CARIBINER INTERNATIONAL INC, 10-K, 1996-12-27

CARIBINER INTERNATIONAL INC
10-K, 1996-12-27
BUSINESS SERVICES, NEC

Previous: GROUP LONG DISTANCE INC, 8-A12G, 1996-12-27

Next: CRAZY WOMAN CREEK BANCORP INC, 10KSB, 1996-12-27

<PAGE>

FORM 10-K

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (Fee Required)

For the fiscal year ended ________________September 30, 1996_________________
OR
[_]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (No Fee Required)

For the transition period from ______________________to _______________________

Commission file number 1-14234_________________________________________________

CARIBINER INTERNATIONAL, INC
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)

Delaware 13-3466655
- -------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S.)employer identification no.)
incorporation or organization)

16 West 61st Street, New York, NY 10023
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip)code)

(212) 541-5300
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class Name of exchange on which registered

Common Stock, par value $0.01 per share New York Stock Exchange
--------------------------------------- ------------------------------------

Securities Registered Pursuant to Section 12(g) of the Act:

None
- --------------------------------------------------------------------------------
(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [_]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Registration S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [_]

As of December 24, 1996, the aggregate market value of voting stock held by
non-affiliates of the registrant was $214,573,541.

As of December 24, 1996, the registrant had 9,613,654 shares of its common
stock, par value $0.01 per share, issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:

(1) portions of the registrant's definitive proxy statement (to be filed
pursuant to Regulation 14A) for the 1997 Annual Meeting of Stockholders
(the "Proxy Statement") are incorporated by reference into Part III
hereof.
<PAGE>

PART I

ITEM 1. BUSINESS
--------

Caribiner International, Inc. is a leading international producer of
meetings, events and training programs and a provider of related business
communications services that enable businesses to inform, sell to and train,
their sales forces, dealers, franchisees, partners, stockholders and
employees. As used herein, the terms "Caribiner" or "Company" refer to
Caribiner International, Inc. and its subsidiaries and the terms "fiscal
1994," "fiscal 1995," and "fiscal 1996" refer to the Company's fiscal years
ended September 30, 1994, 1995 and 1996.

Business activities and events that generate a need for business
communications services include sales meetings, product launches, training and
education of employees and dealers, development of strategic and
organizational communications, conferences, stockholder meetings and other
executive management presentations that are used to convey important
information about the business and/or its products. These business
constituencies are not typically communicated with by public relations firms,
which assist a business in communications with or through the news media, or
advertising agencies, which create advertising and marketing campaigns to
communicate with consumers. Large-scale events and programs to communicate
essential corporate messages are often not part of a company's core businesses
because of the unique skills necessary to develop, produce and successfully
stage such events. As a result, many companies look to engage outside firms to
perform these functions. In addition, large corporate events tend not to occur
regularly, depending, for example, on timing of product roll-outs, changing
competitive environments and shifts in corporate strategy, which makes it
relatively costly to maintain the internal resources to create and execute
these events.

The Company offers a wide range of business communications services,
including conceptualizing, planning and producing corporate meetings and
events and providing audio visual equipment rentals, sales and related staging
services for such meetings and events, developing training and educational
materials relating to new job skills, products, systems and organizational
processes, handling internal corporate communications and creating interactive
trade show exhibits. The Company believes it has benefited from a trend among
major corporations toward increased corporate outsourcing of meetings, events,
training and communications. These services can be delivered in all forms of
media, including film, interactive technologies (including CD-ROM), videotape,
slides, computer graphics and animation, print and multimedia.

RECENT ACQUISITIONS

During fiscal 1994 and 1995, Caribiner completed five acquisitions and
acquired a contractual client relationship with a major corporation from
another business communications services provider. Three such acquisitions
were business communications services providers located in New York City,
which permitted the Company to expand its client base and secure the services
of experienced executive management personnel of the acquired businesses. In
addition, during such fiscal years, the Company also completed three other
transactions through which it increased its client base and expanded into new
geographic regions by the addition of offices in Los Angeles, Atlanta, Dallas
and Houston. The total initial purchase cost of the acquisitions completed in
fiscal 1994 and 1995 was $4.5 million and $4.3 million, respectively. Several
such acquisitions also provide for contingent payments following their
purchase based upon achievement of gross profits above specified target
levels.

Effective as of January 1, 1996, the Company acquired substantially all of
the assets of Koors Perry & Associates, Inc. ("Koors Perry"), a regional
business communications services provider based in Atlanta, Georgia with
revenue of $8.9 million for the nine months ended September 30, 1995. The
Company has integrated Koors Perry with its Atlanta office and has used it as
a base from which to expand its presence in the southeastern U.S. In June,
1996, the Company acquired Lighthouse, Ltd. ("Lighthouse"), a leading
midwestern business communications services provider, with revenue of $10.4
million for the year ended December 31, 1995. The Company has integrated its
Chicago office with the Lighthouse headquarters in Rolling Meadows, Illinois
and has used it as a base from which to expand its presence in the midwestern
U.S. The acquisition of

1
<PAGE>

Lighthouse resulted in the Company's establishing a relationship with, among
other clients, Motorola, Inc. Also in June, 1996, the Company acquired SCH
International Limited ("Spectrum"), a leading London-based producer of
meetings and events and provider of other business communications services
with a significant presence in the United Kingdom and Europe with revenue of
$20.5 million for the nine months ended March 31, 1996. The acquisition of
Spectrum allowed the Company to establish an international presence, resulted
in the Company's establishing a relationship with, among other clients, the
European division of a large domestic automobile manufacturer and will enable
it to serve the global needs of its domestic clients.

In September, 1996, the Company acquired Total Audio Visual Services
("TAVS"), a leading provider of audio visual equipment rentals and related
staging services, including hotel audio visual outsourcing services in the
United States. The acquisition of TAVS enables the Company to offer its own
audio visual equipment and staging services for use at meetings and events
serviced by the Company and reduce the Company's reliance on third party
vendors. The Company also believes that since many TAVS' clients are hotel
properties whose business customers tend to book hotel facilities well in
advance of meetings and events, and often prior to contacting a business
communications services provider, it will have opportunities to benefit from
cross-referral of customers. TAVS reported revenue of $45.9 million for the
year ended December 31, 1995.

The total initial purchase cost of the acquisitions completed during fiscal
1996 was approximately $43.9 million. Certain of such acquisitions also
included contingent payment provisions.

RECENTLY ANNOUNCED PURCHASE AGREEMENTS

In December, 1996, the Company entered into a definitive agreement to
acquire all of the outstanding capital stock of Blumberg Communications Inc.
("Blumberg"), a provider of audio visual equipment rentals and sales,
production and staging services and hotel audio visual outsourcing services in
the upper mid-west and southern U.S. The consummation of the acquisition is
subject to certain closing conditions. Upon consummation of the acquisition,
the Company intends to integrate Blumberg's operations with its existing
operations and to expand its presence in the geographic regions which Blumberg
presently serves. Blumberg reported revenue of $42.3 million for the year
ended May 31, 1996.

Also in December, 1996, the Company acquired all of the outstanding capital
stock of Rome Network, Inc. ("Rome"), a leading regional provider of business
communications services in the San Francisco area. The Company intends to
integrate Rome into its San Francisco office to expand and strengthen its
presence in the business communications services market in the geographic
areas which Rome presently serves.

SERVICES

Caribiner offers a wide range of business communications services, including
conceptualizing, planning and producing corporate meetings and events,
developing training and educational materials relating to new job skills,
products, systems and organizational processes, handling internal corporate
communications and creating interactive trade show exhibits. The Company also,
through its TAVS division, provides audio visual equipment rentals and staging
services, as well as hotel audio visual outsourcing services.

Specifically, Caribiner's services include:

BUSINESS MEETINGS AND EVENTS that introduce new products, present newly
designed corporate strategies to targeted audiences or honor a company's
leading contributors.

AUDIO VISUAL EQUIPMENT RENTAL AND STAGING SERVICES through its TAVS
division, which is the preferred in-house provider of audio visual equipment
rentals, sales and related staging services in approximately 70 hotel
properties located primarily in the southeastern U.S. and which also supplies
such equipment and services to production companies and corporations for use
at meetings, events and training programs.

TRAINING PROGRAMS using interactive and technology-driven hardware designed
to improve employee productivity, in the areas of product knowledge, team
building, sales skills, personal skills and behavioral development.

2
<PAGE>

CORPORATE COMMUNICATIONS PROGRAMS used to disseminate management's message
to employees and others.

EXHIBITS AND DISPLAYS, which involves the design and development of a
company's trade show exhibit or a visitor's center/lobby display.

CLIENTS

Caribiner targets clients with large or potentially large recurring needs
for business communications services. Caribiner's client list covers a number
of industry sectors including automotive, information technology, insurance,
pharmaceuticals, financial services, fast food, lodging and petroleum.

Caribiner's clients include ARAMARK, Eastman Kodak Corporation, Ford Motor
Co., Holiday Inn Worldwide, IBM, McDonald's Corporation, Parke-Davis, a
division of Warner Lambert, Schering-Plough, and Shell Oil Company. During
fiscal 1996, Ford Motor Co., IBM and State Farm Group accounted for
approximately 15%, 13% and 11%, respectively, of Caribiner's revenues. From
fiscal 1993 to fiscal 1996, the number of clients to whom the Company provided
services during the year grew from 65 to over 300.

Caribiner's size and strategic focus on enhancing and establishing client
relationships with large or potentially large accounts permits it to dedicate
personnel to a single client to strengthen and build the relationship and
increase the opportunity for cross-selling to other divisions or departments
of the client. When the Company recognized significant opportunities to expand
relationships with Ford Motor Co. and IBM, management decided to increase
Company resources devoted to the servicing of these two accounts. Accordingly,
the Company maintains a Detroit facility with a total of 30 full-time
employees to service the business communications needs of numerous individual
buyers from the 21 Ford business units for whom Caribiner executed projects in
fiscal 1996. In addition, in July, 1995, Caribiner dedicated personnel and
facilities in its White Plains (NY) office to provide services to IBM on a
worldwide basis. Caribiner believes that the strategy it has followed with the
Ford Motor Co. and IBM to build and maintain these accounts can be utilized to
develop and build relationships with other clients having a significant need
for business communications services.

Among the ways the Company seeks to differentiate itself to clients from
other providers of business communications services are by its customer
service, its breadth of creative and technical expertise, its ability to
execute programs successfully, with complete "back-up" system technology, its
demonstrated ability to produce a broad range of projects, large and small,
across a number of industries, its full range of business communications
services, its continuous investment in new technology and equipment, its size
and its international presence.

SALES AND MARKETING

Historically, Caribiner has acquired new clients and marketed its services
primarily by cross-selling to existing clients, responding to requests for
proposals, pursuing client referrals, identifying prospects through research
of a potential client's business communications needs, actively marketing to
potential new customers and through acquisitions of other business
communications services providers. The Company solicits prospective accounts
through personal contacts by members of Caribiner's senior management as well
as through the Company's managers responsible for business development. When a
new account is established, the Company immediately assigns a sales executive
(an account manager) to the client to build the relationship and ensure that
the client's needs are being met, and to seek out further opportunities to
penetrate this account. The Company employs a full-time sales and marketing
staff of approximately 100 persons, and has dedicated a senior group of sales
and marketing executives to identify potential client relationship
opportunities and promote Caribiner's expertise and range of services.
Generally, account managers are assigned a number of different accounts which
may be comprised of a number of businesses or a number of divisions,
departments or groups within the same business.

3
<PAGE>

OPERATIONS

General. Each of the Company's regional offices is run by a general manager,
who is supported by sales executives (the account managers) who establish and
foster customer relationships; creative and technical personnel who direct
concept development, staging and execution of a project; and producers and
project managers who have ultimate responsibility for project execution, media
creation and theatrical staging of an event. In addition, the Company employs
on-site service representatives to serve TAVS' hotel properties. Each regional
office supplements its staff with independent contractors or part-time
employees where needed. Caribiner has long-standing relationships with
freelance contractors and part-time employees in various production and
creative disciplines, which gives it a competitive advantage in being able to
produce the highest quality events for its customers while keeping overhead
lower and utilizing resources more efficiently.

Although each office focuses on serving the needs of clients located in its
geographic region, Caribiner's management emphasizes the coordination of
activities between offices and allocates, when necessary, resources from one
office in order to support another. This coordination of activities allows the
Company to serve its clients at a local level while at the same time providing
clients with resources and expertise of an international organization.
Caribiner has also centralized the accounting, finance, and information
technology functions of the Company in New York and Atlanta to minimize
overhead and administrative expense.

Foreign Operations. In June, 1996, the Company acquired Spectrum, which has
a significant presence in the United Kingdom and Europe. Spectrum owns
Spectrum Communications Limited and Mark Wallace Associates Ltd. in London and
a joint venture interest in Spectrum Communications LLC in Dubai. In addition,
in June, 1996, the Company opened its Hong Kong office, primarily to better
serve its international clients in the Pacific Rim. During fiscal 1996, the
Company's foreign operations generated revenue of $7.0 million and an
operating loss of $0.1 million and at September 30, 1996 had identifiable
assets, including goodwill, of $16.2 million. Such financial information
reflects only four months of foreign operations, and the Company expects that
its foreign operations will be more material in the future.

EMPLOYEES

As of December 13, 1996, Caribiner employed 818 full-time employees, of
which 711 employees were located domestically and 107 were located
internationally.

The Company has no collective bargaining or similar agreements with unions;
however, the Company does from time to time independently contract with or
hire part-time union personnel, especially during the production of a
particular meeting or event. Over the course of any given project period, the
Company evaluates the production personnel requirements and determines the
extent to which it must supplement its available employee base with the use of
freelance contractors or part time employees. Depending on the timing and
specific requirements of the events and the number of overlapping events in
any given planning period, the use of freelance contractors and part time
employees can vary significantly. The Company considers its relations with its
full-time employees, part-time employees and independent contractors to be
good.

COMPETITION

Although no firm data exists with respect to the size of the business
communications services industry and the number and size of competitors within
the industry, management believes, based on its experience in the industry,
that the business communications services industry is highly fragmented.
Caribiner believes that no one participant or small number of participants is
dominant in the industry and that its competitors consist primarily of small,
generally regional firms which provide a limited range of services, although
there are several participants in the industry whose business, like that of
Caribiner, is full service in scope. Management believes that certain
competitors have capabilities and resources comparable to and in certain
respects greater than those of the Company. Caribiner also competes with in-
house communications staffs of existing and potential clients.

4
<PAGE>

Management believes that the competitive factors most important in the
business communications services industry are organizational breadth,
creative, production and technical expertise, demonstrated ability to execute
projects, range of services offered, range of industries serviced, size,
geographical presence and price.

The Company believes its principal strengths are the depth of its creative
and production talent, its ability to consistently meet its clients'
objectives and expectations, its focus on quality and customer service and its
ability to manage effectively and reliably several complex, large-scale
projects contemporaneously. The Company believes it is at a competitive
disadvantage in certain regions where it does not have local offices.

ITEM 2. PROPERTIES
----------

Caribiner's corporate headquarters and New York office are located in leased
offices occupying approximately 40,000 square feet at 16 West 61st Street, New
York, New York 10023-7604. The lease for the Company's headquarters expires in
2000. The Company is presently reviewing expansion into additional space which
it expects to require as it grows, but has not entered into any commitments.

The Company also leases offices in Atlanta, Boston, Columbia (MD), Columbia
(SC), Dallas, Detroit, Houston, Los Angeles, Orlando, Rolling Meadows (IL),
San Francisco and White Plains (NY) in the U.S. and in London, Dubai and Hong
Kong. The Company leases warehouse space in Atlanta, Chicago, Dallas, North
Bergen (NJ), Orlando, Columbia (MD) and Columbia (SC). The terms of the leases
expire between 1997 and 2011. The Company anticipates that as it expands, it
will require additional office space to support such growth and believes that
suitable additional or alternative space will be available as needed.

ITEM 3. LEGAL PROCEEDINGS
-----------------

From time to time, the Company is involved in litigation incidental to its
business. In the opinion of the Company, no such litigation has had or is
likely to have a material adverse effect on the Company's results of
operations, financial condition or liquidity.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------

None.

ITEM 4A. EXECUTIVE OFFICERS AND DIRECTORS OF THE COMPANY
-----------------------------------------------

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Raymond S. Ingleby............. 33 Chairman of the Board and Chief Executive
Officer of Caribiner International, Inc.
Arthur F. Dignam............... 50 Executive Vice President and Chief Financial
and Administrative Officer of Caribiner
International, Inc.
Mark M. Cohen.................. 49 Executive Vice President of Caribiner
International, Inc. and President of
Caribiner Communications
Lawrence P. Golen.............. 39 Executive Vice President of Caribiner
International, Inc. and President of Total
Audio Visual Services
Brian Shepherd................. 39 Executive Vice President, Strategic Planning
and International Operations, of Caribiner
International, Inc.
Errol M. Cook.................. 57 Director
Bryan D. Langton............... 60 Director
Sidney Lapidus................. 59 Director
David E. Libowitz.............. 33 Director
</TABLE>

5
<PAGE>

RAYMOND S. INGLEBY has been a director and Chief Executive Officer of the
Company since its formation in 1989, and Chairman since June, 1993. From 1988
through 1993, Mr. Ingleby served as Chairman and Chief Executive Officer of
Ingleby Communications Corporation ("ICC"), which he founded in 1988. In 1985,
Mr. Ingleby, a British citizen, founded his own advertising company that was
engaged in the installation of advertising displays in hotels, which he sold
in 1988.

ARTHUR F. DIGNAM has been Executive Vice President and Chief Financial
Officer of the Company since February, 1994 and Chief Administrative Officer
since November, 1995. Prior to joining Caribiner, Mr. Dignam worked as an
independent consultant from August, 1993 to January, 1994, and was Vice
President and Chief Financial Officer for Panavision International, the
privately-held predecessor to Panavision Inc., a company that manufactures
high quality cameras and accessories for the film and television industry,
from February, 1989 to July, 1993. Prior thereto, Mr. Dignam served as chief
financial officer in both the news division and operations and technical
services division of the National Broadcasting Company.

MARK M. COHEN has been Executive Vice President of the Company and President
of Caribiner Communications since November, 1995. Mr. Cohen joined Caribiner
in November, 1993 as Executive Vice President of Caribiner, Inc. and General
Manager of its New York office. Prior to joining Caribiner, Mr. Cohen served
in various general management positions with Maritz Inc., a marketing service
and performance improvement company, from June, 1976 to November, 1993.

LAWRENCE P. GOLEN has been Executive Vice President of the Company and
President of TAVS since October, 1996, when he joined Caribiner after its
acquisition of TAVS from General Electric Capital Computer Leasing Corporation
("GECCLC"). Prior thereto, Mr. Golen served as General Manager of TAVS from
September, 1994 to October, 1996 and as General Manager of the Test Equipment
Management Services division of GECCLC from May, 1994 to October, 1996. Prior
thereto, Mr. Golen served as Vice President-Marketing and Sales of Douglas
Manufacturing from January, 1993 to April, 1994 and Regional Marketing
Director of GE Plastics from November, 1991 to December, 1993.

BRIAN SHEPHERD has been Executive Vice President, Strategic Planning and
International Operations, of Caribiner International, Inc. since November,
1995. Mr. Shepherd joined the Company as Vice President of Caribiner, Inc. and
General Manager of its Atlanta office in July, 1995. Mr. Shepherd was formerly
President and Chief Executive Officer of Imagination (USA) Inc., a subsidiary
of Imagination, UK, a large European-based business communications company,
from December, 1992 to July, 1995. Previously, he had been Managing Director
of the London office of Imagination, UK.

ERROL M. COOK has been a director of the Company since June, 1992. Mr. Cook
has been a Managing Director of E.M. Warburg, Pincus & Co., Inc. ("EMW") since
March, 1991. Mr. Cook serves on the board of directors of certain privately
held companies.

BRYAN D. LANGTON has been a director of the Company since April, 1996. Mr.
Langton has been the Chairman Emeritus of Holiday Inn Worldwide, a subsidiary
of Bass plc, since December, 1996. Prior thereto Mr. Langton served as
Chairman and Chief Executive Officer of Holiday Inn Worldwide and Holiday Inn,
Inc. from February, 1990 to December, 1996. Mr. Langton serves on the board of
directors of Bass plc.

SIDNEY LAPIDUS has been a director of the Company since June, 1992. Mr.
Lapidus is a Managing Director of EMW. Mr. Lapidus has been with EMW or its
predecessor since 1967. Mr. Lapidus serves on the board of directors of
Renaissance Communications Corp., Pacific Greystone Corporation and Panavision
Inc., as well as several privately held companies.

DAVID E. LIBOWITZ has been a director of the Company since June, 1992. Mr.
Libowitz has served as a Vice President of Warburg, Pincus Ventures, Inc., the
venture banking subsidiary of EMW, since January, 1995 and has been associated
with EMW since July, 1991. Mr. Libowitz serves on the board of directors of
certain privately held companies.

6
<PAGE>

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
---------------------------------------------------------------------

The Common Stock is listed on the New York Stock Exchange under the symbol
"CWC." The following table sets forth on a per share basis, for the periods
indicated, the high and low sales prices of the Common Stock as reported by
the New York Stock Exchange. The Common Stock was not publicly traded prior to
March 11, 1996, the date of its initial public offering. The number of
stockholders of record of Common Stock on December 1, 1996 was 73.

<TABLE>
<CAPTION>
PRICE RANGE
---------------
HIGH LOW
------- -------
<S> <C> <C>
Fiscal 1996:
Second Quarter (from March 11, 1996)................... $26 7/8 $21 1/8
Third Quarter.......................................... 36 3/4 24 1/2
Fourth Quarter......................................... 43 28
</TABLE>

The Company has not paid any dividends with respect to the Common Stock. The
Company presently intends to retain future earnings to finance its growth and
development and therefore does not anticipate any cash dividends in the
foreseeable future. Payment of future dividends, if any, will depend upon
future earnings and capital requirements of the Company and other factors
which the Board of Directors considers appropriate.

The Company issued and sold the following unregistered securities during
fiscal 1996:

1. In November, 1995, the Company issued and sold an aggregate of 87,210
shares of Non-Voting Common Stock, par value $0.01 per share (the "Non-
Voting Common Stock"), to 35 officers and employees of the Company for an
aggregate purchase price of $130,625 in cash pursuant to award agreements
under the Management Stock Plan. (The Management Stock Plan was terminated
and all such shares of Non-Voting Common Stock were converted, without any
action on the part of the holders thereof, into shares of Common Stock upon
consummation of the IPO on March 15, 1996.)

2. In April, 1996, the Company granted to an employee options to purchase
2,500 shares of Common Stock at an exercise price per share of $25.6875
pursuant to a stock option agreement under the Company's 1996 Stock Option
Plan. Pursuant to the terms of such stock option agreement, one-third of
such options vest and become exercisable in April, 1997; one-third of such
options vest and become exercisable in April, 1998, and one-third of such
options vest and become exercisable in April, 1999.

3. In June, 1996, the Company issued and sold an aggregate of 31,821
shares of Common Stock to Mark P. Fitzgerald, Warren F. Moore II and
Richard C. Hunt in connection with the purchase of substantially all of the
assets, and the assumption of certain of the liabilities, of Lighthouse.

4. In July, 1996, the Company granted to 112 employees options to
purchase an aggregate of 140,000 shares of Common Stock at an exercise
price per share of $28.875 pursuant to stock option agreements under the
Company's 1996 Stock Option Plan. Pursuant to the terms of such stock
option agreements, one-third of such options vest and become exercisable in
July, 1997; one-third of such options vest and become exercisable in July,
1998, and one-third of such options vest and become exercisable in July,
1999.

5. In September, 1996, the Company granted to two employees options to
purchase an aggregate of 8,900 shares of Common Stock at an exercise price
of $40.375 per share pursuant to stock option agreements under the
Company's 1996 Stock Option Plan. Pursuant to the terms of such stock
option agreements, options to purchase 1,600 shares of Common Stock are
presently exercisable. In addition, pursuant to the terms of such stock
option agreements, options to purchase the remaining 7,300 shares vest and
become exercisable one-third in September, 1997, one-third in September,
1998, and one-third in

7
<PAGE>

September, 1999; provided, however, that options to purchase 4,800 of such
7,300 shares vest and become exercisable only upon the satisfaction of
certain performance criteria to be established by the Board of Directors of
the Company.

There were no underwriters employed in connection with any of the
transactions set forth above.

The transactions described above were effected in reliance upon an exemption
from the registration requirements of the Securities Act of 1933, as amended,
on the basis that such transactions did not involve any public offering. The
recipients of securities in each such transaction represented their intentions
to acquire the securities for investment only and not with a view to sell or
offer for sale the securities in connection with any distribution thereof and
appropriate legends were affixed to the securities issued in such
transactions.

8
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA
-----------------------

SELECTED FINANCIAL DATA
(IN THOUSANDS, EXCEPT SHARE DATA)

The historical selected financial data presented below as of and for the
fiscal years ended September 30, 1992, 1993, 1994, 1995 and 1996, are derived
from, and are qualified by reference to, the financial statements that have
been audited by Ernst & Young LLP, independent auditors. The data presented
below should be read in conjunction with the Company's financial statements
and related notes thereto and other information included elsewhere in this
Form 10-K.

<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
------------------------------------------------
1992(a) 1993 1994 1995 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue...................... $ 21,760 $ 50,107 $ 59,174 $ 81,131 $148,330
Cost of revenue.............. 15,767 34,907 39,724 54,312 99,797
-------- -------- -------- -------- --------
Gross profit................. 5,993 15,200 19,450 26,819 48,533
Selling, general and
administrative expenses..... 7,321 12,551 14,349 19,306 30,442
Non-cash compensation
expense(b).................. -- -- -- -- 1,072
Depreciation and
amortization................ 3,064 3,852 2,137 2,330 3,142
Write-off of certain
intangibles(c).............. -- 4,614 -- -- --
-------- -------- -------- -------- --------
Total operating expenses..... 10,385 21,017 16,486 21,636 34,656
-------- -------- -------- -------- --------
Operating income (loss)...... (4,392) (5,817) 2,964 5,183 13,877
Interest expense with related
parties..................... 345 1,435 2,107 2,234 1,199
Interest expense, other...... 173 222 502 1,259 387
-------- -------- -------- -------- --------
Income (loss) before taxes... (4,910) (7,474) 355 1,690 12,291
Provision for taxes.......... 63 23 62 264 4,302
-------- -------- -------- -------- --------
Net income (loss)............ (4,973) (7,497) 293 1,426 7,989
Preferred stock dividends(d). (120) (517) (582) (655) (327)
-------- -------- -------- -------- --------
Net income (loss) available
to common stockholders...... $ (5,093) $ (8,014) $ (289) $ 771 $ 7,662
======== ======== ======== ======== ========
Pro forma net income per common share(e)....... $ 0.30 $ 0.49 $ 1.05
======== ======== ========
<CAPTION>
AS OF SEPTEMBER 30,
------------------------------------------------
1992 1993 1994 1995 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital (deficit).... $ (1,229) $ (1,349) $ (1,452) $ 352 $ 5,451
Total assets................. 27,852 15,182 31,266 45,298 126,321
Total debt, including accrued
interest.................... 13,937 19,223 24,531 34,175 22,839
Stockholders' equity......... (1,273) (12,269) (13,249) (12,434) 53,467
</TABLE>

See Notes to Selected Financial Data

9
<PAGE>

NOTES TO SELECTED FINANCIAL DATA

(a) Prior to August, 1993, the Company was wholly-owned by ICC and comprised
substantially all of the operations of ICC. On June 30, 1992, the Company
completed a private placement of securities to Warburg, Pincus, Investors,
L.P., the proceeds from which were used in part to acquire Caribiner, Inc.
On August 3, 1993, ICC was merged into a wholly-owned subsidiary of the
Company.

(b) Non-cash compensation expense for the year ended September 30, 1996 of $1.1
million (or $0.08 per share) resulting primarily from the vesting of non-
voting common stock issued at a price lower than its fair market value
under the 1993 Management Stock Plan, which was terminated upon
consummation of the Company's initial public offering (the "Initial Public
Offering") of shares of Common Stock in March, 1996.

(c) Reflects adjustment to net realizable value of certain intangibles,
principally module and film libraries acquired in purchase business
transactions.

(d) All preferred stock was converted into Common Stock in connection with the
Initial Public Offering.

(e) Pro forma net income per common share is calculated using the weighted
average number of shares of Common Stock outstanding during the period,
plus Common Stock issued pursuant to the Management Stock Plan and warrants
to purchase Common Stock issued at prices below the Initial Public Offering
price of $17.00 per share during the twelve months immediately preceding
December 15, 1995 (the initial filing date of the Registration Statement
relating to the Initial Public Offering), assuming such Common Stock was
outstanding for all periods presented. In addition, pro forma net income
per common share assumes conversion of the Company's 11.5% Convertible
Promissory Note (the "Convertible Note") and the conversion of all
outstanding shares of preferred stock into shares of Common Stock (which,
in each case, occurred on March 15, 1996) as if such conversions occurred
on October 1, 1994. Accordingly, pro forma net income per common share
reflects adjustments to eliminate interest expense incurred on the
Convertible Note during each of fiscal 1994, fiscal 1995 and fiscal 1996,
and to eliminate accrued preferred stock dividends.

10
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------

Certain statements contained herein are forward-looking statements that are
made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements involve known and
unknown risks and uncertainties which may cause the Company's actual results
in future periods or plans for future periods to differ materially from what
is currently anticipated. Those risks include, among others, general
competitive factors, the Company's ability to successfully complete and
integrate its acquisitions and to implement operational improvements in its
acquired businesses and the seasonality and episodic nature of the Company's
business.

RESULTS OF OPERATIONS

FISCAL 1996 COMPARED TO FISCAL 1995

Revenue. Revenue increased $67.2 million, or 83%, from $81.1 million in
fiscal 1995 to $148.3 million in fiscal 1996. The increase resulted primarily
from expanded activities for certain existing clients, projects for new
clients and the acquisition of other business communications services
providers. Contributing to the increase were sales meetings in connection with
a triennial event held by an insurance client, a product launch for an
existing pharmaceutical client, a franchisee meeting for a new food services
client and increased business from both existing clients and clients developed
through acquisitions.

Gross profit. Gross profit increased 81% from $26.8 million in fiscal 1995
to $48.5 million in fiscal 1996, primarily as a result of the revenue growth
described above. Gross profit as a percentage of revenue decreased slightly to
32.7% in fiscal 1996 from 33.1% in fiscal 1995.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $11.1 million or 58% from $19.3 million in
fiscal 1995 to $30.4 million in fiscal 1996. Salaries and related costs
increased $6.9 million resulting primarily from the addition of new offices
and personnel resulting from acquisitions and in support of other revenue
growth, as well as normal inflationary increases. Other general and
administrative expenses increased $2.6 million resulting from the Company's
overall growth. Direct selling expenses increased $1.6 million to support
revenue growth. Selling, general and administrative expenses as a percentage
of revenue declined from 23.8% in fiscal 1995 to 20.5% in fiscal 1996 as
revenue increased more rapidly than such expenses. The Company also recorded a
non-recurring non-cash compensation expense of $1.1 million resulting from the
vesting of common stock sold pursuant to the Company's management stock plan
at a price lower than its fair market value.

Depreciation and amortization. Depreciation and amortization expense
increased $0.8 million from $2.3 million in fiscal 1995 to $3.1 million in
fiscal 1996. This increase was primarily due to the purchase of computer
equipment, fixed assets acquired through acquisitions and goodwill resulting
from such acquisitions.

Interest expense. Interest expense with related parties decreased by $1.0
million from fiscal 1995 to fiscal 1996 due to the repayment and conversion of
debt as of March 15, 1996 in connection with the Initial Public Offering.
Other interest expense, net, decreased by $0.9 million from fiscal 1995 to
fiscal 1996 due to a lower average borrowing level, the repayment of
outstanding balances as of March 15, 1996 in connection with the Initial
Public Offering, and interest income earned on the proceeds from the Initial
Public Offering.

Income before taxes. Income before taxes increased from $1.7 million in
fiscal 1995 to $12.3 million in fiscal 1996 as revenue growth from internal
business and acquired businesses contributed to the improved earnings of the
Company.

Provision for taxes. The provision for taxes as a percentage of income
before taxes was 35.0% and 15.6% for fiscal 1996 and fiscal 1995,
respectively. The increase in the effective rate is due primarily to income
before tax in excess of the utilization of available net operating loss
carryforwards which are not subject to limitations. Beginning with the fiscal
year ending September 30, 1997, the Company expects to reflect an effective
tax rate in accordance with statutory tax rates as adjusted for book/tax
differences such as nondeductible expenses.

11
<PAGE>

Net income. Net income increased to $8.0 million in fiscal 1996 from net
income of $1.4 million in fiscal 1995, for the reasons set forth in the
preceding paragraphs. Pro forma net income per common share increased in
fiscal 1996 to $1.05 from $0.49 in fiscal 1995. Excluding the effect of the
non-recurring non-cash compensation charge of $1.1 million, pro forma net
income per common share would have been $1.13 for fiscal 1996.

FISCAL 1995 COMPARED TO FISCAL 1994

Revenue. Revenue increased 37.1% from $59.2 million in fiscal 1994 to $81.1
million in fiscal 1995. Higher revenue from the Ford Motor Co. accounted for
approximately two-thirds of the revenue increase. Increased revenue from
clients in the information technology sector contributed approximately 25% of
the increase.

Gross profit. Gross profit increased 37.9% from $19.5 million in fiscal 1994
to $26.8 million in fiscal 1995. The $7.4 million increase resulted primarily
from the revenue growth described in the preceding paragraph. Gross profit as
a percentage of revenue rose slightly from 32.9% to 33.1%.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased 34.5% from $14.3 million in fiscal 1994 to
$19.3 million in fiscal 1995. Salaries and related costs increased $3.1
million primarily as a result of acquisition, new office openings and
additional personnel in connection with the Company's growth as well as annual
inflationary increases. Direct selling expenses increased $0.4 million to
support revenue growth. In addition, other general and administrative expenses
for new and additional offices increased $1.5 million. Selling, general and
administrative expenses as a percentage of revenue declined from 24.3% in
fiscal 1994 to 23.8% in fiscal 1995.

Depreciation and amortization. Depreciation and amortization expense
increased by $0.2 million from fiscal 1994 to fiscal 1995 due primarily to the
purchase of computer equipment and goodwill from acquisitions.

Interest expense. Interest expense with related parties increased $0.1
million in fiscal 1995 from fiscal 1994 due to compounding. Other interest
expense increased $0.8 million due to higher borrowing under the Company's
bank facility to fund acquisitions, office expansions and increased working
capital requirements.

Income before taxes. Income before income taxes increased from $0.4 million
in fiscal 1994 to $1.7 million in fiscal 1995 as revenue growth both from
internal business as well as acquired businesses contributed to the improved
earnings of the Company.

Provision for taxes. The provision for taxes in fiscal 1995 reflects
federal, state and local minimum taxes after benefit from the utilization of
net operating loss carryforwards. The provision for taxes in fiscal 1994
reflects state and local minimum taxes.

Net income. Net income increased to $1.4 million in fiscal 1995 from net
income of $0.3 million in fiscal 1994, for the reasons set forth in the
preceding paragraphs.

LIQUIDITY AND CAPITAL RESOURCES

The Company has financed its operations primarily through internal cash flow
and bank financing, including the Company's new financing facilities, its
recently replaced line of credit (the "1994 Line of Credit") and its recently
replaced term facility (the "1994 Term Facility") (as further described
below). These sources of funds have been used to fund the Company's efforts to
grow both internally and through acquisitions.

12
<PAGE>

of September 30, 1996, each of the 1994 Line of Credit and the 1994 Term
Facility bore interest at the rate of 9.25% per annum, which was 1% over the
lender's prime rate. On December 4, 1996, the Company entered into a new loan
agreement with a syndicate of banks pursuant to which the Company increased
its aggregate available bank financing from $27 million to $100 million,
consisting of a $75 million six year reducing revolving credit facility (the
"Reducing Revolver") to be utilized in connection with the financing of
acquisitions and a $25 million six year revolving line of credit (the
"Revolving Line" and together with the Reducing Revolver, the "1996
Facilities"). Amounts outstanding under the 1994 Line of Credit and 1994 Term
Facility were repaid with proceeds from the 1996 Facilities. The maturity date
of each of the 1996 Facilities is December 31, 2002. Interest on outstanding
amounts under the 1996 Facilities is payable quarterly in arrears and, at the
option of the Company, interest accrues at either (i) LIBOR plus an applicable
margin or (ii) an alternate base rate based on the greatest of (a) the agent
bank's prime rate, (b) the three month secondary certificate of deposit rate
and (c) the federal funds rate. The interest rate will increase by 2.0% if
principal or interest is not paid when due (after applicable grace periods).
Pursuant to the terms of the 1996 Facilities, the Company is required to
reduce outstanding amounts under the Revolving Line to less than $5.0 million
for a period of not less than 30 days during every 12-month period commencing
on December 4, 1996.

The following table sets forth certain information from the Company's
Consolidated Statement of Cash Flows for the periods indicated:

<TABLE>
<CAPTION>
YEAR ENDED
SEPTEMBER 30,
-----------------------
1994 1995 1996
------ ------ -------
(IN THOUSANDS)
<S> <C> <C> <C>
Net cash provided by (used in):
Operating activities.................................. $2,872 $ 442 $ 4,887
Investing activities.................................. (6,601) (7,758) (43,832)
Financing activities.................................. 3,572 7,256 47,078
</TABLE>

In fiscal 1994, the Company generated $2.9 million from its operating
activities. Net income plus depreciation and amortization provided $2.4
million. The net change in working capital provided $0.5 million, with
increases in accounts receivable resulting from increased revenue being more
than offset by increases in accounts payable, deferred income and accrued
liabilities. Investing activities required $6.6 million as a result of the
acquisition of businesses, purchase of property and equipment and additional
payments in connection with the merger with ICC. Financing activities provided
$3.6 million through use of the 1994 Line of Credit and 1994 Term Facility.

In fiscal 1995, the Company generated approximately $0.4 million from
operating activities compared to $2.9 million in fiscal 1994. The decrease was
the result of higher working capital requirements resulting from expansion of
operating activities and revenue growth. Investing activities included the
purchase of property and equipment and acquisitions of intangibles and
businesses that required approximately $7.8 million. Financing activities
provided approximately $7.3 million through use of the 1994 Line of Credit and
1994 Term Facility.

In fiscal 1996, the Company generated $7.3 million from its operating
activities. Net income plus depreciation and amortization and the non-cash
compensation expense described above provided $12.2 million. The net change in
working capital used $7.3 million, with increases in accounts receivable,
prepaid expenses and other current assets as well as a decrease in accrued
interest payable, offset by a net increase in accrued expenses and accounts
payable. Investing activities required $46.2 million, resulting primarily from
the acquisition of businesses and the purchase of equipment. Financing
activities provided approximately $47.1 million, of which an aggregate of
$44.3 million of net proceeds were received in fiscal 1996 from the issuance
of Common Stock and the exercise of warrants to purchase Common Stock, $18.0
million was provided by the 1994 Term Loan and net proceeds of $1.8 million
were provided by the 1994 Line of Credit. Such amounts were offset by $16.9
million used to repay certain outstanding bank borrowings and substantially
all other long-term indebtedness, and pay accrued preferred stock dividends.
In addition, $0.2 million was used to repurchase Common Stock in fiscal 1996.

13
<PAGE>

Capital expenditures were $2.2 million in fiscal 1996 and $1.6 million in
each of fiscal 1995 and fiscal 1994, with the purchase of additional personal
computers and expanded capabilities for the computer system accounting for the
largest areas of expenditure. The Company believes that capital expenditure
requirements will increase to approximately $9.0 million in fiscal 1997
(including Blumberg's anticipated capital expenditure requirements, but
excluding capital expenditure requirements of any additional businesses
acquired) primarily as a result of planned investments in audio visual and
staging equipment.

QUARTERLY RESULTS

The following table sets forth the unaudited quarterly results of operations
for each of the quarters in fiscal 1995 and fiscal 1996. In management's
opinion, this unaudited quarterly information includes all adjustments which
are necessary for a fair presentation of the information for the quarters
presented. The operating results in any quarter are not necessarily indicative
of the results which may be expected for any other interim period.

<TABLE>
<CAPTION>
FISCAL 1995 FISCAL 1996
-------------------------------- --------------------------------
1ST 2ND 3RD 4TH 1ST 2ND 3RD 4TH
QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER
------- ------- ------- ------- ------- ------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue................. $11,399 $19,045 $21,641 $29,046 $20,407 $31,220 $48,150 $48,553
Gross profit............ 3,912 5,861 7,528 9,518 7,066 10,190 15,576 15,701
Operating income (loss). (1,143) 938 2,242 3,146 (87) 1,576 6,556 5,830
Net income (loss)....... (1,593) 91 1,127 1,801 (898) 643 4,408 3,836
</TABLE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
-------------------------------------------

14
<PAGE>

CARIBINER INTERNATIONAL, INC.

CONSOLIDATED FINANCIAL STATEMENTS

INDEX

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Auditors............................................. 16
Consolidated Balance Sheets as of September 30, 1995 and 1996.............. 17
For the Years Ended September 30, 1994, 1995 and 1996:
Consolidated Statements of Operations.................................... 18
Consolidated Statements of Cash Flows.................................... 19
Consolidated Statements of Changes in Stockholders' (Deficit) Equity..... 20
Notes to Consolidated Financial Statements............................... 21
</TABLE>

15
<PAGE>

REPORT OF INDEPENDENT AUDITORS

To the Stockholders and Board of Directors
Caribiner International, Inc.

We have audited the accompanying consolidated balance sheets of Caribiner
International, Inc. (the "Company") as of September 30, 1995 and 1996, and the
related consolidated statements of operations, stockholders' equity (deficit)
and cash flows for each of the three years in the period ended September 30,
1996. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of the Company
at September 30, 1995 and 1996 and the consolidated results of its operations
and its cash flows for each of the three years in the period ended September
30, 1996, in conformity with generally accepted accounting principles.

/s/ Ernst & Young LLP

New York, New York
December 6, 1996
Except for Note 15 as to which the date
is December 20, 1996

16
<PAGE>

CARIBINER INTERNATIONAL, INC.

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
SEPTEMBER 30,
-------------------------
1995 1996
----------- ------------
<S> <C> <C>
ASSETS
------
CURRENT ASSETS:
Cash and cash equivalents.......................... $ 212,612 $ 8,431,777
Trade accounts receivable, net of allowance for
doubtful accounts of
$81,600 in 1995 and $304,860 in 1996.............. 22,920,679 36,201,774
Deferred charges................................... 3,804,858 8,989,410
Prepaid expenses and other current assets.......... 607,494 3,394,951
----------- ------------
TOTAL CURRENT ASSETS........................... 27,545,643 57,017,912
Property and equipment, net........................ 6,383,975 21,180,982
Goodwill, net...................................... 10,288,503 46,681,520
Other intangibles, net............................. 340,251 1,041,280
Other assets....................................... 740,040 399,696
----------- ------------
TOTAL ASSETS................................... $45,298,412 $126,321,390
=========== ============
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
----------------------------------------------
CURRENT LIABILITIES:
Bank line of credit................................ $ 4,220,000 $ 6,000,000
Current portion of long-term debt.................. 4,677,054 648,696
Trade accounts payable............................. 4,581,165 7,529,536
Accrued expenses and other current liabilities..... 3,471,233 12,698,716
Accrued production costs........................... 3,483,084 11,355,416
Deferred income.................................... 6,761,589 13,334,965
----------- ------------
TOTAL CURRENT LIABILITIES...................... 27,194,125 51,567,329
Long-term debt..................................... 7,147,675 16,189,922
Convertible Note including accrued interest........ 17,346,397 --
Deferred income.................................... 3,275,023 5,007,183
Accrued preferred stock dividends.................. 1,874,135 --
Other liabilities.................................. 895,288 89,573
----------- ------------
TOTAL LIABILITIES.............................. 57,732,643 72,854,007
STOCKHOLDERS' (DEFICIT) EQUITY:
Preferred stock, $.01 par value:
1,150,000 shares authorized, 450,000 shares issued
and outstanding at 1995; 2,000,000 shares autho-
rized, none issued and outstanding at 1996........ 4,500 --
Common stock, $.01 par value:
12,330,000 voting shares authorized and 685,000
non-voting shares authorized, 1,924,240 voting
shares and 577,239 non-voting shares issued and
outstanding at 1995; 40,000,000 voting shares au-
thorized, 9,598,159 shares issued and
outstanding at 1996............................... 25,015 95,982
Additional paid-in capital......................... 1,945,272 60,032,954
Translation adjustment............................. -- 85,723
Accumulated deficit................................ (14,409,018) (6,747,276)
----------- ------------
TOTAL STOCKHOLDERS' (DEFICIT) EQUITY........... (12,434,231) 53,467,383
----------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) $45,298,412 $126,321,390
EQUITY............................................. =========== ============
</TABLE>

See accompanying notes to the consolidated financial statements.

17
<PAGE>

CARIBINER INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
------------------------------------
1994 1995 1996
----------- ----------- ------------
<S> <C> <C> <C>
Revenue................................... $59,173,739 $81,131,219 $148,329,868
Cost of revenue........................... 39,723,994 54,312,550 99,797,490
----------- ----------- ------------
Gross profit.............................. 19,449,745 26,818,669 48,532,378
Operating expenses:
Selling, general and administrative
expenses................................ 14,348,904 19,305,899 30,442,235
Non-cash compensation expense........... -- -- 1,072,000
Depreciation and amortization........... 2,137,100 2,329,869 3,141,838
----------- ----------- ------------
Total operating expenses.................. 16,486,004 21,635,768 34,656,073
----------- ----------- ------------
Operating income.......................... 2,963,741 5,182,901 13,876,305
Interest expense with related parties..... 2,107,383 2,233,623 1,199,281
Other interest expense, net............... 501,509 1,259,315 385,909
----------- ----------- ------------
Income before taxes....................... 354,849 1,689,963 12,291,115
Provision for taxes....................... 62,257 264,430 4,301,890
----------- ----------- ------------
Net income.............................. $ 292,592 $ 1,425,533 $ 7,989,225
=========== =========== ============
Pro forma net income per common share... $0.30 $0.49 $1.05
===== ===== =====
</TABLE>

See accompanying notes to the consolidated financial statements.

18
<PAGE>

CARIBINER INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
------------------------------------
1994 1995 1996
----------- ---------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income............................. $ 292,592 $1,425,533 $ 7,989,225
Adjustments to reconcile net income to
net cash provided by
(used in) operating activities:
Non-cash compensation expense.......... -- -- 1,072,000
Depreciation and amortization.......... 2,137,100 2,329,869 3,141,838
Change in assets and liabilities:
(Increase) in accounts receivable.... (10,322,839) (6,407,492) (4,520,122)
(Increase) in deferred charges....... (256,856) (2,558,543) (769,988)
(Increase) in prepaid expenses and
other
current assets...................... (91,303) (261,873) (974,103)
Decrease in other assets............. 264,219 150,536 442,971
Increase (decrease) in accounts pay-
able................................ 2,766,666 (130,891) (1,650,337)
Increase (decrease) in deferred in-
come................................ 4,565,558 2,874,963 (64,800)
Increase in accrued expenses and
other liabilities................... 1,409,775 786,513 8,724,058
Increase (decrease) in accrued inter- 2,107,383 2,233,623 (6,130,397)
est payable......................... ----------- ---------- -----------
Net cash provided by operating activi- 2,872,295 442,238 7,260,345
ties.................................. ----------- ---------- -----------
Cash flow used in investing activities:
Purchase of property and equipment..... (1,592,848) (1,605,978) (2,222,395)
Acquisition of intangibles and busi-
nesses, net of cash acquired.......... (4,599,285) (6,151,649) (43,982,317)
Net cash paid in merger with ICC....... (408,938) -- --
----------- ---------- -----------
Net cash used in investing activities.. (6,601,071) (7,757,627) (46,204,712)
----------- ---------- -----------
Cash flow provided by (used in) financing
activities:
Net proceeds from issuance of common
stock................................. -- -- 42,480,447
Proceeds from exercise of warrants..... -- -- 1,690,500
Net proceeds from bank line of credit.. 660,000 2,550,000 1,780,000
Proceeds from long-term debt........... 3,000,000 6,000,000 18,000,000
Repayments of long-term debt........... (85,000) (1,297,574) (14,668,783)
Payment of preferred dividends......... -- -- (2,201,618)
Proceeds from issuance of common stock
under the
Management stock plan 2,050 5,383 174,167
Repurchase of common stock............. (4,899) (1,878) (176,904)
----------- ---------- -----------
Net cash provided by financing activi- 3,572,151 7,255,931 47,077,809
ties.................................. ----------- ---------- -----------
Effect of exchange rate changes on cash -- -- 85,723
and cash equivalents.................... ----------- ---------- -----------
Net (decrease) increase in cash.......... (156,625) (59,458) 8,219,165
Cash, beginning of year.................. 428,695 272,070 212,612
----------- ---------- -----------
Cash, end of year........................ $ 272,070 $ 212,612 $ 8,431,777
=========== ========== ===========
</TABLE>

See accompanying notes to the consolidated financial statements.

19
<PAGE>

CARIBINER INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE THREE YEARS ENDED SEPTEMBER 30, 1996

<TABLE>
<CAPTION>
COMMON STOCK PREFERRED STOCK ADDITIONAL TOTAL
------------------ ------------------- PAID IN DEFERRED ACCUMULATED TRANSLATION STOCKHOLDERS'
SHARES AMOUNT SHARES AMOUNT CAPITAL COMPENSATION DEFICIT ADJUSTMENT EQUITY (DEFICIT)
--------- ------- ---------- ------- ----------- ------------ ------------ ----------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
October 1, 1993. 2,327,827 $23,278 450,000 $ 4,500 $ 1,951,833 $ -- ($14,885,787) -- ($12,906,176)
Issuance of
common stock
upon the
purchase of
MultiMedia
Holdings, Inc. . 54,714 547 -- -- (388) -- -- -- 159
Exchange offer
and merger...... (5,647) (57) -- -- (60,416) -- -- -- (60,473)
Repurchase of
common stock
under the
Management Stock
Plan............ (33,222) (332) -- -- (250) -- (4,317) -- (4,899)
Issuance of
common stock
under the
Management Stock
Plan............ 107,973 1,080 -- -- 811 -- -- -- 1,891
Issuance of
warrants to
purchase 71,435
shares of common
stock........... -- -- -- -- 9,907 -- -- -- 9,907
Accrued
preferred stock
dividends....... -- -- -- -- -- -- (581,997) -- (581,997)
Net income...... -- -- -- -- -- -- 292,592 -- 292,592
--------- ------- ---------- ------- ----------- ----------- ------------ ------- ------------
Balance at
September 30,
1994............ 2,451,645 24,516 450,000 4,500 1,901,497 -- (15,179,509) -- (13,248,996)
Repurchase of
Management Stock
Plan shares by
the company..... (24,916) (249) -- -- (1,629) -- -- -- (1,878)
Issuance of
warrants to
purchase 293,967
shares of common
stock........... -- -- -- -- 40,769 -- -- -- 40,769
Issuance of
common stock
under the
Management Stock
Plan............ 74,750 748 -- -- 4,635 -- -- -- 5,383
Accrued
preferred stock
dividends....... -- -- -- -- -- -- (655,042) -- (655,042)
Net income...... -- -- -- -- -- -- 1,425,533 -- 1,425,533
--------- ------- ---------- ------- ----------- ----------- ------------ ------- ------------
Balance at
September 30,
1995............ 2,501,479 25,015 450,000 4,500 1,945,272 -- (14,409,018) -- (12,434,231)
Issuance of
common stock
under the
Management Stock
Plan............ 87,210 872 -- -- 1,245,295 (1,072,000) -- -- 174,167
Issuance of
warrants to
purchase 75,593
shares of common
stock........... -- -- -- -- 79,456 -- -- -- 79,456
Repurchase of
common stock.... (31,091) (311) -- -- (176,593) -- -- -- (176,904)
Accrued
preferred stock
dividends....... -- -- -- -- -- -- (327,483) -- (327,483)
Conversion of
Convertible Note
into preferred
stock........... -- -- 600,000 6,000 11,979,450 -- -- -- 11,985,450
Conversion of
preferred stock
into common
stock........... 3,596,250 35,963 (1,050,000) (10,500) (10,913) -- -- -- 14,550
Exercise of
warrants........ 534,505 5,345 -- -- 1,685,155 -- -- -- 1,690,500
Issuance of
common stock
upon
consummation of
initial public
offering........ 2,877,985 28,780 -- -- 42,286,150 -- -- -- 42,314,930
Issuance of
common stock
upon acquisition
of Lighthouse,
Ltd. ........... 31,821 318 -- -- 999,682 -- -- -- 1,000,000
Non-cash
compensation
charge.......... -- -- -- -- -- 1,072,000 -- -- 1,072,000
Translation
adjustment...... 85,723 85,723
Net income...... -- -- -- -- -- -- 7,989,225 -- 7,989,225
--------- ------- ---------- ------- ----------- ----------- ------------ ------- ------------
9,598,159 $95,982 -- $ -- $60,032,954 $ -- ($ 6,747,276) $85,723 $ 53,467,383
========= ======= ========== ======= =========== =========== ============ ======= ============
</TABLE>

See accompanying notes to the consolidated financial statements.

20
<PAGE>

CARIBINER INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. THE COMPANY

Caribiner International, Inc., formerly Business Communications Group, Inc.
(together with its direct and indirect wholly-owned subsidiaries, the
"Company"), is engaged in the production of meetings, events and training
programs and is a provider of related business communications services that
enable businesses to inform, sell to and train their sales forces, dealers,
franchisees, partners, stockholders and employees.

The Company was organized on December 1, 1989 by its then parent, Ingleby
Communications Corporation ("ICC"), and comprised substantially all of the
operations of ICC. Effective as of June 30, 1992, the Company completed a $16
million private placement (the "Private Placement"), with Warburg, Pincus
Investors, L.P. ("Warburg") consisting of $12 million principal amount of the
Company's 11.5% Convertible Promissory Note (the "Convertible Note") and $4
million of Cumulative Redeemable Convertible Voting Preferred Stock, par value
$.01 per share (the "Preferred Stock"). Simultaneously with the Private
Placement, the Company and ICC entered into a Stockholders Agreement with
Warburg that gave Warburg significant control in current and future operations
of the Company and its subsidiaries.

On July 16, 1993, the Company entered into an agreement with certain
shareholders of ICC (the "Exchange Offer") to exchange shares of its voting
common stock, par value $.01 per share (the "Common Stock"), for shares of ICC
common stock held by such shareholders. As a result of these transactions, ICC
was merged into a wholly owned subsidiary of the Company in a manner similar
to a pooling of interests (the "Merger"). In addition, the Stockholders
Agreement was terminated in connection with the Exchange Offer and a new
stockholders agreement was entered into among the Company, Warburg and each of
the other stockholders of the Company.

In March, 1996, the Company consummated an initial public offering (the
"Initial Public Offering") of its Common Stock, which included the sale by the
Company of approximately 2.9 million shares of Common Stock.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Consolidation

The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiaries. All intercompany balances and transactions
have been eliminated in consolidation.

Revenue Recognition

Revenue is recorded principally on the completed contract method of
accounting. The recognition of revenue and cost of revenue is deferred until a
project is completed which is often within a three to six month time period.
For those projects which provide for multiple events, the contract revenue and
costs are apportioned and revenue and profit are recognized as each event
occurs. If a client cancels a project after production has begun, the client
is billed for work performed and expenses incurred through the date of
cancellation, and there are no provisions for non-payment by the client.

Deferred income, which represents advance billings on uncompleted jobs, is
classified as long-term in the same proportion that anticipated profit on such
jobs bears to the related contract price. Deferred charges represent costs
incurred on uncompleted jobs.

21
<PAGE>

CARIBINER INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Cost of Revenue

Cost of revenue is comprised of production costs including salaries and
benefits of production, creative and technical personnel spent on specific
contracts, and other direct costs including contracted services, equipment
rentals and costs associated with the production of audio-visual effects. Such
costs are deferred until project completion.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents.

Property and Equipment

Property and equipment, including equipment under capital leases, are stated
at cost. Depreciation is calculated on the straight-line method over the
estimated useful lives of the assets ranging from five to seven years.
Leasehold improvements are amortized on the straight-line method over the
shorter of the lease term or the estimated useful life.

Goodwill and Other Intangibles

Goodwill represents the excess of the cost over the fair value of net assets
of purchased businesses and is amortized on a straight-line basis over periods
ranging from 15 years to 25 years. Accumulated amortization of goodwill was
$1,608,612 and $2,617,295 at September 30, 1995 and 1996, respectively. The
cost of other acquired intangibles, consisting of non-compete agreements,
sales backlog, customer lists and film and module library is amortized on a
straight-line basis over their estimated useful lives ranging from one to six
years. The cost of the film and module library is amortized on a straight-line
basis over the five-year estimated useful lives. Accumulated amortization of
other acquired intangible assets was $1,975,095 and $1,998,636 at September
30, 1995 and 1996, respectively.

The Company reviews the recoverability of intangible and other long-lived
assets whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. A loss is recognized for the difference between
the carrying amount and the estimated fair value of the asset.

Deferred Financing Fees

Deferred financing fees are amortized on a straight-line basis over the term
of the related debt. Accumulated amortization on deferred financing fees is
$505,200 and $662,656 at September 30, 1995 and 1996, respectively.

Foreign Currency Translation

The financial statements of foreign subsidiaries are translated into U.S.
dollars at current rates as of the balance sheet date, except for revenue,
costs and expenses which are translated at average current rates during each
reporting period. The gains or losses resulting from translation are included
as a separate component in stockholders' equity.

Risks and Uncertainties

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

22
<PAGE>

CARIBINER INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Stock Based Compensation

The Company grants to certain employees stock options for a fixed number of
shares with an exercise price equal to the fair value of the shares at the
date of grant. The Company accounts for stock option grants in accordance with
APB Opinion No. 25, "Accounting for Stock Issued to Employees," and,
accordingly, recognizes no compensation expense for such grants.

New Accounting Pronouncements

The Financial Accounting Standards Board issued two standards which will be
applicable to the Company beginning in fiscal 1997: No. 121, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of and No. 123, Accounting for Stock-Based Compensation. The impairment
standard is not expected to have a significant impact on the Company. The
Company has not yet determined which of the acceptable approaches it will use
under the stock compensation standard. Adoption of certain approaches under
the stock compensation standard could result in non-cash charges which if
made, are not expected to be material. At a minimum, the standard will require
disclosures about the fair value of employee stock options.

3. ACQUISITIONS

During fiscal 1995 and fiscal 1996, the Company purchased six companies
engaged in providing business communication services and acquired a
contractual relationship with a major corporation from another business
communications services provider.

The Company acquired Decomas, Incorporated and Executive Support Systems,
Inc. (collectively, "Decomas") in October, 1994 and Richard Kidd Productions,
Inc. in September, 1995. In addition, in August, 1995, the Company acquired a
contractual relationship with a major corporation from another business
communications company. These transactions resulted in initial payments in the
aggregate of $4.3 million, which were financed through bank borrowings.

In January, 1996, the Company acquired substantially all of the assets of
Koors Perry & Associates, Inc. ("Koors Perry"). In connection with such
acquisition, a promissory note of $1.5 million was issued as partial
consideration. In June, 1996 the Company acquired Lighthouse, Ltd. and SCH
International Limited ("Spectrum"). In connection with the acquisition of
Lighthouse, Ltd., 31,821 shares of the Company's Common Stock having a value
of $1.0 million were issued as partial consideration for the acquisition. In
September, 1996, the Company completed its acquisition of Total Audio Visual
Services ("TAVS"), a leading provider of audio visual equipment rentals and
related staging services. These transactions resulted in initial payments in
the aggregate of $43.9 million, which, except for the promissory note and the
Common Stock issuance described above, were financed through a combination of
cash and bank borrowings.

The accounting for these acquisitions is in accordance with the purchase
method and, accordingly, operations of the acquired businesses are included in
the accompanying consolidated statements of operations from their respective
dates of acquisition.

The acquisitions of each of Weiss/Watson, Inc. (acquired October, 1993),
Decomas, Koors Perry and Spectrum provided for contingent payments for three
years following the purchase based upon the achievement of certain performance
goals. Contingent payments are accounted for as additional purchase price as
they become known. No significant contingent payments were made or accrued
during fiscal 1994. During fiscal 1995 and fiscal 1996, $1.8 million and $1.4
million, respectively, were paid and/or accrued as additional consideration
with respect to certain acquisitions.

23
<PAGE>

CARIBINER INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The following unaudited consolidated pro forma results of operations of the
Company for the years ended September 30, 1995 and 1996 give effect to the
following transactions as if they occurred on October 1, 1994: (i) the
acquisitions of Spectrum and TAVS, (ii) decreased interest expense and
preferred stock dividends resulting from the repayment of substantially all
outstanding bank borrowings and other long-term indebtedness of the Company
from proceeds of the Initial Public (see Note 6) and (iii) the repayment with
the proceeds of the Initial Public Offering of a portion of bank borrowings
that would have been incurred in connection with the acquisition of TAVS as if
such acquisition had occurred on October 1, 1994.

<TABLE>
<CAPTION>
YEAR ENDED
SEPTEMBER 30,
-----------------------
1995 1996
----------- -----------
(IN THOUSANDS,
EXCEPT PER SHARE DATA)
<S> <C> <C>
Revenue............................................. $ 161.4 $ 227.4
Income before taxes................................. 5.6 15.5
Net income.......................................... 5.0 9.6
Pro forma net income per common share............... 0.52 1.00
</TABLE>

The above calculation of pro forma net income per common share assumes that
approximately 9.6 million shares were outstanding during each of the periods
presented.

The unaudited pro forma consolidated results of operations do not purport to
be indicative of the actual results of operations that would have occurred had
the acquisitions been made at the beginning of fiscal 1995 or of results which
may occur in the future.

4. PROPERTY AND EQUIPMENT

At September 30, 1995 and 1996, property and equipment consisted of:

<TABLE>
<CAPTION>
AT SEPTEMBER 30,
-----------------------
1995 1996
----------- -----------
<S> <C> <C>
Furniture and equipment................................ $ 7,909,548 $23,571,968
Leasehold improvements................................. 2,354,692 2,782,271
Capital leases--equipment.............................. 307,188 705,333
----------- -----------
10,571,428 27,059,572
Less--accumulated depreciation and amortization........ 4,187,453 5,878,590
----------- -----------
$ 6,383,975 $21,180,982
=========== ===========
</TABLE>

The related depreciation and amortization expense for the years ended
September 30, 1995 and 1996 was $1,463,608 and $2,060,507, respectively.

5. DEBT

The Company has financed its operations primarily through internal cash flow
and bank financing, including the Company's new financing facilities, its
recently replaced line of credit (the "1994 Line of Credit") and its recently
replaced term facility (the "1994 Term Facility"). These sources of funds have
been used to fund the Company's efforts to grow both internally and through
acquisitions.

The 1994 Line of Credit provided the Company with funds to handle working
capital requirements and the 1994 Term Facility was used primarily to finance
acquisitions. As of September 30, 1996, $6.0 million was outstanding under the
1994 Line of Credit and $15.0 million was outstanding under the 1994 Term
Facility. As of September 30, 1996, each of the 1994 Line of Credit and the
1994 Term Facility bore interest at the rate of 9.25% per annum, which was 1%
over the lender's prime rate. On December 4, 1996, the Company entered into

24
<PAGE>

CARIBINER INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

a new loan agreement with a syndicate of banks pursuant to which the Company
increased its aggregate available bank financing from $27 million to $100
million, consisting of a $75 million six year reducing revolving credit
facility (the "Reducing Revolver") to be utilized in connection with the
financing of acquisitions and a $25 million six year revolving line of credit
(the "Revolving Line" and together with the Reducing Revolver, the "1996
Facilities"). Amounts outstanding under the 1994 Line of Credit and 1994 Term
Facility were repaid with proceeds from the 1996 Facilities. The maturity date
of each of the 1996 Facilities is December 31, 2002. Interest on outstanding
amounts under the 1996 Facilities is payable quarterly in arrears and, at the
option of the Company, interest accrues at either (i) LIBOR plus an applicable
margin or (ii) an alternate base rate based on the greatest of (a) the agent
bank's prime rate, (b) the three month secondary certificate of deposit rate
and (c) the federal funds rate. The interest rate will increase by 2.0% if
principal or interest is not paid when due (after applicable grace periods).
Pursuant to the terms of the 1996 Facilities, the Company is required to
reduce outstanding amounts under the Revolving Line to less than $5.0 million
for a period of not less than 30 days during every 12-month period commencing
on December 4, 1996. The 1996 Facilities require compliance with certain
covenants including financial performance ratios.

During fiscal 1995 and fiscal 1996, under the terms of the 1994 Line of
Credit, the Company had the availability of funds up to $12.0 million, bearing
interest at prime plus 1%, limited to 85% of trade receivables outstanding at
each month-end. At September 30, 1995, $750,000 of the outstanding borrowings
under the 1994 Line of Credit and, at September 30, 1996, $15.0 million under
the 1994 Term Facility were excluded from current liabilities since the
Company intended and had the ability to keep that amount outstanding under the
1994 Line of Credit or the 1994 Term Facility beyond one year from the balance
sheet date, or that any repayment of this amount would have been from sources
other than current assets as of their respective balance sheet dates, such as
new equity financing.

Long-term Debt and Convertible Note

At September 30, 1995 and 1996, long-term debt consisted of:

<TABLE>
<CAPTION>
AT SEPTEMBER 30,
-----------------------
1995 1996
----------- -----------
<S> <C> <C>
Bank term loan......................................... $ 7,750,000 $15,000,000
Bank line of credit.................................... 750,000 --
Loan payable to Warburg................................ 2,999,181 --
Promissory note payable................................ -- 1,243,476
Equipment lease commitments............................ 325,548 595,142
----------- -----------
11,824,729 16,838,618
Less--current portion of long-term debt................ 4,677,054 648,696
----------- -----------
$ 7,147,675 $16,189,922
=========== ===========
Convertible Note including accrued interest............ $17,346,397 $ --
=========== ===========
</TABLE>

At September 30, 1996, the fair value of the above commitments approximated
the carrying amounts.

On July 20, 1994 the Company entered into a credit agreement with a bank
providing for the 1994 Term Facility of up to $5.0 million. As of September
29, 1995 the Company had signed an amendment increasing the availability of
funds to $15.0 million of which $7.3 million was available for working
capital, general corporate purposes and for acquisitions.

Approximately $3.0 million of a $10.0 million Warburg loan facility (the
"Warburg Term Loan"), which accrued interest at 11% per annum, was outstanding
as of September 30, 1995. In addition, warrants were issued during the term
that the Warburg Term Loan was outstanding (see Note 6). The $3.0 million
outstanding under

25
<PAGE>

CARIBINER INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
such loan facility, including accrued interest of $1.0 million, was repaid upon
the consummation of the Initial Public Offering.

The $12.0 million Convertible Note, which bore interest at a rate of 11.5%
annually, was converted into 600,000 shares of Preferred Stock immediately
prior to the Initial Public Offering. Such shares of Preferred Stock were
immediately converted into 2,055,000 shares of the Company's Common Stock. No
dividends had been declared or paid on the Preferred Stock before such
conversion. Accrued interest of $6.3 million relating to the Convertible Note
was paid to Warburg upon consummation of the Initial Public Offering.

In connection with the acquisition of Koors Perry, a promissory note for $1.5
million was issued as partial consideration of the purchase price.
Approximately $1.2 million included in long-term debt represents the present
value of such promissory note which bears an interest rate of 10% and which is
payable over three years.

After giving effect to the 1996 Facilities, the aggregate minimum payments of
long-term debt outstanding at September 30, 1996 and for the next five years
are as follows: 1997--$0.6 million; 1998--$0.6 million; 1999--$0.4 million;
2000--$0.2 million; 2001--$0.0, and thereafter--$15.0 million; totaling $16.8
million.

6. CAPITAL STOCK

Preferred Stock

The Preferred Stock issued in connection with the Private Placement in June,
1992 bore a cumulative compounding 12% dividend through the date of the Initial
Public Offering. Immediately prior to the consummation of the Initial Public
Offering, all shares of Preferred Stock were converted into 1,541,250 shares of
Common Stock and accrued preferred stock dividends of $2.2 million were paid.

Warrants

In August, 1993, as a result of entering into the Warburg Term Loan (see Note
5), the Company issued warrants to Warburg for the purchase of 93,509 shares of
Common Stock at an aggregate exercise price of $3,000. In addition, one year
later, and for each quarter that the principal remained outstanding thereafter,
additional warrants were issued at the rate of .375% of fully diluted Common
Stock, as defined, per each $1 million in principal advanced. Additional
warrants for 71,435 and 293,967 shares in 1994 and 1995, respectively, were
issued. The fair values of the warrants of $9,907, $40,769, and $79,456 were
included in interest expense in fiscal 1994, fiscal 1995 and fiscal 1996,
respectively. In connection with the Initial Public Offering, Warburg exercised
its warrants to purchase 534,505 shares of Common Stock at a weighted average
exercise price per share of $3.16.

Common Stock

In connection with the Exchange Offer and Merger described in Note 1, a total
of 1,869,525 shares of Common Stock was issued in the exchange and a total of
$3,229,238 was paid for the remaining ICC shares of common stock and options
and related professional fees. In addition, the Company assumed net liabilities
of $280,872 of ICC. The excess of the consideration paid by the Company over
the net book value of ICC was charged to additional paid-in capital.

Management Stock Plan

During fiscal 1993, the Company adopted the 1993 Management Stock Plan (the
"Management Stock Plan"). Under the Management Stock Plan, a committee of the
Board of Directors granted to employees awards of the Company's Series A non-
voting common stock, par value $.01 per share.

Prior to the Initial Public Offering in March, 1996, the Company sold common
stock pursuant to the Management Stock Plan at a price lower than its fair
market value and recorded non-cash compensation expense of $93,000 at such
time. Upon consummation of the Initial Public Offering, all shares of non-
voting common

26
<PAGE>

CARIBINER INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
stock outstanding under the Management Stock Plan were converted into 664,450
shares of voting common stock, and such Management Stock Plan was then
terminated. In addition, the Company incurred an additional non-cash
compensation charge of $979,000 upon the immediate vesting of such stock in
connection with the Initial Public Offering.

Receivables of $5,020 from certain officers and employees pursuant to
management stock awards in fiscal 1993 were collected in fiscal 1994.

1996 Stock Option Plan

Effective January 1, 1996, the Company adopted the 1996 Stock Option Plan
(the "Option Plan"). The Option Plan provides that options for an aggregate of
364,000 shares of Common Stock shall be available for grant, subject to
authorization by the Compensation Committee of the Board of Directors. The
purchase price per share under the Option Plan is the market price of the
Common Stock on the grant date. Options vest over a period of three years from
the grant date. During fiscal 1996, stock options to purchase an aggregate of
179,400 shares of Common Stock were granted with a range of exercise prices of
$25.69 to $40.38. Options to purchase 8,600 shares were exercisable as of
September 30, 1996. There were no options exercised or cancelled during fiscal
1996. As of September 30, 1996, 184,600 options are available for future grant.

7. RELATED PARTY TRANSACTIONS

In the normal course of producing projects for clients, the Company
periodically uses the services of individuals related to and/or companies owned
by relatives of certain of its employees. In fiscal 1994 and fiscal 1995, the
Company paid such vendors approximately $0.6 million and $1.3 million,
respectively. During the year ended September 30, 1996, the Company paid
approximately $1.6 million to 14 such vendors.

As of September 30, 1995, the Company had a receivable from an officer of
$362,630 which was fully reserved in fiscal 1992. Such amount was repaid by the
officer following the consummation of the Initial Public Offering.

8. EMPLOYEE BENEFIT PLAN

The Company maintains a defined contribution plan of the profit sharing type,
covering all qualified employees. Company contributions to the plan each year
are based on net income and are at the discretion of the Board of Directors.
Company contributions for fiscal 1994, fiscal 1995 and fiscal 1996 were not
significant. The Company's policy is to fund the costs accrued.

9. INCOME TAXES

Deferred income taxes reflect the net tax effect of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the carrying amounts used for income tax purposes. Differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and income tax purposes resulted from the acquisition of certain
business operations, the difference between financial reporting recovery
periods and tax reporting recovery periods and the write-down of business
assets for financial reporting purposes.

27
<PAGE>

CARIBINER INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Significant components of the Company's deferred tax assets and liabilities
as of September 30, 1995 and September 30, 1996 are as follows:

<TABLE>
<CAPTION>
1995 1996
---------- ----------
<S> <C> <C>
Deferred tax assets:
NOL and tax credit carryforwards...................... $3,422,000 $1,409,798
Intangibles amortization.............................. 574,975 192,387
Allowance for doubtful accounts....................... -- 127,932
Other reserves........................................ 221,513 187,241
---------- ----------
Total deferred tax assets........................... 4,218,488 1,917,358
Valuation allowance................................... (3,691,321) (1,317,464)
---------- ----------
Net deferred tax assets............................. $ 527,167 $ 599,894
---------- ----------
Deferred tax liabilities:
Tax over book depreciation and amortization........... 527,167 985,409
Other................................................. -- 24,500
---------- ----------
Total deferred tax liabilities...................... $ 527,167 $1,009,909
---------- ----------
Net deferred tax liability.............................. $ -- $ 410,015
========== ==========
</TABLE>

The valuation allowance represents a reduction of deferred tax assets for
future tax benefits that may not be realized.

At September 30, 1995 and 1996, the Company has net operating loss ("NOL")
carryforwards for federal income tax purposes of approximately $8.2 million
and $3.2 million, respectively, that expire in the years 2001 through 2007.
Approximately $3.2 million of NOL carryforwards may be subject to limitations
under the change in ownership and consolidated return provisions of the
Internal Revenue Code. The use of the NOL carryforwards, as adjusted, may also
be limited for state and local income tax purposes. The Company has not
recorded any future benefit related to the usage of the NOL carryforwards.

Significant components of the provision for income taxes attributable to
continuing operations are as follows:

<TABLE>
<CAPTION>
1994 1995 1996
-------- -------- ----------
<S> <C> <C> <C>
Current:
Federal.......................................... $ -- $ 42,150 $2,120,612
State............................................ 62,257 222,280 1,736,478
Foreign.......................................... -- -- 34,785
-------- -------- ----------
Total current tax.............................. 62,257 264,430 3,891,875
Deferred:
Federal.......................................... -- -- 281,207
State............................................ -- -- 128,808
-------- -------- ----------
Total deferred tax............................. -- -- 410,015
-------- -------- ----------
Total provision for taxes.......................... $ 62,257 $264,430 $4,301,890
======== ======== ==========
</TABLE>

28
<PAGE>

CARIBINER INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The reconciliation of income tax attributable to operations computed at the
U.S. federal statutory tax rates to income tax expense is as follows:

<TABLE>
<CAPTION>
1994 1995 1996
--------- --------- -----------
<S> <C> <C> <C>
Tax expense at statutory rate............. $ 120,469 $ 574,587 $ 4,301,890
State income tax net of federal benefit... 41,090 146,705 1,212,436
Nondeductible non-cash compensation
expense................................... -- -- 375,200
Other nondeductible expenses.............. 34,527 163,568 263,601
Change in valuation allowance............. -- (900,000) (2,012,202)
Other..................................... (133,829) 279,570 160,965
--------- --------- -----------
$ 62,257 $ 264,430 $ 4,301,890
========= ========= ===========
</TABLE>

10. MAJOR CUSTOMERS

A portion of the Company's total revenue was derived from three major
customers in the automotive, information technology and insurance industries.
Revenues from the two customers in the automotive and information technology
industries aggregated 21% and 19%, respectively, in fiscal 1994; 34% and 16%,
respectively, in fiscal 1995; and 15% and 13%, respectively, in fiscal 1996.
Revenues from the customer in the insurance industry aggregated 11% in fiscal
1996. There was no revenue from this customer in fiscal 1994 and fiscal 1995.
Amounts due from the two customers in the automotive and information
technology industries represented 46% and 17%, respectively, at September 30,
1995, and 24% and 10%, respectively, at September 30, 1996, of accounts
receivable. Amounts due from the customer in the insurance industry
represented 5% of accounts receivable at September 30, 1996.

11. FOREIGN OPERATIONS

During fiscal 1996, the Company's foreign operations located in the United
Kingdom and Hong Kong generated revenue of $7.0 million and an operating loss
of $0.1 million. Such financial information reflects only four months of
foreign operations, and the Company expects that its foreign operations will
be more significant in the future. Included in the Company's Consolidated
Balance Sheet at September 30, 1996 are total identifiable assets of $16.2
million of such foreign operations.

12. COMMITMENTS AND CONTINGENCIES

Minimum annual rentals under noncancelable leases, excluding escalations
based upon increases in real estate taxes and operating expenses, are payable
as follows, for the year ended September 30: 1997--$3.2 million; 1998--$2.5
million; 1999--$2.2 million; 2000--$1.8 million; 2001--$1.1 million;
thereafter--$6.6 million; totaling $17.4 million.

Rent expense charged to operations in fiscal 1994, fiscal 1995 and fiscal
1996, was $1.7 million, $2.0 million, and $2.7, respectively. Rent expense
charged to operations in fiscal 1996 with respect to related parties was $0.1
million.

The Company has employment contracts with certain of its officers and key
employees expiring at various dates through 1999 with future minimum payments
as follows, for the year ended September 30: 1997--$1.3 million; 1998--$1.3
million; 1999--$0.3 million; totaling $2.9 million. Also, certain agreements
provide additional compensation based on performance.

The Company is, from time to time, a defendant in various lawsuits arising
in the ordinary course of business. In the opinion of management resolving
these actions will not have a material effect on the Company's financial
condition, results of operations or liquidity.

29
<PAGE>

CARIBINER INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

13. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Interest paid was $272,959, $807,475 and $7,884,839 in fiscal 1994, fiscal
1995 and fiscal 1996, respectively. Taxes paid were $62,257, $264,430 and
$2,077,829 in fiscal 1994, fiscal 1995 and fiscal 1996, respectively.

14. UNAUDITED PRO FORMA INFORMATION

Pro forma net income per common share is calculated using the weighted
average number of shares of Common Stock outstanding during the period, plus
Common Stock issued pursuant to the Management Stock Plan and warrants to
purchase Common Stock issued at prices below the Initial Public Offering price
of $17.00 per share during the twelve-month period immediately preceding
December 15, 1995 (the initial filing date of the Company's Registration
Statement for its Initial Public Offering), assuming such Common Stock was
outstanding for all periods presented. In addition, shares of Common Stock
issued upon the conversion of all shares of Preferred Stock into shares of
Common Stock are included in the calculation as if they were outstanding for
all periods presented. Accordingly, pro forma net income per common share
reflects adjustments to eliminate interest expense incurred on the Convertible
Note during the periods presented and to eliminate accrued preferred stock
dividends. The weighted average number of shares of Common Stock outstanding
during the years ended September 30, 1994, 1995 and 1996 is 6,550,851,
6,620,003 and 8,245,107, respectively.

Of the net proceeds from the sale of shares of Common Stock offered by the
Company in the Initial Public Offering, approximately $25.6 million were used
to repay aggregate bank borrowings and other long-term indebtedness, including
accrued interest and accrued preferred stock dividends. Assuming the issuance
and sale of only that number of shares of Common Stock which would generate
net proceeds sufficient to repay indebtedness of $25.6 million and assuming
that such indebtedness had been repaid as of October 1, 1994, supplementary
pro forma net income per common share for fiscal 1995 and fiscal 1996 would
have been $0.56 and $1.03, respectively. For purposes of this computation, the
weighted average number of shares of Common Stock outstanding during the
periods ended September 30, 1995 and 1996 is 8,338,106 and 8,969,784,
respectively.

15. SUBSEQUENT EVENTS

In December, 1996, the Company entered into a definitive purchase agreement
to acquire all of the outstanding capital stock of Blumberg Communications
Inc. ("Blumberg"), a provider of audio visual equipment rentals and sales,
production and staging services and hotel audio visual outsourcing services.
Consideration will consist of $16.6 million in cash, repayment of
approximately $5.5 million of indebtedness and shares of Common Stock having a
market value of $1.4 million (the actual number of shares of Common Stock to
be based on the average closing price per share of the Common Stock for the
five business days prior to closing). The closing of the Blumberg acquisition
(which is subject to certain conditions, including the expiration or early
termination of the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended) is expected to occur in January, 1997.
For its fiscal year ended May 31, 1996, Blumberg had revenue of $42.3 million.

In addition, in December, 1996, the Company filed a registration statement
with the Securities and Exchange Commission offering 1,878,200 shares of its
Common Stock, of which 1,750,000 shares of Common Stock would be offered by
the Company.

30
<PAGE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
---------------------------------------------------------------
FINANCIAL DISCLOSURE
--------------------

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
--------------------------------------------------

"Election of Directors" and "Section 16(a) Beneficial Ownership Reporting
Compliance" to be contained in the Proxy Statement are hereby incorporated by
reference. See also "Executive Officers and Directors of the Company" set
forth in Item 4A of Part I hereto.

ITEM 11. EXECUTIVE COMPENSATION
----------------------

"Executive Compensation" to be contained in the Proxy Statement is hereby
incorporated by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------------------------------------------------------------

"Security Ownership of Certain Beneficial Owners and Management" to be
contained in the Proxy Statement is hereby incorporated by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
----------------------------------------------

"Certain Relationships and Transactions with Related Persons" to be
contained in the Proxy Statement is hereby incorporated by reference.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
---------------------------------------------------------------

(a) The following documents are filed as part of this Annual Report on Form
10-K:

(1) The response to this portion of Item 14 is set forth in Item 8 of Part II
hereof.

(2) Financial Statement Schedules.
-----------------------------
Schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are not required
under the related instructions or are inapplicable, and therefore have
been omitted.

(3) Exhibits
--------

See accompanying Index to Exhibits. The Company will furnish to any
stockholder, upon written request, any exhibit listed in the
accompanying Index to Exhibits upon payment by such stockholder of the
Company's reasonable expenses in furnishing any such exhibit.

(b) Reports on Form 8-K

The Company filed the following reports on Form 8-K during the three
months ended September 30, 1996:

<TABLE>
<CAPTION>
DATE OF FILING ITEMS REPORTED SUBJECT OF REPORT
-------------- -------------- ------------------------------------------
<C> <C> <S>
August 13, 1996 7 Form 8-K/A containing financial
information in connection with the
acquisition of Lighthouse
August 14, 1996 7 Form 8-K/A containing financial
information in connection with the
acquisition of Spectrum
September 27, 1996 2,7 Announcing the acquisition of TAVS
</TABLE>

(d) Reference is made to Item 14(a)(2) above.

<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this Report
to be signed on its behalf by the undersigned, thereunto duly authorized, on
December 27, 1996.
CARIBINER INTERNATIONAL, INC.
(Registrant)

/s/ Arthur F. Dignam
By:__________________________________
Name: Arthur F. Dignam
Title: Executive Vice President,
Chief Financial and
Administrative Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report has been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----

<S> <C> <C>
/s/ Raymond S. Ingleby Chairman of the Board, Chief December 27, 1996
____________________________________ Executive Officer and
Raymond S. Ingleby Director (Principal
Executive Officer)

/s/ Arthur F. Dignam Executive Vice President, December 27, 1996
____________________________________ Chief Financial and
Arthur F. Dignam Administrative Officer
(Principal Financial and
Accounting Officer)

/s/ Errol M. Cook Director December 27, 1996
____________________________________
Errol M. Cook

/s/ Bryan D. Langton Director December 27, 1996
____________________________________
Bryan D. Langton

/s/ Sidney Lapidus Director December 27, 1996
____________________________________
Sidney Lapidus

/s/ David E. Libowitz Director December 27, 1996
____________________________________
David E. Libowitz
</TABLE>

S-1
<PAGE>

INDEX TO EXHIBITS

The following is a list of all exhibits filed as part of this report:

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- -----------------------
<C> <S>
2.1 Agreement of Purchase and Sale of Assets, dated June 6, 1996, by and
among the Company, Lighthouse, Ltd., Mark P. Fitzgerald, Warren F. Moore
II and Richard C. Hunt (schedules omitted -- the Company agrees to
furnish a copy of any schedule to the Commission upon request) (filed as
Exhibit 2.1 to the Company's Current Report on Form 8-K filed with the
Commission on June 21, 1996, and incorporated herein by reference)
2.2 Share Sale Agreement, dated June 13, 1996, by and among Peter Devonald
Berners-Price ("Berners-Price") and others, Caribiner Holdings (UK)
Limited ("Caribiner UK") and the Company (schedules omitted -- the
Company agrees to furnish a copy of any schedule to the Commission upon
request) (filed as Exhibit 2.1 to the Company's Current Report on Form
8-K filed with the Commission on June 28, 1996, and incorporated herein
by reference)
2.3 Share Purchase Agreement, dated June 13, 1996, by and among Caribiner
UK, Berners-Price, Mark Wallace, the Company and others (schedules
omitted -- the Company agrees to furnish a copy of any schedule to the
Commission upon request) (filed as Exhibit 2.2 to the Company's Current
Report on Form 8-K filed with the Commission on June 28, 1996, and
incorporated herein by reference)
2.4 Agreement of Purchase and Sale of Assets, dated September 12, 1996, by
and between Caribiner International, Inc. and General Electric Capital
Computer Leasing Corporation (schedules omitted (other than Schedules
2(c), 2(c)(i) and 6(bb)) -- the Company agrees to furnish a copy of any
schedule to the Commission upon request) (filed as Exhibit 2.1 to the
Company's Current Report on Form 8-K filed with the Commission on
September 27, 1996, and incorporated herein by reference)
3.1 Restated Certificate of Incorporation of the Company filed March 15,
1996 with the Secretary of State of the State of Delaware (filed as
Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the three
months ended March 31, 1996 and incorporated herein by reference)
3.2 Second Amended and Restated By-Laws of the Company (filed as Exhibit
3.2(b) to the Company's Registration Statement on Form S-1 (Registration
No. 33-80481) and incorporated herein by reference)
4 Specimen of Certificate of Common Stock of the Company (filed as Exhibit
4 to the Company's Registration Statement on Form S-1 (Registration No.
33-80481) and incorporated herein by reference)
+10.1 1996 Stock Option Plan of the Company (filed as an exhibit to the
Company's Registration Statement on Form S-1 (Registration No. 33-80481)
and incorporated herein by reference)
+10.2 Form of Stock Option Agreement in connection with 1996 Stock Option Plan
of the Company
+10.3 Non-Employee Directors' Stock Plan of the Registrant (filed as an
exhibit to the Company's Registration Statement on Form S-1
(Registration No. 33-80481) and incorporated herein by reference)
+10.4 Employment Agreement, dated as of October 1, 1995, between the Company
and Raymond S. Ingleby (filed as an exhibit to the Company's
Registration Statement on Form S-1 (Registration No. 33-80481) and
incorporated herein by reference)
</TABLE>

<PAGE>

<TABLE>
<S> <C>
+10.5 Employment Agreement, dated as of December 1, 1995, between the Company
and Arthur F. Dignam (filed as an exhibit to the Company's Registration
Statement on Form S-1 (Registration No. 33-80481) and incorporated
herein by reference)
+10.6 Employment Agreement, dated as of December 1, 1995, between the Company
and Mark M. Cohen (filed as an exhibit to the Company's Registration
Statement on Form S-1 (Registration No. 33-80481) and incorporated
herein by reference)
+10.7 Employment Agreement, dated as of July 25, 1995, between Caribiner, Inc.
and Brian Shepherd
+10.8 Employment Agreement, dated October 14, 1996, between the Company and
Lawrence P. Golen
10.9 Credit Agreement, dated as of December 4, 1996, among the Company,
Caribiner, Inc., the lenders named therein and the Chase Manhattan Bank,
as agent (schedules and exhibits omitted -- the Company agrees to
furnish a copy of any such schedule and exhibit to the Commission upon
request) (filed as Exhibit 10.8 to the Company's Registration Statement
on Form S-1 (Registration No. 333-18327) on December 20, 1996, and
incorporated herein by reference)
10.10 Stockholders Agreement, dated as of March 15, 1996, among the Company,
Warburg, Pincus Investors, L.P. and Raymond S. Ingleby (filed as an
exhibit to the Company's Registration Statement on Form S-1
(Registration No. 33-80481) and incorporated herein by reference)
11.1 Statement Regarding Computation of Pro Forma Net Income Per Common Share
11.2 Statement Regarding Computation of Supplementary Pro Forma Income Per
Common Share
21 Subsidiaries of the Company
27 Financial Data Schedule
</TABLE>
- --------
+ Management contracts or compensatory plans or arrangements required to be
filed as an exhibit to this Form 10-K pursuant to Item 14(a)(3).

<PAGE>

EXHIBIT 10.2

STOCK OPTION AGREEMENT
----------------------

THIS STOCK OPTION AGREEMENT is made as of the _____ day of _____, 199_,
between Caribiner International, Inc., a Delaware corporation (hereinafter
called the "Corporation"), and __________________, an employee of the
Corporation or one of its subsidiaries (hereinafter called the "Participant").

WHEREAS, the Corporation desires to give the Participant an opportunity
to participate in the long-term growth of the Corporation by granting to the
Participant options to purchase the Corporation's common stock, par value $0.01
per share (the "Common Stock"), pursuant to the terms and conditions of the
Corporation's 1996 Stock Option Plan (the "Plan") and this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties agree as follows:

1. Grant of Option. The Corporation hereby grants to the Participant the
---------------
right and option (hereinafter called the "Option") to purchase an aggregate of
____________ shares (the "Shares") of Common Stock (such number being subject to
adjustment as provided in paragraph 7 hereof) on the terms and subject to the
conditions herein set forth. Such Option shall vest as follows: (i) thirty-three
and one-third percent (33-1/3%) of the Option herein granted (for up to ______
shares) shall vest and may be exercised at any time on or after the first
anniversary of this Agreement (unless terminated earlier pursuant to paragraph 6
hereof), (ii) thirty-three and one-third percent (33-1/3%) of the Option herein
granted (for up to ______ shares) shall vest and may be exercised on or after
the second anniversary of this Agreement (unless terminated earlier pursuant to
paragraph 6 hereof) and (iii) the remaining thirty-three and one-third percent
(33-1/3%) of the Option herein granted (for up to ______ shares) shall vest and
may be exercised on or after the third anniversary of this Agreement (unless
terminated earlier pursuant to paragraph 6 hereof). The Option granted hereby is
not intended to be an "incentive stock option" within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended (the "Code"), and the Agreement
shall be construed and interpreted in accordance with such intention.

2. Exercise Price. The exercise price of the Shares covered by the
--------------
Option shall be __________ Dollars and __________ Cents ($__.___) per Share.
<PAGE>

3. Term of Option. Subject to paragraph 8 hereof, the Option granted
--------------
hereby shall be exercisable in accordance with paragraph 1. The Participant's
right to exercise the aforementioned Option shall expire ten (10) years from the
date hereof (the "Expiration Date"). Unless terminated earlier pursuant to
paragraph 6 hereof, the Option may not be exercised after the Expiration Date.

4. Nontransferability. The Option granted hereby shall not be
------------------
transferable otherwise than by will or the laws of descent and distribution.
More particularly (except as provided in the preceding sentence), the Option may
not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed
of in any way, shall not be assignable by operation of law, and shall not be
subject to execution, attachment or similar process. Any attempted sale,
assignment, transfer, pledge, hypothecation or other disposition of the Option
contrary to the provisions hereof, and the levy of any execution, attachment or
similar process upon the Option, shall be null and void and without effect. The
Option may be exercised by the Participant only during his lifetime or following
his death pursuant to paragraph 6 hereof.

5. Disclosure and Risk.
-------------------

(a) The Participant represents and warrants to the Corporation as
follows:

(i) The Participant acknowledges that (A) neither the Option nor
the Shares have been registered for resale under the Securities Act of 1933, as
amended (the "Securities Act"), and (B) the Corporation is under no obligation
to effect the registration under the Securities Act of the Option and/or the
Shares.

(ii) The Shares will be acquired by the Participant for the
Participant's own account, for investment and not with a view to, or for resale
in connection with, any distribution or public offering thereof within the
meaning of the Securities Act.

(iii) The Corporation has made available to the Participant the
opportunity to ask questions of the officers and management of the Corporation
and to acquire information about the business and financial condition of the
Corporation and has, and at the time of exercise of the Option will have, all
information necessary for him to make an informed investment decision.

(iv) He has received a copy of the Plan.

2
<PAGE>

(b) Each certificate representing the Shares will be endorsed with
the following or a substantially similar legend:

"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR UNDER ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
UNLESS (i) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT COVERING SUCH SECURITIES, OR (ii) THE CORPORATION
RECEIVES A WRITTEN OPINION FROM COUNSEL FOR THE HOLDER OF THESE
SECURITIES, REASONABLY SATISFACTORY TO THE CORPORATION, STATING THAT
SUCH SALE, TRANSFER, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION MAY BE MADE PURSUANT TO RULE 144 PROMULGATED UNDER THE
SECURITIES ACT OR IS OTHERWISE EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS."

The Corporation need not allow a transfer of any of the Shares unless
one of the conditions specified in the foregoing legend is satisfied. The
Corporation may also instruct its transfer agent not to allow the transfer of
any of the Shares unless one of the conditions specified in the foregoing legend
is satisfied.

Any legend endorsed on a certificate pursuant to the foregoing
language and the stop transfer instructions with respect to such Shares shall be
removed, and the Corporation shall promptly issue a certificate without such
legend to the holder thereof if (i) the Shares are registered under the
Securities Act and a prospectus meeting the requirements of Section 10 of the
Securities Act is available and has been delivered or (ii) the holder provides
the Corporation with a written opinion from counsel for such holder of the
Shares, reasonably satisfactory to the Corporation, to the effect that a sale,
transfer, assignment, pledge, hypothecation or other disposition of such Shares
may be made without registration.

6. Termination of Employment; Disability; Retirement; Death.
--------------------------------------------------------

(a) In the event that the Participant shall cease to be an employee
of the Corporation for any reason other than death, Disability, Retirement or
Cause (each as defined below), the Option may be exercised by the Participant
(to the extent that the Participant shall have been entitled to do so as of the

3
<PAGE>

date of the termination of his employment with the Corporation) at any time
prior to the expiration date of the Option or within 30 days after such
termination, whichever is earlier. So long as the Participant shall continue to
be an employee of the Corporation, the Option shall not be affected by any
change of duties or position.

(b) In the event of the Disability or Retirement of the Participant,
the unexercised portion of the Option that is held by the Participant on the
date of such Disability or Retirement, whether or not otherwise exercisable on
such date, shall be exercisable one (1) year from the date of Disability or
Retirement. "Disability" shall mean any termination of employment with the
Corporation or a subsidiary because of a long-term or total disability, as
determined by the Compensation Committee (the "Committee") of the Board of
Directors (the "Board") of the Corporation in its sole discretion. "Retirement"
shall mean a termination of employment with the Corporation or a subsidiary
either (I) on a voluntary basis by a recipient who is at least 65 years of age
or (ii) otherwise with the written consent of the Committee in its sole
discretion.

(c) During the lifetime of the Participant, the Option shall be
exercisable only by him (or by his legal guardian or representative). In the
event of the death of the Participant while he is an employee of the Corporation
or any subsidiary, the Option (or unexercised portion thereof) which is held by
the Participant at the date of death, whether or not exercisable on the date of
death, shall be exercisable in accordance with the terms of this Agreement by
the beneficiary designated by the Participant for such purpose (the "Designated
Beneficiary") or if no Designated Beneficiary shall have been appointed or if
the Designated Beneficiary shall predecease the Participant, by the
Participant's personal representatives, heirs or legatees at any time for a
period of one (1) year after the date of the Participant's death and any portion
of the Option which is not exercised during such one (1) year period shall be
forfeited.

In the event of the death of the Participant following a termination
of employment due to Retirement or Disability, if such death occurs before the
Option (or any portion thereof) is exercised, the Option (or portion thereof)
that is held by the Participant on the date of termination of employment,
whether or not exercisable on such date, shall be exercisable by such
Participant's Designated Beneficiary or if no Designated Beneficiary shall have
been appointed or if the Designated Beneficiary shall predecease the
Participant, by the Participant's personal representatives, heirs or legatees at
any time for a period of one (1) year after the date of the Participant's death

4
<PAGE>

and any portion of the Option which is not exercised during such one (1) year
period shall be forfeited.

(d) In the event a Participant is terminated for Cause, the Committee
may, in its sole discretion, cause the unexercised portion of the Option that is
held by the Participant on the date of termination to be forfeited. "Cause"
shall mean (i) the Participant's conviction or plea of guilty or nolo contendre
to the commission of a felony, (ii) the Participant's commission of any fraud,
misappropriation or misconduct which causes demonstrable injury to the
Corporation or a subsidiary; (iii) an act of dishonesty by the Participant
resulting or intended to result, directly or indirectly, in gain or personal
enrichment at the expense of the Corporation or a subsidiary, (iv) any breach of
the Participant's fiduciary duties to the Corporation as an employee or officer
or (v) any other serious violation of Corporation policy. The Committee will
have the sole discretion to determine whether the Participant's termination was
for Cause.

7. Changes in Capital Structure. If all or any portion of the Option
----------------------------
shall be exercised subsequent to any stock dividend, stock split,
recapitalization, merger, consolidation, combination or exchange of shares,
separation, spin-off, reorganization, liquidation or the like occurring after
the date hereof, as a result of which shares of any class shall be issued in
respect of outstanding Common Stock or shares of Common Stock shall be changed
into the same or a different number of shares of the same or another class or
classes, the person or persons exercising the Option shall receive, for the
aggregate price paid upon such exercise, the aggregate number and class of
shares which, if the Shares (as authorized at the date hereof) had been
purchased at the date hereof for the same aggregate price (on the basis of the
price per share set forth in paragraph 2 hereof) and had not been disposed of,
such person or persons would be holding at the time of such exercise as a result
of such purchase and all such share dividends, stock splits, recapitalizations,
mergers, consolidations, combinations or exchanges of shares, separations, spin-
offs, reorganizations, liquidations or the like; provided, however, that no
-------- -------
fractional shares shall be issued upon any such exercise, and the aggregate
price paid shall be appropriately reduced on account of any fractional share not
issued. In no event shall any adjustments be made to the Option as a result of
the issuance or redemption of securities of the Corporation for cash or other
consideration, or upon the exercise of any conversion rights of any securities
of the Corporation.

8. Method of Exercising Option. Subject to the terms and conditions of
---------------------------
this Agreement, the Option may be exercised in whole or in part by giving

5
<PAGE>

written notice to the Secretary of the Corporation, at the address set forth
below the Corporation's signature to this Agreement or such other location as
may be designated by the Secretary of the Corporation. Such notice shall state
the Participant's election to exercise the Option and the number of Shares in
respect of which it is being exercised, and shall be signed by the person or
persons so exercising the Option. Payment for the Shares may be made (i) in
cash or (ii) at the option of the Committee, or, in absence of the Committee,
the Board, by delivery of Common Stock already owned by the Participant and
having an aggregate Market Price (as defined in the Plan) on the date of such
delivery equal to the aggregate exercise price of the shares so purchased or
(iii) at the option of the Committee, or, in absence of the Committee, the
Board, by delivery of a combination of cash and Common Stock having an aggregate
Market Price on the date of such delivery equal to the aggregate exercise price
of the shares so purchased. The Corporation shall deliver a certificate or
certificates representing the shares of Common Stock so purchased as soon as
practicable after the notice of election has been received. In the event the
Option shall be exercised by any person or persons other than the Participant,
the notice of election shall be accompanied by appropriate proof of the right of
such person or persons to exercise the Option. All shares of Common Stock that
shall be purchased upon the exercise of the Option as provided herein shall be
fully paid and nonassessable.

9. Change of Control.
-----------------

(a) As long as Participant is an employee of the Corporation, a
"Change of Control" of the Corporation shall cause the Option (or the
unexercised portion thereof), whether or not currently exercisable, to become
immediately exercisable, in whole or in part, as of the effective date of such
Change of Control without regard to any vesting provisions or condition
precedent which may be contained in paragraph 1 of this Agreement. For purposes
of this paragraph, a "Change of Control" shall be deemed to have occurred if (i)
any person or "group" (other than Warburg, Pincus Investors, L.P. or any
affiliate thereof) acquires, in a single transaction or series of related
transactions, 50% or more of the outstanding Common Stock; (ii) during any
period of two consecutive years, individuals that at the beginning of such
period constitute the Board cease for any reason to constitute a majority
thereof, unless the election, or the nomination for election by the
stockholders, of each such new director was approved by a vote of at least two-
thirds of the directors then still in office which were directors at the
beginning of the period; or (iii) the sale of all or substantially all of the
assets of the Corporation (other than to a wholly-owned subsidiary of the
Corporation).

6
<PAGE>

(b) Notwithstanding the provisions of paragraph 9(a), in the case
that the Corporation is merged or consolidated with another corporation, or the
assets or stock of the Corporation is acquired by another corporation, or a
separation, reorganization or liquidation of the Corporation occurs, the Board,
or the Board of Directors of any corporation assuming the obligations of the
Corporation hereunder, shall make appropriate provisions for the protection of
the Option by substitution on an equitable basis of appropriate stock of the
Corporation, or appropriate stock of the merged, consolidated or otherwise
reorganized corporation, provided that only the excess of the aggregate Market
--------
Price of the shares subject to the Option immediately after such substitution
over the aggregate exercise price thereof is not less than the excess of the
aggregate Market Price of the shares subject to the Option immediately before
such substitution over the aggregate exercise price thereof.

10. Optionee Not a Stockholder. The Participant shall not have any rights
--------------------------
as a stockholder with respect to any shares of Common Stock subject to the
Option prior to the date on which he is recorded as the holder of such shares on
the records of the Corporation.

11. Taxes. The Corporation may make such provisions and take such steps
-----
as it may deem necessary or appropriate for the withholding of all federal,
state, local and other taxes required by law to be withheld with respect to the
Option including, but not limited to (i) reducing the number of shares of Common
Stock otherwise deliverable, based upon their fair market value on the date of
exercise, to permit deduction of the amount of any such withholding taxes from
the amount otherwise payable under this Agreement; (ii) deducting the amount of
any such withholding taxes from any other amount then or thereafter payable to
the Participant; or (iii) requiring the Participant, Designated Beneficiary or
legal representative to pay to the Corporation the amount required or desirable
to enable it to satisfy its withholding obligations as a condition of releasing
the Common Stock.

12. General Provisions.
------------------

(a) The Corporation shall at all times during the term of the Option
reserve and keep available such number of Shares as will be sufficient to
satisfy the requirements of this Option Agreement, shall pay all fees and
expenses necessarily incurred by the Corporation in connection therewith, and
shall use its best efforts to comply with all laws and regulations which, in the
reasonable opinion of counsel to the Corporation, are applicable thereto.

7
<PAGE>

(b) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York without regard to principles of conflicts
of laws.

(c) Any notice to be given hereunder by either party to the other
shall be in writing and shall be given either by personal delivery, facsimile or
by mail, registered or certified, postage prepaid, return receipt requested, or
by overnight delivery addressed to the other party at the respective addresses
or facsimile numbers set forth below their signatures to this Agreement, or at
any other address or facsimile number as such party may hereafter specify in
writing.

(d) This Agreement is irrevocable and is intended to conform in all
respects with the Plan. Inconsistencies between this Agreement and the Plan
shall be resolved according to the terms of the Plan. No amendments or
modifications to this Agreement shall be binding unless made in writing and
signed by the parties hereto.

(e) The waiver by either party of a breach of any term or provision
of this Agreement shall not operate or be construed as a waiver of a subsequent
breach of the same provision or of the breach of any other term or provision of
this Agreement.

(f) As used herein, the masculine gender shall include the feminine
and the neuter genders, the neuter shall include the masculine and the feminine
genders, the singular shall include the plural, and the plural shall include the
singular.

(g) The headings in this Agreement are solely for convenience of
reference and shall be given no effect in the construction or interpretation of
this Agreement.

(h) The invalidity or enforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.

8
<PAGE>

(i) NEITHER THE PLAN NOR THIS AGREEMENT SHALL BE (1) CONSTRUED AS
GIVING THE PARTICIPANT THE RIGHT TO BE RETAINED IN THE EMPLOY OF THE CORPORATION
OR ANY SUBSIDIARY THEREOF OR TO BE ENTITLED TO ANY REMUNERATION OR BENEFITS NOT
SET FORTH IN THE PLAN OR THIS AGREEMENT OR (2) INTERFERE WITH OR LIMIT THE RIGHT
OF THE CORPORATION OR ANY SUBSIDIARY THEREOF TO MODIFY THE TERMS OF OR TERMINATE
THE PARTICIPANT'S EMPLOYMENT AT ANY TIME WITH OR WITHOUT CAUSE.

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

PARTICIPANT

______________________________
Name:
Address:

Facsimile:

CARIBINER INTERNATIONAL, INC.

By:___________________________
Name:
Title:

Address: 16 West 61st Street
New York, New York 10023

Facsimile: (212) 541-5384

<PAGE>

EXHIBIT 10.7

================================================================================

EMPLOYMENT AGREEMENT

By and Between

CARIBINER, INC.

and

BRIAN SHEPHERD

================================================================================

July 25, 1995

<PAGE>

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT (this "Agreement") dated as of July 25, 1995, by
and between CARIBINER, INC., a New York corporation having an office at 16
West 61st Street, New York, New York 10023 ("Employer"), an BRIAN SHEPHERD, an
individual residing at 10715 Oxford Mill Circle, Alpharatta, Georgia 30202
("Employee").

W I T N E S S E T H:
- - - - - - - - - -

WHEREAS, Employer has concurrently with this Agreement entered into an
Agreement of Purchase and Sale of Assets (the "Purchase Agreement") with
Imagination (USA), Inc., a Georgia corporation ("Imagination") and The
Imagination Group Limited, a corporation organized and existing under the
laws of England, to purchase substantially all of the assets of Imagination;

WHEREAS, Employee has been serving as the Chief Executive Officer of
Imagination; and

WHEREAS, Employer desires to engage Employee as an employee in its
business and Employee desires to provide his services in connection with such
business and both parties desire to clarify and specify the rights and
obligations which each have with respect to the other in connection with such
employment.

<PAGE>

NOW, THEREFORE, in consideration of the agreements and covenants herein
set forth, the parties hereby agree as follows:

1. EMPLOYMENT

Employer hereby employs Employee as Vice President of Employer and
General Manager of Employer's Atlanta Office (the "Atlanta Office") and Employee
hereby accepts such employment and agrees to render his services as an employee
of Employer, for the term of this Agreement (as set forth in Section 6 hereof),
all subject to and on the terms and conditions herein set forth.

2. DUTIES AND RESPONSIBILITIES OF EMPLOYEE

Employee shall be employed as Vice President of Employer and General
Manager of the Atlanta Office and his duties and responsibilities shall be
commensurate with such title. Employee's duties shall also include strategic
planning for Employer's business on a global basis. In this connection, Employee
shall be called upon to consult with Employer's Chairman, and persons designated
by the Chairman, in connection with Employer's development of a strategy for
expanding the focus of Employer's business to an integrated marketing and
communications company. With the prior written approval of the Chairman,
Employee shall be permitted to hire additional personnel necessary to achieve
such strategic objectives. In the performance of his duties, Employee shall
report to Employer's Chairman and any other person or persons designated by
Employer's

-2-
<PAGE>

Board of Directors (the "Board"). Employee shall use his best efforts to
maintain and enhance the business and reputation of the Employer. Employee
shall be available to travel as the reasonable needs of Employer shall require.

3. EXCLUSIVITY OF SERVICE

Employee agrees to devote substantially all of his business time,
efforts and attention to the business and affairs of the Employer on an
exclusive basis, and not to engage in any other business activities for any
person or entity, other than personal investment activities which do not
materially affect the performance of Employee's duties hereunder.

4. COMPENSATION; BONUS

(a) In consideration for his services to be performed under this
Agreement and as compensation therefor, Employee shall receive, in addition to
all other benefits provided in this Agreement, a base salary at the annual rate
of Two Hundred Twenty Thousand ($220,000) Dollars (the "Base Salary") payable in
bi-weekly installments. Employee's performance and Base Salary shall be reviewed
at least annually and Employee's Base Salary may, in the discretion of the
Board, be increased (but not decreased) following such review.

(b) In addition to the Base Salary, Employee shall receive an annual
bonus (the "Bonus") pursuant to an Annual Incentive Plan (the "Plan") to be
established by Employer in such amount,

-3-

<PAGE>

if any, as shall be determined by the Board in its sole discretion (the
"Bonus"). The Bonus shall be determined by reference to performance criteria
established by the Board and Employee's participation in such Plan shall be
commensurate with the General Managers of Employer's other offices. Employee
understands that the Bonus is entirely discretionary and no promises of any kind
have been made regarding the Bonus.

5. BENEFITS

In addition to the Base Salary and Bonus provided for in Section 4
hereof, Employee shall be entitled to the following benefits during and in
respect of the Term (as defined below):

(a) Employer shall provide Employee with the hospitalization, medical
and dental insurance coverage and other benefits (including long term disability
and life insurance) on the same basis provided to other similar employees (i.e.,
General Managers of Employer's other offices).

(b) Employee shall be entitled to reimbursement for all reasonable
travel, entertainment and other reasonable expenses incurred in connection with
Employer's business provided such expenses are adequately documented and
vouchered in accordance with Employer's policies.

(c) Employee shall be entitled to four (4) weeks paid vacation annually
to be taken by Employee at times mutually and reasonably agreed upon by Employer
and Employee in addition to all other holidays established as part of Employer's
standard

-4-

<PAGE>

practices. No payment shall be made to Employee for unused vacation days nor may
such days be carried over to future years.

(d) Employee shall be entitled to an automobile allowance in the
amount of $500 per month to defray all costs incurred by Employee in connection
with Employee's use of his automobile in connection with the business of
Employer.

(e) Promptly following mutual execution and delivery of this Agreement,
Employee shall be awarded the right to purchase 4,850 shares of non-voting
common stock of Business Communications Group, Inc. ("BCGI") pursuant to the
BCGI 1993 Management Stock Plan (the "Plan") and an Award Agreement to be
entered into by Employee and BCGI in the form adopted pursuant to the Plan.

(f) Employee shall be entitled to reimbursement for up to $200 per month
for dues in respect of one or more clubs utilized by Employee in connection with
an in furtherance of Employer's business.

6. TERM OF EMPLOYMENT

The term (the "Term") of employment shall be from the date of the
closing under the Purchase Agreement and for a period of three (3) years, unless
terminated prior thereto in accordance with Section 9 hereof.

-5-

<PAGE>

7. CONFIDENTIALITY

(a) Employee agrees and covenants that, at any time during employment by
Employer or thereafter, he will not (without first obtaining the written
permission of Employer) divulge to any person or entity, nor use (either himself
or in connection with any business) any trade secrets or business or other
"Confidential Information" (as hereinafter defined) obtained during the course
of his employment unless such disclosure is pursuant to a court order,
disclosure in litigation involving the Employer or in any reports or
applications required by law to be filed with any governmental agency. Nothing
contained in this Section 7 or elsewhere in this Agreement shall limit any
protection or remedy available to Employer under any applicable statute or
law.

(b) Employee agrees that at the time of leaving the employ of Employer
he will deliver to Employer and not keep or deliver to anyone else any and all
notes, notebooks, drawings, computer disks and related information, memoranda,
documents, and in general, any and all material relating to the business of
Employer.

8. NON-COMPETITION; NON-SOLICITATION

(a) Employee hereby agrees and covenants that during the Term he will
not directly or indirectly engage in or become interested (whether as an owner,
principal, agent, stockholder, partner, trustee, venturer, lender or other
investor, director,

-6-

<PAGE>

officer, employee, consultant or through the agency or otherwise) in any
business or enterprise that shall, at the time, be in whole or in substantial
part competitive with any part of the business conducted by Employer during the
period of Employee's employment with Employer (except that ownership of not more
than 1% of the outstanding securities of any class of any entity that are listed
on a national securities exchange or traded in the over-the-counter market shall
not be considered a breach of this Section 8(a)).

(b) Employee agrees and covenants that for a period of two (2) years
following his employment with Employer he will not (without first obtaining the
written permission of Employer) directly or indirectly participate in the
solicitation of business presentation and/or conference business and/or
consulting in respect thereto from any person or entity which was a client or
customer of Employer during the period of Employee's employment with Employer,
and with whom Employee had material dealings during the period of Employee's
employment with Employer, or was a prospective customer of Employer from which
Employee was actively involved in soliciting such prospective customer's
business (of for which a proposal for submission was prepared) during the period
of Employee's employment with Employer.

(c) Employee agrees and covenants that for a period of two (2) years
following his employment with Employer he will not (without first obtaining the
written permission of Employer)

-7-

<PAGE>

directly or indirectly, recruit for employment or induce to terminate his or her
employment with Employer, any person who was an employee of Employer during the
period of Employee's employment with Employer.

9. TERMINATION

(a) CAUSE. Notwithstanding the terms of this Agreement, Employer may
discharge Employee and terminate this Agreement in the event that (i) Employee
shall fail substantially to perform his duties hereunder with reasonable
diligence or shall violate any covenant, agreement or representation of his
herein contained, (ii) Employee shall refuse to carry out the lawful order of
Employer commensurate with Employee's duties to be performed hereunder, (iii)
Employee shall engage in an act of theft or dishonesty involving his employment,
or (iv) Employee shall be charged with a felony involving moral turpitude (which
shall include any felony relating to drugs) or shall be convicted of, or plead
nolo contendere in respect of, any governmental indictment, complaint or other
formal allegation. In the event Employee is discharged pursuant to this Section
9, Employee's Base Salary under Section 4 hereof and all benefits under Section
5 hereof shall terminate immediately upon such discharge (subject to applicable
law such as COBRA), and Employer shall have no further obligation to Employee
except the payment to and reimbursement to Employee for any monies due to
Employee which right to payment or reimbursement accrued prior to such

-8-

<PAGE>

discharge. Notwithstanding (i) and (ii) above to the contrary, Employee shall be
given at least seven (7) days prior written notice and an opportunity to cure
any breach or failure thereunder that is curable.

(b) INCAPACITY OR DISABILITY. Should Employee, in the reasonable
judgment of a physician chosen by the Board become incapacitated to the
extent that he is unable to perform his material duties pursuant to this
Agreement for a period of three (3) consecutive months by reason of illness,
disability, or other incapacity, Employer may terminate this Agreement upon one
(1) month's notice after said three (3) month period.

(c) DEATH. This Agreement shall terminate immediately upon the death
of Employee, in which case Employee's legal representatives shall be entitled
to receive promptly a payment equal to one (1) month's Base Salary.

10. INVENTIONS; DEVELOPMENT PRODUCTS; WORK FOR HIRE

(a) Employee hereby grants to Employer or its nominee all rights of
every kind whatsoever, exclusively and perpetually, in and to all services
performed, products created and product ideas conceived by Employee for
Employer or its nominee, and hereby agrees, upon Employer's request therefor, to
assign and transfer to Employer or its nominee, any and all inventions, trade
secrets, product ideas, improvements, processes, Confidential Information and
"know how" relating to the business or products of Employer, including any
thereof which Employee may learn,

-9-

<PAGE>

possess or acquire during Employee's employment by Employer, and Employee agrees
that all such things and such knowledge are, and will be, the sole and exclusive
property of Employer or its nominee, and will be known or held by Employee only
for the benefit of Employer or its nominee. Any patent, trademark, servicemark
or copyright applications and patents, trademarks, servicemarks or copyrights
developed, obtained or conceived by Employee while employed or engaged by
Employer which relate to the business or product development activities of
Employer or its nominee, as well as all physical embodiments of Confidential
Information, shall be and remain the sole exclusive property of Employer, or its
nominee. At Employer's request, Employee will execute any and all applications,
assignments or other instruments which Employer or its nominee shall deem
necessary to apply for and obtain Letters Patent, trademarks, servicemarks or
copyrights of the United States or any foreign country or to protect otherwise
Employer's interest therein.

(b) As used in this Section 10, the term "Confidential Information"
shall mean and include all information and data in respect of Employer's
operations, financial condition, products, customers and business (including,
without limitation, artwork, photographs, specifications, facsimiles, samples,
business marketing or promotional plans, creative written material and
information relating to characters, concepts, names, trademarks and copyrights)
that are the subject of Employer's reasonable efforts to keep confidential, and
which may be communicated to

-10-

<PAGE>

Employee or to which Employee may have access in the course of Employee's
employment by Employer. Notwithstanding the foregoing, the term "Confidential
Information" shall not include information which:

(i) is, at the time of the disclosure, a part of the public domain
through no act or omission by Employee;

(ii) was otherwise in Employee's lawful possession prior to the
disclosure; or

(iii) is hereafter lawfully disclosed to Employee by a third party who
or which did not acquire the information under an obligation of
confidentiality to or through Employer.

Any combination of known information shall be within any of the foregoing
exclusions only if the combination as such is within such exclusions.

11. VIOLATION OF OTHER AGREEMENTS; IMMIGRATION

-11-

<PAGE>

representations and that they be true in all respects, Employee shall forever
indemnify and hold Employer harmless from and against all liability, costs or
expenses (including attorney's fees and disbursements) on account of the
foregoing representations being untrue. Employee further represents and warrants
to Employer that he possesses (and will maintain) written authorization from the
United States Immigration and Naturalization Service entitling him to be
employed and, prior to the commencement of the Term, will deliver evidence of
the same to Employer as a condition of his employment.

12. SPECIFIC PERFORMANCE; DAMAGES

In the event of a breach or threatened breach of the provisions of
Sections 7, 8 or 10 hereof, Employee agrees that the injury which would be
suffered by Employer would be of a character which could not be fully
compensated for solely by a recovery of monetary damages. Accordingly, Employee
agrees that in the event of a breach or threatened breach of Sections 7, 8 or 10
hereunder, in addition to and not in lieu of any damages sustained by Employer
and any other remedies which Employer may pursue hereunder or under any
applicable law, Employer shall have the right to equitable relief, including
issuance of a temporary or permanent injunction, by any court of competent
jurisdiction against the commission or continuance of any such breach or
threatened breach, without the necessity of proving any actual damages or
posting of any bond or other surety therefor. In

-12-

<PAGE>

addition to, and not in limitation of the foregoing, Employee understands and
confirms that, in the event of a breach or threatened breach of Sections 7, 8,
or 10 hereof, Employee may be held financially liable to Employer for any loss
suffered by Employer as a result.

13. ARBITRATION

The parties agree that any dispute arising out of Section 9(a)(i) of
this Agreement shall be arbitrated in New York City or, at Employer's option, in
Atlanta in accordance with the rules for commercial arbitration of the American
Arbitration Association or any successor thereof; provided, however, that the
foregoing shall not prevent Employer from seeking equitable relief from a court
of competent jurisdiction as provided in Section 12 hereof.

Section 13 Agreed to:

/s/ BS /s/ RSI
_________________ __________________
Employee initials Employer initials

14. NOTICES

Any and all notices, demands or requests required or permitted to be
given under this Agreement shall be given in writing and sent, by registered or
certified U.S. mail return receipt requested, by hand, or by overnight
courier, addressed to the parties hereto at their addresses set forth above or
such other addresses as they may from time-to-time designate by

-13-
<PAGE>

written notice, given in accordance with the terms of this Section, together
with copies thereof as follows:

In the case of Employer, with a copy to:

Zukerman Gore & Brandeis
900 Third Avenue
New York, New York 10022

Attention: Jeffrey D. Zukerman, Esq.

In the case of Employee, with a copy to:

Ellis, Funk, Goldberg & Laybovitz, P.C.
3490 Piedmont Road
Suite 400
Atlanta, Georgia 30305

Attention: David I. Funk, Esq.

Notice given as provided in this Section shall be deemed effective: (i) on the
date hand delivered, (ii) on the first business day following the sending
thereof by overnight courier, and (iii) on the seventh calendar day (or, if it
is not a business day, then the next succeeding business day thereafter) after
the depositing thereof into the exclusive custody of the U.S. Postal Service.

15. WAIVERS

No waiver by any party of any default with respect to any provision,
conditions or requirement hereof shall be deemed to be a waiver of any other
provision, condition or requirement hereof; nor shall any delay or omission of
any party to exercise any

-14-

<PAGE>

right hereunder in any manner impair the exercise of any such right accruing
to it thereafter.

16. PRESERVATION OF INTENT

Should any provision of this Agreement be determined by a court
having jurisdiction in the premises to be illegal or in conflict with any laws
of any state or jurisdiction or otherwise unenforceable, the Employer and
Employee agree that such provision shall be modified to the extent legally
possible so that the intent of this Agreement may be legally carried out and
such provisions shall be interpreted to the maximum extent possible.

17. ENTIRE AGREEMENT

This Agreement sets forth the entire and only agreement or understanding
between the parties relating to the subject matter hereof and supersedes and
cancels all previous agreements, negotiations, letters of intent (including any
memorandum dated May 27, 1995), correspondence, commitments and representations
in respect thereof among them, and no party shall be bound by any conditions,
definitions, warranties or representations with respect to the subject matter of
this Agreement except as provided in this Agreement.

-15-

<PAGE>

18. INUREMENT; ASSIGNMENT

The rights and obligations of Employer under this Agreement shall inure
to the benefit of and shall be binding upon any successor of Employer or to the
business of Employer, subject to the provisions hereof. Employer may assign this
Agreement to any person, firm or corporation controlling, controlled by, or
under common control with Employer. Neither this Agreement nor any rights or
obligations of Employee hereunder shall be transferable or assignable by
Employee.

19. AMENDMENT

This Agreement may not be amended in any respect except by an instrument
in writing signed by the parties hereto.

20. HEADINGS

The headings in this Agreement are solely for convenience of reference
and shall be given no effect in the construction or interpretation of this
Agreement.

21. COUNTERPARTS

This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which when taken together shall
constitute one and the same instrument.

-16-

<PAGE>

22. GOVERNING LAW

This Agreement shall be governed by, construed and enforced in
accordance with the internal laws of the State of New York, without giving
reference to principles of conflict of laws.

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

/s/ Brian Shepherd
______________________________
BRIAN SHEPHERD

CARIBINER, INC.

By: /s/ Raymond S. Ingleby
_____________________________
Raymond S. Ingleby, Chairman

-17-

<PAGE>

_________________________________________________________________________

EMPLOYMENT AGREEMENT

BY AND BETWEEN

CARIBINER INTERNATIONAL, INC.

AND

LAWRENCE P. GOLEN

_________________________________________________________________________

OCTOBER 14, 1996
<PAGE>

EMPLOYMENT AGREEMENT (this "Agreement"), dated as of October 14, 1996, by
and between CARIBINER INTERNATIONAL, INC., a Delaware corporation having an
office at 16 West 61st Street, New York, New York 10023 ("Employer"), and
LAWRENCE P. GOLEN, an individual having an address at 10705 Oxford Mill Circle,
Alpharetta, Georgia 30202 ("Employee").

W I T N E S S E T H:
-------------------

WHEREAS, pursuant to an Agreement of Purchase and Sale of Assets,
dated as of September 12, 1996, by and between Employer and General Electric
Capital Computer Leasing Corporation ("GECCLC"), Employer has acquired (the
"TAVS Acquisition") certain of the assets of Total Audio Visual Services ("GE-
TAVS"), an operating division of GECCLC;

WHEREAS, prior to the TAVS Acquisition, Employee had been employed by
GECCLC serving as Executive Vice President and General Manager of GE-TAVS; and

WHEREAS, Employer desires to engage Employee as an employee in its
business, and Employee desires to provide his services in connection with such
business and both parties desire to clarify and specify the rights and
obligations that each has with respect to the other in connection with such
employment.

NOW, THEREFORE, in consideration of the agreements and covenants herein set
forth, the parties hereby agree as follows:

2
<PAGE>

1. EMPLOYMENT

Employer hereby employs Employee as an Executive Vice President of Employer
and President of Total Audio Visual Services ("CI-TAVS"), a division of
Caribiner, Inc., a wholly-owned subsidiary of Employer ("Caribiner"), and
Employee hereby accepts such employment and agrees to render his services as an
employee of Employer and Caribiner, for the term of this Agreement (as set forth
in Section 6 hereof), all subject to and on the terms and conditions herein set
forth.

2. DUTIES AND RESPONSIBILITIES OF EMPLOYEE

Employee shall be employed as an Executive Vice President of Employer and
President of CI-TAVS and Employee's duties and responsibilities shall be
commensurate with such titles. Upon Employer's request, Employee shall also
perform similar services in an identical executive capacity for Caribiner and
any other subsidiary or division of Employer as designated by Employer. In the
performance of his duties, Employee shall report to the Employer's Chairman or
Chief Executive Officer or President or any such other senior officer of
Employer designated by Employer's Board of Directors (the "Board") and shall
carry out the duties and responsibilities assigned to him by the Board or its
designee. Employee shall use his best efforts to maintain and enhance the
business and reputation of Employer. Employee shall be available to travel as
the reasonable needs of Employer shall require.

3
<PAGE>

3. EXCLUSIVITY OF SERVICE

Employee agrees to devote all of his business time, efforts and attention
to the business and affairs of Employer on an exclusive basis, and not to engage
in any other business activities for any person or entity, other than personal
investment activities and involvement in professional associations and
charitable activities, provided that such activities do not materially affect
--------
the performance of Employee's duties hereunder.

4. COMPENSATION; BONUS

(a) In consideration for his services to be performed under this Agreement
and as compensation therefor, Employee shall receive, in addition to all other
benefits provided in this Agreement, a base salary at the annual rate of Two
Hundred Ten Thousand Dollars ($210,000)(the "Base Salary") payable in bi-weekly
installments. Employee's performance and Base Salary shall be reviewed at least
annually by the Board and may, in the discretion of the Board, be increased (but
not decreased) following such review.

(b) In addition to the Base Salary, Employee shall be entitled to an annual
bonus, payable on approximately December 15 of each year, at the Tier II level
bonus pursuant to Employer's Performance Bonus Program as in effect for the
fiscal year ended immediately prior to the fiscal year in which such bonus is
actually paid.

4
<PAGE>

5. BENEFITS

In addition to the Base Salary and bonus provided for in Section 4 hereof,
Employee shall be entitled to the following benefits during and in respect of
the Term (as defined below):

(a) Employer shall provide to Employee, effective upon the commencement of
his employement with Employer, the hospitalization, medical and dental insurance
coverage and other benefits (including long-term disability and life insurance),
on the same basis as provided to the majority of the other executive vice
presidents of Employer or Caribiner in accordance with Employer's practices.
Employee shall be entitled to participate in Employer's 401(k) plan and other
similar plans adopted by Employer for similar employees. Employee shall be
entitled to family medical and dental insurance coverage at the rate charged
therefor by Employer.

(b) Employee shall be entitled to four (4) weeks paid vacation annually to
be taken by Employee at times mutually agreed upon by Employer and Employee, in
addition to all other holidays established as part of Employer's standard
practices.

(c) Employee shall be entitled to an automobile allowance in the amount of
Five Hundred Dollars ($500) per month, payable in equal installments during each
payroll period, to defray all costs incurred by Employee in connection with
Employee's use of his automobile in connection with the business of Employer
(except for those which Employee is entitled to reimbursement pursuant to
Section 5(d) below).

5
<PAGE>

(d) Employee shall be entitled to reimbursement for all reasonable travel,
entertainment and other reasonable expenses incurred in connection with
Employer's business, provided that such expenses are adequately documented and
--------
vouchered in accordance with Employer's policies.

(e) Promptly following the commencement of the Term (as defined in Section
6 hereof) of this Agreement, Employer shall grant to Employee options to
purchase an aggregate of 28,000 shares of Employer's common stock, par value
$0.01 per share, pursuant to Employer's 1996 Stock Option Plan (the "Plan") and
a Stock Option Agreement to be entered into by Employer and Employee in the form
adopted pursuant to the Plan.

6. TERM OF EMPLOYMENT

The term (the "Term") of Employee's employment hereunder shall commence on
the date hereof and shall continue for a period of three (3) years, unless
terminated prior thereto in accordance with Section 9 hereof.

7. CONFIDENTIALITY; INVENTIONS; DEVELOPMENT PRODUCTS, ETC.

(a) Employee agrees and covenants that he will not (without first obtaining
the written permission of Employer) (i) at any time during employment by
Employer and for a period of three years thereafter, divulge to any person or
entity, nor use (either himself or in connection with any business) any
"Confidential Information" (as hereinafter defined in Section (c) hereof)
obtained during the course of his employment and (ii) at

6
<PAGE>

any time during employment by Employer and thereafter, divulge to any person or
entity, nor use (either himself or in connection with any business) any "Trade
Secrets" (as hereinafter defined in Section (c) hereof to which he may have had
access or which had been revealed to him during the course of his employment,
unless such disclosure is pursuant to a court order, disclosure in litigation
involving the Employer or in any reports or applications required by law to be
filed with any governmental agency.

(b) Employee hereby grants to Employer or its nominee all rights of every
kind whatsoever, exclusively and perpetually, in and to all services performed,
products created and product ideas conceived by Employee for Employer or its
nominee, and hereby agrees, upon Employer's request therefor, to assign and
transfer to Employer or its nominee, any and all inventions, trade secrets,
product ideas, improvements, processes, Confidential Information and "know how"
relating to the business or products of Employer or any subsidiary or division
thereof, including any thereof which Employee may learn, possess or acquire
during Employee's employment by Employer, and Employee agrees that all such
things and such knowledge are, and will be the sole and exclusive property of
Employer or its nominee, and will be known or held by Employee only for the
benefit of Employer or its nominee. Any patent, trademark, servicemark or
copyright applications and patents, trademarks, servicemarks or copyrights
developed, obtained or conceived by Employee while employed or engaged by
Employer which relate to the business or product

7
<PAGE>

development activities of Employer or its nominee, as well as all physical
embodiments of Confidential Information, shall be and remain the sole exclusive
property of Employer, or its nominee. At Employer's request, Employee agrees to
execute any and all applications, assignments or other instruments which
Employer or its nominee shall deem necessary to apply for Letters Patent,
trademarks, servicemarks or copyrights or the United States or any foreign
country or to protect otherwise Employer's interest therein.

(c) As used in this Agreement, the term "Confidential Information" shall
mean and include all information and data in respect of Employer's (or any
subsidiary or division of Employer) operations, financial condition, products,
customers and business (including, without limitation, artwork, photographs,
specifications, facsimiles, samples, business, marketing or promotional plans,
creative written material and information relating to characters, concepts,
names, trademarks and copyrights) which may be communicated to Employee or to
which Employee may have access in the course of Employee's employment by
Employer. Notwithstanding the foregoing, the term "Confidential Information"
shall not include information which:

(i) is, at the time of the disclosure, a part of the public domain
through no act or omission by Employee;

(ii) was otherwise in Employee's lawful possession prior to the
disclosure; or

8
<PAGE>

(iii) is hereafter lawfully disclosed to Employee by a third party who
or which did not acquire the information under an obligation of
confidentiality to or through Employer.

As used in this Agreement, the term "Trade Secrets" shall mean and include
information, without regard to form, including, but not limited to, technical or
non-technical data, a formula, a pattern, a compilation, a program, a device, a
method, a technique, a drawing, a process, financial data, financial plans,
product plans, or a list of actual or potential customers or suppliers which is
not commonly known by or available to the public and which information (i)
derives economic value, actual or potential, from not being known to, and not
being readily ascertainable by proper means by, other persons who can obtain
economic value from its disclosure or use; and (ii) is the subject of efforts
that are reasonable under the circumstances to maintain its secrecy.

Any combination of known information shall be within any of the foregoing
exclusions only if the combination as such is within such exclusions.

Nothing in this Section 7 shall limit any protection, definition or remedy
provided to Employer under any law, statute or legal principle relating to
Confidential Information or Trade Secrets.

(d) Employee agrees that at the time of leaving the employ of Employer he
will deliver to Employer and not deliver to anyone else any and all notes,
notebooks, drawings, memoranda,

9
<PAGE>

documents, and in general, any and all material relating to the business of
Employer (except Employee's personal files and records) or relating to any
employee, officer, director, agent or representative of Employer.

8. NON-COMPETITION; NON-SOLICITATION

(a) Employee hereby agrees and covenants that during the Term, he will not
directly or indirectly engage in or become interested (whether as an owner,
principal, agent, stockholder, member, partner, trustee, venturer, lender or
other investor, director, officer, employee, consultant or through the agency of
any corporation, limited liability company, partnership, association or agent or
otherwise) in any business or enterprise in the United States that shall, at the
time, be in whole or in substantial part competitive with any part of the
business conducted by Employer (or any subsidiary or division thereof) during
the period of Employee's employment with Employer (except that ownership of not
more than 1% of the outstanding securities of any class of any entity that are
listed on a national securities exchange or traded in the over-the-counter
market shall not be considered a breach of this Subsection (a)).

(b) Employee agrees and covenants that for a period of two (2) years
following his employment with Employer he will not (without first obtaining the
written permission of Employer), directly or indirectly, participate in the
solicitation of any business of any type conducted by Employer (or any
subsidiary or division thereof) during the period of Employee's employment with

10
<PAGE>

Employer from any person or entity that was a client or customer of Employer (or
any subsidiary or division thereof) with whom Employee has been involved in
servicing or soliciting on a regular basis, during the period of Employee's
employment with Employer, or was a prospective client or customer of Employer or
any subsidiary or division thereof, as the case may be, from which Employer or
any subsidiary or division thereof, as the case may be, solicited business (or
for which a proposal for submission was prepared) during the period of
Employee's employment with Employer.

(c) Employee agrees and covenants that for a period of two (2) years
following his employment with Employer he will not (without first obtaining the
written permission of Employer), directly or indirectly, form an association
with, employ, recruit for employment, offer to employ or induce to terminate his
employment with Employer, any person who is then employed by Employer.

9. TERMINATION

(A) CAUSE. Notwithstanding the terms of this Agreement, Employer may
discharge Employee and terminate this Agreement in the event that (i) Employee
shall fail to substantially perform his duties hereunder with reasonable
diligence or shall violate any material covenant of his herein contained, (ii)
Employee shall engage in an act of dishonesty in connection with his employment
or theft, (iii) Employee shall unreasonably refuse to carry out the lawful order
of Employer commensurate with

11
<PAGE>

Employee's duties to be performed hereunder or (iv) Employee shall be charged
with a felony involving moral turpitude or shall be convicted of, or plead
guilty or plead nolo contendere (or make any equivalent plea) in respect of, any
---- ----------
governmental indictment, complaint or other formal allegation. Notwithstanding
the foregoing to the contrary, prior to discharging Employee pursuant to clauses
(i) or (iii) of the immediately preceding sentence, Employer shall give Employee
ten (10) days' prior written notice of any breach or failure and an opportunity
to cure any such breach or failure, or cease violating any covenant contained
herein, to the extent curable or ceaseable; provided, however, that no notice
-------- -------
shall be required to be given in the event such breach, failure or violation is
not curable or ceaseable. In the event Employee is discharged pursuant to this
Section 9, Employee's compensation under Section 4 hereof and all benefits under
Section 5 hereof shall terminate immediately upon such discharge (subject to
applicable law such as COBRA), and Employer shall have no further obligation to
Employee except the payment to and reimbursement to Employee for any monies due
to Employee which right to payment or reimbursement accrued prior to such
discharge.

(B) INCAPACITY OR DISABILITY. Should Employee, in the reasonable judgment
of a physician chosen by the Board of Directors of Employer, become
incapacitated to the extent that he is unable to perform his duties pursuant to
this Agreement for a period of three (3) consecutive months by reason of
illness, disability, or other incapacity, Employer may terminate this

12
<PAGE>

Agreement upon one (1) month's notice after said three (3) month period. In such
event, Employee shall also be entitled to the prorated bonus, if any, payable
pursuant to Section 4(b) hereof.

(C) DEATH. This Agreement shall terminate immediately upon the death of
Employee, in which case Employee's legal representatives shall be entitled to
receive promptly a payment equal to one (1) month's Base Salary and any other
sums due Employee as of his death, including, without limitation, the prorated
bonus, if any, payable pursuant to Section 4(b) hereof.

10. VIOLATION OF OTHER AGREEMENTS

Employee represents and warrants to Employer that he is legally able to
enter into this Agreement and accept employment with Employer and that Employee
is not prohibited by the terms of any agreement, understanding or policy, from
entering into this Agreement; and the terms hereof will not and do not violate
or contravene the terms of any agreement, understanding or policy to which
Employee is or may be a party, or by which Employee may be bound. Employee
agrees that, as it is a material inducement to Employer that Employee make the
foregoing representations and that they be true in all respects, Employee shall
forever indemnify and hold Employer harmless from and against all liability,
costs or expenses (including attorney's fees and disbursements) on account of
the foregoing representations being untrue.

11. SPECIFIC PERFORMANCE; DAMAGES

13
<PAGE>

In the event of a breach or threatened breach of any or all of the
provisions of Section 7 or 8 hereof, Employee agrees that the injury which would
be suffered by Employer would be of a character which could not be fully
compensated for solely by a recovery of monetary damages. Accordingly, Employee
agrees that in the event of a breach or threatened breach of any or all of the
provisions of Section 7 or 8 hereof, in addition to and not in lieu of any
damages sustained by Employer and any other remedies which Employer may pursue
hereunder or under any applicable law, Employer shall have the right to
equitable relief, including issuance of a temporary or permanent injunction, by
any court of competent jurisdiction against the commission or continuance of any
such breach or threatened breach, without the necessity of proving any actual
damages or posting of any bond or other surety therefor. In addition to, and
not in limitation of the foregoing, Employee understands and confirms that, in
the event of a breach or threatened breach of Section 7 or 8 hereof, Employee
may be held financially liable to Employer for any loss suffered by Employer as
a result.

12. NOTICES

Any and all notices, demands or requests required or permitted to be given
under this Agreement shall be given in writing and sent, by registered or
certified U.S. mail, return receipt requested, by hand, or by overnight courier,
addressed to the parties hereto at their addresses set forth above or such other
addresses as they may from time-to-time designate by

14
<PAGE>

written notice, given in accordance with the terms of this Section, together
with copies thereof as follows:

In the case of Employer, with a copy to:

Zukerman Gore & Brandeis, LLP
900 Third Avenue
8th Floor
New York, New York 10022-4728
Attention: Jeffrey D. Zukerman, Esq.

In the case of Employee, with a copy to:

Ellis, Funk, Goldberg, Labovitz & Docson, P.C.
One Securities Centre, Suite 400
3490 Piedmont Road
Atlanta, Georgia 30305
Attention: David I. Funk, Esq.

15
<PAGE>

13. WAIVERS

No waiver by any party of any default with respect to any provision,
condition or requirement hereof shall be deemed to be a waiver of any other
provision, condition or requirement hereof; nor shall any delay or omission of
any party to exercise any right hereunder in any manner impair the exercise of
any such right accruing to it thereafter.

14. ARBITRATION

The parties agree that any dispute arising out of Section 9(a)(i) or
9(a)(iii) of this Agreement shall be arbitrated in Atlanta, Georgia in
accordance with the rules for commercial arbitration of the American Arbitration
Association or any successor thereof; provided, however, that the foregoing
-------- -------
shall not prevent Employer from seeking equitable relief form a court of
competent jurisdiction as provided in Section 11 hereof.

Section 14 Agreed to:

/s/ LPG /s/ RSI
_________________ _________________
Employee initials Employer initials

15. PRESERVATION OF INTENT

16
<PAGE>

provision shall be interpreted as broadly as possible so that the intent of this
Agreement may be legally carried out.

16. ENTIRE AGREEMENT

This Agreement sets forth the entire and only agreement or understanding
between the parties relating to the subject matter hereof and supersedes and
cancels all previous agreements, negotiations, letters of intent,
correspondence, commitments and representations in respect thereof among them,
and no party shall be bound by any conditions, definitions, warranties or
representations with respect to the subject matter of this Agreement except as
provided in this Agreement.

17. INUREMENT; ASSIGNMENT

The rights and obligations of Employer under this Agreement shall inure to
the benefit of and shall be binding upon any successor of Employer or to the
business of Employer, subject to the provisions hereof. Employer may assign
this Agreement to any person, firm or corporation controlling, controlled by, or
under common control with Employer. Neither this Agreement nor any rights or
obligations of Employee hereunder shall be transferable or assignable by
Employee.

18. AMENDMENT

This Agreement may not be amended in any respect except by an instrument in
writing signed by the parties hereto.

17
<PAGE>

19. HEADINGS

The headings in this Agreement are solely for convenience of reference and
shall be given no effect in the construction or interpretation of this
Agreement.

20. COUNTERPARTS

This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which when taken together shall
constitute one and the same instrument.

18
<PAGE>

21. GOVERNING LAW

This Agreement shall be governed by, construed and enforced in accordance
with the internal laws of the State of New York, without giving reference to
principles of conflict of laws.

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

/s/ Lawrence P. Golen
______________________________
LAWRENCE P. GOLEN

CARIBINER INTERNATIONAL, INC.

/s/ Raymond S. Ingleby
By:___________________________
Raymond S. Ingleby
Chairman of the Board and
Chief Executive Officer

<PAGE>

EXHIBIT 11.1

CARIBINER INTERNATIONAL, INC.

Computation of Pro Forma Net Income Per Common Share

<TABLE>
<CAPTION>
For the year ended September 30,
------------------------------------
1994 1995 1996
---------- ---------- -----------
<S> <C> <C> <C>
Weighted average common stock outstanding
during the period (1) 2,519,537 2,588,689 4,159,182
Conversion of Convertible Note into shares
of preferred stock stock and the
subsequent conversion of such shares
into shares of Common Stock 2,055,000 2,055,000 2,055,000
Conversion of all outstanding shares of
preferred stock into share of
Common Stock 1,541,250 1,541,250 1,541,250
Exercise of warrants 534,505 534,505 534,505
Effect of exercise of warrants computed
in accordance with the treasury
stock method (99,441) (99,441) (44,830)
---------- ---------- -----------
Total weighted average common stock
outstanding during the period 6,550,851 6,620,003 8,245,107
========== ========== ===========

Income before taxes $ 354,849 $1,689,963 $12,291,115

Plus: reduction in interest expense
from the conversion of the Convertible
Note 1,660,012 1,859,305 926,248
---------- ---------- -----------

Pro forma income before taxes 2,014,861 3,549,268 13,217,363

Pro forma income tax expense 62,257 301,688 4,599,642
---------- ---------- -----------

Pro forma net income $1,952,604 $3,247,580 $ 8,617,721
========== ========== ===========

Pro forma net income per common share $0.30 $0.49 $1.05
========== ========== ===========

</TABLE>

(1) Pursuant to the Securities and Exchange Commission Staff Accouting Bulletin
No. 83, common stock and common stock equivalents issued at prices below the
assumed intial public offering price per share during the twelve month period
immediately preceding the intial filing date of the Company's Registration
Statement for its public offering have been included as outstanding for all
periods presented prior to the initial public offering.

<PAGE>
EXHIBIT 11.2

CARIBINER INTERNATIONAL, INC.

Computation of Supplementary Pro Forma Net Income Per Common Share

<TABLE>
<CAPTION>
For the year ended
September 30,
------------------------
1995 1996
---------- -----------
<S> <C> <C>

Weighted average common stock outstanding during the period (1) 2,588,689 4,159,182
Common stock issued to repay current & long-term indebtedness (2) 1,718,103 724,677
Conversion of Convertible Note into shares of preferred stock and
the subsequent conversion of such shares into shares
of Common Stock 2,055,000 2,055,000
Conversion of all outstanding shares of preferred stock into shares
of Common Stock 1,541,250 1,541,250
Exercise of warrants 534,505 534,505
Effect of exercise of warrants computed in accordance with the
treasury stock method (99,441) (44,830)
---------- -----------
Total weighted average common stock outstanding during the period 8,338,106 8,969,784
========== ===========

Income before taxes $1,689,963 $12,291,115
Plus: reduction in interest expense from the conversion of the
Convertible Note and repayment of substantially all other
indebtedness from proceeds of the initial public offering 3,321,000 1,915,871
---------- -----------
Pro forma income before taxes 5,010,963 14,206,986
Pro forma income tax expense (365,800) (4,972,445)
---------- -----------
Pro forma net income $4,645,163 $ 9,234,541
========== ===========
Pro forma net income per common share $0.56 $1.03
========== ===========
</TABLE>

(1) Pursuant to the Securities and Exchange Commission Staff Accounting
Bulletin No. 83, common stock and common stock equivalents issued at prices
below the assumed initial public offering price per share during the twelve
month period immediately preceding the initial filing date of the Company's
Registration Statement for its public offering have been included as
outstanding for all periods presented prior to the initial public offering.

(2) Supplementary earnings per share reflects the number of shares of common
stock upon consummation of the initial public offering used to repay
current and long-term indebtedness as if such issuance had occurred at the
beginning of the periods presented.

<PAGE>

EXHIBIT 21

SUBSIDIARIES OF THE COMPANY
---------------------------

Jurisdiction Names Under Which
Subsidiary of Incorporation Subsidiary Does Business
- ---------- ---------------- ------------------------
Ingleby Holding Corp. Delaware

Caribiner, Inc. New York Caribiner Communications
Total Audio Visual Services

Entertainment Trademark New York
Consultants, Inc.

Caribiner Holdings (UK) United Kingdom
Limited

SCH International Limited United Kingdom Spectrum Communications
Mark Wallace Associates (MWA)

<PAGE>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE AUDITED
CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1996 AND THE AUDITED CONSOLIDATED
STATEMENT OF INCOME FOR THE YEAR ENDED SEPTEMBER 30, 1996 OF CARIBINER
INTERNATIONAL, INC. AS SET FORTH IN THIS FORM 10-K AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>

<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> SEP-30-1996
<CASH> 8,432
<SECURITIES> 0
<RECEIVABLES> 36,202
<ALLOWANCES> 305
<INVENTORY> 0
<CURRENT-ASSETS> 57,018
<PP&E> 21,181
<DEPRECIATION> 5,879
<TOTAL-ASSETS> 126,321
<CURRENT-LIABILITIES> 51,567
<BONDS> 0
0
0
<COMMON> 96
<OTHER-SE> 53,381
<TOTAL-LIABILITY-AND-EQUITY> 126,321
<SALES> 148,330
<TOTAL-REVENUES> 148,330
<CGS> 99,797
<TOTAL-COSTS> 99,797
<OTHER-EXPENSES> 34,656
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,585
<INCOME-PRETAX> 12,291
<INCOME-TAX> 4,302
<INCOME-CONTINUING> 12,291
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,989
<EPS-PRIMARY> 0
<EPS-DILUTED> 0

</TABLE>