Document:

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                                                                     EXHIBIT 4.1

                          REGISTRATION RIGHTS AGREEMENT

                           DATED AS OF JANUARY 3, 2001

                                  BY AND AMONG

                          WATER PIK TECHNOLOGIES, INC.,

                          SPECIAL VALUE BOND FUND, LLC

                                       AND

                         SPECIAL VALUE BOND FUND II, LLC

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                          REGISTRATION RIGHTS AGREEMENT

                  This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is
entered into as of January 3, 2001 by and among Water Pik Technologies, Inc., a
Delaware corporation (the "Company"), Special Value Bond Fund, LLC, a Delaware
limited liability company ("SVBF") and Special Value Bond Fund II, LLC, a
Delaware limited liability company ("SVBFII" and together with SVBF, the
"Purchaser").

                                   WITNESSETH

                  WHEREAS, the Company and the Purchaser have entered into a
Stock Purchase Agreement (the "Purchase Agreement") of even date herewith
pursuant to which the Purchaser is purchasing 1,973,685 shares (the "Shares") of
the Company's Common Stock, par value $0.01 per share (the "Common Stock"); and

                  WHEREAS, a condition to the Purchaser's obligations under the
Purchase Agreement is that the Company enter into this Agreement to grant the
Purchaser certain registration and other rights with respect to such purchased
Shares of Common Stock.

                                    AGREEMENT

                  NOW, THEREFORE, in consideration of the promises and mutual
agreements contained herein, the parties hereto agree as follows:

                                    ARTICLE I.
                                   DEFINITIONS

         1.1 Definitions. As used herein, unless the context otherwise requires,
the following terms have the following respective meanings:

                  "Affiliate" means, with respect to any Person, any Person
that, directly or indirectly, controls, is controlled by or is under common
control with such Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or by contract or otherwise.

                  "Certificate of Incorporation" means the Certificate of
Incorporation of the Company, as it may be amended or restated hereafter from
time to time.

                  "Closing" shall have the meaning set forth in the Purchase
Agreement.

                  "Common Stock" shall have the meaning set forth in the
preamble of this Agreement.

                  "Company" shall have the meaning set forth in the preamble of
this Agreement.

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                  "Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar or sucessor Federal statute, and the rules and
regulations of the SEC thereunder, all as the same shall be in effect at the
time.

                  "NYSE" means the New York Stock Exchange.

                  "Permitted Transferee" means, with respect to the Purchaser,
any sale or other transfer to (a) an Affiliate or constituent partner or limited
liability company member of the Purchaser (including limited partners, retired
partners, retired members, and spouses, ancestors, descendants and other members
of such partners' or members' immediate families, and trusts for the benefit of
any such party) or (b) any Person who acquires at least 1,000,000 shares of
Registrable Securities (as appropriately adjusted for stock splits,
combinations, recapitalizations and the like).

                  "Person" means and includes an individual, a corporation, a
limited liability company, an association, a partnership, a trust or estate, a
government or any department or agency thereof.

                  "Postponement Period" shall have the meaning set forth in
Section 2.1(i).

                  "Purchase Agreement" shall have the meaning set forth in the
preamble of this Agreement.

                  "Purchaser" shall have the meaning set forth in the preamble
of this Agreement.

                  "Registrable Securities" means (a) the Shares, (b) 386,800
shares of Common Stock previously purchased by the Purchaser and (c) any other
shares of Common Stock issued by way of a stock dividend, stock split or reverse
stock split or in connection with a combination of shares, recapitalization,
merger, consolidation or similar event, with respect to or exchange for or in
replacement of the shares listed in (a) and (b). As to any particular
Registrable Securities, such securities shall cease to be Registrable Securities
when (i) a registration statement covering such securities shall have become
effective under the Securities Act and such securities shall have been disposed
of in accordance with such registration statement, (ii) Rule 144 (or any
successor provision) under the Securities Act is available for the sale of all
the Purchaser's Registrable Securities during any three (3)-month period without
registration or (iii) such securities shall have ceased to be outstanding.

                  "Registration Expenses" means all expenses incident to the
registration and disposition of the Registrable Securities pursuant to Section 2
hereof, including, without limitation, all registration, filing and applicable
national securities exchange fees, all fees and expenses of complying with state
securities or blue sky laws (including fees and disbursements of counsel to the
underwriters or the Purchaser in connection with "blue sky" qualification of the
Registrable Securities and determination of their eligibility for investment
under the laws of the various jurisdictions), all word processing, duplicating
and printing expenses, all messenger and delivery expenses, the fees and
disbursements of counsel for the Company and of its independent public
accountants, including the expenses of "cold comfort" letters or any special
audits required by, or incident to, such registration, all fees and
disbursements of underwriters (other than underwriting discounts and
commissions), and all fees and expenses of one counsel to the

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Purchaser and all holders of Registrable Securities. The Registration Expenses
shall not include the Selling Expenses.

                  "SEC" means the Securities and Exchange Commission or any
other governmental authority at the time administering the Securities Act or the
Exchange Act.

                  "Securities Act" means the Securities Act of 1933, as amended,
or any similar or successor Federal statute, and the rules and regulations of
the SEC thereunder, all as the same shall be in effect at the time.

                  "Selling Expenses" means underwriting discounts, selling fees
and commissions and stock transfer taxes applicable to the Registrable
Securities, which shall be paid by the Purchaser.

                  "Shares" shall have the meaning set forth in the preamble of
this Agreement.

                  "SVBF" shall have the meaning set forth in the preamble of
this Agreement.

                  "SVBFII" shall have the meaning set forth in the preamble of
this Agreement.

                                   ARTICLE II.
                               REGISTRATION RIGHTS

         2.1      Registration on Request.

                  (a) Request. At any time after one (1) year following the
Closing, the Purchaser shall have the right to require the Company to effect the
registration under the Securities Act of all or at least 500,000 shares of the
Registrable Securities, by delivering a written request therefor to the Company,
signed by the holders of at least a majority of the Registrable Securities then
outstanding, specifying the number of shares of Registrable Securities and the
intended method of distribution. The Company shall (i) use commercially
reasonable efforts to effect the registration under the Securities Act
(including by means of a shelf registration pursuant to Rule 415 under the
Securities Act if so requested in such request and if the Company is then
eligible to use such a registration) of the Registrable Securities which the
Company has been so requested to register by the Purchaser, for distribution in
accordance with the intended method of distribution set forth in the written
request delivered by the Purchaser, such registration to be filed as
expeditiously as possible (but in any event within 30 days of receipt of a
written request) and (ii) if requested by the Purchaser, use commercially
reasonable efforts to obtain acceleration of the effective date of the
registration statement relating to such registration.

                  (b) Registration of Other Securities. Whenever the Company
shall effect a registration pursuant to this Section 2.1 in connection with an
underwritten offering by the Purchaser of Registrable Securities, no securities
other than Registrable Securities shall be included among the securities covered
by such registration if inclusion of such other securities would result in a
request by the managing underwriter for a reduction in the number of Registrable
Securities requested to be so registered. If such Registrable Securities
requested to be included in a registration pursuant to this Section 2.1,
together with other securities requested

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to be included in such registration, would result in a request by the managing
underwriter for a reduction in the number of such Registrable Securities and
other securities requested to be so registered, then the Company will be
required to include in such registration only the amount of Registrable
Securities and other securities which it is so advised can be included in such
registration. In such event, securities shall be registered, in the following
priority: (i) first, the Registrable Securities requested by the Purchaser to be
included in such registration statement pursuant to this Section 2.1, (ii)
second, the securities proposed to be included by the Company and (iii) third,
any other securities of the Company requested to be included in such
registration by any other holders having the right to include securities on a
pro rata basis in accordance with the number of securities proposed to be
included by such other holders.

                  (c) Registration Statement Form. Subject to clause (a)(i)
above, Registrations under this Section 2.1 shall be on such appropriate
registration form of the SEC as shall be selected by the Company and as shall be
reasonably acceptable to the Purchaser. The Company agrees to include in any
such registration statement all information which, in the opinion of counsel to
the Purchaser and counsel to the Company, is necessary or desirable to be
included therein.

                  (d) Expenses. In the event of any underwritten public offering
requested in accordance with this Section 2.1 at any time after one (1) year
following the Closing but at or prior to three (3) years following the Closing,
the Registration Expenses for the offering shall be paid as follows: (i) the
filing fee payable to the SEC to register the securities and the listing fees
payable to the applicable national securities exchange shall be paid by the
Company; (ii) the costs of any "cold comfort" letters or any special accounting
audits, printing fees, the expenses of legal counsel for the underwriters and
all other fees, disbursements and expenses of the underwriters (other than the
Selling Expenses, which shall be paid by the Purchaser), shall be paid 50% by
the Company and 50% by the Purchaser; and (iii) all other Registration Expenses
shall be paid 60% by the Company and 40% by the Purchaser. In the event of any
underwritten public offering requested in accordance with this Section 2.1 at
any time after three (3) years following the Closing, the Company shall pay all
Registration Expenses, unless the last reported sale price of the Common Stock
on the NYSE with respect to the trading day immediately preceeding the date of
the written request for registration exceeds $15.00 per share (as appropriately
adjusted for stock splits, combinations, recapitalizations and the like), in
which event the Purchaser shall pay all Registration Expenses (other than the
filing fee payable to the SEC to register the securities and the listing fees
payable to the applicable national securities exchange, which shall be paid
exclusively by the Company). In the event of any non-underwritten public
offering requested in accordance with this Section 2.1, the Company shall pay
all Registration Expenses.

                  (e) Effective Registration Statement. A registration requested
pursuant to this Section 2.1 shall not be deemed to have been effected
(including for purposes of paragraph (h) of this Section 2.1) (i) unless a
registration statement with respect thereto has become effective and has been
kept continuously effective for a period of at least 180 days (or such shorter
period which shall terminate when all the Registrable Securities covered by such
registration statement have been sold or withdrawn pursuant thereto), (ii) if
after it has become effective, such registration is interfered with by any stop
order, injunction or other order or requirement of the SEC or other governmental
agency or court for any reason not attributable to the Purchaser and

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has not thereafter become effective or (iii) if the conditions to closing
specified in the underwriting agreement, if any, entered into in connection with
such registration are not satisfied or waived.

                  (f) Selection of Underwriters. The underwriters of each
underwritten offering, if any, of the Registrable Securities to be so registered
shall be selected by the party paying the Registration Expenses under Section
2.1(d), or if such Registration Expenses are shared, then mutually by the
Company and the holders of a majority of the Registrable Securities
participating in the offering (including the Purchaser).

                  (g) Right to Withdraw. If the managing underwriter of any
underwritten offering shall advise the Purchaser that (i) the Registrable
Securities covered by the registration statement cannot be sold in such offering
within a price range acceptable to the Purchaser or (ii) the amount of
Registrable Securities requested to be included in such offering is reduced
below fifty percent (50%) of the number of Registrable Securities so requested
to be included, then the Purchaser shall have the right to notify the Company in
writing that it has determined that the registration statement be abandoned or
withdrawn, in which event the Company shall abandon or withdraw such
registration statement. In the event of such abandonment or withdrawal, such
request shall not be counted for purposes of the request for registration to
which the Purchaser is entitled pursuant to this Section 2.1.

                  (h) Limitations on Registration on Request. The Purchaser
shall be entitled to require the Company to effect, and the Company shall be
required to effect, no more than one (1) registration pursuant to this Section
2.1.

                  (i) Postponement. The Company shall be entitled once in any
twelve-month period to postpone for a reasonable period of time (but not
exceeding 120 days) (the "Postponement Period") the filing of any registration
statement required to be prepared and filed by it pursuant to this Section 2.1
if the Board of Directors of the Company determines, in good faith, that such
registration and offering would be seriously detrimental to the Company and its
stockholders and promptly gives the Purchaser written notice of such
determination, containing a general statement of the reasons for such
postponement and an approximation of the anticipated delay. If the Company shall
so postpone the filing of a registration statement, (i) the Company shall use
commercially reasonable efforts to limit the delay to as short a period as is
practicable and (ii) the Purchaser shall have the right to withdraw the request
for registration by giving written notice to the Company at any time and, in the
event of such withdrawal, such request shall not be counted for purposes of the
request for registration to which the Purchaser is entitled pursuant to this
Section 2.1.

         2.2      Incidental Registration.

                  (a) Right to Include Registrable Securities. If the Company at
any time proposes to register any Common Stock for its own account or for the
account of any other stockholder under the Securities Act by registration on
Form S-1, S-2 or S-3 or any successor or similar form(s) (except registrations
on any such Form or similar form(s) solely for registration of securities in
connection with an employee benefit plan, stock incentive or dividend
reinvestment plan or a merger, acquisition or consolidation or incidental to an
issuance of

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securities under Rule 144A under the Securities Act or any offering to the
Company's existing security holders), it will each such time give prompt written
notice to the Purchaser of its intention to do so and of the Purchaser's rights
under this Section 2.2. At any time or from time to time after the Closing, upon
the written request of the Purchaser (which request shall specify the maximum
number of Registrable Securities intended to be disposed of by the Purchaser),
made as promptly as practicable and in any event within thirty (30) days after
the receipt of any such notice, the Company shall use commercially reasonable
efforts to effect the registration under the Securities Act of all Registrable
Securities which the Company has been so requested to register by the Purchaser;
provided, however, that if at any time after giving written notice of its
intention to register any securities and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register or to delay registration of such
securities, the Company shall give written notice of such determination and its
reasons therefor to the Purchaser and (i) in the case of a determination not to
register, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from any obligation of
the Company to pay the Registration Expenses in connection therewith), without
prejudice, however, to the rights of the Purchaser to request that such
registration be effected as a registration under Section 2.1 and (ii) in the
case of a determination to delay registering, shall be permitted to delay
registering any Registrable Securities, for such period of time as the Board of
Directors of the Company determines. No registration effected under this Section
2.2 shall relieve the Company of its obligation to effect any registration upon
request under Section 2.1.

                  (b) Expenses. The Company shall pay all Registration Expenses
in connection with any registration requested pursuant to this Section 2.2.

                  (c) Right to Withdraw. The Purchaser shall have the right to
withdraw its request for inclusion of its Registrable Securities in any
registration statement pursuant to this Section 2.2 at any time by giving
written notice to the Company of its request to withdraw.

                  (d) Priority in Incidental Registrations. If the managing
underwriter of any underwritten offering shall inform the Company by writing of
its belief that the number of Registrable Securities requested to be included in
such registration, when added to the number of other securities to be offered in
such registration, would jeopardize such offering, then the Company shall
include in such registration, only that number of such securities, including
Registrable Securities, which the underwriter determines in its sole discretion
will not jeopardize the success of the offering (such securities to be included
in the following priority: (i) first, the securities proposed to be included by
the Company, (ii) second, the Registrable Securities requested by the Purchaser
to be included in such registration and (iii) third, any other securities of the
Company requested to be included in such registration by any other holders
having the right to include securities on a pro rata basis in accordance with
the number of securities proposed to be included by such other holders).

         2.3 Registration Procedures. If and whenever the Company is required to
effect the registration of any Registrable Securities under the Securities Act
as provided in Sections 2.1 and 2.2 hereof, the Company shall as expeditiously
as possible:

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                  (a) prepare and file with the SEC as soon as practicable the
requisite registration statement to effect such registration (and shall include
all financial statements required by the SEC to be filed therewith) and
thereafter use commercially reasonable efforts to cause such registration
statement to become effective; provided, however, in the case of an underwritten
offering under Section 2.1, that before filing such registration statement
(including all exhibits) or any amendment or supplement thereto or comparable
statements under securities or blue sky laws of any jurisdiction, the Company
shall as promptly as practicable furnish such documents to the Purchaser and
each underwriter, if any, participating in the offering of the Registrable
Securities and their respective counsel, which documents will be subject to the
review and comments of the Purchaser, each underwriter and their respective
counsel; provided, further, in the case of a non-underwritten offering under
Section 2.1 or any offering under Section 2.2, that before filing any such
documents, the Company shall as promptly as practicable furnish to the Purchaser
and its counsel any portion of such documents that relate to the Purchaser or
its intended method of distribution, which portion will be subject to the review
and comments of the Purchaser and its counsel;

                  (b) in the case of an underwritten offering under Section 2.1,
notify the Purchaser of the SEC's requests for amending or supplementing the
registration statement and the prospectus; and prepare and file with the SEC
such amendments and supplements to any registration statement under this
Agreement and any prospectus used in connection therewith as may be necessary to
keep such registration statement effective and to comply with the provisions of
the Securities Act with respect to the disposition of all Registrable Securities
covered by such registration statement for a period of at least twelve (12)
months or such shorter period as shall be required for the disposition of all of
such Registrable Securities in accordance with the intended method of
distribution thereof;

                  (c) furnish, without charge, to the Purchaser and each
underwriter such number of conformed copies of such registration statement and
of each such amendment and supplement thereto (in each case including all
exhibits), such number of copies of the prospectus contained in such
registration statement (including each preliminary prospectus and any summary
prospectus) and any other prospectus filed under Rule 424 under the Securities
Act, in conformity with the requirements of the Securities Act, and such other
documents, as the Purchaser and such underwriters may reasonably request;

                  (d) use commercially reasonable efforts (i) to register or
qualify all Registrable Securities and other securities covered by such
registration statement under such securities or blue sky laws of such states of
the United States of America where an exemption is not available and as the
Purchaser or any managing underwriter shall reasonably request, (ii) to keep
such registration or qualification in effect for so long as such registration
statement remains in effect and (iii) to take any other action which may be
reasonably necessary or advisable to enable the Purchaser to consummate the
disposition in such jurisdictions of the securities to be sold by the Purchaser,
except that the Company shall not for any such purpose be required to qualify
generally to do business as a foreign corporation in any jurisdiction wherein it
would not but for the requirements of this subsection (d) be obligated to be so
qualified or to consent to general service of process or subject itself to
taxation in any such jurisdiction;

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                  (e) use commercially reasonable efforts to cause all
Registrable Securities covered by such registration statement to be registered
with or approved by such other federal or state governmental agencies or
authorities as may be necessary in the opinion of counsel to the Company and
counsel to the Purchaser by virtue of the business and operations of the Company
to consummate the disposition of such Registrable Securities;

                  (f) in the case of any underwritten offering under Section
2.1, furnish to the Purchaser and each underwriter, if any, participating in the
offering of the securities covered by such registration statement, a signed
counterpart of (i) an opinion of counsel for the Company and (ii) a "comfort"
letter signed by the independent public accountants who have certified the
Company's or any other entity's financial statements included or incorporated by
reference in such registration statement, covering substantially the same
matters with respect to such registration statement (and the prospectus included
therein) and, in the case of the accountants' comfort letter, with respect to
events subsequent to the date of such financial statements, as is customarily
covered in opinions of issuer's counsel and in accountants' comfort letters
delivered to the underwriters in underwritten public offerings of securities
(and dated the dates such opinions and comfort letters are customarily dated)
and, in the case of the legal opinion, such other legal matters;

                  (g) promptly notify the Purchaser and each managing
underwriter, if any, participating in the offering of the securities covered by
such registration statement (i) when, in the case of an underwritten offering
under Section 2.1, such registration statement, any pre-effective amendment, the
prospectus or any prospectus supplement related thereto or post-effective
amendment to such registration statement has been filed, and, with respect to
any registration statement or any post-effective amendment under this Agreement,
when the same has become effective, (ii) in the case of an underwritten offering
under Section 2.1, of any request by the SEC for amendments or supplements to
such registration statement or the prospectus related thereto or for additional
information, (iii) of the issuance by the SEC of any stop order suspending the
effectiveness of such registration statement or the initiation of any
proceedings for that purpose, (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification of any of the
Registrable Securities for sale under the securities or blue sky laws of any
jurisdiction or the initiation of any proceeding for such purpose, (v) at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act, upon discovery that, or upon the happening of any event as a
result of which, the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, in the light of the circumstances under which they were
made, and in the case of this clause (v), at the request of the Purchaser
promptly prepare and furnish to the Purchaser and each managing underwriter, if
any, participating in the offering of the Registrable Securities, a reasonable
number of copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the Purchaser of such securities,
such prospectus shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under which
they were made and (vi) in the case of an underwritten offering, at any time
when the representations and warranties of the Company contemplated by Section
2.4 (a) or (b) hereof cease to be true and correct;

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                  (h) use commercially reasonable efforts to comply with all
applicable rules and regulations of the SEC, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering the
period of at least twelve months beginning with the first full calendar month
after the effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act
and Rule 158 promulgated thereunder, and promptly furnish to the Purchaser a
copy of any amendment or supplement to such registration statement or
prospectus;

                  (i) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such registration statement
from and after a date not later than the effective date of such registration;

                  (j) use commercially reasonable efforts to cause all
Registrable Securities covered by such registration statement to be listed on
the NYSE or the principal securities exchange on which similar securities issued
by the Company are then listed;

                  (k) in the case of an underwritten offering under Section 2.1,
deliver promptly to counsel to the Purchaser and each underwriter, if any,
participating in the offering of the Registrable Securities, copies of all
correspondence between the SEC and the Company, its counsel or auditors and all
memoranda relating to discussions with the SEC or its staff with respect to such
registration statement;

                  (l) use commercially reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of the registration
statement;

                  (m) provide a CUSIP number for all Registrable Securities, no
later than the effective date of the registration statement; and

                  (n) in the case of an underwritten offering under Section 2.1,
make available its senior executive officers and otherwise provide reasonable
assistance to the Purchaser and the underwriters (taking into account the needs
of the Company's business) in their marketing of Registrable Securities;
provided, that such individuals shall not be obligated to participate in any
such marketing efforts for more than five (5) business days and shall not be
obligated to travel outside of the United States on the account of any such
marketing efforts.

                  The Company may require the Purchaser to furnish the Company
such information regarding the Purchaser and the distribution of the Registrable
Securities as the Company may from time to time reasonably request in writing.

                  The Purchaser agrees that upon receipt of any notice from the
Company of the happening of any event of the kind described in paragraph
(g)(iii) or (v) of this Section 2.3, the Purchaser will, to the extent
appropriate, discontinue its disposition of Registrable Securities pursuant to
the registration statement relating to such Registrable Securities until, in the
case of paragraph (g)(v) of this Section 2.3, its receipt of the copies of the
supplemented or amended prospectus contemplated by paragraph (g)(v) of this
Section 2.3 and, if so directed by the Company, will deliver to the Company (at
the Company's expense) all copies, other than permanent file copies, then in its
possession, of the prospectus relating to such Registrable Securities current at
the time of receipt of such notice. If the disposition by the Purchaser of its

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securities is discontinued pursuant to the foregoing sentence, the Company shall
extend the period of effectiveness of the registration statement by the number
of days during the period from and including the date of the giving of notice to
and including the date when the Purchaser shall have received copies of the
supplemented or amended prospectus contemplated by paragraph (g)(v) of this
Section 2.3; and, if the Company shall not so extend such period, the
Purchaser's request pursuant to which such registration statement was filed
shall not be counted for purposes of the request for registration to which the
Purchaser is entitled pursuant to Section 2.1 hereof.

         2.4      Underwritten Offerings.

                  (a) Requested Underwritten Offerings. If requested by the
underwriters for any underwritten offering by the Purchaser pursuant to a
registration requested under Section 2.1, the Company shall enter into a
customary underwriting agreement (in the form of underwriting agreement used at
such time by the managing underwriter(s)) with a managing underwriter or
underwriters selected by the Purchaser. Such underwriting agreement shall be
satisfactory in form and substance to the Purchaser and shall contain such
representations and warranties by, and such other agreements on the part of, the
Company and such other terms as are generally prevailing in agreements of the
managing underwriter(s), including, without limitation, their customary
provisions relating to indemnification and contribution. The Purchaser shall be
party to such underwriting agreement and may, at its option, require that any or
all of the representations and warranties by, and the other agreements on the
part of, the Company to and for the benefit of such underwriters shall also be
made to and for the benefit of the Purchaser and that any or all of the
conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of the
Purchaser.

                  (b) Incidental Underwritten Offerings. In the case of a
registration pursuant to Section 2.2 hereof, if the Company shall have
determined to enter into any underwriting agreements in connection therewith,
all of the Registrable Securities to be included in such registration shall be
subject to such underwriting agreements. The Purchaser shall be party to such
underwriting agreement and may, at its option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of the Purchaser and that any or all of the conditions precedent
to the obligations of such underwriters under such underwriting agreement be
conditions precedent to the obligations of the Purchaser.

         2.5 Preparation; Reasonable Investigation. In connection with the
preparation and filing of each registration statement under the Securities Act
pursuant to an underwritten offering under Section 2.1 of this Agreement, the
Company will give the Purchaser, its underwriters, if any, and its counsel,
accountants and other representatives and agents the opportunity to participate
in the preparation of such registration statement, each prospectus included
therein or filed with the SEC, and each amendment thereof or supplement thereto,
and give each of them such access to its books and records and such
opportunities to discuss the business of the Company with its officers and
employees and the independent public accountants who have certified its
financial statements, and supply all other information reasonably requested by
each of them, as shall be necessary or appropriate, in the opinion of the
Purchaser and such

                                       10
<PAGE>   12

underwriters' respective counsel, to conduct a reasonable investigation within
the meaning of the Securities Act.

         2.6      Indemnification.

                  (a) Indemnification by the Company. The Company agrees that in
the event of any registration of any securities of the Company under the
Securities Act, the Company shall, and hereby does, indemnify and hold harmless
the Purchaser, its respective directors, officers, employees, members, partners,
agents and affiliates and each other Person who participates as an underwriter
in the offering or sale of such securities and each other Person, if any, who
controls the Purchaser or any such underwriter within the meaning of the
Securities Act, against any losses, claims, damages, or liabilities, joint or
several, to which the Purchaser or any such director, officer, employee, member,
partner, agent or affiliate or underwriter or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities, joint or several (or actions or proceedings, whether
commenced or threatened, in respect thereof), arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in any registration statement under which such securities were registered under
the Securities Act, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, (ii) any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein in light of the
circumstances in which they were made not misleading or (iii) any violation by
the Company of any Federal, state or common law rule or regulation applicable to
the Company and relating to action required of or inaction by the Company in
connection with any such registration, and the Company shall reimburse the
Purchaser and each such director, officer, employee, member, partner, agent or
affiliate, underwriter or controlling Person for any legal or any other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, liability, action or proceeding; provided, that the Company
shall not be liable in any such case to the Purchaser or any such director,
officer, employee, member, partner, agent or affiliate, underwriter or
controlling Person to the extent that any such loss, claim, damage, liability
(or action or proceeding in respect thereof) or expense arises out of or is
based upon (i) any untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement, any such preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Purchaser, specifically stating that it is for
use in the preparation thereof, (ii) any untrue statement or alleged untrue
statement of a material fact contained in any registration statement or
prospectus relating to the Registrable Securities delivered by such Person after
the Company had notified such Person in writing that such registration statement
or prospectus contained such untrue statement or alleged untrue statement, (iii)
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading after
the Company had notified such Person in writing that such registration statement
or prospectus contained such omission or alleged omission or (iv) the failure of
such Person to deliver any preliminary or final prospectus, or any amendments or
supplements thereto, required under applicable securities laws, including the
Securities Act, to be so delivered, provided that a sufficient number of copies
thereof had been previously provided by the Company to such Person. Such
indemnity shall remain in full force regardless of any investigation made by or
on behalf of the Purchaser or any such director, officer, employee,

                                       11
<PAGE>   13

member, partner, agent or affiliate, underwriter or controlling Person and shall
survive the transfer of such securities by the Purchaser.

                  (b) Indemnification by the Purchaser. The Purchaser agrees
that in the event it includes any Registrable Securities in any registration of
any securities of the Company, the Purchaser shall, and hereby does, indemnify
and hold harmless (in the same manner and to the same extent as set forth in
paragraph (a) of this Section 2.6) the Company, and each director of the
Company, each officer, employee, agent and affiliate of the Company and each
other Person, if any, who controls the Company within the meaning of the
Securities Act, with respect to any statement or alleged statement in or
omission or alleged omission from such registration statement, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, but only to the extent such statement or
alleged statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company by or on behalf
of the Purchaser specifically stating that it is for use in the preparation of
such registration statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement; provided, however, that the liability of
the Purchaser under this Section 2.6(b) shall be limited to the amount of
proceeds (net of expenses and underwriting discounts and commissions) received
by the Purchaser in the offering giving rise to such liability. Such indemnity
shall remain in full force and effect, regardless of any investigation made by
or on behalf of the Company or any such director, officer or controlling Person
and shall survive the transfer of such securities by the Purchaser.

                  (c) Notices of Claims, etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding subsections of this Section 2.6,
such indemnified party shall, if a claim in respect thereof is to be made
against an indemnifying party, give written notice to the latter of the
commencement of such action or proceeding; provided, however, that the failure
of any indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding subsections of this
Section 2.6, except to the extent that the indemnifying party is actually
prejudiced by such failure to give notice, and shall not relieve the
indemnifying party from any liability which it may have to the indemnified party
otherwise than under this Section 2.6. In case any such action or proceeding is
brought against an indemnified party, the indemnifying party shall be entitled
to participate therein and, unless in the opinion of outside counsel to the
indemnified party a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, to assume the defense
thereof, jointly with any other indemnifying party similarly notified to the
extent that it may wish, with counsel reasonably satisfactory to such
indemnified party; provided, however, that if the defendants in any such action
or proceeding include both the indemnified party and the indemnifying party and
if in the opinion of outside counsel to the indemnified party there may be legal
defenses available to such indemnified party and/or other indemnified parties
which are different from or in addition to those available to the indemnifying
party, the indemnified party or parties shall have the right to select separate
counsel to defend such action or proceeding on behalf of such indemnified party
or parties, provided, however, that the indemnifying party shall be obligated to
pay for only one counsel and one local counsel for all indemnified parties.
After notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof and approval by the indemnified party
of such counsel, the indemnifying party shall not be liable to such indemnified
party for any legal expenses subsequently incurred by the latter in connection

                                       12
<PAGE>   14

with the defense thereof other than reasonable costs of investigation (unless
the first proviso in the preceding sentence shall be applicable). No
indemnifying party shall be liable for any settlement of any action or
proceeding effected without its written consent. No indemnifying party shall,
without the consent of the indemnified party (which consent shall not be
unreasonably withheld or delayed), consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect to such claim or litigation.

                  (d) Contribution. If the indemnification provided for in this
Section 2.6 shall for any reason be held by a court to be unavailable to an
indemnified party under subsection (a) or (b) hereof in respect of any loss,
claim, damage or liability, or any action in respect thereof, then, in lieu of
the amount paid or payable under subsection (a) or (b) hereof, the indemnified
party and the indemnifying party under subsection (a) or (b) hereof shall
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating the
same), (i) in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand, and the indemnified party on the other,
which resulted in such loss, claim, damage or liability, or action in respect
thereof, with respect to the statements or omissions which resulted in such
loss, claim, damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law or if the allocation
provided in this clause (ii) provides a greater amount to the indemnified party
than clause (i) above, in such proportion as shall be appropriate to reflect not
only the relative fault but also the relative benefits received by the
indemnifying party and the indemnified party from the offering of the securities
covered by such registration statement as well as any other relevant equitable
considerations. The parties hereto agree that it would not be just and equitable
if contributions pursuant to this Section 2.6(d) were to be determined by pro
rata allocation or by any other method of allocation which does not take into
account the equitable considerations referred to in the preceding sentence of
this Section 2.6(d). No Person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. In addition, no Person shall be obligated to contribute
hereunder any amounts in payment for any settlement of any action or claim
effected without such Person's consent, which consent shall not be unreasonably
withheld. Notwithstanding anything in this subsection (d) to the contrary, no
indemnifying party (other than the Company) shall be required to contribute any
amount in excess of the proceeds (net of expenses and underwriting discounts and
commissions) received by such party from the sale of the Registrable Securities
in the offering to which the losses, claims, damages or liabilities of the
indemnified parties relate.

                  (e) Other Indemnification. Indemnification and contribution
similar to that specified in the preceding subsections of this Section 2.6 (with
appropriate modifications) shall be given by the Company and the Purchaser with
respect to any required registration or other qualification of securities under
any Federal, state or blue sky law or regulation of any governmental authority.
The indemnification agreements contained in this Section 2.6 shall be in
addition to any other rights to indemnification or contribution which any
indemnified party may have pursuant to law or contract and shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any indemnified party and shall survive the transfer of any of
the Registrable Securities by the Purchaser.

                                       13
<PAGE>   15

                  (f) Indemnification Payments. The indemnification and
contribution required by this Section 2.6 shall be made by periodic payments of
the amount thereof during the course of the investigation or defense, as and
when bills are received or expense, loss, damage or liability is incurred.

         2.7 Unlegended Certificates. In connection with the offering of any
Registrable Securities registered pursuant to this Section 2, the Company shall
(a) facilitate the timely preparation and delivery to the Purchaser and the
underwriters, if any, participating in such offering, of unlegended certificates
representing ownership of such Registrable Securities being sold in such
denominations and registered in such names as requested by the Purchaser or such
underwriters and (b) instruct any transfer agent and registrar of such
Registrable Securities to release any stop transfer orders with respect to any
such Registrable Securities.

         2.8 No Required Sale. Nothing in this Agreement shall be deemed to
create an independent obligation on the part of the Purchaser to sell any
Registrable Securities pursuant to any effective registration statement.

         2.9 Rule 144. The Company shall use commercially reasonable efforts to
enable holders of Registrable Securities to sell such securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144 of the Securities Act or (b) any similar rule or
regulation hereafter adopted by the SEC including, without limiting the
generality of the foregoing, filing on a timely basis all reports required to be
filed by the Exchange Act. Upon the request of the Purchaser, the Company will
deliver to such holder a written statement as to whether it has complied with
such requirements.

                                   ARTICLE III.
                                  MISCELLANEOUS

         3.1 Notice. All notices, requests, consents and other communications
hereunder to any party shall be deemed to be sufficient if contained in a
written instrument delivered in person or sent by telecopy, nationally
recognized overnight courier or first class registered or certified mail, return
receipt requested, postage prepaid, addressed to such party at the address set
forth below or such other address as may hereafter be designated in writing by
such party to the other party:

                  (a)      If to the Company, to:

                                    Water Pik Technologies, Inc.
                                    23 Corporate Plaza, Suite 246
                                    Newport Beach, California  92660
                                    Attn:  Richard D. Tipton, Esq.

                                       14
<PAGE>   16

                           With a copy to:

                                    Riordan & McKinzie
                                    Plaza Tower
                                    600 Anton Boulevard, 18th Floor
                                    Costa Mesa, California  92626
                                    Attn:  Elaine R. Levin, Esq.

                  (b)      If to the Purchaser, to:

                                    Special Value Investment Management, LLC
                                    11100 Santa Monica Boulevard, Suite 210
                                    Los Angeles, California  90025
                                    Attn:  Mark K. Holdsworth

                           With a copy to:

                                    Latham & Watkins
                                    12636 High Bluff Drive, Suite 300
                                    San Diego, California  92130
                                    Attn:  Craig M. Garner, Esq.

         3.2 Assignment; Third Party Beneficiaries. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors and permitted assigns. This Agreement may
not be assigned by the Company, without the prior written consent of the
Purchaser. The Purchaser may, at its election, at any time or from time to time,
assign its rights under this Agreement, in whole or in part, but only to a
Permitted Transferee; provided, that no such assignment will increase the total
number of registrations pursuant to Section 2.1 that the Company is required to
effect hereunder; provided, further, that the Permitted Transferee shall be
bound by all provisions of this Agreement as if the Permitted Transferee were an
original party to this Agreement.

         3.3 Termination. This Agreement shall terminate and be of no further
force and effect on the earlier of (a) five (5) years from the date of this
Agreement or (b) such time as no Registrable Securities are outstanding. The
Purchaser represents and warrants to and covenants with the Company that the
Purchaser and its Affiliates will not engage, directly or indirectly, in any
short sales of the Common Stock prior to the termination of this Agreement.

         3.4 Remedies. The parties hereto agree that money damages or other
remedy at law would not be sufficient or adequate remedy for any breach or
violation of, or a default under, this Agreement by them and that, in addition
to all other remedies available to them, each of them shall be entitled to an
injunction restraining such breach, violation or default or threatened breach,
violation or default and to any other equitable relief, including without
limitation specific performance, without bond or other security being required.
In any action or proceeding brought to enforce any provision of this Agreement
(including the indemnification provisions thereof), the successful party shall
be entitled to recover reasonable attorneys' fees in addition to its costs and
expenses and any other available remedy.

                                       15
<PAGE>   17

         3.5 No Inconsistent Agreements. The Company will not, on or after the
date of this Agreement, enter into any agreement with respect to its securities
which is inconsistent with the rights granted to the Purchaser in this Agreement
or otherwise conflicts with the provisions hereof. The Company further
represents and warrants that the rights granted to the Purchaser hereunder do
not in any way conflict with and are not inconsistent with any other agreements
to which the Company is a party or by which it is bound.

         3.6 Amendments. The terms and provisions of this Agreement may be
modified or amended, or any of the provisions hereof waived, temporarily or
permanently, in a writing executed and delivered by the Company and the holders
of a majority of the outstanding Registrable Securities.

         3.7 Waiver. No waiver of any of the provisions of this Agreement shall
be deemed to or shall constitute a waiver of any other provision hereof (whether
or not similar). No delay on the part of any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof.

         3.8 Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be a part
of this Agreement.

         3.9 Nouns and Pronouns. Whenever the context may require, any pronouns
used herein shall include the corresponding masculine, feminine or neuter forms,
and the singular form of names and pronouns shall include the plural and vice
versa.

         3.10 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA WITHOUT GIVING EFFECT TO
THE PRINCIPLES OF CONFLICTS OF LAW.

         3.11 Submission to Jurisdiction. Each of the parties hereto hereby
irrevocably and unconditionally consents to submit to the exclusive jurisdiction
of the courts of the State of California and of the United States of America, in
each case located in the County of Los Angeles, for any action or proceeding
arising out of or relating to this Agreement and the transactions contemplated
hereby (and agrees not to commence any litigation relating hereto except in such
courts), and further agrees that service of any process, summons, notice or
document by U.S. registered mail to its respective address set forth in this
Agreement shall be effective service of process for any action or proceeding
brought against it in any such court. Each of the parties hereto hereby
irrevocably and unconditionally waives any objection to the laying of venue of
any action or proceeding arising out of this Agreement or the transactions
contemplated hereby in the courts of the State of California or the United
States of America, in each case located in the County of Los Angeles, hereby
further irrevocably and unconditionally waives and agrees not to plead or claim
in any such court that any such action or proceeding brought in any such court
has been brought in an inconvenient forum.

         3.12 Waiver of Jury Trial. THE COMPANY AND THE PURCHASER HEREBY WAIVE
ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION OR
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT.

                                       16
<PAGE>   18

         3.13 Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart hereof shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.

         3.14 Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid, but if any
provision of this Agreement is held to be invalid or unenforceable in any
respect, such invalidity or unenforceability shall not render invalid or
unenforceable any other provision of this Agreement.

         3.15 Further Assurances. At any time or from time to time after the
date of this Agreement, the Company, on the one hand, and the Purchaser, on the
other hand, agree to cooperate with each other, and at the request of the other
party, to execute and deliver any further instruments or documents and to take
all such further action as the other party may reasonably request in order to
evidence or effectuate the consummation of the transactions contemplated hereby
and to otherwise carry out the intent of the parties hereunder.

         3.16 Entire Agreement; Effectiveness. This Agreement and the Purchase
Agreement contain the entire agreement between the parties with respect to the
subject matter hereof and supersede all prior and contemporaneous arrangements
or understandings with respect thereto; provided that the Confidentiality
Agreement between the parties (or their affiliates) will remain in full force
and effect in accordance with its terms.

                            [Signature Page Follows]

                                       17
<PAGE>   19

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

                                    COMPANY:

                                    WATER PIK TECHNOLOGIES, INC.,
                                    a Delaware corporation

                                    By: /s/ MICHAEL P. HOOPIS
                                        ----------------------------------------
                                    Name:  Michael P. Hoopis
                                    Title: President and Chief Executive Officer

                                    PURCHASER:

                                    SPECIAL VALUE BOND FUND, LLC,
                                    a Delaware limited liability company

                                    By:  SVIM/MSM, LLC
                                    Its: Managing Member

                                         By:  TENNENBAUM & CO., LLC,
                                         Its: Managing Member

                                              By: /s/ MICHAEL E. TENNENBAUM
                                                  ------------------------------
                                                  Name:  Michael E. Tennenbaum
                                                  Title: Managing Member

                                    SPECIAL VALUE BOND FUND II, LLC,
                                    a Delaware limited liability company

                                    By:  SVIM/MSM II, LLC
                                    Its: Managing Member

                                         By:  TENNENBAUM & CO., LLC,
                                         Its: Managing Member

                                              By: /s/ MICHAEL E. TENNENBAUM
                                                  ------------------------------
                                                  Name:  Michael E. Tennenbaum
                                                  Title: Managing Member

                [SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

                                       18<PAGE>   1

                                                                    EXHIBIT 10.1

                            STOCK PURCHASE AGREEMENT

                          DATED AS OF DECEMBER 29, 2000

                                  BY AND AMONG

                          WATER PIK TECHNOLOGIES, INC.,

                          SPECIAL VALUE BOND FUND, LLC

                                       AND

                         SPECIAL VALUE BOND FUND II, LLC

<PAGE>   2

                            STOCK PURCHASE AGREEMENT

         This STOCK PURCHASE AGREEMENT is entered into as of December 29, 2000
(this "Agreement") by and among Water Pik Technologies, Inc., a Delaware
corporation (the "Company"), Special Value Bond Fund, LLC, a Delaware limited
liability company ("SVBF") and Special Value Bond Fund II, LLC, a Delaware
limited liability company ("SVBFII" and together with SVBF, the "Purchaser").

                                   WITNESSETH

         WHEREAS, the Company desires to sell and issue shares of its Common
Stock to the Purchaser, and the Purchaser desires to purchase the Common Stock
from the Company, on the terms and subject to the conditions set forth herein.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the promises and the mutual
agreements contained herein, the parties hereto agree as follows:

                                    ARTICLE I.
                                   DEFINITIONS

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

         "Affiliate" shall mean, with respect to any Person, any Person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person. For the purposes of this definition, "control" (including,
with correlative meanings, the terms "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting securities
or by contract or otherwise.

         "ATI" means Allegheny Teledyne Incorporated, a Delaware corporation.

         "Bylaws" means the Bylaws of the Company, as they may be amended or
restated hereafter from time to time.

         "Certificate of Incorporation" means the Certificate of Incorporation
of the Company, as it may be amended or restated hereafter from time to time.

         "Closing" shall have the meaning set forth in Section 2.2(a).

         "Common Stock" means the Company's Common Stock, par value $0.01 per
share.

         "Company" shall have the meaning set forth in the preamble of this
Agreement.

<PAGE>   3

         "Company Indemnified Party" shall have the meaning set forth in Section
8.2.

         "Consents" shall have the meaning set forth in Section 5.3.

         "DGCL" means the Delaware General Corporation Law.

         "Environmental Laws" shall have the meaning set forth in Section 3.16.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any similar or successor Federal statute, and the rules and regulations of
the SEC thereunder, all as the same shall be in effect at the time.

         "Financial Projections" shall have the meaning set forth in Section
3.9.

         "HSR Act" shall means the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, and the rules and regulations thereunder.

         "IRS" means the U.S. Internal Revenue Service.

         "Litigation" means any claim, action, suit, investigation or
proceeding.

         "Losses" shall have the meaning set forth in Section 8.1.

         "Material Adverse Effect" means any material adverse effect on any of:
(a) the business, properties, assets, operations, prospects, results of
operations or condition (financial or otherwise) of the Company and its
Subsidiaries, if any, taken as a whole; provided, that such material adverse
effect is reasonably expected to have a dollar value of at least $10,000,000,
(b) the transactions contemplated hereby or by the agreements and instruments to
be entered into in connection herewith or (c) the authority or ability of the
Company to perform its obligations under the Transaction Documents.

         "NYSE" shall mean the New York Stock Exchange.

         "Person" shall mean and include an individual, a corporation, a limited
liability company, an association, a partnership, a trust or estate, a
government or any department or agency thereof.

         "Previously Purchased Securities" shall have the meaning set forth in
Section 3.12.

         "Purchaser" shall have the meaning set forth in the preamble of this
Agreement.

         "Purchaser Indemnified Party" shall have the meaning set forth in
Section 8.1.

         "Purchase Price" shall have the meaning set forth in Section 2.1.

         "Registration Rights Agreement" means the Registration Rights
Agreement, substantially in the form attached hereto as Exhibit A, with such
changes therein as to which the Purchaser may agree, by and between the Company
and the Purchaser.

                                       2
<PAGE>   4

         "Ruling Request" means the request for ruling (including all exhibits)
under Section 355 and other provisions of the Internal Revenue Code of 1986, as
amended, as originally filed on behalf of ATI on April 6, 1999, as amended and
supplemented.

         "SEC" means the Securities and Exchange Commission or any other
governmental authority at the time administering the Securities Act or the
Exchange Act.

         "SEC Documents" shall have the meaning set forth in Section 3.6.

         "Securities" shall have the meaning set forth in Section 3.12.

         "Securities Act" means the Securities Act of 1933, as amended, and any
similar or successor Federal statute, and the rules and regulations of the SEC
thereunder, all as the same may be in effect at the time.

         "Shares" shall have the meaning set forth in Section 2.1.

         "Subsidiary" means any entity in which the Company, directly or
indirectly, owns 50% or more of the voting stock or capital stock or other
similar equity interests.

         "SVBF" shall have the meaning set forth in the preamble of this
Agreement.

         "SVBFII" shall have the meaning set forth in the preamble of this
Agreement.

         "Tax Ruling" means the tax ruling from the IRS, as amended, received in
connection with the Company's spin-off from ATI.

         "Trading Day" means any day on which the NYSE is open for customary
trading.

         "Transaction Documents" shall have the meaning set forth in Section
3.2.

                                  ARTICLE II.
                        PURCHASE AND SALE OF COMMON STOCK

         2.1 Purchase and Sale of Common Stock. Subject to the terms and
conditions of this Agreement, the Purchaser agrees to purchase at the Closing
and the Company agrees to sell and issue to the Purchaser at the Closing that
number of shares of Common Stock set forth opposite the Purchaser's name on
Schedule I attached hereto (the "Shares") for an aggregate purchase price of
$15,000,006 (the "Purchase Price").

         2.2 Closing; Delivery.

                  (a) The purchase and sale of the Shares shall take place at
the offices of Latham & Watkins, 12636 High Bluff Drive, Suite 300, San Diego,
California, at 10:00 a.m., on the later of (i) January 3, 2001 or (ii) the
second Trading Day following the satisfaction or waiver of the conditions set
forth in Article VI (other than the conditions that by their nature are to be
satisfied at the Closing, but subject to the satisfaction or waiver of those
conditions), or at

                                       3
<PAGE>   5

such other time and place as the Company and the Purchaser mutually agree upon,
orally or in writing (which time and place are designated as the "Closing").

                  (b) At the Closing, the Company shall deliver to the Purchaser
a certificate representing the Shares being purchased thereby against payment of
the Purchase Price therefor by wire transfer to the Company's bank account in
immediately available funds.

                                  ARTICLE III.
                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         The Company represents and warrants to the Purchaser as follows:

         3.1 Organization and Qualification. The Company and each of its
Subsidiaries are corporations duly organized and validly existing in good
standing under the laws of the jurisdiction in which they are incorporated, and
have the requisite corporate power and authority to own their properties and to
carry on their business as now being conducted. Each of the Company and its
Subsidiaries is duly qualified as a foreign corporation to do business and is in
good standing in every jurisdiction in which its ownership of property or the
nature of the business conducted by it makes such qualification necessary,
except to the extent that the failure to be so qualified or be in good standing
could not reasonably be expected to have a Material Adverse Effect. The Company
has no Subsidiaries except as set forth on Schedule 3.1.

         3.2 Authorization; Enforcement; Validity. (a) The Company has the
requisite corporate power and authority to enter into and perform its
obligations under this Agreement and the Registration Rights Agreement
(collectively, the "Transaction Documents"), and to issue the Shares in
accordance with the terms hereof and thereof, (b) the execution and delivery of
the Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby, including without limitation, the
issuance of the Shares, have been duly authorized by the Board of Directors of
the Company and no further consent or authorization is required by the Company,
its Board of Directors or its stockholders, (c) this Agreement has been, and
each other Transaction Document shall be as of the date of the Closing, duly
executed and delivered by the Company and (d) this Agreement constitutes, and
each other Transaction Document upon its execution on behalf of the Company,
shall constitute, the valid and binding obligations of the Company enforceable
against the Company in accordance with their terms, except as such
enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally, the enforcement of creditors' rights and
remedies, and except as such rights to indemnity and contribution may be limited
by federal and state securities laws and public policy considerations.

         3.3 Capitalization. As of the date hereof, the authorized capital stock
of the Company consists of (a) 50,000,000 shares of Common Stock, of which as of
December 22, 2000, 9,923,685 shares were issued and outstanding, 2,287,026
shares were reserved for issuance pursuant to the Company's option and incentive
plans of which 71,037 shares remained available for future grant under such
plans and (b) 5,000,000 shares of preferred stock, par value $0.01 per share, of
which as of the date hereof no shares are issued and outstanding. All of such
outstanding shares have been, or upon issuance will be, validly issued and are
fully paid and

                                       4
<PAGE>   6

nonassessable. Except as disclosed in Schedule 3.3 or in the SEC Documents, (a)
no shares of the Company's capital stock are subject to preemptive rights or any
other similar rights or any liens or encumbrances suffered or permitted by the
Company and (b) there are no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company or any of its Subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to issue additional shares of capital stock of the Company or any of its
Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
Subsidiaries, other than pursuant to the Company's rights plan, stock incentive,
stock purchase, stock option and other compensation and benefit plans. The
Company has furnished to the Purchaser true and correct copies of the
Certificate of Incorporation and the Bylaws, and copies of securities
convertible into or exercisable for Common Stock and any documents containing
the material rights of the holders thereof in respect thereto.

         3.4 Issuance of Securities. Upon issuance and payment therefor in
accordance with the terms and conditions of this Agreement, the Shares shall be
validly issued, fully paid and nonassessable and free from all taxes, liens and
charges with respect to the issue thereof, with the Purchaser being entitled to
all rights accorded to a holder of Common Stock under the DGCL and the
Certificate of Incorporation and Bylaws.

         3.5 No Conflicts. Except as disclosed in Schedule 3.5, the execution,
delivery and performance of the Transaction Documents by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby
will not (a) result in a violation of the Certificate of Incorporation, any
Certificate of Designations of any outstanding series of preferred stock of the
Company or the Bylaws or (b) conflict with, or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company or
any of its Subsidiaries is a party, or result in a violation of any law, rule,
regulation, order, judgment or decree (including Federal and state securities
laws and regulations and the rules and regulations of the NYSE applicable to the
Company or any of its Subsidiaries) or by which any property or asset of the
Company or any of its Subsidiaries is bound or affected, except in the case of
conflicts, defaults and violations under clause (b), which could not reasonably
be expected to result in a Material Adverse Effect. Except as disclosed in
Schedule 3.5, neither the Company nor its Subsidiaries is in violation of any
term of or is in default under its Certificate of Incorporation, any Certificate
of Designation of any outstanding series of preferred stock of the Company or
the Bylaws or their organizational charter or bylaws, respectively. Except as
disclosed in Schedule 3.5, neither the Company nor any of its Subsidiaries is in
violation of any term of or in default under any contract, agreement, mortgage,
indebtedness, indenture, instrument, judgment, decree or order or any statute,
rule or regulation applicable to the Company or its Subsidiaries, except for
possible conflicts, defaults, terminations or amendments which could not
reasonably be expected to have a Material Adverse Effect. The business of the
Company and its Subsidiaries is not being conducted in violation of any law,
ordinance, regulation of any governmental entity, except for possible
violations, the sanctions for which either individually or in the aggregate
could not reasonably be expected to have a Material Adverse Effect. Except as
specifically contemplated by this Agreement and as

                                       5
<PAGE>   7

required under the Securities Act and applicable state securities laws, the
Company is not required to obtain any consent, authorization or order of, or
make any filing or registration with, any court or governmental agency or any
regulatory or self-regulatory agency in order for it to execute, deliver or
perform any of its obligations under or contemplated by the Transaction
Documents in accordance with the terms hereof or thereof. There is no pending
or, to the knowledge of the Company, threatened action by the NYSE to delist the
Common Stock, and the Company is not aware of any current basis for any such
action.

         3.6 SEC Documents; Financial Statements. Except as disclosed in
Schedule 3.6, since November 29, 1999, the Company has timely filed all reports,
schedules, forms, statements and other documents required to be filed by it with
the SEC pursuant to the reporting requirements of the Exchange Act (all of the
foregoing filed prior to the date hereof and all exhibits included therein and
financial statements and schedules thereto and documents incorporated by
reference therein being hereinafter referred to as the "SEC Documents"). As of
their respective dates (except as they have been correctly amended), the SEC
Documents complied as to form in all material respects with the requirements of
the Exchange Act and the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at the time they
were filed with the SEC (except as they may have been correctly amended),
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. As of their respective dates (except as they have been correctly
amended), the financial statements of the Company included in the SEC Documents
complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto. Such financial statements have been prepared in accordance with
generally accepted accounting principles, consistently applied, during the
periods involved (except (a) as may be otherwise indicated in such financial
statements or the notes thereto or (b) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or
summary statements) and fairly present the financial position of the Company as
of the dates thereof and the results of its operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments).

         3.7 Absence of Certain Changes. Except as disclosed in Schedule 3.7 or
otherwise disclosed in public announcements or press releases which were
previously provided to the Purchaser, since September 30, 2000, there has been
no change to the business, properties, assets, operations, prospects, results of
operations or condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole, except for such changes which could not be
reasonably expected to have a Material Adverse Effect.

         3.8 Brokers or Finders. Except for Credit Suisse First Boston
Corporation, whose fees will be paid solely by the Company, upon the
consummation of the transactions contemplated by this Agreement, no agent,
broker, investment banker or other Person is or will be entitled to any broker's
or finder's fee or any other commission or similar fee from the Purchaser, the
Company or any of its Subsidiaries in connection with any of the transactions
contemplated by the Transaction Documents.

                                       6
<PAGE>   8

         3.9 Financial Projections. The financial projections of the Company,
which were set forth in a press release of the Company on December 5, 2000 and
which press release is attached hereto as Exhibit B (the "Financial
Projections"), have been prepared in good faith on the basis of assumptions by
the Company that the Company believes are reasonable. The Company does not
believe that the Financial Projections are inaccurate, or, to its knowledge,
that it will not achieve the Financial Projections set forth therein, subject to
the assumptions and forward-looking statements disclosure set forth therein.

         3.10 No General Solicitation. Neither the Company, nor any of its
Affiliates, nor any Person acting on its or their behalf, has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D under the Securities Act) in connection with the offer or sale of
the Shares.

         3.11 No Integrated Offering. Except as contemplated by this Agreement,
neither the Company, nor any of its Affiliates, nor any Person acting on its or
their behalf has, directly or indirectly, made any offers or sales of any
security or solicited any offers to buy any security, under circumstances that
would require registration of any of the Shares under the Securities Act or
cause the offering of the Shares to be integrated with prior offerings by the
Company for purposes of the Securities Act or any applicable stockholder
approval provisions, including, without limitation, under the rules and
regulations of any exchange or automated quotation system on which any of the
securities of the Company are listed or designated, nor will the Company or any
of its Subsidiaries take any action or steps that would require registration of
any of the Shares under the Securities Act or cause the offering of the Shares
to be integrated with other offerings in a manner which would cause the sale of
the Shares under this Agreement not to be exempt from the registration
requirements of the Securities Act.

         3.12 Takeover Protections. The Company and its Board of Directors have
taken or will take prior to the date of the Closing all necessary action, in a
manner reasonably acceptable to the Purchaser, in order to approve the purchase
of the Shares by the Purchaser pursuant to the terms of this Agreement (as well
as the 386,800 other shares of Common Stock held by the Purchaser as of the date
of this Agreement (the "Previously Purchased Securities," and together with the
Shares, the "Securities")) in accordance with Section 203 of the DGCL and to
exempt the purchase of the Securities by the Purchaser from application of the
Company's Rights Agreement dated November 12, 1999. To the Company's knowledge,
no other state takeover statute or similar statute or regulation, or other
rights agreement or similar agreement or understanding, applies to or purports
to apply to the Transaction Documents, the purchase of the Securities by the
Purchaser or the transactions contemplated hereby or thereby.

         3.13 Disclosure. Neither this Agreement nor any other Transaction
Document, nor any schedule or exhibit hereto or thereto, when read in
conjunction with the Company's Annual Report on Form 10-K for the year ended
December 31, 1999 and the SEC Documents filed at any time after such 10-K was
filed with the SEC, contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained herein
or therein not misleading (for purposes of the preceding sentence, any
preliminary document or written information shall be disregarded if a final or
updated version of such document or written information was delivered to the
Purchaser by the Company prior to the date hereof). As of the date hereof there
is no fact or information relating to the Company and/or

                                       7
<PAGE>   9

any of its Subsidiaries, including, without limitation, the description of the
Ruling Request and the Tax Ruling in the SEC Documents, that has not been
described in the SEC Documents, the Company's press releases previously provided
to the Purchaser or otherwise disclosed in writing to the Purchaser, except
which could not reasonably be expected to have a Material Adverse Effect.

         3.14 Tax Ruling. The Company and each of its Subsidiaries have complied
with each representation and statement made by the Company or its Subsidiaries
in the Ruling Request and in the materials submitted to the IRS in connection
with the Ruling Request which were required by the Tax Ruling, as supplemented,
to be complied with by the Company and its Subsidiaries prior to the date
hereof. The Company and each of its Subsidiaries have not taken any action or
failed to undertake any action that could jeopardize the Tax Ruling or that
would be inconsistent with the Ruling Request.

         3.15 Intellectual Property Rights. The Company and each of its
Subsidiaries own or possess adequate rights or licenses to use all trademarks,
trade names, service marks, service mark registrations, service names, patents,
patent rights, copyrights, inventions, licenses, approvals, governmental
authorizations, trade secrets and rights necessary to conduct their respective
businesses as now conducted, except where such failure could not reasonably be
expected to have a Material Adverse Effect. Except as set forth on Schedule
3.15, none of the Company's material trademarks, patents or licenses, by the
terms and conditions thereof, could expire or terminate within five years from
the date of this Agreement. The Company and its Subsidiaries do not have any
knowledge of any infringement by the Company or its Subsidiaries of any
trademark, trade name rights, patents, patent rights, copyrights, inventions,
licenses, service names, service marks, service mark registrations, trade secret
or other similar rights of others, or of any such development of similar or
identical trade secrets or technical information by others, except which could
not reasonably be expected to have a Material Adverse Effect and, except as set
forth on Schedule 3.15, there is no claim, action or proceeding being made or
brought against, or to the Company's knowledge, being threatened against, the
Company or its Subsidiaries regarding trademark, trade name, patents, patent
rights, invention, copyright, license, service names, service marks, service
mark registrations, trade secret or other infringement, except which could not
reasonably be expected to have a Material Adverse Effect.

         3.16 Environmental Laws. Except as set forth on Schedule 3.16, and
except in all cases as, individually or in the aggregate, have not had and could
not reasonably be expected to have a Material Adverse Effect, the Company (a)
has obtained all applicable permits, licenses and other authorizations which are
required to be obtained under all applicable federal, state or local laws or any
regulation, code, plan, order, decree, judgment, notice or demand letter issued,
entered, promulgated or approved thereunder relating to pollution or protection
of the environment, including laws relating to emissions, discharges, releases
or threatened releases of pollutants, contaminants, or hazardous or toxic wastes
into ambient air, surface water, ground water, or land or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants or hazardous or toxic
materials or wastes ("Environmental Laws") by the Company, (b) is in compliance
with all terms and conditions of such required permits, licenses and
authorizations, and also is in compliance with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in applicable Environmental Laws, (c) is not

                                       8
<PAGE>   10

aware of nor has received notice of any past or present violations of
Environmental Laws or any event, condition, circumstance, activity, practice,
incident, action or plan which is reasonably likely to interfere with or prevent
continued compliance with or which could give rise to any common law or
statutory liability, or otherwise form the basis of any claim, action, suit or
proceeding against the Company based on or resulting from the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling, or the emission, discharge or release into the environment, of any
pollutant, contaminant or hazardous or toxic material or waste and (d) has taken
all actions necessary under applicable Environmental Laws to register any
products or materials required to be registered by the Company thereunder.

         3.17 Change in Control. The consummation of the transactions
contemplated hereby will not constitute a "Change in Control," as such term is
defined in the employment agreements between the Company and its executive
officers, or otherwise cause the Company or any of its Subsidiaries to incur or
suffer any liability relating to, or obligation to pay, severance, termination
or other payments to any Person or cause the acceleration of any option to
purchase shares of Common Stock.

                                  ARTICLE IV.
                 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

         The Purchaser, jointly and severally, represents and warrants to the
Company as follows:

         4.1 Investment Purpose. Each Purchaser is purchasing the Shares for
such Purchaser's own account for investment only and not with a view toward or
in connection with the resale or distribution thereof. Neither Purchaser will
resell the Shares except pursuant to sales that are exempt from the registration
requirements of the Securities Act and all applicable state securities laws,
and/or sales registered under the Securities Act and all applicable state
securities laws. Each Purchaser understands that it may bear the economic risk
of this investment indefinitely, unless the Shares are registered pursuant to
the Securities Act and any applicable state securities laws or an exemption from
such registration is available, and that the Company has no present intention of
registering any Shares except as contemplated by the Registration Rights
Agreement.

         4.2 Accredited Investor Status. Each Purchaser is an "accredited
investor" as that term is defined in Rule 501(a) of Regulation D promulgated
under the Securities Act. By reason of its business and financial experience,
sophistication and knowledge, each Purchaser is capable of evaluating the risks
and merits of the investment made pursuant to this Agreement.

         4.3 Authorization; Enforcement; Validity. The Transaction Documents
have been duly and validly authorized, executed and delivered on behalf of each
Purchaser and are valid and binding agreements of each Purchaser enforceable in
accordance with their terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, or similar laws affecting the enforcement of
creditors' rights generally or by equitable principles relating to
enforceability, and except as such rights to indemnity and contribution may be
limited by federal and state securities laws and public policy considerations.

                                       9
<PAGE>   11

         4.4 Organization and Qualification. Each Purchaser is duly organized
and validly existing in good standing under the laws of the State of Delaware,
and has the requisite power and authority to carry on its business as now being
conducted.

         4.5 No Conflicts. The execution, delivery and performance of the
Transaction Documents by each Purchaser and the consummation by each Purchaser
of the transactions contemplated hereby and thereby will not (a) result in a
violation of the organizational documents of either Purchaser or (b) conflict
with, or constitute a default (or an event which with notice or lapse of time or
both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which either Purchaser is a party, or result in a violation of any
law, rule, regulation, order, judgment or decree or by which any property or
asset of either Purchaser is bound or affected, except in the case of conflicts,
defaults and violations under clause (b), which could not reasonably be expected
to have a material adverse effect on the business or operations of either
Purchaser. Neither Purchaser is required to obtain any consent, authorization or
order of, or make any filing or registration with, any court or governmental
agency or any regulatory or self-regulatory agency (including under the HSR Act)
in order for it to execute, deliver or perform any of its obligations under or
contemplated by the Transaction Documents in accordance with the terms hereof or
thereof.

         4.6 Brokers or Finders. Upon the consummation of the transactions
contemplated by this Agreement, no agent, broker, investment banker or other
Person is or will be entitled to any broker's or finder's fee or any other
commission or similar fee from either Purchaser in connection with any of the
transactions contemplated by the Transaction Documents.

         4.7 Ownership. Prior to the Closing, the Purchaser and their
Affiliates, individually and collectively, will not (a) beneficially own (as
calculated in accordance with Rule 13d-3 of the Exchange Act), directly or
indirectly, more than 386,800 shares of Common Stock or (b) have any agreement
or understanding with any Person to acquire or dispose of, directly or
indirectly, any shares of Common Stock, other than the purchase of the Shares
from the Company under this Agreement.

         4.8 Relationship of Purchaser. Michael E. Tennenbaum possesses,
directly or indirectly, shared power to direct or cause the direction of the
management, policies and investment decisions of each Purchaser either through
the ownership of voting securities or by contract.

                                   ARTICLE V.
                               CERTAIN COVENANTS

         5.1 Conduct of Business by the Company Pending the Closing. The Company
covenants and agrees that, except as set forth in Schedule 5.1, during the
period from the date of this Agreement and continuing until the earlier of the
termination of this Agreement or the Closing, unless the Purchaser otherwise
agrees in writing, the Company shall, and shall cause each of its Subsidiaries
to, (a) conduct its business only in the ordinary course and consistent with
past practice, (b) use commercially reasonable efforts to preserve and maintain
its assets

                                       10
<PAGE>   12

and properties and its relationships with its customers, suppliers, advertisers,
distributors, agents, officers and employees and other Persons with which it has
significant business relationships, (c) use commercially reasonable efforts to
maintain all of the material assets it owns or uses in the ordinary course of
business consistent with past practice, (d) use commercially reasonable efforts
to preserve the goodwill and ongoing operations of its business, (e) maintain
its books and records in the usual, regular and ordinary manner, on a basis
consistent with past practice and (f) comply in all material respects with
applicable Federal, state, foreign or local laws, ordinances or rules. Except as
expressly contemplated by this Agreement or as set forth on Schedule 5.1,
between the date of this Agreement and the Closing, the Company shall not, and
shall cause each of its Subsidiaries not to, do any of the following without the
prior written consent of the Purchaser:

                  (a) change any method of accounting or accounting practice
used by the Company or any of its Subsidiaries, other than such changes required
by United States generally accepted accounting principles, except as disclosed
in the SEC Documents;

                  (b) repurchase, redeem or otherwise acquire or exchange any
shares of Common Stock or other equity interests; except for issuances of Common
Stock pursuant to the exercise of options, grants or rights to purchase Common
Stock outstanding on the date hereof or options, grants or rights issued in
compliance with this clause (b), issue or sell any additional shares of the
capital stock of, or other equity interests in, the Company or any of its
Subsidiaries, or securities convertible into or exchangeable for such shares or
other equity interests, or issue or grant any subscription rights, options,
warrants or other rights of any character relating to shares of such capital
stock, such other equity interests or such securities, other than options,
grants and rights to purchase Common Stock granted after the date hereof in the
ordinary course of business under the Company's existing stock option, stock
incentive, stock purchase and other compensation and benefit plans and the
Company's rights plan; or, declare, set aside, make or pay any dividend, or make
any distribution, in respect of any shares of capital stock of the Company;

                  (c) amend the Company's or any of its Subsidiaries' charter,
bylaws or other organizational documents;

                  (d) take any action that is reasonably likely to result in (i)
any of the representations and warranties set forth in Article II becoming false
or inaccurate in any material respect as of the date of the Closing or (ii) any
of the conditions to the obligations of the Purchaser set forth in Section 6.2
not being satisfied; or

                  (e) agree to take any of the actions restricted by this
Section 5.1.

         5.2 Press Releases; Interim Public Filings. The Company shall, and
shall cause each of its Subsidiaries to, deliver to the Purchaser complete and
correct copies of all press releases and public filings made between the date
hereof and the date of the Closing. To the extent any such press releases refer
to the Purchaser or its Affiliates, shall give the Purchaser the reasonable
opportunity to review and comment on such releases and filings (on a strictly
confidential basis until such information is released), in each case prior to
release in the form in which it will be issued.

                                       11
<PAGE>   13

         5.3 Consents; Approvals. The Company shall use commercially reasonable
efforts to obtain prior to the Closing all consents, waivers, exemptions,
approvals, authorizations or orders (collectively, "Consents") required in
connection with the transactions contemplated by this Agreement or any of the
other Transaction Documents (including, without limitation (a) all Consents
required to avoid any breach, violation, default, encumbrance or right of
termination, modification, cancellation, prepayment, suspension, limitation,
revocation or acceleration of any material agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which any of their material
assets are bound, (b) all Consents pursuant to the Company's or any of its
Subsidiaries' financing documents, including without limitation, all indentures
and credit agreements of the Company or any of its Subsidiaries and (c) all
governmental and regulatory rulings and approvals). The Company also shall use
commercially reasonable efforts to obtain all necessary state securities laws or
blue sky permits and approvals required to carry out the transactions
contemplated hereby and shall furnish all information as may be reasonably
requested in connection with any such action.

         5.4 Listing. The Company shall use commercially reasonable efforts to
continue to have its Common Stock listed on the NYSE for so long as any Shares
are outstanding. Prior to the Closing, the Company shall prepare and submit to
the NYSE a listing application covering the Shares and shall take all actions
reasonably necessary to obtain approval for the listing of such shares. If such
approval is not obtained prior to the Closing, the Company shall use
commercially reasonable efforts to obtain, as promptly as practicable following
the Closing, the approval for the listing of the Shares on the NYSE.

         5.5 Cooperation. Each of the Purchaser and the Company agrees to use
commercially reasonable efforts to take, or cause to be taken, all such further
actions as shall be necessary to make effective and consummate the transactions
contemplated by this Agreement.

         5.6 Access to Property; Records. Between the date hereof and the
Closing the Company shall afford the Purchaser and its employees, counsel,
accountants, partners, members, investors, and other authorized representatives
reasonable access, upon notice, during normal business hours, to the assets,
properties, offices and other facilities and books and records of the Company
and of its Subsidiaries, and to the outside auditors of the Company and their
work papers relating to the Company and its Subsidiaries. The parties hereto
agree that no investigation by the Purchaser or its representatives shall affect
or limit the scope of the representations and warranties of the Company
contained in this Agreement or in any other Transaction Document delivered
pursuant hereto or limit the liability for breach of any such representation or
warranty.

         5.7 Use of Proceeds. The Company agrees to conduct its business in the
manner proposed in the Ruling Request and to take all actions necessary to
preserve the validity of the Tax Ruling. The Company further agrees to use the
proceeds received by the Company pursuant to this Agreement in the manner and
during the time periods set forth in the Tax Ruling.

         5.8 Standstill. The Purchaser agrees that, for a period of one (1) year
from the Closing, unless such shall have been specifically invited in writing by
the Board of Directors of the Company, neither the Purchaser, Michael E.
Tennenbaum nor any of their respective Affiliates will in any manner, directly
or indirectly, (a) effect or seek, offer or propose (whether

                                       12
<PAGE>   14

publicly or otherwise) to effect, or cause or participate in or in any way
assist any other Person to effect or seek, offer or propose (whether publicly or
otherwise) to effect or participate in, (i) any open market acquisition of any
securities (or beneficial ownership thereof) or assets of the Company or any of
its Subsidiaries, (ii) any tender or exchange offer or merger or other business
combination involving the Company or any of its Subsidiaries, (iii) any
recapitalization, restructuring, liquidation, dissolution or other extraordinary
transaction with respect to the Company or any of its Subsidiaries or (iv) any
"solicitation" of "proxies" (as such terms are used in the proxy rules of the
SEC) or consents to vote any voting securities of the Company, (b) form, join or
in any way participate in a "group" (as defined under the Exchange Act) with
respect to any securities of the Company, (c) otherwise act, alone or in concert
with others, to seek to control or influence the management, Board of Directors
or policies of the Company, (d) take any action which might force the Company to
make a public announcement regarding any of the types of matters set forth in
(a) above or (e) enter into any discussions or arrangements with any third party
with respect to any of the foregoing. In addition, the Purchaser agrees that,
for a period of six (6) months from the date of this Agreement, neither the
Purchaser, Michael E. Tennenbaum nor any of their respective Affiliates will in
any manner, directly or indirectly, dispose of any securities (or beneficial
ownership thereof) of the Company. The Purchaser also agrees, for a period of
one (1) year from the Closing, not to request the Company (or its directors,
officers, employees or agents), directly or indirectly, to amend or waive any
provision of this Section (including this sentence).

                                  ARTICLE VI.
                              CONDITIONS OF CLOSING

         6.1 Conditions to Obligations of the Purchaser. The obligations of the
Purchaser to consummate the transactions contemplated hereby shall be subject to
the satisfaction or waiver at or prior to the Closing of each of the following
conditions:

                  (a) No statute, rule or regulation or order of any court or
administrative agency shall be in effect which prohibits the consummation of the
transactions contemplated hereby;

                  (b) The Company shall have performed in all material respects
its covenants and agreements contained in this Agreement required to be
performed at or prior to the Closing and the representations and warranties of
the Company and its Subsidiaries contained in this Agreement that are qualified
as to a Material Adverse Effect shall be true and correct and any such
representations and warranties that are not so qualified shall be true and
correct except where the failure to be true and correct individually or in the
aggregate could not reasonably be expected to have a Material Adverse Effect in
each case, as of the Closing as if made as of the Closing (except to the extent
that the representation or warranty is expressly limited by its terms to another
date);

                  (c) The Company shall have executed and delivered the
Registration Rights Agreement, and the Registration Rights Agreement shall be in
full force and effect;

                  (d) The Purchaser shall have received an opinion of Riordan &
McKinzie, outside counsel to the Company, with respect to the due incorporation,
due

                                       13
<PAGE>   15

authorization, validity of the Shares, Securities Act exemption and the valid
and binding nature of this Agreement and the Registration Rights Agreement;

                  (e) The Company shall have paid the fees and expenses of the
Purchaser pursuant to Section 9.1; and

                  (f) The Company shall have either (i) obtained approval to
list the Shares on the NYSE or (ii) provided the Purchaser with reasonable
assurances from the NYSE that such approval will promptly be received following
the Closing or that such approval is not necessary to list the Shares.

         6.2 Conditions to Obligations of the Company. The obligations of the
Company to consummate the transactions contemplated hereby shall be subject to
the satisfaction or waiver at or prior to the Closing of each of the following
conditions:

                  (a) No statute, rule or regulation or order of any court or
administrative agency shall be in effect which prohibits the consummation of the
transactions contemplated hereby; and

                  (b) The Purchaser shall have performed in all material
respects its covenants and agreements contained in this Agreement required to be
performed at or prior to the Closing and the representations and warranties of
the Purchaser contained in this Agreement that are qualified as to a material
adverse effect shall be true and correct and any such representations and
warranties that are not so qualified shall be true and correct except where the
failure to be true and correct individually or in the aggregate would not
reasonably be expected to have a material adverse effect on the Purchaser, in
each case, as of the Closing as if made as of the Closing (except to the extent
that the representation or warranty is expressly limited by its terms to another
date).

                                   ARTICLE VII.
                                   TERMINATION

         7.1 Termination. This Agreement may be terminated at any time prior to
the Closing:

                  (a) by mutual written agreement of the Company and the
Purchaser;

                  (b) by either the Purchaser or the Company (provided that the
terminating party is not then in material breach of any representation,
warranty, covenant or other agreement contained in this Agreement) if the
Closing shall not have been consummated on or before January 15, 2001;

                  (c) by either the Purchaser or the Company if a court of
competent jurisdiction or governmental, regulatory or administrative agency or
commission shall have issued a non-appealable final order, decree or ruling or
taken any other action having the effect of permanently restraining, enjoining
or otherwise prohibiting the transactions contemplated by this Agreement;

                                       14
<PAGE>   16

                  (d) by either the Purchaser or the Company (provided that the
terminating party is not then in material breach of any representation,
warranty, covenant or other agreement contained in this Agreement) in the event
of a material breach by the other party of any representation or warranty
contained in this Agreement which cannot be or has not been cured within 30 days
after the giving of written notice to the breaching party of such breach; or

                  (e) by either the Purchaser or the Company (provided that the
terminating party is not then in material breach of any representation,
warranty, covenant or other agreement contained in this Agreement) in the event
of a material breach by the other party of any covenant or agreement contained
in this Agreement which cannot be or has not been cured within 30 days after the
giving of written notice to the breaching party of such breach.

         7.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 7.1, this Agreement shall forthwith become void
and there shall be no liability on the part of any party hereto (or any
stockholder, director, officer, partner, employee, agent, consultant or
representative of such party) except as set forth in this Section 7.2, provided
that nothing contained in this Agreement shall relieve any party from liability
for any breach of this Agreement and provided further that Article IX shall
survive termination of this Agreement.

                                  ARTICLE VIII.
                                 INDEMNIFICATION

         8.1 Indemnification by Company. In addition to all other sums due
hereunder or provided for in this Agreement, the Company agrees to indemnify and
hold harmless the Purchaser and its Affiliates and their respective officers,
directors, members, agents, employees and partners (each, a "Purchaser
Indemnified Party") to the fullest extent permitted by law from and against any
and all losses, claims, damages, expenses (including reasonable fees,
disbursements and other charges of counsel), damages or other liabilities
("Losses") resulting from any breach of any representation or warranty, covenant
or agreement of the Company in the Transaction Documents or any legal,
administrative or other actions (including actions brought by any equity holders
of the Company or derivative actions brought by any Person claiming through the
Company or in the Company's name), proceedings or investigations (whether formal
or informal), or written threats thereof, based upon, relating to or arising out
of the Transaction Documents, the transactions contemplated hereby or thereby,
or any Purchaser Indemnified Party's role therein or in the transactions
contemplated hereby or thereby; provided, however, that the Company shall not be
liable under this Section 8.1: (a) for any amount paid in settlement of claims
without the Company's consent (which consent shall not be unreasonably withheld)
or (b) to the extent that it is finally judicially determined that such Losses
resulted primarily from the willful misconduct, bad faith or gross negligence of
such Purchaser Indemnified Party or a breach of the Purchaser's representations
in Article IV; provided, further, that if and to the extent that such
indemnification is unenforceable for any reason, the Company shall make the
maximum contribution to the payment and satisfaction of such indemnified
liability that shall be permissible under applicable laws. In connection with
the obligation of the Company to indemnify for expenses as set forth above, the
Company further agrees to reimburse each Purchaser Indemnified Party for all
such expenses (including reasonable fees, disbursements and other charges of
counsel) as they are incurred by such Purchaser Indemnified Party; provided,
however, that if a Purchaser Indemnified Party is reimbursed hereunder for any
expenses, such

                                       15
<PAGE>   17

reimbursement of expenses shall be refunded to the extent it is finally
judicially determined that the Losses in question resulted primarily from the
willful misconduct, bad faith or gross negligence of such Purchaser Indemnified
Party.

         8.2 Indemnification by the Purchaser. The Purchaser, jointly and
severally, agrees to indemnify and hold harmless the Company and its Affiliates
and their respective officers, directors, agents and employees (each a "Company
Indemnified Party") to the fullest extent permitted by law from and against any
and all Losses resulting from any breach of any representation or warranty,
covenant or agreement of the Purchaser in this Agreement; provided, however,
that the Purchaser shall not be liable under this Section 8.2 to the extent that
it is finally judicially determined that such Losses resulted primarily from the
willful misconduct, bad faith or gross negligence of such Company Indemnified
Party or a breach of the Company's representations in Article III; provided,
further, that if and to the extent that such indemnification is unenforceable
for any reason, the Purchaser shall make the maximum contribution to the payment
and satisfaction of such indemnified liability that shall be permissible under
applicable laws. In connection with the obligation of the Purchaser to indemnify
for expenses as set forth above, the Purchaser further agrees to reimburse each
Company Indemnified Party for all such expenses (including reasonable fees,
disbursements and other charges of counsel) as they are incurred by such Company
Indemnified Party; provided, however, that if a Company Indemnified Party is
reimbursed hereunder for any expenses, such reimbursement of expenses shall be
refunded to the extent it is finally judicially determined that the Losses in
question resulted primarily from the willful misconduct, bad faith or gross
negligence of such Company Indemnified Party. Notwithstanding anything to the
contrary contained herein, in no event shall the maximum aggregate liability of
the Purchaser under this Article VIII exceed an amount equal to the Purchase
Price.

         8.3 Notification. Each indemnified party under this Article VIII will,
promptly (and in any event within twenty (20) Trading Days), after the receipt
of notice of the commencement of any action or other proceeding against such
indemnified party in respect of which indemnity may be sought from the
indemnifying party under this Article VIII, notify the indemnifying party in
writing of the commencement thereof. The failure of any indemnified party so to
notify the indemnifying party of any such action shall not relieve the
indemnifying party from any liability that it may have to such indemnified party
pursuant to this Article VIII, except to the extent that such failure causes
actual damage to the indemnifying party. In case any such action or other
proceeding shall be brought against any indemnified party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it may wish, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party; provided, however, that any indemnified party may, at its own
expense, retain separate counsel to participate in such defense. Notwithstanding
the foregoing, in any action or proceeding in which both the indemnifying party
and an indemnified party is, or is reasonably likely to become, a party, such
indemnified party shall have the right to employ separate counsel at the
indemnifying party's expense and to control its own defense of such action or
proceeding if, in the written opinion of counsel to such indemnified party, (a)
there are or may be legal defenses available to such indemnified party or to
other indemnified parties that are different from or additional to those
available to the indemnifying party or (b) any conflict or potential conflict
exists between the indemnifying party and such indemnified party that would make
such separate representation advisable; provided,

                                       16
<PAGE>   18

however, that in no event shall the indemnifying party be required to pay fees
and expenses under this Article VIII for more than one firm of attorneys in any
jurisdiction in any one legal action or group of related legal actions. The
indemnifying party shall not, without the consent of the indemnified party
(which consent shall not be unreasonably withheld), consent to the entry of any
judgment or enter into any settlement that does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability in respect to such claim or litigation or that
requires action other than the payment of money by the indemnifying party. The
rights accorded to indemnified parties hereunder shall be in addition to any
rights that any indemnified party may have at common law, by separate agreement
or otherwise.

         8.4 Registration Rights Agreement. Notwithstanding anything to the
contrary in this Article VIII, the indemnification and contribution provisions
of the Registration Rights Agreement shall govern any claim made with respect to
registration statements filed pursuant thereto or sales made thereunder.

         8.5 Survival of Provisions of Article VIII. The obligations of the
Company under this Article VIII shall survive until the first Trading Day
following the filing with the SEC of the Company's Quarterly Report on Form 10-Q
for the quarter ending September 30, 2001.

                                   ARTICLE IX.
                                  MISCELLANEOUS

         9.1 Expenses. At the Closing, the Company shall pay, or reimburse the
Purchaser for all reasonable costs and expenses incurred by the Purchaser in
connection with the negotiation, execution, delivery, performance and
consummation of this Agreement and the transactions contemplated herein; but in
no event shall the Company be obligated to pay or reimburse the Purchaser for
any such costs and expenses in excess of $100,000 without the Company's prior
written approval, which approval shall not be unreasonably withheld. The Company
shall pay its own expenses incurred in connection with the negotiation,
execution, delivery, performance and consummation of this Agreement and the
transactions contemplated hereby. Notwithstanding the foregoing, if this
Agreement is terminated prior to the Closing (a) by either party, when the
Purchaser has failed to consummate the transactions contemplated hereby
following the satisfaction or waiver of the conditions set forth in Section 6.1,
then the Purchaser shall pay the expenses set forth in this Section 9.1, (b) by
either party, when the Company is in breach of any provision of this Agreement
or has otherwise failed to perform, then the Company shall pay the expenses set
forth in this Section 9.1, (c) by either party, when both the Purchaser has
failed to consummate the transactions contemplated hereby following the
satisfaction or waiver of the conditions set forth in Section 6.1 and the
Company is in breach of any provision of this Agreement or has otherwise failed
to perform, then the Purchaser and the Company shall equally pay the expenses
set forth in this Section 9.1 and (d) by either party, when neither the
Purchaser nor the Company is in breach of any provision of this Agreement or has
otherwise failed to perform, then the Company shall pay the expenses set forth
in this Section 9.1.

                                       17
<PAGE>   19

         9.2 Public Announcements. The Purchaser and the Company shall consult
with each other before issuing any press release with respect to this Agreement
or the transactions contemplated hereby and neither shall issue any such press
release or make any such public statement without the prior consent of the
other, which consent shall not be unreasonably withheld; provided, however, that
a party may, without the prior consent of the other party, issue such press
release or make such public statement as may upon the advice of counsel be
required by law if it has used commercially reasonable efforts to consult with
the other party prior thereto. The parties hereby consent to the filing of the
Transaction Documents by the Company with the NYSE and the SEC.

         9.3 Restrictive Legends. The Shares may not be transferred without
registration under the Securities Act and applicable state securities laws
unless counsel to the Company shall advise the Company that such transfer may be
effected without such registration. Each certificate representing any of the
foregoing shall bear a legend in substantially the following form:

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE
         AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
         EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
         SECURITIES LAWS OR AN APPLICABLE EXEMPTION TO THE REGISTRATION
         REQUIREMENTS OF SUCH ACT OR SUCH LAWS.

         9.4 Further Assurances. At any time or from time to time after the
Closing, the Company, on the one hand, and the Purchaser, on the other hand,
agree to cooperate with each other, and at the request of the other party, to
execute and deliver any further instruments or documents and to take all such
further action as the other party may reasonably request in order to evidence or
effectuate the consummation of the transactions contemplated hereby or by the
other Transaction Documents and to otherwise carry out the intent of the parties
hereunder or thereunder.

         9.5 Successors and Assigns. This Agreement shall bind and inure to the
benefit of the Company and the Purchaser and the respective successors,
permitted assigns, heirs and personal representatives of the Company and the
Purchaser; provided, that, the Company may not assign its rights or obligations
under this Agreement to any Person without the prior written consent of the
Purchaser; provided, further, that the Purchaser may not assign its rights or
obligations under this Agreement to any Person (other than an Affiliate) without
the prior written consent of the Company.

         9.6 Entire Agreement. This Agreement and the other Transaction
Documents contain the entire agreement between the parties with respect to the
subject matter hereof and supersede all prior and contemporaneous arrangements
or understandings with respect thereto; provided that the Confidentiality
Agreement between the parties (or their Affiliates) will remain in full force
and effect in accordance with its terms. To the extent that any term contained
in the

                                       18
<PAGE>   20

Confidentiality Agreement is inconsistent or conflicts with any term contained
herein, the provisions of this Agreement shall control.

         9.7 Notices. All notices, requests, consents and other communications
hereunder to any party shall be deemed to be sufficient if contained in a
written instrument delivered in person or sent by telecopy, nationally
recognized overnight courier or first class registered or certified mail, return
receipt requested, postage prepaid, addressed to such party at the address set
forth below or such other address as may hereafter be designated in writing by
such party to the other party:

                  (a)      If to the Company, to:

                           Water Pik Technologies, Inc.
                           23 Corporate Plaza, Suite 246
                           Newport Beach, California  92660
                           Attn:  Richard D. Tipton, Esq.

                           With a copy to:

                           Riordan & McKinzie
                           Plaza Tower
                           600 Anton Boulevard, 18th Floor
                           Costa Mesa, California  92626
                           Attn:  Elaine R. Levin, Esq.

                  (b)      If to the Purchaser, to:

                           Special Value Investment Management, LLC
                           11100 Santa Monica Boulevard, Suite 210
                           Los Angeles, California  90025
                           Attn:  Mark K. Holdsworth

                           With a copy to:

                           Latham & Watkins
                           12636 High Bluff Drive, Suite 300
                           San Diego, California  92130
                           Attn:  Craig M. Garner, Esq.

All such notices, requests, consents and other communications shall be deemed to
have been given or made if and when delivered personally or by overnight courier
to the parties at the above addresses or sent by electronic transmission, with
confirmation received (or at such other address for a party as shall be
specified by like notice).

         9.8 Amendments. The terms and provisions of this Agreement may be
modified or amended, or any of the provisions hereof waived, temporarily or
permanently, in a writing executed and delivered by the Company and the
Purchaser.

                                       19
<PAGE>   21

         9.9 Waiver. No waiver of any of the provisions of this Agreement shall
be deemed to or shall constitute a waiver of any other provision hereof (whether
or not similar). No delay on the part of any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof.

         9.10 Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart hereof shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.

         9.11 Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be a part
of this Agreement.

         9.12 Nouns and Pronouns. Whenever the context may require, any pronouns
used herein shall include the corresponding masculine, feminine or neuter forms,
and the singular form of names and pronouns shall include the plural and vice
versa.

         9.13 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA WITHOUT GIVING EFFECT TO
THE PRINCIPLES OF CONFLICTS OF LAW.

         9.14 Submission to Jurisdiction. Each of the parties hereto hereby
irrevocably and unconditionally consents to submit to the exclusive jurisdiction
of the courts of the State of California and of the United States of America, in
each case located in the County of Los Angeles, for any Litigation arising out
of or relating to this Agreement or the other Transaction Documents and the
transactions contemplated hereby and thereby (and agrees not to commence any
Litigation relating hereto or thereto except in such courts), and further agrees
that service of any process, summons, notice or document by U.S. registered mail
to its respective address set forth in this Agreement shall be effective service
of process for any Litigation brought against it in any such court. Each of the
parties hereto hereby irrevocably and unconditionally waives any objection to
the laying of venue of any Litigation arising out of this Agreement or the
transactions contemplated hereby in the courts of the State of California or the
United States of America, in each case located in the County of Los Angeles,
hereby further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such Litigation brought in any such court has
been brought in an inconvenient forum.

         9.15 WAIVER OF JURY TRIAL. THE COMPANY AND THE PURCHASER HEREBY WAIVE
ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING
OR LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS.

         9.16 Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid, but if any
provision of this Agreement is held to be invalid or unenforceable in any
respect, such invalidity or unenforceability shall not render invalid or
unenforceable any other provision of this Agreement.

                                       20
<PAGE>   22

         9.17 Survival of Representations Warranties and Indemnities. All
representations and warranties contained herein or made in writing by the
Company in connection herewith shall survive the execution and delivery of this
Agreement and the Shares, regardless of any investigation made by the Purchaser
or on the Purchaser's behalf until the first Trading Day following the filing
with the SEC of the Company's Quarterly Report on Form 10-Q for the quarter
ending September 30, 2001.

                            [Signature Page Follows]

                                       21
<PAGE>   23

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

                                      COMPANY:

                                      WATER PIK TECHNOLOGIES, INC.,
                                      a Delaware corporation

                                      By: /s/ MICHAEL P. HOOPIS
                                          ------------------------------------
                                      Name: Michael P. Hoopis
                                      Title: President and Chief Executive
                                             Officer

                                      PURCHASER:

                                      SPECIAL VALUE BOND FUND, LLC,
                                      a Delaware limited liability company

                                      By:  SVIM/MSM, LLC
                                      Its: Managing Member

                                           By:  TENNENBAUM & CO., LLC,
                                           Its: Managing Member

                                                By: /s/ MICHAEL E. TENNENBAUM
                                                    ----------------------------
                                                    Name:  Michael E. Tennenbaum
                                                    Title:  Managing Member

                                      SPECIAL VALUE BOND FUND II, LLC,
                                      a Delaware limited liability company

                                      By:  SVIM/MSM II, LLC
                                      Its: Managing Member

                                           By:  TENNENBAUM & CO., LLC,
                                           Its: Managing Member

                                                By: /s/ MICHAEL E. TENNENBAUM
                                                    ----------------------------
                                                    Name:  Michael E. Tennenbaum
                                                    Title:  Managing Member

                  [SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT]

<PAGE>   24

                                   SCHEDULE I

PURCHASER                                                     NO. OF SHARES
---------                                                     -------------

Special Value Bond Fund, LLC                                      300,000

Special Value Bond Fund II, LLC                                 1,673,685
                                                                ---------

                                                     Total      1,973,685

<PAGE>   25

                                    EXHIBITS

Exhibit A - Form of Registration Rights Agreement

Exhibit B - Press Release

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