AGREEMENT AND PLAN OF MERGER

                                      AMONG

                    IMAGINON, INC. (A CALIFORNIA CORPORATION)

                                       AND

              CALIFORNIA PRO SPORTS, INC. (A DELAWARE CORPORATION)

                                       AND

              IMAGINON ACQUISITION CORP. (A CALIFORNIA CORPORATION)

                             AS OF JANUARY 30, 1998

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         This Agreement and Plan of Merger (the  "Agreement")  is made as of the
30th day of  January,  1998,  among  California  Pro  Sports,  Inc.,  a Delaware
corporation ("Cal Pro");  ImaginOn  Acquisition Corp., a California  corporation
(the "Merger Subsidiary"), which is wholly owned by Cal Pro; and ImaginOn, Inc.,
a California corporation ("ImaginOn").

W I T N E S S E T H:

         WHEREAS,  the  respective  Boards of  Directors  of Cal Pro, the Merger
Subsidiary and ImaginOn each have determined that it is in the best interests of
their respective stockholders for Cal Pro to acquire ImaginOn through the merger
of Merger  Subsidiary  with and into the ImaginOn upon the terms and  conditions
set forth herein;

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and certain other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto covenant and
agree as follows:

                                    ARTICLE 1

                                   The Merger

         1.1  MERGER.   In  accordance  with  the  provisions  of  the  business
corporation  laws  of  the  State  of  California  at  the  Effective  Date  (as
hereinafter  defined),  Merger  Subsidiary  shall be merged (the  "Merger") into
ImaginOn,  as soon as  practicable  following  the  satisfaction  or waiver,  if
permissible,  of the  conditions  set forth in Articles 6 and 7.  Following  the
Merger,  ImaginOn shall continue as the surviving  corporation  (the  "Surviving
Corporation")  and shall  continue  to be  governed  by the laws of the State of
California.

         1.2 CONTINUING OF CORPORATE  EXISTENCE.  Except as may otherwise be set
forth  herein,  the corporate  existence and identity of ImaginOn,  with all its
purposes, powers, franchises,  privileges, rights and immunities, shall continue
unaffected  and  unimpaired  by the  Merger,  and the  corporate  existence  and
identity  of  Merger  Subsidiary,  with all its  purposes,  powers,  franchises,
privileges,  rights and  immunities,  at the Effective Date shall be merged with
and into that of ImaginOn,  and ImaginOn shall be vested fully therewith and the
separate corporate  existence and identity of Merger Subsidiary shall thereafter
cease except to the extent continued by statute.

         1.3 EFFECTIVE  DATE. The Merger shall become  effective upon the filing
of the Certificate of Merger with the Secretary of State of California  pursuant
to the provisions of the California  General  Corporation Law. The date and time
when the  Merger  shall  become  effective  is  hereinafter  referred  to as the
"Effective Date".

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         1.4 CORPORATE GOVERNANCE OF THE SURVIVING CORPORATION.

             (a) The Certificate of Incorporation  of ImaginOn,  as in effect on
         the Effective  Date,  shall continue in full force and effect and shall
         be the Certificate of Incorporation of the Surviving Corporation.

             (b) The Bylaws of ImaginOn,  as in effect as of the Effective Date,
         shall  continue in full force and effect and shall be the Bylaws of the
         Surviving Corporation.

             (c)  The  members  of the  Board  of  Directors  of  the  Surviving
         Corporation  shall be the persons holding such office in ImaginOn as of
         the Effective Date.

             (d) The officers of the Surviving  Corporation shall be the persons
         holding such offices in ImaginOn as of the Effective Date.

         1.5 RIGHTS AND LIABILITIES OF THE SURVIVING CORPORATION.  The Surviving
Corporation shall have the following rights and obligations:

             (a)  The   Surviving   Corporation   shall  have  all  the  rights,
         privileges,  immunities  and  powers  and shall be  subject  to all the
         duties and liabilities of a corporation organized under the laws of the
         State of California.

             (b) The title to all real estate and other  property  owned by each
         of ImaginOn and the Merger  Subsidiary shall be, at the Effective Date,
         transferred  to  and  vested  in  the  Surviving   Corporation  without
         reversion  or  impairment;  and such  transfer  to and  vesting  in the
         Surviving Corporation shall be deemed to occur by operation of law, and
         no  consent  or  approval  of any other  person  shall be  required  in
         connection  with any such  transfer or vesting  unless such  consent or
         approval is  specifically  required in the event of merger by law or by
         express provision in any contract,  agreement,  decree, order, or other
         instrument to which ImaginOn or the Merger  Subsidiary is a party or by
         which it is bound.

             (c)  At  the  Effective  Date,  the  Surviving   Corporation  shall
         thenceforth have all liabilities of ImaginOn and the Merger Subsidiary,
         and any proceeding  pending against  ImaginOn or the Merger  Subsidiary
         may be  continued  as if the  Merger  did not  occur  or the  Surviving
         Corporation  may  be  substituted  in the  proceeding  for  the  Merger
         Subsidiary.

         1.6 CLOSING.  Consummation  of the  transactions  contemplated  by this
Agreement (the "Closing") shall take place at the offices of ImaginOn located at
864 Laurel Street, 2nd Floor, San Carlos, California,  commencing at 10:00 a.m.,
local time, as soon as  practicable  after the last to be fulfilled or waived of
the  conditions  set forth in Articles 6 and 7 or at such other place,  time and
date as shall be fixed by mutual agreement between Cal Pro and ImaginOn. The day
on which the Closing  shall occur is referred to herein as the  "Closing  Date."


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Each party will cause to be prepared,  executed and delivered the Certificate of
Merger  to be filed  with the  Secretary  of State of  California  and all other
appropriate  and customary  documents as any party or its counsel may reasonably
request for the purpose of consummating  the  transactions  contemplated by this
Agreement.  All actions  taken at the Closing shall be deemed to have been taken
simultaneously at the time the last of any such actions is taken or completed.

         1.7 TAX CONSEQUENCES. It is intended that the Merger shall constitute a
reorganization  within  the  meaning  of Section  368(a)(2)(E)  of the  Internal
Revenue Code of 1986, as amended (the  "Code"),  and that this  Agreement  shall
constitute  a "plan of  reorganization"  for the  purposes of Section 368 of the
Code.


                                    ARTICLE 2

                   Conversion of Shares; Treatment of Options

         2.1  CONVERSION  OF SHARES.  At the  Effective  Date,  by virtue of the
Merger and without any action on the part of the holder thereof:

             (a) Except as noted on Exhibit 2.1, the holders of ImaginOn  common
         stock,  par value $.001 per share (the  "ImaginOn  Common Stock") shall
         hold 60% of the  post-Merger  issued  and  outstanding  Cal Pro  common
         stock,  par  value  $.01  per  share  (the  "Cal  Pro  Common  Stock").
         Consequently,  the ImaginOn Common Stock outstanding  immediately prior
         to  the  Effective  Date  (the  "Converted  Shares")  shall  as of  the
         Effective  Date,  by virtue of the Merger and without any action on the
         part of the holder thereof, be converted into and represent  16,789,205
         shares of issued and  outstanding  Cal Pro Common Stock.  To the extent
         that the proceeds from the sale by Cal Pro of its interest in USA Skate
         Corporation to a third party (the "USA  Transaction") are not available
         to ImaginOn or the Surviving Corporation in the form of a loan, working
         capital or otherwise, then the number of shares of Cal Pro Common Stock
         to be issued to holders of ImaginOn  Common  Stock shall be adjusted so
         that they  receive  additional  shares equal to 1.5 times the number of
         shares  attributable to the proceeds from the USA Transaction which are
         not available to ImaginOn or the Surviving Corporation.

             (b) Each  share of Common  Stock,  $.01 par  value,  of the  Merger
         Subsidiary  which  shall  be  outstanding   immediately  prior  to  the
         Effective Date shall at the Effective Date, by virtue of the Merger and
         without any action on the part of the holder thereof, be converted into
         one share of newly issued Cal Pro Common Stock.

         2.2 FRACTIONAL  SHARES. No scrip or fractional shares of Cal Pro Common
Stock shall be issued in the  Merger.  All  fractional  shares of Cal Pro Common
Stock  to which a holder  of  ImaginOn  Common  Stock  immediately  prior to the
Effective  Date would  otherwise  be  entitled  at the  Effective  Date shall be
aggregated.   If  a  fractional  share  results  from  such  aggregation,   such
stockholder shall be entitled,  after the later of (a) the Effective Date or (b)
the surrender of such stockholder's "Certificate" (as defined in Section 2.5) or
Certificates  that  represent such shares of ImaginOn  Common Stock,  to receive
from Cal Pro an amount in cash in lieu of such fractional  share.  The amount of
such cash payment shall be equal to such  fractional  proportion of the "Average
Closing  Price" of Cal Pro's  common  stock,  $0.01 par value  ("Cal Pro  Common
Stock").  Cal Pro will make  available  to the  "Exchange  Agent" (as defined in
Section 2.5) the cash  necessary  for the purpose of paying cash for  fractional

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shares.  For purposes of this Agreement,  "Average Closing Price" shall mean the
average  per share  closing  price of Cal Pro Common  Stock as  reported  on the
Nasdaq  SmallCap Market ("NSM") over the 20 trading days  immediately  preceding
the fifth trading day prior to the Effective Date.

         2.3 STOCK OPTIONS AND WARRANTS.

             (a)  Except as set forth on  Schedule  2.3,  there are no  options,
         warrants or  convertible  securities  outstanding  entitling the holder
         thereof to purchase Cal Pro capital stock.

             (b) At the Effective  Date, all options and warrants  (collectively
         the "Options")  then  outstanding to acquire shares of ImaginOn  Common
         Stock shall remain  outstanding  following the Effective  Date and such
         Options  shall,  by virtue of the Merger and without any further action
         on the part of ImaginOn or the holder of any such Option, be assumed by
         Cal Pro in  accordance  with the terms and  conditions  of the Options,
         except that (A) each such Option  shall be  exercisable  in  accordance
         with its terms for that whole  number of shares of Cal Pro Common Stock
         (rounded to the nearest whole share) into which the number of shares of
         ImaginOn Common Stock subject to such Option  immediately  prior to the
         Effective  Date would be  converted  under  Section  2.1 at an exercise
         price per share of Cal Pro Common Stock  (rounded to the nearest  cent)
         equal  to the  exercise  price  per  share  of  ImaginOn  Common  Stock
         applicable  to such  Option  divided by the  exchange  ratio as finally
         determined  by the parties;  (B) all actions to be taken  thereunder by
         the Board of  Directors  of ImaginOn or a  committee  thereof  shall be
         taken by the Board of Directors of Cal Pro or a committee thereof;  and
         (C) no payment shall be made for fractional  interests.  From and after
         the date of this Agreement,  no additional  options shall be granted by
         ImaginOn.

             (c) It is intended that the assumed  Options,  as set forth herein,
         shall not give to any holder  thereof any benefits in addition to those
         which such holder had prior to the  assumption  of the Option.  Cal Pro
         shall take all  necessary  corporate  action  necessary  to reserve for
         issuance  a  sufficient  number of shares of Cal Pro  Common  Stock for
         delivery upon exercise of the Options.

         2.4 EXCHANGE AGENT.

             (a) Cal Pro shall  authorize  Corporate  Stock Transfer to serve as
         exchange agent  hereunder (the  "Exchange  Agent").  Promptly after the
         Effective Date, Cal Pro shall deposit or shall cause to be deposited in
         trust with the Exchange Agent the aggregate of the  following:  (i) the
         Merger  Consideration  with respect to each Converted  Share;  and (ii)
         cash sufficient to pay for fractional  shares then known to Cal Pro, if
         applicable  (such  cash  amounts  and  certificates  being  hereinafter
         referred to as the "Exchange Fund"). The Exchange Agent shall, pursuant
         to  irrevocable  instructions  received  from  Cal Pro,  pay the Merger

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         Consideration  with respect to such Converted Shares as provided for in
         this Article 2 out of the Exchange  Fund.  Any cash needed from time to
         time by the Exchange Agent to make payments for fractional shares shall
         be provided by Cal Pro and shall become part of the Exchange  Fund. The
         Exchange  Fund  shall  not be used for any  other  purpose,  except  as
         provided in this Agreement,  or as otherwise  agreed to by Cal Pro, the
         Merger Subsidiary and ImaginOn prior to the Effective Date.

             (b) As soon as practicable  after the Effective  Date, the Exchange
         Agent shall mail and  otherwise  make  available to each record  holder
         who,  as of  the  Effective  Date,  was  a  holder  of  an  outstanding
         certificate or certificates  which  immediately  prior to the Effective
         Date represented shares of the Converted Shares (the  "Certificates") a
         form of letter of transmittal and instructions for use in effecting the
         surrender  of the  Certificates  for payment  therefor  and  conversion
         thereof,  which letter of transmittal  shall comply with all applicable
         rules of the NSM.

             (c) Delivery of  Certificates  shall be effected,  and risk of loss
         and title to the Certificates  shall pass, only upon proper delivery of
         the  Certificates  to the  Exchange  Agent  and the form of  letter  of
         transmittal shall so reflect. Upon surrender to the Exchange Agent of a
         Certificate,  together with such letter of  transmittal  duly executed,
         the holder of such Certificate shall be entitled to receive in exchange
         therefor one or more  certificates as requested by the holder (properly
         issued, executed and countersigned,  as appropriate)  representing that
         number of whole  shares of Cal Pro Common Stock to which such holder of
         ImaginOn  Common  Stock  shall have  become  entitled  pursuant  to the
         provisions of this Article 2, and the Certificate so surrendered  shall
         forthwith be canceled.

             (d) Cal Pro shall  pay any  transfer  or other  taxes  required  by
         reason of the issuance of a certificate  representing shares of Cal Pro
         Common Stock; provided, however, that such certificate is issued in the
         name of the  person  in  whose  name  the  Certificate  surrendered  in
         exchange therefor is registered. If any portion of the consideration to
         be received  pursuant to this Article 2 upon  exchange of a Certificate
         is to be issued or paid to a person other than the person in whose name
         the  Certificate  surrendered in exchange  therefor is  registered,  it
         shall be a condition of such issuance and payment that the  Certificate
         so surrendered  shall be properly  endorsed or otherwise in proper form
         for transfer and that the person  requesting such exchange shall pay in
         advance any transfer or other taxes  required by reason of the issuance
         of a  certificate  representing  shares of Cal Pro Common Stock to such
         other person,  or establish to the  satisfaction  of the Exchange Agent
         that such tax has been paid or that no such tax is applicable. From the
         Effective  Date until  surrender in accordance  with the  provisions of
         this Section 2.5,  each  Certificate  shall  represent for all purposes
         only the right to receive the  consideration  provided in Sections  2.1
         and 2.2.  No  dividends  that are  otherwise  payable on Cal Pro Common
         Stock will be paid to persons  entitled to receive Cal Pro Common Stock
         until such persons surrender their Certificates.  After such surrender,
         there  shall be paid to the person in whose  name Cal Pro Common  Stock
         shall be issued any  dividends  on such Cal Pro Common Stock that shall
         have a record  date on or after  the  Effective  Date and prior to such
         surrender.   In  no  event  shall  the  persons  entitled  to   receive

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         surrender.  In no event  shall the  persons  entitled  to receive  such
         dividends  be  entitled  to receive  interest  on such  dividends.  All
         payments in respect of shares of ImaginOn Common Stock that are made in
         accordance  with the terms  hereof shall be deemed to have been made in
         full satisfaction of all rights pertaining to such securities.

             (e)  In  the  case  of  any  lost,  mislaid,  stolen  or  destroyed
         Certificates,  the  holder  thereof  may be  required,  as a  condition
         precedent to the delivery to such holder of the consideration described
         in this Article 2, to deliver to Cal Pro a bond, in such reasonable sum
         as Cal Pro may direct,  or other form of indemnity  satisfactory to Cal
         Pro,  as  indemnity  against  any claim  that may be made  against  the
         Exchange Agent,  Cal Pro or the Surviving  Corporation  with respect to
         the  Certificate  alleged  to  have  been  lost,  mislaid,   stolen  or
         destroyed.

             (f) After the  Effective  Date,  there shall be no transfers on the
         stock  transfer  books of the  Surviving  Corporation  of the shares of
         ImaginOn Common Stock that were  outstanding  immediately  prior to the
         Effective  Date.  If,  after  the  Effective  Date,   Certificates  are
         presented to the  Surviving  Corporation  for  transfer,  they shall be
         canceled and exchanged for the consideration  described in this Article
         2.

         2.5 ADJUSTMENT.  If, between the date of this Agreement and the Closing
Date or the  Effective  Date,  as the case may be,  the  outstanding  shares  of
ImaginOn  Common  Stock or Cal Pro Common  Stock shall have been  changed into a
different number of shares or a different class by reason of any classification,
recapitalization,  split-up, combination, exchange of shares, or readjustment or
a stock  dividend  thereon  shall be  declared  with a record  date  within such
period,  then the consideration to be received pursuant to Section 2.1(a) hereof
by the  holders  of  shares  of  ImaginOn  Common  Stock  shall be  adjusted  to
accurately reflect such change.

         2.6 STATUS OF CAL PRO  SECURITIES.  The shares of Cal Pro Common  Stock
being issued in the Merger are  "restricted  securities"  as defined in Rule 144
under the Securities Act (the "Rule"), and (unless registered for resale or some
other exemption from  registration,  are available for any transfer) the Cal Pro
Common Stock must be held for a minimum of one year  following  the Merger,  and
thereafter  Cal Pro  Common  Stock  may be sold in  only  limited  amounts  in a
specified manner in accordance with the terms and conditions of the Rule, if the
Rule is  applicable  (there being no  representation  by Cal Pro that it will be
applicable).  In case the Rule is applicable,  any sales of Cal Pro Common Stock
may be made only pursuant to an effective registration statement or an available
exemption  from  registration.  Cal Pro will cause its stock  transfer  agent to
reflect  such  restrictions  in Cal Pro's stock  transfer  books and to place an
appropriate  restrictive legend or legend on any certificates evidencing the Cal
Pro  Common  Stock  and any  certificates  issued  in  replacement  or  exchange
therefor. The Rule 144 holding period for the Cal Pro Common Stock will begin on
the  Effective  Date.  Cal Pro has no  intention of  registering  Cal Pro Common
Stock.

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                                    ARTICLE 3

                   Representations and Warranties of ImaginOn

         ImaginOn  represents and warrants to Cal Pro and the Merger  Subsidiary
that the statements  contained in Article 3 are true and correct in all material
respects, except as set forth on the schedules attached hereto.

         3.1  ORGANIZATION  AND  GOOD  STANDING  OF  IMAGINON.   ImaginOn  is  a
corporation duly organized, validly existing and in good standing under the laws
of California.

         3.2 NO  SUBSIDIARIES  OR  INVESTMENTS.  ImaginOn owns no equity or debt
interest in any subsidiary corporation,  limited liability company,  partnership
or other business entity.

         3.3 FOREIGN QUALIFICATION. ImaginOn is duly qualified or licensed to do
business and is in good standing as a foreign  corporation in every jurisdiction
where  the  failure  so to  qualify  would  have a  material  adverse  effect (a
"ImaginOn Material Adverse Effect") on (a) the business,  operations,  assets or
financial condition of ImaginOn or (b) the validity or enforceability of, or the
ability of ImaginOn to perform its obligations  under, this Agreement.  ImaginOn
is qualified to do business in no state other than California.

         3.4 COMPANY POWER AND AUTHORITY.  ImaginOn has the corporate or company
power and authority to own,  lease and operate its  properties and assets and to
carry on its business as currently being  conducted.  ImaginOn has the corporate
power and authority to execute and deliver this  Agreement  and,  subject to the
approval of this  Agreement and the Merger by its  stockholders,  to perform its
obligations  under this Agreement and to consummate  the Merger.  The execution,
delivery and  performance by ImaginOn of this Agreement has been duly authorized
by all necessary corporate action.

         3.5 BINDING EFFECT. This Agreement has been duly executed and delivered
by  ImaginOn  and is  the  legal,  valid  and  binding  obligation  of  ImaginOn
enforceable in accordance with its terms except that:

             (a)  enforceability  may be limited by  bankruptcy,  insolvency  or
         other similar laws affecting creditors' rights;

             (b) the  availability  of  equitable  remedies  may be  limited  by
         equitable principles of general applicability; and

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             (c) rights to  indemnification  may be limited by considerations of
         public policy.

         3.6 ABSENCE OF RESTRICTIONS AND CONFLICTS. The execution,  delivery and
performance  of  this  Agreement  and the  consummation  of the  Merger  and the
fulfillment of and compliance with the terms and conditions of this Agreement do
not and will  not,  with the  passing  of time or the  giving of notice or both,
violate or conflict with, constitute a breach of or default under, result in the
loss of any material benefit under, or permit the acceleration of any obligation
under,  (i) any term or provision of the Certificate of  Incorporation or Bylaws
of ImaginOn,  (ii) any "Material  Contract" (as defined in Section 3.13),  (iii)
any judgment,  decree or order of any court or governmental  authority or agency
to which  ImaginOn is a party or by which  ImaginOn or any of its  properties is
bound, or (iv) any statute, law, regulation or rule applicable to ImaginOn other
than such  violations,  conflicts,  breaches or defaults which would not have an
ImaginOn  Material  Adverse Effect.  Except for the filing of the Certificate of
Merger with the Secretary of State of the State of Delaware and the Secretary of
State of the State of California, compliance with the applicable requirements of
the Securities Act,  Securities  Exchange Act of 1934, as amended (the "Exchange
Act"),  and applicable state  securities  laws, no consent,  approval,  order or
authorization of, or registration,  declaration or filing with, any governmental
agency or public or regulatory unit,  agency,  body or authority with respect to
ImaginOn is required in connection  with the execution,  delivery or performance
of  this  Agreement  by  ImaginOn  or  the   consummation  of  the  transactions
contemplated hereby.

         3.7 CAPITALIZATION OF IMAGINON.

             (a) The capitalization of ImaginOn is set forth on Schedule 3.7(a).

             (b) All of the issued and  outstanding  shares of  ImaginOn  Common
         Stock have been duly  authorized and validly issued and are fully paid,
         nonassessable and free of preemptive rights.

             (c) There are no voting  trusts,  stockholder  agreements  or other
         voting arrangements by the stockholders of ImaginOn.

             (d) There is no outstanding subscription,  contract, convertible or
         exchangeable security,  option, warrant, call or other right obligating
         ImaginOn  to issue,  sell,  exchange,  or  otherwise  dispose of, or to
         purchase,  redeem  or  otherwise  acquire,  shares  of,  or  securities
         convertible into or exchangeable for, capital stock of ImaginOn.

         3.8 IMAGINON  INFORMATION.  ImaginOn has made or will make available to
Cal Pro and the Merger  Subsidiary all  information  that ImaginOn has available
(including  all tax returns,  financial  statements  given to any other  person,
contracts,  payroll  schedules,  financial  books  and  records),  and all other
information  ImaginOn,  its business,  its customers,  its  management,  and its
financial condition which Cal Pro may have requested (all such information being
referred to herein as the "ImaginOn Information"). As of their respective dates,

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the ImaginOn Information did not contain any 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, in light of the circumstances under which they were
made, not misleading.

         3.9  FINANCIAL  STATEMENTS  AND RECORDS OF IMAGINON.  ImaginOn has made
available to Cal Pro and the Merger Subsidiary true, correct and complete copies
of the following financial statements (the "ImaginOn Financial Statements"). The
consolidated  financial  statements  of  ImaginOn  and  its  subsidiaries  as of
December  31,  1996 and 1997 and for the years then ended,  including  the notes
thereto,  in each case  examined by and  accompanied  by the report of Murdock &
Assoc. (collectively, the "ImaginOn Year-End Statements").

         The ImaginOn  Year-End  Statements  have been prepared from, and are in
         accordance  with, the books and records of ImaginOn and present fairly,
         in all material respects,  the financial position of ImaginOn as of the
         dates thereof and the results of operations  and cash flows thereof for
         the  periods  then ended,  in each case in  conformity  with  generally
         accepted accounting principles,  consistently applied,  except as noted
         therein.  Adequate  reserves  are set  forth on the  ImaginOn  Year-End
         Statements,  and the amount of such reserves are reasonable.  The books
         and  records  of  ImaginOn  have  been  and  are  being  maintained  in
         accordance   with  good   business   practice,   reflect   only   valid
         transactions,  are complete  and correct in all  material  respects and
         present  fairly in all material  respects  the basis for the  financial
         position  and  results of  operations  of  ImaginOn as set forth on the
         ImaginOn Year Statements.

         3.10 ABSENCE OF CERTAIN CHANGES.  Since December 31, 1997, ImaginOn has
not,  except as otherwise set forth in the ImaginOn  Information or the ImaginOn
Financial Statements:

             (a)  suffered  any  adverse  change  in the  business,  operations,
         assets, or financial condition,  except for such changes that would not
         result in an ImaginOn Material Adverse Effect;

             (b) suffered any material  damage or  destruction to or loss of the
         assets of ImaginOn, whether or not covered by insurance, which property
         or assets are material to the operations or business of ImaginOn;

             (c) settled, forgiven,  compromised,  canceled, released, waived or
         permitted  to lapse any  material  rights or claims  other  than in the
         ordinary course of business;

             (d) entered into or terminated  any Material  Contract or agreed or
         made any  changes in any  Material  Contract,  other than  renewals  or
         extensions thereof and leases, agreements, transactions and commitments
         entered into or terminated in the ordinary course of business;

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             (e) written up,  written  down or written off the book value of any
         material  amount  of  assets  other  than  in the  ordinary  course  of
         business;

             (f)  declared,  paid or set  aside  for  payment  any  dividend  or
         distribution with respect to ImaginOn's capital stock;

             (g) redeemed,  purchased or otherwise acquired, or sold, granted or
         otherwise  disposed  of,  directly  or  indirectly,  any of  ImaginOn's
         capital stock or securities or any rights to acquire such capital stock
         or securities,  or agreed to changes in the terms and conditions of any
         such rights outstanding as of the date of this Agreement;

             (h)  increased  the  compensation  of or paid  any  bonuses  to any
         employees or  contributed to any employee  benefit plan,  other than in
         accordance with established policies,  practices or requirements and as
         provided in Section 5.1 hereof;

             (i)  entered  into  any  employment,   consulting  or  compensation
         agreement with any person or group,  except for agreements  which would
         not have an ImaginOn Material Adverse Effect;

             (j)  entered  into any  collective  bargaining  agreement  with any
         person or group;

             (k) entered into, adopted or amended any employee benefit plan; or

             (l) entered into any agreement to do any of the foregoing.

         3.11 NO MATERIAL UNDISCLOSED  LIABILITIES.  There are no liabilities or
obligations of ImaginOn of any nature, whether absolute, accrued, contingent, or
otherwise, other than:

             (a) the liabilities and obligations that are reflected,  accrued or
         reserved against on the ImaginOn Financial  Statements,  or referred to
         in the  footnotes  thereto,  or  incurred  in the  ordinary  course  of
         business and consistent with past practices since December 31, 1997; or

             (b) liabilities  and  obligations  which in the aggregate would not
         result in an ImaginOn Material Adverse Effect.

         3.12 TAX RETURNS;  TAXES.  ImaginOn has duly filed all U.S. federal and
material state, county, local and foreign tax returns and reports required to be
filed by it and all  such  returns  and  reports  are  correct  in all  material
respects;  have  either  paid in full all  taxes  that have  become  due and any
interest and penalties  with respect  thereto or have fully accrued on its books
or have established adequate reserves for all taxes payable but not yet due; and
have made cash deposits with appropriate  governmental  authorities representing
estimated  required  payments of taxes. No extension or waiver of any statute of
limitations  or time  within  which to file any  return  has been  granted to or

30698_8
                                      -11-
<PAGE>

requested  by  ImaginOn  with  respect to any tax.  No  unsatisfied  deficiency,
delinquency or default for any tax,  assessment or governmental  charge has been
claimed, proposed or assessed against ImaginOn, nor has ImaginOn received notice
of any such  deficiency,  delinquency  or default.  ImaginOn has no material tax
liabilities other than those reflected on the ImaginOn Financial  Statements and
those  arising  in the  ordinary  course of  business  since  the date  thereof.
ImaginOn  will make  available to Cal Pro true,  complete and correct  copies of
ImaginOn's  tax  returns.  There  is no  dispute  or  claim  concerning  any tax
liability  of  ImaginOn  or any of its  subsidiaries  either:  (a) raised by any
taxing  authority  in writing;  (b) as to which  ImaginOn  has  received  notice
concerning a potential  audit of any return filed by ImaginOn;  and (c) there is
no  outstanding  audit or  pending  audit of any tax return  filed by  ImaginOn,
except as set forth on Schedule 3.12.

         3.13 MATERIAL  CONTRACTS.  ImaginOn has furnished or made  available to
Cal Pro  accurate  and complete  copies of the  Material  Contracts  (as defined
herein)  applicable to ImaginOn.  Except as set forth on Schedule 3.13, there is
not under any of the Material Contracts any existing breach, default or event of
default  by  ImaginOn  nor any event  that with  notice or lapse of time or both
would  constitute a breach,  default or event of default by ImaginOn  other than
breaches,  defaults  or  events of  default  which  would  not have an  ImaginOn
Material Adverse Effect nor does ImaginOn know of, and ImaginOn has not received
notice of, or made a claim with  respect  to, any breach or default by any other
party  thereto  which  would,  severally or in the  aggregate,  have an ImaginOn
Material  Adverse Effect.  As used herein,  the term "Material  Contracts" shall
mean all contracts and agreements  providing for  expenditures or commitments by
ImaginOn in excess of $10,000 over more than a 12-month period.

         3.14 LITIGATION AND GOVERNMENT CLAIMS. There is no pending suit, claim,
action or litigation,  or  administrative,  arbitration  or other  proceeding or
governmental  investigation or inquiry against ImaginOn to which its business or
assets are subject  which would,  severally or in the  aggregate,  reasonably be
expected  to result in an  ImaginOn  Material  Adverse  Effect nor have any such
proceedings  been  threatened  or  contemplated.  ImaginOn is not subject to any
judgment, decree,  injunction,  rule or order of any court, or, to the knowledge
of  ImaginOn,  any  governmental  restriction  applicable  to ImaginOn  which is
reasonably  likely (i) to have an ImaginOn  Material  Adverse  Effect or (ii) to
cause a material  limitation  on Cal Pro's  ability to operate  the  business of
ImaginOn (as it is currently operated) after the Closing.

         3.15  COMPLIANCE WITH LAWS.  ImaginOn has all material  authorizations,
approvals,  licenses  and  orders  to carry on its  business  as it is now being
conducted,  to own or hold under lease the properties and assets it owns or hold
under lease and to perform all of its obligations  under the agreements to which
it is a party,  except for  instances  which would not have a ImaginOn  Material
Adverse  Effect.  ImaginOn has been and is, to the  knowledge  of  ImaginOn,  in
compliance with all applicable laws  (including  those related to  environmental
matters referenced in the ImaginOn Information),  regulations and administrative
orders  of any  country,  state or  municipality  or of any  subdivision  of any

30698_8
                                      -12-
<PAGE>

thereof  to  which  its  business  and its  employment  of  labor  or its use or
occupancy of properties  or any part hereof are subject,  the violation of which
would have a ImaginOn Material Adverse Effect.

         3.16  EMPLOYEE  BENEFIT  PLANS.  ImaginOn has no employee  benefit plan
subject to the  Employee  Retirement  Income  Security  Act of 1974,  as amended
("ERISA").

         3.17 EMPLOYMENT AGREEMENTS; LABOR RELATIONS.

             (a) Schedule  3.16 sets forth a complete  and accurate  list of all
         material  employee  benefit  or  compensation  plans,   agreements  and
         arrangements to which ImaginOn is a party and which is not disclosed in
         the  ImaginOn   Information,   including  without  limitation  (i)  all
         severance,  employment,  consulting  or  similar  contracts,  (ii)  all
         material  agreements and contracts with "change of control"  provisions
         or  similar  provisions  and (iii) all  indemnification  agreements  or
         arrangements with directors or officers.

             (b) ImaginOn is in  compliance  in all material  respects  with all
         laws  (including  Federal and state  laws)  respecting  employment  and
         employment  practices,  terms and conditions of  employment,  wages and
         hours,  and is not engaged in any unfair  labor or unlawful  employment
         practice.

         3.18  INTELLECTUAL  PROPERTY.  ImaginOn owns or has valid,  binding and
enforceable rights to use all material patents, trademarks, trade names, service
marks, service names,  copyrights,  applications  therefor and licenses or other
rights in  respect  thereof  ("Intellectual  Property")  used or held for use in
connection  with the business of ImaginOn,  without any known  conflict with the
rights of others,  except for such conflicts as do not have an ImaginOn Material
Adverse  Effect.  ImaginOn  has not  received  any notice from any other  person
pertaining  to or  challenging  the right of  ImaginOn  to use any  Intellectual
Property or any trade secrets,  proprietary information,  inventions,  know-how,
processes  and  procedures  owned or used or licensed to  ImaginOn,  except with
respect to rights the loss of which, individually or in the aggregate, would not
have an ImaginOn Material Adverse Effect.

         3.19  PROPERTIES AND RELATED MATTERS.  ImaginOn owns no real estate.

         3.20  BROKERS  AND  FINDERS.   Neither  ImaginOn,   nor  to  ImaginOn's
knowledge, any of its officers, directors and employees has employed any broker,
finder or investment  bank or incurred any liability for any investment  banking
fees,  financial  advisory  fees,  brokerage fees or finders' fees in connection
with the transactions  contemplated  hereby.  ImaginOn is not aware of any claim
for payment of any finder's fees, brokerage or agent's commissions or other like
payments in connection  with the  negotiations  leading to this Agreement or the
consummation of the transactions contemplated hereby.

30698_8
                                      -13-
<PAGE>

                                    ARTICLE 4

                    Representations and Warranties of Cal Pro
                            and the Merger Subsidiary

         Cal Pro and the Merger  Subsidiary  represent  and  warrant to ImaginOn
that the statements  contained in Article 4 are true and correct in all material
respects. As used in this Article 4 and elsewhere in this Agreement,  the phrase
"to Cal  Pro's or the  Merger  Subsidiary's  knowledge"  or "to Cal Pro's or the
Merger Subsidiary's actual knowledge" shall mean to the knowledge of the officer
of Cal Pro or the Merger Subsidiary who has the principal responsibility for the
matter being stated.

         4.1  ORGANIZATION  AND  GOOD  STANDING.  Each of Cal  Pro,  the  Merger
Subsidiary and all  corporations,  partnerships  and other entities in which Cal
Pro owns any equity  interest  (the "Cal Pro  Subsidiaries"  which  includes the
Merger  Subsidiary)  is duly  organized,  validly  existing and in good standing
under the laws of the jurisdiction of its  incorporation  or  organization.  All
shares of capital  stock or other  equity  interests of each of the material Cal
Pro Subsidiaries  are owned by Cal Pro, either directly or indirectly,  free and
clear of all material liens, encumbrances, equities or claims.

         4.2 FOREIGN QUALIFICATION. Cal Pro and each of the Cal Pro Subsidiaries
are duly  qualified  or licensed to do  business  and are in good  standing as a
foreign  corporation in every jurisdiction where the failure so to qualify would
have a material  adverse effect (a "Cal Pro Material Adverse Effect") on (a) the
business,  operations,  assets or financial condition of Cal Pro and the Cal Pro
Subsidiaries  taken as a whole or (b) the validity or enforceability  of, or the
ability of Cal Pro to perform its obligations under, this Agreement.

         4.3 CORPORATE POWER AND AUTHORITY. Cal Pro and the Cal Pro Subsidiaries
have the corporate power and authority and all material  licenses and permits to
own,  lease and operate their  respective  properties and assets and to carry on
their respective  businesses as currently being  conducted.  Each of Cal Pro and
the Merger  Subsidiary  has the  corporate  power and  authority  to execute and
deliver this Agreement and to perform its  obligations  under this Agreement and
to consummate the Merger. The execution, delivery and performance by Cal Pro and
the  Merger  Subsidiary  of this  Agreement  has  been  duly  authorized  by all
necessary corporate action.

         4.4 BINDING EFFECT. This Agreement has been duly executed and delivered
by Cal Pro  and the  Merger  Subsidiary  and is the  legal,  valid  and  binding
obligations of Cal Pro and the Merger Subsidiary, enforceable in accordance with
its terms except that:

             (a)  enforceability  may be limited by  bankruptcy,  insolvency  or
         other similar laws affecting creditors' rights;

30698_8
                                      -14-
<PAGE>

             (b) the  availability  of  equitable  remedies  may be  limited  by
         equitable principles of general applicability; and

             (c) rights to  indemnification  may be limited by considerations of
         public policy.

         4.5 ABSENCE OF RESTRICTIONS AND CONFLICTS. The execution,  delivery and
performance  of  this  Agreement  and the  consummation  of the  Merger  and the
fulfillment of and compliance with the terms and conditions of this Agreement do
not and will  not,  with the  passing  of time or the  giving of notice or both,
violate or conflict with, constitute a breach of or default under, result in the
loss of any material benefit under, or permit the acceleration of any obligation
under,  (i) any term or provision of the Certificate of  Incorporation or Bylaws
of Cal Pro or the Merger  Subsidiary,  (ii) any "Cal Pro Material  Contract" (as
defined in Section  4.12),  (iii) any judgment,  decree or order of any court or
governmental  authority  or  agency  to  which  Cal  Pro or any of the  Cal  Pro
Subsidiaries  is a party or by which Cal Pro or any of the Cal Pro  Subsidiaries
or any of their  respective  properties  is  bound,  or (iv) any  statute,  law,
regulation  or rule  applicable  to Cal  Pro or any of the Cal Pro  Subsidiaries
other than such violations,  conflicts, breaches or defaults as would not have a
Cal Pro Material  Adverse  Effect.  Except for the filing of the  Certificate of
Merger with the Secretary of State of California, compliance with the Securities
Act,  the  Exchange  Act and  applicable  state  securities  laws,  no  consent,
approval,  order or  authorization  of, or  registration,  declaration or filing
with, any  governmental  agency or public or regulatory  unit,  agency,  body or
authority  with  respect to Cal Pro or the Cal Pro  Subsidiaries  is required in
connection with the execution,  delivery or performance of this Agreement by Cal
Pro or the consummation of the transactions contemplated hereby.

         4.6 CAPITALIZATION OF CAL PRO.

             (a) The  capitalization of Cal Pro is set forth on Schedule 4.6(a).
         All of the issued and  outstanding  shares of Cal Pro  Preferred  Stock
         have been duly  authorized  and  validly  issued and are fully paid and
         nonassessable.

             (b) All of the  issued  and  outstanding  shares of Cal Pro  Common
         Stock have been duly  authorized and validly issued and are fully paid,
         nonassessable and free of preemptive rights.

             (c) The shares of Cal Pro  Common  Stock to be issued in the Merger
         will be duly  authorized  and  validly  issued and will be fully  paid,
         nonassessable shares of Cal Pro Common Stock free of preemptive rights.

             (d) The  shares  of Cal Pro  Common  Stock  to be  issued  upon the
         conversion of the Cal Pro Preferred  Stock will be duly  authorized and
         validly issued and will be fully paid,  nonassessable shares of Cal Pro
         Common Stock free of preemptive rights.

             (e) To Cal Pro's knowledge, there are no voting trusts, stockholder
         agreements or other voting arrangements by the stockholders of Cal Pro.

30698_8
                                      -15-
<PAGE>

             (f)  Except  as set  forth in  subsection  (a)  above,  there is no
         outstanding   subscription,   contract,   convertible  or  exchangeable
         security,  option,  warrant,  call or other right obligating Cal Pro or
         its subsidiaries to issue, sell, exchange,  or otherwise dispose of, or
         to purchase,  redeem or  otherwise  acquire,  shares of, or  securities
         convertible into or exchangeable for, capital stock of Cal Pro.


         4.7 CAL PRO SEC REPORTS. Cal Pro has made available to ImaginOn (i) Cal
Pro's Annual  Reports on Form 10-K,  including  all exhibits  filed  thereto and
items  incorporated  therein by reference,  (ii) Cal Pro's Quarterly  Reports on
Form 10-Q,  including  all exhibits  thereto and items  incorporated  therein by
reference, (iii) proxy statements relating to Cal Pro's meetings of stockholders
and  (iv)  all  other  reports  or   registration   statements  (as  amended  or
supplemented prior to the date hereof), filed by Cal Pro with the Securities and
Exchange  Commission  ("SEC")  since  January 1, 1996,  including  all  exhibits
thereto and items  incorporated  therein by  reference  (items (i) through  (iv)
being referred to as the "Cal Pro SEC Reports").  As of their respective  dates,
Cal Pro SEC Reports did not contain any 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,  in light of the  circumstances  under which they were
made,  not  misleading.  Since  January 1, 1996,  Cal Pro has filed all material
forms (and necessary amendments), reports and documents with the SEC required to
be filed by it  pursuant to the  federal  securities  laws and the SEC rules and
regulations  thereunder,  each of which  complied  as to form,  at the time such
form, report or document was filed, in all material respects with the applicable
requirements of the Securities Act and the Exchange Act and the applicable rules
and regulations thereunder.

         4.8 FINANCIAL  STATEMENTS  AND  RECORDS  OF CAL PRO.   Cal Pro has made
available  to  ImaginOn  true,  correct  and  complete  copies of the  following
financial statements (the "Cal Pro Financial Statements"):

             (a) the consolidated balance sheets of Cal Pro and its consolidated
         subsidiaries  as of December  31, 1995 and 1996,  and the  consolidated
         statements  of  income,  stockholders'  equity  and cash  flows for the
         fiscal  years then ended,  including  the notes  thereto,  in each case
         examined by and accompanied by the report of Gelfond Hochstadt Pangburn
         & Co.; and

             (b) the unaudited  balance sheet of Cal Pro as of December 31, 1997
         (the "Cal Pro Balance Sheet"),  with any notes thereto, and the related
         unaudited  statement  of  income  for the  fiscal  quarter  then  ended
         (collectively,  the "Cal Pro  Quarterly  Statements")  as set  forth on
         Schedule 4.8(b).

         The  Cal Pro  Financial  Statements  present  fairly,  in all  material
         respects, the financial position of Cal Pro as of the dates thereof and

30698_8
                                      -16-
<PAGE>

         the results of operations and changes in financial position thereof for
         the  periods  then ended,  in each case in  conformity  with  generally
         accepted accounting principles,  consistently applied,  except as noted
         therein.  Since  December  31,  1997,  there  has  been  no  change  in
         accounting  principles applicable to, or methods of accounting utilized
         by, Cal Pro, except as noted in the Cal Pro Financial  Statements.  The
         books and  records  of Cal Pro have been and are  being  maintained  in
         accordance   with  good   business   practice,   reflect   only   valid
         transactions,  are complete and correct in all material  respects,  and
         present  fairly in all material  respects  the basis for the  financial
         position and results of  operations of Cal Pro set forth in the Cal Pro
         Financial Statements.

         4.9 ABSENCE OF CERTAIN  CHANGES.  Since  December 31, 1997, Cal Pro has
not,  except as  otherwise  set forth in the Cal Pro SEC  Reports or on Schedule
4.9:

             (a)  suffered  any  adverse  change  in the  business,  operations,
         assets,  or financial  condition except for such changes that would not
         have a Cal Pro Material Adverse Effect;

             (b) suffered any material  damage or  destruction to or loss of the
         assets of Cal Pro or any of the Cal Pro  Subsidiaries,  whether  or not
         covered by  insurance,  which  property  or assets are  material to the
         operations  or  business  of Cal Pro and its  subsidiaries  taken  as a
         whole;

             (c) settled, forgiven,  compromised,  canceled, released, waived or
         permitted  to lapse any  material  rights or claims  other  than in the
         ordinary course of business;

             (d) entered into or terminated  any Material  Contract or agreed or
         made any  changes in any  Material  Contract,  other than  renewals  or
         extensions thereof and leases, agreements, transactions and commitments
         entered into or terminated in the ordinary course of business;

             (e) written up,  written  down or written off the book value of any
         material  amount  of  assets  other  than  in the  ordinary  course  of
         business;

             (f)  declared,  paid or set  aside  for  payment  any  dividend  or
         distribution with respect to Cal Pro's capital stock;

             (g) redeemed,  purchased or otherwise acquired, or sold, granted or
         otherwise disposed of, directly or indirectly, any of Cal Pro's capital
         stock or securities  (other than shares issued upon exercise of the Cal
         Pro Options) or any rights to acquire such capital stock or securities,
         or agreed to changes  in the terms and  conditions  of any such  rights
         outstanding as of the date of this Agreement;

30698_8
                                      -17-
<PAGE>

             (h)  increased  the  compensation  of or paid  any  bonuses  to any
         employees or  contributed to any employee  benefit plan,  other than in
         accordance with established policies,  practices or requirements and as
         provided in Section 5.2 hereof;

             (i)  entered  into  any  employment,   consulting  or  compensation
         agreement with any person or group,  except for agreements  which would
         not have a Cal Pro Material Adverse Effect;

             (j)  entered  into any  collective  bargaining  agreement  with any
         person or group;

             (k) entered into, adopted or amended any employee benefit plan; or

             (l) entered into any agreement to do any of the foregoing.

         4.10 NO MATERIAL UNDISCLOSED  LIABILITIES.  There are no liabilities or
obligations of Cal Pro and its consolidated  subsidiaries of any nature, whether
absolute, accrued, contingent, or otherwise, other than:

             (a)  liabilities  and  obligations  that are reflected,  accrued or
         reserved  against on the Cal Pro  Balance  Sheet or  referred to in the
         footnotes  to the Cal Pro Balance  Sheet,  or incurred in the  ordinary
         course of business and consistent  with past  practices  since December
         31, 1997; or

             (b) liabilities  and  obligations  which in the aggregate would not
         result in a Cal Pro Material Adverse Effect.

         4.11 TAX RETURNS;  TAXES.  Each of Cal Pro and the Cal Pro Subsidiaries
have duly filed all U.S. federal and material state,  county,  local and foreign
tax  returns and  reports  required  to be filed by it and all such  returns and
reports are correct in all material respects; have either paid in full all taxes
that have become due and any interest and penalties with respect thereto or have
fully accrued on its books or have established  adequate  reserves for all taxes
payable  but  not  yet  due;  and  have  made  cash  deposits  with  appropriate
governmental  authorities  representing required estimated payments of taxes. No
extension or waiver of any statute of  limitations  or time within which to file
any  return  has  been  granted  to or  requested  by Cal  Pro or  the  Cal  Pro
Subsidiaries with respect to any tax. No unsatisfied deficiency,  delinquency or
default  for any tax,  assessment  or  governmental  charge  has  been  claimed,
proposed or assessed  against Cal Pro or the Cal Pro  Subsidiaries,  nor has Cal
Pro or the  Cal  Pro  Subsidiaries  received  notice  of  any  such  deficiency,
delinquency or default.  Cal Pro and the Cal Pro  Subsidiaries  have no material
tax  liabilities  other than those  reflected  on the Cal Pro Balance  Sheet and
those arising in the ordinary course of business since the date thereof. Cal Pro
will make available to ImaginOn  true,  complete and correct copies of Cal Pro's
consolidated  tax returns.  There is no dispute or claim concerning any material
tax liability of Cal Pro or any of its  subsidiaries  either:  (a) raised by any
taxing authority in writing;  (b) as to which Cal Pro or any of its subsidiaries

30698_8
                                      -18-
<PAGE>

has received notice concerning a potential audit of any return filed by Cal Pro;
and (c) there is no  outstanding  audit or pending audit of any tax return filed
by Cal Pro, except as set forth on Schedule 4.11.

         4.12 MATERIAL  CONTRACTS.  Cal Pro has  furnished or made  available to
ImaginOn  accurate and complete  copies of the Cal Pro  Material  Contracts  (as
defined herein) applicable to Cal Pro or any of the Cal Pro Subsidiaries. Except
as set forth on Schedule  4.12,  there is not under any of the Cal Pro  Material
Contracts any existing breach,  default or event of default by Cal Pro or any of
the Cal Pro  Subsidiaries  nor event  that with  notice or lapse of time or both
would constitute a breach,  default or event of default by Cal Pro or any of the
Cal Pro  Subsidiaries  other than breaches,  defaults or events of default which
would not have a Cal Pro Material  Adverse  Effect nor does Cal Pro know of, and
Cal Pro has not received  notice of, or made a claim with respect to, any breach
or  default  by  any  other  party  thereto  which  would,  severally  or in the
aggregate, have a Cal Pro Material Adverse Effect. As used herein, the term "Cal
Pro Material  Contracts"  shall mean all  contracts  and  agreements  filed,  or
required to be filed,  as exhibits to Cal Pro's  Annual  Report on Form 10-K for
the year ended December 31, 1996 and any contracts and  agreements  entered into
since December 31, 1996 which would be required to be filed or  incorporated  by
reference  therein as an exhibit to Cal Pro's Annual Report on Form 10-K for the
year ending December 31, 1997.

         4.13 LITIGATION AND GOVERNMENT  CLAIMS.  Except as disclosed in the Cal
Pro SEC Reports,  there is no pending  suit,  claim,  action or  litigation,  or
administrative, arbitration or other proceeding or governmental investigation or
inquiry against Cal Pro or the Cal Pro Subsidiaries to which their businesses or
assets are subject  which would,  severally or in the  aggregate,  reasonably be
expected  to  result  in a Cal Pro  Material  Adverse  Effect  nor have any such
proceedings  been  threatened or  contemplated.  Neither Cal Pro nor any Cal Pro
Subsidiary is subject to any judgment, decree, injunction,  rule or order of any
court, or, to the knowledge of Cal Pro, any governmental  restriction applicable
to Cal Pro or any Cal Pro  Subsidiary  which is reasonably  likely to have a Cal
Pro Material Adverse Effect.

         4.14  COMPLIANCE WITH LAWS. Cal Pro and the Cal Pro  Subsidiaries  each
own or hold under  lease the  properties  or assets they own or hold under lease
and perform all of their  obligations  under the  agreements to which they are a
party,  except for  instances  which would not have a Cal Pro  Material  Adverse
Effect. Cal Pro and the Cal Pro Subsidiaries have been and are, to the knowledge
of Cal Pro, in compliance with all applicable laws (including  those  referenced
in the  Cal Pro SEC  Reports),  regulations  and  administrative  orders  of any
country,  state or municipality or any subdivision of any thereof to which their
respective  business and their  employment of labor or their use or occupancy of
properties  or any part hereof are subject,  the violation of which would have a
Cal Pro Material Adverse Effect.

         4.15 EMPLOYMENT  AGREEMENTS;  LABOR RELATIONS.  Each of Cal Pro and the
Cal Pro  Subsidiaries  is in compliance  in all material  respects with all laws
(including  Federal  and  state  laws)  respecting   employment  and  employment

30698_8
                                      -19-
<PAGE>

practices,  terms and  conditions  of  employment,  wages and hours,  and is not
engaged  in any  unfair  labor  or  unlawful  employment  practice.  There is no
unlawful  employment practice  discrimination  charge pending before the EEOC or
EEOC  recognized  state  "referral  agency."  There is no unfair labor  practice
charge or complaint  against Cal Pro or any of the Cal Pro Subsidiaries  pending
before the  National  Labor  Review  Board.  There is no  collective  bargaining
agreement that is binding on Cal Pro or any of the Cal Pro Subsidiaries.

         4.16 CAL PRO EMPLOYEE  BENEFIT PLANS.  Cal Pro has no employee  benefit
plans subject to ERISA.

         4.17 INTELLECTUAL PROPERTY. Cal Pro and the Cal Pro Subsidiaries own or
have  valid,  binding  and  enforceable  rights  to use  all  material  patents,
trademarks, trade names, service marks, service names, copyrights,  applications
therefor and licenses or other rights in respect thereof ("Cal Pro  Intellectual
Property")  used or held for use in  connection  with the business of Cal Pro or
the Cal Pro Subsidiaries,  without any known conflict with the rights of others,
except for such  conflicts  as do not have a Cal Pro  Material  Adverse  Effect.
Neither Cal Pro nor any of the Cal Pro Subsidiaries has received any notice from
any other person pertaining to or challenging the right of Cal Pro or any of the
Cal Pro  Subsidiaries  to use any Cal Pro  Intellectual  Property  or any  trade
secrets, proprietary information, inventions, know-how, processes and procedures
owned or used or  licensed to Cal Pro or the Cal Pro  Subsidiaries,  except with
respect to rights the loss of which, individually or in the aggregate, would not
have a Cal Pro Material Adverse Effect.

         4.18  PROPERTIES  AND RELATED  MATTERS.  Neither Cal Pro nor the Merger
Subsidiary owns any real property.

         4.19 NASDAQ  FEES.  Except as set forth on Schedule  4.19,  Cal Pro has
paid all fees due and owing to Nasdaq  with  respect to Cal Pro Common  Stock on
the NSM and Cal Pro will pay all such fees  arising  out of the  issuance of any
shares of Cal Pro Common Stock in connection with the transactions  contemplated
hereby.


                                    ARTICLE 5

                        Certain Covenants and Agreements

         5.1 CONDUCT  OF  BUSINESS  BY  IMAGINON.   From the date  hereof to the
Effective Date,  ImaginOn will, except as required in connection with the Merger
and  the  other  transactions  contemplated  by this  Agreement  and  except  as
otherwise  disclosed in the ImaginOn  Information  or consented to in writing by
Cal Pro:

30698_8
                                      -20-
<PAGE>

             (a) not  engage  in any new  line of  business  or  enter  into any
         Material  Contract,  transaction  or  activity  or  make  any  material
         commitment  except those in the ordinary and regular course of business
         and not otherwise prohibited under this Section 5.1;

             (b)  neither  change nor amend its  Articles  of  Incorporation  or
         Bylaws;

             (c) not issue or sell shares of capital  stock of  ImaginOn  (other
         than upon the  exercise  of ImaginOn  Options) or issue,  sell or grant
         options,  warrants or rights to purchase or subscribe to, or enter into
         any arrangement or contract with respect to the issuance or sale of any
         of the capital stock of ImaginOn or rights or  obligations  convertible
         into or  exchangeable  for any shares of the capital stock of ImaginOn,
         not alter the terms of any  outstanding  ImaginOn  Options and not make
         any changes (by split-up, combination,  reorganization or otherwise) in
         the capital structure of ImaginOn;

             (d) not declare, pay or set aside for payment any dividend or other
         distribution in respect of the capital stock or other equity securities
         of ImaginOn and not redeem, purchase or otherwise acquire any shares of
         the  capital  stock  or other  securities  of  ImaginOn  or  rights  or
         obligations  convertible  into or  exchangeable  for any  shares of the
         capital  stock  or  other   securities   of  ImaginOn  or   obligations
         convertible  into such,  or any  options,  warrants or other  rights to
         purchase or subscribe to any of the foregoing;

             (e) not acquire or enter into any agreement to acquire,  by merger,
         consolidation or purchase of stock or assets, any business or entity;

             (f) use its  reasonable  efforts to preserve  intact the  corporate
         existence, goodwill and business organization of ImaginOn;

             (g) perform all of its  obligations  under all  Material  Contracts
         (except those being contested in good faith) and not enter into, assume
         or amend any contract or commitment  that would be a Material  Contract
         other than contracts to provide  services  entered into in the ordinary
         course of business; and

             (h) except in instances  which would not have an ImaginOn  Material
         Adverse Effect, prepare and file all federal,  state, local and foreign
         returns for taxes and other tax reports, filings and amendments thereto
         required  to be filed by it,  and allow  Cal Pro,  at its  request,  to
         review all such returns,  reports, filings and amendments at ImaginOn's
         offices prior to the filing  thereof,  which review shall not interfere
         with the timely filing of such returns.

         In connection with the continued  operation of the business of ImaginOn
between the date of this Agreement and the Effective Date, ImaginOn shall confer
in  good  faith  and  on  a  regular  and  frequent   basis  with  one  or  more
representatives of Cal Pro designated in writing to report  operational  matters
of  materiality  and  the  general  status  of  ongoing   operations.   ImaginOn

30698_8
                                      -21-
<PAGE>

acknowledges  that Cal Pro does not and will not  waive  any  rights it may have
under  this  Agreement  as a result of such  consultations  nor shall Cal Pro be
responsible  for any decisions  made by ImaginOn's  officers and directors  with
respect to matters which are the subject of such consultation.

         5.2  CONDUCT  OF  BUSINESS  BY CAL PRO.  From the  date  hereof  to the
Effective  Date, Cal Pro will, and will cause the Merger  Subsidiary and each of
the Cal Pro  Subsidiaries  to, except as required in connection  with the Merger
and  the  other  transactions  contemplated  by this  Agreement  and  except  as
otherwise disclosed in the Cal Pro Information hereto or consented to in writing
by ImaginOn:

             (a) not  engage  in any new  line of  business  or  enter  into any
         agreement, transaction or activity or make any commitment;

             (b) neither change nor amend its  Certificate of  Incorporation  or
         Bylaws;

             (c) not make any changes (by split-up, combination,  reorganization
         or  otherwise)  in  the  capital  structure  of  Cal  Pro,  the  Merger
         Subsidiary or any of the Cal Pro Subsidiaries;  provided,  however, Cal
         Pro may sell all or a portion of the shares it owns in USA Skate  Corp.
         for which it is currently negotiating the sale;

             (d)  except  as set  forth on  Schedule  5.2(d),  not issue or sell
         shares of capital stock of Cal Pro (other than upon the exercise of Cal
         Pro  Options) or issue,  sell or grant  options,  warrants or rights to
         purchase or  subscribe  to, or enter into any  arrangement  or contract
         with respect to the issuance or sale of any of the capital stock of Cal
         Pro or rights or obligations  convertible  into or exchangeable for any
         shares of the capital  stock of ImaginOn and not alter the terms of any
         outstanding Cal Pro Options or the Cal Pro Option Plans;

             (e) not declare, pay or set aside for payment any dividend or other
         distribution in respect of the capital stock or other equity securities
         of Cal Pro and not redeem,  purchase or otherwise acquire any shares of
         the capital stock or other  securities of Cal Pro or any of the Cal Pro
         Subsidiaries, or rights or obligations convertible into or exchangeable
         for any shares of the capital stock or other securities of Cal Pro, the
         Merger  Subsidiary or any of the Cal Pro  Subsidiaries  or  obligations
         convertible  into such,  or any  options,  warrants or other  rights to
         purchase or subscribe to any of the foregoing;

             (f) not acquire or enter into any agreement to acquire,  by merger,
         consolidation  or purchase of stock or assets,  any business or entity;
         and

             (g) use its  reasonable  efforts to preserve  intact the  corporate
         existence of Cal Pro and the Cal Pro Subsidiaries.

30698_8
                                      -22-
<PAGE>

             (h) not  make  or  incur  (other  than in the  ordinary  course  of
         business) any capital expenditures;

             (i) perform all of its  obligations  under all  Material  Contracts
         (except those being contested in good faith) and not enter into, assume
         or amend any contract or commitment that would be a Material  Contract;
         and

             (j) prepare and file all federal,  state, local and foreign returns
         for taxes  and  other  tax  reports,  filings  and  amendments  thereto
         required  to be filed by it, and allow  ImaginOn,  at its  request,  to
         review all such returns,  reports,  filings and amendments at Cal Pro's
         office prior to the filing  thereof,  which review shall not  interfere
         with the timely filing of such returns.

         In connection with the wind-down of the business of Cal Pro between the
         date of this Agreement and the Effective  Date, Cal Pro shall confer in
         good  faith  and on a  regular  and  frequent  basis  with  one or more
         representatives of ImaginOn designated in writing to report operational
         matters of materiality  and the general  status of ongoing  operations.
         Cal Pro  acknowledges  that  ImaginOn  does not and will not  waive any
         rights  it  may  have  under  this   Agreement  as  a  result  of  such
         consultations  nor shall ImaginOn be responsible for any decisions made
         by Cal Pro's  officers and directors  with respect to matters which are
         the subject of such consultation.

         5.3 NOTICE OF ANY MATERIAL CHANGE.  Each of ImaginOn and Cal Pro shall,
promptly  after the first  notice or  occurrence  thereof but not later than the
Closing  Date,  advise the other in writing of any event or the existence of any
state of facts that (i) would make any of its  representations and warranties in
this  Agreement  untrue  in  any  material  respect,  or  (ii)  would  otherwise
constitute  either an ImaginOn  Material  Adverse  Effect or a Cal Pro  Material
Adverse Effect.

         5.4 INSPECTION AND ACCESS TO INFORMATION.

             (a)  Between the date of this  Agreement  and the  Effective  Date,
         ImaginOn  will provide to the Merger  Subsidiary  and Cal Pro and their
         accountants,  counsel and other authorized  representatives  reasonable
         access,  during normal  business hours to its premises,  and will cause
         its officers to furnish to Cal Pro and the Merger  Subsidiary and their
         authorized representatives such financial, technical and operating data
         and  other  information  pertaining  to its  business,  as  the  Merger
         Subsidiary and Cal Pro shall from time to time reasonably request.

             (b) Between the date of this Agreement and the Effective  Date, Cal
         Pro will, and will cause each of the Cal Pro  Subsidiaries  to, provide
         to  ImaginOn  and  its   accountants,   counsel  and  other  authorized
         representatives  reasonable access, during normal business hours to its

30698_8
                                      -23-
<PAGE>

         premises,  and will cause its  officers to furnish to ImaginOn  and its
         authorized representatives such financial, technical and operating data
         and other  information  pertaining to its business,  as ImaginOn  shall
         from time to time reasonably request.

             (c) Each of the parties hereto and their respective representatives
         shall  maintain  the  confidentiality  of all  information  (other than
         information which is generally  available to the public) concerning the
         other parties hereto acquired pursuant to the transactions contemplated
         hereby in the event  that the  Merger is not  consummated.  Each of the
         parties hereto and their representatives shall not use such information
         so obtained to the detriment or competitive  disadvantage  of the other
         party hereto.  All files,  records,  documents,  information,  data and
         similar items  relating to the  confidential  information  of ImaginOn,
         whether  prepared  by Cal  Pro  or  otherwise  coming  into  Cal  Pro's
         possession,  shall remain the exclusive  property of ImaginOn and shall
         be promptly  delivered to ImaginOn upon  termination of this Agreement.
         All files,  records,  documents,  information,  data and similar  items
         relating to the  confidential  information of Cal Pro, whether prepared
         by  ImaginOn or  otherwise  coming into  ImaginOn's  possession,  shall
         remain  the  exclusive  property  of Cal  Pro  and  shall  be  promptly
         delivered to Cal Pro upon termination of this Agreement.

         5.5 CAL PRO EXCHANGE ACT REPORTS.  ImaginOn  acknowledges  that Cal Pro
will be required to report its  acquisition of ImaginOn  promptly  following the
Effective Date. ImaginOn agrees to provide as promptly as practicable to Cal Pro
such  information  concerning its business and financial  statements and affairs
as, in the reasonable  judgment of Cal Pro, may be required or  appropriate  for
inclusion in the required report,  or in any amendments or supplements  thereto,
and to cause its counsel and  auditors to cooperate  with Cal Pro's  counsel and
auditors in the preparation of such report.

         5.6 REASONABLE EFFORTS; FURTHER ASSURANCES; COOPERATION. Subject to the
other  provisions  of this  Agreement,  the parties  hereby shall each use their
reasonable  efforts to perform their obligations herein and to take, or cause to
be taken or do, or cause to be done, all things reasonably necessary,  proper or
advisable  under  applicable law to obtain all regulatory  approvals and satisfy
all  conditions to the  obligations  of the parties under this  Agreement and to
cause the Merger and the other  transactions  contemplated  herein to be carried
out promptly in accordance with the terms hereof. The parties agree to use their
reasonable best efforts to consummate the  transactions  contemplated  hereby as
promptly as  possible.  The parties  shall  cooperate  fully with each other and
their respective officers,  directors,  employees,  agents, counsel, accountants
and other  designees in connection with any steps required to be taken as a part
of  their  respective  obligations  under  this  Agreement,   including  without
limitation:

             (a) In the event any claim,  action,  suit,  investigation or other
         proceeding by any governmental  body or other person is commenced which
         questions  the  validity  or legality of the Merger or any of the other
         transactions   contemplated  hereby  or  seeks  damages  in  connection

30698_8
                                      -24-
<PAGE>

         therewith,  the  parties  agree  to  cooperate  and use all  reasonable
         efforts to defend against such claim,  action,  suit,  investigation or
         other  proceeding and, if an injunction or other order is issued in any
         such action, suit or other proceeding, to use all reasonable efforts to
         have such injunction or other order lifted, and to cooperate reasonably
         regarding any other  impediment to the consummation of the transactions
         contemplated by this Agreement.

             (b) Each party shall give prompt written notice to the other of (i)
         the occurrence,  or failure to occur, of any event which  occurrence or
         failure  would be likely to cause any  representation  or  warranty  of
         ImaginOn or Cal Pro, as the case may be, contained in this Agreement to
         be untrue or  inaccurate  in any material  respect at any time from the
         date  hereof to the  Effective  Date or that will or may  result in the
         failure to satisfy the conditions  specified in Article 6 or 7 and (ii)
         any  failure of ImaginOn or Cal Pro, as the case may be, to comply with
         or satisfy any covenant,  condition or agreement to be complied with or
         satisfied by it hereunder.

         5.7 PUBLIC  ANNOUNCEMENTS.  The timing and content of all announcements
regarding any aspect of this Agreement or the Merger to the financial community,
government  agencies,  employees or the general public shall be mutually  agreed
upon in advance  (unless Cal Pro or ImaginOn is advised by counsel that any such
announcement or other disclosure not mutually agreed upon in advance is required
to be made by law or applicable NSM rule and then only after making a reasonable
attempt to comply with the provisions of this Section).

         5.8 NO SOLICITATIONS. (a) From the date hereof until the Effective Date
or  until  this  Agreement  is  terminated  or  abandoned  as  provided  in this
Agreement,  ImaginOn  shall not directly or  indirectly  (i) solicit or initiate
discussion with or (ii) enter into  negotiations or agreements  with, or furnish
any  information  to, any  corporation,  partnership,  person or other entity or
group  (other  than  Cal  Pro,  an  affiliate  of Cal  Pro or  their  authorized
representatives  pursuant  to this  Agreement)  concerning  any  proposal  for a
merger,  sale of  substantial  assets,  sale of shares of stock or securities or
other takeover or business combination  transaction (the "Acquisition Proposal")
involving ImaginOn, and ImaginOn will instruct its officers, directors, advisors
and its  financial and legal  representatives  and  consultants  not to take any
action contrary to the foregoing provisions of this sentence; provided, however,
that  ImaginOn,  its officers,  directors,  advisors and its financial and legal
representatives  and  consultants  will not be prohibited from taking any action
described  in (ii)  above to the  extent  such  action  is taken by, or upon the
authority  of, the Board of  Directors of ImaginOn in the exercise of good faith
judgment as to its  fiduciary  duties to the  shareholders  of  ImaginOn,  which
judgment is based upon the advice of  independent,  outside legal counsel that a
failure of the Board of  Directors  of  ImaginOn  to take such  action  would be
likely to  constitute  a breach of its  fiduciary  duties to such  shareholders.
ImaginOn  will  notify  Cal Pro  promptly  if  ImaginOn  becomes  aware that any
inquiries or proposals are received by, any information is requested from or any
negotiations  or  discussions  are sought to be initiated  with,  ImaginOn  with
respect to an Acquisition  Proposal,  and ImaginOn shall promptly deliver to Cal
Pro any written  inquiries  or  proposals  received  by ImaginOn  relating to an
Acquisition Proposal.

30698_8
                                      -25-
<PAGE>

         5.9 NO SOLICITATIONS. (a) From the date hereof until the Effective Date
or  until  this  Agreement  is  terminated  or  abandoned  as  provided  in this
Agreement,  Cal Pro shall not  directly  or  indirectly  (i) solicit or initiate
discussion with or (ii) enter into  negotiations or agreements  with, or furnish
any  information  to, any  corporation,  partnership,  person or other entity or
group  (other  than  ImaginOn,  an  affiliate  of  ImaginOn  or  its  authorized
representatives  pursuant  to this  Agreement)  concerning  any  proposal  for a
merger,  sale of  substantial  assets,  sale of shares of stock or securities or
other takeover or business combination  transaction (the "Acquisition Proposal")
involving Cal Pro, and Cal Pro will instruct its officers,  directors,  advisors
and its  financial and legal  representatives  and  consultants  not to take any
action contrary to the foregoing provisions of this sentence; provided, however,
that Cal Pro, its  officers,  directors,  advisors and its  financial  and legal
representatives  and  consultants  will not be prohibited from taking any action
described  in (ii)  above to the  extent  such  action  is taken by, or upon the
authority  of, the Board of  Directors  of Cal Pro in the exercise of good faith
judgment  as to its  fiduciary  duties  to the  shareholders  of Cal Pro,  which
judgment is based upon the advice of  independent,  outside legal counsel that a
failure of the Board of Directors of Cal Pro to take such action would be likely
to constitute a breach of its  fiduciary  duties to such  shareholders.  Cal Pro
will notify  ImaginOn  promptly if Cal Pro becomes  aware that any  inquiries or
proposals are received by, any information is requested from or any negotiations
or  discussions  are sought to be  initiated  with,  Cal Pro with  respect to an
Acquisition Proposal, and Cal Pro shall promptly deliver to ImaginOn any written
inquiries or proposals received by Cal Pro relating to an Acquisition Proposal.

         5.10 CAL PRO BOARD OF DIRECTORS. Not later than the Effective Date, Cal
Pro's current  directors  shall have resigned and have elected David M. Schwartz
and his nominees as directors of Cal Pro.

         5.11 PROXY  STATEMENT.  As soon as possible after the date hereof,  Cal
Pro shall prepare and file with the SEC and mail to its stockholders, as soon as
permitted,  proxy materials requesting that the Cal Pro stockholders approve (i)
the Merger;  (ii) a recapitalization or other amendment to its charter documents
that will  result in there  being  sufficient  shares  of Cal Pro  Common  Stock
available for the Merger Consideration and for other corporate purposes; (iii) a
reverse stock split; (iv) a change of the name of Cal Pro to ImaginOn, Inc.; and
(v) election of a new board of directors.

         5.12  EXERCISE  OF PUBLIC  WARRANTS.  If,  within  12 months  after the
Effective  Date Cal Pro shall not have  received  at least $2  million  from the
exercise of its publicly traded  warrants (the  "Warrants")  and/or  alternative
financing,  then the persons who were stockholders of ImaginOn immediately prior
to the Effective  Date  ("ImaginOn  Stockholders")  shall be entitled to receive
additional  shares of Cal Pro Common  Stock,  or Cal Pro Common Stock if Cal Pro
shall not yet have complied with the provisions of Section 5.11 hereof,  so that
the ImaginOn  Stockholders  shall have  received 80% of the  outstanding  voting
shares of Cal Pro capital stock as of the Effective Date.

30698_8
                                      -26-
<PAGE>

         5.13 SUBSCRIPTION AGREEMENTS.  All of the ImaginOn shareholders who are
to receive  shares of Cal Pro Common Stock in the Merger shall have executed the
Subscription Agreement attached as Exhibit 5.13.


                                    ARTICLE 6

                 Conditions Precedent to Obligations of ImaginOn

         Except as may be waived by  ImaginOn,  the  obligations  of ImaginOn to
consummate the  transactions  contemplated by this Agreement shall be subject to
the  satisfaction  on or  before  the  Closing  Date of  each  of the  following
conditions:

         6.1  COMPLIANCE.  Cal Pro  shall  have,  or shall  have  caused  to be,
satisfied or complied  with and  performed  in all material  respects all terms,
covenants and  conditions of this  Agreement to be complied with or performed by
Cal Pro on or before the Closing Date.

         6.2  REPRESENTATIONS  AND WARRANTIES.  ALl of the  representations  and
warranties  made by Cal Pro in this  Agreement  shall be true and correct in all
material  respects at and as of the Closing  Date with the same force and effect
as if such representations and warranties had been made at and as of the Closing
Date, except for changes permitted or contemplated by this Agreement.

         6.3 MATERIAL  ADVERSE  CHANGES.  Subsequent to December 31, 1997, there
shall have  occurred  no Cal Pro  Material  Adverse  Effect  other than any such
change that affects both Cal Pro and ImaginOn in a substantially similar manner.

         6.4  RESOLUTIONS.  Cal Pro shall have  delivered  to ImaginOn a copy of
resolutions  duly adopted by the board of directors,  authorizing  and approving
the execution and delivery by Cal Pro of this  Agreement,  and the completion by
Cal Pro of the Merger.

         6.5  CERTIFICATES.  ImaginOn  shall  have  received  a  certificate  or
certificates,  executed on behalf of Cal Pro by an executive officer of Cal Pro,
to the effect that the  conditions  contained in Sections  6.1, 6.2, 6.3 and 6.4
hereof have been satisfied.

         6.6 PREPARATION AND DELIVERY OF SCHEDULES. Cal Pro shall have delivered
all Cal Pro  Schedules  referred to in this  Agreement  and ImaginOn  shall have
accepted them, which acceptance shall not be unreasonably withheld.

         6.7  RESERVATION  OF SHARES FOR  OPTIONS.  Cal Pro shall have  reserved
200,000  shares of Common Stock for issuance  after the Effective  Date (a) upon
exercise of options or (b) granting of stock bonuses.

30698_8
                                      -27-
<PAGE>

         6.8  CAL  PRO'S  BUSINESS.  Cal Pro  shall  have  no  ongoing  business
operations,  other than sales of existing inventory, and shall have no full time
employees.

         6.9 APPROVAL OF  STOCKHOLDERS.  The  stockholders of Cal Pro shall have
approved  the  matters  set  forth in  Section  5.11 and  elected a new board of
directors.

         6.10  QUOTATION  OF COMMON  STOCK.  Quotations  of Cal Pro Common Stock
shall be available  through a system  maintained by the National  Association of
Securities Dealers or as otherwise available to registered broker-dealers.

         6.11  OUTSTANDING  PUBLIC  WARRANTS.  Cal Pro shall  have  reduced  the
exercise price of the Warrants from $6.00 to $1.50 per share or such other price
as to which Cal Pro and ImaginOn shall have agreed.

         6.12  SATISFACTION  OF  DEBTS  AND  LIABILITIES.  Cal  Pro  shall  have
satisfied all of its debts and  outstanding  liabilities,  except as the parties
may reasonably agree.


                                    ARTICLE 7

                 Conditions Precedent to obligations of Cal Pro
                            and the Merger Subsidiary

         Except  as may be  waived  by Cal Pro and the  Merger  Subsidiary,  the
obligations of Cal Pro and the Merger  Subsidiary to consummate the transactions
contemplated  by this  Agreement  shall be  subject to the  satisfaction,  on or
before the Closing Date, of each of the following conditions:

         7.1  COMPLIANCE.  ImaginOn  shall  have,  or shall  have  caused to be,
satisfied or complied  with and  performed  in all material  respects all terms,
covenants,  and conditions of this Agreement to be complied with or performed by
it on or before the Closing Date.

         7.2  REPRESENTATIONS  AND WARRANTIES.  All of the  representations  and
warranties  made by ImaginOn in this Agreement  shall be true and correct in all
material  respects at and as of the Closing  Date with the same force and effect
as if such representations and warranties had been made at and as of the Closing
Date, except for changes permitted or contemplated by this Agreement.

         7.3 MATERIAL  ADVERSE  CHANGE.  Since December 31, 1997,  except as set
forth in this Agreement or on the schedules hereto, there shall have occurred no
ImaginOn  Material  Adverse  Effect other than any such change that affects both
Cal Pro and ImaginOn in a substantially similar manner.

30698_8
                                      -28-
<PAGE>

         7.4  RESOLUTIONS.  ImaginOn  shall have  delivered to Cal Pro a copy of
resolutions  duly adopted by the board of directors,  authorizing  and approving
the execution and delivery by ImaginOn of this Agreement,  and the completion by
ImaginOn of the Merger.

         7.5  CERTIFICATES.  Cal  Pro  shall  have  received  a  certificate  or
certificates,  executed  on  behalf  of  ImaginOn  by an  executive  officer  of
ImaginOn,  to the effect that the  conditions  in Sections 7.1, 7.2, 7.3 and 7.4
hereof have been satisfied.

         7.6  PREPARATION  AND  DELIVERY  OF  SCHEDULES.   ImaginOn  shall  have
delivered all ImaginOn Schedules referred to in this Agreement and Cal Pro shall
have accepted them, which acceptance shall not be unreasonably withheld.

         7.7  OPINION OF  COUNSEL.  Cal Pro shall have  received  the opinion of
Pennie & Edmonds LLP, special counsel to ImaginOn,  reasonably acceptable to Cal
Pro, including, but not limited to the following:

             (a)  ImaginOn  is the  exclusive  owner of, and has sole,  full and
         clear  title to, the  ImaginOn  Patents  set forth on  Schedule  7.7(a)
         issued by the United  States Patent and  Trademark  Office,  and is the
         owner of the patent applications set forth on Schedule 7.7(a), free and
         clear of any encumbrances, liens or adverse claims of any kind, and all
         of the  registrations  of said Patents are valid and  subsisting in the
         records of the United States Patent and Trademark Office.

             (b)  ImaginOn  is the  exclusive  owner of, and has sole,  full and
         clear title to, the  registrations  for the  Trademarks  (described  in
         Schedule 7.7(b))  currently  registered in the United States Patent and
         Trademark Office, free and clear of any encumbrances,  liens or adverse
         claims of any kind, and all of the registrations of said Trademarks are
         valid and  subsisting  in the records of the United  States  Patent and
         Trademark Office.

             (c) To the best of such counsel's knowledge, ImaginOn's present use
         of the Patents and Trademarks  does not infringe on any rights of third
         parties,  and there are no third  parties  infringing  on or  otherwise
         interfering with the use of the Patents and Trademarks. Such counsel is
         not aware of any adverse  claims with  respect to any of the Patents or
         Trademarks.

             (d) The  status  of the  license  agreement  between  ImaginOn  and
         JTS/Atari Corp.

             (e) Upon the Merger of Merger  Subsidiary into ImaginOn,  ImaginOn,
         without more,  will continue to be the exclusive  owner of and have the
         sole full and clear  title to the Patents  and the  Trademarks  and the
         good will  associated  therewith,  free and clear of any  encumbrances,
         liens or adverse claims of any kind.

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<PAGE>

         7.8  OPINION  OF  INVESTMENT  BANKER.  Cal Pro shall have  received  an
opinion from an investment  banking firm that the transaction is fair to the Cal
Pro shareholders from a financial point of view.

         7.9 APPROVAL OF  STOCKHOLDERS.  The  stockholders of Cal Pro shall have
approved  the  matters  set  forth in  Section  5.11 and  elected a new board of
directors.

         7.10 CONSENTS;  LITIGATION. Other than the filing of the Certificate of
Merger as  described  in  Article  1, all  authorizations,  consents,  orders or
approvals of, or declarations or filings with, or expirations or terminations of
waiting  periods  imposed  by,  any  governmental   entity,   and  all  required
third-party  consents,  the  failure  to obtain  which  would  have an  ImaginOn
Material Adverse Effect or a Cal Pro Material Effect,  shall have been obtained.
In addition,  no preliminary  or permanent  injunction or other order shall have
been issued by any court or by any  governmental or regulatory  agency,  body or
authority  which prohibits the  consummation of the Merger and the  transactions
contemplated by this Agreement and which is in effect at the Effective Date.

         7.11  APPRAISAL  RIGHTS.  All of the ImaginOn  shareholders  shall have
voted for the Merger and none shall have asserted dissenter or appraisal rights.


                                    ARTICLE 8

               Indemnification; Directors' and Officers' Insurance

         8.1  INDEMNIFICATION.  In the event of any  threatened or actual claim,
action,  suit,  proceeding  or  investigation  (including  any claims  regarding
securities law matters),  whether civil, criminal or administrative,  including,
without limitation, any such claim, action, suit, proceeding or investigation in
which any of the present or former  officers or directors  (the  "Managers")  of
ImaginOn is, or is  threatened to be, made a party by reason of the fact that he
or she  is or  was a  stockholder,  director,  officer,  employee  or  agent  of
ImaginOn,  or is or was  serving  at the  request  of  ImaginOn  as a  director,
officer, employee or agent of another corporation,  partnership,  joint venture,
trust or other enterprise,  whether before or after the Effective Date, ImaginOn
shall indemnify and hold harmless, and from and after the Effective Date each of
the Surviving  Corporation and Cal Pro shall indemnify and hold harmless, as and
to the full extent permitted by applicable law (including by advancing  expenses
promptly as statements  therefor are  received),  each such Manager  against any
losses,  claims,  damages,  liabilities,  costs,  expenses (including attorneys'
fees),  judgments,  fines and amounts paid in settlement in connection  with any
such claim, action, suit,  proceeding or investigation,  and in the event of any
such claim, action, suit proceeding or investigation  (whether arising before or
after the Effective  Date), (i) if ImaginOn (prior to the Effective Date) or Cal
Pro or the Surviving  Corporation  (after the Effective  Date) have not promptly
assumed the defense of such matter, the Managers may retain counsel satisfactory
to them,  and  ImaginOn,  or the  Surviving  Corporation  and Cal Pro  after the

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                                      -30-
<PAGE>


Effective Date, shall pay all fees and expenses of such counsel for the Managers
promptly,  as  statements  therefor  are  received,  and (ii)  ImaginOn,  or the
Surviving  Corporation  and Cal Pro after  the  Effective  Date,  will use their
respective  best efforts to assist in the  vigorous  defense of any such matter;
provided that neither ImaginOn nor the Surviving Corporation or Cal Pro shall be
liable for any  settlement  effected  without its prior written  consent  (which
consent  shall not be  unreasonably  withheld);  and  provided  further that the
Surviving  Corporation and Cal Pro shall have no obligation  under the foregoing
provisions of this Section 8.1 to any Manager if (x) the indemnification of such
Manager in the manner  contemplated  hereby is prohibited by applicable law, and
(y) ImaginOn has breached a representation or warranty hereunder with respect to
the same matters for which  indemnification  is being sought by such Manager and
such Manager  fails to prove that such  Manager had no actual  knowledge of such
breach  at the  Effective  Date.  Upon  the  determination  that  the  Surviving
Corporation or Cal Pro is not liable for any such  indemnification  claims,  the
Manager  will  reimburse  Cal Pro and the  Surviving  Corporation  for any fees,
expenses  and  costs  incurred  by  Cal  Pro  or the  Surviving  Corporation  in
connection  with the  defense  of such  claims.  Any  Manager  wishing  to claim
indemnification under this Section 8.1, upon learning of any such claim, action,
suit,  proceeding  or  investigation,  shall  notify  ImaginOn  and,  after  the
Effective Date, the Surviving  Corporation and Cal Pro,  thereof  (provided that
the  failure to give such  notice  shall not affect any  obligations  hereunder,
except to the extent  that the  indemnifying  party is actually  and  materially
prejudiced   thereby).   Cal  Pro  and   ImaginOn   agree  that  all  rights  to
indemnification  existing in favor of the  Managers  as  provided in  ImaginOn's
Certificate of Incorporation  or Bylaws as in effect as of the date hereof,  and
in any  agreement  between  ImaginOn  and any  Manager  with  respect to matters
occurring prior to the Effective Date, shall survive the Merger. Cal Pro further
covenants  not  to  amend  or  repeal  any  provisions  of  the  Certificate  of
Incorporation  or Bylaws of ImaginOn in any manner which would adversely  affect
the indemnification or exculpatory  provisions contained therein. The provisions
of this  Section  8.1 are  intended  to be for the  benefit  of,  and  shall  be
enforceable by, each indemnified party and his or her heirs and representatives.


                                    ARTICLE 9

                                  Miscellaneous

         9.1 TERMINATION.  In addition to the provisions  regarding  termination
set forth elsewhere  herein,  this Agreement and the  transactions  contemplated
hereby may be terminated at any time on or before the Closing Date:

             (a) by mutual consent of ImaginOn and Cal Pro;

             (b) by either Cal Pro or ImaginOn if the transactions  contemplated
         by this Agreement have not been consummated by August 31, 1998,  unless
         such failure of  consummation  is due to the failure of the terminating

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                                      -31-
<PAGE>


         party to perform or observe the covenants,  agreements,  and conditions
         hereof to be performed or observed by it at or before the Closing Date;

             (c) by either ImaginOn or Cal Pro if the transactions  contemplated
         hereby violate any  nonappealable  final order,  decree, or judgment of
         any court or governmental body or agency having competent jurisdiction;

             (d) by Cal Pro if the  ImaginOn  Board of  Directors  withdraws  or
         materially  modifies or changes its  recommendation to the stockholders
         of ImaginOn to approve this Agreement and the Merger if there exists at
         such time an Acquisition Proposal;.

             (e) by Cal  Pro  if the  Cal  Pro  Board  of  Directors  reasonably
         determines  that the ImaginOn  Schedules are not acceptable to Cal Pro;
         or

             (f) by  ImaginOn  if the  ImaginOn  Board of  Directors  reasonably
         determines that the Cal Pro Schedules are not acceptable to ImaginOn.

         9.2 EXPENSES.  If the  transactions  contemplated by this Agreement are
not  consummated,  each party  hereto  shall pay its own  expenses  incurred  in
connection with this Agreement and the transactions contemplated hereby.

         9.3 ENTIRE  AGREEMENT.  This Agreement and the exhibits  hereto contain
the  complete  agreement  among the  parties  with  respect to the  transactions
contemplated hereby and supersede all prior agreements and understandings  among
the parties with respect to such  transactions.  Section and other  headings are
for  reference  purposes  only  and  shall  not  affect  the  interpretation  or
construction  of  this   Agreement.   The  parties  hereto  have  not  made  any
representation or warranty except as expressly set forth in this Agreement or in
any certificate or schedule  delivered  pursuant hereto.  The obligations of any
party  under any  agreement  executed  pursuant to this  Agreement  shall not be
affected by this section.

         9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties  of each  party  contained  herein  or in any  exhibit,  certificate,
document or instrument  delivered  pursuant to this Agreement  shall not survive
the Closing.

         9.5  COUNTERPARTS.  This  Agreement  may be  executed  in any number of
counterparts,  each of which when so executed and  delivered  shall be deemed an
original, and such counterparts together shall constitute only one original.

         9.6 NOTICES. All notices,  demands,  requests,  or other communications
that may be or are  required  to be given,  served,  or sent by any party to any
other party pursuant to this Agreement  shall be in writing and shall be sent by
facsimile transmission, next-day courier or mailed by first-class, registered or
certified mail,  return receipt  requested,  postage prepaid,  or transmitted by
hand delivery, addressed as follows:

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                                      -32-
<PAGE>


         (a) If to ImaginOn:

             864 Laurel Street,  2nd Floor 
             San Carlos,  CA 94070 
             ATTN:  David M. Schwartz, President

         (b) If to Cal Pro or the Merger Subsidiary:

             Barry S. Hollander, Chief Financial Officer
             California Pro Sports, Inc.
             1221-B South Batesville Road
             Greer, South Carolina  29650

         with a copy (which shall not constitute notice) to:

             Friedlob Sanderson Raskin Paulson & Tourtillott, LLC
             1400 Glenarm Pl., Suite 300
             Denver, Colorado  80202
             ATTN:  Gerald Raskin

         Each party may  designate  by notice in writing a new  address to which
         any notice,  demand,  request,  or  communication  may thereafter be so
         given, served, or sent. Each notice, demand,  request, or communication
         that is mailed,  delivered, or  transmitted  in  the  manner  described
         above shall be deemed  sufficiently given,  served,  sent, and received
         for all purposes at such time as it is delivered to the addressee (with
         the return receipt,  the delivery receipt or the affidavit of messenger
         being deemed  conclusive  evidence of such delivery) or at such time as
         delivery is refused by the addressee upon presentation.

         9.7 SUCCESSORS;  ASSIGNMENTS. This Agreement and the rights, interests,
and  obligations  hereunder shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors and assigns.  Neither this
Agreement nor any of the rights,  interests or  obligations  hereunder  shall be
assigned, by operation of law or otherwise, by any of the parties hereto without
the prior written consent of the other.

         9.8 GOVERNING  LAW. This  Agreement  shall be construed and enforced in
accordance with the laws of the State of Delaware.

         9.9 WAIVER AND OTHER ACTION.  This Agreement may be amended,  modified,
or  supplemented  only by a written  instrument  executed by the parties against
which enforcement of the amendment, modification or supplement is sought.

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                                      -33-
<PAGE>

         9.10  SEVERABILITY.  If any  provision of this  Agreement is held to be
illegal, invalid, or unenforceable, such provision shall be fully severable, and
this Agreement shall be construed and enforced as if such illegal,  invalid,  or
unenforceable  provision  were never a part  hereof;  the  remaining  provisions
hereof  shall  remain in full force and effect and shall not be  affected by the
illegal, invalid, or unenforceable provision or by its severance; and in lieu of
such  illegal,  invalid,  or  unenforceable  provision,  there  shall  be  added
automatically as part of this Agreement,  a provision as similar in its terms to
such  illegal,  invalid,  or  unenforceable  provision as may be possible and be
legal, valid, and enforceable.

         9.11 NO  THIRD  PARTY  BENEFICIARIES.  Article  8 is  intended  for the
benefit of each  "Manager" (as defined in Article 8) and may be enforced by such
persons,  their heirs and representatives.  Other than as expressly set forth in
this Section 9.11,  nothing  expressed or implied in this Agreement is intended,
or shall be construed,  to confer upon or give any person,  firm or  corporation
other than the parties  hereto and their  stockholders,  any  rights,  remedies,
obligations  or  liabilities  under or by reason of this  Agreement or result in
such person,  firm or corporation being deemed a third party beneficiary of this
Agreement.

         9.12  MUTUAL  CONTRIBUTION.  The  parties to this  Agreement  and their
counsel have mutually contributed to its drafting. Consequently, no provision of
this  Agreement  shall be  construed  against  any party on the ground that such
party drafted the provision or caused it to be drafted or the provision contains
a covenant of such party.

         9.13 ARBITRATION.  Any controversy or dispute among the parties arising
in  connection  with  this  Agreement  shall  be  submitted  to a panel of three
arbitrators and finally settled by arbitration in accordance with the commercial
arbitration rules of the American Arbitration Association. Each of the disputing
parties  shall  appoint  one  arbitrator,   and  these  two  arbitrators   shall
independently  select a third  arbitrator.  Arbitration  shall take place in Los
Angeles,  California. The prevailing party in such arbitration shall be entitled
to the award of all costs and  attorneys'  fees in connection  with such action.
Judgment upon the award rendered may be entered in any court having jurisdiction
or  application  may be made to such court for judicial  acceptance of the award
and an order of enforcement, as the case may be.

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                                      -34-
<PAGE>

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


ImaginOn, Inc.

         /s/ David M. Schwartz
By:__________________________________
         David M. Schwartz, President

California Pro Sports, Inc.

         /s/ Henry Fong
By:__________________________________
         Henry Fong, Chairman


         /s/ Barry S. Hollander
By:__________________________________
         Barry S. Hollander, President

ImaginOn Acquisition Corp.

         /s/ Barry S. Hollander
By:__________________________________
         Barry S. Hollander, President

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                                      -35-