, all payments
         of principal and interest due and to become due under the Lease
         Agreement whether made at their respective due dates or as prepayments
         permitted or required by the Lease Agreement together with full power
         and authority, in the name of the Issuer or otherwise, to demand,
         receive, enforce or collect any or all of the foregoing, to endorse or
         execute any checks or other instruments or orders, to file any claims
         and to take any action the Trustee may deem necessary or advisable in
         connection therewith, and the Issuer hereby irrevocably appoints the
         Trustee as attorney-in-fact for the Issuer for such purposes, which
         appointment is coupled with an interest and is irrevocable; provided,
         however, that the Issuer shall continue to have all the rights,
         together with the Trustee, contained in the following sections of the
         Lease Agreement (collectively, the "ISSUER RESERVED RIGHTS"):


                    (i)    Section 6.4 (pertaining to the Issuer's 
               non-exclusive right to receive payment for certain advances);

                    (ii)   Section 7.1 (pertaining to the Issuer's right of
               access to the Project and certain records);

                    (iii)  Section 7.5 (pertaining to the Issuer's right to
               receive payment for certain costs and expenses);

                    (iv)   Section 7.6 (pertaining to the Issuer's right to
               certain indemnities);

                    (v)    Section 7.7 (pertaining to the Issuer's right to
               indemnification);

                    (vi)   Section 7.8 (pertaining to the Issuer's right to
               request and provide certain information);



                                       3

<PAGE>   11


                    (vii)  Section 8.1 (pertaining to the Issuer's right to
               consent or withhold consent to assignment of rights of the
               Lessee under the Lease Agreement or lease or sale of the
               Project);

                    (viii) Section 9.5 (pertaining to the Issuer's right to
               reimbursement of expenses incurred upon a default); and

                    (ix)   Section 12.5 (pertaining to the Issuer's right to
               receive notices);

               (b) All money and securities at any time on deposit in, in
         transit to or credited to any account or fund created hereunder,
         including without limitation the Project Fund and the Bond Fund, but
         excluding the Rebate Fund; and

               (c) Revenues (as hereinafter defined);

and it is so mutually agreed and covenanted by and between the parties hereto
for the equal and proportionate benefit and security of the Bondholders without
preference, priority or distinction as to lien or otherwise, except as
hereinafter provided, of any one Bond over any other Bond, by reason of
priority in the issue, sale or negotiation thereof or otherwise, for the
benefit of the Bondholders and as security for the fulfillment of the
obligations of the Issuer hereunder;

         TO HAVE AND TO HOLD the same forever, subject, however, to the
exceptions, reservations and matters therein and herein recited but IN TRUST,
nevertheless, for the benefit and security of the owners from time to time of
the Bonds delivered hereunder and issued by the Issuer and Outstanding;

         PROVIDED, HOWEVER, that if, after the right, title and interest of the
Trustee in and to the Trust Estate pledged and assigned to it under this
Indenture shall have ceased, terminated and become void in accordance with
Article XIV hereof, the principal of, premium, if any, and interest on the
Bonds and any other obligations arising hereunder shall have been paid to the
Bondholders or shall have been provided for by the Lessee pursuant to Article
XIV hereof, then this Indenture and all covenants, agreements and other
obligations of the Issuer hereunder shall cease, terminate and be void, and
thereupon the Trustee shall cancel and discharge this Indenture and execute and
deliver to the Issuer and the Lessee such instruments in writing as shall be
required to evidence the discharge hereof; otherwise, this Indenture shall be
and remain in full force and effect.

         THIS INDENTURE FURTHER WITNESSETH, and it is expressly declared, that
the Bonds issued and secured hereunder are to be issued and delivered and the
Trust Estate and other revenues and funds herein pledged and assigned are to be
dealt with and disposed of under, upon and subject to the terms, conditions,
stipulations, covenants, agreements, trusts, uses and purposes as hereinafter
expressed.




                                       4

<PAGE>   12

                                   ARTICLE I

                     DEFINITIONS AND RULES OF CONSTRUCTION

         SECTION 1.1   DEFINITIONS. All words and terms defined in Article I of
the Lease Agreement shall have the same meanings in this Indenture, unless
otherwise specifically defined herein. In addition, the following words and
terms as used in this Indenture shall have the following meanings unless some
other meaning is plainly intended:

         "ACT" means, Chapter 53 of Title 7 of Tennessee Code Annotated.

         "ALTERNATE CREDIT FACILITY" shall mean an irrevocable direct-pay
letter of credit, insurance policy or similar credit enhancement or support
facility for the benefit of the Trustee, the terms of which Alternate Credit
Facility shall, in all respects material to the Bondholders, be the same
(except for the term of such Alternate Credit Facility) as or better than the
Credit Facility that is replaced by such Alternate Credit Facility as set forth
in Section 6.3 hereof.

         "AUTHENTICATING AGENT" shall mean the Trustee and any agent,
designated and appointed pursuant to Section 2.7 hereof.

         "AUTHORIZED INVESTMENTS" means (i) direct or indirect obligations of
the State or any municipality, instrumentality or political subdivision
thereof, or the United States of America or any instrumentality thereof or (ii)
obligations, the full and timely payment of the principal and interest of which
are directly and unconditionally guaranteed by the State or the United States
of America or (iii) bankers' acceptances of, or certificates of deposit issued
by, or time deposits or other banking arrangements or deposits with the Bank or
the Trustee with a rating of investment grade at all times by Moody's and S&P
or (iv) commercial paper of any Person other than any Related Person which has
been classified for rating purposes by Moody's as Prime-1 and by S&P as A-1 or
(v) commercial paper of the Bank or (vi) money market funds or other mutual
funds with at least $2 billion in assets and which invest exclusively in assets
described in (i) or (ii) above.

         "AVAILABLE MONEYS" shall mean:

               (a) with respect to any payment date occurring during any period
         that the Bonds are entitled to the benefit of a Credit Facility:

                   (A) any moneys which have been paid to the Trustee by the
               Lessee (including moneys transferred from the Project Fund
               pursuant to Section 4.1 hereof and which have been on deposit
               with the Trustee for at least one hundred twenty-seven (127)
               days during and prior to which no Event of Bankruptcy shall have
               occurred, and the proceeds from the investment of such moneys
               after such moneys have become Available Moneys;




                                       5

<PAGE>   13


                   (B) moneys on deposit with the Trustee representing proceeds
               from the resale by the Remarketing Agent of Bonds to persons
               other than the Issuer or the Lessee as described in Article III
               hereof, which, in each case, were at all times since their
               deposit with the Trustee held in a separate and segregated
               account or accounts or sub-account or sub-accounts in which only
               moneys that were Available Moneys were at any time held, and the
               proceeds from the investment thereof;

                   (C) moneys drawn under a Credit Facility that were at all
               times since their deposit with the Trustee held in a separate
               and segregated account or accounts or sub-account or
               sub-accounts in which no moneys (other than those drawn under a
               Credit Facility) were at any time held; and

               (b) with respect to any payment date not occurring during a
         period that the Bonds are entitled to the benefit of a Credit
         Facility, any moneys furnished to the Trustee and the proceeds from
         the investment thereof. The Trustee may presume that no Event of
         Bankruptcy has occurred unless notified in writing to the contrary by
         the Lessee, the Credit Facility Issuer or the owners of not less than
         twenty-five percent (25%) in aggregate principal amount of Bonds
         Outstanding.

         "BANK" shall mean (a) First Union National Bank, a national banking
association, as the issuer of the Letter of Credit, and its successors and
assigns; and (b) any Substitute Bank.

         "BANK ACCOUNT" shall mean the account of that name established in the
Bond Purchase Fund pursuant to Section 3.2 hereof.

         "BOND" or "BONDS" shall mean the Series 1999 Bonds and the Tax-Exempt
Series Bonds.

         "BOND COUNSEL" shall mean the firm of Bass, Berry & Sims PLC, or its
successors appointed by the Issuer. If the Trustee determines, in its sole
discretion, that the Issuer has failed to appoint a successor, "BOND COUNSEL"
shall mean a firm of attorneys of nationally recognized standing in matters
pertaining to the tax-exempt nature of interest on bonds issued by states and
their political subdivisions, duly admitted to the practice of law before the
highest court of any state of the United States of America.

         "BOND FUND" shall mean the trust fund so designated which is
established pursuant to Section 5.2(a) hereof.

         "BOND PURCHASE FUND" shall mean the trust fund so designated which is
established pursuant to Section 3.2 hereof.

         "BOND REGISTER" shall have the meaning provided in Section 2.4 hereof.

         "BOND REGISTRAR" shall mean the Bond Registrar as designated in
Section 2.4 hereof. 




                                       6

<PAGE>   14

         "BONDHOLDER" or "BONDHOLDERS" or "OWNER" or "OWNERS" shall mean the
initial owner or owners and any future owner or owners of the Bond or Bonds as
registered on the books and records of the Bond Registrar pursuant to Section
2.4 hereof.

         "BOOK ENTRY AGREEMENT" shall have the meaning provided in Section 2.14
hereof.

         "BUSINESS DAY" means a day on which (a) banks located in each of the
cities in which the principal office of the Trustee, the Credit Facility Issuer
and the Remarketing Agent is located are not required or authorized by law or
executive order to close for business, and (b) The New York Stock Exchange is
not closed.

         "CALCULATION PERIOD" shall mean the period from and including the day
following the Determination Date of each week (even if not a Business Day) to
and including the following Determination Date.

         "CODE" shall mean the Internal Revenue Code of 1986, as amended.
Reference herein to any specific provision of the Code shall be deemed to
include a reference to any successor provision to such provision and to any
Regulations issued or proposed under or with respect to such provision.

         "CONVERSION DATE" shall mean that Business Day elected by the Lessee
in accordance with Section 2.2(e) hereof as the effective date of conversion of
the interest rate on the Bonds from the Variable Rate to the Fixed Rate, which
date shall be an Interest Payment Date.

         "COUNSEL" shall mean an attorney or firm of attorneys acceptable to
the Trustee (who may, but need not be, counsel to the Issuer or the Lessee).

         "CREDIT FACILITY" shall mean the Letter of Credit or any Alternate
Credit Facility delivered to the Trustee pursuant to Article VI hereof.

         "CREDIT FACILITY ACCOUNT" shall mean the account of that name
established in the Bond Fund pursuant to Section 5.2 hereof.

         "CREDIT FACILITY ISSUER" shall mean (i) the Bank with respect to the
Letter of Credit or (ii) the institution issuing any Alternate Credit Facility.

         "DEFAULTED INTEREST" has the meaning provided in Section 2.8 hereof.

         "DETERMINATION DATE" shall mean Wednesday of each week or if Wednesday
is not a Business Day then the next succeeding Business Day.

         "DETERMINATION OF TAXABILITY" shall be defined as and shall be deemed
to have occurred on the first to occur of the following:




                                       7

<PAGE>   15

                    (i)    on the date when the Lessee or Sterile Recoveries,
               Inc., as the case may be, files any statement, supplemental
               statement or other tax schedule, return or document which
               discloses that an Event of Taxability shall have in fact
               occurred; and

                    (ii)   on the date when any Bondholder or former Bondholder
               notifies the Lessee, Sterile Recoveries, Inc., or the Trustee
               that it has received a written opinion of Bond Counsel to the
               effect that an Event of Taxability shall have occurred unless,
               within one (1) year after receipt by the Lessee or Sterile
               Recoveries, Inc. of such notification from the Trustee, any
               Bondholder or any former Bondholder, the Lessee or Sterile
               Recoveries, Inc. shall obtain and deliver to the Trustee a
               favorable ruling or determination letter issued to or on behalf
               of the Lessee or Sterile Recoveries, Inc. by the Commissioner or
               any District Director of Internal Revenue (or any other
               government official exercising the same or a substantially
               similar function from time to time) to the effect that, after
               taking into consideration such facts as form the basis for the
               opinion that an Event of Taxability has occurred, an Event of
               Taxability shall not have occurred;

                    (iii)  on the date when the Lessee or Sterile Recoveries,
               Inc., as the case may be, shall be advised in writing by the
               Commissioner or any District Director of Internal Revenue (or
               any other government official or agent exercising the same or a
               substantially similar function from time to time) that, based
               upon filings of the Lessee or Sterile Recoveries, Inc., as the
               case may be, or upon any review or audit of the Lessee or
               Sterile Recoveries, Inc., as the case may be, or upon any other
               ground whatsoever, an Event of Taxability shall have occurred;

                    (iv)   on the date when the Lessee shall receive notice in
               writing from any Bondholder or former Bondholder, or from the
               Trustee, that the Internal Revenue Service (or any other
               government agency exercising the same or a substantially similar
               function from time to time) has assessed as includable in the
               gross income of any Bondholder or former Bondholder the interest
               on such Bondholder's or former Bondholder's Bonds due to the
               occurrence of an Event of Taxability;

provided, however, no Determination of Taxability shall be deemed to have
occurred under subparagraph (iii) or (iv) hereof unless the Lessee or Sterile
Recoveries, Inc., as the case may be, has been afforded the opportunity, at its
expense, to contest any such assessment or unfavorable ruling and, further, no
Determination of Taxability shall be deemed to have occurred until such
contest, if made, has been finally determined.

         "DTC" means The Depository Trust Company, or any successor thereto.

         "DTC PARTICIPANT" or "DTC PARTICIPANTS" means securities brokers and
dealers, trust companies and clearing corporations that have access to the DTC
system either directly or through other DTC Participants.




                                       8

<PAGE>   16

         "EVENT OF BANKRUPTCY" shall mean a petition by or against the Lessee
or the Issuer under any bankruptcy act or under any similar act which may be
enacted which shall have been filed (other than bankruptcy proceedings
instituted by the Lessee or the Issuer against third parties) unless such
petition shall have been dismissed within 90 days and such dismissal shall be
final and not subject to appeal.

         "EVENT OF DEFAULT" shall mean any of the events specified in Section
9.1 hereof to be an Event of Default.

         "EVENT OF TAXABILITY" shall mean a change in law or fact or the
interpretation thereof, or the occurrence or existence of any fact, event or
circumstance (including, without limitation, the issuance of obligations or the
incurring of capital expenditures in excess of those permitted by Section
144(a)(4) of the Code, or the taking of any action by the Lessee or Sterile
Recoveries, Inc., or the failure to take any action by the Lessee or Sterile
Recoveries, Inc., or the making by the Lessee or Sterile Recoveries, Inc. of a
misrepresentation herein or in any certificate required to be given in
connection with the issuance, sale or delivery of the Tax-Exempt Series Bonds)
which has the effect of causing the interest paid or payable on any Tax-Exempt
Series Bond to become includable in the gross income of any Bondholder or
former Bondholder of any Tax-Exempt Series Bond other than a Bondholder or
former Bondholder who is or was a "substantial user" or "related person" (as
defined in the Code).

         "FINANCING BANK" shall mean First Union National Bank, a national
banking association, as the Lender and the Holder under the Participation
Agreement and any successor or permitted assignee.

         "FIXED RATE" shall mean the fixed annual rate of interest on the Bonds
determined by the Placement Agent pursuant to Section 2.2(e) hereof. If, for
any reason, the Fixed Rate is held to be invalid or unenforceable by a court of
competent jurisdiction, the Fixed Rate shall be equal to the Maximum Rate then
in effect.

         "FIXED RATE PERIOD" shall mean the period during which the Fixed Rate
is in effect, which shall be the period beginning on the Conversion Date and
ending on the Maturity Date.

         "GOVERNMENTAL OBLIGATIONS" shall mean:

                    (i)    direct obligations of the United States of America 
               for the full and timely payment of which the full faith and 
               credit of the United States of America is pledged,

                    (ii)   obligations issued by a Person controlled or
               supervised by and acting as an instrumentality of the United
               States of America, the full and timely payment of which is
               unconditionally guaranteed as a full faith and credit obligation
               of the United States of America, and




                                       9

<PAGE>   17


                    (iii)  securities or receipts evidencing ownership
               interests in obligations or specified portions (such as
               principal or interest) of obligations described in clause (i) 
               or (ii) above the full and timely payment of which securities,
               receipts or obligations is unconditionally guaranteed by the
               United States of America, which securities, receipts or
               obligations are not subject to redemption prior to maturity at
               less than par at the option of anyone other than the holder
               thereof.

         "HOLDER" shall have the meaning provided in Appendix A to the
Participation Agreement.

         "INDENTURE" shall mean this Indenture as amended or supplemented from
time to time.

         "INITIAL INTEREST RATE" shall mean a variable rate of interest as
determined by the Remarketing Agent on the date of the issuance of the Bonds.

         "INITIAL RATE PERIOD" shall mean from and including the Original
Delivery Date to and including March 3, 1999.

         "INTEREST PAYMENT DATE" shall mean (i) the first Business Day of each
February, May, August and November commencing on the first Business Day of May,
1999 and ending on the Maturity Date, (ii) the Conversion Date and (iii) the
Maturity Date.

         "ISSUER" shall mean the (i) The Industrial Development Board of the
County of Hamilton, Tennessee, a public non-profit corporation, organized and
existing under the laws of the State of Tennessee, its successors and assigns,
and (ii) any local governmental body resulting from or surviving any
consolidation or merger to which the Issuer or its successors may be a party.

         "ISSUER RESERVED RIGHTS" shall have the meaning set forth in the
recitals hereto.

         "LEASE AGREEMENT" shall mean the Lease Agreement of even date herewith
between the Issuer and the Lessee and any amendments or supplements thereof
permitted by this Indenture.

         "LENDER" shall have the meaning provided in Appendix A to the
Participation Agreement.

         "LESSEE" shall mean First Security Bank, National Association, as
Owner Trustee under SRI Realty Trust 1998-1 and its successors or assigns and
any surviving, resulting or transferee corporations or other entities.

         "LESSEE'S REPRESENTATIVE" shall mean such persons as, at the time, are
designated to act on behalf of the Lessee by written certificate furnished to
the Trustee and to the Issuer containing the specimen signature of each such
person and signed on behalf of (i) the Lessee by a vice-president or any trust
officer of First Security Bank, National Association, in its capacity as Owner




                                      10

<PAGE>   18

Trustee under the SRI Realty Trust 1998-1 and (ii) Sterile Recoveries, Inc. by
its Executive Vice President.

         "LETTER OF CREDIT" shall mean the irrevocable direct pay letter of
credit, dated the date of delivery of the Bonds in the amount of $4,725,000
issued by the Bank in favor of the Trustee as beneficiary, with an initial term
of approximately three (3) years, subject to any extensions thereof.

         "MAJORITY OF THE BONDHOLDERS" shall mean the owners of a majority of
the aggregate principal amount of the Outstanding Bonds.

         "MANDATORY TAX-EXEMPT CONVERSION REDEMPTION DATE" shall mean the
Business Day that the Series 1999 Bonds are to be converted to the Tax-Exempt
Series Bonds.

         "MATURITY DATE" mean the first Business Day of February, 2014 unless
the maturity of the Bonds shall be accelerated by the Trustee pursuant to
Section 9.2 hereof, in which case the "MATURITY DATE" of the Bonds shall be the
date set forth in the notice of acceleration from the Trustee to the Issuer
pursuant to Section 9.2 hereof.

         "MAXIMUM RATE" shall, in the case of the Series 1999 bonds, mean the
lesser of 10% or the maximum contract rate of interest permitted by the laws of
the State, and in the case of the Tax-Exempt Series Bonds, mean the lesser of
8% or the maximum contract rate of interest permitted by the laws of the State.

         "MOODY'S" shall mean Moody's Investors Service, Inc. a Delaware
corporation, its successors and assigns, and, if such corporation shall be
dissolved or liquidated or shall no longer perform the functions of a
securities rating agency, "MOODY'S" shall be deemed to refer to any other
nationally recognized securities rating agency designated by the Trustee, with
the consent of the Lessee and the Credit Facility Issuer.

         "NET PROCEEDS," when used with respect to (i) any insurance proceeds
or (ii) any award resulting from, or other amount received in connection with,
eminent domain, means the gross proceeds from such proceeds, award or other
amount, less all expenses (including attorneys' fees) incurred in the
realization thereof.

         "OPTIONAL RETENTION NOTICE" shall mean a notice of the owner of a Bond
to the Trustee as described in Sections 2.2(e) and 7.1(d) hereof regarding
retention of the Bonds after a conversion of the interest rate.

         "OPTIONAL TENDER NOTICE" shall mean a notice from the owner of a Bond
to the Tender Agent as described in Sections 2.3 and 3.1 hereof regarding the
optional tender of the Bonds by the owners.




                                      11

<PAGE>   19

         "ORIGINAL DELIVERY DATE" shall mean February 24, 1999.

         "OUTSTANDING" in connection with Bonds shall mean, as of the time in
question, all Bonds authenticated and delivered under the Indenture, except:

                    (i)    Bonds theretofore canceled or required to be 
               canceled under Section 2.12 hereof,

                    (ii)   Bonds which are deemed to have been paid in 
               accordance with Article XIV hereof; and

                    (iii)  Bonds in substitution for which other Bonds have 
               been authenticated and delivered pursuant to Article II hereof.

In determining whether the owners of a requisite aggregate principal amount of
Bonds Outstanding have concurred in any request, demand, authorization,
direction, notice, consent or waiver under the provisions hereof, Bonds which
are held by or on behalf of the Lessee (unless all of the outstanding Bonds are
then owned by the Lessee) or an Affiliate of the Lessee (as defined below)
shall be disregarded for the purpose of any such determination. For the purpose
of this paragraph, an "AFFILIATE" of any specified entity shall mean any other
entity directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified entity and "CONTROL," when used
with respect to any specific entity, shall mean the power to direct the
management and policies of such entity, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"CONTROLLING" and "CONTROLLED" have meanings correlative to the foregoing.

         "PARTICIPATION AGREEMENT" shall mean the Participation Agreement dated
as of February 1, 1999 among Sterile Recoveries, Inc., the Lessee and the
Financing Bank, as the Lender and the Holder.

         "PAYING AGENT" shall mean the Trustee and its successors as provided
in Section 15.3 hereof.

         "PAYMENT DATE" shall have the meaning set forth in Section 5.2(d)
hereof.

         "PERSON" or "PERSONS" means an individual, partnership, corporation,
limited liability company, trust or unincorporated organization, and a
government or agency as political subdivision or branch thereof.

         "PLACEMENT AGENT" shall mean the securities dealer, bank or trust
company which is designated by the Lessee with the consent of the Credit
Facility Issuer, which is responsible for the initial placement of the Bonds
and which will agree to establish the Preliminary Fixed Rate and 




                                      12

<PAGE>   20

to use its best efforts to arrange for the sale of Tendered Bonds on the
Conversion Date, all as more particularly described in Section 2.2(e) hereof.

         "PLEDGE AGREEMENT" shall mean the Pledge Agreement of even date
herewith by the Lessee to the Bank, and any amendments or supplements thereof.

         "PLEDGED REVENUES" means and shall include the payments required to be
made by the Lessee under the Lease Agreement except payments to be made to the
Trustee for services rendered as Trustee under the Indenture and as Bond
Registrar and Paying Agent for the Bonds and except for expenses,
indemnification and other payments required to be made pursuant to Sections 7.5
and 7.6 of the Lease Agreement.

         "PRELIMINARY FIXED RATE" shall mean the rate of interest determined by
the Placement Agent prior to the Conversion Date to be that rate which, in the
sole judgment of the Placement Agent based on prevailing market conditions, is
the minimum fixed rate of interest necessary for the Placement Agent to arrange
for the sale at par of all of the Bonds for which the Placement Agent would be
so required to arrange for the sale on the Conversion Date pursuant to Section
2.2(e) hereof.

         "PRINCIPAL OFFICE" of the Trustee or Bond Registrar shall mean the
office at which, at the time in question, its corporate trust business with
respect to the Bonds is principally conducted.

         "PROJECT" shall mean the financing, in whole or in part, of the
acquisition, construction, installation and equipping of an industrial facility
consisting of the following: (i) approximately 4.7 acres of land located at
6024 Century Oaks Drive, Chattanooga, Hamilton County, Tennessee, and any other
interests, easements or other rights therein (the "LAND"); (ii) an
approximately 50,000 square foot facility, and any other rights therein or
improvements made thereto, located on the Land (the "BUILDING" and, together
with the Land, the "REAL PROPERTY"); and (iii) related equipment and machinery
to be installed on or in the Real Property, and any interests therein (the
"EQUIPMENT"), all as more fully set forth on Exhibit D.

         "PROJECT FUND" shall mean the trust fund so designated which is
established pursuant to Section 4.1 hereof.

         "PURCHASE DATE" has the meaning set forth in Section 3.2 herein.

         "PURCHASE PRICE" means an amount equal to 100% of the principal amount
of any Bonds tendered or deemed tendered for purchase pursuant to Section 3.2
and 3.3 of the Indenture, plus accrued interest thereon, if any, to the
Purchase Date.

         "REBATE FUND" shall mean the trust fund so designated which is
established pursuant to Section 5.4 hereof.




                                      13

<PAGE>   21

         "REGULAR RECORD DATE" shall mean:

                    (i)    in respect of any Interest Payment Date during the
               Variable Rate Period, the close of business on the Business Day
               immediately preceding each such Interest Payment Date, and

                    (ii)   in respect of any Interest Payment Date during the
               Fixed Rate Period, the fifteenth (15th) day (whether or not a
               Business Day) of the calendar month immediately preceding each
               such Interest Payment Date.

         "REIMBURSEMENT AGREEMENT" shall mean the Credit Agreement of even date
herewith by and between the Lessee and the Bank, as the same may be amended
from time to time and filed with the Trustee, and any agreement of the Lessee
with a Credit Facility Issuer setting forth the obligations of the Lessee to
such Credit Facility Issuer arising out of any payments under a Credit Facility
and which provides that it shall be deemed to be a Reimbursement Agreement for
the purpose of this Indenture.

         "REMARKETING ACCOUNT" shall mean the account of that name established
in the Bond Purchase Fund pursuant to Section 3.2 hereof.

         "REMARKETING AGENT" shall mean First Union Capital Markets Corp. and
its successors as provided in Section 12.1 hereof.

         "REMARKETING AGREEMENT" shall mean the Remarketing Agreement of even
date herewith among the Lessee, Sterile Recoveries, Inc. and the Remarketing
Agent and any amendments and supplements thereof.

         "REPAYMENTS ACCOUNT" shall mean the account of that name established
in the Bond Fund pursuant to Section 5.2 hereof.

         "REQUISITE BONDHOLDERS" shall mean the owners of more than two-thirds
(2/3) in aggregate principal amount of the Outstanding Bonds.

         "RESPONSIBLE OFFICER" when used with respect to the Trustee shall mean
the chairman or vice chairman of the board of directors, the chairman or
vice-chairman of the executive committee of the board of directors, the
president, any vice president, the secretary, any assistant secretary, the
treasurer, any assistant treasurer, the cashier, any assistant cashier, any
trust officer, any assistant trust officer, the controller, any assistant
controller or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers of banking
institutions with trust powers and also shall mean, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.




                                      14

<PAGE>   22

         "REVENUES" shall mean:

                    (i)    all amounts payable to the Trustee with respect to 
               the principal of, redemption premium, if any, or interest on the
               Bonds (a) by the Lessee under the Lease Agreement, (b) by the
               Credit Facility Issuer under a Credit Facility and (c) by
               transfer from the Project Fund pursuant to Section 4.1 hereof,
               and

                    (ii)   investment income with respect to any moneys held by
               the Trustee in the Project Fund and the Bond Fund.

         "SECURITY INTEREST" or "SECURITY INTERESTS" refers to the security
interests created herein and shall have the meaning set forth in the U.C.C.

         "SERIES 1999 BONDS" shall mean The Industrial Development Board of the
County of Hamilton, Tennessee Revenue Bonds (Sterile Recoveries, Inc. Project)
Taxable Series 1999, issued by the Issuer under this Indenture.

         "S&P" shall mean Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., a New York corporation, its successors and
assigns, and, if such corporation shall be dissolved or liquidated or shall no
longer perform the functions of a securities rating agency, "S&P" shall be
deemed to refer to any other nationally recognized securities rating agency
designated by the Trustee, with the consent of the Lessee and the Credit
Facility Issuer.

         "SPECIAL RECORD DATE" shall mean for purpose of payment of Defaulted
Interest on the Bonds, the date fixed by the Trustee pursuant to Section 2.8
hereof.

         "STATE" shall mean the State of Tennessee.

         "SUBSTITUTE BANK" shall mean a commercial bank or savings and loan
association which has issued a Substitute Letter of Credit.

         "SUBSTITUTE LETTER OF CREDIT" shall mean a letter of credit delivered
to the Trustee in accordance with Section 6.3(c) of this Indenture, issued by
the Bank or a Substitute Bank, replacing any existing Letter of Credit and with
substantially identical payment terms and conditions to the Letter of Credit
being replaced.

         "SYNTHETIC LEASE FINANCING DEFAULT" shall have the meaning specified
for the term "Default" as provided in Appendix A to the Participation
Agreement.

         "SYNTHETIC LEASE FINANCING EVENT OF DEFAULT" shall have the meaning
specified for the term "Event of Default" as provided in Appendix A to the
Participation Agreement.




                                      15

<PAGE>   23

         "TAX-EXEMPT SERIES BONDS" shall mean The Industrial Development Board
of the County of Hamilton, Tennessee Revenue Bonds (Sterile Recoveries, Inc.
Project) Tax-Exempt Series.

         "TENDER AGENT" shall mean First Union National Bank and its successors
as provided in Section 12.2 hereof.

         "TENDER AGENCY AGREEMENT" shall mean the Tender Agency Agreement of
even date herewith among the Lessee, the Trustee and the Tender Agent and any
amendments and supplements thereof and thereto.

         "TENDERED BONDS" shall mean those Bonds tendered or deemed tendered by
the owners for purchase pursuant to an Optional Tender Notice or on the
Conversion Date.

         "TRUSTEE" shall mean First Union National Bank, a national banking
association, and its successor in the trust hereunder.

         "U.C.C." means the Uniform Commercial Code of the State of Tennessee.

         "UNDELIVERED BOND" shall mean:


                    (i)    any Bond for which an Optional Tender Notice has 
               been given pursuant to Section 2.3 hereof and which has not been
               delivered to the Tender Agent on the date specified for
               purchase, and

                    (ii)   any Bond which has not been delivered to the Trustee
               for redemption or purchase on any mandatory redemption or
               purchase date or the Conversion Date if, with respect to Bonds
               to be delivered on the Conversion Date, the owner thereof has
               not provided the Trustee with the Optional Retention Notice;
               provided that in either case the Trustee has on hand and
               available on such date funds sufficient to purchase or redeem
               said Bond.

         "VARIABLE RATE" shall mean a variable interest rate established after
the Initial Rate Period as the rate of interest determined by the Remarketing
Agent on and as of each Determination Date as the minimum rate of interest
necessary, in the judgment of the Remarketing Agent, taking into account market
conditions prevailing on the Determination Date, to enable the Remarketing
Agent to arrange for the sale of all of the Bonds on the Determination Date in
the secondary market at a price equal to the principal amount thereof (plus
interest accrued to the date of settlement). If the Remarketing Agent fails to
certify such rate, the Variable Rate for the next succeeding Calculation Period
or Periods until thereafter certified by the Remarketing Agent shall remain the
same as that most recently established and certified by the Remarketing Agent
until thereafter certified by the Remarketing Agent or adjusted as set forth in
the next succeeding sentences. If the Remarketing Agent fails to certify such
rate for the Series 1999 Bonds for four consecutive Calculation Periods, the
rate for the Series 1999 Bonds for each Calculation Period thereafter (if 




                                      16

<PAGE>   24

none is certified by the Remarketing Agent) to be determined by the Trustee
shall be a rate equal to the 30 day LIBOR Rate. "LIBOR Rate" shall mean, for
any period, an interest rate per annum (based on a 360-day year) determined by
the Trustee or its designee to be the rate or the arithmetic mean of rates
(rounded upward, if necessary, to the nearest one-sixteenth (1/16) of one
percentage point of the rate per annum) for deposits in immediately available
and freely transferable dollars of the United States of America that appears on
Telerate Screen, page 3747, as published daily by the British Bankers
Association Interest Settlement Rates (or another comparable international
financial data service satisfactory to the Trustee, or its designee, in its
discretion, if Telerate no longer publishes such rates) and that is offered by
first class banks in the London InterBank market to the offices of the Trustee
or its designee at 10:00 a.m. on the applicable Determination Date. In the
event the Remarketing Agent fails to certify such rate for the Tax-Exempt
Series Bonds for four (4) consecutive Calculation Periods for the Bonds, such
rate for the Tax-Exempt Series Bonds for each Calculation Period thereafter (if
none is certified by the Remarketing Agent) shall be ninety percent (90%) of
the yield for United States Treasury bills maturing approximately thirty (30)
days after the Determination Date for such Calculation Period as published by
The Wall Street Journal on such Determination Date (or the next preceding
Business Day on which The Wall Street Journal is published if The Wall Street
Journal is not published on the Determination Date) (or, if The Wall Street
Journal is no longer published, then any reasonably equivalent financial
publication selected by the Remarketing Agent) (or the next Business Day on
which such other publication is published if not published on the Determination
Date). If, for any reason, the Variable Rate is not determined as described
above or is held to be invalid or unenforceable by a court of competent
jurisdiction for any period, the interest rate for each such period shall be
equal to the Maximum Rate then in effect.

         "VARIABLE RATE PERIOD" shall mean that period during which a Variable
Rate is in effect on the Bonds.

         "VARIABLE RATE PURCHASE DATE" shall mean while the Bonds bear interest
at the Variable Rate, any Business Day (prior to and upon the effective date of
the Fixed Interest Rate) on which the Bonds may be tendered for purchase at the
option of the owner thereof in accordance with Section 2.3 hereof.


         SECTION 1.2   RULES OF CONSTRUCTION.

               (a) Words of the masculine gender shall be deemed and construed
to include correlative words of the feminine and neuter genders. Unless the
context shall otherwise indicate, the words "Bondowner," "Bondholder,"
"Bondholder of Record" and "person" shall include the plural as well as the
singular number; the word "person" shall include any individual, corporation,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof, and the word "Bondholder" when used herein with respect to
the Bonds shall mean the registered owner of any of the Bonds.



                                      17

<PAGE>   25

               (b) Words importing the redemption or calling for redemption of
the Bonds shall not be deemed to refer to or connote payment of Bonds at their
stated maturity.

               (c) The Table of Contents, captions and headings in this
Indenture are for convenience only and in no way limit the scope or intent of
any provision or section of this Indenture.

               (d) All references herein to particular articles or sections are
references to articles or sections of this Indenture unless some other
reference is indicated.

               (e) All references herein to the Code or any particular
provision or section thereof shall be deemed to refer to any successor, or
successor provision or section, thereof, as the case may be.

               (f) All references herein to time shall be prevailing Eastern
time.


                                   ARTICLE II

                                   THE BONDS

         SECTION 2.1   AMOUNT, TERMS, AND ISSUANCE OF THE BONDS.

               (a) The Bonds shall be limited to $4,500,000 in aggregate
principal amount. The Series 1999 Bonds shall contain substantially the terms
recited in the form of Series 1999 Bond in Exhibit C-1 and as set forth in this
Indenture. The Tax-Exempt Series Bonds shall contain substantially the terms
recited in the form of Tax-Exempt Series Bond contained in Exhibit C-2 and as
set forth in this Indenture. No Bonds may be issued under this Indenture except
in accordance with this Article II or Section 3.6 hereof. No additional bonds
shall be issued under this Indenture.

               (b) The Issuer may cause a copy of the text of the opinion of
Bond Counsel delivered in connection with the issuance of the Bonds to be
printed on or attached to any of the Bonds. The Bonds may bear such endorsement
or legend satisfactory to the Trustee as may be required to conform to usage or
law with respect thereto, including the imposition of CUSIP or other
identifying numbers.

               (c) Upon satisfaction of the conditions set forth in Section
2.13 hereof, the Issuer shall issue the Bonds, and the Trustee shall, at the
Issuer's request, authenticate the Bonds and deliver them as specified in the
request.




                                      18

<PAGE>   26


         SECTION 2.2   DESIGNATION, DENOMINATIONS, MATURITY DATE AND INTEREST
RATES OF THE BONDS.

               (a) DESIGNATION, DENOMINATIONS, MATURITY DATE. The Bonds shall
be designated "$4,500,000 The Industrial Development Board of the County of
Hamilton, Tennessee Industrial Development Revenue Bonds (Sterile Recoveries,
Inc. Project), Taxable Series 1999." At the option of the Lessee, the Series
1999 Bonds may be converted to Tax-Exempt Series Bonds pursuant to Section 3.6
hereof. The Bonds shall be issuable as fully registered Bonds in the
denominations of $100,000 or any integral multiple of $5,000 in excess thereof,
provided that if less than One Hundred Thousand Dollars ($100,000) principal
amount of Bonds is outstanding one Bond shall be issued in such smaller
denomination. All Bonds shall bear the date of their authentication, shall bear
interest from the most recent date to which interest has been paid or duly
provided for, or, if authenticated on an Interest Payment Date, from that date,
or, if no interest has been paid or duly provided for, from the date of
authentication, and shall mature, subject to prior redemption as provided in
Article VII hereof, on the first Business Day of February, 2014. The Bonds
shall be numbered from "1" consecutively upwards prefixed by the letter "R."

               (b) INTEREST RATES. The Bonds shall bear interest at the
applicable rate provided below. On each Interest Payment Date, interest accrued
through the day immediately preceding such Interest Payment Date shall be
payable by the Lessee. While the Bonds bear interest at a Variable Rate
interest on the Bonds shall be computed on the basis of a year of three hundred
sixty-five (365) or three hundred sixty-six (366) days, as applicable, for the
number of days actually elapsed. From and including the Conversion Date, and
thereafter, interest on the Bonds shall be computed on the basis of a three
hundred sixty (360) day year for the number of days actually elapsed.

               (c) INITIAL INTEREST RATE. For the Initial Rate Period, the
Bonds shall bear interest at the Initial Interest Rate. Anything herein to the
contrary notwithstanding, in no event shall the interest rate borne by the
Bonds exceed the maximum contract rate of interest permitted by the laws of the
State.

               (d) VARIABLE RATE. Following the Initial Rate Period and until
the Conversion Date, the Bonds shall bear interest at the Variable Rate. During
the Variable Rate Period, the Remarketing Agent shall determine the interest
rate for the Bonds on each Determination Date. The Remarketing Agent shall give
telephonic notice on the Determination Date to the Trustee and the Lessee of
the interest rate to be in effect for the following Calculation Period. The
determination of the Variable Rate by the Remarketing Agent shall be conclusive
and binding upon the Bondholders, the Issuer, the Lessee, the Trustee, the
Tender Agent and the Remarketing Agent. Any owner may request the Variable Rate
in effect from time to time with respect to the Bonds from the Trustee or the
Remarketing Agent.




                                      19

<PAGE>   27

               (e) FIXED RATE: CONVERSION TO FIXED RATE.

                   (1) The Lessee has a one-time option to convert the interest
               rate payable on the Bonds from the Variable Rate to the Fixed
               Rate effective on an Interest Payment Date following compliance
               by the Lessee with the provisions of this Section 2.2(e). The
               Fixed Rate shall be established after delivery by the Lessee to
               the Issuer, the Trustee, the Credit Facility Issuer, the Tender
               Agent and the Remarketing Agent of:

                       (A) a notice to the effect that the interest rate on the
                   Bonds shall become fixed on the Conversion Date specified in
                   such notice, which notice shall designate the Placement
                   Agent and shall state that a Credit Facility will not be in
                   effect after the Conversion Date, and

                       (B) an opinion of Bond Counsel addressed to the Trustee
                   and the Issuer that the establishment of a Fixed Rate is
                   authorized and permitted under this Indenture and, if the
                   Bonds are then the Tax-Exempt Series Bonds, will not, in and
                   of itself, cause interest on the Bonds to be includable in
                   the gross income of the owners thereof for federal income
                   tax purposes. Such notice and opinion must be delivered not
                   less than thirty (30) nor more than sixty (60) days prior to
                   the Conversion Date.

                   (2) At least twenty-five (25) days prior to the proposed
               Conversion Date, the Placement Agent shall determine the
               Preliminary Fixed Rate as of such date and shall notify the
               Trustee and the Lessee of the Preliminary Fixed Rate by
               telephone, telecopier, telex, telegram or other
               telecommunication device and upon request, shall confirm such
               notice in writing.

                   (3) Upon receipt of notice of the Preliminary Fixed Rate,
               the Trustee shall, as soon as practicable (but in no event more
               than two (2) Business Days thereafter), mail, in the name of the
               Issuer, a notice to the owners of the Bonds which shall be in
               the form of the Notice of Conversion attached hereto as Exhibit
               A and which shall:

                       (A) state that the interest rate on the Bonds is being
                   converted to the Fixed Rate effective on the Conversion Date
                   and specify the Conversion Date,

                       (B) state that after the tenth (10th) day preceding the
                   Conversion Date, the owners shall not be entitled to deliver
                   Bonds for purchase pursuant to Section 2.3 hereof,

                       (C) state the Preliminary Fixed Rate,




                                      20

<PAGE>   28

                       (D) state that depending on market conditions, the Fixed
                   Rate may be higher but in no event lower than the
                   Preliminary Fixed Rate,

                       (E) state that payment of the Bonds will not be
                   supported by a Credit Facility after the Conversion Date,

                       (F) state that the rating on the Bonds (if any) may be
                   reduced or withdrawn on the Conversion Date,

                       (G) state that all owners who desire to retain such
                   Bonds must deliver an Optional Retention Notice to the
                   Trustee by the tenth (10th) day preceding the Conversion
                   Date (or the next succeeding Business Day if such date is
                   not a Business Day) or be deemed to have tendered their
                   Bonds for purchase and must deliver the Bonds to the Trustee
                   on or before the Conversion Date to be stamped with the
                   legend contained in Section 2.2(e)(8) hereof,

                       (H) state that the delivery by the Lessee to the Trustee
                   of a letter from Bond Counsel dated as of the Conversion
                   Date confirming the opinion received pursuant to the notice
                   is a condition precedent to a conversion to a Fixed Rate,
                   and

                       (I) state that in order to receive payment of the
                   Purchase Price of any Bond which is deemed to have been
                   tendered, the owner of such Bond must deliver such Bond to a
                   specified office of the Tender Agent before 10:00 a.m.
                   (prevailing Eastern time) on the Conversion Date.

                   (4) The delivery by the Lessee to the Trustee of a letter
               from Bond Counsel confirming the opinion required prior to the
               notification described above on such Conversion Date is a
               condition precedent to any such conversion. In the event the
               Lessee fails to deliver to the Trustee the letter of Bond
               Counsel referred to in the preceding sentence, such conversion
               shall not take effect, and the Bonds shall continue to bear
               interest at the Variable Rate.

                   (5) Any owner of Bonds to be converted to a Fixed Rate not
               providing the Trustee with the Optional Retention Notice shall
               be deemed to have tendered its Bonds to the Tender Agent. Said
               owner shall not be entitled to any payment (including any
               interest to accrue subsequently to the Conversion Date) other
               than the Purchase Price for such Bonds which shall be equal to
               the unpaid principal amount of and accrued interest to the
               Conversion Date on such Bonds, and such Bonds shall no longer be
               entitled to the benefits of this Indenture, except for the
               purpose of payment of the Purchase Price therefor. Payment of
               the Purchase Price of any such Bonds shall be made only upon the
               presentment and surrender of such 




                                      21

<PAGE>   29

               Bonds to the Tender Agent. Upon request, the Trustee shall
               provide the Tender Agent with the address set forth on the Bond
               Register for such owner. The Trustee shall notify the Bond
               Registrar of all Bonds with respect to which the Trustee has not
               received Optional Retention Notices, which Bonds shall be deemed
               to be tendered for purchase on the Conversion Date. In the case
               of any Bond deemed tendered, the Issuer shall cause to be
               executed, and the Trustee shall authenticate and deliver to the
               new owner as provided in Section 3.1 hereof, a new Bond of like
               date and tenor in lieu of and in substitution for such Bond
               deemed to be tendered.

                   (6) On the Conversion Date, the Fixed Rate shall be
               established as follows:

                       (A) if any of the Bonds have been tendered or deemed
                   tendered for purchase, then:

                           (i)  if the Placement Agent shall have arranged for
                       the sale of any or all Tendered Bonds at a price equal
                       to the principal amount thereof, the Fixed Rate shall be
                       equal to the interest rate or rates at which such Bonds
                       were sold by the Placement Agent, provided that all
                       Tendered Bonds shall be sold at par and at a rate
                       greater than or equal to the Preliminary Fixed Rate; or

                           (ii) if the Placement Agent shall have arranged for
                       the sale of none of the Tendered Bonds, the Fixed Rate
                       shall be equal to the Preliminary Fixed Rate; or

                       (B) if all owners of the Bonds elect to retain such
                   Bonds, the Fixed Rate shall be equal to the Preliminary
                   Fixed Rate.


                   (7) On the Conversion Date, the Placement Agent shall give
               written notice to the Trustee of the Fixed Rate and the Trustee
               shall give notice of the same as soon as practicable (but in no
               event more than two (2) Business Days thereafter) to the owners
               of Bonds being converted to bear the Fixed Rate.

                   (8) On or before the Conversion Date, all Bonds shall be
               presented to the Trustee for stamping thereon of the legend:

                   "The interest rate on this Bond has been fixed at ____% per
                   annum in accordance with the provisions of this Bond and
                   Section 2.2(e) of the Indenture." And, if applicable: "There
                   is not a Credit Facility in effect."




                                      22

<PAGE>   30


         SECTION 2.3   OPTIONAL TENDER PROVISIONS OF THE BONDS.

               (a) While the Bonds bear interest at the Variable Rate, any Bond
or portion thereof in an authorized denomination (other than a Bond registered
in the name of the Lessee) shall be purchased on the demand of the owner
thereof, on any Business Day at a Purchase Price equal to one hundred percent
(100%) of the principal amount thereof plus interest accrued to the date of
purchase, if the owner of such Bond delivers to the Tender Agent, and the
Tender Agent actually receives, at its address filed with the Trustee an
Optional Tender Notice at least seven (7) days prior to the Variable Rate
Purchase Date specified in such Optional Tender Notice.

               (b) Any Optional Tender Notice delivered pursuant to the
preceding subsection shall automatically constitute: (1) an irrevocable offer
to sell such Bond on the Variable Rate Purchase Date at a price equal to one
hundred percent (100%) of the principal amount of such Bond plus interest
accrued to the Variable Rate Purchase Date; and (2) an irrevocable
authorization and instruction to the Bond Registrar to effect transfer of such
Bond to the purchaser thereof on the Variable Rate Purchase Date. No purchase
of Bonds pursuant to the provisions of this Section 2.3 shall be deemed a
redemption thereof.

               (c) Any owner who delivers an Optional Tender Notice pursuant to
this Section 2.3 shall deliver such Bond to the Tender Agent, at its address
filed with the Trustee, not less than five (5) days prior to the Variable Rate
Purchase Date specified in the aforesaid Optional Tender Notice; provided,
however, that any Bond owner which is an investment company registered under
the Investment Company Act of 1940 may deliver Bonds owned by it to the Tender
Agent at its address filed with the Trustee, at or prior to 10:00 a.m. on the
Variable Rate Purchase Date. All Bonds delivered to the Tender Agent pursuant
to this Section 2.3 must be duly endorsed for transfer in blank in form
satisfactory to the Trustee.

               (d) If a Bondholder who gives the Optional Tender Notice shall
fail to deliver the Bond or Bonds identified in the Optional Tender Notice to
the Tender Agent at or prior to 10:00 a.m. on the Variable Rate Purchase Date,
such Undelivered Bond shall be purchased and shall cease to accrue interest on
such Variable Rate Purchase Date and the owner thereof shall thereafter be
entitled only to payment of the Purchase Price therefor and not to the benefits
of this Indenture, and the Issuer, to the extent permitted by law, shall
execute and the Trustee or the Authenticating Agent shall authenticate and
deliver a substitute Bond or Bonds in lieu of the Undelivered Bond and the Bond
Registrar shall register such Bond in the name of the purchaser or purchasers
thereof pursuant to Section 2.5 hereof. The Tender Agent shall notify the
Trustee and the Bond Registrar of any Undelivered Bonds. The Trustee shall (1)
notify the Remarketing Agent of such Undelivered Bonds and (2) place a stop
transfer against such Undelivered Bonds until the Undelivered Bonds are
properly delivered to the Tender Agent. Payment of the Purchase Price of any
such Undelivered Bonds shall be made only upon the presentment and surrender of
such Bonds to the Tender Agent. Upon notice of such delivery, the Bond
Registrar shall make any necessary adjustment to the Bond Register.




                                      23

<PAGE>   31


               (e) Notwithstanding anything to the contrary contained herein,
the rights of the owners to tender Bonds pursuant to this Section 2.3 shall
cease immediately and without further notice from and including the date
payment of the Bonds is accelerated following an Event of Default pursuant to
Article IX hereof.


         SECTION 2.4   REGISTERED BONDS REQUIRED: BOND REGISTRAR AND BOND
REGISTER.

               (a) All Bonds shall be issued in fully registered form. The
Bonds shall be registered upon original issuance and upon subsequent transfer
or exchange as provided in this Indenture.

               (b) The Issuer shall designate one or more persons to act as
"Bond Registrar" for the Bonds, provided that the Bond Registrar appointed for
the Bonds shall be either the Trustee or a person which would meet the
requirements for qualification as a successor trustee imposed by Section 10.15
hereof. The Issuer hereby appoints First Union National Bank as its Bond
Registrar in respect of the Bonds. Any person other than the Trustee
undertaking to act as Bond Registrar shall first execute a written agreement,
in form satisfactory to the Trustee, to perform the duties of a Bond Registrar
under this Indenture, which agreement shall be filed with the Trustee and the
Tender Agent.

               (c) The Bond Registrar shall act as registrar and transfer agent
for the Bonds. There shall be kept at an office of the Bond Registrar a
register (herein sometimes referred to as the "BOND REGISTER") in which,
subject to such reasonable regulations as the Issuer, the Trustee or the Bond
Registrar may prescribe, there shall be provisions for the registration of the
Bonds and for the registration of transfers of the Bonds. The Issuer shall
cause the Bond Registrar to designate, by a written notification to the
Trustee, a specific office location (which may be changed from time to time,
upon similar notification) at which the Bond Register is kept. In the absence
of a specific designation by the Bond Registrar, the corporate trust office of
the Trustee in Nashville, Tennessee, shall be deemed such office in respect of
the Bonds for which the Trustee is acting as Bond Registrar.


         SECTION 2.5   TRANSFER AND EXCHANGE.

               (a) Upon surrender for transfer of any Bond at the office of the
Bond Registrar, the Issuer shall execute and the Trustee or its Authenticating
Agent shall authenticate and deliver in the name of the transferee or
transferees, one or more new fully registered Bonds of authorized denomination
for the aggregate principal amount which the new owner is entitled to receive;
provided that if moneys for the purchase of such Bond have been provided
pursuant to a draw under the Credit Facility, such Bond shall not be
transferable to any one other than the Lessee or its assignee or pledgee.
Except for transfers in connection with the purchase of Bonds pursuant to
Section 2.3 hereof and the remarketing thereof pursuant to Article III, which
shall be effected at the corporate trust office of the Tender Agent in
Nashville, Tennessee, Bonds shall be surrendered for transfer at the corporate
trust office of the Trustee in Nashville, Tennessee. Also,




                                      24


<PAGE>   32

the Issuer shall execute and the Trustee or its Authenticating Agent shall
authenticate and deliver Bonds in lieu of Undelivered Bonds.

               (b) Bonds may be exchanged for other Bonds of any other
authorized denomination, of a like aggregate principal amount, upon surrender
of the Bonds to be exchanged at the principal corporate trust office of the
Bond Registrar or Trustee; provided, however, that in connection with the
purchase of Bonds tendered for purchase and the remarketing thereof pursuant to
Article III hereof, Bonds may be exchanged at the principal office of the
Tender Agent, or any office of any agent designated by the Trustee. Whenever
any Bonds are so surrendered for exchange, the Issuer shall execute, and the
Trustee or its Authenticating Agent shall authenticate and deliver, the Bonds
which the Bondholder making the exchange is entitled to receive.

               (c) All Bonds presented for transfer, exchange, redemption or
payment (if so required by the Issuer, the Bond Registrar or the Trustee) shall
be accompanied by a written instrument or instruments of transfer or
authorization for exchange, in form satisfactory to the Bond Registrar, which
may include a signature guarantee, duly executed by the owner or by his
attorney duly authorized in writing.

               (d) No service charge shall be made to a Bondholder for any
exchange or transfer of Bonds, but the Issuer or the Bond Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto.

               (e) Except in connection with the purchase of Bonds pursuant to
Section 2.3 hereof and the remarketing thereof pursuant to Article III hereof,
neither the Issuer nor any Bond Registrar on behalf of the Issuer shall be
required to issue, transfer or exchange any Bond selected for redemption in
whole or in part.

               (f) New Bonds delivered upon transfer or exchange shall be valid
obligations of the Issuer, evidencing the same debt as the Bond surrendered,
shall be secured by this Indenture and shall be entitled to all of the security
and benefits hereof to the same extent as the Bonds surrendered.


         SECTION 2.6   EXECUTION.

               (a) The Bonds shall be executed by the manual or facsimile
signature of the Chairman or Vice Chairman of the Issuer and the same shall be
attested by the manual or facsimile signature of the Secretary or the Acting
Secretary of the Issuer.

               (b) Bonds executed as above provided may be issued and shall,
upon request of the Issuer, be authenticated by the Trustee or the
Authenticating Agent, notwithstanding that any officer signing such Bonds or
whose facsimile signature appears thereon shall have ceased to hold office at
the time of issuance or authentication or shall not have held office at the
date of the Bond.




                                      25

<PAGE>   33


         SECTION 2.7   AUTHENTICATION; AUTHENTICATING AGENT.

               (a) No Bond shall be valid for any purpose until the Trustee's
Certificate of Authentication thereon shall have been duly executed as provided
in this Indenture, and such authentication shall be conclusive proof that such
Bond has been duly authenticated and delivered under this Indenture and that
the owner thereof is entitled to the benefit of the trust hereby created
subject to the provisions of Section 2.3(d) and Article XIV hereof.

               (b) If the Bond Registrar is other than the Trustee, the Trustee
may appoint the Bond Registrar as an Authenticating Agent with the power to act
on the Trustee's behalf and subject to its direction in the authentication and
delivery of Bonds in connection with transfers and exchanges under Section 2.5
hereof, and the authentication and delivery of Bonds by an Authenticating Agent
pursuant to this Section shall, for all purposes of this Indenture, be deemed
to be the authentication and delivery "by the Trustee." The Trustee shall,
however, itself authenticate all Bonds upon their initial issuance. The
Authenticating Agent may authenticate Bonds in substitution for Undelivered
Bonds. The Authenticating Agent shall be entitled to reasonable compensation
from the Lessee for its services.

               (c) Any corporation into which any Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, consolidation or conversion to which any
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate trust business of any Authenticating Agent shall be the successor of
the Authenticating Agent hereunder, if such successor corporation is otherwise
eligible as a Bond Registrar under Section 2.4 hereof, without the execution or
filing of any further document on the part of the parties hereto or the
Authenticating Agent or such successor corporation.

               (d) Any Authenticating Agent may at any time resign by giving
written notice of resignation to the Trustee, the Issuer, the Remarketing Agent
and the Lessee. The Trustee may at any time terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent, the Issuer and the Lessee. Upon receiving such a notice
of resignation or upon such a termination, or in case at any time any
Authenticating Agent shall cease to be eligible under this Section, the Trustee
may promptly appoint a successor Authenticating Agent, shall give written
notice of any such appointment to the Issuer and the Lessee, and shall mail
notice of any such appointment to all owners of Bonds as the names and
addresses of such owners appear on the Bond Register.


         SECTION 2.8   PAYMENT OF PRINCIPAL AND INTEREST; INTEREST RIGHTS 
PRESERVED.

               (a) The principal of, and redemption premium, if any, on any
Bond shall be payable, upon surrender of such Bond, at the office of the
Trustee or other paying agent appointed pursuant to this Indenture. Interest on
each Interest Payment Date shall be payable by check, mailed on the Interest
Payment Date to the address of the person entitled thereto on the Regular
Record Date or, if applicable, the Special Record Date, as such address shall
appear in the Bond Register. While 




                                      26


<PAGE>   34

the Bonds bear interest at a Variable Rate, interest shall also be payable by
wire transfer to the account of a member bank of the Federal Reserve System of
any owner of Bonds in the aggregate principal amount of $1,000,000 or more at
the written request (identifying such account by number) of such owner received
by the Trustee at least ten (10) days prior to the Regular Record Date or
Special Record Date.

               (b) Interest on any Bond that is payable, and is punctually paid
or duly provided for, on any Interest Payment Date shall be paid to the person
in whose name that Bond is registered at the close of business on the Regular
Record Date for such interest.

               (c) Any interest on any Bond that is payable, and is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "DEFAULTED INTEREST") shall forthwith cease to be payable to the owner
of such Bonds on the relevant Regular Record Date solely by virtue of such
registered owner having been such record owner on the Regular Record Date, and
such Defaulted Interest shall be paid, pursuant to Section 9.11 hereof, to the
person in whose name the Bond is registered at the close of business on a
Special Record Date to be fixed by the Trustee, such date to be not more than
fifteen (15) nor less than ten (10) days prior to the date of proposed payment.
The Trustee shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first class postage
prepaid, to each Bondholder, at its address as it appears in the Bond Register,
not less than ten (10) days prior to such Special Record Date.

               (d) Subject to the foregoing provisions of this Section 2.8,
each Bond delivered under this Indenture, upon transfer of or exchange for or
in lieu of any other Bond shall carry the rights to interest accrued and
unpaid, and to accrue, as such other Bond.

         All payments of principal of, redemption premium, if any, and interest
on the Bonds, whether upon redemption, acceleration, maturity or otherwise,
shall be made first, pursuant to draws under the Credit Facility in accordance
with its terms on the dates when due; second, from Available Moneys on deposit
with the Trustee and not held in trust for the benefit of the owners of the
Bonds pursuant to the provisions of Article XIV hereof, and then from other
collected funds available to the Trustee hereunder for such payments.


         SECTION 2.9   PERSONS DEEMED OWNERS. The Issuer, the Trustee, the Bond
Registrar and the Authenticating Agent may deem and treat the person in whose
name any Bond is registered as the absolute owner thereof (whether or not such
Bond shall be overdue and notwithstanding any notation of ownership or other
writing thereon made by anyone other than the Issuer, the Trustee, the Bond
Registrar or the Authenticating Agent) for the purpose of receiving payment of
or on account of the principal of (and premium, if any, on), and (subject to
Section 2.8 hereof) interest on such Bond, and for all other purposes, and
neither the Issuer, the Trustee, the Bond Registrar, nor the Authenticating
Agent shall be affected by any notice to the contrary. All such payments so
made to any such registered owner, or upon his order, shall be valid and, to
the extent of the 




                                       27

<PAGE>   35

sum or sums so paid, effectual to satisfy and discharge the liability for
moneys payable upon any such Bond.

         SECTION 2.10  MUTILATED, DESTROYED, LOST, STOLEN OR UNDELIVERED BONDS

               (a) If any Bond shall become mutilated, the Issuer shall
execute, and the Trustee or its Authenticating Agent shall thereupon
authenticate and deliver, a new Bond of like tenor and denomination in exchange
and substitution for the Bond so mutilated, but only upon surrender to the
Trustee of such mutilated Bond for cancellation, and the Issuer and the Trustee
may require reasonable indemnity therefor. If any Bond shall be reported lost,
stolen or destroyed, evidence as to the loss, theft or destruction thereof
shall be submitted to the Issuer and the Trustee; and if such evidence shall be
satisfactory to both and indemnity satisfactory to both shall be given, the
Issuer shall execute, and thereupon the Trustee or its Authenticating Agent
shall authenticate and deliver, a new Bond of like tenor and denomination. The
cost of providing any substitute Bond under the provisions of this Section
shall be borne by the Bondholder for whose benefit such substitute Bond is
provided. If any such mutilated, lost, stolen or destroyed Bond shall have
matured or be about to mature, the Issuer may, with the consent of the Trustee,
pay to the owner the principal amount of such Bond upon the maturity thereof
and the compliance with the aforesaid conditions by such owner, without the
issuance of a substitute Bond therefor.

               (b) The Issuer shall execute and the Trustee or its
Authenticating Agent shall authenticate and deliver a substitute Bond in lieu
of each Undelivered Bond.

               (c) Every substituted Bond issued pursuant to this Section 2.10
shall constitute an additional contractual obligation of the Issuer, whether or
not the Bond alleged to have been destroyed, lost or stolen shall be at any
time enforceable by anyone, and shall be entitled to all of the benefits of
this Indenture equally and proportionately with any and all other Bonds duly
issued hereunder.

               (d) All Bonds shall be held and owned upon the express condition
that the foregoing provisions are, to the extent permitted by law, exclusive
with respect to the replacement or payment of mutilated, destroyed, lost,
stolen or Undelivered Bonds and shall preclude any and all other rights or
remedies.

         SECTION 2.11  TEMPORARY BONDS. Pending preparation of definitive 
Bonds, or by agreement with the purchasers of all Bonds, the Issuer may issue,
and, upon its request, the Trustee shall authenticate, in lieu of definitive
Bonds one or more temporary printed or typewritten Bonds of substantially the
tenor recited above in any denomination authorized under Section 2.2 hereof.
Upon request of the Issuer, the Trustee shall authenticate definitive Bonds in
exchange for and upon surrender of an equal principal amount of temporary
Bonds. Until so exchanged, temporary Bonds shall have the same rights, remedies
and security hereunder as definitive Bonds.



                                      28

<PAGE>   36


         SECTION 2.12  CANCELLATION OF SURRENDERED BONDS. Bonds surrendered for
payment, redemption, transfer or exchange and Bonds surrendered to the Trustee
by the Issuer or by the Lessee for cancellation shall be canceled by the
Trustee and a certificate evidencing such cancellation shall be furnished by
the Trustee to the Issuer and the Lessee. Bonds purchased pursuant to Section
2.3 hereof shall not be surrendered Bonds and, unless otherwise specifically
provided in this Indenture, shall be Outstanding Bonds.


         SECTION 2.13  CONDITIONS OF ISSUANCE.

               (a) Prior to or simultaneously with the authentication and
delivery of the Bonds by the Trustee, the Trustee shall have received notice
that the conditions for the issuance of the Letter of Credit as set forth in
Article VII of the Reimbursement Agreement have been satisfied and there shall
be filed with the Trustee such documents, certificates and opinions as Trustee
may require, including, the following:

                   (1) A copy, certified by the Secretary or Acting Secretary
               of the Issuer, of the resolution or resolutions of the Issuer
               authorizing the issuance of the Series 1999 Bonds, awarding the
               Series Bonds and directing the authentication and delivery of
               the Series 1999 Bonds to or upon the order of the purchaser(s)
               therein named upon payment of the Purchase Price therein set
               forth.

                   (2) Executed counterparts of this Indenture, the Lease
               Agreement, the Letter of Credit, Reimbursement Agreement, the
               Tender Agency Agreement and the Remarketing Agreement.

                   (3) An opinion of Counsel for the Issuer, to the effect that
               the execution and delivery of the Lease Agreement and this
               Indenture have been duly authorized by the Issuer, that the
               Lease Agreement and this Indenture are in substantially the
               forms so authorized and have been duly executed by the Issuer
               and that, assuming proper authorization and execution of this
               Indenture by the Trustee and of the Lease Agreement by the
               Lessee, the Lease Agreement and this Indenture are the valid and
               binding agreements of the Issuer enforceable in accordance with
               their respective terms, subject to the qualification that
               enforceability thereof may be limited by bankruptcy, insolvency,
               reorganization, moratorium or similar laws affecting enforcement
               of creditors' rights generally and by the exercise of judicial
               discretion in accordance with general equitable principles.

                   (4) An opinion of Counsel to the Lessee to the effect that
               the execution and delivery of the Lease Agreement, the
               Reimbursement Agreement, the Remarketing Agreement and the
               Tender Agency Agreement have been duly authorized by the Lessee,
               that the Lease Agreement, the Reimbursement Agreement, the
               Remarketing Agreement and the Tender Agency Agreement have been
               duly executed and delivered by the Lessee, and that the Lease
               Agreement, the Reimbursement Agreement, the Remarketing
               Agreement and 




                                      29


<PAGE>   37

               the Tender Agency Agreement, assuming due authorization,
               execution and delivery thereof by the other parties thereto, if
               any, are valid, binding and enforceable against the Lessee in
               accordance with their terms, subject to the qualification that
               enforceability thereof may be limited by bankruptcy, insolvency,
               reorganization, moratorium or similar laws affecting enforcement
               of creditors' rights generally and by the exercise of judicial
               discretion in accordance with general equitable principles.

                   (5) An opinion of Bond Counsel, to the effect that the
               issuance of the Series 1999 Bonds has been duly and validly
               authorized by the Issuer, that the Bonds are valid and binding
               agreements of the Issuer enforceable in accordance with their
               terms, subject to the qualification that enforceability thereof
               may be limited by bankruptcy, insolvency, reorganization,
               moratorium or similar laws affecting enforcement of creditors'
               rights generally and by the exercise of judicial discretion in
               accordance with general equitable principles.

                   (6) Evidence satisfactory to the Trustee of compliance by
               the Lessee with the insurance requirements of Section 6.3 of the
               Lease Agreement.

                   (7) A written request and authorization of the Issuer
               addressed to the Trustee directing the Trustee to authenticate
               and deliver the Series 1999 Bonds.

                   (8) Such other documents as the Trustee may reasonably
               require.

               (b) When the documents mentioned in paragraphs (1) through (8)
of subsection (a) of this Section shall have been filed with the Trustee and
when the Series 1999 Bonds shall have been executed as required by this
Indenture, the Trustee shall authenticate the Series 1999 Bonds and deliver
them to or upon the order of the purchaser(s) named in the resolution mentioned
in paragraph (1) thereof, but only upon payment to the Trustee for the account
of the Issuer of the Purchase Price of the Series 1999 Bonds. The Trustee shall
be entitled to rely conclusively upon such resolution or resolutions, or
document approved thereby, as to the name of the purchasers and the amount of
such Purchase Price.

               (c) Simultaneously with the delivery of the Bonds, the Trustee
shall apply the proceeds of the Series 1999 Bonds in accordance with Article IV
of this Indenture.


         SECTION 2.14  BOOK ENTRY. The Issuer shall enter into an agreement in 
substantially the form attached hereto as Exhibit B (the "BOOK ENTRY AGREEMENT")
with the Paying Agent and DTC, or any successor thereto, or other securities
depository, and make such other provision and perform such further acts as are
necessary or appropriate to provide for the distribution of the Bonds in
book-entry form.

         Neither the Issuer, the Lessee, the Trustee, nor the Paying Agent will
have any responsibility or obligations to the DTC Participants, DTC Indirect
Participants (as each is defined 




                                      30


<PAGE>   38

in the Book Entry Agreement contained as Exhibit B hereto) or the beneficial
owners with respect to (i) the accuracy of any records maintained by DTC or any
DTC Participant or DTC Indirect Participant; (ii) the payment by DTC or any DTC
Participant or DTC Indirect Participant of any amount due to any beneficial
owner in respect of the principal of, redemption premium, if any, or interest
on the Bonds; (iii) the delivery by DTC or any DTC Participant or DTC Indirect
Participant of any notice to any beneficial owner that is required or permitted
to be given to bondholders under the terms of the Indenture; (iv) the selection
of the beneficial owners to receive payment in the event of any partial
redemption of the Bonds; or (v) any consent given or other action taken by DTC
as registered owner.

         The Trustee shall issue Bonds directly to beneficial owners of Bonds
other than DTC, or its nominee, in the event that:

                   (1) DTC determines not to continue to act as securities
               depository for the Bonds; or

                   (2) the Trustee has advised DTC at the request of the Lessee
               of the Lessee's determination that DTC is incapable of
               discharging its duties; or

                   (3) the Issuer determines that it is in the best interest of
               the Lessee not to continue the book-entry system (and the Lessee
               provides written approval of such determination) or that the
               interests of the beneficial owners of the Bonds might be
               adversely affected if the book-entry system is continued.

         Upon occurrence of the events described in (1) or (2) above, the
Lessee shall attempt to locate another qualified securities depository.

         In the event the Issuer makes the determination noted in (3) above, or
if the Lessee fails to locate another qualified securities depository to
replace DTC upon occurrence of the events described in (1) or (2) above, the
Trustee shall mail a notice to DTC for distribution to the beneficial owners of
the Bonds stating that DTC will no longer serve as securities depository,
whether a new securities depository will or can be appointed, the procedures
for obtaining such Bonds and the provisions of this Indenture which govern the
Bonds including, but not limited to, provisions regarding authorized
denominations, transfer and exchange, principal and interest payment and other
related matters.

         The Trustee reserves the right to initially issue the Bonds directly
to the beneficial owners of the Bonds if the Trustee receives an opinion of
Bond Counsel that determines that use of the book entry system would cause the
interest on the Bonds to be included in gross income of the bondholders for
federal income tax purposes pursuant to Section 103 of the Code, if applicable.




                                      31

<PAGE>   39


                                  ARTICLE III

                   PURCHASE AND REMARKETING OF TENDERED BONDS


         SECTION 3.1   REMARKETING OF TENDERED BONDS.

               (a) Not later than the close of business on the date the Tender
Agent receives an Optional Tender Notice, the Tender Agent shall notify the
Remarketing Agent, the Trustee and the Lessee by telephone, telex or
telecopier, confirmed in writing if requested, specifying the Variable Rate
Purchase Date and the aggregate principal amount of Bonds to be purchased on
such Variable Rate Purchase Date.

               (b) Not later than the close of business on the ninth (9th) day
prior to the Conversion Date, the Trustee shall notify the Placement Agent and
the Lessee by telephone, telex or telecopier, confirmed in writing if
requested, specifying the aggregate principal amount of Bonds tendered or
deemed tendered for mandatory purchase on the Conversion Date.

               (c) Except as provided in subsection (d) below and Section 3.5
hereof, upon receipt by the Remarketing Agent of notice from the Tender Agent
pursuant to Section 3.1(a) hereof and by the Placement Agent of notice from the
Trustee pursuant to Section 3.1(b) hereof, the Remarketing Agent or the
Placement Agent, as the case may be, shall use its best efforts to arrange for
the sale, at par plus accrued interest, if any, of such Bonds tendered or
deemed tendered for settlement on the Variable Rate Purchase Date or the
Conversion Date, respectively. At or before 3:00 p.m. on the Business Day
immediately preceding the Variable Rate Purchase Date or the Conversion Date,
the Remarketing Agent or the Placement Agent, respectively, shall give notice
by telephone, telecopier or telex, promptly confirmed in writing if requested,
to the Trustee and the Tender Agent specifying the principal amount of such
Bonds, if any, to be placed by it and to the Trustee the names, addresses and
social security numbers or other tax identification numbers of the proposed
purchasers thereof.

               (d) Notwithstanding the provisions of subsection (c) above, any
Bond purchased pursuant to the terms of this Indenture from the date notice of
redemption or conversion is given shall not be remarketed except to a buyer who
agrees at the time of such purchase to tender such Bond for redemption or
purchase on the redemption or purchase date.

               (e) During the Variable Rate Period, the Remarketing Agent shall
continue to use its best efforts to arrange for the sale, at the best price
available, but not less than the principal amount thereof plus accrued
interest, of any Bonds purchased with moneys advanced under the Credit Facility
pursuant to Section 3.2(a)(2) hereof, provided that Bonds purchased with moneys
advanced under the Credit Facility shall not be released for delivery to the
purchasers unless the Credit Facility has been reinstated by the amount drawn
thereunder to pay the Purchase Price for such Bonds and the Trustee has
received the executed reinstatement certificate required to be delivered by
such Credit Facility Issuer.




                                      32

<PAGE>   40


         SECTION 3.2   PURCHASE OF BONDS DELIVERED TO THE TENDER AGENT.

               (a) There is hereby established with the Tender Agent, as agent
for the Trustee, a "The Industrial Development Board of the County of Hamilton,
Tennessee Industrial Development Revenue Bonds (Sterile Recoveries, Inc.
Project), Bond Purchase Fund" (the "BOND PURCHASE FUND") out of which the
Purchase Price for Bonds tendered for purchase on a Variable Rate Purchase
Date, the Conversion Date or on such other date on which Bonds are remarketed
shall be paid. There are hereby established in the Bond Purchase Fund two
separate and segregated accounts, to be designated the "REMARKETING ACCOUNT"
and the "BANK ACCOUNT." Funds received from purchasers of Tendered Bonds (other
than the Lessee or the Credit Facility Issuer) shall be transferred by the
Remarketing Agent or the Placement Agent, as the case may be, to the Trustee
for deposit in the Remarketing Account. At or prior to 10:00 a.m. on each
Variable Rate Purchase Date or the Conversion Date, the Remarketing Agent or
the Placement Agent, as the case may be, shall deliver to the Tender Agent for
deposit in the Remarketing Account of the Bond Purchase Fund immediately
available funds, payable to the order of the Tender Agent, in an amount equal
to the Purchase Price of the Bonds to be delivered to the Tender Agent that
have been remarketed by the Remarketing Agent or placed by the Placement Agent
as specified in the notice delivered pursuant to Section 3.1(c) hereof. Funds,
if any, drawn by the Trustee under the Credit Facility pursuant to Section
3.2(b) below in an amount equal to the aggregate Purchase Price of Bonds
tendered for purchase less the amount available in the Remarketing Account
shall, at the direction of the Trustee, be delivered by the Credit Facility
Issuer to the Tender Agent for deposit in the Bank Account of the Bond Purchase
Fund. On each Variable Rate Purchase Date and on the Conversion Date, the
Tender Agent in coordination with the Trustee shall effect the purchase, but
only from the funds listed below, of such Bonds from the owners thereof at a
Purchase Price equal to the principal amount thereof, plus interest accrued, if
any, to the date of purchase and such payment shall be made in immediately
available funds. Funds for the payment of such Purchase Price shall be derived
from the following sources in the order of priority indicated:

                   (1) proceeds of the remarketing of such Bonds pursuant to
               Section 3.1(c) hereof which constitute Available Moneys;

                   (2) moneys furnished by the Trustee to the Tender Agent
               representing proceeds of a drawing by the Trustee under the
               Credit Facility which constitute Available Moneys; and

                   (3) any other Available Moneys available for such purposes.

               (b) The Tender Agent shall advise the Trustee by telex or
telecopier and shall advise the Credit Facility Issuer and the Lessee by
telephone, in each case, no later than 10:30 a.m. on each Variable Rate
Purchase Date or the Conversion Date, as the case may be, of the amount of any
drawing under the Credit Facility necessary to make full and timely payments
hereunder. The Trustee shall promptly (and in no event later than 11:00 a.m.)
take all action necessary to draw 




                                      33


<PAGE>   41

on the Credit Facility the specified amount. All amounts received by the
Trustee from a drawing under the Credit Facility shall be transferred to the
Tender Agent and held by the Tender Agent in the Bank Account pending
application of such moneys as provided in this Article III. The Trustee shall
provide to the Tender Agent the funds referred to in paragraph (2) of Section
3.2(a) prior to the time the Tender Agent is required to apply such funds to
effect the purchase of Bonds and shall notify the Tender Agent promptly after
receipt of notice from the Credit Facility Issuer reinstating the Credit
Facility. The Remarketing Agent shall deliver funds from the sale of Bonds held
by the Credit Facility Issuer as pledgee of the Lessee pursuant to Section
3.1(e) hereof to the Tender Agent for deposit in the Remarketing Account, which
funds shall be promptly paid by the Tender Agent on behalf of the Lessee to the
Credit Facility Issuer as reimbursement under the Reimbursement Agreement. The
Tender Agent shall notify the Trustee of any such reimbursement, and the
Trustee shall promptly deliver to the Credit Facility Issuer any reinstatement
certificate and the form of transfer certificate required by the Credit
Facility.


         SECTION 3.3   DELIVERY OF PURCHASED BONDS

               (a) Bonds purchased shall be delivered as follows:

                   (1) Bonds placed by the Remarketing Agent or the Placement
               Agent pursuant to Section 3.1 hereof shall be delivered by the
               Tender Agent to the Remarketing Agent or the Placement Agent, as
               the case may be, on behalf of the purchasers thereof.

                   (2) Bonds purchased with moneys described in Section
               3.2(a)(2) shall be delivered to the Credit Facility Issuer as
               pledgee of the Lessee pursuant to the terms of the Reimbursement
               Agreement and the Pledge Agreement, or the Credit Facility
               Issuer designee.

                   (3) Bonds purchased with excess moneys transferred from the
               Project Fund to the Bond Fund pursuant to Section 4.5 hereof or
               with draws under the Credit Facility for which the Credit
               Facility Issuer has been reimbursed with such excess moneys from
               the Project Fund shall be canceled by the Trustee.

               (b) Except as otherwise set forth herein, Bonds delivered as
provided in this Section 3.3 shall be registered by the Bond Registrar in the
manner directed by the recipient thereof.

               (c) In the event that any Bond to be delivered to the Tender
Agent is not delivered by the owner thereof properly endorsed for transfer on
or prior to the Variable Rate Purchase Date or the Conversion Date, as the case
may be, and there has been irrevocably deposited with the Tender Agent an
amount sufficient to pay the Purchase Price thereof, which amount may be held
by the Tender Agent in a non-interest bearing account, the Issuer shall execute
and the Trustee or its Authenticating Agent shall authenticate and deliver a
substitute Bond in lieu of the Undelivered Bond and the Bond Registrar shall
register such Bond in the name of the purchaser thereof. 




                                      34


<PAGE>   42

Thereafter, interest on such Undelivered Bond shall cease to accrue, and the
holder thereof shall be entitled only to payment of the Purchase Price therefor
and not to the benefits of the Indenture.

               (d) Notwithstanding the foregoing, Bonds purchased with funds
identified in Section 3.2(a)(2) hereof shall be held by the Credit Facility
Issuer or the Tender Agent and shall not be delivered to subsequent purchasers
thereof or any other person until the Trustee has received notice in writing
from the Credit Facility Issuer that the Credit Facility has been reinstated to
the extent of the Purchase Price of such Bonds and interest thereon.


         SECTION 3.4   DELIVERY OF THE PROCEEDS OF THE SALE OF REMARKETED BONDS.
The proceeds from the sale by the Remarketing Agent of Bonds delivered to the
Tender Agent, or by the Placement Agent of Bonds on the Conversion Date, shall
be paid first, to the tendering Bondholders of such Bonds; second, to the
Credit Facility Issuer, to the extent of any amounts drawn under the Credit
Facility in connection with the payment of the Purchase Price for such Bonds
and not reimbursed to the Credit Facility Issuer as of the time of sale of such
Bonds; and third, to the Lessee.


         SECTION 3.5   NO REMARKETING AFTER CERTAIN EVENTS. Anything in this
Indenture to the contrary notwithstanding, there shall be no remarketing of
Bonds pursuant to this Article III after the Conversion Date or the principal
of the Bonds shall have been accelerated pursuant to Section 9.2 hereof.


         SECTION 3.6   CONVERSION OF SERIES 1999 BONDS TO TAX-EXEMPT SERIES
BONDS. The Lessee shall have the option to convert the Series 1999 Bonds to
Tax-Exempt Series Bonds upon the satisfaction of the following conditions:

               (a) Not later than forty (40) days prior to the Mandatory
Tax-Exempt Conversion Redemption Date, the Lessee shall provide the Trustee,
the Remarketing Agent, the Tender Agent, the Bank and the Issuer, the
following:

                   (i)   written notice of the Lessee's election to convert the
               Series 1999 Bonds to Tax-Exempt Series Bonds, specifying the
               date of such conversion.

                   (ii)  an opinion of Bond Counsel to the effect that the
               interest on the Tax-Exempt Series Bonds to be issued will be
               excludable from gross income for federal income tax purposes.

                   (iii) evidence of a private activity bond allocation from
               the Tennessee Department of Economic and Community Development
               in an amount at least equal to the principal amount of the
               Tax-Exempt Series Bonds.




                                      35

<PAGE>   43

                   (iv)  evidence from the Bank that the Letter of Credit will
               remain in effect and will be sufficient to cover the principal
               of and interest (up to 120 days at an assumed interest rate of
               15%) on the Tax-Exempt Series Bonds.

               (b) At least thirty (30) days prior to the Mandatory Tax-Exempt
Conversion Redemption Date, the Trustee will provide notice in the manner
provided in Section 7.4 hereof, notice to each Owner of the Series 1999 Bonds
that on the proposed Mandatory Tax-Exempt Conversion Redemption Date, the
Series 1999 Bonds will be redeemed with a draw under the Letter of Credit for
principal and accrued interest to the Mandatory Tax-Exempt Conversion
Redemption Date. If any of the conditions to issue the Tax-Exempt Series Bonds
are not satisfied, the Series 1999 Bonds will be remarketed by the Remarketing
Agent on the Mandatory Tax-Exempt Conversion Redemption Date as Series 1999
Bonds. No owner of a Series 1999 Bond will have the right to retain his or her
Series 1999 bond on or after the Mandatory Tax-Exempt Conversion Redemption
Date as provided in this Section 3.6.

               (c) Not later than two (2) Business Days prior to the Mandatory
Tax-Exempt Conversion Redemption Date, the Remarketing Agent shall provide the
Trustee, the Lessee and the Bank notice of the initial rate of interest for the
Tax-Exempt Bonds. The Lessee shall be responsible to pay any costs associated
with the issuance of the Tax-Exempt Series Bonds from its own funds.

               (d) On or before 10:00 a.m., prevailing Eastern time, on
Mandatory Tax-Exempt Conversion Redemption Date, the Trustee shall be in
receipt of the following:

                   (i)    a fully executed Tax Certificate of the Lessee and
               Sterile Recoveries, Inc.;

                   (ii)   a completed IRS Form 8038 duly executed by the
               Issuer;

                   (iii)  a Bond Counsel opinion in the form described in
               paragraph (a)(ii) above;

                   (iv)  such other certificates required by Bond Counsel, the
               Issuer, the Bank or the Trustee;

                   (v)    an offering document relating to the Tax-Exempt Series
               Bonds;

                   (vi)   a written request and authorization of the Issuer
               addressed to the Trustee directing the Trustee to authenticate
               and deliver the Tax-Exempt Series Bonds;

                   (vii)  opinions of counsel to the Issuer, the Lessee and
               the Bank, as necessary in the reasonable judgment of Bond
               Counsel;




                                      36

<PAGE>   44

                   (viii) evidence from the Bank that the Letter of Credit
               will remain in effect and will be sufficient to cover the
               principal of and interest (up to 120 days at an assumed interest
               rate of 15%) on the Tax-Exempt Series Bonds; and

                   (ix)   such other documents and certificates deemed necessary
               by the Bond Counsel.


                                   ARTICLE IV

                                  PROJECT FUND


         SECTION 4.1   CREATION OF AND DEPOSITS TO THE PROJECT FUND.

               (a) A special fund is hereby created and designated "The
Industrial Development Board of the County of Hamilton, Tennessee Industrial
Development Revenue Bonds (Sterile Recoveries, Inc. Project), Taxable Series
1999, Project Fund" (the "PROJECT FUND") to the credit of which such deposits
shall be made as are required by the provisions of this Indenture. Any moneys
received by the Issuer or by the Trustee as trustee under this Indenture from
any source for payment of the Cost of the Project, including all proceeds of
the sale of the Bonds and insurance and condemnation proceeds as provided in
the Lease Agreement, shall be deposited to the credit of the Project Fund.

               (b) The moneys in the Project Fund shall be held by the Trustee
in trust and, subject to the provisions of Section 4.5 and 9.2 of this
Indenture, shall be applied to the payment of (i) the Cost of the Project and
(ii), in an amount not to exceed 2% of the original aggregate principal amount
of the Bonds, cost of issuance of the Bonds and, pending such application,
shall be and are hereby made subject to a lien and charge in favor of the
owners of the Bonds issued and outstanding under this Indenture and for the
further security of such owners until paid out or transferred as herein
provided.


         SECTION 4.2   PAYMENTS FROM THE PROJECT FUND.

               (a) Payment of the Cost of the Project shall be made from the
Project Fund. All payments from the Project Fund shall be subject to the
provisions and restrictions set forth in this Article, and the Issuer covenants
that it will not cause to be paid from the Project Fund any sums except in
accordance with such provisions and restrictions. Such payments shall be made
by the Trustee upon receipt of an appropriately completed requisition and
certificate, signed by the Lessee's Representative (substantially in the form
of the Requisition and Certificate attached hereto as Exhibit "E" and hereby
deemed incorporated herein) stating to whom the payment described is to be made
and the purpose, in reasonable detail, for which the obligation to make such
payment was incurred and including, if such requisition and certificate
comprises an item for payment for 




                                      37


<PAGE>   45

labor or to contractors, buildings or materialmen, a paragraph in the form of
the last paragraph of the attached form of requisition and certificate.

               (b) The Trustee is authorized and directed to apply the moneys
in the Project Fund in accordance herewith but only upon receipt of the
requisitions required by this Section 4.2, duly executed by the person and in
the manner provided for herein.

               (c) Interest earnings on the funds deposited in the Project Fund
shall be transferred to the Repayments Account of the Bond Fund.

         SECTION 4.3   TRUSTEE MAY RELY ON REQUISITIONS. All requisitions in the
form provided by Section 4.2 hereof and all other statements, orders,
certifications and approvals received by the Trustee, as required by this
Article as conditions of payment from the Project Fund, may be conclusively
relied upon by the Trustee, and shall be retained by the Trustee as provided in
Section 4.6, subject at all reasonable times to examination by the Lessee, the
Bank, the Issuer, any Bondholder and the agents and representatives thereof.


         SECTION 4.4   COMPLETION DATE. The establishment of the Completion Date
and the disposition of moneys then held for the credit of the Project Fund
shall be in accordance with Sections 4.3 and 4.4 of the Lease Agreement,
respectively.


         SECTION 4.5   TRANSFERS TO THE BOND FUND. In the event that the Lessee
should elect or be required to prepay the rentals pursuant to Section 10.1,
Section 10.2, or Section 10.3 of the Lease Agreement or that the Trustee shall
declare the Bonds to be due and payable pursuant to Section 9.2 hereof, the
Trustee shall, without further authorization, forthwith transfer any balance
remaining in the Project Fund to the Bond Fund.


         SECTION 4.6   TRUSTEE'S RECORDS. The Trustee shall maintain adequate
records for a period of at least three (3) years after the Completion Date
pertaining to all disbursements from the Project Fund. After the Completion
Date, the Trustee shall deliver to the Lessee, and the Issuer upon request a
final accounting.


         SECTION 4.7   DISPOSITION OF BALANCE IN PROJECT FUND. When the Project
shall have been completed and the Trustee shall have received a certificate of
the Lessee's Representative stating the Completion Date and what items of the
Cost of the Project, if any, have not been paid, and for the payment of which
money should be reserved, any funds remaining after the Trustee has reserved
funds for unpaid items shall be deposited in the Bond Fund and applied by the
Trustee at the written direction of the Lessee as soon thereafter as
practicable, (a) to the purchase of Bonds at such price and upon such terms and
conditions as the Lessee may direct or to the reimbursement of the Credit
Facility Issuer for draws under the Credit Facility to purchase Bonds, or (b)
to the redemption of the Bonds, on the first redemption date occurring after
the Completion Date at the applicable optional or mandatory redemption price or
to reimburse the Credit Facility Issuer for draws under the Credit Facility to
redeem bonds, or (c) provided that, if the Bonds are then the 




                                      38


<PAGE>   46

Tax-Exempt Series Bonds, the Trustee shall have received an opinion of Bond
Counsel that such deposit shall not cause interest on the Bonds to be
includable in gross income for Federal income tax purposes under Section 103 of
the Code, such amounts may be transferred to the Bond Fund for payment of
maturing principal of or interest on any of the Bonds or to reimburse the
Credit Facility Issuer for draws under the Credit Facility for such payment.



                                   ARTICLE V

                        REVENUES AND APPLICATION THEREOF


         SECTION 5.1   REVENUES TO BE PAID OVER TO TRUSTEE. The Issuer has 
caused the Revenues from the Lease Agreement payments to be paid directly to
the Trustee. If, notwithstanding these arrangements, the Issuer receives any
payments under the Lease Agreement or on account of a Credit Facility with
respect to the principal of, redemption premium, if any, or interest on the
Bonds, the Issuer shall immediately pay over the same to the Trustee to be held
as Revenues.

         SECTION 5.2   THE BOND FUND.

               (a) There is hereby established with the Trustee a special fund
to be designated "The Industrial Development Board of the County of Hamilton,
Tennessee Industrial Development Revenue Bonds (Sterile Recoveries, Inc.
Project), Bond Fund" (the "BOND FUND"), the moneys in which, in accordance with
Section 5.2(c) hereof, the Trustee shall apply to (1) the principal of and
redemption premium, if any, on the Bonds as they mature or become due, upon
surrender thereof, and (2) the interest on Bonds as it becomes payable. There
are hereby established with the Trustee within the Bond Fund two separate and
segregated accounts, to be designated the "REPAYMENTS ACCOUNT" and the "CREDIT
FACILITY ACCOUNT."

               (b) There shall be deposited into the various accounts of the
Bond Fund from time to time the following:

                   (1) into the Repayments Account, moneys received by the
               Trustee under and pursuant to the provisions of this Indenture
               or any of the provisions of the Lease Agreement, when
               accompanied by written directions from the person depositing
               such moneys that such moneys are to be paid into such account of
               the Bond Fund, which shall include the interest earnings on the
               Project Fund deposited as required by Section 4.2(c) hereof. All
               amounts deposited in the Repayments Account shall be segregated
               and held, with the earnings thereon, separate and apart from
               other funds in the Bond Fund until such amounts become Available
               Moneys. At such time as funds deposited in the Repayments
               Account become Available Moneys, they may be commingled with
               other Available Moneys in the Repayments Account; and




                                      39

<PAGE>   47

                   (2) into the Credit Facility Account, all moneys drawn by
               the Trustee under the Credit Facility to pay principal (whether
               at maturity, upon redemption, acceleration or otherwise)
               (excluding redemption premium) and interest on the Bonds.

               (c) Except as provided in Section 9.11 hereof, moneys in the
Bond Fund shall be used solely for the payment of the principal and redemption
premium, if any, and interest on the Bonds from the following source or sources
but only in the following order of priority;

                   (1) moneys held in the Credit Facility Account, provided
               that in no event shall moneys held in the Credit Facility
               Account be used to pay any amounts due on Bonds which are held
               by or for the Lessee, including without limitation, Bonds
               pledged to the Credit Facility Issuer, or to pay any portion of
               the redemption premium required pursuant to Section 7.1(a)(2)
               hereof; and

                   (2) moneys held in the Repayments Account to the extent such
               amounts qualify as Available Moneys (except with respect to
               moneys paid on Bonds that are held by or for the Lessee,
               including without limitation, Bonds pledged to the Credit
               Facility Issuer, which moneys need not qualify as Available
               Moneys).

               (d) Not later than 10:00 A.M. on the third (3rd) Business Day
preceding the date on which principal of, redemption premium, if any, or
interest on the Bonds is due and payable (the "PAYMENT DATE"), the Trustee
shall have notified the Lessee and the Credit Facility Issuer of the amounts of
principal of, premium, if any, and interest due on the Bonds on the Payment
Date. Not later than 11:00 A.M. on each Payment Date, the Trustee shall present
a draft or drafts under the Credit Facility in the amounts due and payable on
the Bonds. Such funds shall be wired by the Credit Facility Issuer to the
Trustee and immediately deposited by the Trustee in the Credit Facility
Account, and payments due under the Bonds shall be made by the Trustee in
accordance with Section 2.8 and Section 5.2(c) hereof. Following such payment
to the Bondholders, the Trustee shall, on behalf of the Lessee, promptly pay
moneys on deposit in the Repayments Account in an amount equal to the amounts
of such drawing or drawings to the Bank as reimbursement to the Credit Facility
Issuer under the terms of the Reimbursement Agreement. If no amounts are owed
by the Lessee to the Credit Facility Issuer under the Reimbursement Agreement,
any amounts remaining in the Repayments Account on the Business Day immediately
following a Payment Date shall be paid to the Lessee upon request with the
consent of the Credit Facility Issuer.

               (e) Except as provided in the following sentence, the Bond Fund
shall be depleted at least once each year, except for a reasonable carryover
amount (not to exceed the greater of one year's earnings on the Bond Fund or
one-twelfth (1/12th) of annual debt service). Any money deposited in the Bond
Fund shall be spent within a thirteen (13) month period beginning on the date
of deposit, and any amount received from investment of money held in the Bond
Fund shall be spent within a one (1) year period beginning on the date of
receipt. Any amounts remaining in the Bond Fund after payment in full of the
principal of, redemption premium, if any, and interest 




                                      40


<PAGE>   48

on the Bonds (or provisions for payment thereof) shall be paid to the Lessee at
the written request of the Lessee therefor or as otherwise required by law;
provided, that if any payments have been received by the Trustee under the
Credit Facility in connection with such payment of the Bonds, any remaining
amounts shall be paid to the Credit Facility Issuer to the extent of such
payments.


         SECTION 5.3   REVENUES TO BE HELD FOR ALL BONDHOLDERS; CERTAIN
EXCEPTIONS. Revenues shall, until applied as provided in this Indenture, be
held by the Trustee in trust for the benefit of the owners of all Outstanding
Bonds, except that any portion of the Revenues representing principal of,
redemption premium, if any, and interest on any Bonds previously matured or
called for redemption in accordance with Article VII of this Indenture, shall
be held for the benefit of the owners of such Bonds only.


         SECTION 5.4   REBATE FUND. In the event the Lessee provides for the
deposit of amounts from time to time for rebate to the United States of America
pursuant to the Lease Agreement, the Trustee is hereby authorized to create a
special fund to be designated as the "REBATE FUND." The Rebate Fund shall be
held separate and apart from all other funds under this Indenture and shall not
be subject to the lien and pledge granted hereunder for the benefit of
Bondholders. The Trustee shall remit money deposited in the Rebate Fund to the
United States or otherwise as directed in writing by the Lessee. All moneys
deposited in the Rebate Fund shall be held and invested at the sole direction
of the Lessee. In making investments hereunder, or in selling or disposing of
investments as required hereby, the Trustee shall have no duty or
responsibility to independently verify compliance with Sections 148(d) and
148(f) of the Code and the regulations promulgated thereunder and the Trustee
and the Issuer shall be fully protected in relying solely upon the written
directions of the Lessee as aforesaid. Under no circumstances whatsoever shall
the Trustee be liable to the Issuer, the Lessee or any holder for any loss of
tax-exempt status of the Bonds, or any claims, demands, damages, liabilities,
losses, costs or expenses resulting therefrom or in any way connected
therewith, so long as the Trustee acts only in accordance with the written
directions of the Lessee as provided hereunder and in accordance with its other
obligations hereunder. Neither the Trustee nor the Issuer shall be responsible
for any losses in the investment of money in the Rebate Fund made at the
direction of the Lessee.



                                  ARTICLE VI

                      DEPOSITORIES OF MONEYS; SECURITY FOR
                        DEPOSITS AND INVESTMENT OF FUNDS


         SECTION 6.1   SECURITY FOR DEPOSITS. All moneys deposited with the
Trustee under the provisions of this Indenture or the Lease Agreement shall be
held in trust and applied only in accordance with the provisions of this
Indenture and the Lease Agreement and shall not be subject to lien (other than
the lien created hereby) or attachment by any creditor of the Trustee, the
Issuer or the Lessee.




                                      41

<PAGE>   49


         SECTION 6.2   INVESTMENT OF MONEYS.

               (a) At the request and the direction of the Lessee's
Representative (confirmed in writing), moneys held for the credit of the
Project Fund and the Bond Fund (including any amount therein) shall be invested
and reinvested by the Trustee in Authorized Investments which shall mature not
later than the respective dates when the moneys held for the credit of said
funds will be required for the purposes intended, provided that moneys held in
the Credit Facility Account of the Bond Fund shall be invested and reinvested
by the Trustee only in Governmental Obligations which shall mature not later
than the date on which such moneys will be required to be paid; provided
further that such investment shall only be made at the direction of the
Lessee's Representative. The Trustee shall be entitled to rely on instruction
from the Lessee's Representative. In making investments hereunder, or in
selling or disposing of investments as required hereby, the Trustee shall have
no duty or responsibility to independently verify compliance with Sections
148(d) and 148(f) of the Code and the regulations promulgated thereunder and
the Trustee shall be fully protected in relying solely upon the written
directions of the Lessee as aforesaid. Under no circumstances whatsoever shall
the Trustee be liable to the Issuer, the Lessee or any holder for any loss of
tax-exempt status of the Bonds, or any claims, demands, damages, liabilities,
losses, costs or expenses resulting therefrom or in any way connected
therewith, so long as the Trustee acts only in accordance with the written
directions of the Lessee as provided hereunder and in accordance with its other
obligations hereunder.

               (b) Obligations so purchased as an investment of moneys in any
such fund or account shall be deemed at all times to be a part of such fund or
account, and the interest accruing thereon and any profit realized from such
investment shall be credited to such fund or account (except as provided in
Section 4.2(c)), and any loss resulting from such investment shall be charged
to such fund or account. The Trustee shall sell at market price or present for
redemption any obligation so purchased whenever it shall be necessary so to do
in order to provide cash to meet any payment or transfer from any such fund or
account. Neither the Trustee nor the Issuer shall be liable or responsible for
loss resulting from any such investment or the sale of any such investment made
pursuant to the terms of this Section.

               (c) For the purpose of the Trustee's determination of the amount
on deposit to the credit of any such fund or account, obligations in which
moneys in such fund or account have been invested shall be valued at the lower
of cost or market.

               (d) The Trustee may make any and all investments permitted by
this Section through its own bond or investment department, unless otherwise
directed in writing by the Lessee's Representative.




                                      42

<PAGE>   50


         SECTION 6.3   THE CREDIT FACILITY.


               (a) INITIAL LETTER OF CREDIT.

                   (1) The Letter of Credit shall be a direct pay letter of
               credit and shall provide for direct payments to or upon the
               order of the Trustee as hereinafter set forth and shall be the
               irrevocable obligation of the Bank to pay to or upon the order
               of the Trustee, upon request and in accordance with the terms
               thereof, an amount of up to $4,725,000 of which (A) $4,500,000
               shall support the payment of principal of the Bonds when due and
               that portion of the Purchase Price corresponding to principal of
               Tendered Bonds not remarketed on any Variable Rate Purchase Date
               or sold on the Conversion Date, and (B) $225,000 shall support
               the payment of up to one hundred twenty (120) days' interest at
               an assumed rate of fifteen percent (15%) per annum (which is the
               maximum rate of interest borne by the Bonds) on the Bonds when
               due and that portion of the Purchase Price corresponding to
               interest on Tendered Bonds not remarketed on any Variable Rate
               Purchase Date or sold on the Conversion Date.

                   (2) The Letter of Credit shall terminate automatically on
               the earliest of (A) the date on which a drawing under the Letter
               of Credit has been honored upon the maturity or acceleration of
               the Bonds or redemption of all the Bonds, (B) the day on which
               the Credit Facility Issuer receives the notice of the conversion
               following the Conversion Date, (C) the date on which the Bank
               receives notice from the Trustee that an Alternate Credit
               Facility is substituted for the Letter of Credit and is in
               effect, (D) the date on which the Bank receives notice from the
               Trustee that there are no longer any Bonds Outstanding and (E)
               the "STATED EXPIRATION DATE" stated in the Letter of Credit as
               it may be extended pursuant to the terms thereof.

                   (3) The Bank's obligation under the Letter of Credit may be
               reduced to the extent of any drawing thereunder, subject to
               reinstatement as provided therein. The Letter of Credit shall
               provide that, with respect to a drawing by the Trustee solely to
               pay interest on the Bonds on any Interest Payment Date, if the
               Trustee shall not have received from the Bank within ten (10)
               days from the date of such drawing a notice by telecopier, by
               telex or in writing that the Bank has not been reimbursed, the
               Trustee's right to draw under the Letter of Credit with respect
               to the payment of interest shall be reinstated on or before the
               eleventh (11th) calendar day following such drawing in an amount
               equal to such drawing. With respect to any other drawing by the
               Trustee, the amount available under the Letter of Credit for
               payment of the Purchase Price of the Bonds and the principal and
               interest on the Bonds shall be reinstated in an amount equal to
               any such drawing but only to the extent that the Bank is
               reimbursed in accordance with the terms of the Reimbursement
               Agreement for the amounts so drawn and the Bank delivers a
               notice to the Trustee reinstating the Letter of Credit in such
               amount.




                                      43

<PAGE>   51

                   (4) The Letter of Credit shall provide that if, in
               accordance with the terms of the Indenture, the Bonds shall
               become or be declared immediately due and payable pursuant to
               any provision of the Indenture, the Trustee shall be entitled to
               draw on the Letter of Credit to the extent that the amounts are
               available thereunder to pay the aggregate principal amount of
               the Bonds then Outstanding plus an amount of interest not to
               exceed one hundred twenty (120) days.

                   (5) Upon the termination of the Letter of Credit, the
               Trustee shall return the Letter of Credit to the Bank, marked
               "CANCELED" on its face.

               (b) EXPIRATION. Unless an Alternate Credit Facility has been
provided in accordance with Section 6.3(c) hereof at least thirty (30) days
before the Interest Payment Date immediately preceding the fifteenth (15th) day
prior to the Stated Expiration Date of a Credit Facility or unless the interest
rate payable on the Bonds has been converted from the Variable Rate to the
Fixed Rate pursuant to Section 2.2 hereof, the Trustee shall call the Bonds for
redemption in accordance with the Section 7.1(c)(2) hereof. If at any time
there shall cease to be any Bonds Outstanding hereunder, the Trustee shall
promptly surrender the then current Credit Facility to the Credit Facility
Issuer for cancellation. The Trustee shall comply with the procedures set forth
in the Credit Facility relating to the termination thereof.

               (c) ALTERNATE CREDIT FACILITIES. While the Bonds bear interest
at the Variable Rate, the Lessee may, at its option, provide for the delivery
to the Trustee of an Alternate Credit Facility. The Alternate Credit Facility
shall have terms in all respects material to the owners of the Bonds the same
as the Credit Facility being replaced and shall be in form acceptable to the
Trustee and the Tender Agent. On or prior to the date of delivery of an
Alternate Credit Facility to the Trustee, the Lessee shall furnish to the
Trustee:

                   (1) an opinion of Counsel stating that the delivery of such
               Alternate Credit Facility to the Credit Facility Trustee is
               authorized under this Indenture and complies with the terms
               hereof and that such Alternate Credit Facility is enforceable
               against the Credit Facility Issuer thereof in accordance with
               its terms, and

                   (2) if the Bonds are rated by Moody's or S&P, written
               evidence from Moody's, if the Bonds are rated by Moody's, and
               from S&P, if the Bonds are rated by S&P, in each case to the
               effect that such rating agency has reviewed the proposed
               Alternate Credit Facility and that the substitution of the
               proposed Alternate Credit Facility for the then current Credit
               Facility will not, by itself, result in:

                       (A) a permanent withdrawal of its rating of the Bonds,
                   or

                       (B) a reduction of the then current rating of the Bonds,




                                      44

<PAGE>   52


               or if the Bonds are not rated by Moody's or S&P, written
               evidence (or such other evidence satisfactory to the Trustee in
               its sole discretion) that the obligations of the bank or
               institution issuing the proposed Alternate Credit Facility
               substantially equivalent in term to the remaining term of the
               Bonds are rated by Moody's or S&P in the same category as the
               obligations of substantially equivalent term of the bank or
               institution which issued the Credit Facility being replaced;
               provided, however, if the Lessee provides the Trustee with an
               opinion of Bond Counsel that a change in the then current rating
               on the Bonds or a change in the Credit Facility Issuer to a bank
               or institution the obligations of which are rated in a different
               category than those obligations of equivalent term of the issuer
               of the Credit Facility being replaced will not adversely affect
               the exclusion of the interest on the Bonds from gross income
               from federal tax purposes, then such evidence need not be
               provided, but the Lessee shall instead provide the Trustee with
               written evidence (or such other evidence as shall be
               satisfactory to the Trustee) that (i) the commercial paper of
               the bank or institution issuing the proposed Alternate Credit
               Facility is rated P-3 or higher by Moody's or A-3 or higher by
               S&P, and (ii) the Issuer has consented to the proposed Alternate
               Credit Facility.

         The Trustee shall then accept such Alternate Credit Facility and
         surrender the previously held Credit Facility to the previous Credit
         Facility Issuer for cancellation promptly on or before the fifteenth
         (15th) day after the Alternate Credit Facility becomes effective, but
         not later than the fifteenth (15th) day following the last Interest
         Payment Date covered by the Credit Facility to be canceled.

               (d) NOTICES OF SUBSTITUTION OR REPLACEMENT OF CREDIT FACILITY.

                   (1) The Trustee shall, at least twenty (20) days prior to
               the proposed replacement of a Credit Facility with an Alternate
               Credit Facility, give notice thereof by mail to the owners of
               the Bonds, which notice shall include the identity of the issuer
               thereof and the rating, if any, to be assigned to the Bonds by
               Moody's or S&P following the effective date of such Alternate
               Credit Facility or, if the Bonds are not then rated by Moody's
               or S&P, then the rating assigned by Moody's or S&P to the
               obligations of the issuer of such Alternate Credit Facility
               substantially equivalent in term to the remaining term of the
               Bonds.

                   (2) The Trustee shall promptly give notice of any
               replacement of the Credit Facility to the Issuer, the Tender
               Agent and the Remarketing Agent.




                                      45

<PAGE>   53


                                  ARTICLE VII

                      REDEMPTION OR PURCHASE OF THE BONDS


         SECTION 7.1   REDEMPTION OR PURCHASE DATES AND PRICES. The Bonds shall
be subject to redemption, and, in certain instances, to purchase, prior to
maturity in the amounts, at the times and in the manner provided in this
Article VII. Payments of the redemption price or the Purchase Price of any Bond
shall be made only upon the surrender to the Trustee or its agent, as directed,
of any Bond so redeemed or purchased.

               (a) OPTIONAL REDEMPTION.

                   (1) Optional Redemption During Variable Rate Period. While
               the Bonds bear interest at the Variable Rate, the Bonds shall be
               subject to redemption, upon the written direction of the Issuer,
               given at the request of the Lessee, with the consent of the
               Credit Facility Issuer, on any Interest Payment Date and on the
               Conversion Date in whole or in part, at a redemption price of
               one hundred percent (100%) of the principal amount thereof,
               without premium, plus interest accrued to the redemption date.

                   (2) Optional Redemption With Premium During Fixed Rate
               Period. While the Bonds bear interest at the Fixed Rate, the
               Bonds shall be subject to redemption upon the written direction
               of the Issuer, given at the request of the Lessee, in whole on
               any date, or in part on any Interest Payment Date, occurring on
               or after the dates set forth below, at the redemption prices
               (expressed as percentages of principal amount to be redeemed)
               set forth below plus interest accrued to the redemption date as
               follows:

<TABLE>
<CAPTION>

                       Commencement of
                      Redemption Period                 Redemption Price
               -------------------------------     ---------------------------

<S>                                                <C>
               The Business Day four (4) years     103% declining by 1/2% on
               from the Conversion Date            each succeeding anniversary
                                                   date of the first Business
                                                   day of the redemption
                                                   period until reaching 100%
                                                   and thereafter at 100%

</TABLE>

               (b) EXTRAORDINARY OPTIONAL REDEMPTION DUE TO CASUALTY OR EMINENT
DOMAIN.


                   (1) The Bonds may be redeemed as a whole or in part by the
               Issuer at any time at the written direction of the Lessee, at a
               redemption price equal to one hundred percent (100%) of the
               principal amount thereof plus interest accrued thereon to the
               redemption date, without premium, under any of the following
               conditions, the existence of which shall be certified to the
               Trustee by the Lessee's Representative:




                                      46

<PAGE>   54


                       (A) The Project shall have been damaged or destroyed to
                   such extent that the amount of Net Proceeds of insurance
                   exceeds $50,000 and the Lessee elects not to rebuild the
                   Project or fails to so elect within ninety (90) days of
                   receipt by the Trustee of such Net Proceeds; or

                       (B) Title to, or the temporary use of, all of the
                   Project or any substantial portion thereof shall have been
                   taken by Eminent Domain and the amount of Net Proceeds from
                   such taking exceeds $50,000 and the Lessee elects not to
                   replace the property so taken or fails so to elect within
                   ninety (90) days of receipt by the Trustee of such Net
                   Proceeds.

                   (2) Such redemption shall occur on the next Interest Payment
               Date occurring not less than thirty (30) days following the
               expiration of such 90-day period referred to in paragraph (1) of
               this Section 7.1(b).

               (c) MANDATORY REDEMPTION.

                   (1) Determination of Taxability. The Tax-Exempt Series Bonds
               shall be subject to mandatory redemption in whole on any date at
               a redemption price equal to one hundred percent (100%) of the
               principal amount thereof plus accrued interest to the redemption
               date which shall not be more than one hundred eighty (180) days
               following the receipt by the Trustee of a written notice of a
               Determination of Taxability.

                   (2) Failure to Provide Alternate Credit Facility. The Bonds
               shall be subject to mandatory redemption during the Variable
               Rate Period at one hundred percent (100%) of the principal
               amount thereof, without premium, plus interest accrued, if any,
               thereon to the date of redemption, on the Interest Payment Date
               occurring closest to but not after fifteen (15) days prior to
               the date of expiration of the then current Credit Facility,
               unless an Alternate Credit Facility has been provided in
               accordance with Article VI hereof.

                   (3) Excess Moneys in Project Fund. The Bonds shall be
               subject to mandatory redemption in whole or in part on any date
               from excess moneys in the Project Fund or from moneys drawn
               under the Credit Facility for which the Credit Facility Issuer
               has been reimbursed from such excess moneys in accordance with
               the provisions of Section 4.4 of the Lease Agreement, at a price
               equal to 100% of the principal amount thereof, without premium,
               plus accrued interest to the redemption date, provided such
               redemption date shall be no more than 60 days following the date
               of transfer of moneys to the Bond Fund from the Project Fund.

                   (4) Tax-Exempt Conversion. The Series 1999 Bonds shall be
               subject to mandatory redemption in whole on the Mandatory
               Tax-Exempt Conversion Redemption 




                                      47


<PAGE>   55

               Date at a redemption price equal to one hundred percent (100%)
               of the principal amount thereof plus accrued interest to the
               redemption date.

               (d) MANDATORY PURCHASE ON CONVERSION DATE. The Bonds shall be
subject to mandatory purchase in whole on the Conversion Date at a Purchase
Price equal to one hundred percent (100%) of the principal amount thereof,
without premium, plus interest accrued, if any, thereon to the date of
purchase, on the Conversion Date; provided that there shall not be so purchased
(1) Bonds or portions thereof in authorized denominations with respect to which
the Trustee shall have received Optional Retention Notices from the owners
thereof, and (2) Bonds issued in exchange for or upon the registration of
transfer of Bonds or portions thereof in authorized denominations referred to
in above.

               (e) PURCHASE IN LIEU OF REDEMPTION. The Bonds are subject to
optional call and purchase in whole prior to the Conversion Date on any
Interest Payment Date upon the written direction of the Issuer, given at the
request of the Lessee, which purchase may be in lieu of redemption, from moneys
deposited with the Trustee sufficient for payment of 100% of the principal
amount due upon such call together with accrued interest on the Bonds to the
call date.


         SECTION 7.2   LESSEE TO DIRECT OPTIONAL REDEMPTION. The Issuer shall
direct the Trustee in writing to call Bonds for optional redemption when and
only when it shall have been notified by the Lessee to do so and the Lessee has
notified the Trustee in writing that the Lessee has made or intends to make a
corresponding prepayment under the Lease Agreement. Such direction from the
Issuer to the Trustee shall be given at least forty-five (45) days but not more
than sixty (60) days prior to the redemption date or such shorter period as
shall be acceptable to the Trustee. So long as a Credit Facility is then held
by the Trustee, the Trustee shall only call Bonds for optional redemption if it
has Available Moneys in the Repayments Account of the Bond Fund or has been
notified by the Credit Facility Issuer that it will receive moneys pursuant to
the Credit Facility, in the aggregate, sufficient to pay the redemption price
of the Bonds to be called for redemption, plus accrued interest thereon. No
optional redemptions shall be effected at the option of the Lessees during the
Variable Rate Period under this Article VII without the prior written consent
of the Credit Facility Issuer.


         SECTION 7.3   SELECTION OF BONDS TO BE CALLED FOR REDEMPTION. Except 
as otherwise provided herein or in the Bonds, if less than all the Bonds are to 
be redeemed, the particular Bonds to be called for redemption shall be selected 
in the following order of priority: first, Bonds pledged to the Bank pursuant to
the Pledge Agreement; second, Bonds owned by the Lessee; and third, Bonds
selected by any random or other method determined by the Trustee in its sole
discretion to be fair and reasonable. The Trustee shall treat any Bond of a
denomination greater than One Hundred Thousand Dollars ($100,000) as
representing that number of separate Bonds each of the denomination of the
minimum denomination of One Hundred Thousand Dollars ($100,000) or any integral
multiple of Five Thousand Dollars ($5,000) in excess thereof as the Trustee
shall so determine.




                                      48

<PAGE>   56

         SECTION 7.4   NOTICE OF REDEMPTION OR PURCHASE.

               (a) When required to redeem or purchase Bonds under any
provision of this Article VII, or when directed to do so by the Issuer, the
Trustee shall cause notice of the redemption or purchase to be given not more
than sixty (60) days and not less than twenty (20) days prior to the redemption
or purchase date by mailing a copy of all notices of redemption or purchase by
first class mail, postage prepaid, to all registered owners of Bonds to be
redeemed or purchased at their addresses shown on the Bond Register. Failure to
mail any such notice or defect in the mailing thereof in respect of any Bond
shall not affect the validity of the redemption or purchase of any other Bond.
Notices of redemption or purchases shall also be mailed to the Remarketing
Agent and the Credit Facility Issuer if any. Any such notice shall be given in
the name of the Issuer, shall identify the Bonds to be redeemed or purchased
(and, in the case of partial redemption or purchase of any Bonds, the
respective principal amounts thereof to be redeemed or purchased), shall
specify the redemption or purchase date, and shall state that on the redemption
or purchase date, the redemption or Purchase Price of the Bonds called for
redemption or purchase will be payable at the principal corporate trust office
of the Trustee, or in the case of mandatory redemptions or purchases pursuant
to Section 7.1(c)(2) or 7.1(d) hereof at the office of the Trustee's Paying
Agent, if any, and that from that date interest will cease to accrue. The
Trustee may use "CUSIP" numbers in notices of redemption or purchase as a
convenience to Bondholders, provided that any such notice shall state that no
representation is made as to the correctness of such numbers either as printed
on the Bonds or as contained in any notice of redemption or purchase and that
reliance may be placed only on the identification numbers containing the prefix
established under the Indenture.

               (b) With respect to any notice of redemption or purchase of
Bonds in accordance with Section 7.1(c)(2) hereof, such notice shall also
specify the date of the expiration of the term of the Credit Facility.

               (c) If at the time of mailing of notice of any optional
redemption the Issuer shall not have deposited with the Trustee moneys
sufficient to redeem all the Bonds called for redemption, such notice may state
that it is conditional on the deposit of Available Moneys (or in the case of
purchase pursuant to Section 7.1(e), moneys) with the Trustee not later than
the redemption date, and such notice shall be of no effect unless such moneys
are so deposited.

               (d) Upon redemption of less than all of the Bonds, the Trustee
shall furnish to the Credit Facility Issuer a notice in the form specified by
the Credit Facility Issuer to reduce the coverage provided by the Credit
Facility and upon redemption of all of the Bonds, the Trustee shall surrender
the Credit Facility to the Credit Facility Issuer for cancellation.

               (e) Purchases under Section 7.1(d) hereof shall be in accordance
with Section 2.2(e) hereof.




                                      49

<PAGE>   57


         SECTION 7.5   BONDS REDEEMED OR PURCHASED IN PART. Any Bond which is to
be redeemed or purchased only in part shall be surrendered at a place stated in
the notice provided for in Section 7.4 hereof (with due endorsement by, or a
written instrument of transfer in form satisfactory to the Trustee duly
executed by, the owner thereof or his attorney duly authorized in writing), and
the Issuer shall execute and the Trustee or its Authenticating Agent shall
authenticate and deliver to the owner of such Bond without service charge, a
new Bond or Bonds, of any authorized denomination as requested by such owner in
an aggregate principal amount equal to and in exchange for the unredeemed and
unpurchased portion of the principal of the Bond so surrendered.



                                 ARTICLE VIII

                      PARTICULAR COVENANTS AND PROVISIONS


         SECTION 8.1   COVENANT TO PAY THE BONDS; BONDS LIMITED OBLIGATIONS OF
THE ISSUER.

               (a) The Issuer covenants that it will promptly pay the principal
of, redemption premium, if any, and interest on the Bonds at the places, on the
dates and in the manner provided herein and in the Bonds according to the true
intent and meaning thereof. Such principal, redemption premium, if any, and
interest are payable solely from the payments made by the Lessee under the
Lease Agreement and other Revenues.

               (b) The Bonds shall not be general obligations of the Issuer but
limited and special obligations payable solely from the amounts payable under
the Lease Agreement and other amounts specifically pledged therefor under this
Indenture, and shall be a valid claim of the respective Owners thereof only
against the designated accounts of the Bond Fund and other moneys held by the
Trustee and the amounts payable under the Lease Agreement or otherwise pledged
therefor, which amounts are hereby pledged, assigned and otherwise secured for
the equal and ratable payment of the Bonds and shall be used for no other
purpose than to pay the principal of , premium, if any, and interest on the
Bonds, except as may be otherwise expressly authorized in this Indenture. The
Bonds do not constitute an indebtedness of the Issuer or a loan of credit
thereof within the meaning of any constitutional or statutory provisions.


         SECTION 8.2   COVENANTS TO PERFORM OBLIGATIONS UNDER THIS INDENTURE. 
The Issuer covenants that it will faithfully perform at all times any and all
covenants, undertakings, stipulations and provisions contained in this
Indenture, in the Bonds executed and delivered hereunder and in all proceedings
of the Issuer pertaining thereto and will faithfully observe and perform at all
times any and all covenants, undertakings, stipulations and provisions of the
Lease Agreement on its part to be observed or performed. The Issuer covenants
that it is duly authorized under the Constitution and laws of the State,
including particularly and without limitation the Act, to issue the Bonds
authorized hereby and to enter into this Indenture, to pledge the payments
under the Lease Agreement and other Revenues in the manner and to the extent
herein set forth, and to 




                                      50


<PAGE>   58

assign its interest in the Lease Agreement to the Trustee; and that all action
on its part for the issuance of the Bonds issued hereunder and the execution
and delivery of this Indenture has been duly and effectively taken; and that
the Bonds in the hands of the owners thereof are and will be the valid and
binding obligations of the Issuer according to the tenor and import thereof.


         SECTION 8.3   COVENANT TO PERFORM OBLIGATIONS UNDER THE LEASE 
AGREEMENT. Subject to the provisions of Section 8.4 of this Article, the Issuer
covenants and agrees that it will not suffer, permit or take any action or do
anything or fail to take any action or fail to do anything which may result in
the termination or cancellation of the Lease Agreement so long as any Bond is
Outstanding; that it will punctually fulfill its obligations and will require
the Lessee to perform punctually its duties and obligations under the Lease
Agreement; that it will not execute or agree to any change, amendment or
modification of or supplement to the Lease Agreement or this Indenture except
by a supplement or an amendment duly executed by the Issuer and the Lessee with
the approval of the Trustee and upon the further terms and conditions set forth
in Article VIII of this Indenture; that it will not agree to any abatement,
reduction, abrogation, waiver, diminution or other modification in any manner
or to any extent whatsoever of the obligation of the Lessee to pay the lease
payments and to meet its other obligations as provided in the Lease Agreement;
and that it will promptly notify the Trustee in writing of any actual or
alleged Event of Default under the Lease Agreement, whether by the Lessee or
the Issuer, and will further notify the Trustee at least thirty (30) days
before the proposed date of effectiveness of any proposed termination or
cancellation of the Lease Agreement.


         SECTION 8.4   TRUSTEE MAY ENFORCE THE ISSUER'S RIGHTS UNDER THE LEASE
AGREEMENT. The Lease Agreement, a duly executed counterpart of which has been
filed with the Trustee, sets forth the covenants and obligations of the Issuer
and the Lessee, including a provision in Section 12.9 thereof that subsequent
to the issuance of the Bonds and prior to Payment of the Bonds (as defined in
the Lease Agreement) the Lease Agreement may not be effectively amended,
changed, modified, altered or terminated except as provided in Article VIII of
this Indenture, and reference is hereby made to the Lease Agreement for a
detailed statement of said covenants and obligations of the Lessee under the
Lease Agreement, and the Issuer agrees that the Trustee, subject to the
provisions of the Lease Agreement and this Indenture reserving to the Issuer
the Issuer Reserved Rights and respecting actions by the Trustee in its name or
in the name of the Issuer, may enforce all rights of the Issuer and all
obligations of the Lessee under and pursuant to the Lease Agreement for and on
behalf of the Bondholders whether or not the Issuer is in default hereunder.


         SECTION 8.5   COVENANT AGAINST ARBITRAGE. The Issuer covenants and
agrees that it will not make or authorize any use, and directs the Trustee not
to make or permit any use, of the proceeds of the Bonds which would cause any
Bond to be an "arbitrage bond" within the meaning of Section 148 of the Code
and the applicable regulations promulgated from time to time thereunder, and
further covenants that it will observe and not violate the requirements of
Section 148 of the Code and any such applicable regulations to the extent
necessary so that the interest on the Bonds will not cease to be excluded from
the gross income of the recipients thereof for federal income tax purposes by
reason of such use of proceeds; provided that (i) neither the Issuer nor the




                                      51

<PAGE>   59

Trustee shall be liable for any investment of moneys under this Indenture made
at the direction of the Lessee's Representative and (ii) the Issuer shall not
be liable for any investment of moneys under this Indenture made by the Trustee
made in contravention of the directors of the Issuer; provided further, that
the Issuer shall have no affirmative obligation to undertake any investigation
into investments made by the Trustee.


         SECTION 8.6   INSPECTION OF THE BOND REGISTER. At reasonable times and
upon reasonable regulations established by the Bond Registrar, the Bond
Register may be inspected and copied by and at the expense of the Lessee but
only if the Bond Registrar is furnished with opinion of Counsel to the effect
that such inspection is lawfully permitted.


         SECTION 8.7   PRIORITY OF PLEDGE AND SECURITY INTEREST. The pledge
herein made of the Trust Estate and the security interest created herein with
respect thereto constitutes a first and prior pledge of, and a security
interest in, the Trust Estate. Said pledge and security interest shall at no
time be impaired directly or indirectly by the Issuer or the Trustee, and the
Trust Estate shall not otherwise be pledged and, except as provided herein and
in the Lease Agreement, no persons shall have any rights with respect thereto.


         SECTION 8.8   MAINTENANCE OF INSURANCE: PAYMENT OF TAXES, CHARGES, ETC.
Pursuant to the provisions of 6.3 and 6.4 of the Lease Agreement and Section
4.3 of the Reimbursement Agreement, the Lessee has agreed to maintain certain
insurance and to pay all lawful taxes, assessments and charges at any time
levied or assessed upon or against the Project, or any part thereof, which
might impair or prejudice the lien afforded by this Indenture as to the Trust
Estate; provided, however, that nothing contained in this Section shall require
the maintenance of such insurance or the payment of any such taxes, assessments
or charges if the same are not required to be maintained or paid under the
provisions of the Lease Agreement.


         SECTION 8.9   MAINTENANCE AND REPAIR. Pursuant to the provisions of
Section 6.1 of the Lease Agreement, the Lessee has agreed at its own expense to
cause the Project to be maintained, preserved and kept in good condition,
repair and working order, and that it will, from time to time, cause to be made
all needed repairs so that the Project shall at all times be kept in good
condition and repair, and that the Lessee may, at its own expense, make, from
time to time, additions, modifications and improvements to the Project under
the terms and conditions set forth in the Lease Agreement.


         SECTION 8.10  INSURANCE AND CONDEMNATION PROCEEDS. Reference is hereby
made to Section 6.7 of the Lease Agreement whereunder it is provided that under
certain circumstances the respective Net Proceeds of insurance and condemnation
awards (or Net Proceeds from a sale in lieu of condemnation) are to be paid to
the Trustee and deposited in separate trust accounts (but not in the Bond Fund)
and to be disbursed and paid out as therein provided. The Trustee hereby
accepts and agrees to perform the duties and obligations as therein specified.




                                      52

<PAGE>   60


         SECTION 8.11  ACTIONS ON BEHALF OF THE LESSEE. Subject to the proviso
to this sentence, but notwithstanding any other provision of this Indenture or
any related document, (a) all decisions which are to be made and all actions
which are to be taken, in each case by the Lessee pursuant to this Indenture or
any related document, shall be made or taken (or cause to be made or taken) by
Sterile Recoveries, Inc., (b) all notices and communications which are to be
delivered to the Lessee pursuant to this Indenture or any related document
shall also be delivered concurrently to Sterile Recoveries, Inc. and the
Financing Bank and (c) all notices and communications which are to be delivered
by the Lessee pursuant to this Indenture or any related document shall be
delivered by Sterile Recoveries, Inc. and copies thereof shall also be
delivered concurrently to the Financing Bank; provided, notwithstanding the
foregoing, (x) the rights of Sterile Recoveries, Inc. referenced in Section
8.11(a) shall automatically terminate upon the Financing Bank giving notice to
the Trustee and the Issuer at the addresses set forth in Section 15.2 of this
Indenture (or any other address which is subsequently designated by either such
party to the Financing Bank in writing) of the occurrence of any Synthetic
Lease Financing Default or Synthetic Lease Financing Event of Default and (y)
thereafter, the Issuer and the Trustee agree that the Financing Bank shall
exercise all such rights on behalf of the Lessee; but, provided further that
Sterile Recoveries, Inc. shall again have the rights referenced in Section
8.11(a) if any such Synthetic Lease Financing Default or Synthetic Lease
Financing Event of Default has been cured within the applicable cure period or
waived.


         SECTION 8.12  NO LIEN ON THE PROJECT IN FAVOR OF THE TRUSTEE OR THE
ISSUER; QUITCLAIM TRANSFER OF RIGHT, TITLE AND INTEREST IN THE PROJECT.
Notwithstanding any other provision of this Indenture or any related document,
(a) each of the Trustee and the Issuer hereby confirms that, except for nominal
title held by the Issuer, neither the Trustee nor the Issuer currently is (and
at no time shall become) the beneficiary of any lien, mortgage, pledge,
security interest, encumbrance, option or charge of any kind on or with respect
to the Project and (b) upon the request of the Lessee (or the Financing Bank on
behalf of the Lessee), the Issuer and the Trustee each shall promptly issue in
favor of the Lessee a quitclaim deed and bill of sale (in substantially the
same form of the Deed referenced in Section 10.5 of the Lease Agreement) upon
the full payment of all Outstanding Bonds (or provisions for payment thereof
having been made in accordance with the provisions of this Indenture).



                                  ARTICLE IX

                              DEFAULT AND REMEDIES



         SECTION 9.1   DEFAULTS. Each of the following events is hereby 
declared to be an "EVENT OF DEFAULT:"

               (a) Payment of interest on any of the Bonds shall not be made
when the same shall become due; or




                                      53

<PAGE>   61

               (b) Payment of the principal of or redemption premium, if any,
on any of the Bonds shall not be made when the same shall become due, whether
at maturity or upon call for redemption or otherwise; or

               (c) An "Event of Default" under the Lease Agreement shall have
occurred and not have been waived; or

               (d) The Trustee receives written notice from the Credit Facility
Issuer that an Event of Default under the Reimbursement Agreement has occurred
and has not been waived; or

               (e) The Trustee receives notice by telecopier, by telex or in
writing from the Credit Facility Issuer that the Credit Facility Issuer has not
been reimbursed for a drawing on or before the close of business on the tenth
(10th) calendar day following a drawing under such Credit Facility to pay
interest on the Bonds and that the interest portion of the Credit Facility will
not be reinstated for the amount so drawn; or

               (f) Payment of the Purchase Price of any Bond tendered pursuant
to Section 2.3 hereof is not made when payment is due; or

               (g) The Issuer shall fail to duly and punctually perform any of
the covenants, conditions, agreements and provisions contained in the Bonds or
in this Indenture on the part of the Issuer to be performed other than as
referred to in the preceding subsections of this Section;

provided, however, that no failure specified in subsections (c) or (g) of this
Section 9.1 shall constitute an Event of Default until written notice
specifying such failure and requiring the same to be remedied shall have been
given to the Lessee and the Issuer by the Trustee, which may give notice in its
discretion and shall give such notice at the written direction of the owners of
not less than twenty-five percent (25%) in aggregate principal amount of Bonds
Outstanding, and the Lessee and the Issuer shall have had thirty (30) days
after receipt of such notice to correct said failure and shall not have
corrected said failure within the applicable period, provided, however, that if
the Issuer or Lessee as the case may be, is diligently and continuously
pursuing a cure or correction of such failure but has been unable to affect
such cure within the aforementioned thirty (30) day period, the Trustee shall
extend such period to allow for the same to be remedied.


         SECTION 9.2   ACCELERATION AND ANNULMENT THEREOF.

               (a) Subject to the requirement that, so long as the Credit
Facility Issuer is performing under the Credit Facility, the consent of the
Credit Facility Issuer to any acceleration must be obtained in the case of an
Event of Default described in subsections (c) or (g) of Section 9.1 hereof,
upon the occurrence of an Event of Default, the Trustee may, and upon (1) the
written request of the Credit Facility Issuer, or (2) the occurrence of an
Event of Default described in 




                                      54


<PAGE>   62

subsection (a), (b), (d), (e) or (f) of Section 9.1 hereof the Trustee shall,
by notice to the Issuer, declare the entire unpaid principal of and interest on
the Bonds due and payable; and upon such declaration, the said principal,
together with interest accrued thereon, shall become payable immediately at the
place of payment provided therein, anything in the Indenture or in the Bonds to
the contrary notwithstanding. The Trustee shall not be permitted to request
receipt of indemnity to its satisfaction prior to such declaration of
acceleration. Upon the occurrence of any acceleration hereunder, the Trustee,
to the extent it has not already done so, shall immediately draw upon the
Credit Facility to the extent permitted by the terms thereof. Interest on the
Bonds shall cease to accrue upon receipt by the Trustee of funds drawn under
the Credit Facility.

               (b) Immediately after any acceleration because of the occurrence
of an Event of Default under Sections 9.1(a), (b), (d), (e), (f) or (g), the
Trustee shall (immediately, and in no event within two Business Days
thereafter) notify in writing the Issuer, the Lessee and the Credit Facility
Issuer of the occurrence of such acceleration. Within five (5) days of the
occurrence of any acceleration hereunder, the Trustee shall notify by first
class mail, postage prepaid, the owners of all Bonds Outstanding of the
occurrence of such acceleration.

               (c) If, after the principal of the Bonds has become due and
payable, all arrears of interest upon the Bonds are paid by the Lessee, and the
Lessee also performs all other things in respect to which it may have been in
default under the Lease Agreement and pays the reasonable charges of the
Trustee and the Bondholders, including reasonable attorneys' fees, then, and in
every such case, the Credit Facility Issuer or a Majority of the Bondholders by
written notice to the Issuer and to the Trustee, may annul such acceleration
and its consequences, and such annulment shall be binding upon the Trustee and
upon all owners of Bonds issued hereunder; provided, however, that the Trustee
shall not annul any declaration without the written consent of the Credit
Facility Issuer unless such acceleration has resulted from the failure of the
Credit Facility Issuer to honor a proper draw for payment under the Credit
Facility. Notwithstanding the foregoing, the Trustee shall not annul any
acceleration which has resulted from an Event of Default under Section 9.1(e)
hereof unless the Credit Facility has been reinstated in accordance with its
terms to an amount equal to the principal amount of the Bonds Outstanding plus
one hundred twenty (120) days' interest accrued thereon, and the Trustee has
received written notice of such reinstatement from the Credit Facility Issuer.
The Trustee shall forward a copy of any notice from Bondholders received by it
pursuant to this paragraph to the Lessee.


         SECTION 9.3   OTHER REMEDIES. If any Event of Default occurs and is
continuing, the Trustee, before or after the principal of the Bonds becomes
immediately due and payable, may enforce each and every right granted to it
under the Lease Agreement and any supplements or amendments thereto. In
exercising such rights and the rights given the Trustee under this Article IX,
the Trustee shall take such action as, in the judgment of the Trustee applying
the standards described in Section 10.1 hereof would best serve the interests
of the Bondholders.




                                      55

<PAGE>   63


         SECTION 9.4   LEGAL PROCEEDINGS BY THE TRUSTEE.

               (a) If any Event of Default has occurred and is continuing, the
Trustee in its direction may, and upon the written request of the Credit
Facility Issuer or the owners of not less than twenty-five percent (25%) in
aggregate principal amount of the Outstanding Bonds and receipt of indemnity to
its satisfaction shall, in its own name:

                   (1) By mandamus, or other suit, action or proceeding at law
               or in equity, enforce all rights of the Bondholders hereunder;

                   (2) Bring suit upon the Bonds, the Credit Facility (but only
               to the extent the Credit Facility Issuer shall have wrongfully
               dishonored drawings made in strict conformity with the terms
               hereof); and

                   (3) By action or suit in equity seek to enjoin any acts or
               things which may be unlawful or in violation of the rights of
               the Bondholders.

               (b) If an Event of Default under Section 9.1(c) occurs and is
continuing, the Trustee in its discretion may, and upon the written request of
the owners of not less than twenty-five percent (25%) in aggregate principal
amount of the Outstanding Bonds and receipt of indemnity to its satisfaction
shall, enforce each and every right granted to it under the Lease Agreement.


         SECTION 9.5   DISCONTINUANCE OF PROCEEDINGS BY THE TRUSTEE. If any
proceeding commenced by the Trustee on account of any Event of Default is
discontinued or is determined adversely to the Trustee, then the Lessee, the
Credit Facility Issuer, the Issuer, the Trustee and the Bondholders shall be
restored to their former positions and rights hereunder as though no
proceedings had been commenced.


         SECTION 9.6   CREDIT FACILITY ISSUER OR BONDHOLDERS MAY DIRECT
PROCEEDINGS. Anything to the contrary in this Indenture notwithstanding, either
the Credit Facility Issuer if a Credit Facility is in effect (and no default
has occurred and is continuing under the Credit Facility), or a Majority of the
Bondholders, if there is no Credit Facility in effect, shall have the right,
after furnishing indemnity satisfactory to the Trustee, to direct the method
and place of conducting all remedial proceedings by the Trustee hereunder,
provided that such direction shall not be in conflict with any rule of law or
with this Indenture or unduly prejudice the rights of minority Bondholders.


         SECTION 9.7   LIMITATIONS ON ACTIONS BY THE BONDHOLDERS.

               (a) No Bondholder shall have any right to bring suit on the
Credit Facility. No Bondholder shall have any right to pursue any other remedy
hereunder unless:

                   (1) the Trustee shall have been given written notice of an
               Event of Default;





                                      56


<PAGE>   64

                   (2) the owners of not less than twenty-five percent (25%) in
               aggregate principal amount of the Outstanding Bonds shall have
               requested the Trustee, in writing, to exercise the powers
               hereinabove granted or to pursue such remedy in its or their
               name or names;

                   (3) the Trustee shall have been offered indemnity
               satisfactory to it against costs, expenses and liabilities,
               except that no offer of indemnification shall be required for a
               declaration of acceleration under Section 9.2 hereof or for a
               drawing under the Credit Facility;

                   (4) the Trustee shall have failed to comply with such
               request within a reasonable time; and

                   (5) prior to the Conversion Date, the Credit Facility Issuer
               has failed to honor a proper draw request under the Credit
               Facility.

               (b) Notwithstanding the foregoing provisions of subsection (a)
of this Section 9.7 or any other provision of this Indenture, the obligation of
the Issuer shall be absolute and unconditional to pay hereunder, but solely
from the Revenues and other funds pledged under this Indenture, the principal
of, redemption premium, if any, and interest on, the Bonds to the respective
owners thereof on the respective due dates thereof, and nothing herein shall
affect or impair the right of action, which is absolute and unconditional, of
such owners to enforce such payment.


         SECTION 9.8   TRUSTEE MAY ENFORCE RIGHTS WITHOUT POSSESSION OF THE
BONDS. All rights under this Indenture and the Bonds may be enforced by the
Trustee without the possession of any Bonds or the production thereof at the
trial or other proceedings relative thereto, and any proceedings instituted by
the Trustee shall be brought in its name for the ratable benefit of the owners
of the Bonds.


         SECTION 9.9   REMEDIES NOT EXCLUSIVE. No remedy herein conferred is
intended to be exclusive of any other remedy or remedies, and each remedy is in
addition to every other remedy given hereunder or now or hereafter existing at
law or in equity or by statute.


         SECTION 9.10  DELAYS AND OMISSIONS NOT TO IMPAIR RIGHTS. No delays or
omission in respect of exercising any right or power accruing upon any default
shall impair such right or power or be a waiver of such default, and every
remedy given by this Article IX may be exercised from time to time and as often
as may be deemed expedient.


         SECTION 9.11  APPLICATION OF MONEYS IN THE EVENT OF DEFAULT.

               (a) Any moneys received by the Trustee, under this Article IX
shall be applied in the following order; provided that any moneys received by
the Trustee from a drawing under the Credit Facility shall be applied to the
extent permitted by the terms thereof only as provided in 




                                      57


<PAGE>   65

paragraph (3) below with respect to the principal of (but not redemption
premium) and interest accrued on, Bonds other than Bonds held by or for the
Lessee:

                   (1) To the payment of the reasonable costs of the Trustee,
               including counsel fees and any disbursements of the Trustee,
               with interest thereon from the date of payment at the overdue
               rate, and its reasonable compensation; and

                   (2) To the payment of reasonable costs and expenses of the
               Issuer, including counsel fees, incurred in connection with the
               Event of Default; and

                   (3) To the payment of principal of, premium, if any, and
               interest on the Bonds, and in case such moneys shall be
               insufficient to pay the same in full, then to payment of
               principal of, redemption premium, if any, and interest ratably,
               without preference or priority of one over another or of any
               installment of interest over any other installment of interest.

               (b) The surplus, if any, shall be paid to the Lessee or the
person lawfully entitled to receive the same as a court of competent
jurisdiction may direct; provided that, if the Trustee has received payments on
the Credit Facility following the Event of Default, the surplus shall be paid
to the Credit Facility Issuer to the extent of such payments.


         SECTION 9.12  TRUSTEE AND BONDHOLDERS ENTITLED TO ALL REMEDIES UNDER
THE ACT. It is the purpose of this Article IX to provide such remedies to the
Trustee and the Bondholders as may be lawfully granted under the provisions of
the Act, but should any remedy herein granted be held unlawful, the Trustee and
the Bondholders shall nevertheless be entitled to every remedy provided by the
Act. It is further intended that, insofar as lawfully possible, the provisions
of this Article shall apply to and be binding upon any trustee or receiver
appointed under applicable law.


         SECTION 9.13  TRUSTEE MAY FILE CLAIM IN BANKRUPTCY.

               (a) In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition
or other similar judicial proceeding relating to the Issuer, the Lessee or any
other obligor upon the Lease Agreement or the Bonds or to property of the
Issuer, the Lessee, or such other obligor or the creditors of any of them, the
Trustee (irrespective of whether the principal of the Bonds shall then be due
and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Lessee
for the payment of an amount equal to overdue principal or interest or
additional interest) shall be entitled and empowered, by intervention in such
proceedings or otherwise.

                   (1) to file and prove a claim for the whole amount of
               principal and interest owing and unpaid in respect of the Bonds
               and to file such other papers or documents as may be necessary
               or advisable in order to have the claims of the Trustee
               (including any 




                                      58


<PAGE>   66

               claim for the reasonable compensation, expenses, disbursements
               and advances of the Trustee, its agents and counsel) and of the
               Bondholders allowed in such judicial proceeding; and

                   (2) to collect and receive any moneys or other property
               payable or deliverable on any such claims and to distribute the
               same;

and any receiver, assignee, trustee, liquidator, sequestrator (or other similar
official) in any such judicial proceeding is hereby authorized by the
Bondholders to make such payments to the Trustee, and in the event that the
Trustee shall consent to the making of such payments directly to the
Bondholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 9.11 hereof.

               (b) Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept, or adopt on behalf of the
Bondholders, any plan of reorganization, arrangement, adjustment or composition
affecting the Bonds or the rights of any Bondholder thereof, or to authorize
the Trustee to vote in respect of the claim of the Bondholders in any such
proceeding.

               (c) All moneys received by the Trustee pursuant to any right
given or action taken under this Indenture shall, after payment of the costs
and expenses of the proceedings resulting in the collection of such moneys and
the fees and expenses of the Trustee, be deposited in the Bond Fund and applied
to the payment of the principal of, redemption premium, if any, and interest
then due and unpaid on the Bonds in accordance with the provisions of this
Indenture.


         SECTION 9.14  RECEIVER. Upon the occurrence of an Event of Default and
upon the filing of a suit or other commencement of judicial proceedings to
enforce the rights of the Trustee and of the Bondholders under this Indenture,
the Trustee shall be entitled, as a matter of right, to the appointment of a
receiver or receivers of the amounts payable under the Lease Agreement and
assigned to the Trustee under this Indenture pending such proceedings, with
such powers as the court making such appointment shall confer, whether or not
any such amounts payable shall be deemed sufficient ultimately to satisfy the
Bonds.


         SECTION 9.15  SUBROGATION RIGHTS OF CREDIT FACILITY ISSUER. The Credit
Facility Issuer shall be subrogated to the rights possessed under this
Indenture by the owners of the Bonds, to the extent the Credit Facility is
drawn upon and the amount of such drawing is not subsequently reimbursed to the
Credit Facility Issuer. For purposes of the subrogation rights of the Credit
Facility Issuer hereunder, (i) any reference herein to the owners of the Bonds
shall mean the Credit Facility Issuer, (ii) any principal of or interest on the
Bonds paid with money collected pursuant to the Credit Facility shall be deemed
to be unpaid hereunder, and (iii) the Credit Facility Issuer may exercise any
rights it would have hereunder as the owner of the Bonds. The subrogation
rights granted to the Credit Facility Issuer in this Indenture are not intended
to be exclusive of any 




                                      59


<PAGE>   67

other remedy or remedies available to the Credit Facility Issuer, and such
subrogation rights shall be cumulative and shall be in addition to every other
remedy given hereunder, under the Reimbursement Agreement or under any other
instrument or agreement with respect to the reimbursement of moneys paid by the
Credit Facility Issuer under the Credit Facility or with respect to the
security for the obligations of the Lessee under the Reimbursement Agreement,
and every other remedy now or hereafter existing at law or in equity or by
statute.



                                   ARTICLE X

                             CONCERNING THE TRUSTEE


         SECTION 10.1  ACCEPTANCE OF THE TRUSTS. The Trustee hereby represents
and warrants to the Issuer (for the benefit of the Lessee and the Bondholders
as well as the Issuer) that it is a national banking association and that it is
duly authorized under the laws of the United States of America to accept and
execute trusts of the character herein set out.

         The Trustee accepts and agrees to execute the trusts imposed upon it
by this Indenture, but only upon the terms and conditions set forth in this
Article and subject to the provisions of this Indenture including the following
express terms and conditions, to all of which the parties hereto and the
Bondholders agree:

               (a) Except during the continuance of an Event of Default, the
Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee.

               (b) In case an Event of Default has occurred and is continuing,
the Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent Trustee would exercise or use under the facts and circumstances in the
conduct of its own affairs.

               (c) The Trustee may execute any of the trusts or powers hereof
and perform any of its duties by or through attorneys, agents, receivers or
employees but shall be answerable for the conduct of the same in accordance
with the standard specified above, and shall be entitled to act upon the
opinion or advice of its Counsel concerning all matters of trust hereof and the
duties hereunder, and may in all cases be reimbursed hereunder for reasonable
compensation paid to all such attorneys, agents, receivers and employees as may
reasonably be employed in connection with the trust hereof. The Trustee may
conclusively rely upon an opinion of Counsel and shall not be responsible for
any loss or damage resulting from any action or non-action by it taken or
omitted to be taken in good faith in reliance upon such opinion of Counsel.




                                      60

<PAGE>   68

               (d) The Trustee shall not be responsible for any recital herein,
or in the Bonds (except in respect to the authentication certificate of the
Trustee endorsed on the Bonds), or for insuring the Trust Estate or any part of
the Project or collecting any insurance moneys, or for the validity of the
execution hereof by the Issuer or of any supplements hereto or instruments of
further assurance, or for the sufficiency of the security for the Bonds; and
the Trustee shall not be bound to ascertain or inquire as to the performance or
observance of any agreements or conditions on the part of the Issuer or on the
part of the Lessees under the Lease Agreement, except as hereinafter set forth;
but the Trustee may require of the Issuer or the Lessee full information and
advice as to the performance of the agreements and conditions aforesaid and as
to the condition of the Trust Estate.

               (e) The Trustee shall not be liable in connection with the
performance or nonperformance of its duties under this Indenture except for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:

                   (1) This subsection shall not be construed to limit the
               effect of subsection (a) of this Section 10.1;

                   (2) The Trustee shall not be liable for any error of
               judgment made in good faith by a responsible Officer or Officers
               of the Trustee unless it shall be proved that the Trustee was
               negligent in ascertaining the pertinent facts; and

                   (3) The Trustee shall not be liable with respect to any
               action taken or omitted to be taken by it in good faith in
               accordance with the direction of a Majority of the Bondholders
               relating to the time, method and place of conducting any
               proceeding for any remedy available to the Trustee, or
               exercising any trust or power conferred upon the Trustee under
               this Indenture.

               (f) Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee, including
without limitation Sections 10.3 and 10.4 hereof, shall be subject to the
provisions of this Section 10.1.


         SECTION 10.2  TRUSTEE TO GIVE NOTICE.

               (a) The Trustee shall not be required to take notice or be
deemed to have notice of any default hereunder, except failure by the Issuer to
cause to be made any of the payments to the Trustee required to be made by
Article V or failure by the Issuer or the Lessee to file with the Trustee any
document required by this Indenture or the Lease Agreement to be so filed,
unless the Trustee shall be notified of such default by the Issuer or by the
holders of 25% in aggregate principal amount of Bonds then Outstanding or
unless a responsible corporate trust officer of the Trustee charged with the
responsibility for the management of the trusts conferred by this Indenture
shall have actual knowledge of such default.




                                      61

<PAGE>   69

               (b) If a responsible trust officer of the Trustee charged with
the responsibility for the management of the trusts conferred by this Indenture
shall have actual knowledge of any Event of Default continuing hereunder, the
Trustee shall give to all Bondholders and to the Credit Facility Issuer written
notice of all such defaults within thirty (30) days after receipt of such
information.

               (c) Promptly upon receipt of notice of the occurrence of a
Determination of Taxability, the Trustee shall give notice thereof to the
Lessee, the Issuer, the Bondholders and former Bondholders and to the Credit
Facility Issuer.


         SECTION 10.3  TRUSTEE ENTITLED TO INDEMNITY.

               (a) The Lessee shall indemnify the Trustee and its officers,
directors and employees against any loss, liability or expense incurred by any
thereof arising out of or in connection with the acceptance or administration
of its duties under this Indenture, except as set forth in subsection (b)
below. The Trustee shall notify the Lessee promptly of any claim for which it
may seek indemnity. Except where the Lessee is the claimant, the Lessee shall
defend the claim, and the Trustee shall cooperate in the defense. The Trustee
may have separate counsel, and the Lessee shall pay the reasonable fees and
expenses of such counsel.

               (b) The Lessee shall not be obligated to reimburse any expense
or to indemnify against any loss or liability incurred by the Trustee through
negligence or bad faith.

               (c) To secure the Lessee's payment obligations in this Section,
the Trustee shall have a lien prior to the lien of the Trustee for the benefit
of the owners of the Bonds on all money or property held or collected by the
Trustee, except for amounts drawn under the Credit Facility as to which the
Trustee shall have no such lien. Such obligations shall survive the
satisfaction and discharge of this Indenture.

               (d) When the Trustee, incurs expenses or renders services after
an Event of Default, the expenses and compensation for the services are
intended to constitute expenses of administration under any applicable
bankruptcy law.

               (e) The Trustee may, nevertheless, begin suit, or appear in and
defend suit, or do anything else in its judgment proper to be done by it as
such Trustee without indemnity, and in such case the Issuer shall reimburse the
Trustee from funds available therefor under the Lease Agreement for all costs
and expenses, outlays and counsel fees and other reasonable disbursements
properly incurred in connection therewith; provided, however, that the Trustee
shall:

                   (1) make all payments hereunder of principal of, redemption
               premium, if any, and interest on the Bonds and of the Purchase
               Price of Bonds tendered at the option of the owners thereof or
               purchased by the Lessee in lieu of redemption,




                                      62

<PAGE>   70


                   (2) accelerate the Bonds when required to do so hereunder
               other than at the direction of the Bondholders, and

                   (3) draw on the Credit Facility when required to do so
               hereunder,

each without the necessity of the Bondholders providing security or indemnity
to the Trustee. If the Issuer shall fail to make reimbursement, the Trustee may
reimburse itself from any moneys in its possession under the provisions of this
Indenture (other than amounts drawn under the Credit Facility) and shall be
entitled with respect thereto to a preference over the Bonds.


         SECTION 10.4  TRUSTEE NOT RESPONSIBLE FOR INSURANCE, TAXES, EXECUTION
OF THIS INDENTURE, ACTS OF THE ISSUER OR APPLICATION OF THE MONEYS APPLIED IN
ACCORDANCE WITH THIS INDENTURE.

               (a) The Trustee shall not be under any obligation to effect or
maintain insurance or to renew any policies of insurance or to inquire as to
the sufficiency of any policies of insurance carried by the Lessee, or to
report, or make or file claims or proof of loss for, any loss or damage insured
against or which may occur, or to keep itself informed or advised as to the
payment of any taxes or assessments, or to require any such payment to be made.
The Trustee shall have no responsibility in respect of the validity,
sufficiency, due execution or acknowledgment of this Indenture or any
supplements thereto or instruments of further assurance or the validity or
sufficiency of the security provided hereunder or in respect of the validity of
the Bonds or the due execution or issuance thereof. The Trustee shall not be
under any obligation to see that any duties herein imposed upon any party other
than itself, or any covenants herein contained on the part of any party other
than itself to be performed, shall be done or performed, and the Trustee shall
be under no liability for failure to see that any such duties or covenants are
so done or performed.

               (b) The Trustee shall not be liable or responsible because of
the failure of the Issuer or of any of its employees or agents to make any
collections or deposits or to perform any act herein required of the Issuer or
because of the loss of any moneys arising through the insolvency or the act or
default or omission of any other depository in which such moneys shall have
been deposited under the provisions of this Indenture. The Trustee shall not be
responsible for the application of any of the proceeds of the Bonds or any
other moneys deposited with it and paid out, withdrawn or transferred hereunder
if such application, payment, withdrawal or transfer shall be made in
accordance with the provisions of this Indenture. The Trustee shall not be
responsible or liable for any loss suffered in connection with any investment
of funds made by it in accordance with Section 6.2 hereof.

               (c) The permissive right of the Trustee to do things enumerated
in this Indenture shall not be construed as a duty, and the Trustee shall not
be answerable for other than its negligence or willful misconduct. The
immunities and exemptions from liability of the Trustee hereunder shall extend
to the directors, officers, employees and agents of the Trustee.




                                      63

<PAGE>   71


         SECTION 10.5  COMPENSATION. The Issuer shall use its best efforts to
cause the Lessee to pay to the Trustee a total annual fee of $4,100 each year
during the term hereof and reasonable out-of-pocket expenses in accordance with
Section 7.5 of the Lease Agreement. In computing such compensation, the parties
shall not be limited by any law on the compensation of an express trust. If the
Lessee shall fail to make any payment required by this Section 10.5, the
Trustee may, but shall be under no obligation to, make such payment from any
moneys in its possession under the provisions of this Indenture and shall be
entitled to a preference therefor over the Bonds hereunder; provided that no
payments under this Section 10.5 shall be made with moneys drawn under the
Credit Facility. When the Trustee incurs expenses or renders services after an
Event of Default, the expenses and compensation for the services are intended
to and shall constitute expenses of administration under any applicable
bankruptcy law.


         SECTION 10.6  TRUSTEE TO PRESERVE RECORDS. All records and files
pertaining to the Project in the custody of the Trustee shall be open at all
reasonable times to the inspection of the Issuer, the Credit Facility Issuer
and the Lessee and their agents and representatives; provided, however, that
inspection of the bond registration books shall be permitted only in accordance
with Section 8.6 hereof.


         SECTION 10.7  TRUSTEE MAY BE A BONDHOLDER. The institution acting as
Trustee under this Indenture, and its directors, officers, employees or agents,
may in good faith buy, sell, own, hold and deal in the Bonds issued under and
secured by this Indenture, and may join in the capacity of a Bondholder in any
action which any Bondholder may be entitled to take with like effect as if such
institution were not the Trustee under this Indenture. To the extent permitted
by law, such institution may also receive tenders and purchase in good faith
Bonds from itself, including any department, affiliate or subsidiary, with like
effect as if it were not the Trustee.


         SECTION 10.8  TRUSTEE NOT RESPONSIBLE FOR RECITALS. Except for the
authentication of the Bonds by the Trustee, the recitals, statements and
representations contained herein and in the Bonds shall be taken and construed
as made by and on the part of the Issuer and not by the Trustee, and, except
for the authentication of the Bonds by the Trustee, the Trustee shall be under
no responsibility for the correctness of the same.


         SECTION 10.9  NO RESPONSIBILITY FOR RECORDING OR FILING. The Trustee
shall be under no obligation to see to the recording or filing of this
Indenture, the Lease Agreement, any financing statements or any other
instrument or otherwise to the giving to any person of notice of the provisions
hereof or thereof.


         SECTION 10.10 TRUSTEE MAY REQUIRE INFORMATION. Except for the
obligations of the Trustee under Section 9.2 hereof, the obligations of the
Trustee to make payments on the Bonds when due, and the obligations of the
Trustee to draw under the Credit Facility as required hereunder, anything
contained in this Indenture to the contrary notwithstanding, the Trustee shall
have the right, but shall not be required, to demand, as a condition of any
action by the Trustee in respect of the authentication of any Bonds, the
withdrawal of any cash, the release of any 




                                      64


<PAGE>   72

property, or any action whatsoever within the purview of this Indenture, any
showings, certificates, opinions, appraisals or other information, or corporate
action or evidence thereof, in addition to that required by the terms hereof.


         SECTION 10.11 TRUSTEE MAY RELY ON CERTIFICATES. The Trustee shall be
protected and shall incur no liability in acting or proceeding, or in not
acting or not proceeding, in good faith and in accordance with the terms of
this Indenture, upon any ordinance, resolution, order, notice, request,
consent, waiver, certificate, statement, instrument, opinion, affidavit,
requisition, bond or other paper or document which it shall in good faith
believe to be genuine and to have been adopted or signed by the proper board or
person or to have been prepared and furnished pursuant to any of the provisions
of the Lease Agreement or this Indenture, or upon the written opinion of any
attorney, engineer, accountant or other expert believed by it to be qualified
in relation to the subject matter, and the Trustee shall not be under any duty
to make any investigation or inquiry as to any statements contained or matters
referred to in any such instrument. Any action taken by the Trustee pursuant to
this Indenture upon the request or authority or consent of any person who at
the time of making such request or giving such authority or consent is the
owner of any Bond shall be conclusive and binding upon all future owners of the
same Bond and upon Bonds issued in exchange therefor or in place thereof.


         SECTION 10.12 TRUSTEE BOND. The Trustee shall not be required to give
any bond or surety in respect to the execution of its rights and obligations
hereunder.


         SECTION 10.13 SEGREGATION OF FUNDS; INTERESTS. All moneys received by
the Trustee shall, until used or applied or invested as herein provided, be
held in trust in the manner and for the purposes for which they were received
but need not be segregated from other funds except to the extent required by
this Indenture or law. The Trustee shall be under no liability for interest on
any moneys received hereunder.


         SECTION 10.14 QUALIFICATION OF THE TRUSTEE. There shall at all times
be a Trustee hereunder which shall be an association or a corporation organized
and doing business under the laws of the United States of America or of any
state, authorized under such laws and the applicable laws of the State to
exercise corporate trust powers and act as Bond Registrar hereunder, having a
combined capital and surplus of at least Fifty Million Dollars ($50,000,000),
and subject to supervision or examination by federal or state authority. If
such association or corporation is not a commercial bank or trust company, it
shall also have a rating by Moody's (if the Bonds are then rated by Moody's) of
BAA 3/P3 or higher, or by S&P (if the Bonds are then rated by S&P) of BBB/A3 or
higher or shall otherwise be approved in writing by Moody's or S&P, as the case
may be. If such association or corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section
10.14, the combined capital and surplus of such association or corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Trustee shall cease
to be eligible in accordance with the 




                                      65


<PAGE>   73

provisions of this Section 10.14, it shall resign immediately in the manner and
with the effect specified in Section 10.15 hereof.


         SECTION 10.15 RESIGNATION AND REMOVAL OF THE TRUSTEE.

               (a) No resignation or removal of the Trustee and no appointment
of a successor Trustee pursuant to this Article shall become effective until
the acceptance of appointment by the successor Trustee under Section 10.16
hereof.

               (b) The Trustee may resign at any time by giving written notice
thereof to the Issuer and the Lessee. If an instrument of acceptance by a
successor Trustee shall not have been delivered to the Trustee within thirty
(30) days after the giving of such notice of resignation, the resigning Trustee
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.

               (c) The Trustee may be removed (i) at any time by an instrument
or instruments in writing to the Trustee, with copies to the Issuer and the
Lessee, signed by a Majority of the Bondholders or by their attorneys, legal
representatives or agents and delivered to the Trustee, the Issuer and the
Lessee (such instruments to be effective only when received by the Trustee) and
(ii) at anytime by an instrument in writing from the Lessee delivered to the
Trustee, with the consent of the Issuer and the Bank.

               (d) If at any time:

                   (1) the Trustee shall cease to be eligible under Section
               10.14 hereof and shall fail to resign after written request
               therefor by the Lessee or by a Majority of the Bondholders, or

                   (2) the Trustee shall become incapable of acting or shall be
               adjudged a bankrupt or insolvent or a receiver of the Trustee or
               of the property of the Trustee shall be appointed or any public
               officer shall take charge or control of the Trustee or of the
               property or affairs for the purpose of rehabilitation,
               conservation or liquidation of the Trustee,

then, in any such case, the Issuer or the Lessee may remove the Trustee, or any
Bondholder may petition any court of competent jurisdiction for the removal of
the Trustee, and the appointment of a successor.

               (e) If the Trustee shall resign, be removed or become incapable
of acting, or if a vacancy shall occur in the office of Trustee for any cause,
the Issuer with the approval of the Lessee shall promptly appoint a successor.
If, within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by act of
the Majority of the Bondholders delivered to the Lessee and the resigning or
removed Trustee, the 




                                      66


<PAGE>   74

successor Trustee so appointed shall forthwith upon its acceptance of such
appointment, become the successor Trustee, and supersede the successor Trustee
appointed by the Issuer and approved by the Lessee. If no successor Trustee
shall have been so appointed by the Issuer and approved by the Lessee or a
Majority of the Bondholders and accepted appointment in the manner hereinafter
provided, any Bondholder, if he has been a bona fide owner of a Bond for at
least six (6) months, may petition any court of competent jurisdiction for the
appointment of a successor Trustee.

               (f) The Issuer shall cause the successor Trustee to give notice
of the resignation and removal of the Trustee and the appointment of a
successor Trustee by mailing written notice of such event by first class mail,
postage prepaid, to each Bondholder. Each notice shall include the name and
address of the principal corporate trust office of the successor Trustee.


         SECTION 10.16 SUCCESSOR TRUSTEE.

               (a) Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to its predecessor, and also to the Issuer and the
Lessee, an instrument in writing accepting such appointment hereunder, and
thereupon and upon transfer of the Credit Facility to the successor Trustee,
such successor Trustee without any further act, shall become fully vested with
all the rights, immunities, powers and trusts, and subject to all the duties
and obligations, of its predecessor; but such predecessor shall, nevertheless,
on the written request of its successor or of the Issuer and upon payment of
the expenses, charges and other disbursements of such predecessor which are
payable pursuant to the provisions of Section 10.5 hereof, execute and deliver
an instrument transferring to such successor Trustee all the rights,
immunities, powers and trusts of such predecessor hereunder; and every
predecessor Trustee, shall deliver all property and moneys held by it hereunder
to its successor, subject, nevertheless, to its preference, if any, provided
for in Sections 10.3 and 10.5 hereof. Should any instrument in writing from the
Issuer be required by any successor Trustee for more fully and certainly
vesting in such Trustee the rights, immunities, powers and trusts hereby vested
or intended to be vested in the predecessor Trustee, any such instrument in
writing shall and will, on request, be executed, acknowledged and delivered by
the Issuer. The resignation of any Trustee and the instrument or instruments
removing any Trustee and appointing a successor hereunder, together with all
other instruments provided for in this Article, shall be filed and/or recorded
by the successor Trustee in each recording office where this Indenture and the
Financing Statements have been filed and/or recorded.

               (b) Notwithstanding any of the foregoing provisions of this
Article, any bank or trust company having power to perform the duties and
execute the trusts of this Indenture and otherwise qualified to act as Trustee
hereunder with or into which the bank or trust company acting as Trustee may be
merged or consolidated, or to which the assets and business of such bank or
trust company may be sold, shall be deemed the successor of the Trustee;
provided, however, that any sale of trust assets, if any, other than as part of
all other assets of the bank or trust company being sold shall be deemed a
resignation pursuant to Section 10.15 hereof.




                                      67

<PAGE>   75


         SECTION 10.17 CO-TRUSTEE. It is the purpose of this Indenture that
there shall be no violation of any law of any jurisdiction denying or
restricting the right of certain banking corporations or associations to
transact business as trustee as contemplated herein in such jurisdiction. It is
recognized that in case of litigation under this Indenture and in particular in
case of the enforcement of the security interest contained in this Indenture
upon the occurrence of an Event of Default, it may be necessary that the
Trustee appoint an additional individual or institution as a separate Trustee
or Co-Trustee, which shall be satisfactory to the Lessee. The following
provisions of this Section 10.17 are adapted to these ends:

               (a) In the event of the incapacity or lack of authority of the
Trustee by reason of any present or future law of any jurisdiction to exercise
any of the rights, powers and trusts herein granted to the Trustee or to hold
title to or a security interest in the Trust Estate or to take any other action
which may be necessary or desirable in connection therewith, each and every
remedy, power, right, claim, demand, cause of action, immunity, estate, title,
interest and lien expressed or intended by this Indenture to be exercised by or
vested in or conveyed to the Trustee with respect thereto shall be exercisable
by and vest in such separate Trustee or Co-Trustee but only to the extent
necessary to enable the separate Trustee or Co-Trustee to exercise such rights,
powers and trusts, and every covenant and obligation necessary to the exercise
thereof shall run to and be enforceable by such separate Trustee or Co-Trustee.

               (b) Should any deed, conveyance or instrument in writing from
the Issuer be required by the separate Trustee or Co-Trustee so appointed by
the Trustee in order to more fully and certainly vest in and confirm to it such
properties, rights, powers, trusts, duties and obligations any and all such
deeds, conveyances and instruments shall, on request, be executed, acknowledged
and delivered by the Issuer. In case any separate Trustee or Co-Trustee or a
successor to either, shall die, be dissolved, become incapable of action,
resign or be removed, all the estates, properties, rights, powers, trusts,
duties and obligations of such separate Trustee or Co-Trustee, so far as
permitted by are, shall vest in and be exercised by the Trustee until the
appointment of a new Trustee or successor to such separate Trustee or
Co-Trustee.


         SECTION 10.18 NOTICE TO MOODY'S OR S&P. At any time during which the
Bonds are rated by Moody's or S&P, the Trustee, to the extent it has knowledge
of the following, shall notify Moody's or S&P, as applicable, promptly of:

               (a) any change in the Trustee,

               (b) the expiration or termination of the Credit Facility during
the Variable Rate Period or the provision of an Alternate Credit Facility in
accordance with the terms of this Indenture,




                                      68

<PAGE>   76

               (c) a change in the interest rate borne by the Bonds from a
Variable Rate to a Fixed Rate,

               (d) the payment of all of the Bonds, or

               (e) any material change to this Indenture, the Lease Agreement,
or the Reimbursement Agreement.



                                   ARTICLE XI

                  EXECUTION OF INSTRUMENTS BY THE BONDHOLDERS
                      AND PROOF OF OWNERSHIP OF THE BONDS


         SECTION 11.1  EXECUTION OF INSTRUMENTS BY THE BONDHOLDERS AND PROOF OF
OWNERSHIP OF THE BONDS.

               (a) Any request, direction, consent or other instrument in
writing required or permitted by this Indenture to be signed or executed by a
Bondholder may be signed or executed by the Bondholder or its attorneys or
legal representatives. Proof of the execution of any such instrument and of the
ownership of the Bonds shall be sufficient for any purpose of this Indenture
and shall be conclusive in favor of the Trustee with regard to any action taken
by the Trustee under such instrument if made in the following manner:

                   The fact and date of the execution by any person of any
               such instrument may be proved by the verification of any
               officer in any jurisdiction who, by the laws thereof, has
               power to take affidavits within such jurisdiction, to the
               effect that such instrument was subscribed and sworn to
               before him, or by an affidavit of a witness to such
               execution, and where such execution is by an officer of a
               corporation or association or a member of a partnership on
               behalf of such corporation, association or partnership,
               such verification or affidavit shall also constitute
               sufficient proof of his authority.

               (b) Nothing contained in this Section 11.1 shall be construed as
limiting the Trustee to such proof, it being intended that the Trustee may
accept any other evidence of the matters herein stated which may be sufficient.
Any request or consent of a Bondholder shall bind every future owner of the
Bond(s) to which such request or consent pertains or any Bond(s) issued in lieu
thereof in respect of anything done by the Trustee pursuant to such request or
consent.

               (c) Notwithstanding any of the foregoing provisions of this
Section 11.1, the Trustee shall not be required to recognize any person as an
owner of Bonds or to take any action at such owner's request unless the Bonds
shall be deposited with the Trustee.




                                      69

<PAGE>   77


         SECTION 11.2  PRESERVATION OF INFORMATION. The Trustee shall preserve
in the Bond Register, in as current a form as is reasonably practicable, the
name and address of each Bondholder received by the Trustee in its capacity as
Bond Registrar.



                                  ARTICLE XII

                           THE REMARKETING AGENT, THE
                      TENDER AGENT AND THE PLACEMENT AGENT


         SECTION 12.1  THE REMARKETING AGENT.

               (a) The Issuer hereby appoints First Union Capital Markets
Corp., with its corporate office in Charlotte, North Carolina, as Remarketing
Agent under this Indenture. The Remarketing Agent and any successor Remarketing
Agent, by written instrument delivered to the Issuer, the Trustee and the
Lessee, shall accept the duties and obligations imposed on it under this
Indenture and the Remarketing Agreement.

               (b) In addition to the other obligations imposed on the
Remarketing Agent hereunder, the Remarketing Agent shall agree to keep such
books and records in connection with its activities as Remarketing Agent
hereunder as shall be consistent with prudent industry practice and make such
books and records available for inspection by the Issuer, the Trustee, the
Credit Facility Issuer and the Lessee at all reasonable times.

               (c) The Remarketing Agent shall at all times be a member of the
National Association of Securities Dealers, Inc. and registered as a Municipal
Securities Dealer under the Securities Exchange Act of 1934, as amended, or a
national banking association or a bank or a trust company, in each case
authorized by law to perform its obligations hereunder.

               (d) If at any time the Remarketing Agent is unable or unwilling
to act as Remarketing Agent, the Remarketing Agent, upon thirty (30) Business
Days' prior written notice to the Issuer, the Trustee, the Credit Facility
Issuer, the Tender Agent and the Lessee, may resign. The Remarketing Agent may
be removed at any time by the Lessee with the consent of the Issuer and the
Bank, by written notice signed by the Lessee delivered to the Trustee, the
Remarketing Agent, the Credit Facility Issuer and the Tender Agent. Upon
resignation or removal of the Remarketing Agent, the Lessee, with the consent
of the Issuer, shall appoint a substitute Remarketing Agent meeting the
qualifications of Section 12.1(c) above.

               (e) In the event that the Lessee shall fail to appoint a
successor Remarketing Agent, upon the resignation or removal of the Remarketing
Agent or upon its dissolution, insolvency or bankruptcy, the Trustee may, but
is not required to, appoint a Remarketing Agent or may itself act as
Remarketing Agent until the appointment of a successor Remarketing Agent in
accordance with this Section 12.1; provided, however, that the Trustee, in its
capacity as Remarketing Agent, 




                                      70


<PAGE>   78

shall not be required to sell Bonds or determine the interest rate on the Bonds
pursuant to Section 2.2 hereof.


         SECTION 12.2  THE TENDER AGENT.

               (a) The Issuer hereby appoints as Tender Agent under this
Indenture First Union National Bank, which agent has a corporate trust office
in Nashville, Tennessee. The Tender Agent and any successor Tender Agent, by
written instrument delivered to the Issuer, the Trustee and the Lessee, shall
accept the duties and obligations imposed on it under this Indenture.

               (b) The Tender Agent shall at all times be a member of the
National Association of Securities Dealers, Inc. having a capitalization of at
least Fifteen Million Dollars ($15,000,000) and a rating by Moody's (if the
Bonds are then rated by Moody's) of Baa 3/P3 or higher or a national banking
association of a bank or a trust company having capital and surplus of at least
$50,000,000, in each case authorized by law to perform its obligations
hereunder.

               (c) If at any time the Tender Agent is unable or unwilling to
act as Tender Agent, the Tender Agent, upon sixty (60) days' prior written
notice to the Issuer, the Trustee, the Remarketing Agent and the Lessee, may
resign; provided, however, that in no case shall such resignation become
effective until the appointment of a successor Tender Agent. The Tender Agent
may be removed at any time by the Lessee with the consent of the Issuer, by
written notice signed by the Lessee delivered to the Trustee, the Remarketing
Agent, the Credit Facility Issuer and the Tender Agent; provided, however, that
in no case shall such removal become effective until the appointment of a
successor Tender Agent. Upon resignation or removal of the Tender Agent, the
Lessee, with the consent of the Issuer, shall appoint a substitute Tender Agent
meeting the qualifications of Section 12.2(b) above.

               (d) In the event that the Lessee shall fail to appoint a
successor Tender Agent, upon the resignation or removal of the Tender Agent or
upon its dissolution, insolvency or bankruptcy, the Trustee may at its
discretion, but is not required to, act as Tender Agent until the appointment
of a successor Tender Agent in accordance with this Section 12.2.


         SECTION 12.3  THE PLACEMENT AGENT. The Placement Agent shall be a
member of the National Association of Securities Dealers, Inc. and registered
as a municipal securities dealer under the Securities Exchange Act of 1934, as
amended, or a national banking association or a bank or trust company, in each
case authorized by law to perform its obligations described in Section 2.2(e)
hereof.


         SECTION 12.4  NOTICES. The Trustee shall, within thirty (30) days of
the resignation or removal of the Remarketing Agent or the Tender Agent or the
appointment of the Placement Agent or a successor Remarketing Agent or a
successor Tender Agent, give notice thereof by first class mail, postage
prepaid, to the owners of the Bonds.




                                      71

<PAGE>   79



                                  ARTICLE XIII

                           AMENDMENTS AND SUPPLEMENTS


         SECTION 13.1  AMENDMENTS AND SUPPLEMENTS WITHOUT THE BONDHOLDERS'
CONSENT. This Indenture may be amended or supplemented at any time and from
time to time, without the consent of the Bondholders, but with the consent of
the Lessee and the Credit Facility Issuer, if a Credit Facility is in effect
(and no Event of Default has occurred and is continuing under the Credit
Facility), by a supplemental indenture authorized by a resolution of the Issuer
filed with the Trustee, for one or more of the following purposes:

               (a) to add additional covenants of the Issuer or to surrender
any right or power herein conferred upon the Issuer;

               (b) for any purpose not inconsistent with the terms of this
Indenture or to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, or to make such other provisions in regard to matters or questions
arising under this Indenture which shall not adversely affect the interests of
the owners of the Bonds;

               (c) to permit the Bonds to be converted during the Variable Rate
Period to certificateless securities or securities represented by a master
certificate held in trust, ownership of which, in either case, is evidenced by
book entries on the books of the Bond Registrar, for any period of time;

               (d) to permit the appointment of a Co-Trustee under this
Indenture;

               (e) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualification of
this Indenture under the Trust Indenture Act of 1939, as amended, or under any
similar federal statute hereafter enacted, and to add to this Indenture such
other provisions as may be expressly permitted by the Trust Indenture Act of
1939, as amended;

               (f) except as otherwise provided in Section 13.2 hereof, to
modify, eliminate or add to the provisions of this Indenture to such extent as
shall be necessary to obtain a rating of the Bonds from Moody's or S&P;

               (g) to amend the administrative provisions hereof to accommodate
the provisions of an Alternate Credit Facility; and




                                      72

<PAGE>   80

               (h) to change or modify any provisions of the Indenture (other
than as specified in Section 13.2 hereof) which in the judgment of the Trustee
are not to the material prejudice of any Bondholder.

               Notwithstanding the foregoing, prior to the making of any
amendment or supplement as described in the preceding paragraph, the Lessee
shall provide the Trustee, and during the Variable Rate Period (if no Event of
Default has occurred and is continuing under the Credit Facility) the Credit
Facility Issuer, with:

                   (1) a copy of the proposed amendment or supplement, and

                   (2) an opinion of Bond Counsel to the effect that, if the
               Bonds are then the Tax-Exempt Series Bonds, such amendment or
               supplement will not adversely affect the exclusion of the
               interest on the Bonds from the gross income of the recipients
               thereof for federal income tax purposes, and, unless the Trustee
               shall have otherwise given its consent to such amendment or
               supplement, to the further effect that such amendment or
               supplement will not otherwise adversely affect the interests of
               the Bondholders.


         SECTION 13.2  AMENDMENTS WITH THE BONDHOLDERS' AND THE CREDIT FACILITY
ISSUER'S CONSENT.

               (a) This Indenture may be amended pursuant to Section 13.2 from
time to time, except with respect to:

                   (1) the principal of, redemption premium, if any, or
               interest payable upon any Bonds,

                   (2) the Interest Payment Dates, the dates of maturity or the
               redemption or purchase provisions of any Bonds, and

                   (3) this Article XIII,

by a supplemental indenture authorized by a resolution of the Issuer filed with
the Trustee and consented to by the Credit Facility Issuer if a Credit Facility
is in effect (and no Event of Default has occurred and is continuing under the
Credit Facility) and by the Lessee.

               (b) This Indenture may be amended with respect to the matters
enumerated in paragraphs (1) through (3) of subsection (a) of this Section with
the unanimous consent of all Bondholders, the Credit Facility Issuer if a
Credit Facility is in effect (and no Event of Default has occurred and is
continuing under the Credit Facility), the Lessee and the Issuer.




                                      73

<PAGE>   81

               (c) Notwithstanding the foregoing provisions of this Section
13.2, prior to the making of any amendment or supplement as described in this
Section 13.2, the Lessee shall provide the Trustee, and during the Variable
Rate Period (if no Event of Default has occurred and is continuing under the
Credit Facility) the Credit Facility Issuer, with:

                   (1) a copy of the proposed amendment or supplement, and

                   (2) an opinion of Bond Counsel to the effect that such
               amendment or supplement will not adversely affect the exclusion
               of the interest on the Bonds from the gross income of the
               recipients thereof for federal income tax purposes, and, unless
               the Trustee shall have otherwise given its consent to such
               amendment or supplement, to the further effect that such
               amendment or supplement will not otherwise adversely affect the
               interests of the Bondholders.


         SECTION 13.3  SUPPLEMENTAL INDENTURES AFFECTING THE RIGHTS OF THE
CREDIT FACILITY ISSUER. Anything herein to the contrary notwithstanding, a
supplemental indenture under this Article XIII which in the judgment of the
Credit Facility Issuer if a Credit Facility is in effect (and no Event of
Default has occurred and is continuing under the Credit Facility) materially
and adversely affects the rights of the Credit Facility Issuer shall not become
effective unless or until the Credit Facility Issuer shall have consented to
the execution and delivery thereof.


         SECTION 13.4  AMENDMENT OF THE LEASE AGREEMENT.

               (a) The Lessee and the Issuer may amend the Lease Agreement, but
only with the consent of the Credit Facility Issuer (if no default has occurred
and is continuing under the Credit Facility) during the Variable Rate Period;
provided that prior to making any amendment, the Lessee shall provide the
Trustee and, during the Variable Rate Period (if no default has occurred and is
continuing under the Credit Facility), the Credit Facility Issuer, with:

                   (1) copy of the proposed amendment, and

                   (2) an opinion of Bond Counsel to the effect that such
               amendment will not adversely affect the exclusion of the
               interest on the Bonds from the gross income of the recipients
               thereof for federal income tax purposes, and, unless the Trustee
               shall have otherwise given its consent to such amendment, to the
               further effect that such amendment will not otherwise adversely
               affect the interests of the Bondholders.

Notwithstanding the foregoing, the Issuer and the Lessee may amend the Lease
Agreement to such extent as may be necessary to obtain a rating of the Bonds
from Moody's or S&P without providing the opinion of Bond Counsel specified in
paragraph (2) above.

               (b) If the Lessee proposes to amend the Lease Agreement in such
a manner as would materially and adversely affect the interests of the
Bondholders, the Trustee shall notify 




                                      74

<PAGE>   82

Bondholders of the proposed amendment and may consent thereto with the consent
of at least a Majority of the Bondholders which would be affected by the action
proposed to be taken; provided, that the Trustee shall not, without the
unanimous consent of the owners of all Bonds then Outstanding, consent to any
amendment which would:

                   (1) decrease the amounts payable under the Lease Agreement,

                   (2) change the due date of lease payments corresponding with
               payment of principal of or interest on the Bonds or change any
               of the prepayment provisions of the Lease Agreement, or

                   (3) change Section 5.6 of the Lease Agreement.


         SECTION 13.5  AMENDMENT OF THE LEASE AGREEMENT REQUIRING THE CONSENT OF
THE CREDIT FACILITY ISSUER. Anything herein to the contrary notwithstanding,
any amendment, change or modification of the Lease Agreement which in the
judgment of the Credit Facility Issuer (if a Credit Facility is in effect and
no default has occurred and is continuing under the Credit Facility) materially
and adversely affects the rights of the Credit Facility Issuer shall not become
effective unless or until the Credit Facility Issuer shall have consented to
the execution and delivery of such amendment, change or modification.


         SECTION 13.6  AMENDMENT OF THE CREDIT FACILITY. The initial Credit
Facility may be amended to such extent as shall be necessary to obtain a rating
of the Bonds from Moody's or S&P provided that such amendment or supplement
will not adversely affect the interests of the Bondholders. The Trustee shall
notify the Bondholders and the Issuer of any proposed amendment of the Credit
Facility which would materially and adversely affect the interests of the
Bondholders and may consent thereto with the consent of the Issuer, which
consent shall not be unreasonably withheld, and the consent of at least a
Majority of the Bondholders which would be affected by the action proposed to
be taken; provided, that the Trustee shall not, without the unanimous consent
of the owners of all Bonds then Outstanding, consent to any amendment which
would decrease the amount payable under the Credit Facility or reduce the term
of the Credit Facility.


         SECTION 13.7  TRUSTEE AUTHORIZED TO JOIN IN AMENDMENTS AND SUPPLEMENTS;
RELIANCE ON COUNSEL. The Trustee is authorized to join with the Issuer in the
execution and delivery of any supplemental indenture or amendment permitted by
this Article XIII and in so doing shall be fully protected by an opinion of
Counsel that such supplemental indenture or amendment is so permitted and has
been duly authorized by the Issuer and that all things necessary to make it a
valid and binding agreement have been done; provided that certain amendments
may, by agreement between the Trustee and the Credit Facility Issuer, require
the prior consent of the Credit Facility Issuer.




                                      75

<PAGE>   83



                                  ARTICLE XIV

                           DEFEASANCE; OTHER PAYMENTS


         SECTION 14.1  DEFEASANCE.

               (a) When the principal of, redemption premium, if any, and
interest on all Bonds issued hereunder shall have been paid, including without
limitation the Purchase Price for Bonds tendered under Section 2.2 hereof, or
provision has been made for payment of the same, together with the compensation
of the Trustee and all other sums payable hereunder by the Issuer, the right,
title and interest of the Trustee in and to the Trust Estate and the security
interests shall thereupon cease, and the Trustee, on written demand of the
Issuer, shall release this Indenture and the security interests and shall
execute such documents to evidence such release as may be reasonably required
by the Issuer and shall turn over to the Lessee or to such person, body or
authority as may be entitled to receive the same all balances then held by the
Trustee hereunder; provided, that, if any payments have been derived from draws
by the Trustee under the Credit Facility in connection with such release, such
balances shall be paid to the Credit Facility Issuer to the extent of such
payments. If payment or provision therefor is made with respect to less than
all of the Bonds, the particular Bonds (or portion thereof) for which provision
for payment shall have been considered made shall be selected by lot by the
Trustee and thereupon the Trustee shall take similar action for the release of
this Indenture with respect to such Bonds. Notwithstanding anything to the
contrary contained herein, Bonds purchased at the option of the owners thereof
with moneys held by the Trustee pursuant to this Article XIV shall not be
remarketed but shall be canceled by the Trustee.

               (b) Provision for the payment of Bonds shall be deemed to have
been made when the Trustee holds in the Bond Fund, in trust and irrevocably set
aside exclusively for such payment, (1) moneys sufficient to make such payment
provided that if a Credit Facility is then held by the Trustee, such moneys
shall constitute Available Moneys or (2) noncallable Governmental Obligations
maturing as to principal and interest in such amounts and at such times as will
provide sufficient moneys without reinvestment to make such payment; provided
that the Trustee shall have received an opinion of Bond Counsel to the effect
that such deposit will not affect the exclusion of the interest on any of the
Bonds from the gross income of the recipients thereof for federal income tax
purposes (e.g. by causing any of the Bonds to be classified as an "arbitrage
bond" within the meaning of Section 148 of the Code), and provided further,
that if a Credit Facility is then held by the Trustee, such Governmental
Obligations shall have been on deposit with the Trustee in a separate and
segregated account for a period of three hundred sixty-six (366) days during
and prior to which no Event of Bankruptcy has occurred or which Governmental
Obligations were purchased with Available Moneys.

               (c) No Bonds in respect of which a deposit under subsection (b)
above has been made shall be deemed paid within the meaning of this Article
unless the Trustee is satisfied that the amounts deposited are sufficient to
make all payments that might become due on the Bonds, 




                                      76

<PAGE>   84

including Purchase Price payments for Bonds tendered at the option of the
owners or purchased by the Lessee in lieu of redemption, if any.
Notwithstanding the foregoing, no delivery to the Trustee under this subsection
(c) shall be deemed a payment of any Bonds which are to be redeemed prior to
their stated maturity until such Bonds shall have been irrevocably called or
designated for redemption on a date thereafter on which such Bonds may be
redeemed in accordance with the provisions of this Indenture or the Issuer
shall have given the Trustee, in form satisfactory to the Trustee, irrevocable
instructions to give notice of redemption. Neither the obligations nor moneys
deposited with the Trustee pursuant to this Section shall be withdrawn or used
for any purpose other than, and shall be segregated and held in trust for, the
payment of the principal of, redemption premium, if any, Purchase Price (if
applicable) and interest on the Bonds with respect to which such deposit has
been made. In the event that such moneys or obligations are to be applied to
the payment of principal of, or redemption premium, if any, on any Bonds more
than sixty (60) days following the deposit thereof with the Trustee, the
Trustee shall mail a notice stating that such moneys or obligations have been
deposited and identifying the Bonds for the payment of which such moneys or
obligations are being held to all owners of such Bonds at their addresses shown
on the Bond Register.

               (d) Anything in Article XIV to the contrary notwithstanding, if
moneys or Governmental Obligations have been deposited or set aside with the
Trustee pursuant to this Article for the payment of the principal of,
redemption premium, if any, Purchase Price (if applicable) and interest on the
Bonds, and such moneys or Governmental Obligations do not constitute Available
Moneys, no amendment to the provisions of this Article shall be made without
the consent of the owner of each of the Bonds affected thereby.

               (e) Notwithstanding the foregoing, those provisions relating to
the purchase of Bonds upon the demand of any Bondholders, the maturity of
Bonds, interest payments and dates thereof, and the dates, premiums and notice
requirements for optional and mandatory redemption or purchase and the
Trustee's remedies with respect thereto, and provisions relating to exchange,
transfer and registration of Bonds, replacement of mutilated, destroyed, lost
or stolen Bonds, the safekeeping and cancellation of Bonds, non-presentment of
Bonds, the holding of moneys in trust and repayments to the Lessee or the
Credit Facility Issuer from the Bond Fund and the duties of the Trustee in
connection with all of the foregoing and the fees, expenses and indemnities of
the Trustee, shall remain in effect and shall be binding upon the Trustee, the
Issuer, the Lessee and the Bondholders notwithstanding the release and
discharge of the lien of this Indenture.


         SECTION 14.2  DEPOSIT OF FUNDS FOR PAYMENT OF THE BONDS. If the
principal of and redemption premium, if any, on any Bonds to become due, either
at maturity or by call for redemption or otherwise, together with all interest
accruing thereon to the due date, has been paid or provision therefor made in
accordance with Section 14.1 hereof, all interest on such Bonds shall cease to
accrue on the due date and all liability of the Issuer with respect to such
Bonds shall likewise cease, except as hereinafter provided. Thereafter the
owners of such Bonds shall be restricted exclusively to the funds so deposited
for any claim of whatsoever nature with respect to such Bonds, and the Trustee
shall hold such funds in trust for such owners.




                                      77

<PAGE>   85


         SECTION 14.3  EFFECT OF PURCHASE OF THE BONDS. No purchase of Bonds
pursuant to Section 3.3 hereof shall be deemed to be a payment or redemption of
such Bonds or any portion thereof and such purchase will not operate to
extinguish or discharge the indebtedness evidenced by such Bonds.



                                   ARTICLE XV

                            MISCELLANEOUS PROVISIONS


         SECTION 15.1  COVENANTS OF THE ISSUER TO BIND ITS SUCCESSORS. In the
event of the dissolution of the Issuer, all of the covenants, stipulations,
obligations and agreements contained in this Indenture by or on behalf of or
for the benefit of the Issuer shall bind or inure to the benefit of the
successor or successors of the Issuer from time to time and any officer, board,
commission, authority, agency or instrumentality to whom or to which any power
or duty affecting such covenants, stipulations, obligations and agreements
shall be transferred by or in accordance with law, and the term "Issuer" as
used in this Indenture shall include such successor or successors.

         SECTION 15.2  NOTICES.

               (a) Any notice, demand, direction, request or other instrument
authorized or required by this Indenture to be given or filed with the Issuer,
the Trustee, the Lessee or the Credit Facility Issuer shall be in writing and
shall be deemed given or filed for all purposes of this Indenture when
delivered by hand delivery, sent via overnight courier service or mailed by
first class mail, postage prepaid, registered or certified mail, addressed as
follows:

                           If to the Issuer:

                                 The Industrial Development Board of the County
                                 of Hamilton, Tennessee
                                 c/o Ross Schram, III
                                 Suite 500, First Tennessee Building
                                 701 Market Street
                                 Chattanooga, Tennessee 37402-4800
                                 Attention: Chairman
                                 Telephone: (423) 265-2214
                                 Telecopy:  (423) 266-1842




                                      78

<PAGE>   86

                           If to the Trustee:

                                 First Union National Bank
                                 150 Fourth Avenue, North, TN 1327
                                 Nashville, Tennessee 37219
                                 Attention: Corporate Trust Group
                                 Telephone: (615) 251-9294
                                 Telecopy:  (615) 251-9364

                           If to the Lessee:

                                 First Security Bank, National Association
                                 79 South Main Street
                                 Salt Lake City, Utah 84111
                                 Attention: Van T. Orton,
                                            Vice President
                                 Telephone: (801) 246-5300
                                 Telecopy:  (801) 246-5053

                           with copies to:

                                 Sterile Recoveries, Inc.
                                 28100 US Highway 19N, Suite 201
                                 Clearwater, Florida 33761
                                 Attention: James T. Boosales
                                 Telephone: (813) 726-4421
                                 Telecopy:  (813) 726-8037

                           and the Bank

                           If to the Bank:

                                 First Union National Bank
                                 c/o First Union Capital Markets Group
                                 DC 6
                                 301 South College Street
                                 Charlotte, North Carolina 28288-0166
                                 Attention: Christy Lee Foster,
                                 Capital Markets Services
                                 Telephone: (704) 383-5398
                                 Telecopy:  (704) 383-7989




                                      79

<PAGE>   87

and if sent by telegraph, telegram report of delivery requested, or telecopy,
addressed as above, at the time and date appearing on the report of delivery.
Notwithstanding the foregoing, the delivery of Bonds, Optional Tender Notices,
or Optional Retention Notices to the Trustee or Tender Agent if made by
telegraph, telegram or telecopy, must be made by delivery of the hard copy by
overnight delivery on the date of delivery of such telegraph, telegram or
telecopy and shall not be effective until actual receipt thereof by the Trustee
or the Tender Agent, as the case maybe.

               (b) A duplicate copy of each notice or other communication given
hereunder by either the Issuer or the Trustee to the other shall also be given
to the Lessee.

               (c) All documents received by the Trustee under the provisions
of this Indenture, or photographic copies thereof, shall be retained in its
possession until this Indenture shall be released in accordance with the
provisions of the Indenture, subject at all reasonable times to the inspection
of the Issuer and the Lessee and the agents and representatives thereof.

               (d) The Issuer, the Trustee, the Lessee and the Credit Facility
Issuer may, by notice given hereunder, designate any further or different
addresses to which subsequent notices, certificates or other communications
shall be sent.


         SECTION 15.3  TRUSTEE AS THE PAYING AGENT AND THE BOND REGISTRAR. The
Trustee is hereby designated and agrees to act as Paying Agent and Bond
Registrar for and in respect of the Bonds and any amounts received under the
Credit Facility or the Lease Agreement.


         SECTION 15.4  RIGHTS UNDER THIS INDENTURE. Except as herein otherwise
expressly provided, nothing in this Indenture expressed or implied is intended
or shall be construed to confer upon any person, firm or corporation other than
the parties hereto, the Lessee and the owners of the Bonds issued under and
secured by this Indenture, any benefit of this Indenture or any provisions
hereof, this Indenture and all its provisions being intended to be and being
for the sole and exclusive benefit of the parties hereto, the Lessee and the
owners from time to time of the Bonds issued hereunder.


         SECTION 15.5  FORM OF CERTIFICATES AND OPINIONS. Except as otherwise
provided in this Indenture, any request, notice, certificate or other
instrument from the Issuer or the Lessee to the Trustee shall be deemed to have
been signed by the proper party or parties if signed by the Issuer
Representative or the Lessee's Representative, respectively, and the Trustee
may accept and rely upon a certificate signed by the Issuer Representative as
to any action taken by the Issuer and by the Lessee's Representative as to any
action taken by the Lessee.


         SECTION 15.6  SEVERABILITY. In case any one or more of the provisions
of this Indenture or of the Bonds issued hereunder shall for any reason be held
to be illegal or invalid, such illegality or invalidity shall not affect any
other provisions of this Indenture or of the Bonds, but this Indenture and the
Bonds shall be construed and enforced as if such illegal or invalid provision
had




                                      80

<PAGE>   88

not been contained therein. In case any covenant, stipulation, obligation or
agreement of the Issuer contained in this Indenture or in the Bonds shall for
any reason be held to be in violation of law, then such covenant, stipulation,
obligation or agreement of the Issuer shall be given effect to the full extent
permitted by law.


         SECTION 15.7  COVENANTS OF ISSUER NOT COVENANTS OF OFFICIALS
INDIVIDUALLY. All covenants, stipulations, obligations and agreements of the
Issuer contained in this Indenture shall be deemed to be covenants,
stipulations, obligations and agreements of the Issuer to the full extent
permitted by the Constitution and laws of the State. No covenant, stipulation,
obligation or agreement contained herein shall be deemed to be a covenant,
stipulation, obligation or agreement of any present or future officer, member,
agent or employee of the Issuer in his individual capacity, and no officer of
the Issuer executing the Bonds shall be liable personally on the Bonds or be
subject to any personal liability or accountability by reason of the issuance
thereof. No officer, agent or employee of the Issuer shall incur any personal
liability in acting or proceeding or in not acting or not proceeding in
accordance with the terms of this Indenture.


         SECTION 15.8  NO PERSONAL LIABILITY. No recourse shall be had for the
enforcement of any obligation, promise or agreement of the Issuer contained
herein or in the Bonds or other documents to which the Issuer is a party or for
any claim based hereon or thereon or otherwise in respect hereof or thereof
against any director, member, officer, agent, attorney or employee, as such, in
his/her individual capacity, past, present or future, of the Issuer or of any
successor entity, either directly or through the Issuer or any successor
entity, under or by reason of any of the obligations, promises or agreements
entered into in the Bonds or between the Issuer and the Trustee, whether herein
contained or to be implied herefrom as being supplemental hereto; and all
personal liability of that character against every such director, member,
officer, agent, attorney and employee is, by the execution of this Indenture
and as a condition of, and as part of the consideration for, the execution of
this Indenture, expressly waived and released.

         The Bonds shall be limited obligations of the Issuer. The Bonds and
the interest thereon and redemption premium, if any, shall not be deemed to
constitute or create an indebtedness, liability or obligation of the Issuer,
the State or any political subdivision or agency thereof within the meaning of
any State constitutional provision or statutory limitation or a pledge of the
faith the credit or the taxing power of the State or any such political
subdivision or agency. The Bonds and the interest thereon are payable solely
from and secured by the Trust Estate, including the moneys available to be
drawn by the Trustee under the Letter of Credit that may be in effect from time
to time to support payments due on or with respect to the Bonds, all as
described in and subject to limitations set forth in this Indenture, for the
equal and ratable benefit of the Holders, from time to time, of the Bonds.
Nothing in the Bonds or in the Indenture or the proceedings of the Issuer to
create a debt of the Issuer, the State, or any political subdivision thereof
within the meaning of any constitutional or statutory provision of the State.
No member, director or officer, agent, attorney or employee of the Issuer,
including any person executing the Indenture or the Bonds, shall be liable
personally on the Bonds or subject to any personal liability for any reason
relating to the issuance of the Bonds. The Bonds and interest due thereon shall
not be a general obligation, 




                                      81


<PAGE>   89

debt or liability of the Issuer and do not constitute or give rise to any
pecuniary liability or charge against the general credit of the Issuer.

         No recourse shall be had for the enforcement of any obligation,
promise or agreement of the Issuer contained herein or in the Bonds or the
other documents to which the Issuer is a party or for any claim based hereon or
thereon or otherwise in respect hereof or thereof against any director, member,
officer, agent, attorney or employee, as such, in his/her individual capacity,
past, present or future, of the Issuer or of any successor entity, either
directly or through the Issuer or any successor entity whether by virtue of any
constitutional provision, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise. No personal liability whatsoever shall
attach to, or be incurred by, any member, officer, agent, attorney or employee
as such, past, present or future, of the Issuer or of any successor entity,
either directly or through the Issuer or any successor entity, under or by
reason of any of the obligations, promises or agreements entered into in the
Bonds or between the Issuer and the Trustee, whether herein contained or to be
implied herefrom as being supplemental hereto; and all personal liability of
that character against every such direct, member, officer, agent, attorney and
employee is, by the extension of this Indenture and as a condition of, and as
part of the consideration for, the execution of this Indenture, expressly
waived and released.


         SECTION 15.9  NO LIABILITY OF COUNTY, OFFICERS, ETC. Hamilton County,
Tennessee, its officials and agents, shall not in any event be liable for the
performance of any pledge, mortgage, obligation or agreement of any kind
whatsoever herein or in any of the Bonds, and none of the agreements or
obligations of the Issuer contained in this Indenture or in the Bonds or
otherwise shall be construed to constitute an indebtedness of Hamilton County,
Tennessee or its officials or agents, within the meaning of any constitutional
or statutory provision whatsoever.


         SECTION 15.10  LIMITED LIABILITY OF THE ISSUER. Notwithstanding
anything to the contrary, any liability for payment of money and any other
liability or obligation which the Issuer may incur under the Bonds, this
Indenture, the Lease Agreement or the Placement Agreement shall not constitute
a general obligation of the Issuer but shall constitute limited obligations of
the Issuer payable solely from and enforced only against the Trust Estate. No
recourse shall be had for the enforcement of any obligation, promise or
agreement of the Issuer contained herein or in the Bonds or the Lease Agreement
to which the Issuer is a party or for any claim based hereon or thereon or
otherwise in respect hereof or thereof against any director, member, officer,
agent, attorney or employee, as such, in his individual capacity, past, present
or future, of the Issuer or of any successor entity, either directly or through
the Issuer or any successor entity whether by virtue of any constitutional
provision, statute or rule of law, or by the enforcement of any assessment or
penalty otherwise. No personal liability whatsoever shall attach to, or be
incurred by, any director, member, officer, agent, attorney or employee as
such, past, present or future, of the Issuer or of any successor entity, either
directly or through the Issuer or any successor entity, under or by reason of
any of the obligations, promises or agreements entered into in the Bonds or
between the Issuer and the Trustee, whether herein contained or to be implied
herefrom as being supplemental hereto; and to all personal liability of that
character against every such 




                                      82


<PAGE>   90

director, member, officer, agent, attorney and employee is, by the execution of
this Indenture and as a condition of, and as part of the consideration for, the
execution of this Indenture, expressly waived and released.


         SECTION 15.11 STATE LAW GOVERNS. This Indenture shall be governed by
and construed in accordance with the laws of the State.


         SECTION 15.12 PAYMENTS DUE ON DAYS OTHER THAN BUSINESS DAYS. In any
case where the date of maturity of interest on or principal of the Bonds or the
date fixed for redemption of the Bonds shall be in the city of payment a day
other than a Business Day, then payment of interest or principal need not be
made on such date but may be made on the next succeeding Business Day with the
same force and effect as if made on the date of maturity or the date fixed for
redemption, provided that interest shall accrue for the period of any such
extension.


         SECTION 15.13 THIRD-PARTY BENEFICIARIES. Notwithstanding any other
provision of this Indenture or any related document, the Issuer and the Trustee
each agree that the Lessee and the Financing Bank, as the Lender and the
Holder, are each third-party beneficiaries of this Indenture, as permitted
under Tennessee law.


         SECTION 15.14 EXECUTION IN COUNTERPARTS. This Indenture may be
executed in multiple counterparts, each of which shall be regarded for all
purposes as an original, and such counterparts shall constitute but one and the
same instrument, and no one counterpart of which need be executed by all
parties.


                           [Execution pages follow.]




                                      83

<PAGE>   91


         IN WITNESS WHEREOF, the Issuer has caused this Indenture to be
executed in its name and on its behalf by its Chairman and its Acting
Secretary; and the Trustee has caused this Indenture to be executed in its name
and on its behalf by a vice president or trust officer; all as of the date and
year first above written.


                                         THE INDUSTRIAL DEVELOPMENT BOARD OF 
                                         THE COUNTY OF HAMILTON, TENNESSEE



                                         By: /s/ Chairman
                                            -----------------------------------
                                                 Chairman



                                         By: /s/ Secretary
                                            -----------------------------------
                                                 Acting Secretary



                                         FIRST UNION NATIONAL BANK,
                                         as Trustee



                                         By: /s/ Authorized Officer
                                            -----------------------------------
                                         Title:




                                      84

<PAGE>   92


                                   EXHIBIT A

                          Form of Notice of Conversion


[Name and Address of Owner]

         Re:  $4,500,000 The Industrial Development Board of the County of
              Hamilton, Tennessee Industrial Development Revenue Bonds (Sterile
              Recoveries, Inc. Project), Taxable Series 1999 or Tax-Exempt
              Series Bonds

         The undersigned officer of First Union National Bank, as Trustee with
respect to the captioned Bonds, pursuant to the provisions of Section 2.2(e) of
that certain Trust Indenture (the "Indenture"), dated as of February 1, 1999,
between The Industrial Development Board of the County of Hamilton, Tennessee
and the Trustee, hereby notifies you that the interest rate borne by the
captioned Bonds shall be converted from the Variable Rate to the Fixed Rate, as
follows (capitalized terms used herein shall have the meanings provided in the
Indenture):

         The Conversion Date is ____________________.

         1.   The Placement Agent is First Union Capital Markets, a division of
              Wheat First Securities, Inc., One First Union Center, TW8, 301
              South College Street, Charlotte, North Carolina 28288-0600.

         2.   All Owners of Bonds are required to tender their Bonds on the
              Conversion Date to the Tender Agent, at the address set forth
              below, for purchase on the Conversion Date. In the event any
              owner of Bonds shall fail to tender such owner's Bonds for
              purchase on the Conversion Date, such Bonds shall be deemed to
              have been tendered for purchase on the Conversion Date.

         3.   The address of the Tender Agent is as follows:

                           First Union National Bank
                           150 Fourth Avenue, North, TN 1327
                           Nashville, Tennessee 37219
                           Attention: Corporate Trust Department

         4.   After the tenth day preceding the Conversion Date, you will not
              be entitled to tender any Bond for purchase.

         5.   In order to receive payment of the Purchase Price of any Bond
              which is deemed to have been tendered, you must deliver such Bond
              to the office of the Tender Agent shown above before 10:00 a.m.
              (prevailing Eastern time) on the Conversion Date.




                                      A-1

<PAGE>   93

         6.   Interest on any Bond will be payable only to (but not including)
              the Conversion Date.

         7.   The delivery by the Lessee to the Trustee of a letter from Bond
              Counsel confirming the opinion received pursuant to this
              notification is a condition precedent to a conversion to a Fixed
              Rate. In the event that the Lessee fails to deliver to the
              Trustee the letter of Bond Counsel herein referred to, the
              conversion of interest on the Bonds to the Fixed Rate shall not
              take effect and the Bonds shall continue to bear interest at the
              Variable Rate.

         8.   The Preliminary Fixed Rate is _____________

         9.   Depending on market conditions, the Fixed Rate may be higher but
              in no event lower than the Preliminary Fixed Rate.

         10.  After the Conversion Date, payment on the Bonds will not be
              supported by a Credit Facility.

         11.  The rating on the Bonds (if any) may be reduced or withdrawn on
              the Conversion Date.

         12.  All owners of Bonds who desire to retain such Bonds must deliver
              an Optional Retention Notice to the Trustee by the tenth (10th)
              day preceding the Conversion Date (or the next succeeding
              Business Day if such date is not a Business Day) or be deemed to
              have tendered their Bonds for purchase and must deliver the Bonds
              to the Trustee on or before the Conversion Date to be stamped
              with the legend contained in Section 2.2(e)(8) of the Indenture.

         Dated this ________ day of ____________________, ____.

                                          FIRST UNION NATIONAL BANK,
                                          as Trustee

                                          -------------------------------------
                                          Title:

         A copy of this Notice has been delivered to the Tender Agent at the
address above.




                                      A-2

<PAGE>   94


                                   EXHIBIT B

                  DTC Blanket Issuer Letter of Representations

                                 (see attached)














                                      B-1

<PAGE>   95

                                  EXHIBIT C-1

                        Form of Taxable Series 1999 Bond

                    THE INDUSTRIAL DEVELOPMENT BOARD OF THE
                         COUNTY OF HAMILTON, TENNESSEE
                      INDUSTRIAL DEVELOPMENT REVENUE BONDS
            (STERILE RECOVERIES, INC. PROJECT), TAXABLE SERIES 1999

                          CUSIP NO. __________________

                                                                        No. R-1

Registered Owner: Cede & Co.

Principal Amount: $______________

Maturity Date: First Business Day of February, 2014

Initial Interest Rate: ______%

Interest Payment Dates: The first Business Day of each February, May, August 
                        and November, commencing the first Business Day of 
                        May __, 1999, and ending on the Maturity Date, the
                        Conversion Date (hereinafter defined) and the Maturity
                        Date.

Original Delivery Date: _____________________

         THE ISSUER HAS ESTABLISHED A BOOK ENTRY SYSTEM OF REGISTRATION FOR
THIS BOND. EXCEPT AS SPECIFICALLY PROVIDED OTHERWISE IN THE INDENTURE, CEDE &
CO., AS NOMINEE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), WILL BE THE REGISTERED OWNER AND WILL HOLD THIS BOND ON BEHALF OF EACH
BENEFICIAL OWNER HEREOF. BY ACCEPTANCE OF A CONFIRMATION OF PURCHASE, DELIVERY
OR TRANSFER, EACH BENEFICIAL OWNER OF THIS BOND SHALL BE DEEMED TO HAVE AGREED
TO SUCH ARRANGEMENT. CEDE & CO., AS REGISTERED OWNER OF THIS BOND, MAY BE
TREATED AS THE OWNER OF IT FOR ALL PURPOSES.

         UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
TO THE TRUSTEE FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY BOND
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO 




                                     C-1-1


<PAGE>   96


SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.

         THE BONDS SHALL NOT BE GENERAL OBLIGATIONS OF THE ISSUER BUT LIMITED
AND SPECIAL OBLIGATIONS PAYABLE SOLELY FROM THE AMOUNTS PAYABLE UNDER THE LEASE
AGREEMENT AND OTHER AMOUNTS SPECIFICALLY PLEDGED THEREFOR UNDER THE INDENTURE,
AND SHALL BE A VALID CLAIM OF THE RESPECTIVE OWNERS THEREOF ONLY AGAINST THE
DESIGNATED ACCOUNTS OF THE BOND FUND AND OTHER MONEYS HELD BY THE TRUSTEE AND
THE AMOUNTS PAYABLE UNDER THE LEASE AGREEMENT OR OTHERWISE PLEDGED THEREFOR,
WHICH AMOUNTS ARE HEREBY PLEDGED, ASSIGNED AND OTHERWISE SECURED FOR THE EQUAL
AND RATABLE PAYMENT OF THE BONDS AND SHALL BE USED FOR NO OTHER PURPOSE THAN TO
PAY THE PRINCIPAL OF, PREMIUM, IF ANY, AND INTEREST ON THE BONDS, EXCEPT AS MAY
BE OTHERWISE EXPRESSLY AUTHORIZED IN THE INDENTURE. THE BONDS DO NOT CONSTITUTE
AN INDEBTEDNESS OF THE ISSUER OR A LOAN OF CREDIT THEREOF WITHIN THE MEANING OF
ANY CONSTITUTIONAL OR STATUTORY PROVISIONS.

         THIS BOND AND THE INTEREST THEREON SHALL NOT BE DEEMED TO CONSTITUTE A
DEBT OR A PLEDGE OF THE FAITH AND CREDIT OF THE STATE OF TENNESSEE OR ANY
POLITICAL SUBDIVISION THEREOF, INCLUDING HAMILTON COUNTY, TENNESSEE. HAMILTON
COUNTY, TENNESSEE SHALL NOT IN ANY EVENT BE LIABLE FOR THE PAYMENT OF THE
PRINCIPAL OF, PREMIUM, IF ANY, OR IN ANY EVENT BE LIABLE FOR THE PAYMENT OF THE
PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THIS BOND, OR FOR THE PERFORMANCE
OF ANY PLEDGE, MORTGAGE, OBLIGATION OR AGREEMENT OF ANY KIND WHATSOEVER HEREIN
OR INDEBTEDNESS BY THE ISSUER, AND NEITHER THIS BOND NOR ANY OF THE ISSUER'S
AGREEMENTS OR OBLIGATIONS DESCRIBED HEREIN OR OTHERWISE SHALL BE CONSTRUED OR
CONSTITUTE AN INDEBTEDNESS OF HAMILTON COUNTY, TENNESSEE, WITHIN THE MEANING OF
ANY CONSTITUTIONAL OR STATUTORY PROVISION WHATSOEVER.

         THIS BOND MAY BE TENDERED FOR PURCHASE AS DESCRIBED HEREIN. DELIVERY
OF AN OPTIONAL TENDER NOTICE WITH RESPECT TO THIS BOND CONSTITUTES AN
IRREVOCABLE OFFER TO SELL THIS BOND ON THE DATE SPECIFIED THEREIN AND IS
BINDING ON SUBSEQUENT OWNERS OF THIS BOND. IN THE EVENT THE OWNER OF THIS BOND
FAILS TO DELIVER THIS BOND TO THE TENDER AGENT ON THE SPECIFIED DATE, THE OWNER
HEREOF SHALL THEREAFTER BE ENTITLED ONLY TO PAYMENT OF THE PURCHASE PRICE AND
NOT TO THE BENEFITS OF THE INDENTURE. THIS BOND ALSO IS SUBJECT TO MANDATORY
TENDER AND PURCHASE AS DESCRIBED HEREIN.




                                     C-1-2

<PAGE>   97

         The Industrial Development Board of the County of Hamilton, Tennessee
(herein called the "ISSUER"), a public non-profit corporation, organized and
existing under the laws of the State of Tennessee, for value received, hereby
promises to pay (but only from the sources hereinafter mentioned) to the
Registered Owner set forth above, or registered assigns, the Principal Amount
set forth above on the Maturity Date set forth above and to pay (but only from
the sources hereinafter mentioned) interest thereon from the Interest Payment
Date immediately preceding the Date of Authentication endorsed hereon, unless
this Bond is authenticated on an Interest Payment Date in which event it will
bear interest from such date, payable on each Interest Payment Date, until
payment of said principal sum has been made or provided for, at the rate or
rates per annum set forth below. Principal and interest and premium, if any,
will be paid in any coin or currency of the United States of America which, at
the time of payment, is legal tender for the payment of public and private
debts. Interest will be paid by check mailed on the Interest Payment Date to
the person in whose name this Bond is registered at the close of business on
the Regular Record Date (as hereinafter defined) immediately preceding such
Interest Payment Date; provided, however, that while the Bonds (as hereinafter
defined) bear interest at the Variable Rate (as hereinafter defined) interest
will also be payable by wire transfer to the account at a member bank of the
Federal Reserve System of any registered owner of Bonds in the aggregate
principal amount of One Million Dollars ($1,000,000) or more at the written
request (identifying such account by number) of such owner received by the
Trustee (as hereinafter defined) on or before the Regular Record Date. While
the Bonds bear interest at the Variable Rate (as hereinafter defined), the
Regular Record Date will be the close of business on the Business Day
immediately preceding each Interest Payment Date. While the Bonds bear interest
at the Fixed Rate (as hereinafter defined), the Regular Record Date will be the
fifteenth (15th) day of the calendar month immediately preceding each Interest
Payment Date. Any such interest not so punctually paid or duly provided for
will forthwith cease to be payable to the owner on such Regular Record Date,
and may be paid to the person in whose name this Bond is registered at the
close of business on a Special Record Date (as defined in the Indenture
(hereinafter defined)) for the payment of such defaulted interest to be fixed
by the Trustee, or may be paid at any time in any other lawful manner, all as
more fully provided in the Indenture. Principal of and redemption premium, if
any, will be paid upon surrender of this Bond at the corporate trust office of
First Union National Bank, as trustee (said banking institution and any
successor trustee or co-trustee under the Indenture being herein called the
"TRUSTEE"), in Nashville, Tennessee. Payment of the Purchase Price of Bonds
purchased as described herein will be paid, upon surrender of such Bonds, at
the office of First Union National Bank in Nashville, Tennessee (in such
capacity, herein called the "TENDER AGENT").

         This Bond is issued under and pursuant to the Constitution and laws of
the State of Tennessee (the "STATE"), particularly the provisions of Chapter 53
of Title 7 of Tennessee Code Annotated (the "ACT").

         This Bond and the issue of which it is a part and the Purchase Price
thereof, the premium, if any, and interest thereon are limited obligations of
the Issuer payable by the Issuer solely from the revenues and receipts derived
from the Lease Agreement (as hereinafter defined), which revenues and receipts
have been pledged and assigned to the Trustee to secure payment thereof 




                                     C-1-3


<PAGE>   98

and from amounts received pursuant to the Credit Facility (as hereinafter
defined). This Bond and the interest hereon will not constitute an indebtedness
or a charge against the general credit or assets of the Issuer within the
meaning of any constitutional provision or statutory limitation and shall never
constitute nor give rise to any pecuniary liability of the Issuer, but will be
a limited obligation of the Issuer payable solely from the revenues and other
funds pledged therefor and will not be payable from any assets or funds of the
Issuer other than the revenues and other funds pledged therefor, and neither
the faith and credit nor the taxing power of the State or any political
subdivision or any agency thereof is pledged to the payment of the principal of
or the interest on this Bond.

         This Bond is one of the Bonds of a duly authorized issue of variable
rate industrial revenue bonds of the Issuer in the aggregate principal amount
of $4,500,000 and designated The Industrial Development Board of the County of
Hamilton, Tennessee Industrial Development Revenue Bonds (Sterile Recoveries,
Inc. Project), Taxable Series 1999 (the "BONDS").

         The Bonds have been issued for the purpose of financing the
acquisition, construction, installation and equipping of an industrial facility
(herein called the "PROJECT") and to pay a portion of the costs of issuing the
Bonds.

         The Bonds are issued under and pursuant to a Trust Indenture, dated as
of February 1, 1999 (said Trust Indenture, together with all such supplements
and amendments thereto as therein permitted, being herein called the
"INDENTURE"), between the Issuer and the Trustee. An executed counterpart of
the Indenture is on file at the principal corporate trust office of the
Trustee. Reference is hereby made to the Indenture for the provisions, among
others, with respect to the custody and application of the proceeds of the
Bonds; the collection and disposition of revenues; a description of the funds
charged with and pledged to the payment of the principal of and interest on and
any other amounts payable under the Bonds; the nature and extent of the
security; the terms and conditions under which the Bonds are or may be issued;
and the rights, duties and obligations of the Issuer and of the Trustee and the
rights of the owners of the Bonds, and, by the acceptance of this Bond, the
owner hereof assents to all of the provisions of the Indenture.

         The Issuer has entered into a Lease Agreement, dated as of February 1,
1999 (herein called the "LEASE AGREEMENT"), with First Security Bank, National
Association, as Owner Trustee under SRI Realty Trust 1998-1 (the "LESSEE"),
under which the Issuer has agreed to use the proceeds of the Bonds to provide
financing for the acquisition, construction, installation and equipping of
certain manufacturing buildings and facilities directly related or ancillary
thereto and to pay a portion of the costs of issuing the Bonds, and in
consideration therefor, the Lessee has agreed to make lease payments in
installments, bearing interest at a rate or rates and payable at times
corresponding to the principal amount of, installments of principal of,
interest rates on and due dates of the Bonds. The Lease Agreement also provides
for the payment by the Lessee of certain fees and expenses of the Issuer and
the Trustee, and the Lease Agreement further obligates the Lessee (d) to pay
the cost of maintaining the Project in good repair in all material respects and
keeping the same properly insured and (e) to maintain a Credit Facility (as
hereinafter defined) 




                                     C-1-4


<PAGE>   99

during the period of time the Bonds bear interest at the Variable Rate (herein
called the "VARIABLE RATE PERIOD").

         As security for the payment of the Bonds, all right, title and
interest of the Issuer in (a) the Lease Agreement (except certain Issuer
Reserved Rights defined in the Indenture); (b) all money and securities at any
time on deposit in, in transit to or credited to any account or Fund created
under the Indenture, including without limitation the Project Fund and the Bond
Fund (as defined in the Indenture), but excluding the Rebate Fund (as defined
in the Indenture); and (c) Revenues (as defined in the Indenture) have been
assigned to the Trustee under the Indenture and pledged to the payment of the
principal of, and the redemption premium (if any) and the interest on, the
Bonds. The Project shall not otherwise constitute any part of the security for
the payment of the Bonds.

         Reference to the Indenture is hereby made for a description of the
aforesaid Bond Fund which is charged with, and pledged to, the payment of the
principal of, and the redemption premium (if any) and the interest on, the
Bonds, the nature and extent of the security, the rights, duties and
obligations of the Issuer, the Lessee and the Trustee, the rights of the owners
of the Bonds, the terms and conditions under and upon the occurrence of which
the Indenture and the Lease Agreement may be modified and the terms and
conditions under and upon the occurrence of which the lien of the Indenture may
be defeased as to this Bond prior to the maturity or redemption date hereof, to
all of the provisions of which the owner hereof, by the acceptance of this
Bond, assents.

         Credit Facility. The Lessee has entered into a Credit Agreement, dated
as of February 1, 1999 (herein called the "REIMBURSEMENT AGREEMENT"), by and
between the Lessee and First Union National Bank (in such capacity, herein
called the "BANK").

         Pursuant to the Reimbursement Agreement, the Lessee has caused a
Letter of Credit issued by the Bank (herein called the "LETTER OF CREDIT"; such
Letter of Credit and any extensions or renewals thereof or any amendment
thereto and any Alternate Credit Facility (as hereinafter defined) referred to
herein as the "CREDIT FACILITY") to be delivered to the Trustee. The Trustee
will be entitled under the Letter of Credit to draw up to an amount of
$4,725,000 of which (a) $4,500,000 will be available for the payment of
principal or that portion of the Purchase Price corresponding to principal of
the Bonds and (b) $225,000 will support the payment of up to one hundred twenty
(120) days' interest or that portion of the Purchase Price corresponding to
interest on the Bonds at an assumed rate of fifteen percent (15%) per annum,
which is the maximum rate of interest borne by the Bonds. Subject to the
provisions of the Indenture, the Lessee is required during the Variable Rate
Period to provide an alternate credit facility with terms and provisions
substantially the same as those of the Letter of Credit (an "ALTERNATE CREDIT
FACILITY") prior to the termination of Letter of Credit. During the Variable
Rate Period unless the Letter of Credit or the then current Alternate Credit
Facility is replaced prior to its expiration in accordance with the terms of
the Indenture, this Bond will become subject to mandatory redemption as
provided in the Indenture.





                                     C-1-5

<PAGE>   100

         Source of Funds. The principal of, premium (if any) and interest on
the Bonds are payable solely from lease payments under the Lease Agreement and
from any other moneys held by the Trustee under the Indenture for such purpose,
including, with respect to principal and interest only, moneys drawn by the
Trustee under the Letter of Credit or Alternate Credit Facility for the benefit
of the Bondholders (the Bank as the issuer of the Letter of Credit and the
institution issuing any Alternate Credit Facility are herein called the "CREDIT
FACILITY ISSUER"). Except as otherwise specified in the Indenture, this Bond is
entitled to the benefits of the Indenture equally and ratably both as to
principal (and redemption and Purchase Price) and interest with all other Bonds
issued under the Indenture.


                                 INTEREST RATES

         Initial Interest Rate. The Bonds will bear interest from the Original
Delivery Date specified above to March 3, 1999 at the Initial Interest Rate.

         Variable Rate. The Bonds will initially bear interest from the
Original Delivery Date (as defined in the Indenture) through March 3, 1999 at
the Initial Interest Rate stated thereon as determined in accordance with the
Indenture. Thereafter, prior to and including the Conversion Date, the Bonds
will bear interest at a floating rate determined weekly by the Remarketing
Agent as set forth below (the "VARIABLE RATE"). The Variable Rate will be equal
to the rate of interest certified to the Trustee by the Remarketing Agent on
and as of each Wednesday (or the next Business Day if such Wednesday is not a
Business Day) (the "DETERMINATION DATE") as the minimum rate of interest
necessary, in the judgment of the Remarketing Agent taking into account market
conditions prevailing on the Determination Date, to enable the Remarketing
Agent to arrange for the sale of all of the Bonds in the secondary market on
the Determination Date at a price equal to the principal amount thereof (plus
accrued interest to the date of settlement). If the Remarketing Agent fails to
certify such rate for the Bonds for four consecutive Calculation Periods, the
rate for the Bonds for each Calculation Period thereafter (if none is certified
by the Remarketing Agent) to be determined by the Trustee shall be a rate equal
to the 30 day LIBOR Rate. "LIBOR Rate" shall mean, for any period, an interest
rate per annum (based on a 360-day year) determined by the Trustee or its
designee to be the rate or the arithmetic mean of rates (rounded upward, if
necessary, to the nearest one-sixteenth (1/16) of one percentage point of the
rate per annum) for deposits in immediately available and freely transferable
dollars of the United States of America that appears on Telerate Screen, page
3747, as published daily by the British Bankers Association Interest Settlement
Rates (or another comparable international financial data service satisfactory
to the Trustee, or its designee, in its discretion, if Telerate no longer
publishes such rates) and that is offered by first class banks in the London
InterBank market to the offices of the Trustee or its designee at 10:00 a.m. on
the applicable Determination Date. If, for any reason, the Variable Rate is not
determined as described above or is held to be invalid or unenforceable by a
court of competent jurisdiction for any period, the interest rate for each such
period shall be equal to the Maximum Rate (as defined in the Indenture) then in
effect. While the Bonds bear interest at a Variable Rate, interest on the Bonds
shall be computed on the basis of a year of 365 or 366 days, as applicable, for
the number of days actually elapsed and shall be payable on each Interest
Payment Date.




                                     C-1-6

<PAGE>   101

         Fixed Rate. (a) The interest rate on this Bond will be converted to
the Fixed Rate upon an election by the Lessee pursuant to the Indenture to
convert the rate of interest on all Bonds then outstanding from the Variable
Rate to the Fixed Rate (herein called the "FIXED RATE ELECTION"), on any
Interest Payment Date by giving written notice, accompanied by the items
described in Section 2.2(e) of the Indenture, to the Issuer, the Trustee, the
Credit Facility Issuer, the Tender Agent and the Remarketing Agent, which
notice will specify, among other things, the name and address of the Placement
Agent which has agreed to use its best efforts to arrange for the sale of any
Bonds to be tendered or deemed tendered for purchase on the Conversion Date
(herein called the "PLACEMENT AGENT"). At least twenty-five (25) days prior to
the Conversion Date, the Placement Agent will determine a rate (the
"PRELIMINARY FIXED RATE") which will be the minimum rate of interest on the
Bonds determined by the Placement Agent to be the fixed annual rate of interest
(for the period beginning on the Conversion Date and ending on the Maturity
Date) necessary, in the judgment of the Placement Agent taking into account
market conditions prevailing on the date such rate is determined, to enable the
Placement Agent to arrange for the sale of all of the Bonds in the secondary
market at a price equal to the principal amount thereof if the Bonds were
tendered for purchase on the Conversion Date. The Placement Agent will promptly
notify the Trustee of the Preliminary Fixed Rate.

               (b) As soon after the receipt of notice from the Placement Agent
of the Preliminary Fixed Rate as practicable (but in no event more than two (2)
Business Days thereafter) a notice will be mailed by the Trustee to each
registered owner of Bonds stating, among other things, (1) the Preliminary
Fixed Rate, (2) that, depending on market conditions, the Fixed Rate may be
higher but in no event will be lower than the Preliminary Fixed Rate, (3) the
Conversion Date, (4) that after the tenth (10th) day preceding the Conversion
Date, the owner will not be entitled to tender this Bond for purchase as
described below, (5) that payment of this Bond will not be supported by an
Alternate Credit Facility after the Conversion Date, (6) that the rating on the
Bonds (if at such time there is a rating in effect on the Bonds) may be reduced
or withdrawn on the Conversion Date, (7) that unless such registered owner
delivers to the Trustee a notice (an "OPTIONAL RETENTION NOTICE") in the form
attached hereto as Exhibit A at least ten days prior to the Conversion Date,
this Bond will be deemed tendered for purchase on the Conversion Date, (8) that
in order to receive payment of the Purchase Price of any Bond which is deemed
to have been tendered, the registered owner of such Bond must deliver such Bond
to the office of the Tender Agent before 10:00 a.m. on the Conversion Date
specifying such address, and (9) that interest on any Bond deemed to have been
tendered will be payable only to (but not including) the Conversion Date.

               (c) Upon the Conversion Date stated in such notice, the Fixed
Rate to be borne by the Bonds for the period beginning on the Conversion Date
until the Maturity Date or prior redemption of the Bonds (the "FIXED RATE"),
will be determined as follows:

                   (1) if any of the Bonds have been tendered or deemed
               tendered for purchase (herein called the "TENDERED BONDS"),
               then:




                                     C-1-7

<PAGE>   102

                       (A) if the Placement Agent shall have arranged for the
                   sale of any or all of the Tendered Bonds, at a price equal
                   to the principal amount thereof, the Fixed Rate will be
                   equal to the interest rate at which all such Bonds were sold
                   by the Placement Agent, provided that all such Bonds will be
                   sold at a rate greater than or equal to the Preliminary
                   Fixed Rate; and

                       (B) if the Placement Agent shall have arranged for the
                   sale of none of the Tendered Bonds, the Fixed Rate will be
                   equal to the Preliminary Fixed Rate; or

                   (2) if all owners of the outstanding Bonds elect to retain
               such Bonds, the Fixed Rate will be equal to the Preliminary
               Fixed Rate.

               (d) If, for any reason, the Fixed Rate is held to be invalid or
unenforceable by a court of competent jurisdiction, the Fixed Rate will be the
Maximum Rate (as defined in the Indenture) then in effect.

               (e) The Fixed Rate will be computed on the basis of a three
hundred sixty (360)-day year, computed for the actual number of days elapsed,
and will be payable on each Interest Payment Date after the Conversion Date
until the principal of, and premium, if any, and interest on the Bonds shall
have been paid in full.

         Interest Rate Determination Binding. The determination of the interest
rate on the Bonds by the Remarketing Agent or Placement Agent, as appropriate,
in accordance with the terms of the Indenture will be conclusive and binding
upon the owners of the Bonds, the Issuer, the Lessee, the Trustee, the Trustee,
the Remarketing Agent, the Placement Agent, the Tender Agent and the Credit
Facility Issuer.

         No Usury. Anything herein to the contrary notwithstanding, in no event
shall the interest rate borne by the Bonds exceed the maximum contract rate of
interest permitted by the laws of the State.


                              REDEMPTION OF BONDS

               (a) Optional Redemption. While the Bonds bear interest at the
Variable Rate, the Bonds will be subject to redemption upon the written
direction of the Issuer, given at the request of the Lessee, with the consent
of the Credit Facility Issuer, on any Interest Payment Date and on the
Conversion Date, in whole or in part, at redemption price equal to one hundred
percent (100%) of the principal amount thereof without premium plus interest
accrued to the redemption date.

               (b) While the Bonds bear interest at the Fixed Rate, the Bonds
will be subject to redemption upon the written direction of the Issuer, given
at the request of the Lessee, in whole on any date, or in part on any Interest
Payment Date, occurring on or after the dates set forth 




                                     C-1-8

<PAGE>   103

below, at the redemption prices (with a premium expressed as a percentage of
principal amount to be redeemed) set forth below plus interest accrued to the
redemption date as follows:

         Commencement of
         Redemption Period               Redemption Price
         -----------------               ----------------
         The Business Day four (4)       103% declining by 1/2% on each 
         years from the Conversion       succeeding anniversary date of the 
         Date                            first day of the redemption period 
                                         until reaching 100% and thereafter 
                                         at 100%


               (c) The Bonds will be subject to redemption upon the written
direction of the Issuer, given at the request of the Lessee, at any time in
whole or in part at a redemption price equal to one hundred percent (100%) of
the principal amount thereof plus interest accrued to the redemption date in
the event of damage, destruction or condemnation of the Project, all as more
fully described in Section 7.1(b) of the Indenture.

               Mandatory Redemption. (a) The Bonds will be subject to mandatory
redemption in whole on the Mandatory Tax-Exempt Conversion Redemption Date (as
defined in the Indenture) at a redemption price equal to one hundred percent
(100%) of the principal amount thereof plus accrued interest to the redemption
date.

               (b) During the Variable Rate Period, the Bonds will be subject
to mandatory redemption in whole on the Interest Payment Date occurring closest
to but not after fifteen (15) days prior to the date of expiration of the then
current Credit Facility unless prior to such date an Alternate Credit Facility
has been provided in accordance with the Indenture, at a redemption price or
Purchase Price equal to one hundred percent (100%) of the principal amount
thereof, without premium, plus interest accrued to the redemption date.

               (c) The Bonds are subject to redemption without premium from
proceeds of the Bonds not used to complete the Project or from moneys drawn
under the Credit Facility for which the Credit Facility Issuer is reimbursed
from such excess proceeds in accordance with the provisions of the Indenture,
which redemption date shall be no more than sixty (60) days following the date
of transfer of moneys to the Bond Fund established under the Indenture from the
Project Fund established under the Indenture.

         Purchase in Lieu of Redemption. The Bonds are subject to optional call
and purchase in whole prior to the Conversion Date on any Interest Payment Date
upon the written direction of the Issuer, given at the request of the Lessee,
which purchase may be in lieu of redemption, from moneys deposited with the
Trustee sufficient for payment of 100% of the principal amount due upon such
call together with accrued interest on the Bonds to the call date.




                                     C-1-9

<PAGE>   104

         Notice of Redemption and Selection of Bonds. Any notice of redemption,
identifying the Bonds or portions thereof to be redeemed, will be given not
more than sixty (60) days and not less than twenty (20) days prior to the
redemption date, by mailing a copy of the redemption notice by first class mail
to the owner of each Bond to be redeemed in whole or in part at the address
shown on the Bond Register (as defined in the Indenture) maintained by the Bond
Registrar (as hereinafter described). Notice of optional redemption may be
conditioned upon the deposit of moneys with the Trustee before the date fixed
for redemption and such notice will be of no effect unless such moneys are so
deposited. All Bonds so called for redemption, including Bonds purchased by the
Lessee as provided in the Indenture but not yet surrendered for payment of the
Purchase Price, will cease to bear interest on the specified redemption date
provided funds for the payment of their redemption price and any accrued
interest payable on the specified redemption date are on deposit at the
principal place of payment at that time. If less than all the Bonds are to be
redeemed, the particular Bonds to be called for redemption will be selected in
the following order of priority: first, Bonds pledged to the Credit Facility
Issuer; second, Bonds owned by the Lessee and third, Bonds selected by any
random or other method determined by the Trustee in its sole discretion.

         Mandatory Tender for Purchase Upon Conversion to Fixed Rate. The Bonds
will be subject to mandatory purchase in whole (and not in part) on the
Conversion Date at a Purchase Price equal to one hundred percent (100%) of the
principal amount thereof plus interest accrued thereon to the date of purchase;
provided that there will not be so purchased (a) Bonds or portions thereof in
authorized denominations which the owners have irrevocably elected to retain on
the Conversion Date in accordance with the Indenture by the delivery of an
Optional Retention Notice in accordance with the provisions of Section 2.2(e)
of the Indenture, or (b) Bonds issued in exchange for or upon the registration
of transfer of Bonds referred to in clause (a) above.

         THE OWNER OF THIS BOND, BY ACCEPTANCE HEREOF, AGREES TO THE MANDATORY
PURCHASE OF THIS BOND AS PROVIDED IN THE INDENTURE, AND AGREES THAT THIS BOND
WILL BE PURCHASED ON THE DATE SPECIFIED UPON DEPOSIT WITH THE TRUSTEE OF AN
AMOUNT SUFFICIENT TO PAY THE PURCHASE PRICE HEREOF. THE OWNER OF THIS BOND ALSO
UNDERSTANDS AND AGREES THAT IN THE EVENT THE OWNER FAILS TO DELIVER THIS BOND,
PROPERLY ENDORSED FOR TRANSFER, TO THE TRUSTEE ON THE DATE SPECIFIED, INTEREST
WILL CEASE TO ACCRUE HEREON ON SUCH SPECIFIED DATE AND THE OWNER HEREOF WILL
THEREAFTER BE ENTITLED ONLY TO PAYMENT OF THE PURCHASE PRICE AND NOT TO THE
BENEFIT OF THE INDENTURE.

         Purchase at Option of the Owner During Variable Rate Period. While the
Bonds bear interest at the Variable Rate, any Bond or portion thereof in an
authorized denomination will be purchased on the demand of the owner thereof,
on any Business Day at a Purchase Price equal to one hundred percent (100%) of
the principal amount thereof plus interest accrued to the date of purchase upon
delivery to the Tender Agent of a notice (herein called an "OPTIONAL TENDER
NOTICE") in the form attached hereto as Exhibit B specifying the date on which
such Bond will be purchased, which date will be a Business Day not prior to the
seventh (7th) day after the date of delivery of the Optional Tender Notice. To
receive payment of the Purchase Price, the owner will 




                                    C-1-10


<PAGE>   105

be required to deliver such Bond to the Tender Agent, accompanied by an
executed form of assignment and any other instruments of transfer satisfactory
to the Trustee, not less than five (5) days prior to the purchase date
specified in such notice as provided in the Indenture; provided, however, that
any owner which is an investment company registered pursuant to the Investment
Company Act of 1940 may deliver such Bond to the Tender Agent at or prior to
10:00 a.m. on the date of purchase. No purchase of Bonds at the option of the
owner thereof or on the Conversion Date will be deemed to be a payment or
redemption of the Bonds or any portion thereof. Notwithstanding the foregoing,
no owner will have a right to tender such owner's Bond(s) for purchase as
described in this paragraph following acceleration of the payment of the Bonds
pursuant to the terms of the Indenture or after the Conversion Date.

         THE OWNER OF THIS BOND, BY ACCEPTANCE HEREOF, AGREES THAT DELIVERY OF
THE WRITTEN NOTICE DESCRIBED IN THE PRECEDING PARAGRAPH BY THE OWNER
CONSTITUTES AN IRREVOCABLE OFFER TO SELL THIS BOND ON THE DATE SPECIFIED, AND
THAT THIS BOND WILL BE PURCHASED ON SUCH DATE UPON DEPOSIT WITH THE TENDER
AGENT OF AN AMOUNT SUFFICIENT TO PAY THE PURCHASE PRICE HEREOF. THE OWNER OF
THIS BOND ALSO UNDERSTANDS AND AGREES THAT IN THE EVENT THE OWNER FAILS TO
DELIVER THIS BOND, PROPERLY ENDORSED FOR TRANSFER, TO THE TENDER AGENT ON THE
DATE SPECIFIED IN THE NOTICE, THIS BOND WILL BE HELD BY THE OWNER AS AGENT FOR
THE LESSEE, INTEREST WILL CEASE TO ACCRUE HEREON AS OF THE DATE SPECIFIED IN
THE NOTICE AND THE OWNER HEREOF WILL THEREAFTER BE ENTITLED ONLY TO PAYMENT OF
THE PURCHASE PRICE AND NOT TO THE BENEFITS OF THE INDENTURE, AND THE ISSUER
WILL, TO THE EXTENT PERMITTED BY LAW, EXECUTE AND THE TRUSTEE WILL AUTHENTICATE
AND DELIVER A SUBSTITUTE BOND IN LIEU OF THE UNDELIVERED BOND.

         Tender Agent. The Issuer has appointed First Union National Bank,
Nashville, Tennessee as Tender Agent. The Tender Agent may be changed at any
time by the Lessee with the consent of the Issuer and the Trustee.

         Authorized Denominations. Subject to the provisions of the Indenture,
the Bonds are issuable as registered Bonds in the denomination of One Hundred
Thousand Dollars ($100,000) or any integral multiple of $5,000 in excess
thereof; provided that if less than $100,000 in principal amount of Bonds is
Outstanding (as defined in the Indenture), one Bond shall be issued in such
smaller denomination. Subject to the limitations provided in the Indenture and
upon payment of any tax or governmental charge, if any, Bonds may be exchanged
for a like aggregate principal amount of Bonds of other authorized
denominations.

         Transfer. This Bond is transferable by the registered owner hereof or
his duly authorized attorney at the corporate trust office of First Union
National Bank, as Bond Registrar, in Nashville, Tennessee, in compliance with
the terms and conditions set forth in the Indenture and upon surrender of this
Bond, provided that transfers in connection with the remarketing hereof will be
made at the corporate trust office of the Trustee in Nashville, Tennessee,
accompanied by a 




                                    C-1-11


<PAGE>   106

duly executed instrument of transfer in form satisfactory to the Bond
Registrar, subject to such reasonable regulations as the Issuer, the Bond
Registrar or the Trustee may prescribe and upon payment of any tax or other
governmental charge incident to such transfer, PROVIDED THAT IF MONEYS FOR THE
PURCHASE OF THIS BOND HAVE BEEN PROVIDED PURSUANT TO A DRAW UNDER THE CREDIT
FACILITY, THIS BOND IS NOT TRANSFERABLE TO ANYONE OTHER THAN THE LESSEE OR ITS
ASSIGNEE OR PLEDGEE. Upon any such transfer, a new Bond or Bonds registered in
the name of the transferee or transferees in denominations authorized by the
Indenture and in the same aggregate principal amount as the principal amount of
this Bond (and of the same maturity and bearing interest at the same rate) will
be issued to the transferee. Except as set forth in this Bond and as otherwise
provided in the Indenture, the person in whose name this Bond is registered
will be deemed the owner hereof for all purposes, and the Issuer, the Bond
Registrar and the Trustee will not be affected by any notice to the contrary.

         The owner of this Bond will have no right to enforce the provisions of
the Indenture or to institute action to enforce the covenants therein, or to
take any action with respect to any Event of Default under the Indenture or to
institute, appear in or defend any suit or other proceeding with respect
thereto, except as provided in the Indenture.

         In certain events, on the conditions, in the manner and with the
effect set forth in the Indenture, the principal of this Bond may become or may
be declared due and payable before the stated maturity hereof, together with
the interest accrued hereon.

         Modifications or alterations of the Lease Agreement and the Indenture
and any supplement or amendment thereto may be made only to the extent and in
the circumstances permitted by the Indenture and may be made in certain cases
without the consent of the owners of the Bonds.

         No recourse shall be had for the enforcement of any obligation,
promise or agreement of the Issuer contained herein or other documents to which
the Issuer is a party or for any claim based hereon or thereon or otherwise in
respect hereof or thereof against any director, member, officer, agent,
attorney or employee, as such, in his/her individual capacity, past, present or
future, of the Issuer or of any successor entity, either directly or through
the Issuer or any successor entity, under or by reason of any of the
obligations, promises or agreements entered into in this Bond or between the
Issuer and the Trustee; and all personal liability of that character against
every such director, member, officer, agent, attorney and employee is, by the
execution of the Indenture and as a condition of, and as part of the
consideration for, the execution of this Indenture, expressly waived and
released.

         Notwithstanding anything to the contrary, any liability for payment of
money and any other liability or obligation which the Issuer may incur under
this Bond shall not constitute a general obligation of the Issuer but shall
constitute limited obligations of the Issuer payable solely from and enforced
only against the Trust Estate. No recourse shall be had for the enforcement of
any obligation, promise or agreement of the Issuer contained herein or in the
Bonds or the Lease Agreement to which the Issuer is a party or for any claim
based hereon or thereon or otherwise 




                                    C-1-12


<PAGE>   107

in respect hereof or thereof against any director, member, officer, agent,
attorney or employee, as such, in his individual capacity, past, present or
future, of the Issuer or of any successor entity, either directly or through
the Issuer or any successor entity whether by virtue of any constitutional
provision, statute or rule of law, or by the enforcement of any assessment or
penalty otherwise. No personal liability whatsoever shall attach to, or be
incurred by, any director, member, officer, agent, attorney or employee as
such, past, present or future, of the Issuer or of any successor entity, either
directly or through the Issuer or any successor entity, under or by reason of
any of the obligations, promises or agreements entered into in this Bond or
between the Issuer and the Trustee, whether herein contained or to be implied
herefrom as being supplemental hereto; and to all personal liability of that
character against every such director, member, officer, agent, attorney and
employee is, by the execution of the Indenture and as a condition of, and as
part of the consideration for, the execution of the Indenture, expressly waived
and released.

         Anything herein or in the Indenture to the contrary notwithstanding,
the obligations of the Issuer hereunder will be subject to the limitation that
payment of interest to the owner of this Bond will not be required to the
extent that receipt of any such payment by the owner of this Bond would be
contrary to the provisions of law applicable to such Bond which limits the
maximum rate of interest which may be charged or collected by such owner.

         In any case where the date of maturity of interest on or principal of
the Bonds or the date fixed for redemption of the Bonds shall be in the city of
payment a day other than a Business Day, then payment of interest or principal
need not be made on such date but may be made on the next succeeding Business
Day with the same force and effect as if made on the date of maturity or the
date fixed for redemption, provided that interest will accrue for the period of
any such extension.

         This Bond will be governed by and construed in accordance with the
laws of the State of Tennessee.

         Tennessee Code Annotated Sections 7-53-305(a) and 67-5-205(a), as
amended, provide that this Bond and the income therefrom shall be exempt from
all taxes in the State of Tennessee. Other provisions of the Tennessee Code
Annotated indicate, however, that the Bond and/or interest thereon may be
subject to Tennessee inheritance, transfer and gift taxes and to the Tennessee
corporate excise and franchise taxes.

         All acts, conditions and things required to happen, exist and be
performed precedent to and in the issuance of this Bond and the execution of
the Indenture have happened, exist and have been performed as so required.




                                    C-1-13

<PAGE>   108

         IN WITNESS WHEREOF, The Industrial Development Board of the County of
Hamilton, Tennessee has caused this Bond to be executed with the manual
signatures of its Chairman and its Acting Secretary, all as of _______________.

                                         THE INDUSTRIAL DEVELOPMENT BOARD OF 
                                         THE COUNTY OF HAMILTON, TENNESSEE


                                         By:     
                                            -----------------------------------
                                                  Chairman

                                         Attest:
                                                -------------------------------
                                                  Acting Secretary












                                    C-1-14

<PAGE>   109


                         CERTIFICATE OF AUTHENTICATION



         This Bond is one of the Bonds of the series designated therein and
issued under the provisions of the within-mentioned Indenture.

                                          FIRST UNION NATIONAL BANK,
                                          as Trustee


                                          By:     
                                             ----------------------------------
                                                  Authorized Representative



Date of Authentication:
                       --------------







                                    C-1-15

<PAGE>   110


                                   ASSIGNMENT


  FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto


PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE






                                          -------------------------------------

the within bond of the ____________________________ and does hereby constitute
and appoint _______________________________ attorney to transfer the said bond
on the books of the within named Issuer, with full power of substitution in the
premises.



Dated:


In the presence of:                       -------------------------------------
                                                       Bondholder



Signature Guaranteed:


------------------------

NOTICE:           Signature(s) must be guaranteed by a member
                  firm of a Medallion Program acceptable to the
                  Trustee.






                                    C-1-16

<PAGE>   111


                                   EXHIBIT A

                 FORM OF BONDHOLDER'S OPTIONAL RETENTION NOTICE


                                                     Date:                     
                                                          ---------------------


First Union National Bank, as
Trustee (the "Trustee") under the Trust Indenture dated 
as of January 1, 1999 (the "Indenture") between the 
Trustee and The Industrial Development Board of the 
County of Hamilton, Tennessee

Attention:     Corporate Trust Department

         Re:   $4,500,000 The Industrial Development Board of the County of
               Hamilton, Tennessee Industrial Development Revenue Bonds
               (Sterile Recoveries, Inc. Project), Taxable Series 1999

         1. The undersigned hereby certifies that it is the lawful registered
owner of the Bonds described above.

         2. Pursuant to the provisions of the Indenture, the undersigned hereby
irrevocably elect(s) to hold the Bonds, which will bear interest at the Fixed
Rate (as defined in, and to be determined as described in, the Indenture),
effective on the Conversion Date (as defined in the Indenture) specified in the
notice from the Trustee (the "Notice of Conversion").

         3. The undersigned hereby acknowledges that it has received the Notice
of Conversion and that it acknowledges, without limitation, that (i) the Bonds
will not be supported by an Alternate Credit Facility after the Conversion
Date, (ii) the rating on the Bonds, if any, may be reduced or withdrawn after
the Conversion Date, and (iii) after the tenth day preceding he Conversion Date
the undersigned will not be entitled to deliver Bonds for purchase pursuant to
Section 2.3 of the Indenture.

         4. The undersigned hereby acknowledges that, even if it fails to
deliver such Bonds as agreed pursuant to paragraph 5 hereof, the bonds will
nevertheless bear the Fixed Rate effective on the Conversion Date.

         5. The undersigned hereby undertakes to deliver the Bonds to First
Union National Bank, as Tender Agent, at its corporate trust office located at
150 Fourth Avenue, North, TN 1327, Nashville, Tennessee 37219, Attention:
Corporate Trust Department, to be stamped with the legend set forth in Section
2.2(e) of the Indenture not later than 10:00 A.M. prevailing Eastern time on
the Conversion Date. 





                                    C-1-17

<PAGE>   112

Name of Bondholder:
                   ------------------------------
                      (Type or Print)

Signature:
          ---------------------------------------
Guaranteed by:
              -----------------------------------

Name of Institution:
                    -----------------------------

Date:
     --------------------------------------------


                       [End of Exhibit A to Form of Bond]








                                    C-1-18

<PAGE>   113


                                   EXHIBIT B

                  FORM OF BONDHOLDER'S OPTIONAL TENDER NOTICE


                                                     Date:
                                                          ---------------------


First Union National Bank, as
Trustee (the "Trustee") under the Trust Indenture dated 
as of January 1, 1999 (the "Indenture") between the 
Trustee and The Industrial Development Board of the 
County of Hamilton, Tennessee

Attention:     Corporate Trust Department

         Re:   $4,500,000 The Industrial Development Board of the County of
               Hamilton, Tennessee Industrial Development Revenue Bonds
               (Sterile Recoveries, Inc. Project), Taxable Series 1999

         1. The undersigned hereby certifies that it is the lawful registered
owner of the Bonds described above.

         2. Pursuant to the provisions of the Indenture, the undersigned hereby
irrevocably request(s) the purchase of the Bonds described above.

         3. The date on which the Bonds shall be purchased shall be
______________, ____ [Note: This date must be a Business Day (as defined in the
Indenture) which is at least seven days after delivery of this notice to the
Tender Agent].

         4. The person or persons to whom or to whose order the proceeds of the
purchase of the Bonds are to be paid is ___________________, and the address or
addresses of such payee or payees is _________________________________________.

         5. The undersigned hereby irrevocably authorizes and instructs the
Trustee or the Bond Registrar (as defined in the Bonds) to the effect the
transfer of such Bonds (or any Bond(s) exchanged therefor), upon payment of the
purchase price therefor, to the purchaser(s) thereof, whether or not it
delivers such Bonds as agreed pursuant to paragraph (7) hereof.

         6. The undersigned hereby acknowledges that, even it if fails to
deliver such Bonds, the bonds may nevertheless be purchased pursuant to the
Indenture, and that, in any event, on and after the proposed purchase date set
forth in paragraph 3 hereof, the bonds will cease to be outstanding for all
purposes under the Indenture, to evidence the indebtedness of the Issuer with
respect thereto and to bear interest.




                                    C-1-19

<PAGE>   114

         7. The undersigned hereby undertakes to deliver the Bonds to you, as
Tender Agent, at 150 Fourth Avenue, North, TN 1327, Nashville, Tennessee 37219,
Attention: Corporate Trust Department at least five days prior to the proposed
purchase date set forth in paragraph 3 above duly endorsed in blank for
transfer.


Name of Bondholder:
                   ------------------------------
                      (Type or Print)

Signature:
          ---------------------------------------
Guaranteed by:
              -----------------------------------

Name of Institution:
                    -----------------------------

Date:
     --------------------------------------------


                       [End of Exhibit A to Form of Bond]







                                    C-1-20

<PAGE>   115


                                  EXHIBIT C-2

                         Form of Tax-Exempt Series Bond

                    THE INDUSTRIAL DEVELOPMENT BOARD OF THE
                         COUNTY OF HAMILTON, TENNESSEE
                      INDUSTRIAL DEVELOPMENT REVENUE BONDS
             (STERILE RECOVERIES, INC. PROJECT), TAX-EXEMPT SERIES

                          CUSIP NO.
                                   ------------------

                                                                        No. R-1

Registered Owner: Cede & Co.

Principal Amount: $
                   -----------------

Maturity Date: First Business Day of                 ,
                                     ----------------  ------

Initial Interest Rate:       %
                      -------

Interest Payment Dates: The first Business Day of each February, May, August 
                        and November commencing the first Business Day of
                        _______________, ____, and ending on the Maturity
                        Date, the Conversion Date (hereinafter defined) and 
                        the Maturity Date.

Original Delivery Date:
                       -----------------------


         THE ISSUER HAS ESTABLISHED A BOOK ENTRY SYSTEM OF REGISTRATION FOR
THIS BOND. EXCEPT AS SPECIFICALLY PROVIDED OTHERWISE IN THE INDENTURE, CEDE &
CO., AS NOMINEE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), WILL BE THE REGISTERED OWNER AND WILL HOLD THIS BOND ON BEHALF OF EACH
BENEFICIAL OWNER HEREOF. BY ACCEPTANCE OF A CONFIRMATION OF PURCHASE, DELIVERY
OR TRANSFER, EACH BENEFICIAL OWNER OF THIS BOND SHALL BE DEEMED TO HAVE AGREED
TO SUCH ARRANGEMENT. CEDE & CO., AS REGISTERED OWNER OF THIS BOND, MAY BE
TREATED AS THE OWNER OF IT FOR ALL PURPOSES.

         UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
TO THE TRUSTEE FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY BOND
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF 




                                     C-2-1

<PAGE>   116

DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.

         THE BONDS SHALL NOT BE GENERAL OBLIGATIONS OF THE ISSUER BUT LIMITED
AND SPECIAL OBLIGATIONS PAYABLE SOLELY FROM THE AMOUNTS PAYABLE UNDER THE LEASE
AGREEMENT AND OTHER AMOUNTS SPECIFICALLY PLEDGED THEREFOR UNDER THE INDENTURE,
AND SHALL BE A VALID CLAIM OF THE RESPECTIVE OWNERS THEREOF ONLY AGAINST THE
DESIGNATED ACCOUNTS OF THE BOND FUND AND OTHER MONEYS HELD BY THE TRUSTEE AND
THE AMOUNTS PAYABLE UNDER THE LEASE AGREEMENT OR OTHERWISE PLEDGED THEREFOR,
WHICH AMOUNTS ARE HEREBY PLEDGED, ASSIGNED AND OTHERWISE SECURED FOR THE EQUAL
AND RATABLE PAYMENT OF THE BONDS AND SHALL BE USED FOR NO OTHER PURPOSE THAN TO
PAY THE PRINCIPAL OF, PREMIUM, IF ANY, AND INTEREST ON THE BONDS, EXCEPT AS MAY
BE OTHERWISE EXPRESSLY AUTHORIZED IN THE INDENTURE. THE BONDS DO NOT CONSTITUTE
AN INDEBTEDNESS OF THE ISSUER OR A LOAN OF CREDIT THEREOF WITHIN THE MEANING OF
ANY CONSTITUTIONAL OR STATUTORY PROVISIONS.

         THIS BOND AND THE INTEREST THEREON SHALL NOT BE DEEMED TO CONSTITUTE A
DEBT OR A PLEDGE OF THE FAITH AND CREDIT OF THE STATE OF TENNESSEE OR ANY
POLITICAL SUBDIVISION THEREOF, INCLUDING HAMILTON COUNTY, TENNESSEE. HAMILTON
COUNTY, TENNESSEE SHALL NOT IN ANY EVENT BE LIABLE FOR THE PAYMENT OF THE
PRINCIPAL OF, PREMIUM, IF ANY, OR IN ANY EVENT BE LIABLE FOR THE PAYMENT OF THE
PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THIS BOND, OR FOR THE PERFORMANCE
OF ANY PLEDGE, MORTGAGE, OBLIGATION OR AGREEMENT OF ANY KIND WHATSOEVER HEREIN
OR INDEBTEDNESS BY THE ISSUER, AND NEITHER THIS BOND NOR ANY OF THE ISSUER'S
AGREEMENTS OR OBLIGATIONS DESCRIBED HEREIN OR OTHERWISE SHALL BE CONSTRUED OR
CONSTITUTE AN INDEBTEDNESS OF HAMILTON COUNTY, TENNESSEE, WITHIN THE MEANING OF
ANY CONSTITUTIONAL OR STATUTORY PROVISION WHATSOEVER.

         THIS BOND MAY BE TENDERED FOR PURCHASE AS DESCRIBED HEREIN. DELIVERY
OF AN OPTIONAL TENDER NOTICE WITH RESPECT TO THIS BOND CONSTITUTES AN
IRREVOCABLE OFFER TO SELL THIS BOND ON THE DATE SPECIFIED THEREIN AND IS
BINDING ON SUBSEQUENT OWNERS OF THIS BOND. IN THE EVENT THE OWNER OF THIS BOND
FAILS TO DELIVER THIS BOND TO THE TENDER AGENT ON THE SPECIFIED DATE, THE OWNER
HEREOF SHALL THEREAFTER BE ENTITLED ONLY TO PAYMENT OF THE PURCHASE PRICE AND
NOT TO THE BENEFITS OF THE INDENTURE. THIS BOND ALSO IS SUBJECT TO MANDATORY
TENDER AND PURCHASE AS DESCRIBED HEREIN.




                                     C-2-2

<PAGE>   117

         The Industrial Development Board of the County of Hamilton, Tennessee
(herein called the "ISSUER"), a public non-profit corporation, organized and
existing under the laws of the State of Tennessee, for value received, hereby
promises to pay (but only from the sources hereinafter mentioned) to the
Registered Owner set forth above, or registered assigns, the Principal Amount
set forth above on the Maturity Date set forth above and to pay (but only from
the sources hereinafter mentioned) interest thereon from the Interest Payment
Date immediately preceding the Date of Authentication endorsed hereon, unless
this Bond is authenticated on an Interest Payment Date in which event it will
bear interest from such date, payable on each Interest Payment Date, until
payment of said principal sum has been made or provided for, at the rate or
rates per annum set forth below. Principal and interest and premium, if any,
will be paid in any coin or currency of the United States of America which, at
the time of payment, is legal tender for the payment of public and private
debts. Interest will be paid by check mailed on the Interest Payment Date to
the person in whose name this Bond is registered at the close of business on
the Regular Record Date (as hereinafter defined) immediately preceding such
Interest Payment Date; provided, however, that while the Bonds (as hereinafter
defined) bear interest at the Variable Rate (as hereinafter defined) interest
will also be payable by wire transfer to the account at a member bank of the
Federal Reserve System of any registered owner of Bonds in the aggregate
principal amount of One Million Dollars ($1,000,000) or more at the written
request (identifying such account by number) of such owner received by the
Trustee (as hereinafter defined) on or before the Regular Record Date. While
the Bonds bear interest at the Variable Rate (as hereinafter defined), the
Regular Record Date will be the close of business on the Business Day
immediately preceding each Interest Payment Date. While the Bonds bear interest
at the Fixed Rate (as hereinafter defined), the Regular Record Date will be the
fifteenth (15th) day of the calendar month immediately preceding each Interest
Payment Date. Any such interest not so punctually paid or duly provided for
will forthwith cease to be payable to the owner on such Regular Record Date,
and may be paid to the person in whose name this Bond is registered at the
close of business on a Special Record Date (as defined in the Indenture
(hereinafter defined)) for the payment of such defaulted interest to be fixed
by the Trustee, or may be paid at any time in any other lawful manner, all as
more fully provided in the Indenture. Principal of and redemption premium, if
any, will be paid upon surrender of this Bond at the corporate trust office of
First Union National Bank, as trustee (said banking institution and any
successor trustee or co-trustee under the Indenture being herein called the
"TRUSTEE"), in Nashville, Tennessee. Payment of the Purchase Price of Bonds
purchased as described herein will be paid, upon surrender of such Bonds, at
the office of First Union National Bank in Nashville, Tennessee (in such
capacity, herein called the "TENDER AGENT").

         This Bond is issued under and pursuant to the Constitution and laws of
the State of Tennessee (the "STATE"), particularly the provisions of Chapter 53
of Title 7 of Tennessee Code Annotated (the "ACT").

         This Bond and the issue of which it is a part and the Purchase Price
thereof, the premium, if any, and interest thereon are limited obligations of
the Issuer payable by the Issuer solely from the revenues and receipts derived
from the Lease Agreement (as hereinafter defined), which revenues and receipts
have been pledged and assigned to the Trustee to secure payment thereof




                                     C-2-3

<PAGE>   118

and from amounts received pursuant to the Credit Facility (as hereinafter
defined). This Bond and the interest hereon will not constitute an indebtedness
or a charge against the general credit or assets of the Issuer within the
meaning of any constitutional provision or statutory limitation and shall never
constitute nor give rise to any pecuniary liability of the Issuer, but will be
a limited obligation of the Issuer payable solely from the revenues and other
funds pledged therefor and will not be payable from any assets or funds of the
Issuer other than the revenues and other funds pledged therefor, and neither
the faith and credit nor the taxing power of the State or any political
subdivision or any agency thereof is pledged to the payment of the principal of
or the interest on this Bond.

         This Bond is one of the Bonds of a duly authorized issue of variable
rate industrial revenue bonds of the Issuer in the aggregate principal amount
of $_____________ and designated The Industrial Development Board of the County
of Hamilton, Tennessee Industrial Development Revenue Bonds (Sterile
Recoveries, Inc. Project), Tax-Exempt Series (the "BONDS").

         The Bonds have been issued for the purpose of financing the
acquisition, construction, installation and equipping of an industrial facility
(herein called the "PROJECT") and to pay a portion of the costs of issuing the
Bonds.

         The Bonds are issued under and pursuant to a Trust Indenture, dated as
of February 1, 1999 (said Trust Indenture, together with all such supplements
and amendments thereto as therein permitted, being herein called the
"INDENTURE"), between the Issuer and the Trustee. An executed counterpart of
the Indenture is on file at the principal corporate trust office of the
Trustee. Reference is hereby made to the Indenture for the provisions, among
others, with respect to the custody and application of the proceeds of the
Bonds; the collection and disposition of revenues; a description of the funds
charged with and pledged to the payment of the principal of and interest on and
any other amounts payable under the Bonds; the nature and extent of the
security; the terms and conditions under which the Bonds are or may be issued;
and the rights, duties and obligations of the Issuer and of the Trustee and the
rights of the owners of the Bonds, and, by the acceptance of this Bond, the
owner hereof assents to all of the provisions of the Indenture.

         The Issuer has entered into a Lease Agreement, dated as of February 1,
1999 (herein called the "LEASE AGREEMENT"), with First Security Bank, National
Association, as Owner Trustee under SRI Realty Trust 1998-1 (the "LESSEE"),
under which the Issuer has agreed to use the proceeds of the Bonds to provide
financing for the acquisition, construction, installation and equipping of
certain manufacturing buildings and facilities directly related or ancillary
thereto and to pay a portion of the costs of issuing the Bonds, and in
consideration therefor, the Lessee has agreed to make lease payments in
installments, bearing interest at a rate or rates and payable at times
corresponding to the principal amount of, installments of principal of,
interest rates on and due dates of the Bonds. The Lease Agreement also provides
for the payment by the Lessee of certain fees and expenses of the Issuer and
the Trustee, and the Lease Agreement further obligates the Lessee (a) to pay
the cost of maintaining the Project in good repair in all material respects and
keeping the same properly insured and (b) to maintain a Credit Facility (as
hereinafter defined) 




                                     C-2-4

<PAGE>   119

during the period of time the Bonds bear interest at the Variable Rate (herein
called the "VARIABLE RATE PERIOD").

         As security for the payment of the Bonds, all right, title and
interest of the Issuer in (a) the Lease Agreement (except certain Issuer
Reserved Rights defined in the Indenture); (b) all money and securities at any
time on deposit in, in transit to or credited to any account or Fund created
under the Indenture, including without limitation the Project Fund and the Bond
Fund (as defined in the Indenture), but excluding the Rebate Fund (as defined
in the Indenture); and (c) Revenues (as defined in the Indenture) have been
assigned to the Trustee under the Indenture and pledged to the payment of the
principal of, and the redemption premium (if any) and the interest on, the
Bonds. The Project shall not otherwise constitute any part of the security for
the payment of the Bonds.

         Reference to the Indenture is hereby made for a description of the
aforesaid Bond Fund which is charged with, and pledged to, the payment of the
principal of, and the redemption premium (if any) and the interest on, the
Bonds, the nature and extent of the security, the rights, duties and
obligations of the Issuer, the Lessee and the Trustee, the rights of the owners
of the Bonds, the terms and conditions under and upon the occurrence of which
the Indenture and the Lease Agreement may be modified and the terms and
conditions under and upon the occurrence of which the lien of the Indenture may
be defeased as to this Bond prior to the maturity or redemption date hereof, to
all of the provisions of which the owner hereof, by the acceptance of this
Bond, assents.

         Credit Facility. The Lessee has entered into a Credit Agreement, dated
as of February 1, 1999 (herein called the "REIMBURSEMENT AGREEMENT"), by and
between the Lessee and First Union National Bank (in such capacity, herein
called the "BANK").

         Pursuant to the Reimbursement Agreement, the Lessee has caused a
Letter of Credit issued by the Bank (herein called the "LETTER OF CREDIT"; such
Letter of Credit and any extensions or renewals thereof or any amendment
thereto and any Alternate Credit Facility (as hereinafter defined) referred to
herein as the "CREDIT FACILITY") to be delivered to the Trustee. The Trustee
will be entitled under the Letter of Credit to draw up to an amount of
$4,725,000 of which (a) $4,500,000 will be available for the payment of
principal or that portion of the Purchase Price corresponding to principal of
the Bonds and (b) $225,000 will support the payment of up to one hundred twenty
(120) days' interest or that portion of the Purchase Price corresponding to
interest on the Bonds at an assumed rate of fifteen percent (15%) per annum,
which is the maximum rate of interest borne by the Bonds. Subject to the
provisions of the Indenture, the Lessee is required during the Variable Rate
Period to provide an alternate credit facility with terms and provisions
substantially the same as those of the Letter of Credit (an "ALTERNATE CREDIT
FACILITY") prior to the termination of Letter of Credit. During the Variable
Rate Period unless the Letter of Credit or the then current Alternate Credit
Facility is replaced prior to its expiration in accordance with the terms of
the Indenture, this Bond will become subject to mandatory redemption as
provided in the Indenture.




                                     C-2-5

<PAGE>   120


         Source of Funds. The principal of, premium (if any) and interest on
the Bonds are payable solely from lease payments under the Lease Agreement and
from any other moneys held by the Trustee under the Indenture for such purpose,
including, with respect to principal and interest only, moneys drawn by the
Trustee under the Letter of Credit or Alternate Credit Facility for the benefit
of the Bondholders (the Bank as the issuer of the Letter of Credit and the
institution issuing any Alternate Credit Facility are herein called the "CREDIT
FACILITY ISSUER"). Except as otherwise specified in the Indenture, this Bond is
entitled to the benefits of the Indenture equally and ratably both as to
principal (and redemption and Purchase Price) and interest with all other Bonds
issued under the Indenture.

                                 INTEREST RATES

         Initial Interest Rate. The Bonds will bear interest from the Original
Delivery Date specified above to _______________ at the Initial Interest Rate.

         Variable Rate. The Bonds will initially bear interest from the
Original Delivery Date (as defined in the Indenture) through
_____________________ at the Initial Interest Rate stated thereon as determined
in accordance with the Indenture. Thereafter, prior to and including the
Conversion Date, the Bonds will bear interest at a floating rate determined
weekly by the Remarketing Agent as set forth below (the "VARIABLE RATE"). The
Variable Rate will be equal to the rate of interest certified to the Trustee by
the Remarketing Agent on and as of each Wednesday (or the next Business Day if
such Wednesday is not a Business Day) (the "DETERMINATION DATE") as the minimum
rate of interest necessary, in the judgment of the Remarketing Agent taking
into account market conditions prevailing on the Determination Date, to enable
the Remarketing Agent to arrange for the sale of all of the Bonds in the
secondary market on the Determination Date at a price equal to the principal
amount thereof (plus accrued interest to the date of settlement). In the event
the Remarketing Agent fails to certify such rate for four (4) consecutive
Calculation Periods for the Bonds, such rate for the Bonds for each Calculation
Period thereafter (if none is certified by the Remarketing Agent) shall be
ninety percent (90%) of the yield for United States Treasury bills maturing
approximately thirty (30) days after the Determination Date for such
Calculation Period as published by The Wall Street Journal on such
Determination Date (or the next preceding Business Day on which The Wall Street
Journal is published if The Wall Street Journal is not published on the
Determination Date) (or, if The Wall Street Journal is no longer published,
then any reasonably equivalent financial publication selected by the
Remarketing Agent) (or the next Business Day on which such other publication is
published if not published on the Determination Date). If, for any reason, the
Variable Rate is not determined as described above or is held to be invalid or
unenforceable by a court of competent jurisdiction for any period, the interest
rate for each such period shall be equal to the Maximum Rate (as defined in the
Indenture) then in effect. While the Bonds bear interest at a Variable Rate,
interest on the Bonds shall be computed on the basis of a year of 365 or 366
days, as applicable, for the number of days actually elapsed and shall be
payable on each Interest Payment Date.




                                     C-2-6

<PAGE>   121

               Fixed Rate. (d) The interest rate on this Bond will be converted
to the Fixed Rate upon an election by the Lessee pursuant to the Indenture to
convert the rate of interest on all Bonds then outstanding from the Variable
Rate to the Fixed Rate (herein called the "FIXED RATE ELECTION"), on any
Interest Payment Date by giving written notice, accompanied by the items
described in Section 2.2(e) of the Indenture, to the Issuer, the Trustee, the
Credit Facility Issuer, the Tender Agent and the Remarketing Agent, which
notice will specify, among other things, the name and address of the Placement
Agent which has agreed to use its best efforts to arrange for the sale of any
Bonds to be tendered or deemed tendered for purchase on the Conversion Date
(herein called the "PLACEMENT AGENT"). At least twenty-five (25) days prior to
the Conversion Date, the Placement Agent will determine a rate (the
"PRELIMINARY FIXED RATE") which will be the minimum rate of interest on the
Bonds determined by the Placement Agent to be the fixed annual rate of interest
(for the period beginning on the Conversion Date and ending on the Maturity
Date) necessary, in the judgment of the Placement Agent taking into account
market conditions prevailing on the date such rate is determined, to enable the
Placement Agent to arrange for the sale of all of the Bonds in the secondary
market at a price equal to the principal amount thereof if the Bonds were
tendered for purchase on the Conversion Date. The Placement Agent will promptly
notify the Trustee of the Preliminary Fixed Rate.

               (e) As soon after the receipt of notice from the Placement Agent
of the Preliminary Fixed Rate as practicable (but in no event more than two (2)
Business Days thereafter) a notice will be mailed by the Trustee to each
registered owner of Bonds stating, among other things, (1) the Preliminary
Fixed Rate, (2) that, depending on market conditions, the Fixed Rate may be
higher but in no event will be lower than the Preliminary Fixed Rate, (3) the
Conversion Date, (4) that after the tenth (10th) day preceding the Conversion
Date, the owner will not be entitled to tender this Bond for purchase as
described below, (5) that payment of this Bond will not be supported by an
Alternate Credit Facility after the Conversion Date, (6) that the rating on the
Bonds (if at such time there is a rating in effect on the Bonds) may be reduced
or withdrawn on the Conversion Date, (7) that unless such registered owner
delivers to the Trustee a notice (an "OPTIONAL RETENTION NOTICE") in the form
attached hereto as Exhibit A at least ten days prior to the Conversion Date,
this Bond will be deemed tendered for purchase on the Conversion Date, (8) that
in order to receive payment of the Purchase Price of any Bond which is deemed
to have been tendered, the registered owner of such Bond must deliver such Bond
to the office of the Tender Agent before 10:00 a.m. on the Conversion Date
specifying such address, and (9) that interest on any Bond deemed to have been
tendered will be payable only to (but not including) the Conversion Date.

               (f) Upon the Conversion Date stated in such notice, the Fixed
Rate to be borne by the Bonds for the period beginning on the Conversion Date
until the Maturity Date or prior redemption of the Bonds (the "FIXED RATE"),
will be determined as follows:

                   (1) if any of the Bonds have been tendered or deemed
               tendered for purchase (herein called the "TENDERED BONDS"),
               then:



                                     C-2-7

<PAGE>   122

                       (A) if the Placement Agent shall have arranged for the
                   sale of any or all of the Tendered Bonds, at a price equal
                   to the principal amount thereof, the Fixed Rate will be
                   equal to the interest rate at which all such Bonds were sold
                   by the Placement Agent, provided that all such Bonds will be
                   sold at a rate greater than or equal to the Preliminary
                   Fixed Rate; and

                       (B) if the Placement Agent shall have arranged for the
                   sale of none of the Tendered Bonds, the Fixed Rate will be
                   equal to the Preliminary Fixed Rate; or

                   (2) if all owners of the outstanding Bonds elect to retain
               such Bonds, the Fixed Rate will be equal to the Preliminary
               Fixed Rate.

               (g) If, for any reason, the Fixed Rate is held to be invalid or
unenforceable by a court of competent jurisdiction, the Fixed Rate will be the
Maximum Rate (as defined in the Indenture) then in effect.

               (h) The Fixed Rate will be computed on the basis of a three
hundred sixty (360)-day year, computed for the actual number of days elapsed,
and will be payable on each Interest Payment Date after the Conversion Date
until the principal of, and premium, if any, and interest on the Bonds shall
have been paid in full.

         Interest Rate Determination Binding. The determination of the interest
rate on the Bonds by the Remarketing Agent or Placement Agent, as appropriate,
in accordance with the terms of the Indenture will be conclusive and binding
upon the owners of the Bonds, the Issuer, the Lessee, the Trustee, the
Remarketing Agent, the Placement Agent, the Tender Agent and the Credit
Facility Issuer.

         No Usury. Anything herein to the contrary notwithstanding, in no event
shall the interest rate borne by the Bonds exceed the maximum contract rate of
interest permitted by the laws of the State.

                              REDEMPTION OF BONDS

               Optional Redemption. (a) While the Bonds bear interest at the
Variable Rate, the Bonds will be subject to redemption upon the written
direction of the Issuer, given at the request of the Lessee, with the consent
of the Credit Facility Issuer, on any Interest Payment Date and on the
Conversion Date, in whole or in part, at redemption price equal to one hundred
percent (100%) of the principal amount thereof without premium plus interest
accrued to the redemption date.

               (b) While the Bonds bear interest at the Fixed Rate, the Bonds
will be subject to redemption upon the written direction of the Issuer, given
at the request of the Lessee, in whole on any date, or in part on any Interest
Payment Date, occurring on or after the dates set forth 




                                     C-2-8

<PAGE>   123

below, at the redemption prices (with a premium expressed as a percentage of
principal amount to be redeemed) set forth below plus interest accrued to the
redemption date as follows:

         Commencement of
         Redemption Period                  Redemption Price
         -----------------                  ----------------

         The Business Day four (4)          103% declining by 1/2% on each 
         years from the Conversion          succeeding anniversary date of the 
         Date                               first day of the redemption period 
                                            until reaching 100% and thereafter 
                                            at 100%


               (c) The Bonds will be subject to redemption upon the written
direction of the Issuer, given at the request of the Lessee, at any time in
whole or in part at a redemption price equal to one hundred percent (100%) of
the principal amount thereof plus interest accrued to the redemption date in
the event of damage, destruction or condemnation of the Project, all as more
fully described in Section 7.1(b) of the Indenture.

               Mandatory Redemption (a). The Bonds will be subject to mandatory
redemption in whole on any date at a redemption price equal to one hundred
percent (100%) of the principal amount thereof plus accrued interest to the
redemption date within one hundred eighty (180) days after receipt by the
Trustee of a written notice of a Determination of Taxability (as defined in the
Lease Agreement).

               (b) During the Variable Rate Period, the Bonds will be subject
to mandatory redemption in whole on the Interest Payment Date occurring closest
to but not after fifteen (15) days prior to the date of expiration of the then
current Credit Facility unless prior to such date an Alternate Credit Facility
has been provided in accordance with the Indenture, at a redemption price or
Purchase Price equal to one hundred percent (100%) of the principal amount
thereof, without premium, plus interest accrued to the redemption date.

               (c) The Bonds are subject to redemption without premium from
proceeds of the Bonds not used to complete the Project or from moneys drawn
under the Credit Facility for which the Credit Facility Issuer is reimbursed
from such excess proceeds in accordance with the provisions of the Indenture,
which redemption date shall be no more than sixty (60) days following the date
of transfer of moneys to the Bond Fund established under the Indenture from the
Project Fund established under the Indenture.

         Purchase in Lieu of Redemption. The Bonds are subject to optional call
and purchase in whole prior to the Conversion Date on any Interest Payment Date
upon the written direction of the Issuer, given at the request of the Lessee,
which purchase may be in lieu of redemption, from moneys deposited with the
Trustee sufficient for payment of 100% of the principal amount due upon such
call together with accrued interest on the Bonds to the call date.




                                     C-2-9

<PAGE>   124

         Notice of Redemption and Selection of Bonds. Any notice of redemption,
identifying the Bonds or portions thereof to be redeemed, will be given not
more than sixty (60) days and not less than twenty (20) days prior to the
redemption date, by mailing a copy of the redemption notice by first class mail
to the owner of each Bond to be redeemed in whole or in part at the address
shown on the Bond Register (as defined in the Indenture) maintained by the Bond
Registrar (as hereinafter described). Notice of optional redemption may be
conditioned upon the deposit of moneys with the Trustee before the date fixed
for redemption and such notice will be of no effect unless such moneys are so
deposited. All Bonds so called for redemption, including Bonds purchased by the
Lessee as provided in the Indenture but not yet surrendered for payment of the
Purchase Price, will cease to bear interest on the specified redemption date
provided funds for the payment of their redemption price and any accrued
interest payable on the specified redemption date are on deposit at the
principal place of payment at that time. If less than all the Bonds are to be
redeemed, the particular Bonds to be called for redemption will be selected in
the following order of priority: first, Bonds pledged to the Credit Facility
Issuer; second, Bonds owned by the Lessee and third, Bonds selected by any
random or other method determined by the Trustee in its sole discretion.

         Mandatory Tender for Purchase Upon Conversion to Fixed Rate. The Bonds
will be subject to mandatory purchase in whole (and not in part) on the
Conversion Date at a Purchase Price equal to one hundred percent (100%) of the
principal amount thereof plus interest accrued thereon to the date of purchase;
provided that there will not be so purchased (a) Bonds or portions thereof in
authorized denominations which the owners have irrevocably elected to retain on
the Conversion Date in accordance with the Indenture by the delivery of an
Optional Retention Notice in accordance with the provisions of Section 2.2(e)
of the Indenture, or (b) Bonds issued in exchange for or upon the registration
of transfer of Bonds referred to in clause (a) above.

         THE OWNER OF THIS BOND, BY ACCEPTANCE HEREOF, AGREES TO THE MANDATORY
PURCHASE OF THIS BOND AS PROVIDED IN THE INDENTURE, AND AGREES THAT THIS BOND
WILL BE PURCHASED ON THE DATE SPECIFIED UPON DEPOSIT WITH THE TRUSTEE OF AN
AMOUNT SUFFICIENT TO PAY THE PURCHASE PRICE HEREOF. THE OWNER OF THIS BOND ALSO
UNDERSTANDS AND AGREES THAT IN THE EVENT THE OWNER FAILS TO DELIVER THIS BOND,
PROPERLY ENDORSED FOR TRANSFER, TO THE TRUSTEE ON THE DATE SPECIFIED, INTEREST
WILL CEASE TO ACCRUE HEREON ON SUCH SPECIFIED DATE AND THE OWNER HEREOF WILL
THEREAFTER BE ENTITLED ONLY TO PAYMENT OF THE PURCHASE PRICE AND NOT TO THE
BENEFIT OF THE INDENTURE.

         Purchase at Option of the Owner During Variable Rate Period. While the
Bonds bear interest at the Variable Rate, any Bond or portion thereof in an
authorized denomination will be purchased on the demand of the owner thereof,
on any Business Day at a Purchase Price equal to one hundred percent (100%) of
the principal amount thereof plus interest accrued to the date of purchase upon
delivery to the Tender Agent of a notice (herein called an "OPTIONAL TENDER
NOTICE") in the form attached hereto as Exhibit B specifying the date on which
such Bond will be purchased, which date will be a Business Day not prior to the
seventh (7th) day after the date of delivery of the Optional Tender Notice. To
receive payment of the Purchase Price, the owner will 




                                    C-2-10


<PAGE>   125

be required to deliver such Bond to the Tender Agent, accompanied by an
executed form of assignment and any other instruments of transfer satisfactory
to the Trustee, not less than five (5) days prior to the purchase date
specified in such notice as provided in the Indenture; provided, however, that
any owner which is an investment company registered pursuant to the Investment
Company Act of 1940 may deliver such Bond to the Tender Agent at or prior to
10:00 a.m. on the date of purchase. No purchase of Bonds at the option of the
owner thereof or on the Conversion Date will be deemed to be a payment or
redemption of the Bonds or any portion thereof. Notwithstanding the foregoing,
no owner will have a right to tender such owner's Bond(s) for purchase as
described in this paragraph following acceleration of the payment of the Bonds
pursuant to the terms of the Indenture or after the Conversion Date.

         THE OWNER OF THIS BOND, BY ACCEPTANCE HEREOF, AGREES THAT DELIVERY OF
THE WRITTEN NOTICE DESCRIBED IN THE PRECEDING PARAGRAPH BY THE OWNER
CONSTITUTES AN IRREVOCABLE OFFER TO SELL THIS BOND ON THE DATE SPECIFIED, AND
THAT THIS BOND WILL BE PURCHASED ON SUCH DATE UPON DEPOSIT WITH THE TENDER
AGENT OF AN AMOUNT SUFFICIENT TO PAY THE PURCHASE PRICE HEREOF. THE OWNER OF
THIS BOND ALSO UNDERSTANDS AND AGREES THAT IN THE EVENT THE OWNER FAILS TO
DELIVER THIS BOND, PROPERLY ENDORSED FOR TRANSFER, TO THE TENDER AGENT ON THE
DATE SPECIFIED IN THE NOTICE, THIS BOND WILL BE HELD BY THE OWNER AS AGENT FOR
THE LESSEE, INTEREST WILL CEASE TO ACCRUE HEREON AS OF THE DATE SPECIFIED IN
THE NOTICE AND THE OWNER HEREOF WILL THEREAFTER BE ENTITLED ONLY TO PAYMENT OF
THE PURCHASE PRICE AND NOT TO THE BENEFITS OF THE INDENTURE, AND THE ISSUER
WILL, TO THE EXTENT PERMITTED BY LAW, EXECUTE AND THE TRUSTEE WILL AUTHENTICATE
AND DELIVER A SUBSTITUTE BOND IN LIEU OF THE UNDELIVERED BOND.

         Tender Agent. The Issuer has appointed First Union National Bank as
Tender Agent. The Tender Agent may be changed at any time by the Lessee with
the consent of the Issuer and the Trustee.

         Authorized Denominations. Subject to the provisions of the Indenture,
the Bonds are issuable as registered Bonds in the denomination of One Hundred
Thousand Dollars ($100,000) or any integral multiple of $5,000 in excess
thereof; provided that if less than $100,000 in principal amount of Bonds is
Outstanding (as defined in the Indenture), one Bond shall be issued in such
smaller denomination. Subject to the limitations provided in the Indenture and
upon payment of any tax or governmental charge, if any, Bonds may be exchanged
for a like aggregate principal amount of Bonds of other authorized
denominations.

         Transfer. This Bond is transferable by the registered owner hereof or
his duly authorized attorney at the corporate trust office of First Union
National Bank, as Bond Registrar, in Nashville, Tennessee, in compliance with
the terms and conditions set forth in the Indenture and upon surrender of this
Bond, provided that transfers in connection with the remarketing hereof will be
made at the corporate trust office of the Trustee in Nashville, Tennessee,
accompanied by a 



                                    C-2-11

<PAGE>   126


duly executed instrument of transfer in form satisfactory to the Bond
Registrar, subject to such reasonable regulations as the Issuer, the Bond
Registrar or the Trustee may prescribe and upon payment of any tax or other
governmental charge incident to such transfer, PROVIDED THAT IF MONEYS FOR THE
PURCHASE OF THIS BOND HAVE BEEN PROVIDED PURSUANT TO A DRAW UNDER THE CREDIT
FACILITY, THIS BOND IS NOT TRANSFERABLE TO ANYONE OTHER THAN THE LESSEE OR ITS
ASSIGNEE OR PLEDGEE. Upon any such transfer, a new Bond or Bonds registered in
the name of the transferee or transferees in denominations authorized by the
Indenture and in the same aggregate principal amount as the principal amount of
this Bond (and of the same maturity and bearing interest at the same rate) will
be issued to the transferee. Except as set forth in this Bond and as otherwise
provided in the Indenture, the person in whose name this Bond is registered
will be deemed the owner hereof for all purposes, and the Issuer, the Bond
Registrar and the Trustee will not be affected by any notice to the contrary.

         The owner of this Bond will have no right to enforce the provisions of
the Indenture or to institute action to enforce the covenants therein, or to
take any action with respect to any Event of Default under the Indenture or to
institute, appear in or defend any suit or other proceeding with respect
thereto, except as provided in the Indenture.

         In certain events, on the conditions, in the manner and with the
effect set forth in the Indenture, the principal of this Bond may become or may
be declared due and payable before the stated maturity hereof, together with
the interest accrued hereon.

         Modifications or alterations of the Lease Agreement and the Indenture
and any supplement or amendment thereto may be made only to the extent and in
the circumstances permitted by the Indenture and may be made in certain cases
without the consent of the owners of the Bonds.

         No recourse shall be had for the enforcement of any obligation,
promise or agreement of the Issuer contained herein or other documents to which
the Issuer is a party or for any claim based hereon or thereon or otherwise in
respect hereof or thereof against any director, member, officer, agent,
attorney or employee, as such, in his/her individual capacity, past, present or
future, of the Issuer or of any successor entity, either directly or through
the Issuer or any successor entity, under or by reason of any of the
obligations, promises or agreements entered into in this Bond or between the
Issuer and the Trustee; and all personal liability of that character against
every such director, member, officer, agent, attorney and employee is, by the
execution of the Indenture and as a condition of, and as part of the
consideration for, the execution of this Indenture, expressly waived and
released.

         Notwithstanding anything to the contrary, any liability for payment of
money and any other liability or obligation which the Issuer may incur under
this Bond shall not constitute a general obligation of the Issuer but shall
constitute limited obligations of the Issuer payable solely from and enforced
only against the Trust Estate. No recourse shall be had for the enforcement of
any obligation, promise or agreement of the Issuer contained herein or in the
Bonds or the Lease Agreement to which the Issuer is a party or for any claim
based hereon or thereon or otherwise 




                                    C-2-12

<PAGE>   127

in respect hereof or thereof against any director, member, officer, agent,
attorney or employee, as such, in his individual capacity, past, present or
future, of the Issuer or of any successor entity, either directly or through
the Issuer or any successor entity whether by virtue of any constitutional
provision, statute or rule of law, or by the enforcement of any assessment or
penalty otherwise. No personal liability whatsoever shall attach to, or be
incurred by, any director, member, officer, agent, attorney or employee as
such, past, present or future, of the Issuer or of any successor entity, either
directly or through the Issuer or any successor entity, under or by reason of
any of the obligations, promises or agreements entered into in this Bond or
between the Issuer and the Trustee, whether herein contained or to be implied
herefrom as being supplemental hereto; and to all personal liability of that
character against every such director, member, officer, agent, attorney and
employee is, by the execution of the Indenture and as a condition of, and as
part of the consideration for, the execution of the Indenture, expressly waived
and released.

         Anything herein or in the Indenture to the contrary notwithstanding,
the obligations of the Issuer hereunder will be subject to the limitation that
payment of interest to the owner of this Bond will not be required to the
extent that receipt of any such payment by the owner of this Bond would be
contrary to the provisions of law applicable to such Bond which limits the
maximum rate of interest which may be charged or collected by such owner.

         In any case where the date of maturity of interest on or principal of
the Bonds or the date fixed for redemption of the Bonds shall be in the city of
payment a day other than a Business Day, then payment of interest or principal
need not be made on such date but may be made on the next succeeding Business
Day with the same force and effect as if made on the date of maturity or the
date fixed for redemption, provided that interest will accrue for the period of
any such extension.

         This Bond will be governed by and construed in accordance with the
laws of the State of Tennessee.

         Tennessee Code Annotated Sections 7-53-305(a) and 67-5-205(a), as
amended, provide that this Bond and the income therefrom shall be exempt from
all taxes in the State of Tennessee. Other provisions of the Tennessee Code
Annotated indicate, however, that the Bond and/or interest thereon may be
subject to Tennessee inheritance, transfer and gift taxes and to the Tennessee
corporate excise and franchise taxes.

         All acts, conditions and things required to happen, exist and be
performed precedent to and in the issuance of this Bond and the execution of
the Indenture have happened, exist and have been performed as so required.




                                     C-2-13

<PAGE>   128


         IN WITNESS WHEREOF, The Industrial Development Board of the County of
Hamilton, Tennessee has caused this Bond to be executed with the manual
signatures of its Chairman and its Secretary, all as of _______________.

                                         THE INDUSTRIAL DEVELOPMENT BOARD OF 
                                         THE COUNTY OF HAMILTON, TENNESSEE


                                         By:     
                                            -----------------------------------
                                                 Chairman


                                         Attest:
                                                -------------------------------
                                                 Secretary







                                    C-2-14

<PAGE>   129


                         CERTIFICATE OF AUTHENTICATION



         This Bond is one of the Bonds of the series designated therein and
issued under the provisions of the within-mentioned Indenture.

                                          FIRST UNION NATIONAL BANK,
                                          as Trustee



                                          By:     
                                             ----------------------------------
                                                  Authorized Representative



Date of Authentication:
                       ---------------




                                    C-2-15

<PAGE>   130



                                   ASSIGNMENT



         FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto


PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE



-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------



the within bond of the ____________________________ and does hereby constitute
and appoint _______________________________ attorney to transfer the said bond
on the books of the within named Issuer, with full power of substitution in the
premises.



Dated:


In the presence of:
                                          -------------------------------------
                                                        Bondholder



Signature Guaranteed:



-------------------------------------

NOTICE: Signature(s) must be guaranteed by a member
        firm of a Medallion Program acceptable to the
        Trustee.






                                    C-2-16

<PAGE>   131


                                   EXHIBIT A

                 FORM OF BONDHOLDER'S OPTIONAL RETENTION NOTICE


                                                     Date:
                                                          ---------------------

First Union National Bank, as
Trustee (the "Trustee") under the Trust Indenture dated 
as of January 1, 1999 (the "Indenture") between the 
Trustee and The Industrial Development Board of the 
County of Hamilton, Tennessee

Attention:     Corporate Trust Department

         Re:   $4,500,000 The Industrial Development Board of the County of
               Hamilton, Tennessee Industrial Development Revenue Bonds
               (Sterile Recoveries, Inc. Project), Tax-Exempt Series

         1. The undersigned hereby certifies that it is the lawful registered
owner of the Bonds described above.

         2. Pursuant to the provisions of the Indenture, the undersigned hereby
irrevocably elect(s) to hold the Bonds, which will bear interest at the Fixed
Rate (as defined in, and to be determined as described in, the Indenture),
effective on the Conversion Date (as defined in the Indenture) specified in the
notice from the Trustee (the "Notice of Conversion").

         3. The undersigned hereby acknowledges that it has received the Notice
of Conversion and that it acknowledges, without limitation, that (i) the Bonds
will not be supported by an Alternate Credit Facility after the Conversion
Date, (i) the rating on the Bonds, if any, may be reduced or withdrawn after
the Conversion Date, and (iii) after the tenth day preceding he Conversion Date
the undersigned will not be entitled to deliver Bonds for purchase pursuant to
Section 2.3 of the Indenture.

         4. The undersigned hereby acknowledges that, even if it fails to
deliver such Bonds as agreed pursuant to paragraph 5 hereof, the bonds will
nevertheless bear the Fixed Rate effective on the Conversion Date.

         5. The undersigned hereby undertakes to deliver the Bonds to First
Union National Bank, as Tender Agent, at its corporate trust office located at
150 Fourth Avenue, North, TN 1327, Nashville, Tennessee 37219, Attention:
Corporate Trust Department, to be stamped with the legend set forth in Section
2.2(e) of the Indenture not later than 10:00 A.M. prevailing Eastern time on
the Conversion Date.





                                    C-2-17

<PAGE>   132

Name of Bondholder:
                   ------------------------------
                           (Type or Print)

Signature:
          ---------------------------------------

Guaranteed by:
              -----------------------------------

Name of Institution:
                    -----------------------------
Date:
     --------------------------------------------


                       [End of Exhibit A to Form of Bond]




                                    C-2-18

<PAGE>   133


                                   EXHIBIT B

                  FORM OF BONDHOLDER'S OPTIONAL TENDER NOTICE


                                                     Date:                     
                                                          ---------------------


First Union National Bank, as
Trustee (the "Trustee") under the Trust Indenture dated 
as of January 1, 1999 (the "Indenture") between the 
Trustee and The Industrial Development Board of the 
County of Hamilton, Tennessee

Attention:     Corporate Trust Department

         Re:   $4,500,000 The Industrial Development Board of the County of
               Hamilton, Tennessee Industrial Development Revenue Bonds
               (Sterile Recoveries, Inc. Project), Tax-Exempt Series

         1. The undersigned hereby certifies that it is the lawful registered
owner of the Bonds described above.

         2. Pursuant to the provisions of the Indenture, the undersigned hereby
irrevocably request(s) the purchase of the Bonds described above.

         3. The date on which the Bonds shall be purchased shall be
______________, ____ [Note: This date must be a Business Day (as defined in the
Indenture) which is at least seven days after delivery of this notice to the
Tender Agent].

         4. The person or persons to whom or to whose order the proceeds of the
purchase of the Bonds are to be paid is ___________________, and the address or
addresses of such payee or payees is _________________________________________.

         5. The undersigned hereby irrevocably authorizes and instructs the
Trustee or the Bond Registrar (as defined in the Bonds) to the effect the
transfer of such Bonds (or any Bond(s) exchanged therefor), upon payment of the
purchase price therefor, to the purchaser(s) thereof, whether or not it
delivers such Bonds as agreed pursuant to paragraph (7) hereof.

         6. The undersigned hereby acknowledges that, even it if fails to
deliver such Bonds, the bonds may nevertheless be purchased pursuant to the
Indenture, and that, in any event, on and after the proposed purchase date set
forth in paragraph 3 hereof, the bonds will cease to be outstanding for all
purposes under the Indenture, to evidence the indebtedness of the Issuer with
respect thereto and to bear interest. 




                                    C-2-19

<PAGE>   134

         7. The undersigned hereby undertakes to deliver the Bonds to you, as
Tender Agent, at 150 Fourth Avenue, North, TN 1327, Nashville, Tennessee 37219,
Attention: Corporate Trust Department at least five days prior to the proposed
purchase date set forth in paragraph 3 above duly endorsed in blank for
transfer.


Name of Bondholder:
                   ------------------------------
                           (Type or Print)

Signature:
          ---------------------------------------

Guaranteed by:
              -----------------------------------

Name of Institution:
                    -----------------------------
Date:
     --------------------------------------------


                       [End of Exhibit B to Form of Bond]



                                    C-2-20

<PAGE>   135


                                   EXHIBIT D

                             Description of Project


Legal Description of the Property

         ALL that certain plot, piece or parcel of land situate, lying and
being in Hamilton County, Tennessee, bounded and described as follows:

                                (to be supplied)


Description of Equipment

         All equipment, machinery, and items of personal property acquired,
constructed and installed and/or to be acquired, constructed and installed in
connection with the completion of the Project located at 6024 Century Oaks
Drive, Chattanooga, Tennessee, and purchased with the proceeds of The
Industrial Development Board of the County of Hamilton, Tennessee's Industrial
Development Revenue Bonds (Sterile Recoveries, Inc. Project), Taxable Series
1999.






                                      D-1

<PAGE>   136


                                   EXHIBIT E

                            REQUISITION CERTIFICATE

TO:      FIRST UNION NATIONAL BANK, as Trustee

FROM:    STERILE RECOVERIES, INC. (agent for the Lessee)

SUBJECT: LEASE AGREEMENT DATED AS OF FEBRUARY 1, 1999


         This represents Requisition Certificate No. _______ in the total
amount of $___________ for payment of those Costs of the Project detailed in
the schedule attached.

         The undersigned does certify that:

         1. All of the expenditures for which moneys are requested hereby
represent proper Costs of the Project, have not been included in a previous
Requisition Certificate and have been properly recorded on the Lessee's books.

         2. The moneys requested thereby are not greater than those necessary
to meet obligations due and payable or to reimburse the company for funds
actually advanced for Costs of the Project. The moneys requested do not include
retention or other moneys not yet due or earned under construction contracts.

         3. After payment of moneys hereby requested, there will remain
available to the Lessee sufficient funds to complete the Project substantially
in accordance with the plans.

         4. At least 95% of the sum of the payment herein requested form the
bond proceeds and all other payments from the proceeds of the Bonds heretofore
made have been used to finance the acquisition, renovation, construction,
renovation or improvement of land and buildings, all of which property other
than land is of a character subject to the allowance for depreciation under
Section 167 of the Code, all of which costs for such property or land were
first incurred subsequent to September 25, 1998, and no more than 5% of the sum
of the payment herein requested from the bond proceeds, and no more than 2% of
the sum for payment of costs of issuance, and all other payments from the
proceeds of the Bonds heretofore made from the bond proceeds has been or will
be used, directly or indirectly as working capital or to finance inventory or
issuance costs.

         5. The Lessee is not in default under the Lease Agreement or the
Reimbursement Agreement and nothing has occurred to the knowledge of the Lessee
that would prevent the performance of its obligations under the Lease Agreement
or the Reimbursement Agreement.




                                      E-1

<PAGE>   137


         Executed this _________ day of ________________, _____.

                                          STERILE RECOVERIES, INC.


                                          By:
                                             ----------------------------------
                                             Its:

Approved by First Union National Bank
(as the "Bank")



By:
   ----------------------------------
Title:








                                      E-2