Document:

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EXHIBIT 4.1                                                      FORM OF WARRANT

THESE SECURITIES AND THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
STATE SECURITIES LAWS, INCLUDING IN PARTICULAR, SECTION 10-5-9(13) OF THE
GEORGIA SECURITIES ACT OF 1973, AS AMENDED AND NEITHER SUCH SECURITIES NOR ANY
INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE
TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS
EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR (2) THE
COMPANY RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH
COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH
SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER
CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR
APPLICABLE STATE SECURITIES LAWS.

                     ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.

                        WARRANT TO PURCHASE COMMON STOCK

Warrant No. ______ Issued to ______________            Number of Shares: ______
Date of Issuance: as of December 31, 1999

Environmental Solutions Worldwide, Inc., a Florida corporation (the "COMPANY"),
hereby certifies that, for value received, ______________ (the "HOLDER"), the
registered holder hereof or its permitted assigns, is entitled, subject to the
terms set forth below, to purchase from the Company upon surrender of this
Warrant, at any time or times on or after the date hereof, but not after 5:00
P.M. Eastern Standard Time on the Expiration Date (as defined herein), December
6, 2005, fully paid nonassessable shares of Common Stock (as defined herein) of
the Company (the "WARRANT SHARES") at the purchase price per share provided in
Section 1(b) below (the "WARRANT EXERCISE PRICE").

     Section 1.  GENERAL PROVISIONS.

          (a) DEFINITIONS. The following words and terms as used in this Warrant
shall have the following meanings:

              "COMMON STOCK" means (i) the Company's common stock, par value
$0.001 per share, and (ii) any capital stock into which such Common Stock shall
have been changed or any capital stock resulting from a reclassification of such
Common Stock.

              "EXPIRATION DATE" means the date five (5) years from the date of
this Warrant or, if such date falls on a Saturday, Sunday or other day on which
banks are required or authorized to be closed in the City of Atlanta or the
State of Georgia (a "HOLIDAY"), the next preceding date that is not a Holiday.

              "PERSON" means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a government or any department or agency thereof.

<PAGE>

               "SECURITIES ACT" means the Securities Act of 1933, as amended.

               "WARRANT" shall mean this Warrant and all Warrants issued in
exchange, transfer or replacement of any thereof.

               "WARRANT EXERCISE PRICE" shall be equal to $1.50 per share prior
to and, subject to adjustment as hereinafter provided.

          (c)  OTHER DEFINITIONAL PROVISIONS.

               (i) Except as otherwise specified herein, all references herein
(A) to the Company shall be deemed to include the Company's successors, and (B)
to any applicable law defined or referred to herein, shall be deemed references
to such applicable law as the same may have been or may be amended or
supplemented from time to time.

               (ii) When used in this Warrant, the words "HEREIN," "HEREOF," and
"HEREUNDER," and words of similar import, shall refer to this Warrant as a whole
and not to any provision of this Warrant, and the words "SECTION," "SCHEDULE,"
and "EXHIBIT" shall refer to Sections of, and Schedules and Exhibits to, this
Warrant unless otherwise specified.

               (iii) Whenever the context so requires, the neuter gender
includes the masculine or feminine, and the singular number includes the plural,
and vice versa.

     Section 2. EXERCISE OF WARRANT.

          (a)  Subject to the terms and conditions hereof, this Warrant may be
               exercised by the holder hereof then registered on the books of
               the Company, in whole or in part, at any time during normal
               business hours on any business day on or after the opening of
               business on the date hereof and prior to 5:00 P.M. Eastern
               Standard Time on the Expiration Date by (i) delivery of a written
               notice, in the form of the subscription notice attached as
               Exhibit A hereto, of such holder's election to exercise this
               Warrant, which notice shall specify the number of Warrant Shares
               to be purchased, (ii) payment to the Company of an amount equal
               to the Warrant Exercise Price multiplied by the number of Warrant
               Shares as to which the Warrant is being exercised (plus any
               applicable issue or transfer taxes (the "AGGREGATE EXERCISE
               PRICE") in cash or by check or wire transfer, and (iii) the
               surrender of this Warrant, at the principal office of the
               Company; provided, that if such Warrant Shares are to be issued
               in any name other than that of the registered holder of this
               Warrant, such issuance shall be deemed a transfer and the
               provisions of Section 7 shall be applicable.

     (b) This Warrant may also be exercised on a cashless basis, by submitting
     the Warrant as described above with an indication of election to use
     cashless exercise. The number of shares of Common Stock to be issued on
     cashless exercise shall be determined as follows:

<TABLE>
                           <S> <C>
                           X = Y (A-B)
                               -------
                                   A
</TABLE>

                                      -8-

<PAGE>

where "X" equals the number of shares of Common Stock to be received on cashless
exercise, "Y" equals the number of Warrants so exercised, "A" equals the Average
Market Price of the Common Stock for the period of five (5) trading days
immediately preceding the date of exercise, and "B" equals the Warrant Exercise
Price. For purposes of Rule 144(d)3(iii), it is understood that the Common Stock
issuable on exercise of this Warrant in a cashless exercise transaction shall be
deemed to have been acquired, and the holding period applicable thereto shall
have commenced, on the date this Warrant was issued.

                  (c) In the event of any exercise of the rights represented by
this Warrant in compliance with Section 2(a), a certificate or certificates for
the Warrant Shares so purchased, in such denominations as may be requested by
the holder hereof and registered in the name of, or as directed by, the holder,
shall be delivered at the Company's expense to, or as directed by, such holder
as soon as practicable after such rights shall have been so exercised.

                  (d) Unless the rights represented by this Warrant shall have
expired or shall have been fully exercised, the Company shall, as soon as
practicable and at its own expense, issue a new Warrant identical in all
respects to the Warrant exercised except (i) it shall represent rights to
purchase the number of Warrant Shares purchasable immediately prior to such
exercise under the Warrant exercised, less the number of Warrant Shares with
respect to which such Warrant is exercised, and (ii) the holder thereof shall be
deemed for all corporate purposes to have become the holder of record of such
Warrant Shares immediately prior to the close of business on the date on which
the Warrant is surrendered and payment of the amount due in respect of such
exercise and all applicable taxes is made, irrespective of the date of delivery
of certificates evidencing such Warrant Shares, except that, if the date of such
surrender and payment is a date when the stock transfer books of the Company are
properly closed, such person shall be deemed to have become the holder of such
Warrant Shares at the opening of business on the next succeeding date on which
the stock transfer books are open.

                  (e) No fractional shares of Common Stock are to be issued upon
the exercise of this Warrant, but rather the number of shares of Common Stock
issued upon exercise of this Warrant shall be rounded up or down to the nearest
whole number.

     Section 3. COVENANTS AS TO COMMON STOCK. The Company hereby covenants and
agrees as follows:

                  (a) This Warrant is, and any Warrants issued in substitution
for or replacement of this Warrant will upon issuance be, duly authorized and
validly issued.

                  (b) All Warrant Shares which may be issued upon the exercise
of the rights represented by this Warrant will, upon issuance, be validly
issued, fully paid and nonassessable and free from all taxes, liens and charges
with respect to the issue thereof.

                  (c) During the period within which the rights represented by
this Warrant may be exercised, the Company will at all times have authorized and
reserved a sufficient number of the number of shares of Common Stock needed to
provide for the exercise of the rights then represented by this Warrant and the
par value of said shares will at all times be less than or equal to the
applicable Warrant Exercise Price.

                  (d) The Company shall promptly secure the listing of the
shares of Common Stock issuable upon exercise of this Warrant upon each national
securities exchange or automated quotation

                                      -9-

<PAGE>

system, if any, upon which shares of Common Stock are then listed (subject to
official notice of issuance upon exercise of this Warrant) and shall maintain,
so long as any other shares of Common Stock shall be so listed, such listing of
all shares of Common Stock from time to time issuable upon the exercise of this
Warrant; and the Company shall so list on each national securities exchange or
automated quotation system, as the case may be, and shall maintain such listing
of, any other shares of capital stock of the Company issuable upon the exercise
of this Warrant if and so long as any shares of the same class shall be listed
on such national securities exchange or automated quotation system.

                  (e) The Company will not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed by it hereunder, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may reasonably be requested by the holder of this
Warrant in order to protect the exercise privilege of the holder of this Warrant
against impairment, consistent with the tenor and purpose of this Warrant.
Without limiting the generality of the foregoing, the Company (i) will not
increase the par value of any shares of Common Stock receivable upon the
exercise of this Warrant above the Exercise Price then in effect, and (ii) will
take all such actions as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant.

                  (f) This Warrant will be binding upon any entity succeeding to
the Company by merger, consolidation or acquisition of all or substantially all
of the Company's assets.

         Section 4. TAXES. The Company shall not be required to pay any tax or
taxes attributable to the initial issuance of the Warrant Shares or any
permitted transfer involved in the issue or delivery of any certificates for
Warrant Shares in a name other than that of the registered holder hereof or upon
any permitted transfer of this Warrant.

         Section 5. WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise
specifically provided herein, no holder, as such, of this Warrant shall be
entitled to vote or receive dividends or be deemed the holder of shares of the
Company for any purpose, nor shall anything contained in this Warrant be
construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote, give or withhold consent to any
corporate action (whether any reorganization, issue of stock, reclassification
of stock, consolidation, merger, conveyance or otherwise), receive notice of
meetings, receive dividends or subscription rights, or otherwise, prior to the
issuance to the holder of this Warrant of the Warrant Shares which he or she is
then entitled to receive upon the due exercise of this Warrant. In addition,
nothing contained in this Warrant shall be construed as imposing any liabilities
on such holder to purchase any securities or as a stockholder of the Company,
whether such liabilities are asserted by the Company or by creditors of the
Company. Notwithstanding this Section 5, the Company will provide the holder of
this Warrant with copies of the same notices and other information given to the
stockholders of the Company generally, contemporaneously with the giving thereof
to the stockholders.

         Section 6. REPRESENTATIONS OF HOLDER. The holder of this Warrant, by
the acceptance hereof, represents that it is acquiring this Warrant and the
Warrant Shares for its own account for investment.

                                      -10-

<PAGE>

         Section 7. OWNERSHIP AND TRANSFER.

                  (a) The Company shall maintain at its principal executive
offices (or such other office or agency of the Company as it may designate by
notice to the holder hereof), a register for this Warrant, in which the Company
shall record the name and address of the person in whose name this Warrant has
been issued, as well as the name and address of each transferred. The Company
may treat the person in whose name any Warrant is registered on the register as
the owner and holder thereof for all purposes, notwithstanding any notice to the
contrary, but in all events recognizing any transfers made in accordance with
the terms of this Warrant.

                  (b) This Warrant and the rights granted to the holder hereof
are transferable, in whole or in part, upon surrender of this Warrant, together
with a properly executed warrant power in the form of Exhibit B attached hereof;
provided, however, that any transfer or assignment shall be subject to the
conditions set forth in Section 7(c) below. The rights of the holder of this
Warrant to transfer this Warrant and the rights granted to the holder as
provided for herein shall include, but not be limited to, the right to make such
a transfer to a family member or corporation, partnership, trust or other entity
which is owned or controlled by, or under common control with, the holder of
this Warrant.

                  (c) The holder of this Warrant understands that this Warrant
has not been and is not expected to be, registered under the Securities Act or
any state securities laws, and may not be offered for sale, sold, assigned or
transferred unless (a) subsequently registered thereunder, or (b) such holder
shall have delivered to the Company an opinion of counsel, reasonably
satisfactory in form, scope and substance to the Company, to the effect that the
securities to be sold, assigned or transferred may be sold, assigned or
transferred pursuant to an exemption from such registration; (i) any sale of
such securities made in reliance on Rule 144 promulgated under the Securities
Act may be made only in accordance with the terms of said Rule and further, if
said Rule is not applicable, any resale of such securities under circumstances
in which the seller (or the person through whom the sale is made) may be deemed
to be an underwriter (as that term is defined in the Securities Act) may require
compliance with some other exemption under the Securities Act or the rules and
regulations of the Securities and Exchange Commission thereunder.

                  (d) The Holder shall be entitled to piggy-back registration
rights for the Warrant Shares and will have the right four times per each
calender year to have the Warrant Shares which may be issued by the Company from
time to time registered by the Company as freely tradeable shares pursuant to
Form S-8. The Holder may transfer this Warrant to one or more partners of Sims
Moss Kline & Davis LLP at any time.

         Section 8. ADJUSTMENT OF WARRANT EXERCISE PRICE AND NUMBER OF SHARES.
In order to prevent dilution of the rights granted under this Warrant, the
Warrant Exercise Price and the number of shares of Common Stock issuable upon
exercise of this Warrant shall be adjusted form time to time as follows:

                  (a) ADJUSTMENT OF WARRANT EXERCISE PRICE UPON SUBDIVISION OR
COMBINATION OF COMMON STOCK. If the Company at any time subdivides (by any stock
split, stock dividend, recapitalization or otherwise) one or more classes of its
outstanding shares of Common Stock into a greater number of shares, the Warrant
Exercise Price in effect immediately prior to such subdivision will be
proportionately reduced and the number of shares of Common Stock obtainable upon
exercise of this Warrant will be proportionately increased. If the Company at
any time combines (by combination, reverse stock split or otherwise) one or more
classes of its outstanding shares of Common Stock into a smaller number of
shares, the Warrant Exercise Price in effect immediately prior to such
combination will

                                      -11-

<PAGE>

be proportionately increased and the number of shares of Common Stock obtainable
upon exercise of this Warrant will be proportionately decreased.

                  (b) REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER OR
SALE. Any recapitalization, reorganization, reclassification, consolidation,
merger, sale of all or substantially all of the Company's assets to another
Person (as defined below) or other transaction which is effected in such a way
that holders of Common Stock are entitled to receive (either directly or upon
subsequent liquidation) stock, securities or assets with respect to or in
exchange for Common Stock is referred to herein as "ORGANIC CHANGE." Prior to
the consummation of any Organic Change, the Company will make appropriate
provision to insure that each holder of Warrants will thereafter have the right
to acquire and receive in lieu of or in addition to (as the case may be) the
shares of Common Stock immediately theretofore acquirable and receivable upon
the exercise of such holder's Warrants, such shares of stock, securities or
assets as may be issued or payable with respect to or in exchange for the number
of shares of Common Stock immediately theretofore acquirable and receivable upon
the exercise of such holder's Warrants had such Organic Change not taken place.
In any such case, the Company will make appropriate provision of such Warrants
with respect to such holders' rights and interests to insure that the provisions
of this Section 8 and Section 9 below will thereafter be applicable to the
Warrants. The Company will not effect any such consolidation, merger or sale,
unless prior to the consummation thereof, the successor entity (if other than
the company) resulting from consolidation or merger or the entity purchasing
such assets assumes, by written instrument (in form and substance satisfactory
to the holders of Warrants representing a majority of shares of Common Stock
issuable upon exercise of the Warrants then outstanding), the obligation to
delivery to each holder of Warrants such shares of stock, securities or assets
as, in accordance with the foregoing provisions, such holder may be entitled to
acquire.

                  (c) NOTICES.

                         (i) Immediately upon any adjustment of the Warrant
Exercise Price, the Company will give written notice thereof to the holder of
this Warrant, setting forth in reasonable detail and certifying the calculation
of such adjustment.

                         (ii) The Company will give written notice to the holder
of this Warrant at least twenty (20) days prior to the date on which the Company
closes its books or takes a record (A) with respect to any dividend or
distribution upon the Common Stock, (B) with respect to any pro rata
subscription offer to holders of Common Stock, or (C) for determining rights to
vote with respect to any Organic Change, dissolution or liquidation, except that
in no event shall such notice be provided to such holder prior to such
information being made known to the public.

                          (iii) The Company will also give written notice to the
holder of this Warrant at least twenty (20) days prior to the date on which any
Organic Change, dissolution or liquidation will take place.

         Section 9. PURCHASE RIGHTS, In addition to any adjustments pursuant to
Section 8 above, if at any time the Company grants, issues or sells any Options,
Convertible Securities or rights to purchase stock, warrants, securities or
other property pro rata to the record holders of any class of Common Stock (the
"PURCHASE RIGHTS"), then the holder of this Warrant will be entitled to acquire,
upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights
which such holder could have acquired if such holder had held the number of
shares of Common Stock acquirable upon complete exercise of this Warrant
immediately before the date on which a record is taken for the grant, issuance
or sale of such Purchase Rights, or, if no such record is taken, the ate as of
which the record holders of Common Stock

                                      -12-

<PAGE>

are to be determined for the grant, issue or sale of such Purchase Rights.

         Section 10. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT. If this
Warrant is lost, stolen, mutilated or destroyed, the Company shall, on receipt
of an indemnification undertaking, issue a new Warrant of like denomination and
tenor as the Warrant so lost, stolen, mutilated or destroyed.

         Section 11. NOTICE. Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this Warrant
must be in writing and will be deemed to have been delivered (i) upon receipt,
when delivered personally; (ii) upon receipt, when sent by facsimile, provided a
copy is mailed by U.S. certified mail, return receipt requested; (iii) three (3)
days after being sent by U.S. certified mail, return receipt requested; or (iv)
one (1) day after deposit with a nationally recognized overnight delivery
service, in each case properly addressed to the party to receive the same. The
addresses and facsimile numbers for such communications shall be:

                  If to the Company:
                  30 Wertheim Ct.
                  Suite 24, 2nd Fl
                  Richmond Hill
                  ONTARIO, Canada
                  L4B-1B9

                  Telephone: (905) 763-3799
                  Facsimile: (905) 763-7774

                If to a holder of this Warrant, to it at the address set forth
                below such holder's signature on the signature page hereof.

Each party shall provide five (5) days' prior written notice to the other party
of any change in address or facsimile number.

         Section 12. MISCELLANEOUS. This Warrant and any term hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party or holder hereof against which enforcement of such change,
waiver, discharge or termination is sought. The headings in this Warrant are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof. This Warrant shall be governed by and interpreted under the laws
of the State of Florida.

                                      -13-
<PAGE>

         Section 13. DATE. The date of this Warrant is as of December 31, 1999.
This Warrant, in all events, shall be wholly void and of no effect after the
close of business on the Expiration Date, except that notwithstanding any other
provisions hereof, the provisions of Section 7 shall continue in full force and
effect after such date as to any Warrant Shares or other securities issued upon
the exercise of this Warrant.

                                     * * * *

         IN WITNESS WHEREOF, the parties hereto have duly caused this Agreement
to be executed as of the day and year first above written.

                                  "THE HOLDER"

                                  __________________________________________
                                        [name]

                                  "THE COMPANY"

                                  ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.

                                  By:_______________________________________
                                       Bengt Odner, Chairman of the Board

                                      -14-

<PAGE>

                              EXHIBIT A TO WARRANT

                                  EXERCISE FORM

                  (to be signed only upon exercise of Warrant)

To:  ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.

The undersigned, the holder of the attached Warrant, hereby irrevocably elects
to exercise the purchase right represented by that Warrant for, and to purchase
under the Warrant, ______ shares of Common Stock of ENVIRONMENTAL SOLUTIONS
WORLDWIDE, INC. (the "Company") and herewith:

         _____ makes payments of $___________ for those shares,

and requests that the certificates for those shares be issued in its name, and
delivered to the following
address:_______________________________________________________________________.

Dated:   ________________, 19__.

                                    __________________________________________
                                    Signature

                                    (Signature must conform in all respects to
                                    name of holder as specified on the face
                                    of the Warrant.)

                                    __________________________________________
                                    Address

                                    __________________________________________

<PAGE>

                              EXHIBIT B TO WARRANT

                              FORM OF WARRANT POWER

FOR VALUE RECEIVED, the undersigned does hereby assign and transfer to
__________________________, Federal Identification No. _____________, a warrant
to purchase ___________ shares of the capital stock of ENVIRONMENTAL SOLUTIONS
WORLDWIDE, INC., a Florida corporation, represented by warrant certificate no.
______, standing in the name of the undersigned on the books of said
corporation. The undersigned does hereby irrevocably constitute and appoint
___________________________, attorney to transfer the warrants of said
corporation, with full power of substitution in the premises.

Dated:______________________

                     __________________________________________

                     By:_______________________________________
                     Its:________________________________________Prepared by MERRILL CORPORATION www.edgaradvantage.com

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Exhibit 10.1  

  SECURITIES PURCHASE AGREEMENT         

    THIS SECURITIES PURCHASE AGREEMENT ("Agreement") is made and entered into as of October 10, 2000, by and among
Reuter Manufacturing Inc., a Minnesota corporation (the "Company"), Activar, Inc., a Minnesota corporation
("Activar"), J.L. Reissner ("Reissner"), and M.J. Tate
("Tate") (Activar, Reissner and Tate, individually an "Investor" and collectively, the
"Investors"). 

    NOW
THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and the Investors hereby agree as follows: 

    1.  Authorization of Securities.  The Company shall designate, from its previously authorized "blank
check" preferred stock, the number of shares of Series A Convertible Preferred Stock, $.1875 par value per share (the "Series A Preferred"), as provided
herein, which shall be entitled to the preferences, rights and benefits set forth in the certificate of designation attached hereto as Exhibit 1 (the
"Certificate of Designation"). As used in this Agreement, the term "Preferred Stock" shall mean the
Series A Preferred to be sold at the closing described in Section 3 of this Agreement and all shares of Series A Preferred issued in exchange or substitution therefor. The Series A Preferred shall be
convertible into shares of the Company's common stock, $.1875 par value per share (the "Common Stock"). Any shares of Common Stock issuable upon
conversion of the Series A Preferred, when issued, shall be referred to as "Conversion Shares." 

    2.  Sale and Purchase of Shares.  Subject to the terms and conditions hereof, the Company agrees to sell
to each Investor and each Investor agrees to purchase from the Company in accordance with this Agreement, the respective numbers of shares of Series A Preferred and Common Stock set forth opposite
each Investor's name on Exhibit 2 at a purchase price of $0.1777778 per share (the "Purchase
Commitment"), a total purchase price of eight hundred thousand dollars ($800,000). The Series A Preferred and Common Stock sold to the Investors pursuant to this Agreement are
referred to herein as the "Shares." The Company's agreements with each Investor are separate agreements, and the Company's sales of Series A Preferred
and Common Stock to each Investor are separate sales. 

    3.  Closing.  The closing of the purchase of the Shares described herein shall take place at the offices
of Oppenheimer Wolff & Donnelly LLP, 45 South Seventh Street, Suite 3300, Minneapolis, Minnesota 55402, at 10 a.m., Minneapolis time, on or about October 10, 2000, or as soon as practicable thereafter
(the "Closing"), or at such other place or different time or day as may be mutually acceptable to the Investors and the Company, provided that an
aggregate of at least $800,000 of Shares are purchased by the Investors at the Closing. The date and time on which the Closing occurs shall be referred to as the "Closing
Date." 

    At
the Closing, (a) the Company shall deliver to each Investor stock certificates for the number of Shares being purchased by such Investor, which Shares shall be registered in the
Investor's name or as otherwise designated by the Investor, and (b) the Investor shall pay to the Company the purchase price for the Purchase Commitment set forth on Exhibit
2, by wire transfer or bank or cashier's check payable to the Company. The Company acknowledges receipt of $407,000 of the purchase price from Activar prior to the date of this
Agreement. 

    4.  Representations and Warranties by the Company.  To induce the Investors to enter into this Agreement
and to purchase the Shares, the Company hereby represents and warrants to the Investors that: 

    4.1.  Organization, Standing, Etc.  The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Minnesota and has the requisite corporate power and authority to own, lease or operate its properties and to carry on its business as it is now being
conducted and as it is proposed to be conducted. 

    4.2.  Governing Instruments.  The copies of the Articles of Incorporation and the Bylaws of the Company,
and all amendments thereto (collectively, the "Charter Documents"), made available to the Investors prior to the execution of this Agreement, are true
and complete copies of the duly and legally adopted Charter Documents in effect as of the date of this Agreement and at the Closing. 

    4.3.  Corporate Acts and Proceedings.  This Agreement and the Voting Agreement have been duly authorized
by all necessary corporate action on behalf of the Company, have been duly executed and delivered by authorized officers of the Company, are valid and binding agreements on the part of the Company and
are enforceable against the Company in accordance with their respective terms, except as the enforceability thereof may be limited by (a) bankruptcy, insolvency, fraudulent conveyance, moratorium,
reorganization or other similar laws affecting the enforcement of creditors' rights generally or (b) judicial limitations on the enforcement of the remedy of specific performance and other equitable
remedies. 

    4.4.  Capital Stock.  Immediately prior to the Closing, the authorized capital stock of the Company
consists of 9,000,000 shares of Common Stock, of which 5,224,219 shares are issued and outstanding; and 1,000,000 shares of Series A Preferred, none of which is issued and outstanding. All of the
outstanding shares of capital stock of the Company were duly authorized and validly issued and are fully paid and nonassessable. Schedule 4.4 contains a listing of all options, warrants and other
rights outstanding for the purchase of equity of the Company outstanding as of the date of this Agreement. 

    4.5.  Valid Issuance.  The Company has the requisite corporate power and authority to execute and deliver
this Agreement and the Voting Agreement and to perform its obligations under each. The Shares, when issued and paid for pursuant to the terms of this Agreement, will be duly authorized and validly
issued and outstanding, fully paid, nonassessable and free and clear of all pledges, liens, encumbrances and restrictions, except as set forth herein or in the Articles of Incorporation or the Voting
Agreement. Upon approval by the shareholders of the Company of an amendment to the Company's Articles of Incorporation increasing the number of authorized shares of Common Stock, the Conversion Shares
will be reserved for issuance upon conversion of the Series A Preferred and, when issued upon conversion of the Series A Preferred in accordance with the terms of this Agreement, will be duly
authorized, validly issued and outstanding, fully paid, nonassessable and free and clear of all pledges, liens, encumbrances and restrictions, except as set forth herein or in the Articles of
Incorporation or the Voting Agreement. 

    4.6.  No Brokers or Finders.  No person, firm or corporation has or will have, as a result of any
contractual undertaking by the Company, any right, interest or valid claim against the Company or the Investors for any commission, fee or other compensation as a finder or broker, or in any similar
capacity, in connection with the transactions contemplated by this Agreement. The Company will defend, indemnify and hold the Investors harmless against any and all liability with respect to any such
commission, fee or other compensation which may be payable or determined to be payable. 

    5.  Representations of the Investors.  Each Investor represents to the Company that with respect to such
Investor: 

    5.1.  Investment Intent.  The Shares and the Conversion Shares into which such Shares may be converted
being acquired by such Investor are being purchased for investment for such Investor's own account and not with the view to, or for resale in connection with, any distribution or public offering
thereof. Such Investor has no current plan or intention to engage in a sale, exchange, transfer, distribution, redemption, reduction in any way of such Investor's risk of ownership by short sale or
otherwise, or other disposition, directly or indirectly of the Shares being acquired by each such Investor pursuant to this Agreement or the Conversion Shares into which such Shares may be converted.
Such Investor is
able to bear the economic risk of its investment and has the knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks (including tax
considerations) of its investment, including the high degree of risk of loss of such Investor's entire investment herein. 

    5.2.  Restrictions on Resale, Rule 144.  The Investor understands that the Shares have not been
registered under the Securities Act of 1933, as amended (the "Securities Act") or any state securities 

2

laws by reason of their contemplated issuance in transactions exempt from the registration requirements of the Securities Act pursuant to Section 4(2) thereof or Rule 504, 505 or 506 promulgated under
the Securities Act and applicable state securities laws, and that the reliance of the Company and others upon these exemptions is predicated in part upon this representation by the Investor. The
Investor further understands that the Shares may not be transferred or resold without (i) registration under the Securities Act and any applicable state securities laws or (ii) an exemption from the
requirements of the Securities Act and applicable state securities laws. The Investor also understands that the Conversion Shares will be issued without prior registration thereof under the Securities
Act or applicable state securities laws in reliance upon Section 4(2) of the Securities Act and transactional exemptions from registration under applicable state securities laws based upon appropriate
representations of the Investor. As such, the Conversion Shares will be subject to transfer restrictions similar to restrictions applicable to the Shares. The Investor understands that any sales
pursuant to Rule 144 can be made only in full compliance with the provisions of Rule 144. 

    5.3.  Location of Principal Office, Qualification as an Accredited Investor, Etc.  The state in which the
Investor's principal office is located is the state set forth in the Investor's address on Exhibit 2. The Investor by execution of this Agreement hereby
represents that he or it qualifies as an "accredited investor" for purposes of Regulation D promulgated under the Securities Act. The Investor (i) is an investor in securities of companies in the
development stage and acknowledges that he or it is able to fend for himself or itself, and bear the loss of his or its entire investment in the Shares and (ii) has such knowledge and experience in
financial and business matters that he or it is capable of evaluating the merits and risks of the investment to be made by him or it pursuant to this Agreement. Activar also represents he or it has
not been organized solely for the purpose of acquiring the Shares or Conversion Shares. 

    5.4.  Acts and Proceedings.  The Investor has full power and authority to enter into and perform under
this Agreement in accordance with its terms. This Agreement has been duly authorized by all necessary action on the part of the Investor, has been duly executed and delivered by the such Investor, and
is a valid and binding agreement of the Investor and enforceable against the Investor in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization or other similar laws affecting the enforcement of creditors' rights generally and to judicial limitations on
the remedy of specific enforcement and other equitable remedies. The execution of and performance of the transactions contemplated by this Agreement to be executed by the Investor and compliance with
its provisions by the Investor will not violate any provision of law and will not conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute a default under,
or require a consent or waiver under, its organizational documents (each as amended to date) or any indenture, lease, agreement or other instrument to which the Investor is a party or by which the
Investor or any of the Investor's properties is bound, or any decree, judgment, order, statute, rule or regulation applicable to the Investor. 

    5.5.  Disclosure of Information.  The Investor represents that the Company has made available to the
Investor at a reasonable time prior to the execution of this Agreement sufficient and satisfactory opportunity to ask questions and receive answers from the Company's management concerning the
Company's business, management and financial affairs, the terms and conditions of the offering of the Shares and to obtain any additional information (which the Company possesses or can acquire
without unreasonable effort or expense) as may be necessary to verify the accuracy of information furnished to the Investor. The Investor has reviewed the representations concerning the Company
contained in this Agreement. The foregoing, however, does not limit or modify the representations and warranties of the Company in this Agreement or the right of the Investor to rely thereon. 

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    5.6.  Legend; Stop Transfer.  The Shares, and any Conversion Shares issued upon conversion thereof, shall
bear a legend substantially similar to the following: 

THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER EITHER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE BLUE SKY LAWS, AND ARE SUBJECT TO CERTAIN
INVESTMENT REPRESENTATIONS. THESE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION UNDER THE ACT AND SUCH APPLICABLE BLUE SKY LAWS, OR AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. 

The
Company shall make a notation regarding the restrictions on transfer of the Shares and any such Conversion Shares in its books and the Shares and any such Conversion Shares shall be transferred on
the books of the Company only if transferred or sold pursuant to an effective registration statement under the Securities Act covering the securities to be transferred or an opinion of counsel
satisfactory to the Company that such registration is not required. 

    5.7.  No Brokers or Finders.  No person, firm or corporation has or will have, as a result of any
contractual undertaking by any Investor, any right, interest or valid claim against any Investor or the Company for any commission, fee or other compensation as a finder or broker, or in any similar
capacity, in connection with the transactions contemplated by this Agreement. Each Investor will indemnify and hold the Company harmless against any and all liability with respect to any such
commission, fee or other compensation which may be payable or determined to be payable. 

    6.  Conditions of the Investor's Obligation.  The obligation of each Investor to purchase the Shares on
the Closing Date is subject to the fulfillment or waiver by each such Investor prior to or on such Closing Date of the conditions set forth in this Section 6. 

    6.1.  Representations and Warranties.  The representations and warranties of the Company under this
Agreement shall be true in all material respects as of the Closing Date with the same effect as though made on and as of such date. 

    6.2.  Compliance With Agreements.  The Company shall have performed and complied in all material respects
with all agreements or conditions required by this Agreement and the Voting Agreement to be performed and complied with by it prior to or as of the Closing Date. 

    6.3.  Qualification Under State Securities Laws.  All registrations, qualifications, permits and
approvals required under Minnesota state securities laws for the lawful execution and delivery of this Agreement and the offer, sale, issuance and delivery of the Shares to each Investor at the
Closing shall have been obtained or will be obtained by the Company in compliance with such laws. 

    6.4.  Voting Agreement.  As of the Closing Date, the Voting Agreement shall have been executed and
delivered and remain in effect, in the form attached hereto as Exhibit 6.4. 

    7.  Conversion of Preferred Stock.  The Series A Preferred shall be convertible into Conversion Shares in
accordance with the terms and conditions set forth in the Certificate of Designation. Each Investor acknowledges the need to amend the Company's Articles of Incorporation in order to authorize
additional shares of Common Stock to effect the conversion of the Series A Preferred. All shares of Conversion Shares that may be issued will be, upon issuance in accordance with the terms of this
Agreement, fully paid and nonassessable and free from all taxes, liens and charges (except for taxes, if any, upon the income of the holder and applicable transfer taxes) with respect to the issue
thereof, and the issuance thereof shall not give rise to any preemptive rights on the part of any person. 

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    8.  Restrictions On Transfer of Securities.  

    8.1.  Restrictions.  The Shares, and upon conversion of the Series A Preferred, the Conversion Shares,
are transferable only pursuant to (i) a public offering registered under the Securities Act; (ii) Rule 144 of the Commission (or any similar rule then in effect) if such rule is available; and (iii)
subject to the conditions specified elsewhere in this Section 8, any other legally available means of transfer under applicable federal and state securities laws; provided, however, that in the case
of (ii) and (iii), the Company first shall have received an opinion of legal counsel, reasonably satisfactory to the Company, to the effect that such sale or transfer is exempt from the registration
requirements of the Securities Act. 

    8.2.  Legend.  Each certificate representing Shares or Conversion Shares shall be endorsed with a legend
substantially similar to the legend set forth in Section 5.6 hereof. 

    8.3.  Removal of Legend.  Any legend endorsed on a certificate shall be removed, and the Company shall
issue a certificate without such legend to the holder of such security, if such security is being disposed of pursuant to a registration under the Securities Act or pursuant to Rule 144 or any similar
rule then in effect or if such holder provides the Company with an opinion of counsel satisfactory to the Company to the effect that a transfer of such securities may be made without registration. In
addition, if the holder of such securities delivers to the Company an opinion of such counsel, reasonably satisfactory to the Company, to the effect that no subsequent transfer of such securities will
require registration pursuant to Rule 144(k) under the Securities Act, the Company will promptly upon such contemplated transfer deliver new certificates evidencing such security that do not bear the
legend set forth in Section 5.6. 

    9.  Miscellaneous.  

    9.1.  Oral Changes, Waivers, Etc.  Neither this Agreement nor any provision hereof may be changed,
waived, discharged or terminated orally, but only by a statement in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought. 

    9.2.  Notices.  All notices, requests, consents and other communications required or permitted hereunder
shall be in writing and shall be delivered, or mailed first-class postage prepaid, registered or certified mail, as follows: (a) if to any Investor, to such Investor's address as listed on  Exhibit 2; (b)
 if to the Company, to 410 11th Avenue South, Hopkins, MN 55343 Attn: President. Such notices and other communications shall for all
purposes of this Agreement be treated as being effective or having been given if delivered personally, or, if sent by mail, when received. Any party may change its address for such communications by
giving notice thereof to the other parties in conformity with this Section. 

    9.3.  Survival of Representations, Warranties, Etc.  All representations, warranties, covenants and
agreements contained herein or in any other agreement or schedule delivered pursuant to this Agreement shall survive for a period of one year after the execution and delivery of this Agreement or such
other agreement or schedule, as the case may be. 

    9.4.  Delays or Omissions.  Except as expressly provided herein, no delay or omission to exercise any
right, power or remedy accruing to any party under this Agreement shall impair any such right, power or remedy of such party nor shall it be construed to be a waiver of any such breach or default, or
an acquiescence thereto, or of a similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party hereto of any breach or default under this Agreement, or any waiver on the part of any
party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. 

5

    9.5.  Other Remedies.  Any and all remedies herein expressly conferred upon a party shall be deemed
cumulative with, and not exclusive of, any other remedy conferred hereby or by law on such party, and the exercise of any one remedy shall not preclude the exercise of any other. The parties may seek
enforcement of the terms of this Agreement by suit in equity on action at law to protect the rights granted under this Agreement. 

    9.6.  Entire Agreement.  This Agreement, the exhibits hereto, the documents referenced herein and the
exhibits thereto, constitute the entire understanding and agreement of the parties hereto with respect to the subject matter hereof and thereof and supersede all prior and contemporaneous agreements
or understandings, inducements or conditions, express or implied, written or oral, between the parties with respect hereto and thereto, including without limitation any term sheet(s) executed prior to
and relating to this Agreement (the "Term Sheet"). The express terms hereof control and supersede any course of performance or usage of the trade
inconsistent with any of the terms hereof. 

    9.7.  Severability.  Should any one or more of the provisions of this Agreement or of any agreement
entered into pursuant to this Agreement be determined to be illegal or unenforceable, all other provisions of this Agreement and of each other agreement entered into pursuant to this Agreement, shall
be given effect separately from the provision or provisions determined to be illegal or unenforceable and shall not be affected thereby. The parties further agree to replace such void or unenforceable
provision of this Agreement with a valid and enforceable provision which will achieve, to the extent possible, the economic, business and other purposes of the void or unenforceable provision. 

    9.8.  Successors and Assigns.  The terms and conditions of this Agreement shall inure to the benefit of
and be binding upon and be enforceable by the successors and assigns of the parties hereto. 

    9.9.  Governing Law.  This Agreement shall be governed by and construed under the laws of the State of
Minnesota, notwithstanding the laws of conflict of any jurisdiction. 

    9.10.  Counterparts.  This Agreement may be executed concurrently in two (2) or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 

    9.11.  Payment of Fees and Expenses.  The parties will be solely responsible for their own respective
legal costs incurred in negotiating and performing this transaction. 

(BALANCE OF PAGE INTENTIONALLY BLANK; SIGNATURE PAGE FOLLOWS NEXT)  

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    IN WITNESS WHEREOF, this Agreement is hereby executed as of the date first written above. 

	Company:	 	REUTER MANUFACTURING INC.
	 

 	 
 	 
 By:	 

/s/ MICHAEL TATE   
 Michael Tate
 Its: President and Chief Executive Officer
	 
 Investor:	 
 	 
 ACTIVAR, INC.
	 

 	 
 	 
 By:	 

/s/ J.L. REISSNER   
 J.L. Reissner
 Its: President and Chief Operating Officer
	 
 Investor:	 
 	 

By:	 

/s/ J.L. REISSNER   
 J.L. Reissner
	 
 Investor:	 
 	 

By:	 

/s/ M.J. TATE   
 M.J. Tate

(SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT)  

7

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