FIRST AMENDMENT TO STOCK CONTRIBUTION AGREEMENT

Exhibit 1

FIRST AMENDMENT TO
STOCK CONTRIBUTION AGREEMENT

This FIRST AMENDMENT TO STOCK CONTRIBUTION AGREEMENT (this “Amendment”), is made as of April 4, 2003, by and among the stockholders listed on signature pages hereof (the “Contributing Stockholders”), Acorn Merger Corporation, a Delaware corporation (the “Company”) and Porter, Wright, Xxxxxx & Xxxxxx LLP (as Escrow Agent).

RECITALS

WHEREAS, the Contributing Stockholders, the Company and the Escrow Agent were parties to that certain Stock Contribution Agreement dated as of February 21, 2003 (the “Agreement”; terms not otherwise defined herein shall have the meanings ascribed to them in the Agreement);

WHEREAS, pursuant to the Agreement each of the Contributing Stockholders agreed to contribute all of the shares of the outstanding common stock, par value $0.01 (“Acorn Stock”), of Acorn Products, Inc. (“Acorn”) owned by such Contributing Stockholder (the “Contributed Shares”);

WHEREAS, Trust Company of the West (“TCW”) desires to refrain from contributing the shares of Acorn common stock held by TCW Special Credits Fund III; and

WHEREAS, each of the Contributing Stockholders desires to authorize Acorn to consummate a reverse stock split and to amend the certificate of incorporation of Acorn (“Acorn Certificate”) immediately after the consummation of the Merger.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and other good and valuable consideration, the receipt and adequacy of which hereby is acknowledged, the parties hereto, intending to be legally bound, hereby agree to amend and supplement the Agreement as follows:

Section 1. AMENDMENT TO ARTICLE 1

a) The following Sections are hereby added to Article 1 of the Agreement:

“1.5  Reverse Stock Split.  Each of the Contributing Stockholders hereby consents to the consummation of a reverse stock split by Acorn immediately following the effectiveness of the Merger pursuant to which every forty (40) shares of Acorn Stock outstanding shall be converted into and constitute one (1) fully paid and nonassessable share of Acorn Stock.

1.6  Amendment to Certificate.  Each of the Contributing Stockholders hereby consents to an amendment of the Acorn Certificate immediately following the consummation of the Merger to decrease the number of authorized shares of Acorn Stock from 20,000,000 to 500,000.”

Section 2. AMENDMENT OF EXHIBIT A

a) Exhibit A of the Agreement is amended to reflect the contribution of fewer Contributed Shares by TCW by deleting such Exhibit A in its entirety and substituting the following in its place:

EXHIBIT A

OWNERSHIP OF CONTRIBUTED SHARES

Contributing Stockholder		Contributed Shares		Company Shares
OCM Principal Opportunities Fund, L.P.		1,890,441		1,890,441
Trust Company of the West		2,412,370		2,412,370
CapitalSource Holdings LLC		213,354		213,354
A. Xxxxxxx Xxxxx		2,150		2,150
Xxxx X. Xxxxx		21,500		21,500	*
Xxxx X. Xxxxxxxxx		20,000		20,000	*
Xxxxx X. XxXxxxx		8,000		8,000	*
Total		4,567,815		4,567,815

* Subject to Restrictions

Section 3. MISCELLANEOUS

a) Reference to and Effect on the Agreement.

i) Each reference in the Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like import referring to the Agreement, and each reference in any other document (“Other Documents”) to the “Agreement”, “thereunder”, “thereof” or words of like import referring to the Agreement shall mean and be a reference to the Agreement as amended by this Amendment.

ii) Except as specifically amended by this Amendment, the Agreement shall remain in full force and effect and is ratified and confirmed.

iii) The execution, delivery and performance of this Amendment shall not, except as expressly provided in this Amendment, constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of any party to the Agreement or any of the Other Documents.

b) Headings.  Section and subsection headings in this Amendment are included in this Amendment for convenience of reference only and shall not constitute a part of this Amendment for any other purpose or be given any substantive effect.

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c) GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF DELAWARE.

d) Counterparts.  This Amendment may be executed in any number of counterparts and when so executed, all of such counterparts shall constitute a single instrument binding upon all parties notwithstanding the fact that all parties are not signatory to the original or to the same counterpart.

[SIGNATURES FOLLOW]

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IN WITNESS WHEREOF, each of the parties hereto has approved and executed this First Amendment to Stock Contribution Agreement as of the date first above written.

	TRUST COMPANY OF THE WEST
	By:	/s/ Xxxxxxx Xxxxx
		Name:	Xxxxxxx Xxxxx
		Title:	Authorized Signatory
	By:	/s/ Xxxxxxx Xxxxxx
		Name:	Xxxxxxx Xxxxxx
		Title:	Authorized Signatory
	Address for Notices: The TCW Group, Inc. 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000 Xxx Xxxxxxx, XX 00000 Attention: General Counsel Telephone: (000) 000-0000

	OCM PRINCIPAL OPPORTUNITIES FUND, L.P.
	By:	Oaktree Capital Management, LLC, Its
	General Partner
	By:	/s/ Xxxxxxx X. Xxxxxx
		Name:		Xxxxxxx X. Xxxxxx
		Title:		Managing Director
	By:	/s/ Xxxxxxx X. Xxxxxx
		Name:		Xxxxxxx X. Xxxxxx
		Title:		Principal
	Address for Notices: Oaktree Capital Management, LLC 000 Xxxxx Xxxxx Xxxxxx, 00xx xxxxx Xxx Xxxxxxx, XX 00000
	Attention:		General Counsel
	Telephone:		(000) 000-0000
	Facsimile:		(000) 000-0000
	CAPITALSOURCE HOLDINGS LLC
	By:	/s/ Xxxxxx Xxxxxx
		Name:		Xxxxxx Xxxxxx
		Title:		Associate General Counsel
	Address for Notices: 0000 Xxxxxxx Xxxxxx, 00xx Xxxxx Xxxxx Xxxxx, Xxxxxxxx  00000 Attention: Corporate Finance Group, Portfolio Manager
	Telephone:		(000) 000-0000
	Facsimile:		(000) 000-0000

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	Individual Stockholders:
	/s/ A. Xxxxxxx Xxxxx
	A. Xxxxxxx Xxxxx
	/s/ Xxxx X. Xxxxx
	Xxxx X. Xxxxx
	/s/ Xxxx X. Xxxxxxxxx
	Xxxx X. Xxxxxxxxx
	/s/ Xxxxx X. XxXxxxx
	Xxxxx X. XxXxxxx
	Address for Notices to Individual Stockholders: 000 X. Xxxxxxxxxx Xxxx. Xxxxxxxx, Xxxx 00000
	Telephone: Facsimile:	(000) 000-0000 (000) 000-0000

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	ACORN MERGER CORPORATION
	By:	/s/ Xxxxxxx X. Xxxxxx
		Name:	Xxxxxxx X. Xxxxxx
		Title:	Chairman and President

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	Acknowledged and Agreed to as Escrow Agent Only:
	PORTER, WRIGHT, XXXXXX AND XXXXXX LLP
	By:	/s/ Xxxxxx X. Xxxxxxx
		Name:	Xxxxxx X. Xxxxxxx
		Title:	Partner

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