SNYDER COMMUNICATIONS INC, S-1/A, 1996-08-30

SNYDER COMMUNICATIONS INC
S-1/A, 1996-08-30
BUSINESS SERVICES, NEC

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 30, 1996.

REGISTRATION NO. 333-7495
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

AMENDMENT NO. 3

TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------

SNYDER COMMUNICATIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE
(STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION)

7389
(PRIMARY STANDARD INSTITUTIONAL
CLASSIFICATION CODE NUMBER)

52-1983617
(I.R.S. EMPLOYER
IDENTIFICATION NO.)

BRIAN BENHAIM
6903 ROCKLEDGE DRIVE
15TH FLOOR
BETHESDA, MARYLAND 20817
(301) 571-1236
(NAME, ADDRESS AND TELEPHONE NUMBER
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES AND AGENT FOR SERVICE)
------------------------
Copy to:

THOMAS H. MCCORMICK, ESQ.
SHAW, PITTMAN, POTTS & TROWBRIDGE
2300 N STREET, N.W.
WASHINGTON, D.C. 20037
(202) 663-8000
MICHAEL W. BLAIR, ESQ.
DEBEVOISE & PLIMPTON
875 THIRD AVENUE
NEW YORK, NEW YORK 10022
(212) 909-6000

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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
possible after the effective date of this registration statement.

If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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SNYDER COMMUNICATIONS, INC.

EXPLANATORY NOTE

This registration statement contains a form of prospectus relating to a
United States offering by Snyder Communications, Inc., as well as certain pages
marked X-1 to X-5, which will be used to form a prospectus related to a
concurrent international offering. The prospectuses will be identical except for
such pages. Both prospectuses will be filed with the Securities and Exchange
Commission pursuant to Rule 424(b).
<PAGE> 3

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED AUGUST , 1996
PROSPECTUS

7,800,000 SHARES
SNYDER COMMUNICATIONS, INC. LOGO
COMMON STOCK
------------------------

Of the 7,800,000 shares of Common Stock, par value $.001 per share (the
"Common Stock"), of Snyder Communications, Inc. (together with its directly and
indirectly owned subsidiaries, the "Company" or "Snyder Communications") offered
hereby, 4,038,162 are being offered by the Company and 3,761,838 are being
offered by a stockholder of the Company (the "Selling Stockholder"). Certain
other stockholders of the Company (the "Over-Allotment Selling Stockholders"
and, together with the Selling Stockholder, the "Selling Stockholders") have
granted to the Underwriters options to cover over-allotments, if any. The
Company will not receive any proceeds from the sale of shares of Common Stock by
the Selling Stockholders.

Of the 7,800,000 shares of Common Stock offered hereby, 6,240,000 are being
offered initially in the United States and Canada by the U.S. Underwriters and
1,560,000 shares are being offered initially outside the United States and
Canada by the International Managers. The initial public offering price and the
underwriting discount per share are identical for both Offerings. See
"Underwriting."

Prior to the Offerings, there has been no public market for the Common
Stock. It is currently estimated that the initial public offering price will be
between $14.00 and $16.00 per share. See "Underwriting" for a discussion of
certain factors to be considered in determining the initial public offering
price.

Upon consummation of the Offerings, executive officers, directors and
director nominees will beneficially own 72.4% of the outstanding Common Stock of
the Company (approximately 69.0% if the Underwriters' over-allotment options are
exercised in full) and, if they act in concert, will have the ability to
exercise substantial influence by virtue of their voting power over matters
requiring stockholder action. See "Principal and Selling Stockholders."

The Common Stock has been approved for listing on the New York Stock
Exchange, subject to notice of issuance, under the trading symbol "SNC."

SEE "RISK FACTORS" BEGINNING ON PAGE 11 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SHARES OF COMMON
STOCK OFFERED HEREBY.
------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

<TABLE>
<CAPTION>
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<S> <C> <C> <C> <C>
PRICE TO UNDERWRITING PROCEEDS TO PROCEEDS TO
PUBLIC DISCOUNT(1) COMPANY(2) SELLING STOCKHOLDER
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Per Share...................... $ $ $ $
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Total(3)....................... $ $ $ $
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</TABLE>

(1) The Company, Snyder Marketing Services, Inc., Snyder Communications, L.P.
and the Selling Stockholders have agreed to indemnify the several
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."

(2) Before deducting expenses of the Offerings payable by the Company, estimated
at $2,000,000.

(3) The Over-Allotment Selling Stockholders have granted to the U.S.
Underwriters and the International Managers options, exercisable within 30
days after the date of this Prospectus, to purchase up to 936,000 and
234,000 additional shares of Common Stock, respectively, solely to cover
over-allotments, if any. If such options are exercised in full, the total
Price to Public, Underwriting Discount, Proceeds to Company and Proceeds to
Selling Stockholders will be $ , $ , $ and
$ , respectively. See "Underwriting."
------------------------

The shares of Common Stock are offered by the several Underwriters, subject
to prior sale, when, as and if issued to and accepted by them, and subject to
the approval of certain legal matters by counsel for the Underwriters and to
certain other conditions. The Underwriters reserve the right to withdraw, cancel
or modify such offer and to reject orders in whole or in part. It is expected
that delivery of the shares of Common Stock will be made in New York, New York,
on or about September , 1996.

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MERRILL LYNCH & CO.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
ALLEN & COMPANY
INCORPORATED
MONTGOMERY SECURITIES
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The date of this Prospectus is , 1996.
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INSIDE FRONT COVER OF PROSPECTUS:

GATEFOLD

On facing page (left side): Photographs of the Company's teleservices
associates calling prospective customers, field sales representatives visiting
prospective customers and the WallBoard(R) and sampling pack programs. Centered
above the photographs is the following statement: "Providing outsourced
marketing services, primarily for Fortune 500 companies."

On Gatefold (two pages): On the left side are photographs of the Company's
teleservices associates calling prospective customers, field sales
representatives visiting prospective customers as well as examples of the
Company's different WallBoards(R). On the right side are photographs of the
Company's training facilities and information technology equipment as well as
examples of the Company's sampling pack and WallBoard(R) programs. Centered
beneath the pictures on the gatefold is the following statement: "Snyder
Communications, Inc., a national provider of outsourced marketing services,
designs and implements programs utilizing a range of complementary marketing
services, including field sales, teleservices, WallBoard(R) information
displays, and product sampling. The Company identifies and targets high value
market segments, in addition to general markets, including residential and small
business customers in multicultural markets (using 16 foreign languages); new
and working parents through maternity wards and daycare centers; patients with
heart conditions, arthritis and diabetes, through healthcare providers' offices;
and business executives through corporate aviation terminals."

IN CONNECTION WITH THE OFFERINGS, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK OF
THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

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PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and the financial statements
and notes thereto appearing elsewhere in this Prospectus. Unless otherwise
indicated, all information in this Prospectus (a) assumes no exercise of the
Underwriters' over-allotment options and (b) gives effect to the consummation of
the Reorganization (as defined herein) to be effective on or prior to the
effectiveness of the Offerings. As used herein, the "Company" or "Snyder
Communications" means Snyder Communications, Inc. after giving effect to the
Reorganization, including its directly and indirectly owned subsidiaries. Snyder
Communications, Inc. was formed in June 1996 to be the holding company for
Snyder Communications, L.P., a limited partnership established in 1988 (the
"Partnership") in which Snyder Marketing Services, Inc. ("SMS") is the general
partner. On or prior to the effectiveness of the Offerings, the Company will
consummate the Reorganization, pursuant to which the Company will acquire all of
the limited partnership interests of the Partnership and all of the issued and
outstanding stock of SMS. See "The Company."

THE COMPANY

Snyder Communications is a rapidly growing provider of innovative and high
value-added outsourced marketing services. The Company designs and implements
marketing programs for its clients utilizing a range of complementary marketing
resources, including field sales, teleservices, sponsored wallboard information
displays ("WallBoards(R)") and product sampling. The Company's clients are
primarily Fortune 500 companies with large annual marketing expenditures facing
significant competitive pressures to retain or expand market share. Based on
1995 revenues, the ten largest clients of the Company, listed alphabetically,
were AT&T Communications, Inc., Eastman Kodak Company, Gerber Products Company,
Kellogg U.S.A., Inc., Kraft Foods Inc., Lehn & Fink Products (now a unit of
Reckitt & Colman, Inc.), MCI Telecommunications Corporation, Nestle Beverage
Company, The Prudential Insurance Company of America and Reckitt & Colman, Inc.

The Company enhances the value of its outsourced marketing services by
identifying and targeting high value market segments, in addition to general
markets, in order to increase market share for its clients. For example, the
Company's field sales representatives and teleservices associates have the
capability to market services in 16 foreign languages, in addition to English,
to reach both residential and business customers in multi-cultural markets, as
well as general markets. The Company utilizes its WallBoards(R) and sampling
packs to market products and services through targeted channels of distribution,
including the offices of cardiologists, rheumatologists and orthopedists, and
endocrinologists and diabetologists, to reach patients with heart conditions,
arthritis and diabetes; maternity wards and day care centers to reach new and
working parents; and corporate aviation terminals to reach business executives.
The Company seeks to identify and access market segments with high growth
characteristics.

As of June 30, 1996, the Company employed approximately 900 field sales
representatives operating out of 58 offices in 41 cities, and 445 teleservices
associates providing services from 326 call stations in three call centers. As
of that date, the Company had 11 different WallBoard(R) programs at over 17,000
sites. During 1995, the Company distributed over 3.8 million sampling packs
containing over 75 different product samples, coupons and pieces of literature
of 49 clients of the Company at approximately 20,000 locations.

The Company's revenues increased from $11.7 million in 1994 to $42.9
million in 1995, and from $14.0 million in the first six months of 1995 to $34.9
million in the first six months of 1996. Net income, as adjusted to reflect a
pro forma provision for income taxes, as if the Company were subject to
corporate income taxes and to eliminate certain non-recurring compensation in
1995, grew from $1.2 million in the first six months of 1995 to $2.5 million in
the first six months of 1996.

Consumer Markets

In its Consumer Markets division, established in 1993, the Company provides
outsourced marketing services to AT&T Communications, Inc. ("AT&T"). Using
face-to-face field sales, including event marketing, and teleservices, the
Company markets AT&T long-distance telecommunications services to residential
customers. The Company began marketing AT&T services using its field sales force
in February 1994. The

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Company expanded this relationship to add teleservices capabilities in the
second quarter of 1996. The revenues generated by AT&T have grown from $1.7
million in 1994 to $25.0 million in 1995.

The Company, jointly with AT&T, develops sales and marketing programs
designed to enroll residential long-distance telecommunications customers for
AT&T. The Company is principally responsible for implementation of substantially
all aspects of the marketing initiatives it develops with AT&T ("turn-key"
programs). The Company develops lists of potential customers to be contacted;
creates marketing materials, including customer applications; hires, trains and
supervises its sales representatives and teleservices associates to market AT&T
services; and monitors the effectiveness of its programs. The Company's turn-key
approach differentiates it from other marketing services firms, which generally
merely implement a client's marketing strategy using contact lists provided by
the client.

The Company targets multi-cultural markets as well as general consumer
markets throughout the United States, seeking in particular to secure customers
who AT&T believes would be high-value subscribers. To reach multi-cultural
markets, the Company develops demographic databases identifying potential
customers in such communities and employs field sales representatives and
teleservices associates who are capable of marketing services in a prospective
customer's native language as well as in English. The Company also develops and
distributes sales literature and collateral documents in these languages. In
addition, in marketing services to these multi-cultural communities, the Company
has developed databases of information on specialized demographic segments,
which the Company intends to use in the future to market products and services
for additional clients.

Relying primarily on its existing infrastructure and capabilities, the
Company believes that it will be able to expand the clients and industries
served by its Consumer Markets division. The Company recently entered into an
agreement to provide marketing and sales services for the online computer
service of Prodigy Services Company ("Prodigy"), using field sales, including
event marketing, and other marketing services. In August 1996, the Company
entered into two contracts with Foundation Health, a California Health Plan
("Foundation Health"), to market and sell memberships in certain managed health
care plans to residential customers in designated areas using the Company's
field sales (including event marketing), teleservices and other marketing
services.

Business Markets

In its Business Markets division, established in late 1994, the Company
provides marketing and sales services to MCI Telecommunications Corporation
("MCI"), targeting small business customers in general and multi-cultural
markets throughout the United States. Using both field sales and teleservices,
the Company seeks to enroll long-distance business customers for MCI. As in the
Consumer Markets division, the Company offers MCI turn-key marketing initiatives
and is principally responsible for the implementation of such initiatives.

The Company's Business Markets operations are separate from its Consumer
Markets operations. This separation helps to ensure confidentiality for the
Company's clients that operate in the same industry and permits the Company to
perform services targeted at different markets for different clients. The two
divisions have separate offices, separate field sales forces and teleservices
personnel, separate management (including senior management) and separate
demographic databases.

The Company believes that it will be able to market the capabilities that
it has developed in the Business Markets division to attract new clients in
other industries. In August 1996, the Company entered into a contract with
Lucent Technologies, BCS ("Lucent") to market and sell certain Lucent
telecommunications equipment to business customers throughout the United States
using the Company's field sales, inbound and outbound teleservices and other
marketing services.

Marketing Services

The Marketing Services division, established in 1988, specializes in two
services that provide the Company's clients with targeted channels of
distribution: the WallBoard(R) and sampling pack programs. The

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Company's WallBoard(R) or "magazine-on-the-wall" is a sponsored information
center encased in a 42X30 or 57X30 oak or mahogany frame which highlights an
exclusive sponsor and provides educational, editorial and product information
addressed specifically to the needs of the target audience. As of June 30, 1996,
the Company had 11 different WallBoard(R) programs at over 17,000 sites, in
which 44 clients of the Company participate. Each sponsor pays the Company an
annual amount for participation in the service. Locations displaying
WallBoards(R) generally do so under two- or three-year exclusive agreements with
the Company, with automatic renewal provisions. Participation in the
WallBoard(R) program is provided free of charge to the doctors' offices, child
care centers, hospitals and other locations at which the WallBoards(R) are
displayed. The Company identifies locations for its WallBoards(R) that will
reach specific high-value audiences targeted by the WallBoard(R) programs'
sponsors. For example, at June 30, 1996 the Company had WallBoards(R) in the
offices of approximately 1,200 cardiologists, 700 rheumatologists and
orthopedists, and 600 endocrinologists and diabetologists, which are utilized by
drug companies, medical product companies and other sponsors interested in
reaching the patients of such doctors. Similarly, at June 30, 1996 the Company
had WallBoards(R) in approximately 12,000 child care centers, which are utilized
by sponsors seeking to reach new parents and dual-income families.

The Company also designs, develops and delivers sampling packs, to provide
targeted distribution of sponsors' product samples, coupons and literature to
potentially high-value customers. These programs differ from mass sampling
programs which distribute large numbers of samples into the general market. The
Company designs colorful boxes containing a variety of nationally recognized
product samples, coupons and literature of particular relevance to the target
audiences at a time when the audiences are most likely to use the items included
in the pack. At June 30, 1996, the Company offered six exclusive programs. Based
on contracts with locations in effect at that date the Company expects to
distribute in 1996: (1) the Your Kids Parents Pack(TM), to parents through day
care providers at approximately 16,600 child care centers; (2) the Diabetes
Pack(TM), to patients through approximately 2,700 endocrinologists and
diabetologists; (3) the Heart Pack(TM), to patients through approximately 2,000
cardiologists; (4) the Arthritis Pack(TM), to patients through approximately
1,700 rheumatologists and orthopedists; (5) the New Member Kit for Men(TM); and
(6) the New Member Kit for Women(TM), together with the New Member Kit for
Men(TM), to new members at approximately 1,000 health and fitness clubs. The
Company implements most of its sampling programs in cooperation with a leading
association in the targeted channel of distribution, specifically, the National
Child Care Association, the American Heart Association, the Arthritis Foundation
and the American Diabetes Association. The Company has two- and three-year
exclusive contracts to be the sole provider of sampling packs to locations
(i.e., child care centers, doctors' offices and health and fitness clubs)
through which the sampling packs are distributed.

The Company retains The Gallup Organization, Market Facts and Audits &
Surveys to provide research to assess the impact of participation in the
WallBoard(R) and sampling pack programs. The research organizations determine
for sponsors the extent to which their products and literature reach the target
audience and conduct studies designed to help measure the efficacy of the
programs.

RISK FACTORS

There are important risks associated with the Company's business, financial
results and ability to implement its growth strategy. These risks include (i)
the Company's current reliance on AT&T, which accounted for 59% of its 1995
revenues, and on other major clients; (ii) the Company's ability to sustain and
manage future growth; (iii) the Company's dependence on industry trends toward
outsourcing of marketing services; (iv) risks associated with the Company's
contracts; (v) the dependence of the Company's success on its executive officers
and other key employees, in particular Daniel M. Snyder, its President, Chief
Executive Officer and Chairman of the Board of Directors; and (vi) the possible
impact of certain government regulations on the Company's operations. Before
purchasing shares of Common Stock offered hereby, prospective investors should
consider carefully all of the information set forth in this Prospectus
including, in particular, the information set forth under "Risk Factors."

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OUTSOURCING AND DEMOGRAPHIC TRENDS

The market for the field sales and telephone-based marketing services
provided by the Company has grown principally as a result of the increased
outsourcing of such services by large organizations in order to supplement their
internal marketing capabilities. Outsourcers can provide several advantages over
a company acting alone, including the ability to reach special, hard-to-locate
audiences; the ability to augment internal sales forces to gain market share
more quickly; the avoidance of infrastructure costs, such as opening new sales
offices; the opportunity to act quickly by utilizing the outsourcers' marketing
channels that could take months or years to develop internally; and the
opportunity to pay only for quantifiable results. The Company believes that
sellers of products and services will increasingly integrate outsourcers, such
as the Company, into their overall marketing strategies.

The Company seeks to identify and access markets with high growth
characteristics. The Company expects that the multi-cultural communities which
it targets primarily through its Consumer Markets and Business Markets divisions
will grow significantly in the coming years. For example, in February 1996, the
U.S. Bureau of the Census (the "Census Bureau") projected, based in part on 1990
census data, that the Hispanic and Asian/Pacific Islander communities in the
United States were comprised in 1995 of approximately 26.9 million and
approximately 9.4 million people, respectively, and would grow approximately 53%
and approximately 63%, respectively, by 2010. In contrast, the Census Bureau
projected at that time, based in part on 1990 census data that the general
population in the United States would grow approximately 13% by 2010. Similarly,
at that time, the Census Bureau projected, based in part on 1990 census data,
that the 50 years or older population in the United States was comprised of
approximately 68.3 million people in 1995, and would grow approximately 41% by
2010. The Company believes that many of its programs in its Marketing Services
division are in locations that are often used by people who are 50 years or
older.

GROWTH STRATEGY

The Company recently has experienced significant growth. The Company
increased the number of its field sales offices from 25 offices located in 23
cities at the end of 1994, the first year in which the Company conducted field
sales operations in both its Consumer Markets and Business Markets divisions, to
58 offices located in 41 cities at June 30, 1996. The Company also increased the
number of teleservices personnel from 177 persons working from one call center
at the end of 1995, to 445 persons working from three call centers at June 30,
1996. In its Marketing Services division, the Company increased its WallBoard(R)
programs from six different programs highlighting 11 clients at December 31,
1993, to 11 different programs highlighting 44 clients at June 30, 1996. The
Company also increased its sampling pack programs from two sampling pack
programs with 16 sponsors distributed through over 13,000 locations at the end
of 1993, to six sampling pack programs with 37 sponsors expected by the Company
to be distributed to approximately 24,000 locations in 1996 based on contracts
with locations in effect at June 30, 1996.

The Company believes that its targeted marketing strategy and
multi-cultural capabilities are adaptable to serve additional needs of existing
clients and the needs of new clients in other industries. The Company
anticipates that its existing infrastructure of offices, management, supervisory
and training personnel, and teleservices capabilities can accommodate additional
clients in each operating division.

The Company's commitment to continued growth through internal expansion and
complementary acquisitions is evidenced by the following:

Consumer Markets

- The Company is adding approximately 80 call stations, which it expects
will be operating by late 1996, to its existing 300 call stations in this
division.

- In June 1996, the Company expanded its relationship with AT&T by entering
into a new agreement with AT&T Communications (U.K.) Ltd. ("AT&T (U.K.)"),
to market long-distance telecommunications services to residential
customers based in the United Kingdom. As part of this expansion, the

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Company intends to add one call center and one or more field sales offices
in the United Kingdom in 1997.

- The Company entered into a contract with Prodigy in June 1996, to provide
marketing and sales services for Prodigy's online service to residential
customers, using the Company's field sales, including event marketing, and
other marketing services.

- In August 1996, the Company entered into two contracts with Foundation
Health to market and sell memberships in certain managed health care plans
to residential customers in designated areas using the Company's field
sales (including event marketing), teleservices and other marketing
services.

Business Markets

- In August 1996, the Company entered into an agreement with Lucent to
market and sell certain Lucent telecommunications equipment to business
customers throughout the United States using the Company's field sales,
inbound and outbound teleservices and other marketing services.

- The Company also seeks to add additional inbound telephone-based sales in
its Business Markets division.

Marketing Services

- The Company increased the number of sales managers and executives in this
division from five as of December 31, 1993 to approximately 20 as of June
30, 1996, to take advantage of opportunities to expand the services
offered to existing clients and to develop new lines of business.

- The Company has recently developed, in conjunction with Hoechst Marion
Roussel, Inc. (formerly Marion Merrill Dow) ("Hoechst Marion Roussel"),
its Allergy Health WallBoard,(R) of which Hoechst Marion Roussel is the
exclusive client sponsor under a three-year contract with the Company. The
Company currently has contracts with approximately 600 allergists' and
otolaryngologists' offices in which the Allergy Health WallBoard(R) will
be located beginning in the fourth quarter of 1996.

- Since January 1996, the Company has developed three additional new
WallBoard(R) programs: the Women's Wellness WallBoard(R), which will be
located in obstetrics' and gynecologists' offices; the Caring
WallBoard(R), which will be located in oncologists' offices and oncology
treatment centers; and the New Home WallBoard(R), which will be located in
real estate offices throughout the United States. The Company anticipates
that it will begin distributing WallBoards(R) through these new programs
by January 1997. The Company does not currently have any contractual
commitments with locations in which these new WallBoard(R) programs will
be located and there can be no assurance that it will be successful in its
efforts to secure such contracts.

- In May 1996, the Company acquired from RD Publications, Inc., an
affiliate of Readers Digest Association Incorporated, a "new member"
health club sampling pack program through which it expects to distribute
approximately 735,000 health club member kits to new members at
approximately 1,000 health and fitness clubs during the second half of
1996.

The Company also intends to pursue strategic acquisitions of companies that
offer complementary services or expand the geographic markets served by the
Company. Although the Company has no agreements, understandings or arrangements
with respect to any particular acquisition opportunities, it believes that the
fragmentation in the marketing services industry will result in consolidation,
providing opportunities for the Company to pursue selectively domestic and
international complementary acquisitions.

BACKGROUND OF THE COMPANY

Snyder Communications, Inc. was formed in June 1996 to be the holding
company for Snyder Communications, L.P., a limited partnership established in
1988, in which SMS is the corporate general partner. On or prior to the
effectiveness of the Offerings, the Company will consummate the Reorganization,
pursuant to which the Company will acquire all of the limited partnership
interests of the Partnership and all

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of the issued and outstanding stock of SMS. Each 1% interest in the Partnership
will be exchanged, directly by the limited partners of the Partnership or
indirectly by the stockholders of SMS, for 294,584 shares of the Company's
Common Stock resulting in 29,458,400 aggregate shares issued in exchange for
100% of the Partnership.

Prior to the Reorganization, the Partnership intends to distribute to its
partners, including SMS, its then cash balance in one or more distributions
(collectively, the "Distribution"), and SMS intends to distribute to its
stockholders its then cash balance in one or more distributions. The amount of
the Distribution by the Partnership between July 1, 1996 and the date of the
Offerings is not expected to exceed $10.0 million. The Partnership distributed
approximately $3.9 million in the aggregate to its limited partners and, through
SMS, to the SMS stockholders in 1995 and approximately $8.6 million in the
aggregate to date in 1996 (of which approximately $2.7 million was a non-cash
distribution), as a return on their respective investments and to allow them to
pay their income tax liability. See "Certain Transactions." The Partnership's
partners and the SMS stockholders are liable for the income tax payable with
respect to the Company's operations for periods through the date of the
Reorganization. See "The Company."

THE OFFERINGS

Of the 7,800,000 shares of Common Stock, par value $.001 per share, offered
hereby, 6,240,000 shares of the Common Stock are being offered initially in the
United States and Canada (the "U.S. Offering") and 1,560,000 shares of the
Common Stock are being offered initially outside the United States and Canada
(the "International Offering"). The U.S. Offering and the International Offering
are collectively referred to herein as the "Offerings."

Common Stock offered by:

<TABLE>
<S> <C>
The Company................................... 4,038,162 shares
The Selling Stockholder....................... 3,761,838 shares
Common Stock to be outstanding after the
Offerings(a)..................................... 33,496,562 shares
Use of Proceeds.................................... The estimated net proceeds to be
received by the Company of
approximately $54.6 million will be
used to repay certain indebtedness,
provide working capital and for
general corporate purposes, which
may include expansion of its
facilities, hiring additional sales
and marketing personnel, capital
expenditures and acquisitions. See
"Use of Proceeds."
Proposed New York Stock Exchange symbol............ SNC
</TABLE>

- ---------------
(a) Does not include (i) approximately 2.4 million shares of Common Stock
reserved for issuance upon exercise of outstanding options which are
exercisable at the initial public offering price per share, and (ii)
approximately 2.6 million shares of Common Stock available for future
issuance under the Company's Stock Option Plan. See "Management -- Stock
Option Plan."

8
<PAGE> 11

SUMMARY FINANCIAL AND OPERATING DATA
(IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA)

<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED JUNE 30,
---------------------------------------------------------- -------------------------
1991 1992 1993 1994 1995 1995 1996
----------- ----------- ------ ------- ----------- ----------- -----------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues.................. $ 2,747 $ 4,056 $9,043 $11,740 $ 42,892 $ 13,981 $ 34,861
Operating expenses
(excluding compensation
to SMS
stockholders)(a)........ 2,564 3,424 8,458 9,989 34,694 11,816 30,205
Compensation to SMS
stockholders(a)......... -- -- -- -- 4,424 -- --
----------- ----------- ------ ------- ----------- ----------- -----------
Income from operations.... 183 632 585 1,751 3,774 2,165 4,656
Interest
expense--substantially
all to related
parties................. (330) (407) (314) (296) (784) (215) (552)
Interest income........... 5 5 7 20 198 12 97
----------- ----------- ------ ------- ----------- ----------- -----------
Income (loss) before
taxes................... (142) 230 278 1,475 3,188 1,962 4,201
SMS income tax provision
(benefit)............... -- -- 15 85 (245) 383 58
----------- ----------- ------ ------- ----------- ----------- -----------
Net income (loss)......... $ (142) $ 230 $ 263 $ 1,390 $ 3,433 $ 1,579 $ 4,143
=========== =========== ====== ======== ============ ============ ============
Pro forma income data
(unaudited):
Historical income before
income taxes as
reported................ $ 3,188 $ 1,962 $ 4,201
Pro forma adjustment for
compensation to SMS
stockholders(a)......... 4,424 -- --
----------- ----------- -----------
Pro forma income before
income taxes............ $ 7,612 $ 1,962 $ 4,201
============ ============ ============
Pro forma income tax
provision(b)............ 3,021 779 1,681
----------- ----------- -----------
Pro forma net
income(a)(b)............ $ 4,591 $ 1,183 $ 2,520
============ ============ ============
Pro forma net income
per share(c)............ $ 0.15 $ 0.04 $ 0.08
============ ============ ============
Pro forma weighted average
number of shares
outstanding(c).......... 30,207,057 30,207,057 30,207,057

PRO FORMA, AS ADJUSTED, INCOME STATEMENT DATA (UNAUDITED):
Interest expense(d)..................................................... $ 41 $ 15 $ 29
Net income(e)........................................................... 5,038 1,304 2,834
Net income per share(e)(f).............................................. 0.15 0.04 0.08
Weighted average shares outstanding(f).................................. 33,496,562 33,496,562 33,496,562
</TABLE>

<TABLE>
<CAPTION>
AS OF JUNE 30, 1996
-------------------------
PRO FORMA,
ACTUAL AS ADJUSTED(G)
------- --------------
(UNAUDITED)
<S> <C> <C>
BALANCE SHEET DATA:
Working capital (deficit)..................................................... $(5,680) $ 41,620
Total assets.................................................................. 12,300 59,109
Long-term debt, less current maturities....................................... 5,906 677
Equity (deficit).............................................................. (5,537) 46,685
</TABLE>

Continued on next page

9
<PAGE> 12

<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF
-------------------------------- JUNE 30,
1993 1994 1995 1996
------ ------ ------ --------
<S> <C> <C> <C> <C>
SELECTED OPERATING DATA (UNAUDITED):
Number of field sales offices.................. -- 25 55 58
Number of call stations........................ -- -- 90 326
Number of teleservices associates.............. -- -- 177 445
Number of WallBoard(R) programs................ 6 8 9 11
Number of sampling packs distributed (in
millions).................................... 2.6(h) 2.6(h) 3.8(h) (i)
Number of sampling pack locations (in
thousands)................................... 13.1 14.8 20.0 (i)
Number of sampling pack programs............... 2 2 4 6
Number of WallBoard(R) and sampling pack
sponsors(j).................................. 25 32 68 64
</TABLE>

- ---------------
(a) Certain employees of the Company also served as officers of SMS, the
corporate general partner of the Partnership, for which such employees
received compensation from SMS in 1995, which is treated as non-recurring.
The pro forma adjustment gives effect to the elimination in 1995 of this
non-recurring compensation based on compensation levels for the Company, as
approved by its Board of Directors. Following consummation of the
Reorganization, such officers will not be required to perform any
comparable duties or responsibilities for SMS. Further, other costs are not
likely to be incurred which would offset the impact of this pro forma
adjustment. Therefore, such compensation is treated as non-recurring. See
Note 12 to the Company's Combined Financial Statements.

(b) Prior to the Offerings, the Company's principal operations were not subject
to Federal or state corporate income taxes. The income statement data for
the year ended December 31, 1995 and the six-month periods ended June 30,
1995 and 1996 reflects a pro forma provision for income taxes as if all
operations of the Company were subject to Federal and state corporate income
taxes. The pro forma provision for income taxes represents an effective
combined Federal and state tax rate of approximately 39.7% for the year
ending December 31, 1995, and the six months ended June 30, 1995, and 40.0%
for the six months ended June 30, 1996. See "The Company" and Notes 6 and 12
to the Company's Combined Financial Statements.

(c) Prior to the Reorganization, the Partnership intends to distribute to its
partners, including SMS, its then cash balance in one or more
distributions, and SMS intends to distribute to its stockholders its then
cash balance in one or more distributions. The amount of the Distribution
by the Partnership between July 1, 1996 and the date of the Offerings is
not expected to exceed $10.0 million in the aggregate. Pro forma net income
per share information assumes that 748,657 of the shares being offered by
the Company hereby were outstanding during the periods indicated. This
represents the approximate number of shares of Common Stock that the
Company would need to issue (at an assumed initial public offering price of
$15.00 per share, which is the mid-point of the initial public offering
price range), to fund the payment of the distribution in excess of earnings
to the Partnership's existing partners. See "The Company" and Note 2 to the
Company's Combined Financial Statements.

(d) Adjusted to give effect to reduction of interest expense associated with the
repayment of the Company's 12.25% subordinated debentures with a portion of
the proceeds from the Offerings. See "Use of Proceeds."

(e) Pro forma, as adjusted, net income and pro forma net income per share give
effect to an adjustment to reflect the elimination of the non-recurring
compensation to certain SMS stockholders (see (a) above) and a pro forma
provision for Federal and state corporate income taxes. Pro forma, as
adjusted, net income and pro forma net income per share do not give effect
to the non-recurring prepayment penalties and other expenses expected to be
incurred upon the early retirement of the 12.25% subordinated debentures.
This charge to income is estimated to be $2.1 million ($1.3 million net of
income taxes).

(f) Pro forma, as adjusted, net income per share has been calculated based on
the weighted average number of shares of common stock outstanding during
the periods plus the shares of Common Stock issued in the Offerings.

(g) Adjusted to give effect to the distribution of the Partnership's cash
balance existing at the date of such distribution ($1.3 million at June 30,
1996) to its existing partners, the recording of a net deferred tax asset,
the sale of the shares issued by the Company in the Offerings (at an assumed
initial public offering price at the mid-point of the initial public
offering price range set forth on the cover page of this Prospectus) and the
application of the estimated net proceeds therefrom as set forth under "Use
of Proceeds." See Note 12 to the Company's Combined Financial Statements.

(h) Represents sampling packs distributed during the years ended December 31,
1993, 1994 and 1995, respectively.

(i) As of June 30, 1996, the Company had contracts with clients to distribute
approximately 4.5 million sampling packs during 1996. As of the same date,
the Company had contracts with approximately 24,000 locations to distribute
such packs.

(j) A number of the Company's clients participate in both the WallBoard(R) and
sampling pack programs.

10
<PAGE> 13

RISK FACTORS

In addition to the other information set forth in this Prospectus, the
following risk factors should be considered carefully in evaluating the Company
and its business before purchasing any of the shares of Common Stock offered
hereby.

RELIANCE ON AT&T

Currently, AT&T is the Company's largest client, accounting for 17% of the
Company's revenues in 1994, 59% in 1995 and 56% in the first six months of 1996.
The contract with AT&T does not contain specific performance criteria, but
instead provides for varying payments depending on the type of customer enrolled
by the Company. In addition, under the contract, the Company is precluded from
concurrently selling similar telecommunications services for competitors of AT&T
to U.S.-based residential customers who either speak foreign languages or are
English speakers who consider foreign countries their home (the "Foreign-Origin
Consumer Market"). See "Business -- Services -- Consumer Markets."

The Company's contract with AT&T runs through December 1997, subject to
AT&T's right to seek to renew the contract upon terms mutually agreeable to AT&T
and the Company. The Company's arrangement with AT&T relating to field sales
marketing services performed by the Company for AT&T with respect to U.S.
residential customers who are not part of the Foreign-Origin Consumer Market
(the "Domestic Consumer Market") is not reflected in a formal contract. The
Company has provided such marketing services to AT&T since September 1995,
initially through a program that expired in December 1995. Since the expiration
of that program the Company has continued to provide such marketing services to
AT&T. The Company anticipates that this arrangement will continue through
December 1996. In the first six months of 1996, services performed by the
Company for AT&T in the Domestic Consumer Market accounted for approximately 21%
of the Company's total revenues.

The Company anticipates that as the expiration of the AT&T relationship
nears, it will enter into negotiations with AT&T regarding extending the
relationship. The loss of AT&T as a client, or any significant portion of the
services provided to AT&T, would have a material adverse effect on the Company.
If such negotiations were to prove unsuccessful, the Company anticipates that it
would enter into negotiations with other companies, including with other
telecommunications companies, to utilize the resources currently devoted to AT&T
(although under the terms of the AT&T contract it could not enter into such
negotiations with other telecommunications companies for services targeting the
Foreign-Origin Consumer Market until thirty days after the expiration of the
AT&T contract). The Company also anticipates that the deregulation of the U.S.
telecommunications industry by 1998, pursuant to the Telecommunications Act of
1996, and the competitive environment that will result therefrom, would provide
it with opportunities to service other telecommunications businesses. There can
be no assurance, however, that the Company would be able to find clients that
would generate the same amount of revenues or profitability of business as does
AT&T. See "Business -- Services -- Consumer Markets."

RELIANCE ON OTHER MAJOR CLIENTS

In addition to AT&T, the Company has a number of other significant clients.
Based on 1995 revenues, the nine largest clients of the Company after AT&T,
listed alphabetically, are Eastman Kodak Company, Gerber Products Company,
Kellogg U.S.A., Inc., Kraft Foods Inc., Lehn & Fink Products (now a unit of
Reckitt & Colman, Inc.), MCI Telecommunications Corporation, Nestle Beverage
Company, The Prudential Insurance Company of America and Reckitt & Colman, Inc.
Each of these nine clients generated revenues ranging from approximately 1% to
8% of the Company's total revenues in 1995. In the first six months of 1996, MCI
accounted for approximately 25% of the Company's revenues. The Company does not
believe that revenues from an individual client for a particular period are
necessarily indicative of revenues from that client for the entire year. The
loss of MCI as a client would have a material adverse effect on the Company. All
of the clients named above currently have contracts with the Company of at least
one year and, in some cases, multi-year duration, with renewal options. The
contract with MCI can be terminated by MCI upon 90 days' notice to the Company.
Each of these contracts contains product exclusivity, which precludes the
Company from providing similar services for competing products. Accordingly, if
any such client were to terminate or

11
<PAGE> 14

not renew its contract with the Company, the Company could potentially replace
its business with that of a competitor of such client. If, however, the Company
were to lose any of these clients and be unable to replace its business with a
competitor or otherwise, it could have a material adverse effect on the Company.
See "Business -- Services."

MANAGEMENT OF GROWTH

The Company has experienced rapid growth over the past several years.
Continued growth depends in significant part on the Company's ability to
successfully utilize its existing infrastructure and databases to perform
services for other clients, as well as on the Company's ability to develop and
successfully implement new marketing methods or channels for new services for
existing and new clients. Continued growth will also depend on a number of other
factors, including the Company's ability to (i) maintain the high quality of the
services it provides to customers and to increase its penetration with existing
customers, (ii) recruit, motivate and retain qualified personnel, (iii) train
existing sales representatives or recruit new sales representatives on an
economic basis to sell different categories of services or products and (iv)
open new field sales offices and new call centers in a timely and economic
fashion. The Company's continued growth also will require the implementation of
enhanced operational and financial systems, will require additional management,
operational and financial resources and could place a strain on the Company's
operations and resources. There can be no assurance that the Company will be
able to manage its expanding operations effectively or that it will be able to
maintain its growth. If the Company is unable to manage growth effectively, its
business, results of operations or financial condition could be materially
adversely affected. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business -- Growth Strategy."

GROWTH THROUGH ACQUISITIONS; INTERNATIONAL EXPANSION

Among other growth strategies, the Company plans to expand its business
through complementary acquisitions. There can be no assurance that the Company
will have sufficient capital resources to pursue this aspect of its growth
strategy. Additionally, there can be no assurance that the Company will
successfully identify, complete or integrate acquisitions or that any
acquisitions will perform as expected or will contribute significant revenues or
profits to the Company. The Company has also recently expanded its business to
the United Kingdom. There can be no assurance that this or any other
international expansion will generate revenues or profits for the Company. Any
new international operation, including the United Kingdom operation, would be
subject to currency fluctuations and other risks, including adverse developments
in the foreign political and economic environment, difficulties in staffing and
managing foreign operations and potentially adverse tax consequences. There can
be no assurance that one or more of these factors will not have a material
adverse effect on the Company's international operations.

DEPENDENCE ON TREND TOWARD OUTSOURCING

The Company's business and growth depend in large part on the trend toward
outsourcing of marketing services. The Company is dependent on outsourcing from
telecommunications company clients, in particular AT&T. There can be no
assurance that this trend in outsourcing will continue, as companies may elect
to perform such services internally. A significant change in the direction of
this trend, or a trend in the telecommunications industry not to use, or reduce
the use of, outsourced marketing services, such as those provided by the
Company, would have a material adverse effect on the Company. See
"Business -- Industry Overview."

RISKS ASSOCIATED WITH THE COMPANY'S CONTRACTS

Although the Company currently seeks to sign multi-year contracts with its
clients, the Company's contracts do not assure the Company a specific level of
revenues and do not designate the Company as the client's exclusive marketing
services provider. The Company believes maintaining satisfactory relationships
with its clients has a more significant impact on the Company's revenues than
the specific terms of its client contracts. In the Marketing Services division,
the majority of the Company's contracts with clients are annual contracts with
terms that expire by the end of 1996. There can be no assurance that the clients
will renew or

12
<PAGE> 15

extend such contracts. In addition, the Company's contracts with MCI and certain
other significant clients are terminable by its clients on relatively short
notice, and all of the Company's significant contracts prohibit the Company from
providing services to a direct competitor of a client that are identical or
similar to the services the Company provides to such client during the term of
such contract and in some cases up to ninety days thereafter. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
"Business -- Growth Strategy" and "-- Services."

The Company's Marketing Services division depends significantly on its
ability to establish and maintain relationships with sponsors and affiliations
with industry associations. A significant reduction in the Company's ability to
establish relationships with additional sponsors or associations, or in renewal
rates on the Company's contracts with existing sponsors or associations, could
have a material adverse effect on the Company. See
"Business -- Services -- Marketing Services."

COMPETITIVE AND FRAGMENTED INDUSTRY; POTENTIAL CONSUMER SATURATION

The industry in which the Company competes is highly competitive and
fragmented. The Company competes with providers of other forms of advertising
and marketing media, such as direct mail, television, radio and other
advertising media. The Company also competes with the internal marketing
capabilities of clients and prospective clients. The Company's largest clients,
AT&T and MCI, have significant internal teleservices and field force marketing
capabilities and also contract for these services from competitors of the
Company. The Company competes as well with other marketing services firms,
ranging in size from very small firms offering special applications or
short-term projects to large independent firms. A number of competitors have
capabilities and resources equal to, or greater than, the Company's. There can
be no assurance that, as the Company's industry continues to evolve, additional
competitors with greater resources than the Company will not enter the industry
(or particular segments of the industry) or that the Company's clients will not
choose to conduct more of their targeted marketing services internally or
through alternative marketing media. See "Business -- Competition."

Moreover, the effectiveness of marketing by telephone could also decrease
as a result of consumer saturation and increased consumer resistance to this
marketing method. Although the Company intends to monitor industry trends and
respond accordingly, there can be no assurance that the Company will be able to
anticipate and successfully respond to such trends in a timely manner. See
"Business."

DEPENDENCE ON LABOR FORCE

The Company's industry is very labor intensive and experiences high
personnel turnover. Many of the Company's employees receive hourly wages plus
commissions, if earned. A significant number of the Company's employees,
including all of its teleservices associates, are employed on a part-time basis.
A higher turnover rate among the Company's employees would increase the
Company's recruiting and training costs and decrease operating efficiencies and
productivity. The Company's operations, particularly direct sales and
teleservices, require specially trained employees, such as those employees who
market services and products in languages other than English. Growth in the
Company's business will require it to recruit and train qualified personnel at
an accelerated rate from time to time. There can be no assurance that the
Company will be able to continue to hire, train and retain a sufficient labor
force of qualified employees, particularly bilingual employees. A significant
portion of the Company's costs consists of wages to hourly workers. In August
1996, the United States Congress passed and the President signed legislation
(H.R. 3448) which will increase the minimum wage 90 cents over two years;
beginning on October 1, 1996, the minimum wage will increase from $4.25 to $4.75
per hour and on September 1, 1997 will increase to $5.15 per hour. Although the
Company compensates most of its workforce above the minimum wage and therefore
will not be directly impacted by the legislation, the increase in the minimum
wage may have the effect of inflating wages among hourly workers generally in
the marketplace and, in turn, the prevailing wage for employees performing
services for the Company. An increase in hourly wages, costs of employee
benefits, employment taxes or commission rates could have a material adverse
effect on the Company. See "Business -- Hiring and Training" and "-- Employees."

13
<PAGE> 16

RELIANCE ON TECHNOLOGY; RISK OF BUSINESS INTERRUPTION

The Company has invested significantly in sophisticated and specialized
telecommunications and computer technology and has focused on the application of
this technology to provide customized solutions to meet many of its clients'
needs. In addition, the Company has invested significantly in sophisticated
end-user databases and software that enable it to market its clients' products
to targeted markets. The Company anticipates that it will be necessary to
continue to select, invest in and develop new and enhanced technology and
end-user databases on a timely basis in the future in order to maintain its
competitiveness. In addition, the Company's business is highly dependent on its
computer and telephone equipment and software systems, and the temporary or
permanent loss of such equipment or systems, through casualty or operating
malfunction, or a significant increase in the cost of telephone services that is
not recoverable through an increase in the price of the Company's services,
could have a material adverse effect on the Company's business. The Company's
property and business interruption insurance may not adequately compensate the
Company for all losses that it may incur in any such event.

DEPENDENCE ON KEY PERSONNEL

The success of the Company depends in large part upon the abilities and
continued service of its executive officers and other key employees,
particularly Mr. Daniel M. Snyder, President, Chief Executive Officer and
Chairman of the Board of Directors. There can be no assurance that the Company
will be able to retain the services of such officers and employees. The failure
of the Company to retain the services of Mr. Snyder and other key personnel
could have a material adverse effect on the Company. The Company has employment
agreements with certain executive officers, including Mr. Snyder, and also has
non-competition agreements with certain key personnel, including each of its
executive officers. However, courts are at times reluctant to enforce such
non-competition agreements. The Company maintains a key person insurance policy
on Mr. Snyder. In order to support its growth, the Company will be required to
recruit effectively, hire, train and retain additional qualified management
personnel. The inability of the Company to attract and retain the necessary
personnel could have a material adverse effect on the Company. See
"Management -- Employment Agreements."

GOVERNMENT REGULATION

The Company's business is subject to various Federal and state laws and
regulations. Certain portions of the Company's industry have become subject to
an increasing amount of Federal and state regulation in the past five years. The
Federal Communications Commission's (the "FCC") rules under the Federal
Telephone Consumer Protection Act of 1991 limit the hours during which
telemarketers may call consumers and prohibit the use of automated telephone
dialing equipment to call certain telephone numbers. The Federal Telemarketing
and Consumer Fraud and Abuse Prevention Act of 1994 (the "TCFAPA") broadly
authorizes the Federal Trade Commission (the "FTC") to issue regulations
prohibiting misrepresentation in telephone sales. In August 1995, the FTC issued
regulations under the TCFAPA which, among other things, require telemarketers to
make certain disclosures when soliciting sales. The Company believes its
operating procedures comply with the telephone solicitation rules of the FCC and
FTC. However, there can be no assurance that additional Federal or state
legislation, or changes in regulatory implementation, would not limit the
activities of the Company or its clients in the future or significantly increase
the cost of regulatory compliance.

A number of states have enacted or are considering enacting legislation to
regulate telephone and door-to-door solicitations. For example, telephone sales
in certain states cannot be final unless a written contract is delivered to and
signed by the buyer and may be canceled within three business days.

Several of the industries in which the Company's clients operate are
subject to varying degrees of government regulations, particularly the
telecommunications industries. Generally, compliance with these regulations is
the responsibility of the Company's clients. However, the Company could be
subject to a variety of enforcement or private actions for its failure or the
failure of its clients to comply with such regulations.

14
<PAGE> 17

One of the significant regulations of the FCC applicable to long distance
carriers, such as AT&T and MCI, prohibits the unauthorized switching of
subscribers' long distance carriers, also known in the industry as "slamming." A
fine of up to $100,000 may be imposed by the FCC for each instance of slamming.
In order to prevent unauthorized switches, federal law requires that switches
authorized over the telephone, such as through the Company's teleservices, be
verified contemporaneously by a third party. The Company believes its procedures
comply with this third-party verification requirement.

In the past, third-party verification has not been required for switches
obtained in person, such as those obtained by members of the Company's field
sales force. However, effective August 1, 1996, the Company became subject to
third-party verification procedures for switches obtained by the Company's field
sales force in its Business Markets division for MCI. The Company's training and
other procedures are designed to prevent unauthorized switching. However, as
with any field sales force, the Company cannot completely ensure that each
employee will always follow the Company's mandated procedures. Accordingly, it
is possible, and perhaps probable, that employees may in some instances engage
in unauthorized activities, including "slamming." In view of its recent rapid
growth in its field sales force, the Company in the second quarter of 1996 began
to institute additional protective safeguards against the occurrence of
unauthorized activities. Such new safeguards include the institution of an
additional level of field sales supervisors who oversee the activities of the
field sales force. This effort was led by a new director, previously employed by
AT&T for 19 years, with extensive experience in field sales, who was hired by
the Company for this purpose. During the course of her review of the field sales
force operations, the director recommended that two district managers be
terminated as well as certain of their subordinates. Such persons immediately
were terminated in March 1996. During this period, two additional district
managers and certain of their subordinates voluntarily left the employ of the
Company for unspecified reasons. The terminated district managers alleged that
persons in districts other than theirs were engaged in unauthorized activities.
The Company investigated such allegations but concluded that no other
terminations were warranted. The Company is unable to quantify what effect, if
any, any unauthorized activities, if they did occur, may have had on the
financial performance of the Company in 1995. The Company investigates customer
complaints reported to it by its telecommunications clients and reports the
results to its clients. To the Company's knowledge, no FCC complaint has been
brought against any of its clients as a result of the Company's services,
although the Company believes that the FCC is examining the sales activities of
long distance telecommunications providers, including the Company's clients and
the activities of outside vendors, such as the Company, used by such providers.
If any complaints were brought, the Company's client might assert that such
complaints constituted a breach of its agreement with the Company and, if
material, seek to terminate the contract. Any termination would be likely to
have a material adverse effect upon the Company's business. If such complaints
resulted in fines being assessed against a client of the Company, the client
could seek to recover such fines from the Company. Any amounts recovered from
the Company would reduce the Company's net income.

In addition, on June 21, 1996 MCI and the FCC entered into a consent
decree, under which MCI agreed to institute third-party verification procedures
for most small-business customer marketing not currently covered by third-party
verification, including field sales marketing of small-business customers. The
Company provides field sales marketing services to small-business customers on
behalf of MCI, and became subject to third-party verification of switches
obtained by the Company's field sales force for MCI effective August 1, 1996.
The Company expects that the implementation of such third-party verification
will increase the Company's costs to some extent, but does not expect the
implementation of such third-party verification to have a material adverse
effect on the Company's operations.

POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING RESULTS; SEASONALITY

The Company could experience quarterly variations in revenues and operating
income as a result of many factors, including the timing of clients' marketing
campaigns, the implementation of new products or services, the timing of
additional selling efforts and the general and administrative expenses to
acquire and support such new business and changes in the Company's revenue mix
among its various service offerings. In connection with certain contracts, the
Company could incur costs in periods prior to recognizing revenue under those
contracts. In addition, the Company must plan its operating expenditures based
on revenue forecasts, and a

15
<PAGE> 18

revenue shortfall below such forecast in any quarter would be likely to affect
adversely the Company's operating results for that quarter. Historically,
seasonal variations in the Company's business have been overshadowed by the
Company's growth. The Company expects that in the future its sales will reflect
seasonal effects in the first and third quarters due to weather related impact
on the field sales force and the impact on the Company's teleservices operations
of the decreased ability to reach potential customers as a result of summer
vacations. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

NO PRIOR PUBLIC MARKET; POTENTIAL VOLATILITY OF STOCK PRICE

Prior to the Offerings there has been no public market for the Common
Stock. Although the Common Stock has been approved for listing on the New York
Stock Exchange, subject to notice of issuance, there can be no assurance that an
active trading market for the Common Stock will develop or be sustained
following the Offerings. The initial public offering price of the Common Stock
offered hereby will be determined by negotiations among the Company, the Selling
Stockholder and the Representatives of the Underwriters and may bear no
relationship to the trading prices of the Common Stock after the Offerings. See
"Underwriting." The trading price of the Common Stock could be subject to
significant fluctuations in response to actual or anticipated variations in the
Company's quarterly operating results and other factors, such as the
introduction of new services or technologies by the Company or its competitors,
changes in other conditions or trends in the Company's industry or in the
industries of any of the Company's significant clients, changes in governmental
regulations, changes in securities analysts' estimates of the Company's, or its
competitors' or industry's, future performance or general market conditions. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Quarterly Results." General market price declines or market
volatility in the future, or future declines or volatility in the prices of
stocks for companies in the Company's industry or sector, could also affect the
market price of the Common Stock.

SHARES ELIGIBLE FOR FUTURE SALE; REGISTRATION RIGHTS

A substantial number of shares of Common Stock will become available for
sale in the public market at various times following the completion of the
Offerings. No prediction can be made as to the effect, if any, that market sales
or the availability of shares for future market sales will have on the market
price of the Common Stock. Sales of a substantial number of shares of Common
Stock in the public market following the Offerings could adversely affect the
market price for the Company's Common Stock and the ability of the Company to
raise additional capital through sales of additional shares of Common Stock.
Upon completion of the Offerings, the Company will have outstanding an aggregate
of 33,496,562 shares of Common Stock. The Common Stock offered hereby will be
freely tradeable (other than by an "affiliate" of the Company as such term is
defined in the Securities Act of 1933, as amended (the "Securities Act"))
without restriction or registration under the Securities Act. All remaining
shares may be sold under Rule 144 under the Securities Act, subject to the
volume, manner of sale and other restrictions of Rule 144. The Company, the
Selling Stockholder and the Company's other stockholders have agreed, subject to
exceptions for certain pledges and, in the case of the Company, the grant of
employee stock options, not to, directly or indirectly, sell, offer to sell,
grant any option for the sale of, or otherwise dispose of, any capital stock of
the Company or any security convertible or exchangeable into, or exercisable
for, such capital stock, or, in the case of the Company, file any registration
statement with respect to any of the foregoing (other than a registration
statement on Form S-8 to register shares issuable upon exercise of employee
stock options), for a period of 180 days after the date of this Prospectus,
without the prior written consent of Merrill Lynch & Co. Pursuant to an
agreement, Mr. Daniel M. Snyder and certain of the Company's other stockholders
are entitled to certain registration rights with respect to their shares of
Common Stock. If such stockholders, by exercising such registration rights upon
expiration of the lock-up agreement described above, cause a large number of
shares to be registered and sold in the public market, such sales could have an
adverse effect on the market price of the Common Stock. In addition, the Company
intends to file a registration statement under the Securities Act to register
initially an aggregate of five million shares of Common Stock reserved for
issuance in connection with the Company's Stock Option Plan (as defined herein).
The issuance of such shares upon exercise of any options granted under such plan
would result in the dilution of the voting power of the Common Stock purchased
in the Offerings and could have a dilutive effect on earnings per share. See
"Management -- Stock Option Plan," "Description of Capital Stock," "Shares
Eligible for Future Sale" and "Underwriting."

16
<PAGE> 19

CONTROL BY PRINCIPAL STOCKHOLDERS

Following completion of the Offerings, Mr. Daniel M. Snyder, the Chairman
of the Board of Directors, President and Chief Executive Officer of the Company,
and Ms. Michele D. Snyder, Vice Chairman, Chief Operating Officer, and a
director of the Company, will beneficially own approximately 32.0% and 11.2%,
respectively, of the outstanding shares of Common Stock (approximately 30.5% and
10.7% respectively, if the Underwriters' over-allotment options are exercised in
full). As a result, Mr. Snyder individually, and he and Ms. Snyder if they act
in concert, will have the ability to exercise substantial influence over the
Company's business by virtue of their voting power with respect to the election
of directors and all other matters requiring action by stockholders. Such
concentration of share ownership may have the effect of discouraging, delaying
or preventing a change in control of the Company. See "Management" and
"Principal and Selling Stockholders."

EFFECT OF CERTAIN CHARTER AND BYLAW PROVISIONS

The Company's Certificate of Incorporation and Bylaws contain certain
provisions that could discourage potential takeover attempts and make attempts
by the Company's stockholders to change management more difficult. Such
provisions include the requirement that the Company's stockholders follow an
advance notification procedure for certain shareholder nominations of candidates
for the Board of Directors and for new business to be conducted at any meeting
of the stockholders. In addition, the Certificate of Incorporation allows the
Board of Directors to issue up to five million shares of preferred stock and to
fix the rights, privileges and preferences of those shares without any further
vote or action by the stockholders. The rights of the holders of Common Stock
will be subject to, and may be adversely affected by, the rights of the holders
of any preferred shares that may be issued by the Company in the future. While
the Company has no present intention to issue any shares of preferred stock, any
such issuance could have the effect of making it more difficult for a third
party to acquire a majority of the outstanding voting stock of the Company. In
addition, the Company is subject to certain anti-takeover provisions of the
Delaware General Business Corporation Law, which could have effect of
discouraging, delaying or preventing a change of control of the Company. See
"Description of Capital Stock -- Certain Charter Provisions."

DILUTION

Investors purchasing shares of Common Stock in the Offerings will
experience immediate and substantial dilution of $13.63 in the net tangible book
value per share of Common Stock from an assumed initial public offering price at
the mid-point of the range set forth on the cover page of this Prospectus.
Additional dilution may result from the exercise of outstanding employee stock
options. See "Dilution."

17
<PAGE> 20

THE COMPANY

Snyder Communications is a rapidly growing provider of innovative and high
value-added outsourced marketing services. The Company designs and implements
marketing programs for its clients utilizing a range of complementary marketing
resources, including field sales, teleservices, WallBoards(R) and product
sampling. The Company's clients are primarily Fortune 500 companies with large
annual marketing expenditures facing significant competitive pressures to retain
or expand market share. Based on 1995 revenues, the ten largest clients of the
Company, listed alphabetically, were AT&T Communications, Inc., Eastman Kodak
Company, Gerber Products Company, Kellogg U.S.A., Inc., Kraft Foods Inc., Lehn &
Fink Products (now a unit of Reckitt & Colman, Inc.), MCI Telecommunications
Corporation, Nestle Beverage Company, The Prudential Insurance Company of
America and Reckitt & Colman, Inc.

The Company's revenues increased from $11.7 million in 1994 to $42.9
million in 1995, and from $14.0 million in the first six months of 1995 to $34.9
million in the first six months of 1996. Net income, as adjusted to reflect a
pro forma provision for income taxes, as if the Company were subject to
corporate income taxes, and to eliminate certain non-recurring compensation in
1995, grew from $1.2 million in the first six months of 1995 to $2.5 million in
the first six months of 1996.

Snyder Communications, Inc. was formed in June 1996 to be the holding
company for Snyder Communications, L.P. The Partnership was established in 1988
as a limited partnership in which SMS, formerly known as Snyder Communications,
Inc., was the general partner, and a Delaware limited partnership beneficially
owned by Mr. Mortimer B. Zuckerman and Mr. Fred Drasner, Chairman and President,
respectively, of U.S. News & World Report, L.P., was the sole limited partner
(the "Original Limited Partner"). Prior to the consummation of the
Reorganization (as defined below), SMS will be owned by Mr. Daniel M. Snyder,
Ms. Michele D. Snyder, Dr. Anthony O. Roberts and SMS Employee Stock Ownership
Fund ("SMS ESOF"). In May 1995, the Partnership completed a private placement of
12.25% subordinated debentures (the "Debentures") and limited partnership
interests to certain investors, including Allen & Company Incorporated, certain
officers and related persons of Allen & Company Incorporated, and certain other
investors (collectively, the "1995 Investors"), through which the 1995 Investors
became additional limited partners. See "Certain Transactions" and "Principal
and Selling Stockholders."

On or prior to the effectiveness of the Offerings, the Company will
consummate a reorganization (the "Reorganization") pursuant to which the Company
will acquire all of the limited partnership interests of the Partnership and all
of the issued and outstanding stock of SMS. Each 1% interest in the Partnership
will be exchanged, directly by the limited partners of the Partnership or
indirectly by the stockholders of SMS, for 294,584 shares of the Company's
Common Stock resulting in 29,458,400 aggregate shares issued in exchange for
100% of the Partnership. Upon consummation of the Reorganization, the Company
will own all of the limited partnership interests of the Partnership and all of
the issued and outstanding stock of SMS, the corporate general partner of the
Partnership, and thus, effectively, 100% of the Partnership.

18
<PAGE> 21

Prior to the Reorganization, the Partnership intends to distribute to its
partners, including SMS, its then cash balance in one or more distributions, and
SMS intends to distribute to its stockholders its then cash balance in one or
more distributions. The amount of the Distribution by the Partnership between
July 1, 1996 and the date of the Offerings is not expected to exceed $10.0
million. The Partnership distributed approximately $3.9 million in the aggregate
to its limited partners and, through SMS, to the SMS stockholders in 1995 and
approximately $8.6 million in the aggregate to date in 1996 (of which
approximately $2.7 million was a non-cash distribution), as a return on their
respective investments and to allow them to pay their income tax liability. See
"Certain Transactions." The Partnership's partners and the SMS stockholders are
liable for the income tax payable with respect to the Company's operations for
periods through the date of the Reorganization.

The Company's principal executive office is located at Two Democracy
Center, 6903 Rockledge Drive, Fifteenth Floor, Bethesda, Maryland 20817, and its
telephone number is (301) 468-1010.

19
<PAGE> 22

USE OF PROCEEDS

The net proceeds to be received by the Company from the Offerings are
estimated to be approximately $54.6 million, based on an assumed initial public
offering price of $15.00 per share, which is the mid-point of the initial public
offering price range set forth on the cover page of this Prospectus. The Company
will not receive any proceeds from the sale of the shares of Common Stock by the
Selling Stockholders (including any shares sold pursuant to the Underwriters'
over-allotment options). See "Principal and Selling Stockholders."

The Company intends to use approximately $7.1 million of the net proceeds
of the Offerings to repay in full the Company's Debentures, including accrued
and unpaid interest thereon, as of June 30, 1996, which were issued to the 1995
Investors on May 18, 1995, mature on December 31, 2001 and bear interest at a
fixed rate of 12.25% per annum. As of June 30, 1996, the outstanding principal
amount of the Debentures was $6.0 million, and accrued and unpaid interest
totaled $183,750. During the year ending May 18, 1997, the terms of the
Debentures permit prepayment of the principal at 115% of face value, plus
accrued and unpaid interest. The balance of the net proceeds will be used for
working capital and general corporate purposes, which may include expansion of
the Company's facilities, including the expansion of the Company's call centers
in Bethesda, Maryland, the establishment of the Company's call center in the
United Kingdom, the establishment of an executive office in the United Kingdom
and the establishment of additional field sales offices, expansion of the
Company's sales and marketing personnel, capital expenditures, and strategic
acquisitions of complementary businesses. The Company has not entered into any
agreements or understandings nor is it currently engaged in any negotiations or
discussions with respect to any acquisitions. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources" and "Business -- Growth Strategy."

Pending application of the net proceeds as described above, the Company
intends to invest the net proceeds in short-term, interest-bearing investment
grade securities.

DIVIDEND POLICY

The Company currently intends to retain future earnings to finance its
growth and development and therefore does not anticipate paying any cash
dividends in the foreseeable future. Payment of any future dividends will depend
upon the future earnings and capital requirements of the Company and other
factors which the Board of Directors considers appropriate.

20
<PAGE> 23

CAPITALIZATION

The following table sets forth the combined capitalization of the Company
(i) at June 30, 1996, (ii) at June 30, 1996 after giving pro forma effect to the
Reorganization, certain related transactions and the Distribution and (iii) at
June 30, 1996 as further adjusted to reflect the issuance of and the use of the
estimated net proceeds from the sale of the 4,038,162 shares of Common Stock
offered by the Company hereby (at an assumed initial public offering price of
$15.00 per share which is the mid-point of the initial public offering price
range set forth on the cover page of this Prospectus and after deduction of
underwriting discounts and estimated offering expenses). See "Use of Proceeds."
This table should be read in conjunction with the Company's Combined Financial
Statements and notes thereto appearing elsewhere in this Prospectus.

<TABLE>
<CAPTION>
AT JUNE 30, 1996
-----------------------------------
PRO FORMA,
ACTUAL PRO FORMA AS ADJUSTED
------- --------- -----------
(IN THOUSANDS)
<S> <C> <C> <C>
Current portion of notes payable and obligations under capital
leases...................................................... $ 401 $ 401 $ 401
======= ======== =========
Long-term debt, less current maturities(a).................... $ 5,906 $ 5,906 $ 678
Equity:
Preferred stock, none authorized, actual; $.001 par value
per share, 5 million shares authorized, none issued and
outstanding, pro forma and pro forma as adjusted....... -- -- --
Common stock, no stated par value, 3,000 shares
authorized, actual; $.001 par value per share, 120
million shares authorized, pro forma and pro forma as
adjusted; 2,000 shares issued and outstanding, actual;
29,458,400 shares issued and outstanding, pro forma;
and 33,496,562 shares issued and outstanding, pro forma
as adjusted(b)......................................... 1 30 34
Additional paid-in capital(c)............................ 1,360 (6,711) 47,920
Retained earnings (deficit)(c)(d)........................ (4,829) -- (1,269)
Limited partners' (deficit)(c)........................... (2,068) -- --
------- --------- -----------
Total equity (deficit).............................. (5,536) (6,681) 46,685
------- --------- -----------
Total capitalization (deficit)................. $ 370 $ (775) $47,363
======= ======== =========
</TABLE>

- ---------------
(a) Represents obligations under capital leases and the Debentures.

(b) Does not include approximately 2.4 million shares of Common Stock reserved
for issuance upon exercise of outstanding options. See "Management -- Stock
Option Plan."

(c) In connection with the Reorganization, the retained earnings and limited
partners' deficit balances will be reclassified to additional paid-in
capital. The pro forma additional paid-in capital balance also reflects the
planned Distribution by the Partnership of its cash balance to its existing
partners prior to the Offerings. The Company's cash balance at June 30,
1996 was $1.3 million. The amount of the Distribution by the Partnership
between July 1, 1996 and the date of the Offerings is not expected to
exceed $10.0 million. See "The Company."

(d) Pro forma, as adjusted retained earnings represents the after-tax effect of
prepayment penalties ($0.5 million) and the write-off of unamortized
discount and issuance costs ($0.8 million) associated with the repayment of
the Debentures. See "Use of Proceeds."

21
<PAGE> 24

DILUTION

The net tangible book value (deficit) of the Company at June 30, 1996,
after giving effect to the Reorganization but prior to the Distribution, was
approximately $(6.1 million), or $(0.21) per share of Common Stock. Net tangible
book value per share represents the amount of total tangible assets less total
liabilities, divided by the number of shares of Common Stock outstanding. After
giving effect to the Reorganization, certain related transactions and the
Distribution, the pro forma net tangible book value (deficit) of the Company at
June 30, 1996 would have been approximately $(7.4 million) or $(0.25) per share
of Common Stock.

Net tangible book value dilution per share represents the difference
between the amount paid by purchasers of shares of Common Stock in the Offerings
and the pro forma net tangible book value per share of Common Stock immediately
after completion of the Offerings. After giving effect to the sale of the shares
of Common Stock offered by the Company hereby at an assumed initial public
offering price of $15.00 per share, which is the mid-point of the initial public
offering price range set forth on the cover page of this Prospectus, and the
application by the Company of the estimated net proceeds to the Company
therefrom, the pro forma net tangible book value of the Company as of June 30,
1996 would have been approximately $46.0 million or $1.37 per share. This
represents an immediate increase in pro forma net tangible book value of $1.62
per share to existing stockholders and an immediate dilution of $13.63 per share
to new stockholders purchasing shares of Common Stock in the Offerings. The
following table illustrates this dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share........... $15.00
Net tangible book value per share at June 30, 1996
after giving effect to the Reorganization and
certain related transactions, but prior to the
Distribution....................................... (0.21)
Decrease per share attributable to the
Distribution....................................... (0.04)
Increase per share attributable to new
stockholders....................................... 1.62
--------
Pro forma as adjusted net tangible book value per share
after the Offerings..................................... 1.37
------
Net tangible book value per share dilution to new
stockholders............................................ $13.63
======
</TABLE>

The following table sets forth, after giving effect to the Reorganization,
the number of shares of Common Stock purchased from the Company, the total cash
consideration paid for such shares and the average consideration paid per share
by the officers, directors, director nominees or beneficial owners of 10% or
greater of the outstanding Common Stock of the Company and by new investors. The
following computations assume an initial public offering price of $15.00 per
share, which is the mid-point of the initial public offering price range, before
deducting the underwriting discount and estimated offering expenses.

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
--------------------- ----------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- ------- ------------ ------- -------------
<S> <C> <C> <C> <C> <C>
Officers, directors, director nominees
and 10% beneficial owners(a).......... 28,010,372 78.2% $ 150,500 0.1% $ 0.01
New investors........................... 7,800,000 21.8 117,000,000 99.9 15.00
---------- ------- ------------ ------- -------------
Total(b)...................... 35,810,372 100.0% $117,150,500 100.0%
========= ===== =========== =====
</TABLE>

- ---------------
(a) Officers, directors, director nominees and 10% beneficial owners own, in the
aggregate, 95.1% of the outstanding shares of Common Stock prior to the
Offerings.

(b) Does not include shares of Common Stock purchased by existing stockholders
who are not officers, directors, director nominees or beneficial owners of
10% or greater of the outstanding Common Stock of the Company or options to
acquire 300,000 shares of Common Stock which are vested and currently
exercisable with an exercise price equal to the initial public offering
price. See "Management -- Stock Option Plan."

22
<PAGE> 25

SELECTED FINANCIAL AND OPERATING DATA
(IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA)

The following table sets forth selected financial and operating data as of
and for each of the years in the five-year period ended December 31, 1995, and
for the six months ended June 30, 1995 and 1996. The table also sets forth pro
forma income statement data for the year ended December 31, 1995 and the six
month periods ended June 30, 1995 and 1996 after giving effect to Federal and
state income taxes and the elimination in 1995 of certain non-recurring
compensation expense. The historical income statement data and balance sheet
data for and as of each of the years in the three-year period ended December 31,
1995, are derived from the audited Combined Financial Statements of the Company.
The income statement and balance sheet data for and as of each of the years in
the two-year period ended December 31, 1992 and each of the six month periods
ended June 30, 1995 and June 30, 1996, are derived from the unaudited Combined
Financial Statements of the Company and in the opinion of Management include all
adjustments (consisting of normal and recurring adjustments) which are necessary
to present fairly the results of operation and financial position of the Company
for the periods and at the dates presented. The selected financial and operating
data for the six months ended June 30, 1996 are not necessarily indicative of
the results to be expected for the full year. The following selected financial
and operating data should be read in conjunction with "Capitalization,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," the Combined Financial Statements and notes thereto included
elsewhere in this Prospectus.

<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED JUNE 30,
------------------------------------------------------- --------------------------
1991 1992 1993 1994 1995 1995 1996
------- ------- ------- ------- ----------- ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues................................. $ 2,747 $ 4,056 $ 9,043 $11,740 $ 42,892 $ 13,981 $ 34,861
Operating expenses (excluding
compensation to SMS stockholders)(a)... 2,564 3,424 8,458 9,989 34,694 11,816 30,205
Compensation to SMS stockholders(a)...... -- -- -- -- 4,424 -- --
------- ------- ------- ------- ----------- ----------- -----------
Income from operations................... 183 632 585 1,751 3,774 2,165 4,656
Interest expense--substantially all to
related parties........................ (330) (407) (314) (296) (784) (215) (552)
Interest income.......................... 5 5 7 20 198 12 97
------- ------- ------- ------- ----------- ----------- -----------
Income (loss) before taxes............... (142) 230 278 1,475 3,188 1,962 4,201
SMS income tax provision (benefit)....... -- -- 15 85 (245) 383 58
------- ------- ------- ------- ----------- ----------- -----------
Net income (loss)........................ $ (142) $ 230 $ 263 $ 1,390 $ 3,433 $ 1,579 $ 4,143
======== ======== ======== ======== ============ ============ ============
Pro forma income data (unaudited):
Historical income before income taxes as
reported............................... $ 3,188 $ 1,962 $ 4,201
Pro forma adjustment for compensation to
SMS stockholders(a).................... 4,424 -- --
----------- ----------- -----------
Pro forma income before income taxes..... 7,612 1,962 4,201
Pro forma income tax provision(b)........ 3,021 779 1,681
----------- ----------- -----------
Pro forma net income(a)(b)............... $ 4,591 $ 1,183 $ 2,520
============ ============ ============
Pro forma net income per share(c)........ $ 0.15 $ 0.04 $ 0.08
============ ============ ============
Pro forma weighted average number of
shares outstanding(c).................. 30,207,057 30,207,057 30,207,057
</TABLE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31,
--------------------------------------------------- AS OF
1991 1992 1993 1994 1995 JUNE 30, 1996
------- ------- ------- ------- ------- --------------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital (deficit).......................... $(2,146) $(1,214) $(1,802) $(1,509) $(1,564) $ (5,680)
Total assets....................................... 798 1,402 2,320 3,673 13,027 12,300
Long-term debt, less current maturities............ 2,426 3,234 2,638 2,057 5,460 5,906
Equity (deficit)................................... (3,983) (3,422) (3,235) (1,866) (1,050) (5,537)
</TABLE>

See Notes to Selected Financial and Operating Data

23
<PAGE> 26

<TABLE>
<CAPTION>
AS OF DECEMBER 31,
-------------------------------- AS OF
1993 1994 1995 JUNE 30, 1996
------ ------ ------ -------------
<S> <C> <C> <C> <C>
SELECTED OPERATING DATA (UNAUDITED):
Number of field sales offices............... -- 25 55 58
Number of call stations..................... -- -- 90 326
Number of teleservices associates........... -- -- 177 445
Number of WallBoard(R) programs............. 6 8 9 11
Number of sampling packs distributed (in
millions)................................. 2.6(d) 2.6(d) 3.8(d) (e)
Number of sampling pack locations (in
thousands)................................ 13.1 14.8 20.0 (e)
Number of sampling pack programs............ 2 2 4 6
Number of WallBoard(R) and sampling pack
sponsors(f)............................... 25 32 68 64
</TABLE>

- ---------------
(a) Certain employees of the Company also served as officers of SMS, the
corporate general partner of the Partnership, for which such employees
received compensation from SMS in 1995, which is treated as non-recurring.
The pro forma adjustment gives effect to the elimination in 1995 of this
non-recurring compensation based on compensation levels for the Company, as
approved by its Board of Directors. Following consummation of the
Reorganization, such officers will not be required to perform any comparable
duties or responsibilities for SMS. Further, other costs are not likely to
be incurred which would offset the impact of this pro forma adjustment.
Therefore, such compensation is treated as non-recurring. See Note 12 to the
Company's Combined Financial Statements.

(b) Prior to the Offerings, the Company's principal operations were not subject
to Federal or state corporate income taxes. The income statement data for
the year ended December 31, 1995 and the six-month periods ended June 30,
1995 and 1996 reflects a pro forma provision for income taxes as if all
operations of the Company were subject to Federal and state corporate income
taxes. The pro forma provision for income taxes represents an effective
combined Federal and state tax rate of approximately 39.7% for the year
ending December 31, 1995 and the six months ended June 30, 1995, and 40.0%
for the six months ended June 30, 1996. See "The Company" and Notes 6 and 12
to the Company's Combined Financial Statements.

(c) Prior to the Reorganization, the Partnership intends to distribute to its
partners, including SMS, its then cash balance in one or more
distributions, and SMS intends to distribute to its stockholders its then
cash balance in one or more distributions. The amount of the Distribution
by the Partnership between July 1, 1996 and the date of the Offerings is
not expected to exceed $10.0 million in the aggregate. Pro forma net income
per share information assumes that 748,657 of the shares being offered by
the Company hereby were outstanding during the periods indicated. This
represents the approximate number of shares of Common Stock that the
Company would need to issue (at an assumed initial public offering price of
$15.00 per share, which is the mid-point of the initial public offering
price range) to fund the payment of the Distribution in excess of earnings
to the Partnership's existing partners. See "The Company" and Note 2 to the
Combined Financial Statements.

(d) Represents sampling packs distributed during the years ended December 31,
1993, 1994 and 1995, respectively.

(e) As of June 30, 1996, the Company had contracts with clients to distribute
approximately 4.5 million sampling packs during 1996. As of the same date,
the Company had contracts with approximately 24,000 locations to distribute
such packs.

(f) A number of the Company's clients participate in both the WallBoard(R) and
sampling pack programs.

24
<PAGE> 27

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

The following discussion of the Company's historical results of operations
and of its liquidity and capital resources should be read in conjunction with
the Selected Financial and Operating Data of the Company and the Combined
Financial Statements of the Company and related notes thereto included elsewhere
in this Prospectus.

The Company was established in 1988 as a limited partnership between SMS,
as the general partner, and the Original Limited Partner. See "The Company." The
Company's primary business in 1988 was its WallBoard(R) programs. In 1991, the
Company began to develop sampling pack programs for target markets, and in 1993
initiated its field sales services in its Consumer Markets division. In late
1994, the Company began its Business Markets division utilizing, first, field
sales and, soon thereafter, teleservices. Teleservices were added to its
Consumer Markets division in the second quarter of 1996.

The Company's revenues have grown from $2.7 million in 1991 to $42.9
million in 1995. Virtually all of the growth in the Company's revenues during
such period and during the six months ended June 30, 1996, is attributable to
internal growth in the volume of services provided, rather than price increases
or acquisitions. In 1995, revenues from field sales in the Company's Consumer
Markets division contributed more than half of the Company's total revenues.
Revenues from the Company's Business Markets division contributed less than ten
percent of total revenues in 1995, although revenues in this new division grew
successively in each quarter of 1995 and continued their substantial growth into
1996. In 1995 revenues from the Company's WallBoard(R) programs were slightly
higher than revenues from its sampling pack programs, but the growth in revenues
from sampling programs during 1995 was greater than the growth in WallBoard(R)
revenues.

The Company's growth through 1992 was attributable to the introduction,
development and expansion of new WallBoard(R) and sampling pack programs in its
Marketing Services division. This business grew significantly in 1993 and
continued to grow in subsequent years, modestly in 1994 and more substantially
in 1995.

The Company's rapid growth in 1995 and the first six months of 1996 is
primarily the result of the Company's expansion into field sales. The Company
provided targeted field sales services on a modest scale in 1993 and the
beginning of 1994. In the latter part of 1994, the Company entered into a
contract with AT&T under which the Company provided field sales services,
selling telecommunications services to residential customers in selected
multi-cultural markets and general markets. As a result of AT&T's satisfaction
with the Company's services, this client expanded the scope of the Company's
efforts in 1995. Revenues from services provided to AT&T increased from $1.7
million in 1994 to $25.0 million in 1995, and from $6.6 million in the first six
months of 1995 to $19.7 million in the first six months of 1996. In late 1994
and in 1995, the Company established a significant field sales force in its
Consumer Markets division and opened 29 offices by the end of 1995. The Company
has continued in 1996 to add staff, including more field sales supervisors and
senior executives, to improve the quality of the field sales force, training
programs and support systems to allow for the continued expansion of its
existing services and the possible introduction of additional clients in the
Consumer Markets Division. These increases, especially the addition of a
significant number of field sales supervisors, have increased the cost of
services and have adversely affected operating margins in recent periods. The
Company anticipates that its continued build-up of infrastructure to accommodate
anticipated growth may adversely affect operating margins in future periods. See
"-- Quarterly Results." In the second quarter of 1996, the Company added
outbound teleservices in its Consumer Markets division.

In the latter half of 1994, the Company also began to market
business-to-business telecommunications services on behalf of MCI by developing
separate field sales and teleservices in its Business Markets division. As in
its Consumer Markets division, the Company has, to date, added new staff,
locations and systems to allow for the expansion of services to MCI and the
introduction of new clients. Outbound teleservices were added in the Business
Markets division in the second quarter of 1995. Both the field sales and
teleservices components of the Business Markets division grew continuously
throughout 1995 and through June 30, 1996.

25
<PAGE> 28

RESULTS OF OPERATIONS

In its Consumer Markets and Business Markets divisions, the Company
receives revenues from clients to which it provides field and teleservices sales
and marketing services based on both the number of accepted subscribers and the
type of services sold. The Company typically receives a fixed dollar amount per
subscriber. Revenues related to such sales are recognized on the date that the
application for service is accepted by the Company's telecommunications clients.
In its Marketing Services division, the Company is paid by sponsors in its
WallBoard(R) and product sampling programs in installments, generally quarterly
or semi-annually, over the term of the contract under which services are
rendered, which is generally one year.

Cost of services consists of all costs specifically associated with client
programs, such as salary, commissions and benefits paid to personnel, including
senior executive officers associated with specific divisions, inventory,
payments to third-party vendors and systems and other support facilities
specifically associated with client programs.

Selling, general and administrative expense is primarily comprised of costs
associated with the Company's centralized staff functions, such as financial,
accounting, human resources and personnel costs of senior executive officers not
specifically associated with any single division.

Prior to the Reorganization, the Company's principal operations have not
been subject to entity level Federal or state corporate income taxes. Further,
in addition to compensation paid by the Partnership to Mr. Daniel M. Snyder, Ms.
Michele D. Snyder and Mr. Gerald S. Snyder, SMS, the corporate general partner
of the Partnership, paid compensation to the same three individuals for services
performed for that entity. Because the financial statements of SMS and the
Partnership are combined, the compensation paid in 1995 by SMS is included in
the Combined Financial Statements of the Company even though no such
compensation will be paid in 1996 or in the future following the Reorganization
and the Offerings. Accordingly, such amount is separately set forth in the
Combined Financial Statements of the Company as "Compensation to stockholders of
SMS" and is characterized as a non-recurring charge. Pro forma net income for
the year ended December 31, 1995 and for the six-month periods ended June 30,
1995 and 1996 is adjusted for income taxes as if the Company had been treated as
a C corporation and reflects the elimination in 1995 of the non-recurring charge
of $4.4 million related to compensation paid to certain stockholders of SMS. The
Company expects to recognize a net deferred income tax asset of $137,000 at the
time of the Reorganization which will increase net income by that amount in that
period. In addition, the Company intends to use a portion of the net proceeds
from the Offerings to repay all amounts due under the Debentures. See "Use of
Proceeds." Early retirement of the Debentures will result in an extraordinary
charge to income estimated to be $2.1 million ($1.3 million net of income
taxes), determined as of June 30, 1996, representing prepayment penalties plus
the write-off of unamortized discount and debt issuance costs.

26
<PAGE> 29

The following sets forth, for the periods indicated, certain components of
the Company's operating statement data, including such data as a percentage of
revenues.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
---------------------------------------------------- ----------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1993 1994 1995 1995 1996
-------------- --------------- --------------- --------------- ---------------
(UNAUDITED)
(DOLLARS IN THOUSANDS)
Revenues..................... $9,043 100.0% $11,740 100.0% $42,892 100.0% $13,981 100.0% $34,861 100.0%
Operating expenses:
Cost of services......... 5,455 60.3 6,464 55.1 27,480 64.1 9,046 64.7 23,634 67.8
Selling, general and
administrative
expenses............... 3,003 33.2 3,525 30.0 7,214 16.8 2,770 19.8 6,571 18.8
Compensation to SMS
stockholders............... -- -- 4,424 10.3 -- --
------ ----- ------- ----- ------- ----- ------- ----- ------- -----
Income from operations....... 585 6.5 1,751 14.9 3,774 8.8 2,165 15.5 4,656 13.4
Interest expense............. (314) (3.5) (296) (2.5) (784) (1.8) (215) (1.5) (552) (1.6)
Interest income.............. 7 0.1 20 0.2 198 0.5 12 0.1 97 0.3
------ ------- ------- ------- -------
Income before taxes.......... 278 3.1 1,475 12.6 3,188 7.4 1,962 14.0 4,201 12.1
SMS income tax provision
(benefit).................. 15 0.2 85 0.7 (245) (0.6) 383 2.7 58 0.2
------ ------- ------- ------- -------
Net income................... $ 263 2.9% $ 1,390 11.8% $ 3,433 8.0% $ 1,579 11.3% $ 4,143 11.9%
====== ======== ======== ======== ========
Pro forma income data
(unaudited):
Historical income before
income taxes as
reported............... $ 3,188 7.4% $ 1,962 14.0% $ 4,201 12.1%
Pro forma adjustment for
compensation to SMS
stockholders........... 4,424 10.3 -- --
Pro forma provision for
income taxes............... (3,021) (7.0) (779) (5.6) (1,681) (4.8)
------- ------- -------
Pro forma net income......... $ 4,591 10.7% $ 1,183 8.5% $ 2,520 7.2%
======== ======== ========
</TABLE>

Six Months Ended June 30, 1996 Compared to Six Months Ended June 30, 1995

Revenues. Revenues increased $20.9 million, or 149.3%, from $14.0 million
in the first six months of 1995 to $34.9 million in the first six months of
1996. Of such increase, approximately 63% was attributable to significantly
higher revenues in the Consumer Markets division, predominantly from increased
field sales of long distance telecommunications services to residential
customers, and approximately 39% was attributable to higher revenues in the
Business Markets division, as a result of increased revenues from both field
sales and teleservices sales of long distance telecommunications services to
business customers under contracts that were in the early stages of
implementation in the beginning of 1995. The increased revenues in the Consumer
Markets and Business Markets divisions were offset by a slight decline in
revenues in the Marketing Services division. In the Business Markets division,
field sales revenues grew more rapidly than teleservices revenues, reflecting
the later introduction of teleservices. Services provided under these contracts
increased throughout 1995 and the six months ended June 30, 1996. This increase
in revenues corresponded to the buildup during 1995 in sales offices and the
number of field sales personnel in both the Consumer Markets and Business
Markets divisions. Revenues in the Marketing Services division declined slightly
primarily as a result of a decline in revenues from sampling pack programs,
offset by growth in revenues from the WallBoard(R) programs. The decline in
sampling pack program revenues was due to fewer products being included in
sampling packs in the 1996 programs.

Cost of Services. Cost of services increased $14.6 million from $9.0
million in the first six months of 1995 to $23.6 million in the first six months
of 1996 due to the growth in services performed for clients. Cost of services as
a percentage of revenues increased from 64.7% to 67.8%. This increase in the
cost of services as a percentage of revenues resulted from an increase in the
cost of services as a percentage of revenues in the

27
<PAGE> 30

Consumer Markets division offset in part by a decrease in the cost of services
as a percentage of revenues in the Business Markets and Marketing Services
divisions.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $3.8 million from $2.8 million in the first
six months of 1995 to $6.6 million in the first six months of 1996. Selling,
general and administrative expense as a percentage of revenues decreased from
19.8% in the first six months of 1995 to 18.8% in the first six months of 1996,
reflecting a moderately increased corporate overhead expense being spread over a
larger base of revenues.

Interest Expense. Interest expense increased $.4 million from $.2 million
in the first six months of 1995 to $.6 million in the first six months of 1996
due primarily to interest expense related to the Debentures issued in May 1995.

Pro Forma Net Income. Pro forma net income increased $1.3 million from
$1.2 million in the first six months of 1995 to $2.5 million in the first six
months of 1996, primarily due to growth in revenues.

1995 Compared to 1994

Revenues. Revenues increased $31.2 million, or 265.3%, from $11.7 million
in 1994 to $42.9 million in 1995. Of such increase, approximately 75% was
attributable to higher revenues in the Consumer Markets division generated by
increased field sales of long distance services to residential customers,
approximately 8% was attributable to increased sales of long distance services
to business customers in the Business Markets division, and approximately 17%
was attributable to increased revenues in the Marketing Services division,
principally increased revenues from the Company's sampling pack programs. The
increase in revenues in the Consumer Markets division was predominantly due to
the rapid growth of sales of long distance services to residential customers in
certain multi-cultural markets under the contract with AT&T which commenced in
the fourth quarter of 1994 and the expansion of services in 1995 to include all
domestic markets. The increase in revenues in the Business Markets division was
attributable to the commencement of a contract with MCI to sell
business-to-business long distance services in the first quarter of 1995.
Marketing services revenues also increased, principally as a result of new
sampling pack programs initiated in 1995 and the addition of new clients to
existing programs.

Cost of Services. Cost of services increased $21.0 million from $6.5
million in 1994 to $27.5 million in 1995. Cost of services, as a percentage of
revenues, increased from 55.1% in 1994 to 64.1% in 1995 primarily reflecting
increased staffing at the divisional level to support the significant growth and
potential future growth in the Consumer Markets and Business Markets divisions.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $3.7 million, from $3.5 million in 1994 to
$7.2 million in 1995 due primarily to additional administrative personnel and
related corporate expenses associated with the Company's growth. Selling,
general and administrative expenses, as a percentage of revenues, decreased from
30.0% in 1994 to 16.8% in 1995, reflecting a moderately increased corporate
overhead expense being spread over a much larger base of revenues.

Interest Expense. Interest expense increased from $0.3 million in 1994 to
$0.8 million in 1995 due to interest expense related to the Debentures which
were issued in May 1995.

Net Income. Net income increased $2.0 million from $1.4 million in 1994 to
$3.4 million in 1995 as a result of the combination of significantly increased
revenues from the development of the Consumer Markets and Business Markets
divisions and controlled overhead expenditures.

1994 Compared to 1993

Revenues. Revenues increased $2.7 million, or 29.8%, from $9.0 million in
1993 to $11.7 million in 1994. Approximately 62% of such increase resulted from
additional revenues in the Consumer Markets division relating to increased field
sales of long distance services to residential customers. Revenues increased in
the Consumer Markets division because the Company began developing, in late
1993, a field sales force to

28
<PAGE> 31

sell long-distance services to customers in certain multi-cultural market
segments. Approximately 21% of such increase resulted from higher revenues in
the Business Markets division as a result of the commencement of field sales of
telecommunications services and paging services to business customers.
Approximately 17% of such increase was attributable to higher revenues in the
Marketing Services division, as a result of a significant increase in revenues
from sampling pack programs, which was offset in part by lower revenues from
WallBoard(R) programs.

Cost of Services. Cost of services increased $1.0 million from $5.5
million in 1993 to $6.5 million in 1994. Cost of services as a percentage of
revenues decreased from 60.3% in 1993 to 55.1% in 1994. This decrease was
primarily due to start-up costs incurred in 1993 associated with the Company's
Consumer Markets division, which were not offset by a corresponding increase in
revenues during the period.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $0.5 million from $3.0 million in 1993 to $3.5
million in 1994. Selling, general and administrative expenses as a percentage of
net revenues decreased from 33.2% in 1993 to 30.0% in 1994 as overhead costs
increased more slowly than revenues.

Interest Expense. Interest expense remained constant at $0.3 million in
1993 and 1994.

Net Income. Net income increased $1.1 million from $0.3 million in 1993 to
$1.4 million in 1994, due to improved operating margins in the Marketing
Services division and additional revenues from the Consumer Markets division.

QUARTERLY RESULTS

The Company has experienced, and in the future may experience, quarterly
variations in revenue due to a number of factors, many of which are outside of
the Company's control, including: the timing of new contracts, the timing of
clients' promotional campaigns and the seasonal patterns of certain businesses
serviced by the Company. Certain costs incurred by the Company may be recognized
in periods prior to the recognition of revenue under existing contracts.
Historically, seasonal variations in the Company's business have been
overshadowed by the Company's growth. The Company expects that in the future its
sales will reflect seasonal effects in the first and third quarters due to
weather related impact on the field sales force and the impact in the Company's
teleservices operations of the decreased ability to reach potential consumers as
a result of summer vacations.

29
<PAGE> 32

The following table sets forth the unaudited quarterly results of
operations for each of the four quarters in 1995 and the first two quarters in
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 or
for the year ending December 31, 1996.

<TABLE>
<CAPTION>
QUARTER ENDED
-------------------------------------------------------------------------------
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31, MARCH 31, JUNE 30,
1995 1995 1995 1995 1996 1996
--------- -------- ------------- ------------ --------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Revenues........................ $ 6,127 $7,853 $11,937 $ 16,974 $17,360 $ 17,501
Operating expenses:
Cost of services........... 3,823 5,223 7,523 10,910 11,665 11,969
Selling, general and
administrative
expenses................. 1,123 1,647 1,935 2,509 3,005 3,566
Compensation to SMS
stockholders............. -- -- -- 4,424 -- --
--------- -------- ------------- ------------ --------- --------
Income (loss) from operations... 1,181 983 2,479 (869) 2,690 1,966
Interest
expense -- substantially all
to related parties............ (64) (151) (279) (289) (274) (279)
Interest income................. 4 8 69 116 69 29
--------- -------- ------------- ------------ --------- --------
Income (loss) before taxes...... 1,121 840 2,269 (1,042) 2,485 1,716
Pro forma adjustment for
compensation to SMS
stockholders.................. -- -- -- 4,424 -- --
--------- -------- ------------- ------------ --------- --------
Pro forma income before taxes... $ 1,121 $ 840 $ 2,269 $ 3,382 $ 2,485 $ 1,716
</TABLE>

As discussed above, the rapid increase in revenues and corresponding
increase in expenses during the six quarters ended June 30, 1996 were
predominantly attributable to the Company's commencement of services with AT&T
in its Consumer Markets division in late 1994 and with MCI in its Business
Markets division in early 1995. Services performed for these clients increased
in each quarter during the six-quarter period. Revenues in the Marketing
Services division fluctuated modestly on a quarter-to-quarter basis during this
six-quarter period.

The Company's operating margins (income from operations before compensation
to SMS stockholders divided by revenues) increased during the third and fourth
quarters of 1995 compared to the second quarter of 1995, as the growth in the
Company's revenues outpaced the build-up of infrastructure to accommodate the
rapid growth in revenues during the third and fourth quarters of 1995. Operating
margins decreased in the first and second quarters of 1996 compared to the prior
two quarters. The Company expects that operating margins in future periods will
be lower than those reported in the third and fourth quarters of 1995 as the
Company continues to build-up infrastructure to accommodate anticipated growth.
The Company's operating margins in the first and second quarters of 1996 were
influenced by several factors. Beginning in 1996, the Company accelerated its
infrastructure development to accommodate both its current growth and
anticipated growth and began to put in place the capability to expand its
services to additional categories of customers. Expenses relating to the
build-up of infrastructure, including training programs, additional supervisory
personnel, quality assurance programs, salaries associated with additional
marketing staff and additional executive personnel, were greater in the first
and second quarters of 1996 than in prior periods. In addition, in 1996 the
Company expanded the number of programs in its Marketing Services division,
which programs are expected to become revenue generating in 1997. To market the
additional capacity in its Marketing Services division, as well as to exploit
unutilized capacity in its existing programs, the Company significantly expanded
the sales force in this division in the second quarter of 1996. Accordingly, the
sales expense associated with the Marketing Services division increased
significantly in the second quarter of 1996, although any increase in revenue
from the expansion of the sales staff and the additional number of programs is
expected to be realized almost entirely in

30
<PAGE> 33

1997. As a result of this combination of actions, the Company believes it is
more capable to accommodate additional growth successfully.

The Company has experienced, and in the future expects that it will
experience, quarterly variations in its operating margins due to a number of
factors, certain of which are outside the Company's control, including: the
timing of new contracts, the timing of clients' promotional campaigns, the
seasonal patterns of certain businesses serviced by the Company, and the timing
of costs associated with the build-up in the Company's infrastructure to
accommodate anticipated future growth or new services.

LIQUIDITY AND CAPITAL RESOURCES

The following table sets forth selected cash flow information for the
periods indicated.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
--------------------------- ------------------
1993 1994 1995 1995 1996
------ ------ ------- ------- -------
(IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net cash provided by operating activities... $1,247 $1,443 $ 8,118 $ 3,372 $ 4,656
Net cash (used) by investing activities..... (691) (536) (3,903) (3,126) (1,250)
Net cash (used) by financing activities..... (424) (661) (931) 1,804 (6,006)
</TABLE>

The Company's primary source of funding has been, and continues to be, cash
flow from operations. For the years 1993, 1994 and 1995 and the first six months
of 1996, the Company generated an aggregate of $15.5 million in cash from
operating activities.

The Company's accounts receivable turnover ratio (revenues for the period
divided by average accounts receivable for the period) (annualized) was 13.51
for 1993, compared to 10.96 for 1994, and 19.68 for 1995. The Company's accounts
receivable turnover ratio (annualized) was 12.71 for the six months ended June
30, 1995, compared to 17.62 for the six months ended June 30, 1996. The
improvement in the accounts receivable turnover ratio is primarily attributable
to the significant increase over the periods presented of the Company's sales to
one telecommunications client and the resulting cash flows from its invoice
payment schedule.

Cash used in investing activities has been primarily to fund the purchase
of wallboard frames, computer equipment and other capital to support the
expansion of the Company's marketing services business and data processing and
network capabilities. Cash used in investing activities for 1995 includes $2.8
million in advances to SMS stockholders.

Cash flows from financing activities include the effect of the May 1995
issuance of the Debentures ($6.0 million face amount), the proceeds of which
were used in part to repay a note to the Original Limited Partner in the amount
of $2.6 million and to make special cash distributions to the existing limited
partners of $1.1 million. Additional cash distributions to the limited partners
during the period from January 1, 1993 through June 30, 1996 totaled $6.2
million. These distributions included amounts necessary to cover the limited
partners' tax liability related to the income of the Partnership.

During the periods covered, the Company financed certain equipment
purchases through capital leases with various leasing companies. The leases are
secured by the related equipment. Total leases outstanding as of June 30, 1996
are $1.1 million. These leases are payable in varying installments through
fiscal 1999 with a weighted average interest rate of 11.9%.

During 1995, SMS advanced to a stockholder $2.7 million, evidenced by a
non-interest-bearing loan secured by all of such stockholder's stock in SMS. SMS
distributed the obligation, in-kind, to the stockholders of SMS, pro rata on
June 30, 1996. See "Certain Transactions."

Prior to the Reorganization, the Partnership intends to distribute to its
partners, including SMS, its then cash balance in one or more distributions, and
SMS intends to distribute to its stockholders its then cash balance in one or
more distributions. The Company's cash balance at June 30, 1996 was $1.3
million. The Company's cash balance is expected to increase prior to the
consummation of the Reorganization and the Offerings primarily as a result of
collection of receivables, recovery of certain deposits, the completion of

31
<PAGE> 34

pending equipment financings and improved management of other working capital
balances. The amount of the Distribution by the Partnership between July 1, 1996
and the date of the Offerings is not expected to exceed $10.0 million in the
aggregate. The Partnership distributed approximately $3.9 million in the
aggregate to its limited partners and, through SMS, to the SMS stockholders in
1995 and approximately $8.6 million in 1996 (of which approximately $2.7 million
was a non-cash distribution), as a return on their respective investments and to
allow them to pay their income tax liability. The Partnership's partners and the
SMS stockholders are liable for the income tax payable with respect to the
Company's operations for periods through the date of the Reorganization.

The Company expects to use a portion of the net proceeds from the Offerings
to fund its anticipated growth, including expansion of the Company's facilities,
expansion of the Company's call centers in Bethesda, Maryland, the establishment
of the Company's call center in the United Kingdom and the establishment of an
executive office in the United Kingdom. The Company currently estimates that it
will commit between $13 million to $18 million for capital expenditures relating
to such expansion during the twelve-month period ending June 30, 1997.

The Company believes that the proceeds from the Offerings, together with
cash generated from operations and cash available to the Company through future
borrowing arrangements, will be sufficient to finance the Company's current
operations, planned capital expenditures and future growth.

32
<PAGE> 35

BUSINESS

GENERAL

Snyder Communications is a rapidly growing provider of innovative and high
value-added outsourced marketing services. The Company designs and implements
marketing programs for its clients utilizing a range of complementary marketing
resources, including field sales, teleservices, WallBoards(R) and product
sampling. The Company's clients are primarily Fortune 500 companies with large
annual marketing expenditures facing significant competitive pressures to retain
or expand market share. Based on 1995 revenues, the ten largest clients of the
Company, listed alphabetically, were AT&T Communications, Inc., Eastman Kodak
Company, Gerber Products Company, Kellogg U.S.A., Inc., Kraft Foods Inc., Lehn &
Fink Products (now a unit of Reckitt & Colman, Inc.), MCI Telecommunications
Corporation, Nestle Beverage Company, The Prudential Insurance Company of
America and Reckitt & Colman, Inc.

INDUSTRY OVERVIEW

33
<PAGE> 36

general population in the United States would grow approximately 13% by 2010.
Similarly, at that time, the Census Bureau projected, based in part on 1990
census data, that the 50 years or older population in the United States was
comprised of approximately 68.3 million people in 1995, and would grow
approximately 41% by 2010. The Company believes that many of its programs in its
Marketing Services division are in locations that are often used by people who
are 50 years or older.

The Company focuses, in part, on identifying industries and markets in
which companies are under strong competitive pressure to enhance or retain
market share. The Company believes that prospective clients in these areas will
more fully recognize the value of using an outsourced marketing services firm to
gain such market share. The Company then identifies market segments that
prospective clients may perceive will include high-value customers, and designs
and implements marketing strategies designed to reach such customers. In
developing its field sales force and marketing services capabilities, the
Company has focused on the telecommunications industry as a source of clients,
because the competitive effects that have and will continue to occur as barriers
to competition are being removed and the number of telecommunications companies
providing various types of services is rising dramatically. In establishing
relationships with its telecommunications clients, the Company developed a
strategy to target markets, such as those in multi-cultural communities, that
its clients believe contain high-value customers.

The Company believes that other industries such as managed health care,
package delivery and on line services, will face increased competition for
customers in the future as a result of the dramatic changes in their respective
industries. Accordingly, the Company is actively pursuing opportunities with
such organizations.

The industry in which the Company operates tends to be highly fragmented
and characterized by a large number of in-house and independently owned
organizations. Most of the companies operating in the industry offer a limited
number of services within a limited geographic area. The Company believes that
consolidation within the industry will provide significant opportunities to
increase market share through strategic acquisitions. See "-- Competition."

GROWTH STRATEGY

The Company's commitment to continued growth through internal expansion and
complementary acquisitions is evidenced by the following:

Consumer Markets

- The Company is adding approximately 80 call stations, which it expects
will be operating by late 1996, to its existing 300 call stations in this
division.

- In June 1996, the Company expanded its relationship with AT&T by entering
into a new agreement with AT&T (U.K.), to market long-distance
telecommunications services to residential customers

34
<PAGE> 37

based in the United Kingdom. As part of this expansion, the Company
intends to add one call center and one or more field sales offices in the
United Kingdom in 1997.

- In August 1996, the Company entered into two contracts with Foundation
Health to market and sell memberships in certain managed health care
plans to residential customers in designated areas using the Company's
field sales (including event marketing), teleservices and other marketing
services.

Business Markets

- The Company also seeks to add additional inbound telephone-based sales in
its Business Markets division.

Marketing Services

- The Company has recently developed, in conjunction with Hoechst Marion
Roussel, its Allergy Health WallBoard(R), of which Hoechst Marion Roussel
is the exclusive client sponsor under a three-year contract with the
Company. The Company currently has contracts with approximately 600
allergists' and otolaryngologists' offices in which the Allergy Health
WallBoard(R) will be located beginning in the fourth quarter of 1996.

- Since January 1996, the Company has developed three additional new
WallBoard(R) programs: the Women's Wellness WallBoard(R), which will be
located in obstetrics' and gynecologists' offices; the Caring
WallBoard(R), which will be located in oncologists' offices and oncology
treatment centers; and the New Home WallBoard(R), which will be located
in real estate offices throughout the United States. The Company
anticipates that it will begin distributing WallBoards(R) through these
new programs by January 1997. The Company does not currently have any
contractual commitments with locations in which these new WallBoard(R)
programs will be located and there can be no assurance that it will be
successful in its efforts to secure such contracts.

SERVICES

The Company offers a range of complementary marketing services through its
Consumer Markets, Business Markets and Marketing Services divisions. In the
Consumer Markets and Business Markets divisions, the Company currently focuses
on marketing and selling long-distance telecommunications services, with a
particular emphasis on multi-cultural markets. The Marketing Services division
is responsible for the

35
<PAGE> 38

Company's WallBoard(R) and sampling pack programs. The following describes the
services offered by the Company.

CONSUMER MARKETS

In its Consumer Markets division, established in 1993, the Company provides
outsourced marketing services to AT&T. Using face-to-face field sales, including
event marketing, and teleservices, the Company markets AT&T long-distance
telecommunications services to residential customers. The Company began
marketing AT&T services using its field sales force in February 1994. The
Company expanded this relationship to add teleservices capabilities in the
second quarter of 1996. The revenues generated by AT&T have grown from $1.7
million in 1994 to $25.0 million in 1995. See "Risk Factors -- Reliance on
AT&T."

The Company, jointly with AT&T, develops sales and marketing programs
designed to enroll residential long-distance telecommunications customers for
AT&T. The Company provides AT&T with turn-key programs. The Company develops
lists of potential customers to be contacted; creates marketing materials,
including customer applications; hires, trains and supervises its sales
representatives and teleservices associates to market AT&T services; and
monitors the effectiveness of its programs. The Company's turn-key approach
differentiates it from other marketing services firms, which generally merely
implement a client's marketing strategy using contact lists provided by the
client.

The Company targets multi-cultural markets, particularly the Hispanic and
Asian markets, as well as general consumer markets throughout the United States,
seeking in particular to secure customers who AT&T believes would be high-value
subscribers. To reach multi-cultural markets, the Company develops demographic
databases identifying potential customers in such communities and employs field
sales representatives and teleservices associates who are capable of marketing
services in a prospective customer's native language as well as in English. The
Company's Consumer Markets division currently markets telecommunications
products and services in 15 foreign languages, including Spanish, Mandarin,
Cantonese, Vietnamese, Korean and Russian. The Company estimates that over sixty
percent of the field sales associates in the Consumer Markets division are
bilingual; all of the Company's teleservices associates in the Consumer Markets
division are bilingual. The Company also develops and distributes sales
literature and collateral documents in each of these languages. The Company
believes that the ability of its personnel to speak with and provide materials
to a prospective customer in either English or the customer's native language
helps the prospective customer to have a clearer understanding of the services
being offered, which the Company believes increases its ability to attract
customers for AT&T. In addition, in marketing services to these multi-cultural
communities, the Company has developed databases of information on specialized
demographic segments, which the Company intends to use in the future to market
products and services for additional clients.

FIELD SALES. The Company has provided outsourced field sales to AT&T
through its Consumer Markets division since 1994. AT&T was initially a client in
one of the Company's WallBoard(R) programs. See "-- Marketing Services." As of
June 30, 1996, the Company employed in its Consumer Markets division
approximately 550 field sales representatives, 65 field supervisors, 26 district
managers and five regional managers, located in 32 offices in 28 cities
throughout the United States. The Company's field sales representatives are
full-time employees with benefits. The Company's field sales force is supported
by the administrative and executive personnel in the division, as well as the
Company's corporate staff. The Company has established a management structure
designed to provide appropriate supervision of, and support for, its field sales
representatives. Each of the five regional managers is responsible for five to
seven districts. Each district is managed by a district manager, who oversees
from two to seven field supervisors. Field supervisors in turn manage from five
to 20 field sales representatives. All field sales representatives are trained
in appropriate sales and marketing procedures as well as the specific services
being marketed by AT&T. See "-- Hiring and Training."

In addition, the Company also offers event marketing in its Consumer
Markets division. Within each sales district, district managers and field
supervisors identify fairs, festivals and other events that they believe present
an opportunity through which the Company will be able to reach a multi-cultural
market or the general market. The Company works with the event coordinator,
leasing times during which the Company's

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<PAGE> 39

field sales representatives market products and services from a booth set up by
the Company on the premises. Under the Company's contract with AT&T, AT&T has
the right to determine which events will be available to the Company and often
chooses to handle larger events through AT&T's own internal sales force. The
Company also conducts event marketing at shopping malls. Most of the Company's
event marketing is conducted by bilingual sales representatives at community
festivals.

Through June 30, 1996, the Company's field sales operations in its Consumer
Markets division have generated a significantly greater percentage of revenues
than the division's teleservices operations.

TELESERVICES. Beginning in 1996, the Company began to perform teleservices
in its Consumer Markets division for AT&T, to provide another avenue through
which to market AT&T long distance telecommunications services. Teleservices
associates contact prospective customers by telephone, utilizing a computerized
call management system that provides the associate with a script from which to
market selected client products and services. As soon as the teleservices
associate begins to speak, the call management system provides the associate
with information regarding the prospective customer, including name and address.
The Company also recently installed a predictive dialing system, which enhances
the number of contacts a teleservices associate can make per hour by
automatically bypassing busy signals, telephone answering machines and voice
mail boxes.

In the Consumer Markets division, the Company conducts its teleservices
marketing activities from two call centers located in Bethesda, Maryland, which
had 300 call stations as of June 30, 1996. The Company is in the process of
expanding to approximately 380 the number of call stations in its Consumer
Markets division. As of June 30, 1996, the Consumer Markets division employed,
in addition to two directors and two line managers, approximately 390
teleservices associates and 18 supervisors. All of the Company's teleservices
associates are part-time employees who are trained upon hiring and periodically
throughout their employment in appropriate marketing techniques. See "-- Hiring
and Training." Teleservices associates are paid on an hourly basis and are
eligible to earn commissions based on customer sales. See "-- Employees."

CONTRACTUAL RELATIONSHIP WITH AT&T. Under its contract with AT&T, the
Company currently markets a wide range of AT&T long-distance telecommunications
services to U.S.-based residential customers, seeking to identify and access
customers in multi-cultural communities in which the Company has developed an
expertise, as well as the general population in the United States. The services
that the Company currently provides to AT&T include field sales and teleservices
for the Foreign-Origin Consumer Market, and field sales for the Domestic
Consumer Market. The Company's contract with AT&T, which relates to the Foreign-
Origin Consumer Market, runs through December 1997, subject to AT&T's right to
seek to renew the contract upon terms mutually agreeable to AT&T and the
Company.

AT&T enjoys certain exclusivity rights under its contract with respect to
the Foreign-Origin Consumer Market. During the term of the contract, the Company
cannot, for any other long-distance telecommunications company, target the
Foreign-Origin Consumer Market by (i) creating or distributing customized
application brochures to be inserted in the publications in which such brochures
are placed by the Company on behalf of AT&T, or (ii) offering programs similar
to those offered to AT&T under the contract. In addition, during the term of the
contract, if the Company wishes to institute any other marketing program that
involves long-distance telecommunications services targeted to the
Foreign-Origin Consumer Market, AT&T has an exclusive 45-day period in which to
negotiate with the Company with respect to such program. Until 30 days following
termination of the contract, the Company can neither provide, nor enter into
negotiations or discussions to provide, customer acquisition services for
long-distance telecommunications services targeted to the Foreign-Origin
Consumer Market for any other telecommunications company.

The Company's arrangement with AT&T relating to field sales marketing
services performed by the Company for AT&T with respect to the Domestic Consumer
Market is not reflected in a formal contract. The Company has provided such
services to AT&T since September 1995, initially through a program that expired
in December 1995. Since the expiration of that program, the Company has
continued to provide such services to AT&T. The Company anticipates that this
arrangement will continue through December 1996. In the first six months of
1996, services performed by the Company for AT&T in the Domestic Consumer Market
accounted for approximately 21% of the Company's total revenues.

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<PAGE> 40

Consistent with the Company's focus on providing turn-key marketing
programs, AT&T compensates the Company based on the type of customers enrolled
by the Company. In addition, under certain circumstances these rates are
adjusted if performance goals are not met. The contract with AT&T does not
establish a maximum amount the Company can earn for its services, although the
Company is subject to an informal cap on total sales in the AT&T Domestic
Consumer Market for the remainder of 1996. The Company believes that this
pricing system is attractive to AT&T, because AT&T pays only for quantifiable
results.

The Company has recently expanded its relationship with AT&T by signing a
contract with AT&T (U.K.), an affiliate of AT&T, to provide targeted marketing
services for U.K.-based long-distance residential customers. The contract
commences October 1, 1996 and expires on September 30, 1998. Under the contract,
the Company will provide field sales and teleservices for AT&T (U.K.) to sell
long-distance calling services to all residential consumers in the United
Kingdom, including customers in certain multi-cultural markets. Because of the
time associated with developing a field sales and teleservices force in the
United Kingdom, the Company does not expect to generate significant revenues
under this contract until 1997.

CLIENT EXPANSION. The Company seeks to expand the number of clients and
industries served by the Consumer Markets division, relying primarily upon its
existing infrastructure. In June 1996, the Company entered into an agreement
with Prodigy to provide marketing and sell subscriptions to the Prodigy online
service to persons using a variety of marketing techniques and strategies. The
Company currently intends to market and sell the Prodigy service relying on its
existing infrastructure through field sales, including event marketing, and
other marketing services. Prodigy will compensate the Company based on the
number of new subscribers generated by the Company's marketing efforts. The
marketing arrangement commenced on June 1, 1996 and will continue for a
three-year term, unless terminated earlier. Either Prodigy or the Company may
terminate the contract for any reason upon 90 days' written notice. The Company
does not currently anticipate that the Prodigy agreement will generate any
revenues for the Company until early 1997.

In August 1996, the Company entered into two separate agreements with
Foundation Health to market and sell memberships in certain managed health care
plans that Foundation Health operates. Foundation Health will compensate the
Company based on the number of new members generated by the Company's marketing
efforts. The marketing arrangement commences on October 1, 1996 and will
continue until December 31, 1999, unless terminated earlier. Either Foundation
Health or the Company may terminate the agreements upon 90 days' written notice
if certain annual subscription targets are not met.

The Company believes that the capabilities and infrastructure that it has
developed in the Consumer Markets division are adaptable to other companies,
including companies marketing products and services outside of the
telecommunication industry, as illustrated by its recent arrangements with
Prodigy and Foundation Health. The Company believes that its existing
infrastructure of offices, management, supervisory and training personnel and
communications can accommodate additional clients in the Consumer Markets
division, although it may be necessary to hire and train separate field sales
representatives, who may be compensated on a different basis, to market more
complex products and services.

BUSINESS MARKETS

In its Business Markets division, established in late 1994, the Company
provides marketing and sales services to MCI, targeting small business customers
in general and multi-cultural markets throughout the United States. Using both
field sales and teleservices, the Company seeks to enroll long-distance business
customers for MCI. As in the Consumer Markets division, the Company offers MCI
turn-key marketing initiatives and is principally responsible for the
implementation of such initiatives. The Company's marketing efforts for MCI are
enhanced by the electronic computer link between MCI and each of the field sales
offices in the Company's Business Markets division, through which the Company's
field sales representatives are able to directly access and print up-to-date
product information, pricing information and marketing materials. The Company
began providing marketing services to MCI in late 1994. See "Risk
Factors -- Reliance on Other Major Clients."

Consistent with the Company's overall strategy, the Company designs
programs for MCI that access both specialized demographic market segments,
particularly the Asian and Hispanic communities, as well as the

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<PAGE> 41

general markets, in the United States. The Company currently is capable of
conducting marketing services in the Business Markets division in nine foreign
languages including Cantonese, Mandarin, Korean, Vietnamese and Spanish as well
as in English. The Company estimates that approximately one-third of the field
sales associates in the Business Markets division are bilingual and are able to
converse with a prospective customer in either English or the customer's native
language. All of the Company's teleservices associates in the Business Markets
division are bilingual.

Through June 30, 1996, the field sales operations have generated a
significantly greater portion of revenue in the Business Markets division than
teleservices.

FIELD SALES. As of June 30, 1996, in its Business Markets division, the
Company employed approximately 350 field sales representatives, 26 district
managers and three regional managers, who were located in 26 offices in 23
cities throughout the United States. The Company's field sales force is
supported by the administrative and executive personnel in the division, as well
as the Company's corporate staff. Each of the three regional managers is
responsible for six to ten districts. Each district is managed by a district
manager who oversees from five to ten field sales representatives. Certain
districts also employ field sales supervisors who report to the district
managers and oversee a team of three to eight field sales representatives. The
field sales personnel are trained in appropriate sales and marketing procedures,
as well as the specific products and services being marketed. See "-- Hiring and
Training."

TELESERVICES. The Company also provides MCI with a full range of
teleservices in its Business Markets division. Teleservices associates contact
prospective customers by telephone, marketing specific products and services.
Teleservices personnel utilize a proprietary computerized lead management and
order entry system which separates leads by language and routes these to the
appropriate teleservices personnel. The Company's teleservices associates are
trained in appropriate marketing techniques. See "-- Hiring and Training."

The Business Markets' division call center, which began operating in April
1995, is located in Bethesda, Maryland. The Business Markets division had 26
call stations as of June 30, 1996. As of that same date, the Business Markets
division employed approximately 50 teleservices associates, four supervisors,
two managers and two directors.

CONTRACTUAL RELATIONSHIP WITH MCI. The Company's current agreement with
MCI is comprised of five consecutive one-year terms through 2001, subject in
each year to non-renewal. The Company currently is negotiating with MCI
regarding certain new contractual arrangements. Under the existing contract, MCI
has the right to terminate the contract upon 90 days notice to the Company. MCI
also has the right to terminate the agreement immediately if certain performance
criteria are not maintained. Under the existing agreement, MCI enjoys product
exclusivity, and the Company cannot promote or sell competing services to
commercial customers during the term of the contract. In addition, the Company
cannot offer services similar to those offered under the MCI contract to any
current MCI commercial customer until at least 90 days after termination of the
contract. Finally, for three years following termination of the agreement, the
Company cannot use or reveal any confidential material furnished by MCI or any
MCI customer lists.

MCI pays the Company an established rate per customer enrolled. The
contract with MCI does not establish a maximum amount that the Company can earn
for its services. The rate paid varies depending on the MCI service to which the
customer subscribes. MCI has the right to adjust payments made under the
contract if certain performance criteria are not met.

CLIENT EXPANSION. The Company believes that the turn-key marketing
services that it offers in its Business Markets division and the multi-cultural
distribution channels that it has developed are adaptable to serve clients
seeking to reach business customers in other industries. The Company believes
that its existing infrastructure of offices, management, supervisory and
training personnel and telecommunications capabilities

39
<PAGE> 42

are adequate to accommodate additional clients or expansion of its business with
MCI. In the future, the Company also anticipates that it will use the databases
it has compiled to implement targeted marketing efforts for other clients.

In August 1996, the Company entered into an agreement with Lucent to market
and sell certain telecommunications equipment manufactured by Lucent to business
customers throughout the United States. Lucent will compensate the Company based
on the volume of telecommunications equipment sold and installed as a result of
the Company's marketing efforts. The marketing arrangement commenced on the date
of signing and continues for a three-year period. The Company anticipates that
it will begin performing marketing services for Lucent pursuant to the agreement
in the fourth quarter of 1996.

The Company recently has also marketed its services to prospective new
business clients in the package delivery business. The Company also seeks to add
inbound telephone-based sales to the services offered through its Business
Markets division and believes that it currently has the capability of adding
this service for a relatively small additional investment in equipment.

MARKETING SERVICES

The Marketing Services division, established in 1988, specializes in two
services that provide the Company's clients with targeted channels of
distribution: WallBoards(R), which are sponsored information centers mounted on
a wall and encased in a 42" x 30" or 57" x 30" oak or mahogany frame presenting
educational, editorial and product information, and sampling packs, which are
colorful boxes that contain a variety of nationally recognized sample products
and coupons. The Company's internal graphics department produces product
information booklets for customers that are distributed with the sampling packs,
or are available on information racks attached to a WallBoard(R). Most of the
Company's WallBoards(R) and sampling packs are implemented in cooperation with
industry associations with which the Company has established alliances. These
associations designate representatives to become members of an editorial
advisory board established by the Company for a particular market, providing a
quality check upon the information included in the WallBoard(R) or sampling
pack. A program is a WallBoard(R) or sampling pack that targets certain
demographic segments. Several of the WallBoard(R) and sampling pack programs
work in tandem to provide the Company's clients with multiple channels to reach
targeted, high-value potential customers.

The Company evaluates potential opportunities to expand existing or new
WallBoard(R) and sampling pack programs into new market segments. To do this,
the Company first researches new demographic segments containing potentially
high-value customers that can be reached through the Company's programs. For
example, the Company recently identified a demographic segment in new home
buyers that could provide sponsors with high-value customers through a
WallBoard(R) program. The Company then commenced its search for locations by
targeting prominent real estate brokerage companies in leading markets
throughout the United States. The Company's field operations department mails
marketing materials describing the proposed WallBoard(R) and follows up with
telephone calls to the prospective locations. The Company believes that its
method of analysis in identifying new demographic segments will allow it to
expand the number of locations through which its Marketing Services' programs
are distributed and to expand its programs to encompass new targeted channels of
distribution. Participation in the programs is provided free of charge to the
participating locations. Simultaneously, the Company began to approach sponsors
who market products or services typically associated with new home buyers.

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<PAGE> 43

The following table shows the growth of the programs in the Marketing
Services division:

<TABLE>
<CAPTION>
AS OF DECEMBER 31,
---------------------- AS OF
1993 1994 1995 JUNE 30, 1996
---- ---- ---- -------------
<S> <C> <C> <C> <C>
Number of WallBoard(R) programs.................. 6 8 9 11
Number of sampling packs distributed (in
millions)...................................... 2.6(a) 2.6(a) 3.8(a) (b)
Number of sampling pack locations (in
thousands)..................................... 13.1 14.8 20.0 (b)
Number of sampling pack programs................. 2 2 4 6
Number of WallBoard(R) and sampling
pack sponsors(c)............................... 25 32 68 64
</TABLE>

- ---------------
(a) Represents sampling packs distributed during the years ended December 31,
1993, 1994 and 1995, respectively.
(b) As of June 30, 1996, the Company had contracts with clients to distribute
approximately 4.5 million sampling packs during 1996. As of the same date,
the Company had contracts with approximately 24,000 locations to distribute
such packs.
(c) A number of the Company's clients participate in both the WallBoard(R) and
sampling pack programs.

THE WALLBOARD(R) PROGRAMS. As of June 30, 1996, the Company had 11
different WallBoard(R) programs targeted at specific markets. Each WallBoard(R)
location is available only to the Company under a two- or three-year exclusive
agreement, with automatic renewal provisions. A WallBoard(R) presents
educational, editorial and product information targeted to a specific,
high-value audience and is developed by the Company's editorial staff in
conjunction with an editorial advisory board established by the Company. All of
the editorial material is reviewed by the relevant editorial advisory board
prior to publication. Each WallBoard(R) has an exclusive sponsor, and
information is published on the WallBoard(R) about the sponsor's products that
address the needs of the targeted audience. The Company had 44 sponsors of its
WallBoards(R) at June 30, 1996, including, listed alphabetically, Gerber
Products Company, Hoechst Marion Roussel, Kellogg U.S.A., Inc., Kraft Foods,
Inc., The Prudential Insurance Company of America, Quaker Oats Company, Reckitt
& Colman, Inc., Ross Products Division/Abbot Laboratories, and Sandoz
Pharmaceuticals Corporation. Each of these sponsors has "category exclusivity"
for their product in their program. Accordingly, no other product in the same
category is permitted to be a WallBoard(R) sponsor in the relevant market
segment.

The Company's graphics team produces, as a complement to the WallBoards(R),
customer marketing publications or "take-one" booklets, mounted on or near the
WallBoard(R). These publications contain further information for the targeted
audience concerning the sponsor's products relevant to the targeted audiences'
needs. The Company believes that these booklets provide additional effective
avenues for sponsors' information to reach the target audience.

To enhance the editorial quality of its WallBoards(R), the Company has also
established alliances with associations that specialize in the targeted areas.
The Company enters into multiple-year contracts (typically for three years) with
these associations which in turn supply informational brochures, license the use
of their trademarked logos, or review the editorial information on the
WallBoard(R). For instance, the Your Kids WallBoard(R), which targets
dual-income parents of toddlers and pre-schoolers through approximately 12,000
child care centers with a "parent information center," provides editorial on
quality parenting issues such as teaching behavior and stimulating early
learning development. The Company has established an alliance with the National
Child Care Association, which is a member of its editorial advisory board, for
the Your Kids WallBoard(R) and provides an endorsement to the target audience
which the Company believes helps its sponsors to reach more customers and to
gain credibility with these customers. The Company typically renders a
compensating service to the associates, such as including membership information
to customers or paying a royalty or an agreed upon donation.

Each WallBoard(R) program, such as the Your Kids WallBoard(R), has multiple
sponsors, but only one sponsor is shown at a given location. To accomplish this,
the Company creates several different versions of wallboards for each program,
each with a different sponsor and different editorial information. These
wallboards are rotated quarterly to different locations in the program to
reflect different sponsor or editorial information, the number of which varies
from sponsor to sponsor depending on each sponsor's level of

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<PAGE> 44

participation. The Company's two principal market networks for the WallBoard(R)
programs are family markets and medical markets.

In the family markets network, the Company has identified three different
audiences that it can target on behalf of its sponsors. The New Baby
WallBoard(R) and the Beginning Care WallBoard(R), which the Company has produced
since 1990, aim to reach expectant parents in hospital-based childbirth or
obstetrics training classrooms during a six-week class in the last trimester of
pregnancy and are currently located in approximately 430 locations. The
editorial material focuses on childbirth education, with tips on labor and
delivery. The Your Baby WallBoard(R), which the Company also produces in Spanish
as the Su Bebe WallBoard(R), targets new mothers and new fathers at the "point
of birth" in hospital maternity wards. The editorial includes information on new
baby care and development and features current immunization guidelines. These
three WallBoards(R) have seven sponsors, including Eastman Kodak Company and The
Prudential Insurance Company of America.

The Company also determined that medical markets would provide high-value
customers to many potential sponsors. The Company's medical market WallBoards(R)
target various patient audiences, such as diabetics and patients with heart
conditions. The Diabetes Health WallBoard(R), which has four sponsors, reaches
patients with diabetes in the waiting rooms of more than 600 endocrinologists
and diabetes educators. The Heart Health WallBoard(R), in an alliance with the
American Heart Association, reaches patients with cardiovascular disease in over
1,200 cardiologists' offices or cardiology rehabilitation centers. The editorial
material focuses on living with heart disease and includes tips on exercise and
diet.

Recently introduced medical markets WallBoards(R)include: the Arthritis
Health WallBoard(R) which will be located in approximately 700 rheumatologists'
and orthopedists' offices nationwide and, effective January 1, 1997, the Allergy
Health WallBoard(R) which will be located in allergists' and otolaryngologists'
offices, the Women's Wellness WallBoard(R) which will be located in obstetrics'
and gynecologists' offices and the Caring WallBoard(R) which will be located in
oncologists' offices and oncology treatment centers.

In developing WallBoard(R) products for other market segments, the Company
conducts research on under-served markets. For instance, the U.S. News & World
Report WallBoard(R) targets executives traveling through over 1,000 airports for
corporate and private aircraft. The editorial is compiled from U.S. News & World
Report and focuses on current business issues. The Company is also reaching out
to new immigrant markets with the Welcome/Bienvenido WallBoard(R) in over 300
locations to reach newcomers in their native languages, including Spanish,
Chinese, Vietnamese and Korean. The editorial information focuses on the
naturalization process and such issues as finding an English language course and
other educational opportunities.

The success of the Company's WallBoard(R) programs in reaching the target
markets is measured through research studies, currently conducted by The Gallup
Organization, Market Facts and Audits & Surveys, which help to assess product
awareness, editorial recall and increased sponsor awareness. In the WallBoard(R)
programs, these companies generally conduct face to face interviews with people
exiting from the WallBoard(R) location. The interviewer asks several questions
to elicit information regarding both the sponsors' products and the editorial
information which generate conclusions regarding the efficacy of the marketing
technique. These companies also use methods to determine the number of persons
who approach the WallBoard(R). The Company believes that there are numerous
untapped target markets in which WallBoards(R) could be used and believes there
are growth opportunities for the expansion of the program.

THE SAMPLING PROGRAMS. Following the start-up of its WallBoard(R)
programs, the Company established its sampling pack programs which are designed
to provide a targeted distribution of sponsors' product samples, coupons and
literature to potentially high-value customers. During 1995, the Company
distributed approximately 3.8 million sampling packs at approximately 20,000
locations. Participating locations sign a two- or three-year exclusive agreement
stating that the pack will be the only sampling pack program allowed at the
location during that time. As with the WallBoard(R) programs, the Company's
graphics team also produces customer marketing publications to be included in
the sampling packs. Each sampling pack contains an average of 12 product
samples, coupons or pieces of literature. Sponsors of the sampling packs
include, alphabetically, Bayer Corporation, Kellogg U.S.A., Inc., The Nutrasweet
Company/Equal and Reckitt & Colman Inc., among others. The Company has 37
sponsors for its six sampling packs. Each sponsor has

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<PAGE> 45

"category exclusivity" within the sampling pack, as with the WallBoard(R)
sponsors, such that there are no competing products in the pack.

Additionally, as with its WallBoard(R) programs, the Company is able to
leverage its alliances with leading associations in the various fields to
provide the sampling packs with market-specific quality oversight, association
logos and informational brochures. Certain of the Company's contracts with such
associations provide that they will not endorse another sampling pack during the
period of the contract without at least six months' notification to the Company.
For instance, the American Diabetes Association (the "ADA") has permitted the
Company to print the ADA logo on the outside of the Diabetes Pack(TM) and the
Arthritis Foundation has permitted the Company to print its logo on the
Arthritis Pack(TM).

The Company's sampling packs target several different audiences at a time
when those audiences are most likely to use the products included in the packs.
For instance, in 1995, the Company shipped more than two million Your Kids
Parents Pack(TM) for distribution to parents at 12,000 day care centers
nationwide. The products inside the pack include samples of cereal, soap, snack
foods, and cleaning products. The Company ships annually approximately 600,000
of each of the Heart Pack(TM), Arthritis Pack(TM) and the Diabetes Packs(TM) for
distribution to newly diagnosed patients at more than 6,500 doctors' offices and
other locations nationwide.

As part of its growth strategy, the Company intends to pursue acquisitions
that offer complementary services to those of the Company. In May 1996, the
Company acquired from RD Publications, Inc., an affiliate of Readers Digest
Association Incorporated, for $250,000 cash, a "new member" health club sampling
pack program through which it expects to distribute more than 735,000 health
club member kits, which include such products as deodorants, razors and
nutritional supplements, at approximately 1,000 health and fitness clubs during
the remainder of 1996. The Company believes that the demographic segment reached
through these packs is complementary to the other populations that it has
targeted. Several of the Company's current sponsors of other sampling pack
programs may provide product samples for the newly acquired health club program.
The Company anticipates that it will identify more markets into which the
sampling pack programs can be expanded successfully through acquisitions and
through its own research efforts.

To maintain an even flow in the sampling pack distribution during the
course of a year, the Company monitors the flow of persons in each of the
sampling pack locations in order to determine the times during which a type of
location, such as an endocrinologist's office, is likely to distribute more or
fewer sampling packs and adjusts the delivery of the number of sampling packs
during the year accordingly. For instance, the Heart Pack(TM), with an overall
annual distribution of 600,000, is currently distributed to its locations three
times during each year in increments of 200,000.

To monitor the effectiveness of its sampling pack programs, the Company
currently employs The Gallup Organization, as well as its own independent
auditor, to conduct quality control checks on the assembly of the products for
the sampling packs, the information in the sampling packs and the impact of the
sponsors' products on the recipients of the sampling packs. Telephone interviews
are conducted by The Gallup Organization to determine the product usage or
purchases among the recipients of the sampling packs. The Company also places
customer response cards in the sampling packs from which the Company is able to
follow up with those sampling pack recipients who respond and measure the impact
of the sampling packs on their product usage or purchase. Additionally, these
customer response cards permit the Company to compile a database of persons
receiving the sampling packs which the Company could then use in cross-selling
other products through the Business Markets and Consumer Markets divisions. See
"-- Consumer Markets" and "-- Business Markets."

WALLBOARD(R) AND SAMPLING PACK TRACKING SYSTEM. The Company searches for
ways to streamline its operations and communications within its infrastructure.
In Marketing Services, the Company strives to increase its efficiency in
tracking the WallBoard(R) and sampling pack programs. A database tracking system
keeps track of the numbers of WallBoards(R), the various locations,
installations, the scheduled rotation of the WallBoards(R), comments about the
locations and information about the WallBoards(R).

To administer the WallBoard(R) and sampling pack locations, the Company
uses approximately 500 field representatives, who are hired as independent
contractors, from temporary placement agencies or outsourced

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<PAGE> 46

personnel companies to monitor WallBoard(R) locations. WallBoard(R) information
is changed by the Company's field sales representatives, generally quarterly, to
reflect different sponsors or editorial material. These representatives complete
a "call-report" on the site and transmit that report to the Bethesda
headquarters for processing. The Company has purchased an optical character
recognition system that automatically scans the "call reports" into the system,
eliminating human data entry, reducing human error and increasing the efficiency
in processing the field call reports. For its sampling programs, the Company
uses two outsourced distribution and fulfillment centers located on the Eastern
Shore of Maryland and in Los Angeles, California. For its WallBoard(R) programs,
the Company uses an outsourced distribution and fulfillment center located on
the Eastern Shore of Maryland, separate from the center used by its sampling
programs.

The Company is developing a postal distribution efficiency system, which
will evaluate the cost of shipping sampling packs from the two facilities on the
Eastern Shore of Maryland and in Los Angeles, California to the sampling packs'
various destinations. The new program will evaluate the various modes of
transport available and the destination to which the products are bound in order
to determine the least expensive rate for timely delivery. The Company
periodically evaluates the efficiency of its infrastructure and potential
additions to the existing infrastructure.

HIRING AND TRAINING

The Company believes a key component of its success is the quality of its
employees. Therefore, the Company seeks to refine its systematic approach to
hiring, training and managing qualified personnel for its sales force. The
Company recruits from within communities individuals who can help penetrate
specific target markets on behalf of the Company's clients. For example, the
Company recruits personnel who speak and write Spanish to market products and
services to Hispanic communities, and personnel who speak and write Cantonese or
Mandarin to market products and services to Chinese-Americans.

Hiring and training of field sales representatives is conducted separately
in the Consumer Markets and the Business Markets divisions. Each business line
determines its hiring needs and requests approval for those positions from the
Company's Human Resources department.

After an employee is hired, the field sales representative enters a period
of formal training, conducted both in a classroom and in the field to learn
appropriate selling techniques. The Company's initial training for its field
sales representatives takes from two to four weeks and includes classroom
settings during which the representatives receive training on the Company and
its operations, the competitive environment in which the Company's clients
operate, and the products and services the representatives will be marketing, as
well as field sales experience supervised by district managers or supervisors.
Field sales representatives frequently meet with supervisors or district
managers to discuss new services or promotions, and to obtain follow-up training
in sales techniques and skills. In addition, the field sales representatives
participate in periodic retraining programs. During the training period,
employees are paid a training salary to provide an opportunity for the employee
to acclimate to the sales environment before being paid on a commission basis.

In its teleservices operations, new teleservices associates attend a
multi-day formal training program, during which associates are provided
information on the Company and its operations, the competitive environment in
which the Company's clients operate, and the products and services the
associates will be marketing. In addition, these training programs make use of
simulated selling situations and other methods to teach the associates
appropriate sales techniques and skills. During the initial training period,
each teleservices associate also is teamed with either a supervisor or an
experienced sales associate who participates in actual telemarketing service
calls. The Company periodically provides its teleservices sales associates with
additional training, including frequent meetings to discuss any new products,
promotions and services and to sharpen selling skills, as well as through
periodic retraining programs. In addition, teleservices supervisors monitor
calls made by each teleservices associate and provide feedback on selling
techniques and skills. See "Risk Factors -- Dependence on Labor Force."

GOVERNMENT REGULATION

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<PAGE> 47

past five years. The Federal Communications Commission's (the "FCC") rules under
the Federal Telephone Consumer Protection Act of 1991 limit the hours during
which telemarketers may call consumers and prohibit the use of automated
telephone dialing equipment to call certain telephone numbers. The Federal
Telemarketing and Consumer Fraud and Abuse Prevention Act of 1994 (the "TCFAPA")
broadly authorizes the Federal Trade Commission (the "FTC") to issue regulations
prohibiting misrepresentation in telephone sales.

In August 1995, the FTC issued regulations under the TCFAPA which, among
other things, require telemarketers to make certain disclosures when soliciting
sales. The Company believes its operating procedures comply with the telephone
solicitation rules of the FCC and FTC. However, there can be no assurance that
additional Federal or state legislation, or changes in regulatory
implementation, would not limit the activities of the Company or its clients in
the future or significantly increase the cost of regulatory compliance.

In addition, on June 21, 1996 MCI and the FCC entered into a consent decree
under which MCI agreed to institute third-party verification procedures for most
small-business customer marketing not currently covered by third-party
verification, including field sales marketing of small-business customers. The
Company provides field sales marketing services to small-business customers on
behalf of MCI, and became subject to third-party verification of switches
obtained by the Company's field sales force for MCI effective August 1, 1996.
The Company expects that the implementation of third-party verification will
increase the Company's costs to some extent, but does not expect that
implementation of third-party verification with respect to field sales for MCI
will have a material adverse effect on the Company's operations.

A number of states have enacted or are considering enacting legislation to
regulate telephone solicitations. For example, telephone sales in certain states
cannot be final unless a written contract is delivered to and signed by the
buyer and may be canceled within three business days.

The industries served by the Company are also subject to varying degrees of
government regulation. The Company has never been held responsible for
regulatory noncompliance by a client. See "Risk Factors -- Government
Regulation."

COMPETITION

The Company competes with providers of other forms of advertising and
marketing media, such as direct mail, television, radio and other advertising
media for the marketing expenditures of its clients and prospective clients. The
Company also competes with the internal marketing capabilities of clients and
prospective clients. The Company's largest clients, AT&T and MCI, have
significant internal teleservices and field sales marketing capabilities and
also contract for these services from competitors of the Company. Although the
Company believes that its clients and prospective clients find it advantageous
to outsource at least a portion of their marketing services, certain clients may
choose to conduct all or a more significant portion of their marketing efforts
internally.

The Company competes as well with a number of outsourced marketing services
firms. The industry for marketing services is very competitive and highly
fragmented. Many of the companies offer a limited number of services within a
limited geographic area. The Company believes that no one participant or small
number of participants is dominant in the industry, although there are several
participants in the industry whose business, like that of the Company, tends to
be national and offer a broad array of marketing services, such as Sitel
Corporation, APAC TeleServices, Inc. and CUC International, Inc. Management
believes that there are certain competitors which have the capabilities and
resources comparable to and in certain respects greater than those of the
Company.

Management believes that it competes primarily on the basis of demonstrated
ability to attract customers, reputation for quality, price, geographic presence
(in the case of field sales and the WallBoard(R) programs),

45
<PAGE> 48

technological expertise, and the ability to promptly provide clients with
customized solutions to their sales and marketing needs.

The Company believes that its competitive strengths are its targeted
marketing channels of distribution, the length of time during which the Company
has had client relationships with major companies and has had strategic
alliances with consumer associations, and its existing national infrastructure.

EMPLOYEES

As of June 30, 1996, the Company employed 1,196 full-time and 452 part-time
personnel. In addition, the Company retained approximately 500 independent
contractors who work with the Company on a part-time basis in its WallBoard(R)
Program. The following table shows the number of the Company's full-time and
part-time employees broken down by area of operation as of June 30, 1996:

<TABLE>
<CAPTION>
NUMBER OF NUMBER OF NUMBER OF
DISCIPLINE FULL-TIME EMPLOYEES PART-TIME EMPLOYEES TOTAL EMPLOYEES
----------------------------------- ------------------- ------------------- ---------------
<S> <C> <C> <C>
Teleservices....................... 42 445 487
Field Sales........................ 1,061 7 1,068
Marketing Services................. 53 -- 53
Executive & Administrative......... 40 -- 40
------ --- ------
Total......................... 1,196 452 1,648
=============== =============== ============
</TABLE>

Of the total number of employees, approximately 600 are located in the
Company's Bethesda, Maryland facilities and the remainder of the employees are
located among the various field sales offices. None of the Company's employees
is subject to a collective bargaining agreement. The Company considers its
relations with its employees to be good.

FACILITIES

The Company's corporate headquarters are located in Bethesda, Maryland in
leased facilities consisting of approximately 29,600 square feet of office
space. The Company also leases additional space located in two office buildings
in Bethesda, Maryland, at which its three call centers are located, consisting
of 300 work stations located in 20,800 square feet of office space for the
Consumer Markets call center, and 26 work stations located in 2,100 square feet
of office space for the Business Markets call center. The term of the lease, as
amended, expires in June 1997 with respect to substantially all of the space,
with an option to renew for an additional five-year term. The Company is
currently negotiating new lease arrangements and, based on current market
conditions, believes that it will be able to re-lease its existing headquarters
office space upon substantially the same terms and conditions as the existing
lease. The Company currently anticipates that it will relocate its call centers
to a less-expensive location in Bethesda, Maryland and based on current market
conditions believes that it be able to secure a lease for comparable office
space at a slight cost savings to the Company.

The Company also leases the facilities for its field sales offices at June
30, 1996. The leases for the Company's sales offices generally have terms
ranging from a month-to-month basis to two years and generally have renewal
options.

The Company believes that its current facilities are adequate for its
current operations. The Company intends to open one or more field sales offices
and one call center in the United Kingdom in early 1997 to support continued
growth and expansion.

LEGAL PROCEEDINGS

From time to time, the Company is involved in litigation incident 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.

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<PAGE> 49

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth certain information regarding the executive
officers, directors and director nominees of the Company. Each of the executive
officers will perform for the Company duties corresponding to the duties
previously performed for the Partnership. The Company is currently conducting a
search for a Chief Financial Officer.

<TABLE>
<CAPTION>
NAME AGE POSITION
-------------------------------------- --- --------------------------------------
<S> <C> <C>
Daniel M. Snyder...................... 31 Chairman of the Board of Directors,
President and Chief Executive Officer
Michele D. Snyder..................... 34 Vice Chairman, Chief Operating
Officer, and Director
Brian Benhaim......................... 39 Senior Vice President of Corporate
Development, Acting Chief Financial
Officer and Director
Shaun P. Gilmore...................... 42 President -- Direct Sales
Mortimer B. Zuckerman................. 59 Director Nominee
Fred Drasner.......................... 53 Director Nominee
Stephen T. Baldacci................... 35 Senior Vice President of Business
Development
Noel Barnard.......................... 42 Senior Vice President of Business
Development
Terry Bateman......................... 40 Senior Vice President of Marketing
Mitchell N. Gershman.................. 38 Senior Vice President of Operations
Gary T. Griffin....................... 46 Senior Vice President of Sales
Susan L. Marentis..................... 39 Senior Vice President of Account
Management
David B. Pauken....................... 34 Chief Accounting Officer
Bruce T. Wagner....................... 46 Senior Vice President of Sales
Alfred G. Wise........................ 33 Senior Vice President of Operations
</TABLE>

Daniel M. Snyder, Chairman of the Board and a founder of the Company, has
served as the President and Chief Executive Officer of Snyder Communications and
its predecessors since the Company was founded in 1987.

Michele D. Snyder, a founder of the Company, has been with the Company
since its inception, and currently serves as the Vice Chairman, Chief Operating
Officer and a director of the Company. Ms. Snyder is responsible for the
day-to-day operations of the Company, including personnel, executive management,
contract negotiations and research and development of new programs.

Brian Benhaim, a director of the Company, has served as the Senior Vice
President of Corporate Development since May 1996. Mr. Benhaim also serves as
Acting Chief Financial Officer. Previously, he served as Vice President of
Direct Sales of the Company. Prior to joining the Company in July 1993, he
served from 1991 to 1993 as the President of Advanced Sensor Technologies, Inc.,
a company he founded to develop new products for safety-related weather
instrumentation and early warning systems. From 1989 to 1991, he served as the
Vice President of Marketing and Sales of Belfort Instruments, a division of
TransTechnology Corporation, where he was responsible for the turnaround sales
efforts of that corporation. From 1987 to 1989, Mr. Benhaim was a management
consultant with Bain & Company, a management consulting firm, where he was
responsible for strategic planning and acquisitions for Fortune 500 clients.

Shaun P. Gilmore joined the Company in August 1996 as President -- Direct
Sales and is responsible for all aspects of the Consumer and Business Markets
including international expansion. Prior to joining the Company, Mr. Gilmore
spent 16 years at AT&T where from January 1, 1996 to August 1996, he was
President -- Northeast States with responsibility for AT&T's Consumer & Small
Business Markets in New

47
<PAGE> 50

York and New England. In addition, Mr. Gilmore represented all of AT&T in
matters of strategy and external communications for the region. From October
1993 to January 1, 1996, Mr. Gilmore was Vice President -- Global Consumer
Communications Services with responsibility for all aspects of AT&T's Global
Consumer Long Distance business. From 1980 to 1993, Mr. Gilmore held a variety
of positions in Marketing, Finance, Operations, Field Sales, Personnel and
Strategic Planning for AT&T's Business Markets division.

Mortimer B. Zuckerman, who has been nominated to serve as a director of the
Company, has been the Chairman of Boston Properties Inc., a national real estate
development and management company, since 1970. He has been the Chairman of U.S.
News & World Report, L.P. and Editor-in-Chief of U.S. News & World Report since
1985, Chairman of Daily News, L.P. and Co-publisher of the New York Daily News
since 1993, Chairman of The Atlantic Monthly Company since 1980 and Chairman of
the Board of Directors of Applied Graphics Technologies, Inc. since April 1996.

Fred Drasner, who has been nominated to serve as a director of the Company,
has been the Chief Executive Officer of Daily News, L.P. and Co-Publisher of the
New York Daily News since 1993, the President and Chief Executive Officer of
U.S. News & World Report, L.P. since 1985, the Chairman and Chief Executive
Officer of Applied Graphics Technologies, Inc. since April 1996, the Chief
Executive Officer of Applied Printing Technologies, L.P. since 1986, and the
Vice-Chairman and Chief Executive Officer of The Atlantic Monthly Company since
1986.

Stephen T. Baldacci has served as the Senior Vice President of Business
Development since December 1995. Previously, he was the Vice President of
Marketing of the Company from June 1992 to December 1995, where he was
responsible for oversight, development and sales of marketing programs for the
Company. Prior to joining the Company, he was the Sales Development Director for
Entertainment Weekly, a Time, Inc. publication, from November 1991 to June 1992,
where he was primarily responsible for the nationwide sales strategies for the
publication. From December 1990 to November 1991, Mr. Baldacci served as the
Market Development Manager for People Weekly, a Time, Inc. publication, where he
also oversaw the nationwide sales strategy.

Noel Barnard joined the Company in July 1996 as Senior Vice President,
Business Development -- Teleservices and is responsible for directing the
business development for teleservices within the Direct Sales Division. Prior to
joining the Company, from September 1993 to July 1996, Ms. Barnard served in
various capacities at AMR Corporation, parent to American Airlines, most
recently as Senior Vice President, Sales and Customer Service of the TeleService
Resources division where she was responsible for sales, marketing, customer
service and call center operations for telemarketing and reservation service
facilities. From January 1991 to September 1993, Ms. Noel served as Regional
Sales Manager of Software Spectrum, a software reseller. During the period from
1977 to January 1991, Ms. Noel worked in various positions with International
Business Machines Corporation including Manager of Services Marketing and
Programs, Marketing Manager, Program Manager, Account Manager and Sales
Representative.

Terry Bateman has served as the Senior Vice President of Marketing of the
Company since November 1995. Previously, he was the Vice President of Business
Development of the Company from July 1995 to November 1995 where he was
primarily responsible for developing new media programs and supervising
marketing personnel. Prior to joining the Company, he served as a Vice President
of Marketing for Times Mirror corporation from 1994 to July 1995, where he was
responsible for marketing the on-line medical service initiative of Times
Mirror, and was Executive Vice President of the Medical News Network of Whittle
Communications from June 1993 to 1994 where he was responsible for expanding the
Medical News Network into the managed care arena. From June 1991 to June 1993,
Mr. Bateman served as Executive Vice President of the Special Report Network of
Whittle Communications where he oversaw the sales effort of the network. From
March 1989 to June 1991, he served as President of Bateman & Associates, a
marketing concern.

Gary T. Griffin joined the Company in July 1996 as Senior Vice President of
Sales in Direct Sales -- Consumer Markets and is responsible for directing the
operations of the Direct Sales Division. Prior to joining the Company, Mr.
Griffin spent 28 years at Electrolux Corporation, a direct seller of floor care
products, where from January 1991 to July 1996 he served as Senior Vice
President of Sales and Marketing, North America with overall responsibility for
directing sales and marketing in North America. From February 1989 to

48
<PAGE> 51

December 1990, Mr. Griffin served as Vice President, Western Sales Area and from
May 1988 to January 1989 as Vice President, Southeast Sales Area. From 1968 to
1988, Mr. Griffin held a variety of positions at Electrolux including Midwest
Area Vice President, Division Manager, Branch Manager and Sales Representative.

Mitchell N. Gershman joined the Company in April 1996 as a Senior Vice
President of Operations. Mr. Gershman is responsible for the field operations
within the Consumer Markets division and oversees the operation and
distributions of the Company's marketing services in that division. Prior to
joining the Company, from September 1993 to March 1996, Mr. Gershman served as a
Vice President of Sprint International, a division of Sprint Communications
Corporation, where he was responsible for expanding Sprint's efforts in the
residential and small business markets outside of the United States. From
February 1991 to August 1993, he served as Vice President of the Consumer
Marketing Division for Sprint where he was responsible for developing marketing
partnerships and outsourcing relationships, including field sales forces to
expand distribution. He also served in several capacities with MCI
Telecommunications Corporation from 1980 to 1986.

Susan L. Marentis has served as the Senior Vice President of Account
Management for the Company since March 1996. She previously was the Vice
President of Marketing of the Company from July 1993 to February 1996, where she
was responsible for the oversight and development of sales and marketing
programs. Prior to joining the Company, from October 1991 to June 1993, Ms.
Marentis was the Vice President of Sales for POP Radio at Actmedia Corporation
where she managed the POP Radio product sales, creating a network in
supermarkets, toy stores, and drug stores. From October 1990 to October 1991,
she served as Group Sales Manager for several of Actmedia's programs where she
was primarily responsible for developing new accounts.

David B. Pauken joined the Company in August 1996 as the Chief Accounting
Officer. Prior to joining the Company, from July 1984 to August 1996, Mr. Pauken
served in various capacities at Arthur Andersen LLP, most recently as a Senior
Manager in the Washington, D.C. office. At Arthur Andersen LLP, he was primarily
responsible for management of financial statement audits of publicly traded
companies, including Fortune 500 companies, as well as operational and financial
consulting to various entities.

Bruce T. Wagner joined the Company in April 1996 as a Senior Vice President
of Sales. Mr. Wagner is responsible for the field operations within the Business
Markets division, overseeing the operations of that division. Prior to joining
the Company, Mr. Wagner served as Senior Vice President of Sales and Marketing
for Oncor Communications, Inc. from 1994 to 1996, where he was responsible for
the sales of the alternate operator service division and oversaw the three
national sales divisions. From 1992 to 1993, he was the Vice President of Sales
for the Eastern Region with Oncor Communications, where he was responsible for
the region's sales of multiple product lines focused on the operator service
market. As Southeast Regional Sales Manager, from 1990 to 1991, Mr. Wagner
managed the long distance and operator service sales divisions for an eight
state region.

Alfred G. Wise has served as a Senior Vice President of Operations of the
Company since 1993. Mr. Wise joined the Company in 1989 as Vice President of
Field Operations, where he was responsible for all field operations activity.
Since 1993, Mr. Wise has been responsible for the field operations within the
Marketing Services division and oversees the operation and distributions for the
Wallboard(R) and sampling packs programs. Prior to joining the Company, from
July 1988 to June 1989, Mr. Wise worked at the New York Times Company Magazine
Group for publications such as Family Circle, Child and McCall's where he was
responsible for the development of circulation management programs and the
analysis of potential acquisitions.

Directors of the Company are elected at the annual meeting of stockholders
and serve until their successors are duly elected and qualified, or until their
earlier resignation or removal. Executive officers are elected annually by the
Board of Directors and serve until their successors are duly elected and
qualified, or until their earlier resignation or removal. It is anticipated that
Messrs. Zuckerman and Drasner will become directors of the Company immediately
following the completion of the Offerings. Ms. Michele D. Snyder is Mr. Daniel
M. Snyder's sister.

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<PAGE> 52

COMMITTEES OF THE BOARD

The Board has standing Audit and Compensation Committees. It is anticipated
that, immediately following the completion of the Offerings, two directors will
be elected who will be independent directors not affiliated with the Company
and, following the Offerings, will be appointed to serve on the Audit Committee
of the Board of Directors. The Audit Committee will make recommendations
concerning the engagement of independent public accountants, will review with
the independent public accountants the plans and results of the audit
engagement, will review the independence of the independent public accountants,
will consider the range of audit and non-audit fees and will review the adequacy
of the Company's internal controls. It is anticipated that, after the completion
of the Offerings, two outside, non-employee directors will be appointed to serve
on the Compensation Committee. The Compensation Committee is responsible for
establishing salaries, bonuses, and other compensation for the Company's
officers and administering the Company's stock option plans.

EXECUTIVE COMPENSATION

The following table summarizes the compensation paid by the Partnership to
the Company's Chief Executive Officer and to each of the other most highly
compensated executive officers of the Company (collectively, the "Named
Executive Officers") with respect to the year ended December 31, 1995. The
Partnership did not have any pension plan or a long-term incentive plan, did not
issue any restricted stock awards and did not grant any stock options during
1995.

<TABLE>
<CAPTION>
ANNUAL
COMPENSATION(A)
--------------------
SALARY BONUS
NAME AND PRINCIPAL POSITION ($) ($)
---------------------------------------------------------------- -------- --------
<S> <C> <C>
Daniel M. Snyder................................................ $301,784 $ --(b)
Chairman, President and Chief Executive Officer
Michele D. Snyder............................................... 99,043 304,050(c)
Vice Chairman and Chief Operating Officer
Stephen T. Baldacci............................................. 94,327 58,547(d)
Senior Vice President of Business Development
Susan L. Marentis............................................... 86,923 117,846(e)
Senior Vice President of Account Management
Alfred G. Wise.................................................. 83,548 --(f)
Senior Vice President of Operations
</TABLE>

- ---------------
(a) The above compensation table excludes an executive officer of the
Partnership who is no longer with the Partnership and who will not be an
executive officer of the Company.

(b) Excludes $2,871,078 paid in 1995 by SMS, the corporate general partner of
the Partnership, for services provided to SMS. Similar compensation will
not be paid following the Reorganization and the Offerings.

(c) Excludes $1,107,134 paid in 1995 by SMS, the corporate general partner of
the Partnership, for services provided to SMS. Similar compensation will
not be paid following the Reorganization and the Offerings.

(d) Excludes $19,155 paid in 1996, and $8,206 paid in 1995, by SMS, the
corporate general partner of the Partnership, for services provided.

(e) Excludes bonus of $50,000 paid in 1996 for the attainment of performance
criteria during the fourth quarter of 1995.

(f) Excludes $76,620 paid in 1996, and $34,145 paid in 1995, by SMS, the
corporate general partner of the Partnership, for services provided.

EMPLOYMENT AGREEMENTS

The Company has entered into employment agreements with each of its Named
Executive Officers. The Company's employment agreements with each of Mr.
Baldacci, Ms. Marentis and Mr. Wise provide that the

50
<PAGE> 53

Company will employ each such executive officer on an "at will" basis. The base
salary for each such executive officer for 1996 is: Mr. Baldacci -- $150,000,
Ms. Marentis -- $150,000 and Mr. Wise -- $100,000. The employment agreements
between the Company and Mr. Baldacci, Ms. Marentis and Mr. Wise also provide for
incentive bonuses based on attaining specific performance criteria. These
agreements also include a non-competition commitment during the term of the
agreement and for a period of 18 months after termination of the agreement and
contain confidentiality commitments, non-solicitation of employee provisions,
and assignment of work product agreements. In addition, the Company agreed to
grant to each such executive officer nonqualified stock options to acquire
Common Stock. See "-- Stock Option Plan."

The Company also has entered into employment agreements with Mr. Snyder and
Ms. Snyder, which are effective as of the effective time of the Offerings and
are for a term of three years, unless sooner terminated as provided in the
agreements. The agreements provide that the 1996 base salaries for Mr. Snyder
and for Ms. Snyder are $300,000 and $200,000 per year, respectively. The
agreements with Mr. Snyder and Ms. Snyder also provide for incentive bonuses
based on attaining performance criteria to be established by the Compensation
Committee or the Board of Directors, and include a non-competition commitment
during the term of the agreement, confidentiality commitments, non-solicitation
of employee provisions, and assignment of work product agreements.

The Company also has entered into employment agreements with each of its
other executive officers. These agreements generally include certain
non-competition agreements, confidentiality commitments, non-solicitation of
employee provisions and assignment of work product agreements.

STOCK OPTION PLAN

In August 1996, the Board of Directors of the Company adopted and the
stockholders of the Company approved the 1996 Stock Incentive Plan (the "Stock
Option Plan"). The Stock Option Plan, which terminates in August 2006, on the
tenth anniversary of the effective date of the plan, is intended to promote the
long-term growth of the Company by rewarding its officers, key employees and
consultants with a proprietary interest in the Company for outstanding long-term
performance and to attract, motivate and retain capable management employees.
The Stock Option Plan is administered by the Compensation Committee of the
Board, which is required to be composed of at least two directors, or by the
Board of Directors of the Company if no Compensation Committee is appointed. The
Stock Option Plan authorizes the grant of incentive stock options (as defined in
Section 422 of the Internal Revenue Code of 1986, as amended), non-qualified
stock options, restricted stock awards and stock appreciation rights ("SARs"),
or any combination thereof, at the discretion of the Compensation Committee.
Subject to adjustment in certain circumstances, the aggregate number of shares
of Common Stock which may be issued under the Stock Option Plan upon exercise of
options, SARs or in the form of restricted stock may not exceed five million
shares.

The exercise price of options granted under the Stock Option Plan may not
be less than 100% (110% in the case of an optionee who is a 10% stockholder) of
the fair market value per share of Common Stock on the date of the option grant.
The vesting and other provisions of the options will be determined by the
Compensation Committee.

Options may not be exercised after ten years from the option grant date
(five years in the case of an incentive stock option granted to a 10%
stockholder). In the case of any incentive stock option, the option shall
terminate on the date that is three months (one year, in the event that the
termination of employment is by reason of death or disability) after the date on
which the optionee terminates employment or, if earlier, the date specified in
the agreement relating to the option grant.

Awards under the Stock Option Plan also may be made in the form of
restricted stock, at the discretion of the Compensation Committee. The
Compensation Committee has the authority to determine the terms and conditions
of any restricted stock awards.

SARs may be granted in conjunction with all or a part of an option granted
under the Stock Option Plan, either at the time of initial grant of the option
or a subsequent time prior to the expiration of the option, except that SARs may
not be granted in connection with a prior option without the consent of the
option holder.

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<PAGE> 54

Upon the exercise of a SAR, the participant is entitled to the difference
between the fair market value of one share of Common Stock and the option price
per share in the related option, multiplied by the number of shares in respect
of which the SAR has been exercised. The Compensation Committee has the
discretion to determine the form in which the payment will be made, which may be
in cash, shares of Common Stock, or a combination thereof.

The Board of Directors of the Company has approved the grant of
nonqualified options to or for the benefit of certain officers, key employees
and consultants of the Company to purchase approximately 2.4 million shares of
Common Stock in the aggregate. Of such options, approximately 2.1 million were
granted at an exercise price equal to the initial public offering price (but not
less than the fair market value on the date of grant) and become exercisable at
periods ranging from six months following the date of grant to four years
following the effective date of the Offerings. The remaining options to purchase
300,000 shares of Common Stock were granted at an exercise price equal to the
initial public offering price (but not less than the fair market value on the
date of grant), and vested and became immediately exercisable on the grant date.

LIMITATION OF LIABILITY AND INDEMNIFICATION

The Certificate of Incorporation of the Company provides that no director
shall be liable to the Company or its stockholders for monetary charges for a
breach of fiduciary duty to the fullest extent permissible under Delaware law.
The Company's Bylaws provide that the Company shall, to the fullest extent
permissible under Delaware law, indemnify its directors and officers against any
damages arising out of their actions as directors or officers of the Company.
The Company also intends to obtain officer and director liability insurance with
respect to liabilities arising out of certain matters, including matters arising
under the Securities Act of 1933, as amended.

At present, there is no pending litigation or proceeding involving any
director, officer, employee or agent of the Company with respect to which
indemnification would be required or permitted. The Company is not aware of any
threatened litigation or proceeding which may result in a claim for such
indemnification.

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<PAGE> 55

CERTAIN TRANSACTIONS

INVESTMENT IN THE PARTNERSHIP. On May 18, 1995, the Partnership Agreement
was amended to admit the 1995 Investors as limited partners. Concurrently with
the amendment, the Partnership entered into the Debenture and Partnership
Interest Purchase Agreement, and issued to the 1995 Investors the Debentures
(face amount $6.0 million). At that date, the 1995 Investors purchased an
aggregate 3% interest in the Partnership and, concurrently, the Original Limited
Partner purchased an additional 3.15% interest in the Partnership from SMS. A
portion of the proceeds from the issuance of the Debentures was distributed to
the Original Limited Partner to repay its capital contributions in the amount of
$297,773 and to repay a note to the Original Limited Partner in the amount of
$2,606,151. Another portion of the proceeds of such issuance was distributed to
SMS and to the Original Limited Partner in a special cash distribution in the
amount of $1,450,000 and $1,050,000, respectively. The remaining proceeds were
used for general corporate purposes.

INVESTMENT IN SMS. In August 1996, prior to consummation of the
Reorganization, SMS ESOF acquired from Gerald S. Snyder 400 shares of SMS
(representing 20% of the then outstanding shares of SMS common stock) in
exchange for a promissory note payable to Gerald S. Snyder in the amount of
$ . It is expected that SMS ESOF will discharge the note outstanding to
Gerald S. Snyder out of the net proceeds of the Offerings. See "Principal and
Selling Stockholders."

In August 1996, in connection with the execution of the Services Agreement,
as defined below, SMS ESOF acquired directly from SMS an option to acquire 286
shares of SMS common stock (which would represent approximately 12.5% of the
then outstanding shares of SMS common stock) at an exercise price of $ per
share. The option will expire upon consummation of the Reorganization (which
will occur prior to the completion of the Offerings), if not previously
exercised.

RELATED PARTY LENDING. At December 31, 1995, the Company was owed $45,426
by certain stockholders of SMS. These loans were non-interest bearing and were
repaid in June 1996. During the three-year period ended December 31, 1995, the
largest aggregate amount of such indebtedness outstanding was $45,426.

During 1995, SMS advanced to Gerald S. Snyder $2,725,000, evidenced by a
non-interest-bearing loan secured by all of Gerald S. Snyder's stock in SMS. SMS
distributed the obligation, in-kind, to the stockholders of SMS, pro rata on
June 30, 1996.

SERVICES. The Company produces a WallBoard(R) sponsored by U.S. News &
World Report, a publication beneficially owned by Mortimer B. Zuckerman and Fred
Drasner, both of whom also own partnership interests of the Original Limited
Partner of the Partnership. The agreement between the Original Limited Partner
and the Company provides that the Original Limited Partner will provide the
Company with the use of editorial content from U.S. News & World Report, in
WallBoards(R) at airports for private aircraft nationwide, in exchange for U.S.
News & World Report being included as one of the sponsors in this program. The
arrangement is terminable by either party upon 30 days notice. This WallBoard(R)
program commenced in July 1995. Revenues earned by the Company from sponsors of
this WallBoard(R)program other than U.S. News & World Report were approximately
$850,000 during 1995 and $1,448,649 for the six months ended June 30, 1996.

SMS ESOF provides certain marketing and administrative services to SMS
pursuant to the Employment Services Agreement dated August , 1996 (the
"Services Agreement") between SMS ESOF and SMS. The five stockholders of SMS
ESOF are employees of SMS ESOF and were formerly employees of the Partnership.
None of the stockholders of SMS ESOF are current or former executive officers of
Snyder Communications, Inc., SMS or the Partnership. Under the Services
Agreement, SMS ESOF will be paid a management fee for services rendered to SMS
that will not be materially different from the total compensation formerly paid
by the Partnership to the employees of SMS ESOF. It is contemplated that,
following consummation of the Reorganization, SMS ESOF will provide marketing
and administrative services to the Company. The Services Agreement has a
one-year term with automatic one-month renewals thereafter unless terminated by
the parties thereto.

53
<PAGE> 56

RELATED PARTY LEASES. The Company leases its Bethesda, Maryland location
from Boston Properties, a company beneficially owned by Mortimer B. Zuckerman, a
director of the Company. The amounts paid to Boston Properties during 1993, 1994
and 1995 and through the six months ended June 30, 1996 were $223,666, $355,483,
$771,855 and $423,678, respectively. Such space is used as the corporate
headquarters as well as for two teleservices centers for the Business Markets
and Consumer Markets divisions. The Company believes that the terms of the lease
at the time the lease was entered into were no less favorable to the Company
than those that could be obtained from another lessor. See Note 10 to the
Combined Financial Statements.

54
<PAGE> 57

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information known to the Company
regarding the beneficial ownership of shares of Common Stock immediately
following the Reorganization and certain related transactions, and as adjusted
to reflect the sale of the shares of Common Stock in the Offerings, assuming no
exercise of the over-allotment options, by (a) all persons who beneficially own
5% or more of the outstanding stock, (b) each of the Company's directors and
director nominees, (c) each of the Named Executive Officers and (d) all
directors, director nominees and executive officers as a group. If the
over-allotment options are exercised, each of the persons named in the following
table (except SMS ESOF which is the Selling Stockholder) and each of the 1995
Investors identified below will be offered the opportunity to participate as
Over-Allotment Selling Stockholders on a pro-rata basis.

<TABLE>
<CAPTION>
NUMBER OF SHARES OF NUMBER OF SHARES OF
COMMON STOCK COMMON STOCK
BENEFICIALLY OWNED BENEFICIALLY OWNED
PRIOR TO THE AFTER THE
OFFERINGS(A) NUMBER OF OFFERINGS(A)
NAME OF --------------------- SHARES BEING ---------------------
BENEFICIAL OWNER NUMBER PERCENT OFFERED NUMBER PERCENT
- ------------------------------------------ ---------- ------- ------------ ---------- -------
<S> <C> <C> <C> <C> <C>
Daniel M. Snyder(b)....................... 10,721,237 36.39% -- 10,721,237 32.01%
Mortimer B. Zuckerman and
MBZ Trust of 1996(b)(c)(d).............. 6,835,822 23.21 -- 6,835,822 20.41
Michele D. Snyder(b)...................... 3,761,838 12.77 -- 3,761,838 11.23
SMS ESOF(e)............................... 3,761,838 12.77 3,761,838 -- --
Fred Drasner(b)(c)(f)..................... 2,929,638 9.95 -- 2,929,638 8.75
-------
All directors, director nominees and
executive officers as a group (10
persons)................................ 28,010,373 95.09% 24,248,535 72.40%
</TABLE>

- ---------------
(a) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. To the Company's knowledge, except as
set forth in the footnotes to this table and subject to applicable community
property laws, each person named in the table will have sole voting and
investment power with respect to the shares set forth opposite such person's
name. Unless otherwise specified in the footnotes to this table, the address
of each person set forth in the above table is Two Democracy Center, 6903
Rockledge Drive, 15th Floor, Bethesda, Maryland 20817.

(b) Assumes that the over-allotment options granted to the Underwriters by the
Over-Allotment Selling Stockholders are not exercised.

(c) The shares held by such persons are held in a limited partnership in which a
corporation is a 70% general partner and Fred Drasner is a 30% limited
partner. One third of the shares of such corporate general partner is owned
by Mortimer B. Zuckerman and two thirds of the shares of such corporation
are owned by the MBZ Trust of 1996 of which an outside person acts as the
trustee. The address of the trust is c/o Boston Properties, 8 Arlington
Street, Boston, MA 02116.

(d) Mr. Zuckerman's address is 599 Lexington Avenue, Suite 1300, New York, N.Y.
10022.

(e) Represents the shares acquired by SMS ESOF in the Reorganization, in
exchange for the shares of SMS common stock that SMS ESOF acquired from
Gerald S. Snyder. Excludes shares that could be acquired upon exercise of an
option to acquire 286 shares of common stock of SMS granted to SMS ESOF by
SMS, at an option exercise price of $ per share. The option will expire
upon consummation of the Reorganization (which will be consummated prior to
the completion of the Offerings), if not previously exercised. See "Certain
Transactions." Gerald S. Snyder has never been a senior executive officer of
the Company and will be retiring at age 63 in September 1996. SMS ESOF is
the Selling Stockholder in the Offerings. It is expected that all of the
shares of Common Stock held by SMS ESOF will be sold by it in the Offerings
and that SMS ESOF will discharge the note outstanding to Gerald S. Snyder
out of the net proceeds of the Offerings.

(f) Mr. Drasner's address is 450 West 33rd Street, New York, N.Y. 10001.

The following table sets forth certain information regarding the beneficial
ownership of shares of Common Stock by the 1995 Investors immediately following
the Reorganization, and as adjusted to reflect the

55
<PAGE> 58

sale of the shares of Common Stock in the Offerings, assuming no exercise of the
over-allotment options granted to the Underwriters by each of the 1995
Investors.

<TABLE>
<CAPTION>
NUMBER OF SHARES OF
COMMON STOCK NUMBER OF SHARES OF
BENEFICIALLY OWNED COMMON STOCK
PRIOR TO THE BENEFICIALLY OWNED
OFFERINGS AFTER THE OFFERINGS
------------------- -------------------
NAME OF BENEFICIAL OWNER NUMBER PERCENT NUMBER PERCENT
- ------------------------------------------------------ ------- ------- ------- -------
<S> <C> <C> <C> <C>
Allen & Company Incorporated.......................... 259,234 0.88% 259,234 0.77%
Susan K. Allen........................................ 132,563 0.45 132,563 0.40
Susan Strauss Breen................................... 14,729 0.05 14,729 0.04
Barry Diller.......................................... 88,375 0.30 88,375 0.26
Paul Gould............................................ 129,617 0.44 129,617 0.39
HAGC Partners......................................... 132,563 0.45 132,563 0.40
Dan Lufkin............................................ 44,188 0.15 44,188 0.13
Robert Marston........................................ 38,296 0.13 38,296 0.11
Robert A. Strauss..................................... 14,729 0.05 14,729 0.04
Robert S. Strauss..................................... 14,729 0.05 14,729 0.04
Robert S. Strauss, Trustee............................ 14,729 0.05 14,729 0.04
------- ------- ------- -------
883,752 3.00% 883,752 2.62%
</TABLE>

The only other stockholder of the Company is Dr. Anthony O. Roberts who
owns 1.91% of the outstanding shares of Common Stock prior to the Offerings.

56
<PAGE> 59

DESCRIPTION OF CAPITAL STOCK

COMMON STOCK

The Certificate of Incorporation of the Company authorizes the issuance of
up to 120,000,000 shares of Common Stock, par value of $.001 per share. Upon
completion of the Offerings, there will be 33,496,562 shares of Common Stock
issued and outstanding. As of the date of this Prospectus, and after giving
effect to the Reorganization, there are 29,458,400 shares of Common Stock
outstanding. To date, there has been no public market for the Common Stock.

Holders of Common Stock ("Holders") are entitled to one vote per share for
each share held of record on all matters submitted to a vote of the
stockholders. Holders are entitled to receive ratably such dividends as may be
declared by the Board of Directors on the Common Stock out of funds legally
available therefor. The Holders have no preemptive rights, cumulative voting
rights, or rights to convert shares of Common Stock into any other securities,
and are not subject to future calls or assessments by the Company. All shares of
Common Stock of the Company issued in connection with the Offerings will be
fully paid and nonassessable.

PREFERRED STOCK

The Certificate of Incorporation authorizes the Board of Directors to issue
up to an aggregate of 5,000,000 shares of preferred stock (the "Preferred
Stock"), to establish one or more series of Preferred Stock and to determine,
with respect to each such series, the preferences, rights and other terms
thereof. Upon completion of the Offerings, no shares of Preferred Stock will be
outstanding and the Board of Directors has no present plans to issue any such
shares.

CERTAIN CHARTER PROVISIONS

Preferred Stock. The Certificate of Incorporation authorizes the Board of
Directors to establish one or more series of Preferred Stock and to determine,
with respect to any series of Preferred Stock, the preferences, rights and other
terms of such series. See "Description of Capital Stock -- Preferred Stock." The
Company believes that the ability of the Board of Directors to issue one or more
series of Preferred Stock will provide the Company with increased flexibility in
structuring possible future financings and acquisitions and in meeting other
corporate needs. The authorized shares of Preferred Stock, as well as shares of
Common Stock, would be available for issuance without further action by the
Company's stockholders, unless such action is required by applicable law or the
rules of any stock exchange or automated quotation system on which the Company's
securities may be listed or traded. Although the Board of Directors has no
present intention to do so, it could, in the future, issue a series of Preferred
Stock which, due to its terms, could impede a merger, tender offer or other
transaction that some, or a majority, of the Company's stockholders might
believe to be in their best interests.

Section 203 of the Delaware General Corporation Law. The Company is
subject to the provisions of Section 203 of the General Corporation Law of the
State of Delaware (the "Antitakeover Law") regulating corporate takeovers. The
Antitakeover Law prevents certain Delaware corporations, including those whose
securities are listed on the New York Stock Exchange, from engaging, under
certain circumstances, in a "business combination" (which includes a merger or
sale of more than 10% of the corporation's assets) with any "interested
stockholder" (a stockholder who acquired 15% or more of the corporation's
outstanding voting stock without the prior approval of the corporation's Board
of Directors) for three years following the date that such stockholder became an
"interested stockholder." A Delaware corporation may "opt out" of the
Antitakeover Law with an express provision in its original certificate of
incorporation, or an express provision in its certificate of incorporation or
bylaws resulting from a stockholders' amendment approved by at least a majority
of the outstanding voting shares. The Company has not "opted out" of the
application of the Antitakeover Law.

Certain Other Provisions. The Company's Certificate of Incorporation does
not provide for cumulative voting in the election of directors. The Company's
Bylaws provide that stockholders holding, in the aggregate, not less than
twenty-five percent of the Common Stock are permitted to call a special meeting
of the stockholders.

57
<PAGE> 60

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock is American Stock
Transfer & Trust Company.

LISTING

The Common Stock has been approved for listing on the New York Stock
Exchange, subject to notice of issuance, under the trading symbol "SNC."

58
<PAGE> 61

SHARES ELIGIBLE FOR FUTURE SALE

GENERAL

Upon completion of the Offerings, there will be 33,496,562 outstanding
shares of Common Stock. Of the outstanding shares, all of the 7,800,000 shares
sold in the Offerings (8,970,000 if the Underwriters' over-allotment options are
exercised in full) will be eligible for sale in the public market without
restriction under the Securities Act, except that any shares purchased by an
"affiliate" of the Company (as that term is defined in Rule 144 adopted under
the Securities Act) will be subject to the resale limitations of Rule 144. The
remaining 25,696,562 issued and outstanding shares of Common Stock were issued
by the Company in reliance on an exemption from the registration provisions of
the Securities Act. These shares of Common Stock are "restricted securities"
within the meaning of Rule 144 and may not be sold other than pursuant to an
effective registration statement under the Securities Act or pursuant to an
exemption from such registration requirement.

In general, Rule 144 provides that any person (or persons whose shares are
aggregated) to whom Rule 144 is applicable, including an affiliate, who has
beneficially owned shares for at least a two-year period (as computed under Rule
144) is entitled to sell within any three-month period the number of shares that
does not exceed the greater of (i) 1% of the then outstanding shares of the
Common Stock (approximately 334,966 shares after giving effect to the Offerings)
and (ii) the reported average weekly trading volume of the then outstanding
shares of Common Stock during the four calendar weeks immediately preceding the
date on which the notice of sale is filed with the Securities and Exchange
Commission. Sales under Rule 144 also are subject to certain provisions relating
to the manner and notice of sale and the availability of current public
information about the Company. A person (or persons whose shares are aggregated)
who is not deemed an affiliate of the Company at any time during the 90 days
immediately preceding a sale, and who has beneficially owned shares for at least
a three-year period (as computed under Rule 144), would be entitled to sell such
shares under Rule 144(k) without regard to the volume limitation and other
conditions described above. All of the current stockholders other than the 1995
Investors, who in the aggregate will own 24,812,810 shares upon completion of
the Offerings, will satisfy the two-year holding period under Rule 144 and will
be eligible to sell shares in accordance with the Rule 144 limitations. The 1995
Investors, who in the aggregate will own 883,752 shares upon completion of the
Offerings will satisfy the two-year holding period as of May 18, 1997.

All current stockholders have agreed, subject to exceptions for certain
pledges and, in the case of the Company, the grant of employee stock options,
not to, directly or indirectly, sell, offer to sell, grant any option for the
sale of or otherwise dispose of any capital stock of the Company or any security
convertible or exchangeable into, or exercisable for, such capital stock or, in
the case of the Company, file any registration statement with respect to any of
the foregoing (other than a registration statement on Form S-8 to register
shares issuable upon exercise of employee stock options), for a period of 180
days after the date of this Prospectus (the "Lock-Up Period") without the prior
written consent of Merrill Lynch & Co. Upon expiration of the Lock-Up Period,
the shares held by such persons will be eligible for sale in the public market,
subject to the conditions and restrictions of Rule 144, as described above.

Prior to the date of this Prospectus, there has been no public market for
the Common Stock. Trading of the Common Stock is expected to commence following
the completion of the Offerings. No prediction can be made as to the effect, if
any, that future sales of shares, or the availability of shares for future sale,
will have on the market price prevailing from time to time. Sales of substantial
amounts of Common Stock, or the perception that such sales could occur, could
adversely affect prevailing market prices of the Common Stock and the Company's
ability to raise capital in the future through the sale of additional
securities.

REGISTRATION RIGHTS

The Company has granted to Mr. Daniel M. Snyder and the 1995 Investors, as
a group, certain "demand" and "piggyback" registration rights and to Ms. Snyder
and the Original Limited Partner certain "piggyback" registration rights
(collectively, the "Registration Rights") in connection with the shares of
Common Stock that will be held by each of them at the conclusion of the
Offerings (the "Registrable

59
<PAGE> 62

Shares"). See "Principal and Selling Stockholders." Subject to certain
conditions and limitations, the Registration Rights grant to Mr. Snyder and his
assignees and the 1995 Investors as a group the opportunity to register all or
any portion of their Registrable Shares and grant to all of the stockholders
named above the right to have their Registrable Shares registered in connection
with any registration by the Company of shares of Common Stock or other
securities substantially similar to the Common Stock. The 1995 Investors, as a
group, may exercise their demand registration rights only once, and Mr. Snyder
may exercise his demand registration rights no more than five times in total.
The Registration Rights will be transferable in connection with any private sale
of Registrable Shares. The Company will bear all expenses incident to its
registration obligations upon exercise of the Registration Rights, except that
it will not bear any underwriting discounts or commissions, Federal or state
securities registration fees or transfer taxes relating to registration of the
Registrable Shares.

60
<PAGE> 63

CERTAIN UNITED STATES FEDERAL TAX CONSEQUENCES
TO NON-UNITED STATES HOLDERS

The following is a general discussion of certain U.S. Federal income and
estate tax consequences of the ownership and disposition of Common Stock
applicable to Non-U.S. Holders. In general, a "Non-U.S. Holder" is any holder
other than (i) a citizen or resident of the United States, (ii) a corporation or
partnership created or organized in the United States or under the laws of the
United States or of any state, or (iii) an estate or trust, the income of which
is includable in gross income for U.S. Federal income tax purposes regardless of
its source. This discussion is based on current law and is for general
information only. This discussion does not address aspects of U.S. Federal
taxation other than income and estate taxation and does not address all aspects
of income and estate taxation, nor does it consider any specific facts or
circumstances that may apply to a particular Non-U.S. Holder. ACCORDINGLY,
PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR TAX ADVISERS REGARDING THE U.S.
FEDERAL, STATE, LOCAL AND NON-UNITED STATES INCOME AND OTHER TAX CONSEQUENCES OF
HOLDING AND DISPOSING OF SHARES OF COMMON STOCK.

EFFECTIVELY CONNECTED INCOME

In general, if the income earned by a Non-U.S. Holder with respect to the
Common Stock (i.e., dividends payable with respect to the stock or gains from
the disposition of such stock) is effectively connected with a trade or business
carried on by the Non-U.S. Holder within the United States, such income will be
subject to U.S. Federal income tax on a "net income" basis in the same manner as
if the Non-U.S. Holder were a resident of the United States. If certain tax
treaties apply, taxation on a net income basis applies only if the income is
attributable to a U.S. permanent establishment of the Non-U.S. Holder. A
Non-U.S. Holder who is taxable on a net income basis with respect to dividend
income can avoid having U.S. tax withheld on the dividend payment by filing
certain forms, including Internal Revenue Service Form 4224.

In addition to the regular U.S. Federal income tax on the Non-U.S. Holder's
U.S. net income, a Non-U.S. Holder that is a corporation may be subject to the
U.S. branch profits tax at a rate of 30% (or such lower rate as may be specified
by an applicable treaty) on the repatriation from the United States of its
"effectively connected earnings and profits attributable to its income that is
effectively connected with a U.S. trade or business," subject to certain
adjustments.

The remainder of this section discusses the U.S. Federal income tax
consequences of income earned with respect to the Common Stock held by a
Non-U.S. Holder assuming that such income is not effectively connected with the
conduct of a U.S. trade or business (or, where an applicable tax treaty so
provides, not attributable to a U.S. permanent establishment).

DIVIDENDS NOT EFFECTIVELY CONNECTED

In general, dividends paid on the Common Stock to a Non-U.S. Holder will be
subject to United States withholding tax at a 30% rate, or a lower rate
prescribed by an applicable tax treaty. To determine the applicability of a tax
treaty providing for a lower rate of withholding, dividends paid to an address
in a foreign country are presumed to be paid to a resident of that country
absent knowledge to the contrary. Proposed Treasury regulations that have not
been finally adopted, (the "1996 Proposed Regulations"), however, would require
Non-U.S. Holders to file certain forms to obtain the benefit of any applicable
tax treaty providing for a lower rate of withholding tax on dividends. Such
forms would contain the Non-U.S. Holders' name and address and certain other
information. The 1996 Proposed Regulations would generally apply to dividends
paid on Common Stock after December 31, 1997. A Non-U.S. Holder that is eligible
for a reduced rate of U.S. withholding tax pursuant to a tax treaty may obtain a
refund of any excess amounts withheld by filing an appropriate claim for refund
with the Internal Revenue Service.

SALE OF COMMON STOCK NOT EFFECTIVELY CONNECTED

In general, a Non-U.S. Holder will not be subject to United States Federal
income tax on any gain realized upon the disposition of such holder's shares of
Common Stock unless (i) in the case of a Non-

61
<PAGE> 64

U.S. Holder who is an individual and holds shares of Common Stock as a capital
asset and is present in the United States for 183 days or more in the taxable
year of disposition (subject to certain other conditions and limitations), (ii)
the Non-U.S. Holder is subject to tax pursuant to the provisions of United
States tax law applicable to certain United States expatriates whose loss of
United States citizenship had as one of its principal purposes the avoidance of
United States taxes; or (iii) the Company is or has been a United States real
property holding corporation (a "USRPHC") for United States federal income tax
purposes at any time within the shorter of the five year period preceding such
disposition or such Non-U.S. Holder's holding period. The Company believes that
it is not, it has not been, and it is not likely to become, a USRPHC. If the
Company were or were to become a USRPHC, gains realized upon a disposition of
Common Stock by a Non-U.S. Holder which did not directly or indirectly own more
than 5% of the Common Stock during the shorter of the periods described above,
generally would not be subject to United States Federal income tax, provided
that the Common Stock is "regularly traded" on an established securities market.
If the Company Common Stock is listed on the New York Stock Exchange, the
Company believes that the Common Stock will be "regularly traded" on an
established market.

ESTATE TAX

Common Stock owned or treated as owned by an individual who is not a
citizen or resident (as defined for United States Federal estate tax purposes)
of the United States at the time of death will be includable in the individual's
gross estate for United States Federal estate tax purposes (unless an applicable
estate tax treaty provides otherwise), and therefore may be subject to United
States Federal estate tax.

BACKUP WITHHOLDING, INFORMATION REPORTING AND OTHER REPORTING REQUIREMENTS

The Company must report annually to the Internal Revenue Service and to
each Non-U.S. Holder the amount of dividends paid to and the tax withheld with
respect to each Non-U.S. Holder. These reporting requirements apply regardless
of whether withholding was reduced or eliminated by an applicable tax treaty.
Copies of this information also may be made available under the provisions of a
specific treaty or agreement with the tax authorities in the country in which
the Non-U.S. Holder resides or is established.

Under current Treasury Regulations, generally, dividends paid on Common
Stock to a Non-U.S. Holder at an address outside the United States will be
exempt from U.S. Federal backup withholding tax and U.S. information reporting
requirements (other than the reporting of dividend payments described above).
Under the 1996 Proposed Regulations, generally, dividends paid on Common Stock
will be exempt from such backup withholding and information reporting
requirements only if the Non-U.S. Holder provides certain certifications.

The payment of proceeds from the disposition of Common Stock by a Non-U.S.
Holder to or through a United States office of a broker will be subject to
information reporting and backup withholding unless such Non-U.S. Holder, under
penalties of perjury, certifies, among other things, its status as a Non-U.S.
Holder or otherwise establishes an exemption. The payment of proceeds from the
disposition of Common Stock to or through a non-U.S. office of a non-U.S. broker
generally will not be subject to backup withholding and information reporting,
except as noted below. In the case of proceeds from a disposition of Common
Stock paid to or through a non-United States office of a broker that is (i) a
United States person, (ii) a "controlled foreign corporation" for United States
federal income tax purposes or (iii) a foreign person 50% or more of whose gross
income from certain periods is effectively connected with a United States trade
or business, (a) backup withholding will not apply unless such broker has actual
knowledge that the owner is not a Non-U.S. Holder, and (b) information reporting
will apply unless the broker has documentary evidence in its files that the
owner is a Non-U.S. Holder (and the broker has no actual knowledge to the
contrary).

Backup withholding is not an additional tax. Any amounts withheld under the
backup withholding rules from a payment to a Non-U.S. Holder will be refunded or
credited against the Non-U.S. Holder's United States Federal income tax
liability, if any, provided that the required information is furnished to the
Internal Revenue Service.

62
<PAGE> 65

UNDERWRITING

Subject to the terms and conditions set forth in the U.S. purchase
agreement (the "U.S. Purchase Agreement") among the Company, SMS, the
Partnership, the Selling Stockholders and each of the underwriters named below
(the "U.S. Underwriters"), and concurrently with the sale of 1,560,000 shares of
Common Stock to the International Managers (as defined below), the Company and
the Selling Stockholder have agreed to sell to the U.S. Underwriters, and each
of the U.S. Underwriters severally has agreed to purchase from the Company and
the Selling Stockholder, the number of shares of Common Stock set forth opposite
its name below at the initial public offering price less the underwriting
discount set forth on the cover page of this Prospectus.

<TABLE>
<CAPTION>
U.S. UNDERWRITER NUMBER OF SHARES
--------------------------------------------------------------------- -----------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated............................................
Donaldson, Lufkin & Jenrette Securities Corporation..................
Allen & Company Incorporated.........................................
Montgomery Securities................................................
----------
Total................................................... 6,240,000
----------
----------
</TABLE>

Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"),
Donaldson, Lufkin & Jenrette Securities Corporation, Allen & Company
Incorporated and Montgomery Securities are acting as representatives (the "U.S.
Representatives") of the U.S. Underwriters.

The Company, SMS, the Partnership and the Selling Stockholders have also
entered into the international purchase agreement (the "International Purchase
Agreement") with certain underwriters outside the United States and Canada (the
"International Managers" and, together with the U.S. Underwriters, the
"Underwriters") for whom Merrill Lynch International, Donaldson, Lufkin &
Jenrette Securities Corporation, Allen & Company Incorporated and Montgomery
Securities are acting as representatives (the "International Representatives"
and, together with the U.S. Representatives, the "Representatives"). Subject to
the terms and conditions set forth in the International Purchase Agreement, and
concurrently with the sale of 6,240,000 shares of Common Stock to the U.S.
Underwriters pursuant to the U.S. Purchase Agreement, the Company and the
Selling Stockholder have agreed to sell to the International Managers, and the
International Managers severally have agreed to purchase from the Company and
the Selling Stockholder, an aggregate of 1,560,000 shares of Common Stock. The
initial public offering price per share and the total underwriting discount per
share of Common Stock are identical under the U.S. Purchase Agreement and the
International Purchase Agreement.

In the U.S. Purchase Agreement and the International Purchase Agreement,
the several U.S. Underwriters and the several International Managers,
respectively, have agreed, subject to the terms and conditions set forth
therein, to purchase all of the shares of Common Stock being sold pursuant to
each such agreement if any of the shares of Common Stock being sold pursuant to
each such agreement are purchased. Under certain circumstances, the commitments
of non-defaulting U.S. Underwriters or International Managers, as the case may
be, may be increased. The closings with respect to the sale of shares of Common
Stock to be purchased by the U.S. Underwriters and the International Managers
are conditioned upon one another.

The U.S. Underwriters and the International Managers have entered into an
intersyndicate agreement (the "Intersyndicate Agreement") that provides for the
coordination of their activities. Pursuant to the Intersyndicate Agreement, the
U.S. Underwriters and the International Managers are permitted to sell shares of
Common Stock to each other for purposes of resale at the initial public offering
price, less an amount not

63
<PAGE> 66

greater than the selling concession. Under the terms of the Intersyndicate
Agreement, the U.S. Underwriters and any dealer to whom they sell shares of
Common Stock will not offer to sell or sell shares of Common Stock to persons
who are non-United States or non-Canadian persons or to persons they believe
intend to resell to persons who are non-United States or non-Canadian persons,
and the International Managers and any dealer to whom they sell shares of Common
Stock will not offer to sell or sell shares of Common Stock to persons who are
United States or Canadian persons or to persons they believe intend to resell to
persons who are United States or Canadian persons, except in each case for
transactions pursuant to the Intersyndicate Agreement.

The U.S. Representatives have advised the Company and the Selling
Stockholder that the U.S. Underwriters propose initially to offer the shares of
Common Stock offered hereby to the public at the initial public offering price
set forth on the cover page of this Prospectus, and to certain dealers at such
price less a concession not in excess of $ per share of Common Stock. The
U.S. Underwriters may allow, and such dealers may reallow, a discount not in
excess of $ per share of Common Stock on sales to certain other dealers.
After the initial public offering, the public offering price, concession and
discount may be changed.

The Over-Allotment Selling Stockholders have granted an option to the U.S.
Underwriters, exercisable during the 30-day period after the date of this
Prospectus, to purchase up to an aggregate of 936,000 additional shares of
Common Stock at the initial public offering price set forth on the cover page of
this Prospectus, less the underwriting discount. The U.S. Underwriters may
exercise this option only to cover over-allotments, if any, made on the sale of
the Common Stock offered hereby. To the extent that the U.S. Underwriters
exercise this option, each U.S. Underwriter will be obligated, subject to
certain conditions, to purchase a number of additional shares of Common Stock
proportionate to such U.S. Underwriter's initial amount reflected in the
foregoing table. The Over-Allotment Selling Stockholders also have granted an
option to the International Managers, exercisable during the 30-day period after
the date of this Prospectus, to purchase up to an aggregate of 234,000
additional shares of Common Stock to cover over-allotments, if any, on terms
similar to those granted to the U.S. Underwriters.

At the request of the Company, the U.S. Underwriters have reserved up to
234,000 shares of Common Stock for sale at the initial public offering price to
certain employees of the Company and other persons. The number of shares of
Common Stock available for sale to the general public will be reduced to the
extent such persons purchase such reserved shares. Any reserved shares not so
purchased will be offered by the U.S. Underwriters to the general public on the
same basis as the other shares offered hereby. Certain individuals purchasing
reserved shares may be required to agree not to sell, offer or otherwise dispose
of any shares of Common Stock for a period of three months after the date of
this Prospectus.

The Company, the Selling Stockholders and the Company's other existing
stockholders have agreed, subject to exceptions for certain pledges and, in the
case of the Company, the grant of employee stock options, not to, directly or
indirectly, sell, offer to sell, grant any option for the sale of, or otherwise
dispose of, any capital stock of the Company or any security convertible or
exchangeable into, or exercisable for, such capital stock, or, in the case of
the Company, file any registration statement with respect to the foregoing
(other than a registration statement on Form S-8 to register shares issuable
upon exercise of employee stock options), for a period of 180 days after the
date of this Prospectus, without the prior written consent of Merrill Lynch. See
"Shares Eligible for Future Sale."

Prior to the Offerings, there has been no public market for the Common
Stock. The initial public offering price will be determined by negotiations
among the Company, the Selling Stockholder and the Representatives. Among the
factors that will be considered in determining the initial public offering
price, are an assessment of the Company's recent results of operations, the
future prospects of the Company and the industry in general, the price-earnings
ratios and market prices of securities of other companies engaged in activities
similar to the Company, prevailing conditions in the securities market and other
factors deemed relevant. There can be no assurance that an active trading market
will develop for the Common Stock or that the Common Stock will trade in the
public market subsequent to the Offerings at or above the initial public
offering price.

64
<PAGE> 67

The Common Stock has been approved for listing on the New York Stock
Exchange, subject to notice of issuance, under the symbol "SNC." In order to
meet the requirements for listing of the Common Stock on that exchange, the U.S.
Underwriters have undertaken to sell lots of 100 or more shares to a minimum of
2,000 beneficial owners.

The Underwriters do not intend to confirm sales of shares of Common Stock
offered hereby to any accounts over which they exercise discretionary authority.

The Company, SMS, the Partnership and the Selling Stockholders have agreed
to indemnify the U.S. Underwriters and the International Managers against
certain liabilities, including liabilities under the Securities Act, or to
contribute to payments made in respect thereof.

More than 10% in aggregate principal amount of the Debentures, which
constitute all of the outstanding subordinated debt of the Company, is owned by
Allen & Company Incorporated and certain officers and related persons thereof.
See "The Company" and "Certain Transactions." Consequently, the Offerings are
being made pursuant to the provisions of Section 2720 of the Conduct Rules of
the National Association of Securities Dealers, Inc. Pursuant to such
provisions, the public offering price of an equity security can be no higher
than the price recommended by a "qualified independent underwriter" meeting
certain standards. In accordance with this requirement, Merrill Lynch will serve
in such role, and the price of the Common Stock will be no higher than that
recommended by Merrill Lynch in its capacity as the qualified independent
underwriter. In such capacity and in its capacity as one of the Underwriters,
Merrill Lynch has participated in the preparation of the Registration Statement
of which this Prospectus is a part and has performed due diligence with respect
thereto. The Company, SMS, the Partnership and the Selling Stockholders have
agreed to indemnify Merrill Lynch, in its capacity as the qualified independent
underwriter, against certain liabilities, including liabilities under the
Securities Act.

Allen & Company Incorporated, together with certain officers and related
persons thereof, own 2.37% of the shares of Common Stock prior to the Offerings.
See "The Company," "Principal and Selling Stockholders" and "Certain
Transactions." In addition, a portion of the proceeds of the Offerings is
expected to be used to repay amounts owed under the Debentures to such
investors. See "Use of Proceeds."

Merrill Lynch has provided certain financial advisory services to the
Company and its affiliates for which it will receive customary fees.

LEGAL MATTERS

The validity of the Common Stock offered hereby will be passed upon for the
Company by Shaw, Pittman, Potts & Trowbridge, Washington, D.C., a partnership
including professional corporations. Debevoise & Plimpton, New York, New York,
has acted as counsel for the Underwriters with respect to certain legal matters
in connection with the Offerings.

EXPERTS

The Combined Financial Statements of Snyder Communications (as defined in
Note 1 to the Combined Financial Statements) as of December 31, 1994 and 1995
and for each of the three years in the period ended December 31, 1995 included
in this Prospectus have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report with respect thereto, and are included
herein in reliance upon the authority of said firm as experts in giving said
reports.

65
<PAGE> 68

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission"), Washington, D.C., a Registration Statement on Form S-1 (together
with all amendments, schedules and exhibits thereto, the "Registration
Statement") under the Securities Act with respect to the shares of Common Stock
offered hereby. This Prospectus, which constitutes a part of the Registration
Statement, does not contain all of the information set forth in the Registration
Statement, certain items of which are omitted in accordance with the rules and
regulations of the Commission. For further information with respect to the
Company and the Common Stock, reference is made to the Registration Statement,
which may be inspected, without charge, at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549; Seven World Trade Center, 13th Floor, New York, New York
10048; and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies
of such materials may be obtained from the public reference section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
The Registration Statement is also publicly available through the Commission's
web site located at http://www.sec.gov.

The Company intends to furnish its stockholders with annual reports
containing audited financial statements certified by its independent auditors
and quarterly reports containing unaudited financial information for the first
three quarters of each fiscal year.

66
<PAGE> 69

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<S> <C>
Report of Independent Public Accountants...................................... F-2
Combined Balance Sheets as of December 31, 1994 and 1995, and June 30, 1996
(unaudited) and Pro Forma as of June 30, 1996 (unaudited).................... F-3
Combined Statements of Income, including pro forma data for the years ending
December 31, 1993, 1994 and 1995 and the six months ended June 30, 1995
(unaudited) and 1996 (unaudited)............................................. F-4
Combined Statements of Equity for the years ending December 31, 1993, 1994,
1995 and June 30, 1996 (unaudited)........................................... F-5
Combined Statements of Cash Flows for the years ending December 31, 1993, 1994
and 1995 and the six months ended June 30, 1995 and 1996 (unaudited)......... F-6
Notes to Combined Financial Statements........................................ F-7
</TABLE>

F-1
<PAGE> 70

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Snyder Marketing Services, Inc. and
Snyder Communications, L.P.:

We have audited the accompanying combined balance sheets of Snyder
Communications (as defined in Note 1) as of December 31, 1994 and 1995, and the
related combined statements of income, equity and cash flows for each of the
three years in the period ended December 31, 1995. These financial statements
are the responsibility of Snyder Communications' 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 financial position of Snyder Communications as of
December 31, 1994 and 1995, and the results of their operations and their cash
flows for each of the three years in the period ended December 31, 1995, in
conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP
Washington, D.C.,
July 1, 1996

F-2
<PAGE> 71

SNYDER COMMUNICATIONS
(SEE NOTE 1)

COMBINED BALANCE SHEETS

ASSETS

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
-------------------------- --------------------------
1994 1995 1996 1996
----------- ----------- ----------- -----------
(UNAUDITED) (PRO FORMA,
UNAUDITED)
<S> <C> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents................. $ 596,977 $ 3,881,512 $ 1,281,154 $ --
Accounts receivable, net of allowance for
doubtful accounts of $50,000, $100,000
and $150,000 at December 31, 1994 and
1995, and June 30, 1996 (unaudited),
respectively........................... 1,313,279 3,046,460 4,868,929 4,868,929
Prepaid expenses and other assets......... 62,776 124,837 100,380 100,380
----------- ----------- ----------- -----------
Total current assets................. 1,973,032 7,052,809 6,250,463 4,969,309
NOTE AND ADVANCES TO STOCKHOLDERS............. 5,657 2,770,426 -- --
PROPERTY AND EQUIPMENT, NET................... 1,505,702 2,336,254 3,742,546 3,742,546
DEFERRED FINANCING COSTS, NET................. -- 496,001 443,847 443,847
DEFERRED TAX ASSET............................ 118,000 58,000 -- 137,000
DEPOSITS...................................... 54,081 313,025 1,051,529 1,051,529
OTHER ASSETS.................................. 16,320 -- 811,488 811,488
----------- ----------- ----------- -----------
Total assets......................... $ 3,672,792 $13,026,515 $12,299,873 $11,155,719
============ ============ ============ ============

LIABILITIES AND EQUITY

CURRENT LIABILITIES:
Current portion of notes payable and
obligations under capital leases....... $ 804,757 $ 204,047 $ 400,931 $ 400,931
Accrued payroll........................... 306,195 2,854,630 4,407,392 4,407,392
Accounts payable.......................... 1,047,486 3,348,051 4,651,835 4,651,835
Unearned revenue.......................... 1,323,139 2,209,809 2,470,403 2,470,403
----------- ----------- ----------- -----------
Total current liabilities............ 3,481,577 8,616,537 11,930,561 11,930,561
OBLIGATIONS UNDER CAPITAL LEASES.............. 135,353 334,418 677,519 677,519
NOTE PAYABLE TO LIMITED PARTNER............... 1,921,397 -- -- --
SUBORDINATED DEBENTURES DUE TO LIMITED
PARTNERS.................................... -- 5,125,821 5,228,748 5,228,748
----------- ----------- ----------- -----------
Total liabilities.................... 5,538,327 14,076,776 17,836,828 17,836,828
COMMITMENTS AND CONTINGENCIES
EQUITY:
Common stock, no stated par value, 3,000
shares authorized; ($.001 par value,
120,000,000 shares authorized on a pro
forma basis) 2,000 shares issued and
outstanding at December 31, 1994, 1995,
and June 30, 1996; (29,458,400 shares
issued and outstanding on a pro forma
basis)................................. 500 500 500 29,458
Additional paid-in capital................ 138,342 1,359,703 1,359,703 (6,710,567)
Retained earnings (deficit)............... (593,897) (960,134) (4,828,995) --
Limited partners' (deficit) equity........ (1,410,480) (1,450,330) (2,068,163) --
----------- ----------- ----------- -----------
Total (deficit) equity............... (1,865,535) (1,050,261) (5,536,955) (6,681,109)
----------- ----------- ----------- -----------
Total liabilities and equity......... $ 3,672,792 $13,026,515 $12,299,873 $11,155,719
============ ============ ============ ============
</TABLE>

The accompanying notes are an integral part of these combined balance sheets.

F-3
<PAGE> 72

SNYDER COMMUNICATIONS
(SEE NOTE 1)

COMBINED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
----------------------------------------
1993 1994 1995
---------- ----------- -----------
<S> <C> <C> <C>
REVENUES......................................................... $9,042,523 $11,740,235 $42,891,561
OPERATING EXPENSES:
Cost of services............................................. 5,455,345 6,463,703 27,479,690
Selling, general and administrative expenses................. 3,003,096 3,525,363 7,214,074
---------- ----------- -----------
8,458,441 9,989,066 34,693,764
Compensation to SMS stockholders............................. -- -- 4,423,868
---------- ----------- -----------
INCOME FROM OPERATIONS........................................... 584,082 1,751,169 3,773,929
INTEREST EXPENSE--SUBSTANTIALLY ALL TO RELATED PARTIES........... (313,649) (295,774) (783,441)
INTEREST INCOME.................................................. 7,401 19,600 197,954
---------- ----------- -----------
INCOME BEFORE TAXES.............................................. 277,834 1,474,995 3,188,442
SMS INCOME TAX PROVISION (BENEFIT)............................... 15,000 85,000 (245,000)
---------- ----------- -----------
NET INCOME....................................................... $ 262,834 $ 1,389,995 $ 3,433,442
========== ============ ============
PRO FORMA INCOME DATA (UNAUDITED):
Historical income before income taxes as reported............ $ 3,188,442
Pro forma adjustment for compensation to SMS stockholders.... 4,423,868
-----------
Pro forma income before income taxes......................... 7,612,310
-----------
Pro forma provision for income taxes......................... 3,021,088
-----------
Pro forma net income.................................... $ 4,591,222
============
Pro forma net income per share.......................... $ 0.15
============
Pro forma weighted average number of shares
outstanding........................................... 30,207,057
============
</TABLE>

<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED JUNE 30,
--------------------------
1995 1996
----------- -----------
(UNAUDITED)
<S> <C> <C>
REVENUES.................................................................... $13,980,843 $34,861,276
OPERATING EXPENSES:
Cost of services........................................................ 9,046,169 23,633,694
Selling, general and administrative expenses............................ 2,769,616 6,571,484
----------- -----------
11,815,785 30,205,178
----------- -----------
INCOME FROM OPERATIONS...................................................... 2,165,058 4,656,098
INTEREST EXPENSE--SUBSTANTIALLY ALL TO RELATED PARTIES...................... (215,261) (552,404)
INTEREST INCOME............................................................. 12,477 96,837
----------- -----------
INCOME BEFORE TAXES......................................................... 1,962,274 4,200,531
SMS INCOME TAX PROVISION.................................................... 383,000 58,000
----------- -----------
NET INCOME.................................................................. $ 1,579,274 $ 4,142,531
============ ============
PRO FORMA INCOME DATA (UNAUDITED):
Historical income before income taxes as reported....................... $ 1,962,274 $ 4,200,531
Pro forma provision for income taxes.................................... 779,023 1,680,212
----------- -----------
Pro forma net income............................................... $ 1,183,251 $ 2,520,319
============ ============
Pro forma net income per share..................................... $ 0.04 $ 0.08
============ ============
Pro forma weighted average number of shares outstanding............ 30,207,057 30,207,057
============ ============
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-4
<PAGE> 73

SNYDER COMMUNICATIONS
(SEE NOTE 1)

COMBINED STATEMENTS OF EQUITY

<TABLE>
<CAPTION>
ADDITIONAL RETAINED LIMITED
COMMON PAID-IN EARNINGS PARTNERS'
STOCK CAPITAL (DEFICIT) DEFICIT TOTAL
------ ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
BALANCE, December 31, 1992......... $500 $ 138,342 $ (641,295) $(2,919,358) $(3,421,811)
Distributions to SMS
stockholders................ -- -- (76,425) -- (76,425)
Net income.................... 23,897 238,937 262,834
------ ---------- ----------- ----------- -----------
BALANCE, December 31, 1993......... 500 138,342 (693,823) (2,680,421) (3,235,402)
Distributions to SMS
stockholders................ -- -- (20,128) -- (20,128)
Net income.................... 120,054 1,269,941 1,389,995
------ ---------- ----------- ----------- -----------
BALANCE, December 31, 1994......... 500 138,342 (593,897) (1,410,480) (1,865,535)
Proceeds from sale of
partnership interest, net of
income taxes of $815,000.... -- 1,221,361 -- 13,639 1,235,000
Distributions to limited
partners.................... -- -- -- (3,853,168) (3,853,168)
Net income (loss)............. -- (366,237) 3,799,679 3,433,442
------ ---------- ----------- ----------- -----------
BALANCE, December 31, 1995......... 500 1,359,703 (960,134) (1,450,330) (1,050,261)
Net income (unaudited)........ 2,591,364 1,551,167 4,142,531
Distributions (unaudited)..... -- -- (6,460,225) (2,169,000) (8,629,225)
------ ---------- ----------- ----------- -----------
BALANCE, June 30, 1996
(unaudited)...................... $500 $1,359,703 $(4,828,995) $(2,068,163) $(5,536,955)
====== ========= ========== ========== ==========
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-5
<PAGE> 74

SNYDER COMMUNICATIONS
(SEE NOTE 1)

COMBINED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
FOR THE YEAR ENDED FOR THE SIX MONTHS
DECEMBER 31, ENDED JUNE 30,
------------------------------------- --------------------------
1993 1994 1995 1995 1996
---------- ---------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income............................. $ 262,834 $1,389,995 $ 3,433,442 $ 1,579,274 $ 4,142,531
Adjustments to reconcile net income to
net cash provided by operating
activities--
Depreciation and amortization..... 237,167 389,037 595,759 242,876 436,236
Loss on disposal of assets........ 141,540 -- 152,490 (20,207) --
Deferred tax provision............ 15,000 83,000 60,000 42,000 58,000
Changes in assets and liabilities--
Accounts receivable............... (319,360) (490,274) (1,733,181) (1,672,057) (1,822,469)
Deposits and other assets......... 1,600 (38,601) (242,624) (122,407) (1,299,992)
Prepaid expenses and other
assets.......................... 90,661 (50,164) (62,061) (13,262) 24,457
Accounts payable and other
liabilities..................... 817,791 160,267 5,914,670 3,336,278 3,117,140
---------- ---------- ----------- ----------- -----------
Net cash provided by operating
activities.................. 1,247,233 1,443,260 8,118,495 3,372,495 4,655,903
---------- ---------- ----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment.... (938,040) (530,506) (1,137,827) (401,007) (1,295,554)
Note and net advances to SMS
stockholders......................... 246,676 (5,657) (2,764,769) (2,725,000) 45,426
---------- ---------- ----------- ----------- -----------
Net cash used in investing
activities.................. (691,364) (536,163) (3,902,596) (3,126,007) (1,250,128)
---------- ---------- ----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of notes payable to limited
partner.............................. (181,330) (465,300) (2,606,151) (2,606,151) --
Repayment of note payable.............. (166,370) (126,813) (35,817) (35,817) --
Proceeds from issuance of subordinated
debentures due to limited partners... -- -- 5,000,000 5,000,000 --
Proceeds from sale of partnership
interest............................. -- -- 2,050,000 2,050,000 --
Tax effect of equity transaction....... -- -- (815,000) (815,000) --
Debt issuance costs.................... -- -- (557,000) (557,000) --
Distributions to SMS stockholders...... (76,425) (20,128) -- -- (3,735,225)
Distributions to limited partners...... -- -- (3,853,168) (1,200,000) (2,169,000)
Payments on capital lease
obligations.......................... -- (49,060) (114,228) (31,876) (101,908)
---------- ---------- ----------- ----------- -----------
Net cash (used in) provided by
financing activities........ (424,125) (661,301) (931,364) 1,804,156 (6,006,133)
---------- ---------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS.............................. 131,744 245,796 3,284,535 2,050,644 (2,600,358)
CASH AND CASH EQUIVALENTS, beginning of
year..................................... 219,437 351,181 596,977 596,977 3,881,512
---------- ---------- ----------- ----------- -----------
CASH AND CASH EQUIVALENTS, end of year..... $ 351,181 $ 596,977 $ 3,881,512 $ 2,647,621 $ 1,281,154
========== ========== ============ ============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the period for
interest............................. $ 293,512 $ 247,339 $ 529,108 $ 245,158 $ 491,158
SUPPLEMENTAL DISCLOSURE OF NONCASH
ACTIVITIES:
Equipment purchased during the period
under capital leases................. $ -- $ 268,599 $ 433,154 $ 90,492 $ 641,893
Distribution of note receivable from
stockholder to SMS stockholders...... -- -- -- -- 2,725,000
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-6
<PAGE> 75

SNYDER COMMUNICATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS
(INFORMATION AS OF JUNE 30, 1995 AND 1996, AND FOR THE SIX MONTHS ENDED
JUNE 30, 1995 AND 1996 IS UNAUDITED)

1. ORGANIZATION, BASIS OF PRESENTATION AND BUSINESS:

On October 19, 1988, Collegiate Marketing and Communications, Inc., a
Delaware corporation (the "General Partner"), and a Delaware limited partnership
beneficially owned by Mortimer B. Zuckerman and Fred Drasner (the "Original
Limited Partner") entered into a partnership agreement (the "Partnership
Agreement") pursuant to the provisions of the Delaware Act, under the name
Collegiate Marketing and Communications, L.P. (the "Partnership"). On September
1, 1989, the name of the Partnership was changed to Snyder Communications, L.P.,
and the name of the General Partner was changed to Snyder Communications, Inc.
On May 18, 1995, the Partnership Agreement was amended to admit several new
limited partners into the Partnership. On June 25, 1996, the name of the General
Partner was changed to Snyder Marketing Services, Inc. ("SMS").

Snyder Communications, Inc., a Delaware corporation, was incorporated on
June 25, 1996, to continue the business operations of the Partnership. Snyder
Communications, Inc., in conjunction with all of the existing partners in the
Partnership, intends to reorganize (the "Reorganization"), on or prior to the
effectiveness of the initial public offering of its common stock (the
"Offerings").

Prior to the Reorganization, SMS owns 63.85 percent of the partnership and
the limited partners own the remaining 36.15 percent. The Reorganization will
result in the stockholders of SMS exchanging 100 percent of their SMS stock for
stock of Snyder Communications, Inc. simultaneously with the limited partners
exchanging their limited partnership interests in the partnership for common
stock of Snyder Communications, Inc. After consummation of the Reorganization,
Snyder Communications, Inc. will own 100 percent of the stock of SMS and,
directly and indirectly (through its ownership of SMS), 100 percent of the
interests in the Partnership.

Because of the continuity of ownership, the Reorganization will be
accounted for by combining the assets, liabilities and operations of SMS, the
Partnership and Snyder Communications, Inc., at their historical cost basis.
Accordingly, for all periods presented, the accompanying combined financial
statements include a combination of the accounts of SMS and the Partnership (the
combined entity will be referred to herein as the "Company" or "Snyder
Communications") after elimination of all significant intercompany transactions.

Snyder Communications provides outsourced marketing services. The Company
designs and implements marketing programs for its customers utilizing field
sales, teleservices, sponsored wallboards, and product sampling. The Company's
operations are conducted throughout the United States with planned expansion to
the United Kingdom.

There are important risks associated with the Company's business and
financial results. These risks include (i) the Company's current reliance on one
significant customer, which constituted 59% of its 1995 revenues, and on other
major clients (see Note 3); (ii) the Company's ability to sustain and manage
future growth; (iii) the Company's dependence on industry trends toward
outsourcing of marketing services; (iv) the risks associated with the Company's
contracts; and (v) the dependence of the Company's success on its executive
officers and other key employees, in particular, its President, Chief Executive
Officer and Chairman of the Board of Directors.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

CASH AND CASH EQUIVALENTS

Cash and cash equivalents are comprised principally of amounts in operating
accounts and other money market investments, stated at cost which approximates
market value, with original maturities of three months or less.

F-7
<PAGE> 76

SNYDER COMMUNICATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

DEFERRED FINANCING COSTS

Deferred financing costs, which were incurred in connection with the
issuance of the subordinated debentures (see Note 5), are charged to expense as
additional interest expense over the life of the subordinated debentures using
the interest method.

PROPERTY AND EQUIPMENT

Property and equipment is stated at cost. The Company depreciates
furniture, fixtures, and office and telephone equipment on a straight-line basis
over 3 to 10 years. Custom wood cases used to display wallboards are placed in
locations targeted at specific advertising markets. The original cost of these
cases is capitalized and amortized over 5 years.

When assets are retired or sold, the cost and related accumulated
depreciation and amortization are removed from the accounts, and any gain or
loss is reflected in income.

REVENUE RECOGNITION

FIELD SALES AND TELESERVICES REVENUE -- The Company provides field sales
and teleservices sales and marketing of telecommunication services to clients
under contracts which provide for payments based on accepted subscribers and the
type of service purchased by the subscriber. Revenues related to these sales are
recognized on the date the application for service installment is accepted by
the Company's telecommunication clients. At this point, the Company has no
further performance obligation related to the submitted subscriber and is
contractually entitled to payment. One of the Company's contracts provides the
client with the right to seek a return of previously paid commissions if the
subscribers submitted by the Company do not meet certain defined characteristics
and performance standards. These relate to the telecommunication client's
ability to successfully install and provide service to the subscriber, the bad
debt experience of the subscriber base submitted by the Company and certain
minimum usage and life measures of the subscriber base. At the point of revenue
recognition, an allowance is recorded by the Company based on an estimate for
these returned commissions. The allowance is estimated based on the Company's
historical experience and periodically reviewed by the Company and adjusted when
necessary.

WALLBOARD REVENUE -- The Company contracts with sponsors to display
sponsored information in mounted wall units at target market locations.
Wallboard revenue is recognized over the life of the contract as services are
rendered which is generally one year. Unearned revenue is recorded for billings
prior to the earning of such revenue.

PRODUCT SAMPLING -- The Company contracts with sponsors to produce and
distribute product samples, coupons and pieces of literature to target markets.
Sampling revenue is recognized over the contract term of the sampling program as
services are rendered which generally extends for one year.

INCOME TAXES

The accompanying combined financial statements reflect no provision for
Federal or state income taxes related to income earned by the Partnership since
each of the partners of the Partnership reflected their share of the
Partnership's net income on their respective tax returns. Prior to January 1,
1996, SMS was taxed as a C corporation and accordingly a provision (benefit) for
taxes of SMS is reflected in the accompanying statements of income for each of
the three years in the period ended December 31, 1995, and the six months ended
June 30, 1995. During this period, SMS accounted for income taxes in accordance
with Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes." Effective January 1, 1996, SMS

F-8
<PAGE> 77

SNYDER COMMUNICATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
elected to be taxed as an S corporation under the Internal Revenue Code. In lieu
of corporate taxes, the stockholders of an S corporation are taxed on their
proportionate share of the Company's taxable income.

After the Reorganization, the Company will be subject to Federal and state
corporate income taxes. Accordingly, the accompanying combined statements of
income for the year ended December 31, 1995 and the six month periods ended June
30, 1995 and 1996 include unaudited pro forma adjustments for income tax
expense, which would have been recorded had all of the income generated by the
Company been subject to Federal and state corporate income taxes based on the
tax laws in effect during those periods (see Note 6).

ESTIMATES AND ASSUMPTIONS

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

CONCENTRATION OF CREDIT RISK

Concentration of credit risk is limited to trade accounts receivable and is
subject to the financial conditions of certain major clients as described in
Note 3. The Company's receivables are concentrated with customers in the
telecommunications industry. The Company does not require collateral or other
security to support clients' receivables.

PRO FORMA NET INCOME PER SHARE

Pro forma net income per share has been computed by dividing pro forma net
income by the pro forma weighted average number of shares outstanding during
each period. The pro forma weighted-average number of shares outstanding has
been adjusted for the estimated number of shares (748,657) that the Company
would need to issue (at an assumed initial public offering price of $15.00 per
share, which is the mid-point of the proposed initial public offering price
range) to fund distributions in excess of earnings of approximately $11.2
million to the Company's existing stockholders and limited partners (see Note
12).

ACCOUNTING FOR STOCK OPTIONS

Statement of Financial Accounting Standard No. 123 (SFAS 123) establishes a
fair value based method of accounting for stock-based compensation plans. It
encourages entities to adopt that method in place of the provisions of APB
Opinion No. 25, "Accounting for Stock Issued to Employees" (APB 25), for all
arrangements under which employees receive shares of stock or other equity
instruments of the employer. The Company will follow APB 25 and will comply with
the specific provision of SFAS 123 that requires pro forma disclosures
concerning compensation expense in the notes to the financial statements.

INTERIM FINANCIAL STATEMENTS

The combined financial statements of Snyder Communications as of and for
the six months ending June 30, 1995 and 1996, presented herein have been
prepared by the Company without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. The financial statements reflect all
adjustments (consisting of only normal recurring adjustments) which, in the
opinion of management, are necessary to present fairly the combined financial
position, results of operations and cash flows of the Company as of June 30,
1995 and 1996, and for the quarters then ended. The results for the interim
periods are not necessarily indicative of the results to be obtained for the
full year due to the seasonal nature of the Company's business.

F-9
<PAGE> 78

SNYDER COMMUNICATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

3. SIGNIFICANT CLIENTS:

The Company had one client which represented 59, 17 and 3 percent of the
Company's revenues for the years ended December 31, 1995, 1994 and 1993,
respectively. The loss of this client would have a material adverse effect on
the Company's business. The Company's principal contract with this client
extends through December 1997.

In addition, the Company had three and four clients that each accounted for
more than ten percent of the Company's revenues for the years ended December 31,
1994 and 1993, respectively. For the year ended December 31, 1994, these three
clients accounted for 17, 12 and 11 percent of the Company's revenues,
respectively. For the year ended December 31, 1993, these four clients accounted
for 19, 15, 10 and 10 percent of the Company's revenues, respectively.

The Company had two telecommunications clients that accounted for more than
10 percent of the Company's revenues for the six months ended June 30, 1996. For
this period, these two clients accounted for 56 and 25 percent of the Company's
revenues, respectively.

4. PROPERTY AND EQUIPMENT:

Property and equipment consists of the following.

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------- JUNE 30,
1994 1995 1996
---------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Wallboards..................................... $1,503,159 $ 1,829,398 $ 2,028,330
Office and telephone equipment................. 687,848 1,415,795 2,158,677
Furniture and fixtures......................... 101,415 166,919 952,428
Leasehold improvements......................... 61,030 166,614 250,251
---------- ----------- -----------
2,353,452 3,578,726 5,389,686
Accumulated depreciation....................... (847,750) (1,242,472) (1,647,140)
---------- ----------- -----------
$1,505,702 $ 2,336,254 $ 3,742,546
========= ========== ==========
</TABLE>

5. DEBT:

SUBORDINATED DEBENTURES

On May 18, 1995, the Partnership issued $6,000,000 (face value) of
subordinated debentures (the "Debentures") with a stated interest rate of 12.25
percent (effective interest rate to maturity of approximately 17 percent), due
December 31, 2001, to a group consisting of certain limited partners in the
Partnership for $5,000,000 in cash. The difference between the cash proceeds
received and the face amount of the Debentures has been accounted for as an
original issue discount. This discount is being amortized as additional interest
expense over the life of the Debentures using the interest method. The
Debentures require annual principal payments of $1,200,000 beginning on December
31, 1997 and continuing through December 31, 2000 and contain penalties for
prepayment. The remaining unpaid principal balance will be due on December 31,
2001. The Debentures are subordinate to future borrowings, if any (not to exceed
$2,000,000), made under any working capital facility that may be secured by the
Company and contain covenants that restrict distributions (other than those
required for the partners to make tax payments) unless certain liquidity ratios,
as defined, are met. Interest is due semi-annually in April and October of each
year. At December 31, 1995, the fair value of the Debentures approximated their
carrying value.

The Company intends to use a portion of the proceeds from the Offerings to
repay all amounts due under the Debentures. Extinguishment of the Debentures as
of June 30, 1996, would result in an extraordinary

F-10
<PAGE> 79

SNYDER COMMUNICATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

5. DEBT (CONTINUED)
charge to income of approximately $2.1 million ($1.3 million net of income
taxes) representing prepayment penalties plus the write off of unamortized
discount and debt issuance costs.

NOTES PAYABLE

Notes payable consisted of the following at December 31, 1994:

<TABLE>
<S> <C>
Notes payable to a limited partner.............................. $2,606,151
Note payable.................................................... 35,817
----------
2,641,968
Less--Current portion........................................... (720,571)
----------
$1,921,397
=========
</TABLE>

Concurrent with the formation of the Partnership, the Original Limited
Partner loaned the Partnership $350,000 as evidenced by a promissory note. On
May 10, 1989, the Partnership entered into another promissory note agreement
with the Original Limited Partner to repay the principal amount of advances
previously made by the Original Limited Partner to the Partnership. Effective
January 1, 1993, all prior notes payable and the related accrued interest to the
Original Limited Partner were combined into one note totaling $3,252,781. This
note bore interest of 8 percent per annum. This note was paid in full in May of
1995 with a portion of the proceeds from the Debentures.

In November 1992, a settlement agreement was reached between the Company
and an independent contractor hired by the Company whereby the Company was
required to pay the contractor $499,000. Under the settlement agreement, the
Company paid $170,000 to the independent contractor at the date of settlement,
with the remaining $329,000 plus interest at 15 percent per annum paid in
installments through March 1995. This obligation was fully satisfied in 1995.

6. INCOME TAXES:

Prior to January 1, 1996, SMS was taxed as a C corporation for Federal and
state corporate income tax purposes. Effective January 1, 1996, SMS elected to
be taxed as an S corporation and accordingly, SMS's income was taxable to its
stockholders rather than to SMS for the three months ended March 31, 1996. Upon
conversion to an S corporation on January 1, 1996, the deferred tax asset
balance of $58,000 was written off and is reflected as a SMS income tax
provision in the accompanying combined financial statements. The SMS income tax
provision (benefit) for periods when it operated as a C corporation includes the
following components.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------
1993 1994 1995
------- ------- ---------
<S> <C> <C> <C>
Current................................................ $ -- $ 2,000 $ 510,000
Tax effect of equity transaction....................... -- -- (815,000)
Deferred............................................... 15,000 83,000 60,000
------- ------- ---------
SMS income tax provision (benefit)................ $15,000 $85,000 $(245,000)
======= ======= =========
</TABLE>

F-11
<PAGE> 80

SNYDER COMMUNICATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

6. INCOME TAXES (CONTINUED)

A reconciliation of taxes at the U.S. Federal income tax rate to the
Company's actual income taxes is as follows.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
1993 1994 1995
-------- --------- -----------
<S> <C> <C> <C>
Taxes at U.S. Federal income tax rate............. $ 97,000 $ 516,000 $ 1,116,000
Income taxed directly to limited partners......... (84,000) (445,000) (1,330,000)
State taxes (benefit), net of Federal and
permanent differences........................... 2,000 14,000 (31,000)
-------- --------- -----------
Total income taxes........................... $ 15,000 $ 85,000 $ (245,000)
======== ========= ==========
</TABLE>

At December 31, 1995 and 1994, the Company had recorded net deferred tax
assets of $58,000 and $118,000, respectively, related to differences in SMS's
book and tax earnings generated from its general partnership interest in the
Partnership.

Upon the successful completion of the Offerings and the related
Reorganization, a net deferred tax asset will be recorded with an associated
credit to the provision for income taxes. If the effective date of the Offerings
and the Reorganization had been June 30, 1996, a net deferred tax asset of
approximately $137,000 would have been recorded. As of June 30, 1996, the net
deferred tax asset would have consisted of the following:

<TABLE>
<S> <C>
Reserves and other liabilities........................................... $ 122,000
Allowance for doubtful accounts.......................................... 60,000
Property and equipment................................................... (124,000)
Other.................................................................... 79,000
---------
$ 137,000
=========
</TABLE>

7. LEASES:

The Company leases certain facilities, office equipment and other assets.
The following is a schedule of future minimum lease payments for capital leases
and for operating leases (with initial or remaining terms in excess of one year
at December 31, 1995).

<TABLE>
<CAPTION>
YEAR ENDING CAPITAL OPERATING
DECEMBER 31, LEASES LEASES
----------------- --------- ----------
<S> <C> <C>
1996.................................................... $ 257,186 $1,362,364
1997.................................................... 230,868 1,077,808
1998.................................................... 133,648 444,144
1999.................................................... 6,163 444,144
2000.................................................... -- 444,144
Thereafter.............................................. -- 629,204
--------- ----------
Total minimum lease payments....................... 627,865 $4,401,808
=========
Less--Amount representing interest........................... (89,400)
---------
Total obligation under capital leases.............. 538,465
Less--Current portion........................................ (204,047)
---------
Long-term portion............................................ $ 334,418
=========
</TABLE>

F-12
<PAGE> 81

SNYDER COMMUNICATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

7. LEASES (CONTINUED)
Subsequent to December 31, 1995, the Company amended its headquarters and
office lease agreement to lease additional office space in order to house an
expanded call-center adjacent to its existing space and to extend the term of
the lease agreement for approximately six years under similar terms. The total
additional future minimum lease payments under this amendment will approximate
$1.6 million.

Property and equipment, net on the balance sheet includes $219,563,
$538,798 and $1,076,331 for equipment purchased under capital leases as of
December 31, 1994, 1995 and June 30, 1996 (unaudited), respectively.

Rental expense for all operating leases was approximately $271,000,
$434,000 and $1,201,000 for the years ended December 31, 1993, 1994 and 1995,
respectively and approximately $417,215, and $1,097,533 for the six months ended
June 30, 1995 (unaudited) and 1996 (unaudited), respectively.

8. CAPITAL STOCK:

In May 1995, SMS sold a 6.15 percent interest in the Partnership for
$2,050,000 in cash proceeds. These proceeds are reflected (net of associated
income taxes of $815,000 and SMS's basis in the equity interest) as a
contribution to additional paid-in capital in the accompanying combined
financial statements.

9. OPTIONS:

In August 1996, the Board of Directors of the Company adopted and the
stockholders of the Company approved the 1996 Stock Incentive Plan (the "Stock
Option Plan"). The Stock Option Plan, which terminates in August 2006, on the
tenth anniversary of the effective date of the plan, is to be administered by
the Compensation Committee, which is required to be composed of at least two
directors. Following the Offerings, the directors serving on the Compensation
Committee must constitute "non-employee directors" as defined under Rule 16b-3
under the Securities Exchange Act of 1934, as amended. The Stock Option Plan
authorizes the granting of incentive stock options, non-qualified stock options,
restricted stock awards and stock appreciation rights ("SARs"), or any
combination thereof, at the discretion of the Compensation Committee of the
Board of Directors. Subject to adjustment in certain circumstances, the
aggregate number of shares of Common Stock which may be issued under the Stock
Option Plan upon exercise of options, SARs or in the form of restricted stock
may not exceed five million shares.

The exercise price of options granted under the Stock Option Plan may not
be less than 100 percent (110 percent in the case of an optionee who is a 10
percent stockholder) of the fair market value per share of Common Stock on the
date of the option grant. The vesting and other provisions of the options will
be determined by the Compensation Committee.

In the case of any incentive stock option, the option shall terminate on
the date that is three months (one year, in the event that the termination of
employment is by reason of death or disability) after the date on which the
optionee terminates employment or, if earlier, the date specified in the
agreement relating to the option grant.

As of June 30, 1996, no options had been issued under the Stock Option
Plan, although the Company anticipates issuing approximately 2.4 million options
prior to the Offerings with exercise prices equal to the price of shares offered
to the public.

10. RELATED PARTIES:

At December 31, 1995 and June 30, 1996, the Company was owed $45,426 and
$17,536, respectively, by certain stockholders of SMS. These advances were
non-interest bearing and were repaid in June, 1996.

F-13
<PAGE> 82

SNYDER COMMUNICATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

10. RELATED PARTIES (CONTINUED)
The Company's headquarters office space is leased from a third party, in
which one of the limited partners has an ownership interest. Rent paid under
this lease was $223,666, $355,483, $771,855 and $423,678 in 1993, 1994, 1995,
and June 30, 1996 (unaudited), respectively.

The Company produces a wallboard for which a publication beneficially owned
by the Original Limited Partner is one of the sponsors. Such publication
participates as a sponsor in exchange for the use by the Company of its
editorial information. Because it is not practicable to estimate the benefit
received by or provided to the Company and the Original Limited Partner, no
accounting recognition has been provided for this transaction in the
accompanying combined financial statements.

During 1995, the Company advanced $2,725,000 to a stockholder of SMS as
evidenced by a promissory note. The note was non-interest bearing and secured by
SMS stock. This note was distributed to the SMS stockholders, pro rata, on June
30, 1996.

11. COMMITMENTS AND CONTINGENCIES:

The Company is subject to lawsuits, investigations and claims arising out
of the conduct of its business, including those related to commercial
transactions, contracts, government regulation and employment matters. Certain
claims, suits and complaints have been filed or are pending against the Company.
In the opinion of management, and based on all known facts, all matters are
without merit or are of such kind, or involve such amounts, as would not have a
material effect on the financial position or results of operations of the
Company if disposed of unfavorably.

12. PRO FORMA DATA (UNAUDITED):

The unaudited pro forma combined balance sheet is presented as if the
Reorganization had occurred on June 30, 1996. As explained in Note 1, the
Reorganization will entail the limited partners exchanging their limited
partnership interests in the Partnership, and the stockholders of SMS exchanging
their stock in SMS for common stock in Snyder Communications, Inc. The SMS
retained earnings and limited partners' deficit balances will be reclassified to
additional paid-in capital. The Company will be taxed as a C corporation
resulting in the recording of a net deferred tax asset of $137,000, as discussed
in Note 6. Prior to consummation of the Offerings, the Company intends to make a
distribution of its cash balance existing at the date of the distribution (not
expected to exceed $10.0 million between July 1, 1996 and the date of the
Offerings) to its existing shareholders and limited partners. The unaudited pro
forma combined balance sheet gives effect to these items.

The pro forma net income and net income per share amounts for the year
ended December 31, 1995 and the six month periods ended June 30, 1995 and 1996
include a provision for Federal and state income taxes as if the combined
Company had been a C corporation for all the periods presented. The effective
income tax rate reflects the combined Federal and state income taxes of
approximately 39.7 percent for the year ending December 31, 1995, and the six
months ending June 30, 1995, and 40.0 percent for the six months ended June 30,
1996. The difference between the pro forma income tax rate and the Federal
statutory rate of 34% relates primarily to the impact of state income taxes.
Certain stockholders of the Company served as officers of SMS for which such
officers received compensation from SMS in 1995. The unaudited pro forma
combined income statement data includes an adjustment which reflects the
elimination in 1995 of this non-recurring compensation based on compensation
levels for the Company, as approved by its Board of Directors. Following
consummation of the Reorganization, such officers will not be required to
perform any comparable duties or responsibilities for SMS. Further, other costs
are not likely to be incurred which would offset the impact of this pro forma
adjustment. Therefore, such compensation is treated as non-recurring. The
unaudited pro forma combined statement of income data gives effect to these
items.

F-14
<PAGE> 83

SNYDER COMMUNICATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

12. PRO FORMA DATA (UNAUDITED) (CONTINUED)
A portion of the net proceeds from the Offerings is to be used to repay all
amounts due under the Debentures. If the Debentures had been repaid on January
1, 1995 or January 1, 1996, the unaudited pro forma net income per share (as
adjusted for the number of shares the Company would need to issue, at an assumed
initial public offering price of $15.00 per share, to repay the Debentures)
would have been $0.17 and $0.09 for the year ended December 31, 1995, and the
six months ended June 30, 1996, respectively.

The unaudited pro forma combined financial statements and data are not
necessarily indicative of what the actual results of operations or financial
position would have been assuming such transactions had been completed on the
specified dates and they do not purport to represent the future results of
operation or financial position of the Company.

F-15
<PAGE> 84

INSIDE BACK COVER OF PROSPECTUS:

This inside back cover is a multi-color map, in a landscape orientation, of
the United States showing the locations of the Company's Consumer Markets
district offices, marked by squares; Business Markets district offices, marked
by triangles; and Marketing Services offices, marked by circles.

The map also shows an inset of the Company's planned offices in the United
Kingdom.
<PAGE> 85
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY, THE SELLING STOCKHOLDER OR THE UNDERWRITERS. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE
COMMON STOCK IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR
IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.

------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 11
The Company........................... 18
Use of Proceeds....................... 20
Dividend Policy....................... 20
Capitalization........................ 21
Dilution.............................. 22
Selected Financial and Operating
Data................................ 23
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 25
Business.............................. 33
Management............................ 47
Certain Transactions.................. 53
Principal and Selling Stockholders.... 55
Description of Capital Stock.......... 57
Shares Eligible for Future Sale....... 59
Certain United States Federal Tax
Consequences to Non-United States
Holders............................. 61
Underwriting.......................... 63
Legal Matters......................... 65
Experts............................... 65
Additional Information................ 66
Index to Financial Statements......... F-1

UNTIL , 1996, (25 DAYS AFTER THE
DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE COMMON STOCK,
WHETHER OR NOT PARTICIPATING IN THIS
DISTRIBUTION, MAY BE REQUIRED TO DELIVER A
PROSPECTUS. THIS DELIVERY REQUIREMENT IS IN
ADDITION TO THE OBLIGATION OF DEALERS TO
DELIVER A PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.
</TABLE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

7,800,000 SHARES

[SNYDER COMMUNICATIONS, INC. LOGO]

COMMON STOCK

---------------------
PROSPECTUS
---------------------

MERRILL LYNCH & CO.

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

ALLEN & COMPANY
INCORPORATED

MONTGOMERY SECURITIES

, 1996

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 86

[ALTERNATE COVER FOR INTERNATIONAL PROSPECTUS]
SUBJECT TO COMPLETION

PRELIMINARY PROSPECTUS DATED AUGUST , 1996

PROSPECTUS

7,800,000 SHARES
SNYDER COMMUNICATIONS, INC. LOGO
COMMON STOCK
------------------------

Of the 7,800,000 shares of Common Stock offered hereby, 1,560,000 are being
offered initially outside the United States and Canada by the International
Managers and 6,240,000 shares are being offered initially in the United States
and Canada by the U.S. Underwriters. The initial public offering price and the
underwriting discount per share are identical for both Offerings. See
"Underwriting."

The Common Stock has been approved for listing on the New York Stock
Exchange, subject to notice of issuance, under the trading symbol "SNC."

SEE "RISK FACTORS" BEGINNING ON PAGE 11 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SHARES OF COMMON
STOCK OFFERED HEREBY.
------------------------

(2) Before deducting expenses of the Offerings payable by the Company, estimated
at $2,000,000.

(3) The Over-Allotment Selling Stockholders have granted to the International
Managers and the U.S. Underwriters options, exercisable within 30 days after
the date of this Prospectus, to purchase up to 234,000 and 936,000
additional shares of Common Stock, respectively, solely to cover
over-allotments, if any. If such options are exercised in full, the total
Price to Public, Underwriting Discount, Proceeds to Company and Proceeds to
Selling Stockholders will be $ , $ , $ and
$ , respectively. See "Underwriting."
------------------------

------------------------

MERRILL LYNCH INTERNATIONAL
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
ALLEN & COMPANY
INCORPORATED
MONTGOMERY SECURITIES
------------------------

The date of this Prospectus is , 1996.
<PAGE> 87

[ALTERNATE PAGES FOR INTERNATIONAL PROSPECTUS]

UNDERWRITING

Subject to the terms and conditions set forth in the international purchase
agreement (the "International Purchase Agreement") among the Company, SMS, the
Partnership, the Selling Stockholders and each of the underwriters named below
(the "International Managers"), and concurrently with the sale of 6,240,000
shares of Common Stock to the U.S. Underwriters (as defined below), the Company
and the Selling Stockholder have agreed to sell to the International Managers,
and each of the International Managers severally has agreed to purchase from the
Company and the Selling Stockholder, the number of shares of Common Stock set
forth opposite its name below at the initial public offering price less the
underwriting discount set forth on the cover page of this Prospectus.

<TABLE>
<CAPTION>
INTERNATIONAL MANAGER NUMBER OF SHARES
-----------------
<S> <C>
Merrill Lynch International..........................................
Donaldson, Lufkin & Jenrette Securities Corporation..................
Allen & Company Incorporated.........................................
Montgomery Securities................................................
----------
Total................................................... 1,560,000
----------
----------
</TABLE>

Merrill Lynch International, Donaldson, Lufkin & Jenrette Securities
Corporation, Allen & Company Incorporated and Montgomery Securities are acting
as representatives (the "International Representatives") of the International
Managers.

The Company, SMS, the Partnership and the Selling Stockholders have also
entered into the U.S. purchase agreement (the "U.S. Purchase Agreement") with
certain underwriters in the United States and Canada (the "U.S. Underwriters"
and, together with the International Managers, the "Underwriters") for whom
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Donaldson,
Lufkin Jenrette Securities Corporation, Allen & Company Incorporated and
Montgomery Securities are acting as representatives (the "U.S. Representatives"
and, together with the International Representatives, the "Representatives").
Subject to the terms and conditions set forth in the U.S. Purchase Agreement,
and concurrently with the sale of 1,560,000 shares of Common Stock to the
International Managers pursuant to the International Purchase Agreement, the
Company and the Selling Stockholder have agreed to sell to the U.S.
Underwriters, and the U.S. Underwriters severally have agreed to purchase from
the Company and the Selling Stockholder, an aggregate of 6,240,000 shares of
Common Stock. The initial public offering price per share and the total
underwriting discount per share of Common Stock are identical under the
International Purchase Agreement and the U.S. Purchase Agreement.

In the International Purchase Agreement and the U.S. Purchase Agreement,
the several International Managers and the several U.S. Underwriters,
respectively, have agreed, subject to the terms and conditions set forth
therein, to purchase all of the shares of Common Stock being sold pursuant to
each such agreement if any of the shares of Common Stock being sold pursuant to
each such agreement are purchased. Under certain circumstances, the commitments
of nondefaulting International Managers or U.S. Underwriters, as the case may
be, may be increased. The closings with respect to the sale of shares of Common
Stock to be purchased by the International Managers and the U.S. Underwriters
are conditioned upon one another.

The International Managers and the U.S. Underwriters have entered into an
intersyndicate agreement (the "Intersyndicate Agreement") that provides for the
coordination of their activities. Pursuant to the Intersyndicate Agreement, the
International Managers and the U.S. Underwriters are permitted to sell shares of
Common Stock to each other for purposes of resale at the initial public offering
price, less an amount not greater than the selling concession. Under the terms
of the Intersyndicate Agreement, the International

X-2
<PAGE> 88

[ALTERNATE PAGES FOR INTERNATIONAL PROSPECTUS]

Managers and any dealer to whom they sell shares of Common Stock will not offer
to sell or sell shares of Common Stock to persons who are United States or
Canadian persons or to persons they believe intend to resell to persons who are
United States or Canadian persons, and the U.S. Underwriters and any dealer to
whom they sell shares of Common Stock will not offer to sell or sell shares of
Common Stock to persons who are non-United States or non-Canadian persons or to
persons they believe intend to resell to persons who are non-United States or
non-Canadian persons, except in each case for transactions pursuant to the
Intersyndicate Agreement.

The International Representatives have advised the Company and the Selling
Stockholder that the International Managers propose initially to offer the
shares of Common Stock offered hereby to the public at the initial public
offering price set forth on the cover page of this Prospectus, and to certain
dealers at such price less a concession not in excess of $ per share of
Common Stock. The International Managers may allow, and such dealers may
reallow, a discount not in excess of $ per share of Common Stock on sales
to certain other dealers. After the initial public offering, the public offering
price, concession and discount may be changed.

The Over-Allotment Selling Stockholders have granted an option to the
International Managers, exercisable during the 30-day period after the date of
this Prospectus, to purchase up to an aggregate of 234,000 additional shares of
Common Stock at the initial public offering price set forth on the cover page of
this Prospectus, less the underwriting discount. The International Managers may
exercise this option only to cover aver-allotments, if any, made on the sale of
the Common Stock offered hereby. To the extent that the International Managers
exercise this option, each International Manager will be obligated, subject to
certain conditions, to purchase a number of additional shares of Common Stock
proportionate to such International Manager's initial amount reflected in the
foregoing table. The Over-Allotment Selling Stockholders also have granted an
option to the U.S. Underwriters, exercisable during the 30-day period after the
date of this Prospectus, to purchase up to an aggregate of 936,000 additional
shares of Common Stock to cover over-allotments, if any, on terms similar to
those granted to the International Managers.

At the request of the Company, the U.S. Underwriters have reserved up to
234,000 shares of Common Stock for sale at the initial public offering price to
certain employees of the Company and other persons. The number of shares of
Common Stock available for sale to the general public will be reduced to the
extent such persons purchase such reserved shares. Any reserved shares which are
not so purchased will be offered by the U.S. Underwriters to the general public
on the same basis as the other shares offered hereby. Certain individuals
purchasing reserved shares may be required to agree not to sell, offer or
otherwise dispose of any shares of Common Stock for a period of three months
after the date of this Prospectus.

The Company, the Selling Stockholders and the Company's other existing
stockholders have agreed, subject to exceptions for certain pledges and, in the
case of the Company, the grant of employee stock options, not to, directly or
indirectly, sell, offer to sell, grant any option for the sale of, or otherwise
dispose of, any capital stock of the Company, or any security convertible or
exchangeable into, or exercisable for, such capital stock, or in the case of the
Company, file any registration statement with respect to the foregoing (other
than a registration statement on Form S-8 to register shares issuable upon
exercise of employee stock options), for a period of 180 days after the date of
this Prospectus, without the prior written consent of Merrill Lynch. See "Shares
Eligible for Future Sale."

X-3
<PAGE> 89

[ALTERNATE PAGES FOR INTERNATIONAL PROSPECTUS]

Each International Manager has agreed that (i) it has not offered or sold
and, for a period of six months following consummation of the Offerings, will
not offer or sell any shares of Common Stock to persons in the United Kingdom,
except to persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the purposes of
their businesses or otherwise in circumstances which do not constitute an offer
to the public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995; (ii) it has complied and will comply with all
applicable provisions of the Financial Services Act 1986 with respect to
anything done by it in relation to the Common Stock in, from or otherwise
involving the United Kingdom; and (iii) it has only issued or passed on and will
only issue or pass on in the United Kingdom any document received by it in
connection with the issuance of Common Stock to a person who is of a kind
described in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisement)(Exemptions) Order 1995, as amended, or is a person to whom such
document may otherwise lawfully be issued or passed on.

No action has been or will be taken in any jurisdiction (except in the
United States) that would permit a public offering of the shares of Common
Stock, or the possession, circulation or distribution of this Prospectus or any
other material relating to the Company, the Selling Stockholders or shares of
Common Stock in any jurisdiction where action for that purpose is required.
Accordingly, the shares of Common Stock may not be offered or sold, directly or
indirectly, and neither this Prospectus nor any other offering material or
advertisements in connection with the shares of Common Stock may be distributed
or published, in or from any country or jurisdiction except in compliance with
any applicable rules and regulations of any such country or jurisdiction.

Purchasers of the shares offered hereby may be required to pay stamp taxes
and other charges in accordance with the laws and practices of the country of
purchase in addition to the offering price set forth on the cover page hereof.

The Company, SMS, the Partnership and the Selling Stockholders have agreed
to indemnify the International Managers and the U.S. Underwriters against
certain liabilities, including liabilities under the Securities Act, or to
contribute to payments made in respect thereof.

Allen & Company Incorporated, together with certain officers and related
persons thereof, owns 2.37% of the shares of Common Stock prior to the
Offerings. See "The Company," "Principal and Selling Stockholders" and "Certain
Transactions." In addition, a portion of the proceeds of the Offerings is
expected to be used to repay the amounts owed under the Debentures to such
investors. See "Use of Proceeds."

Merrill Lynch has provided certain financial advisory services to the
Company and its affiliates for which it will receive customary fees.

X-4
<PAGE> 90
[ALTERNATE PAGES FOR INTERNATIONAL PROSPECTUS]

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY, THE SELLING STOCKHOLDER OR THE UNDERWRITERS. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE
COMMON STOCK IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR
IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.

THERE ARE RESTRICTIONS ON THE OFFER AND SALE OF THE COMMON STOCK OFFERED
HEREBY IN THE UNITED KINGDOM. ALL APPLICABLE PROVISIONS OF THE FINANCIAL
SERVICES ACT 1986 AND THE PUBLIC OFFERS OF SECURITIES REGULATIONS 1995 WITH
RESPECT TO ANYTHING DONE BY ANY PERSONS IN RELATION TO THE COMMON STOCK IN, FROM
OR OTHERWISE INVOLVING THE UNITED KINGDOM MUST BE COMPLIED WITH. SEE
"UNDERWRITING."

IN THE PROSPECTUS, REFERENCES TO "DOLLARS" AND "$" ARE TO UNITED STATES
DOLLARS.
------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary................... 3
Risk Factors......................... 11
The Company.......................... 18
Use of Proceeds...................... 20
Dividend Policy...................... 20
Capitalization....................... 21
Dilution............................. 22
Selected Financial and Operating 23
Data...............................
Management's Discussion and Analysis 25
of Financial Condition and Results
of Operations......................
Business............................. 33
Management........................... 47
Certain Transactions................. 53
Principal and Selling Stockholders... 55
Description of Capital Stock......... 57
Shares Eligible for Future Sale...... 59
Certain United States Federal Tax 61
Consequences to Non-United States
Holders............................
Underwriting......................... 63
Legal Matters........................ 65
Experts.............................. 65
Additional Information............... 66
Index to Financial Statements........ F-1

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

7,800,000 SHARES

[SNYDER COMMUNICATIONS, INC. LOGO]

COMMON STOCK

---------------------
PROSPECTUS
---------------------

MERRILL LYNCH INTERNATIONAL

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

ALLEN & COMPANY
INCORPORATED

MONTGOMERY SECURITIES

, 1996

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

X-5
<PAGE> 91

PART II. INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the expenses expected to be incurred in
connection with the issuance and distribution of the Common Stock registered
hereby, all of which expenses, except for the Commission registration fee and
the New York Stock Exchange listing fee, are estimates:

<TABLE>
<CAPTION>
DESCRIPTION AMOUNT
---------------------------------------------------------------- ----------
<S> <C>
SEC Registration Fee............................................ $ 76,138
New York Stock Exchange Listing Fee............................. 203,600
NASD filing fee................................................. 22,580
Transfer Agent's and Registrar's Fee............................ 3,500
Printing and Engraving Fees..................................... 250,000
Legal Fees and Expenses (other than Blue Sky)................... 400,000
Accounting Fees and Expenses.................................... 850,000
Blue Sky Fees and Expenses (including fees of counsel).......... 25,000
Miscellaneous................................................... 169,182
----------
TOTAL................................................. $2,000,000
=========
</TABLE>

- ---------------
* To be furnished by amendment.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Delaware General Corporation Law (the "Delaware Law") provides that a
corporation may limit the liability of each director to the corporation or its
stockholders for monetary damages except for liability (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders; (ii) for acts
or omissions not in good faith or that involve intentional misconduct or a
knowing violation of law; (iii) in respect of certain unlawful dividend payments
or stock redemptions or repurchases; and (iv) for any transaction from which the
director derives an improper personal benefit. The Certificate of Incorporation
and Bylaws provide for the elimination and limitation of the personal liability
of directors of the Company for monetary damages to the fullest extent permitted
by the Delaware Law. In addition, the Certificate of Incorporation and Bylaws
provide that if the Delaware Law is amended to authorize the further elimination
or limitation of the liability of a director, then the liability of the
directors shall be eliminated or limited to the fullest extent permitted by the
Delaware Law, as so amended. The effect of this provision is to eliminate the
right of the Company and its stockholders (through stockholders' derivative
suits on behalf of the Company) to recover monetary damages against a director
for breach of the fiduciary duty of care as a director (including breaches
resulting from negligent or grossly negligent behavior) except in the situations
described in clauses (i) through (iv) above. The provision does not limit or
eliminate the rights of the Company or any stockholder to seek non-monetary
relief such as an injunction or rescission in the event of a breach of a
director's duty of care. In addition, the Bylaws provide that the Company shall,
to the full extent permitted by the Delaware Law, as amended from time to time,
indemnify and advance expenses to each of its currently acting and former
directors, officers, employees and agents.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

In connection with the Reorganization of the Company, Daniel M. Snyder,
Mortimer B. Zuckerman, Fred Drasner, Michele D. Snyder, SMS Employee Stock
Ownership Fund, Anthony O. Roberts and certain other stockholders will receive
shares of the Company in exchange for and in proportion to their interests in
the Partnership. These issuances of Common Stock are claimed to be exempt from
the registration provisions of the Securities Act of 1933 pursuant to Section
4(2) of the Act.

II-1
<PAGE> 92

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits

<TABLE>
<C> <S>
1.1 Form of U.S. Purchase Agreement
1.2 Form of International Purchase Agreement
3.1** Certificate of Incorporation of the Registrant
3.2** Bylaws of the Registrant
4.1** Instruments defining the rights of securityholders: Reference is made to
exhibits 3.1 and 3.2
4.2* Specimen common stock certificate
4.3 Form of Exchange Agreement by and among the Registrant, Snyder Marketing
Services, Inc., each of the stockholders of Snyder Marketing Services, Inc.
and each of the limited partners of Snyder Communications, L.P., dated
August , 1996
5* Opinion of Shaw, Pittman, Potts & Trowbridge as to the legality of the
Common Stock being registered
10.1 1996 Stock Incentive Plan of Snyder Communications, Inc.
10.2+** Professional Services Agreement, dated February 1996, as amended, between
the Company and AT&T Communications Inc.
10.3+** Authorized Sales Agent Agreement, dated February 16, 1996, as amended,
between the Company and MCI Telecommunications Corporation
10.4** Services Agreement between the Company and U.S. News & World Report, L.P.
10.5 Form of Registration Rights Agreement among the Company and Daniel M.
Snyder, Michele D. Snyder, U.S. News College Marketing, L.P. and each of
the 1995 Investors (as defined therein) dated August , 1996
10.6** Lease Agreement, Democracy Center, Bethesda, Maryland, dated July 30, 1992,
as amended, between the Company and Democracy Associates Limited
Partnership
10.7** Employment Agreement between the Company and Daniel M. Snyder
10.8** Employment Agreement between the Company and Michele D. Snyder
10.9** Employment Agreement between the Company and Stephen T. Baldacci
10.10** Employment Agreement between the Company and Susan L. Marentis
10.11** Employment Agreement between the Company and Alfred G. Wise
21** Subsidiaries of the Registrant
23.1* Consent of Shaw, Pittman, Potts & Trowbridge (included as part of Exhibit
5)
23.2 Consent of Arthur Andersen LLP
24** Power of Attorney (included on signature page to the Registration
Statement)
27** Financial Data Schedule
</TABLE>

- ---------------
* To be filed by amendment.

** Previously filed.

+ Confidential treatment requested.

(b) Financial Statement Schedules

Schedule II -- Allowance For Doubtful Accounts

Schedules other than those listed above have been omitted since they are
not required or are not applicable or the required information is in the
financial statements or related notes.

ITEM 17. UNDERTAKINGS

(a) The undersigned Registrant hereby undertakes to provide to the
underwriter at the closing specified in the underwriting agreements,
certificates in such denominations and registered in such names as required by
the underwriter to permit prompt delivery to each purchaser.

(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise,

II-2
<PAGE> 93

the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be a part of this
registration statement as of the time it was declared effective.

(2) For purposes of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

II-3
<PAGE> 94

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Washington, District of
Columbia, on August 30, 1996.

SNYDER COMMUNICATIONS, INC.
(Registrant)

By: /s/ DANIEL M. SNYDER

------------------------------------
DANIEL M. SNYDER
CHAIRMAN OF THE BOARD OF DIRECTORS,
PRESIDENT AND CHIEF EXECUTIVE
OFFICER

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and as of the dates indicated.

<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ------------------------------------------ --------------------------------- ----------------
<C> <S> <C>
/s/ DANIEL M. SNYDER Chairman of the Board of August 30, 1996
- ------------------------------------------ Directors, President and Chief
DANIEL M. SNYDER Executive Officer (Principal
Executive Officer)

/s/ MICHELE D. SNYDER Vice Chairman, Chief Operating August 30, 1996
- ------------------------------------------ Officer and Director
MICHELE D. SNYDER

/s/ BRIAN BENHAIM Senior Vice President of August 30, 1996
- ------------------------------------------ Corporate Development, Acting
BRIAN BENHAIM Chief Financial Officer and
Director (Principal Financial
Officer)

/s/ DAVID B. PAUKEN Chief Accounting Officer August 30, 1996
- ------------------------------------------ (Principal Accounting Officer)
DAVID B. PAUKEN
</TABLE>

II-4
<PAGE> 95

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Snyder Communications

We have audited in accordance with generally accepted auditing standards, the
combined financial statements of Snyder Communications (as defined in Note 1 of
the combined financial statements) included in this registration statement, and
have issued our report thereon dated July 1, 1996. Our audit was made for the
purpose of forming an opinion on the basic financial statements taken as a
whole. Schedule II -- Allowance for Doubtful Accounts is the responsibility of
the Company's management and is presented for purposes of complying with the
Securities and Exchange Commission's rules and is not part of the basic
financial statements. This schedule has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, fairly states in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.

ARTHUR ANDERSEN LLP

Washington, DC
July 1, 1996

S-1
<PAGE> 96

SNYDER COMMUNICATIONS
(SEE NOTE 1)

SCHEDULE II
ALLOWANCE FOR DOUBTFUL ACCOUNTS
YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995

<TABLE>
<CAPTION>
DEDUCTIONS
ADDITIONS FROM RESERVE
BALANCE AT CHARGED TO FOR PURPOSES FOR
BEGINNING OF COST AND WHICH RESERVE BALANCE AT
YEAR EXPENSE WAS CREATED END OF YEAR
------------ ---------- ---------------- -----------
<S> <C> <C> <C> <C>
1993.......................................... $ -- $ -- $ -- $ --
1994.......................................... -- 57,400 7,400 50,000
1995.......................................... 50,000 105,777 55,777 100,000
</TABLE>

S-2
<PAGE> 97

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
- ------- ------------------------------------------------------------------------- ----------
<C> <S> <C>
1.1 Form of U.S. Purchase Agreement
1.2 Form of International Purchase Agreement
3.1** Certificate of Incorporation of the Registrant
3.2** Bylaws of the Registrant
4.1** Instruments defining the rights of securityholders: Reference is made to
exhibits 3.1 and 3.2
4.2* Specimen common stock certificate
4.3 Form of Exchange Agreement by and among the Registrant, Snyder Marketing
Services, Inc., each of the stockholders of Snyder Marketing Services,
Inc. and each of the limited partners of Snyder Communications, L.P.,
dated August , 1996
5* Opinion of Shaw, Pittman, Potts & Trowbridge as to the legality of the
Common Stock being registered
10.1 1996 Stock Incentive Plan of Snyder Communications, Inc.
10.2+** Professional Services Agreement, dated February 1996, as amended, between
the Company and AT&T Communications Inc.
10.3+** Authorized Sales Agent Agreement, dated February 16, 1996, as amended,
between the Company and MCI Telecommunications Corporation
10.4** Services Agreement between the Company and U.S. News & World Report, L.P.
10.5 Form of Registration Rights Agreement among the Company and Daniel M.
Snyder, Michele D. Snyder, U.S. News College Marketing, L.P. and each of
the 1995 Investors (as defined therein) dated August , 1996
10.6** Lease Agreement, Democracy Center, Bethesda, Maryland, dated July 30,
1992, as amended, between the Company and Democracy Associates Limited
Partnership
10.7** Employment Agreement between the Company and Daniel M. Snyder
10.8** Employment Agreement between the Company and Michele D. Snyder
10.9** Employment Agreement between the Company and Stephen T. Baldacci
10.10** Employment Agreement between the Company and Susan L. Marentis
10.11** Employment Agreement between the Company and Alfred G. Wise
21** Subsidiaries of the Registrant
23.1* Consent of Shaw, Pittman, Potts & Trowbridge (included as part of Exhibit
5)
23.2 Consent of Arthur Andersen LLP
24** Power of Attorney (included on signature page to the Registration
Statement)
27** Financial Data Schedule
</TABLE>

- ---------------
* To be filed by amendment.

** Previously filed.

+ Confidential treatment requested.

<PAGE> 1
EXHIBIT 1.1

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SNYDER COMMUNICATIONS, INC.
(a Delaware corporation)

6,240,000 Shares of Common Stock

U.S. PURCHASE AGREEMENT

Dated: September , 1996

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<PAGE> 2

TABLE OF CONTENTS

<TABLE>
<S> <C> <C>
U.S. PURCHASE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1. Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . 4
(a) Representations and Warranties by the Company and the Subsidiaries . . . . 4
(i) Compliance with Registration Requirements . . . . . . . . . . . . 4
(ii) Independent Accountants . . . . . . . . . . . . . . . . . . . . . 5
(iii) Financial Statements . . . . . . . . . . . . . . . . . . . . . . . 6
(iv) No Material Adverse Change in Business . . . . . . . . . . . . . 6
(v) Good Standing of the Company . . . . . . . . . . . . . . . . . . 6
(vi) Good Standing of Subsidiaries . . . . . . . . . . . . . . . . . . 7
(vii) Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . 7
(viii) Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(ix) Authorization and Description of Securities . . . . . . . . . . . 8
(x) Reorganization and Distribution . . . . . . . . . . . . . . . . . 8
(xi) Absence of Defaults and Conflicts . . . . . . . . . . . . . . . . 8
(xii) Absence of Labor Dispute . . . . . . . . . . . . . . . . . . . . . 9
(xiii) Absence of Proceedings . . . . . . . . . . . . . . . . . . . . . . 9
(xiv) Accuracy of Exhibits . . . . . . . . . . . . . . . . . . . . . . . 9
(xv) Possession of Intellectual Property . . . . . . . . . . . . . . 10
(xvi) Absence of Further Requirements . . . . . . . . . . . . . . . . 10
(xvii) Possession of Licenses and Permits . . . . . . . . . . . . . . 10
(xviii) Title to Property . . . . . . . . . . . . . . . . . . . . . . . 11
(xix) Compliance with Cuba Act . . . . . . . . . . . . . . . . . . . . 11
(xx) Investment Company Act . . . . . . . . . . . . . . . . . . . . . 11
(xxi) Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . 11
(xxii) Registration Rights . . . . . . . . . . . . . . . . . . . . . . 12
(xxiii) Certain Contracts . . . . . . . . . . . . . . . . . . . . . . . 12
(xxiv) Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . 12
(xxv) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(xxvi) Securityholder Loans . . . . . . . . . . . . . . . . . . . . . . 13
(xxvii) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(b) Representations and Warranties by the Selling Shareholders . . . . . . . 13
(i) Authorization of Agreements . . . . . . . . . . . . . . . . . . 13
(ii) Good and Marketable Title . . . . . . . . . . . . . . . . . . . 14
(iii) Due Execution of Power of Attorney and Custody Agreement . . . 14
(iv) Absence of Manipulation . . . . . . . . . . . . . . . . . . . . 14
(v) Absence of Further Requirements . . . . . . . . . . . . . . . . 15
(vi) Restriction on Sale of Securities . . . . . . . . . . . . . . . 15
(vii) Certificates Suitable for Transfer . . . . . . . . . . . . . . 15
(viii) No Association with NASD . . . . . . . . . . . . . . . . . . . 16
(c) Additional Representations and Warranties by the Executive
Selling Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(d) Officer's Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing. . . . . . . . . . . . . 17
(a) Initial Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(b) Option Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
</TABLE>

i
<PAGE> 3

<TABLE>
<S> <C> <C>
(c) Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(d) Denominations; Registration . . . . . . . . . . . . . . . . . . . . . . 18
(e) Appointment of Qualified Independent Underwriter. . . . . . . . . . . . 18
SECTION 3. Covenants of the Company and the Subsidiaries . . . . . . . . . . . . . 19
(a) Compliance with Securities Regulations and Commission Requests . . . . . 19
(b) Filing of Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(c) Delivery of Registration Statements . . . . . . . . . . . . . . . . . . 19
(d) Delivery of Prospectuses . . . . . . . . . . . . . . . . . . . . . . . . 20
(e) Continued Compliance with Securities Laws . . . . . . . . . . . . . . . 20
(f) Blue Sky Qualifications . . . . . . . . . . . . . . . . . . . . . . . . 21
(g) Rule 158 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(h) Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(i) Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(j) Restriction on Sale of Securities . . . . . . . . . . . . . . . . . . . 21
(k) Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . 22
(l) Compliance with NASD Rules . . . . . . . . . . . . . . . . . . . . . . . 22
(m) Compliance with Rule 463 . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 4. Payment of Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(a) Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(b) Expenses of the Selling Shareholders . . . . . . . . . . . . . . . . . . 23
(c) Termination of Agreement . . . . . . . . . . . . . . . . . . . . . . . . 23
(d) Allocation of Expenses. . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5. Conditions of U.S. Underwriters' Obligations . . . . . . . . . . . . . . 23
(a) Effectiveness of Registration Statement . . . . . . . . . . . . . . . . 24
(b) Opinion of Counsel for Company . . . . . . . . . . . . . . . . . . . . . 24
(c) Opinion of Counsel for the Selling Shareholders . . . . . . . . . . . . 24
(d) Opinion of Counsel for U.S. Underwriters . . . . . . . . . . . . . . . . 24
(e) Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . 25
(f) Certificate of Selling Shareholders . . . . . . . . . . . . . . . . . . 25
(g) Accountant's Comfort Letter . . . . . . . . . . . . . . . . . . . . . . 25
(h) Bring-down Comfort Letter . . . . . . . . . . . . . . . . . . . . . . . 25
(i) Approval of Listing . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(j) No Objection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(k) Lock-up Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(l) Reorganization and Distribution . . . . . . . . . . . . . . . . . . . . 26
(m) Form W-9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(n) Securityholder Loans . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(o) Purchase of Initial International Securities . . . . . . . . . . . . . . 26
(p) Conditions to Purchase of U.S. Option Securities . . . . . . . . . . . . 26
(q) Additional Documents . . . . . . . . . . . . . . . . . . . . . . . . . 27
(r) Termination of Agreement . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 6. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(a) Indemnification of U.S. Underwriters. . . . . . . . . . . . . . . . . . 28
</TABLE>

ii
<PAGE> 4

<TABLE>
<S> <C>
(b) Indemnification of U.S. Underwriters by the Non-Executive
Selling Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(c) Indemnification of Company, Directors and Officers . . . . . . . . . . . 30
(d) Actions against Parties; Notification . . . . . . . . . . . . . . . . . 31
(e) Settlement without Consent if Failure to Reimburse . . . . . . . . . . . 31
(f) Other Agreements with Respect to Indemnification . . . . . . . . . . . . 32
SECTION 7. Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 9. Termination of Agreement. . . . . . . . . . . . . . . . . . . . . . . . 34
(a) Termination; General . . . . . . . . . . . . . . . . . . . . . . . . . . 34
(b) Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 10. Default by One or More of the U.S. Underwriters . . . . . . . . . . . . 34
SECTION 11. Default by One or More of the Selling Shareholders or the Company . . . 35
SECTION 12. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 13. Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 14. GOVERNING LAW AND TIME . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 15. Effect of Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

SCHEDULES
Schedule A - List of Underwriters . . . . . . . . . . . . . . . . . . . . . . . Sch A-1
Schedule B - List of Selling Shareholders . . . . . . . . . . . . . . . . . . . Sch B-1
Schedule C - Pricing Information . . . . . . . . . . . . . . . . . . . . . . . . Sch C-1
Schedule D - List of Persons Subject to Lock-up . . . . . . . . . . . . . . . . Sch D-1

EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel . . . . . . . . . . . . . . . . . . A-1
Exhibit B - Form of Opinion of Selling Shareholders' Counsel . . . . . . . . . . . . B-1
Exhibit C- Form of Lock-up Letter . . . . . . . . . . . . . . . . . . . . . . . . . C-1
Exhibit D - Form of Pledgee Lock-up Letter . . . . . . . . . . . . . . . . . . . . . D-1
</TABLE>

iii
<PAGE> 5

SNYDER COMMUNICATIONS, INC.

(a Delaware corporation)

6,240,000 Shares of Common Stock

(Par Value $.001 Per Share)

U.S. PURCHASE AGREEMENT

September , 1996

MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Donaldson, Lufkin & Jenrette
Securities Corporation
Allen & Company Incorporated
Montgomery Securities
as U.S. Representatives of the several U.S. Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209

Ladies and Gentlemen:

Snyder Communications, Inc., a Delaware corporation (the "Company"), Snyder
Marketing Services, Inc., a Delaware corporation ("SMS"), Snyder
Communications, L.P., a Delaware limited partnership (the "Partnership" and,
together with SMS, the "Subsidiaries"), and the persons listed in Schedule B
hereto (collectively, the "Selling Shareholders") confirm their respective
agreements with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch") and each of the other U.S. Underwriters named in
Schedule A hereto (collectively, the "U.S. Underwriters", which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Merrill Lynch, Donaldson, Lufkin & Jenrette Securities
Corporation, Allen & Company Incorporated and Montgomery Securities are acting
as representatives (in such capacity, the "U.S. Representatives"), with respect
to (i) the sale by the Company and Gerald S. Snyder (the "Initial Selling
Shareholder"), acting severally and

<PAGE> 6

not jointly, and the purchase by the U.S. Underwriters, acting severally and
not jointly, of the respective numbers of shares of Common Stock, par value
$.001 per share, of the Company ("Common Stock") set forth in Schedules A and B
hereto and (ii) the grant by the Selling Shareholders other than the Initial
Selling Shareholder (collectively, the "Option Selling Shareholders") to the
U.S. Underwriters, acting severally and not jointly, of the option described
in Section 2(b) hereof to purchase all or any part of 936,000 additional shares
of Common Stock to cover over-allotments, if any. The aforesaid 6,240,000
shares of Common Stock (the "Initial U.S. Securities") to be purchased by the
U.S. Underwriters and all or any part of the 936,000 shares of Common Stock
subject to the option described in Section 2(b) hereof (the "U.S. Option
Securities") are hereinafter called, collectively, the "U.S. Securities".

It is understood that the Company, the Subsidiaries and the Selling
Shareholders are concurrently entering into an agreement dated the date hereof
(the "International Purchase Agreement") providing for the offering by the
Company and the Initial Selling Shareholder, acting severally and not jointly,
of an aggregate of 1,560,000 shares of Common Stock (the "Initial International
Securities") through arrangements with certain underwriters outside the United
States and Canada (the "International Managers") for which Merrill Lynch
International, Donaldson, Lufkin & Jenrette Securities Corporation, Allen &
Company Incorporated and Montgomery Securities are acting as lead managers (the
"Lead Managers") and the grant by the Option Selling Shareholders to the
International Managers, acting severally and not jointly, of an option to
purchase all or any part of the International Managers' pro rata portion of up
to 234,000 additional shares of Common Stock solely to cover overallotments, if
any (the "International Option Securities" and, together with the U.S. Option
Securities, the "Option Securities"). The Initial International Securities and
the International Option Securities are hereinafter called the "International
Securities". It is understood that the Company is not obligated to sell and
the U.S. Underwriters are not obligated to purchase, any Initial U.S.
Securities unless all of the Initial International Securities are
contemporaneously purchased by the International Managers.

The U.S. Underwriters and the International Managers are hereinafter
collectively called the "Underwriters", the Initial U.S. Securities and the
Initial International Securities are hereinafter collectively called the
"Initial Securities", and the U.S. Securities and the International Securities
are hereinafter collectively called the "Securities".

Daniel M. Snyder and Michele D. Snyder, each an Option Selling Shareholder,
are hereinafter collectively called the "Executive Selling Shareholders", the
Initial Selling Shareholder and the Option Selling Shareholders other than the
Executive Selling Shareholders are hereinafter collectively called the
"Non-Executive Selling Shareholders" and Daniel S. Snyder and U.S. News & World
Report, L.P., each an Option Selling Shareholder, are hereinafter collectively
called the "Pledgor Selling Shareholders".

2
<PAGE> 7

The Underwriters will concurrently enter into an Intersyndicate Agreement
of even date herewith (the "Intersyndicate Agreement") providing for the
coordination of certain transactions among the Underwriters under the direction
of Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated (in
such capacity, the "Global Coordinator").

The Company, the Subsidiaries and the Selling Shareholders understand that
the U.S. Underwriters propose to make a public offering of the U.S. Securities
as soon as the U.S. Representatives deem advisable after this Agreement has
been executed and delivered.

The Company, the Subsidiaries, the Selling Shareholders and the U.S.
Underwriters agree that up to 234,000 shares of the Initial U.S. Securities to
be purchased by the U.S. Underwriters (the "Reserved Securities") shall be
reserved for sale at the public offering price by the Underwriters to certain
eligible employees and other persons, as part of the distribution of the
Securities by the Underwriters, subject to the terms of this Agreement, the
applicable rules, regulations and interpretations of the National Association
of Securities Dealers, Inc. (the "NASD") and all other applicable laws, rules
and regulations. To the extent that such Reserved Securities are not orally
confirmed for purchase by such eligible employees and other persons by the end
of the first business day after the date of this Agreement, such Reserved
Securities may be offered to the public as part of the public offering
contemplated hereby.

The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-7495) covering the
registration of the Securities under the Securities Act of 1933, as amended
(the "1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will
either (i) prepare and file a prospectus in accordance with the provisions of
Rule 430A ("Rule 430A") of the rules and regulations of the Commission under
the 1933 Act (the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule
424(b)") of the 1933 Act Regulations or (ii) if the Company has elected to rely
upon Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term
sheet (a "Term Sheet") in accordance with the provisions of Rule 434 and Rule
424(b). Two forms of prospectus are to be used in connection with the offering
and sale of the Securities: one relating to the U.S. Securities (the "Form of
U.S. Prospectus") and one relating to the International Securities (the "Form
of International Prospectus"). The Form of International Prospectus is
identical to the Form of U.S. Prospectus, except for the front cover and back
cover pages and the information under the caption "Underwriting". The
information included in any such prospectus or in any such Term Sheet, as the
case may be, that was omitted from such registration statement at the time it
became effective but that is deemed to be part of such registration statement
at the time it became effective (a) pursuant to paragraph (b) of Rule 430A is
referred to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule
434 is referred to as "Rule 434 Information." Each Form of U.S. Prospectus and
Form of International

3
<PAGE> 8

Prospectus used before such registration statement became effective, and any
prospectus that omitted, as applicable, the Rule 430A Information or the Rule
434 Information, that was used after such effectiveness and prior to the
execution and delivery of this Agreement, is herein called a "preliminary
prospectus." Such registration statement, including the exhibits thereto and
schedules thereto at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, as applicable, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration
Statement" shall include the Rule 462(b) Registration Statement. The final
Form of U.S. Prospectus and the final Form of International Prospectus in the
forms first furnished to the Underwriters for use in connection with the
offering of the Securities are herein called the "U.S. Prospectus" and the
"International Prospectus," respectively, and collectively, the "Prospectuses."
If Rule 434 is relied on, the terms "U.S. Prospectus" and "International
Prospectus" shall refer to the preliminary U.S. Prospectus dated August ,
1996 and preliminary International Prospectus dated August , 1996,
respectively, each together with the applicable Term Sheet and all references
in this Agreement to the date of such Prospectuses shall mean the date of the
applicable Term Sheet. For purposes of this Agreement, all references to the
Registration Statement, any preliminary prospectus, the U.S. Prospectus, the
International Prospectus or any Term Sheet or any amendment or supplement to
any of the foregoing shall be deemed to include the copy filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system ("EDGAR").

Capitalized terms used herein without definition have the respective
meanings specified therefor in the Prospectuses.

SECTION 1. Representations and Warranties.

(a) Representations and Warranties by the Company and the
Subsidiaries. Each of the Company and the Subsidiaries, jointly and severally,
represents and warrants to each U.S. Underwriter as of the date hereof, as of
the Closing Time referred to in Section 2(c) hereof, and as of each Date of
Delivery (if any) referred to in Section 2(b), hereof and agrees with each U.S.
Underwriter, as follows:

(i) Compliance with Registration Requirements. Each of
the Registration Statement and any Rule 462(b) Registration
Statement has become effective under the 1933 Act and no stop
order suspending the effectiveness of the Registration Statement
or any Rule 462(b) Registration Statement has been issued under
the 1933 Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the Company or
any Subsidiary, are contemplated by the Commission, and any
request on the part of the Commission for additional information
has been complied with.

4
<PAGE> 9

At the respective times the Registration Statement, any
Rule 462(b) Registration Statement and any post-effective
amendments thereto became effective and at the Closing Time (and,
if any U.S. Option Securities are purchased, at the Date of
Delivery), the Registration Statement, the Rule 462(b)
Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and did
not and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading [and the
Prospectuses and any preliminary prospectuses comply or will
comply in all material respects with any applicable laws or
regulations of foreign jurisdictions in which the Prospectuses and
such preliminary prospectuses, as amended or supplemented, if
applicable, are distributed in connection with the offer and sale
of Reserved Securities]. Neither of the Prospectuses nor any
amendments or supplements thereto, at the time the Prospectuses
or any amendments or supplements thereto were issued and at the
Closing Time (and, if any U.S. Option Securities are purchased, at
the Date of Delivery), included or will include an untrue
statement of a material fact or omitted or will omit to state a
material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading. If Rule 434 is used, the Company will comply with the
requirements of Rule 434 and the Prospectuses shall not be
"materially different", as such term is used in Rule 434, from the
prospectuses included in the Registration Statement at the time it
became effective. The representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or the U.S. Prospectus made in reliance
upon and in conformity with information furnished to the Company
in writing by any U.S. Underwriter through the U.S.
Representatives expressly for use in the Registration Statement or
the U.S. Prospectus.

Each preliminary prospectus and the prospectuses filed as
part of the Registration Statement as originally filed or as part
of any amendment thereto, or filed pursuant to Rule 424 under the
1933 Act, complied when so filed in all material respects with the
1933 Act Regulations and each preliminary prospectus and the
Prospectuses delivered to the Underwriters for use in connection
with this offering was identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.

(ii) Independent Accountants. The accountants who
certified the financial statements and supporting schedules
included in the Registration Statement are independent public
accountants as required by the 1933 Act and the 1933 Act
Regulations.

5
<PAGE> 10

(iii) Financial Statements. The financial statements
included in the Registration Statement and the Prospectuses,
together with the related schedules and notes, present fairly the
financial position of the Company and its consolidated
subsidiaries at the dates indicated and the statement of
operations, stockholders' equity and cash flows of the Company and
its consolidated subsidiaries for the periods specified; said
financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved. The supporting
schedules included in the Registration Statement present fairly in
accordance with GAAP the information required to be stated
therein. The selected financial data and the summary financial
information included in the Prospectuses present fairly the
information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included
in the Registration Statement. The financial statements have been
prepared in accordance with the Commission's rules and guidelines
with respect to combined financial statements and have been
properly compiled on the bases described therein. The pro forma
financial statements and the related notes thereto and the other
pro forma financial information included in the Registration
Statement and the Prospectuses present fairly the information
shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma
financial statements and have been properly compiled on the bases
described therein, and the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances
referred to therein.

(iv) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the
Registration Statement and the Prospectuses, except as otherwise
stated therein, (A) there has been no material adverse change in
the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising
in the ordinary course of business (a "Material Adverse Effect"),
(B) there have been no transactions entered into by the Company or
any of its subsidiaries, other than those in the ordinary course
of business, which are material with respect to the Company and
its subsidiaries considered as one enterprise, and (C) there has
been no dividend or distribution of any kind declared, paid or
made by the Company or any Subsidiary on any class of its capital
stock or any partnership interest, as the case may be.

(v) Good Standing of the Company. The Company has been
duly organized and is validly existing as a corporation in good
standing under the laws of the State of Delaware and has corporate
power and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectuses and to
enter into and perform its obligations under this Agreement; and
the

6
<PAGE> 11

Company is duly qualified as a foreign corporation to transact
business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing
would not result in a Material Adverse Effect.

(vi) Good Standing of Subsidiaries. Each of the
Subsidiaries has been duly organized and is validly existing as a
corporation or partnership, as the case may be, in good standing
under the laws of the State of Delaware, has corporate or
partnership, as the case may be, power and authority to own, lease
and operate its properties and to conduct its business as
described in the Prospectuses and is duly qualified as a foreign
corporation or partnership, as the case may be, to transact
business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership
or leasing of property or the conduct of business, except where
the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect; all of the issued and
outstanding capital stock of SMS has been duly authorized and
validly issued, is fully paid and non-assessable and is owned by
the Company directly, and all of the partnership interests of the
Partnership have been duly authorized and validly issued and are
owned by the Company, directly or indirectly, in each case free
and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity; none of the outstanding shares of
capital stock of SMS or partnership interests of the Partnership
was issued in violation of the preemptive or similar rights of any
securityholder of such Subsidiary. The only subsidiaries of the
Company are SMS and the Partnership.

(vii) Capitalization. The authorized, issued and
outstanding capital stock of the Company after giving effect to the
Reorganization and the Distribution is as set forth in the
Prospectuses in the column entitled "Pro Forma" under the caption
"Capitalization" (except for subsequent issuances, if any,
pursuant to this Agreement, pursuant to reservations, agreements
or employee benefit plans referred to in the Prospectuses or
pursuant to the exercise of convertible securities or options
referred to in the Prospectuses). The shares of issued and
outstanding capital stock of the Company, including the Securities
to be purchased by the Underwriters from the Selling Shareholders,
have been duly authorized and validly issued and are fully paid
and non-assessable; none of the outstanding shares of capital
stock of the Company, including the Securities to be purchased by
the Underwriters from the Selling Shareholders, was issued in
violation of the preemptive or other similar rights of any
securityholder of the Company.

(viii) Authorization. This Agreement and the International
Purchase Agreement have been duly authorized, executed and
delivered by the Company and each Subsidiary. The performance of
this Agreement and the International Purchase Agreement and the
consummation of the transactions contemplated in

7
<PAGE> 12

this Agreement, the International Purchase Agreement and the
Registration Statement (including the issuance and sale of the
Securities and the use of the proceeds from the sale of the
Securities as described in the Prospectuses under the caption "Use
Of Proceeds" and the consummation of the Reorganization and the
Distribution) and compliance by the Company and each Subsidiary
with its obligations under this Agreement and the International
Purchase Agreement have been duly authorized by the Company and
each Subsidiary, respectively.

(ix) Authorization and Description of Securities. The
Securities to be purchased by the U.S. Underwriters and the
International Managers from the Company have been duly authorized
for issuance and sale to the U.S. Underwriters pursuant to this
Agreement and the International Managers pursuant to the
International Purchase Agreement, respectively, and, when issued
and delivered by the Company pursuant to this Agreement and the
International Purchase Agreement, respectively, against payment of
the consideration set forth herein and the International Purchase
Agreement, respectively, will be validly issued, fully paid and
non-assessable; the Common Stock conforms to all statements
relating thereto contained in the Prospectuses and such
description conforms to the rights set forth in the instruments
defining the same; no holder of the Securities will be subject to
personal liability by reason of being such a holder; and the
issuance of the Securities is not subject to the preemptive or
other similar rights of any securityholder of the Company.

(x) Reorganization and Distribution. The Reorganization
and the Distribution have occurred.

(xi) Absence of Defaults and Conflicts. Neither the
Company nor any Subsidiary is in violation of its charter or
by-laws or partnership agreement, as the case may be, or in default
in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or
other agreement or instrument to which the Company or any
Subsidiary is a party or by which any of them may be bound, or to
which any of the property or assets of the Company or any
Subsidiary is subject (collectively, "Agreements and Instruments")
except for such defaults that would not result in a Material
Adverse Effect; and the execution, delivery and performance of this
Agreement and the International Purchase Agreement and the
consummation of the transactions contemplated in this Agreement,
the International Purchase Agreement and in the Registration
Statement (including the Reorganization and the Distribution, the
issuance and sale of the Securities and the use of the proceeds
from the sale of the Securities as described in the Prospectuses
under the caption "Use of Proceeds") and compliance by the Company
and each Subsidiary with its obligations under this Agreement and
the International Purchase Agreement have been duly authorized by
all necessary corporate or partnership, as the case may be, action
and do not

8
<PAGE> 13

and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach of,
or default or Repayment Event (as defined below) under, or result
in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any Subsidiary
pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances
that would not result in a Material Adverse Effect), nor will such
action result in any violation of the provisions of the charter or
by-laws or partnership agreement, as the case may be, of the
Company or any Subsidiary or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any Subsidiary or any of their
assets, properties or operations. As used herein, a "Repayment
Event" means any event or condition which gives the holder of any
note, debenture or other evidence of indebtedness (or any person
acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any Subsidiary.

(xii) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any Subsidiary exists or, to the
knowledge of the Company or any Subsidiary, is imminent, and
neither the Company nor any Subsidiary is aware of any existing or
imminent labor disturbance by the employees of any of its
principal suppliers, manufacturers, customers or contractors,
which, in either case, might reasonably be expected to result in a
Material Adverse Effect.

(xiii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any
court or governmental agency or body, domestic or foreign, now
pending, or, to the knowledge of the Company or any Subsidiary,
threatened, against or affecting the Company or any Subsidiary,
which is required to be disclosed in the Registration Statement
(other than as disclosed therein), or which might reasonably be
expected to result in a Material Adverse Effect, or which might
reasonably be expected to materially and adversely affect the
properties or assets thereof or the consummation of the
transactions contemplated in this Agreement and the International
Purchase Agreement, the Reorganization, the Distribution or the
performance by the Company or any Subsidiary of its obligations
hereunder or thereunder; the aggregate of all pending legal or
governmental proceedings to which the Company or any Subsidiary is
a party or of which any of their respective property or assets is
the subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business,
could not reasonably be expected to result in a Material Adverse
Effect.

(xiv) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statement or the Prospectuses or

9
<PAGE> 14

to be filed as exhibits thereto which have not been so described
and filed as required.

(xv) Possession of Intellectual Property. The Company and
the Subsidiaries own or possess, or can acquire on reasonable
terms, adequate patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks, trade names or
other intellectual property (collectively, "Intellectual
Property") necessary to carry on the business now operated by
them, and neither the Company nor any Subsidiary has received any
notice or is otherwise aware of any infringement of or conflict
with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the
interest of the Company or any Subsidiary therein, and which
infringement or conflict (if the subject of any unfavorable
decision, ruling or finding) or invalidity or inadequacy, singly
or in the aggregate, would result in a Material Adverse Effect.

(xvi) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company
or any Subsidiary of its obligations hereunder, in connection with
the offering, issuance or sale of the Securities under this
Agreement and the International Purchase Agreement or the
consummation of the transactions contemplated by this Agreement
and the International Purchase Agreement, the Reorganization or
the Distribution except [(i)] such as have been already obtained
or as may be required under the 1933 Act or the 1933 Act
Regulations and foreign or state securities or blue sky laws [and
(ii) such as have been obtained under the laws and regulations of
foreign jurisdictions in which the Reserved Securities are
offered outside the United States].

(xvii) Possession of Licenses and Permits. The Company and
the Subsidiaries possess such permits, licenses, approvals,
consents and other authorizations (collectively, "Governmental
Licenses") issued by the appropriate federal, state, local or
foreign regulatory agencies or bodies necessary to conduct the
business now operated by them; the Company and the Subsidiaries
are in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would
not, singly or in the aggregate, have a Material Adverse Effect;
all of the Governmental Licenses are valid and in full force and
effect, except when the invalidity of such Governmental Licenses
or the failure of such Governmental Licenses to be in full force
and effect would not have a Material Adverse Effect; and neither
the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the
subject

10
<PAGE> 15

of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.

(xviii) Title to Property. The Company and the Subsidiaries
have good and marketable title to all real property owned by the
Company and the Subsidiaries and good title to all other
properties owned by them, in each case, free and clear of all
mortgages, pledges, liens, security interests, claims,
restrictions or encumbrances of any kind except such as (a) are
described in the Prospectuses or (b) do not, singly or in the
aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such
property by the Company or any Subsidiary; and all of the leases
and subleases material to the business of the Company and its
subsidiaries, considered as one enterprise, and under which the
Company or any Subsidiary holds properties described in the
Prospectuses, are in full force and effect, and neither the
Company nor any Subsidiary has any notice of any material claim of
any sort that has been asserted by anyone adverse to the rights of
the Company or any Subsidiary under any of the leases or subleases
mentioned above, or affecting or questioning the rights of the
Company or any Subsidiary to the continued possession of the
leased or subleased premises under any such lease or sublease.

(xix) Compliance with Cuba Act. Each of the Company and the
Subsidiaries has complied with, and is and will be in compliance
with, the provisions of that certain Florida act relating to
disclosure of doing business with Cuba, codified as Section
517.075 of the Florida statutes, and the rules and regulations
thereunder (collectively, the "Cuba Act") or is exempt therefrom.

(xx) Investment Company Act. Neither the Company nor any
Subsidiary is, or upon the issuance and sale of the Securities as
herein contemplated and the application of the net proceeds
therefrom as described in the Prospectuses will be, an "investment
company" or an entity "controlled" by an "investment company" as
such terms are defined in the Investment Company Act of 1940, as
amended (the "1940 Act").

(xxi) Environmental Laws. Except as described in the
Registration Statement and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the
Company nor any Subsidiary is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code,
policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative
order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface
or subsurface strata) or wildlife, including, without limitation,
laws and regulations relating to the release or threatened release
of chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum or

11
<PAGE> 16

petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials
(collectively, "Environmental Laws"), (B) the Company and the
Subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws and are each in
compliance with their requirements, (C) there are no pending or
threatened administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance
or violation, investigation or proceedings relating to any
Environmental Law against the Company or any Subsidiary and (D)
there are no events or circumstances that might reasonably be
expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party
or governmental body or agency, against or affecting the Company
or any Subsidiary relating to Hazardous Materials or any
Environmental Laws.

(xxii) Registration Rights. Except as described in the
Registration Statement and the Prospectuses, there are no persons
with registration rights or other similar rights to have any
securities registered pursuant to the Registration Statement or
otherwise registered by the Company under the 1933 Act.

(xxiii) Certain Contracts. The Partnership's contract
with AT&T Communications, Inc. ("AT&T") dated as of February __,
1994, as amended by amendments thereto dated as of September 27,
1994 (as revised October 20, 1994), December 20, 1994 and December
22, 1995, respectively, and each such amendment have been duly
executed and delivered by each of the Partnership and, to the best
knowledge of the Company and the Subsdiaries, by AT&T and are in
full force and effect. The Partnership's contract with MCI
Telecommunications Corporation ("MCI") dated February 16, 1996 has
been duly executed and delivered by each of the Partnership and,
to the best knowledge of the Company and the Subsidiaries, by MCI
and is in full force and effect. There does not exist any
default, event or condition that, after notice or lapse of time or
both, could give rise under either such contract to any claim by
any person against the Company or any Subsidiary or would
constitute a default thereunder on the part of the Company or any
Subsidiary or any other party thereto.

(xxiv) Compliance with Laws. Each of the Company and the
Subsidiaries is in compliance with all applicable laws, statutes,
ordinances, rules or regulations of any applicable jurisdiction,
the enforcement of which, singly or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.

(xxv) Taxes. Each of the Company and the Subsidiaries
has filed all material federal, state, local and foreign income
and franchise tax returns required to be filed by it and has paid
all taxes shown as due thereon, other than taxes which are being
contested in good faith and for which adequate reserves have

12
<PAGE> 17

been established in accordance with GAAP; and neither the Company
nor any Subsidiary has knowledge of any tax deficiency which has
been or might be asserted or threatened against the Company or any
Subsidiary. Adequate charges, accruals and reserves have been
provided for in the financial statements referred to in Section
1(a)(iii) above in respect of all material federal, state, local
and foreign taxes for all periods as to which the tax liability of
the Company or any Subsidiary has not been finally determined or
remains open to examination by applicable taxing authorities. SMS
elected to be treated as an S corporation under Section 1362(a) of
the Code (an "S Corporation") effective January 1, 1996, and has
been an S Corporation at all times since such effective date. The
Partnership has not at any time been treated as an association
taxable as a corporation for federal, state, local and foreign tax
purposes, and is and has been since its inception treated as a
partnership for such purposes. No material taxes have been or
will be imposed on the Company or any Subsidiary in connection
with the consummation of the transactions contemplated in this
Agreement and the International Purchase Agreement, the
Reorganization, the Distribution or the performance by the Company
or any Subsidiary of its obligations hereunder or thereunder.

(xxvi) Securityholder Loans. Except as described in the
Registration Statement and Prospectuses, there are no outstanding
loans to any securityholder of the Company or any Subsidiary.

(xxvii) Insurance. Each of the Company and the Subsidiaries
carries or is entitled to the benefits of insurance in such
amounts and covering such risks as it reasonably believes are
sufficient to cover potential losses or damages, and all such
insurance is in full force and effect.

(b) Representations and Warranties by the Selling Shareholders.
Each Selling Shareholder severally represents and warrants to each U.S.
Underwriter as of the date hereof, as of the Closing Time, and, if the Selling
Shareholder is selling U.S. Option Securities on a Date of Delivery, as of each
such Date of Delivery, and agrees with each U.S. Underwriter, as follows:

(i) Authorization of Agreements. Each Selling
Shareholder has the full right, power and authority to enter into
this Agreement and a Power of Attorney and Custody Agreement (the
"Power of Attorney and Custody Agreement") and to sell, transfer
and deliver the Securities to be sold by such Selling Shareholder
hereunder. The execution and delivery of this Agreement, the
International Purchase Agreement and the Power of Attorney and
Custody Agreement and the sale and delivery of the Securities to
be sold by such Selling Shareholder and the consummation of the
transactions contemplated herein and in the International Purchase
Agreement and in the Registration Statement and compliance by such
Selling Shareholder with its obligations hereunder have been

13
<PAGE> 18

duly authorized by such Selling Shareholder and do not and will
not, whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or default
under, or result in the creation or imposition of any tax, lien,
charge or encumbrance upon the Securities to be sold by such
Selling Shareholder or any property or assets of such Selling
Shareholder pursuant to any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, license, lease or other
agreement or instrument to which such Selling Shareholder is a
party or by which such Selling Shareholder may be bound, or to
which any of the property or assets of such Selling Shareholder is
subject, nor will such action result in any violation of the
provisions of the charter or by-laws or other organizational
instrument of such Selling Shareholder, if applicable, or any
applicable treaty, law, statute, rule, regulation, judgment,
order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction
over such Selling Shareholder or any of its properties.

(ii) Good and Marketable Title. Such Selling
Shareholder has and will at the Closing Time and, if any U.S.
Option Securities are purchased, on the Date of Delivery have good
and marketable title to the Securities to be sold by such Selling
Shareholder hereunder, free and clear of any security interest,
mortgage, pledge, lien, charge, claim, equity or encumbrance of
any kind, other than pursuant to this Agreement; and upon delivery
of such Securities and payment of the purchase price therefor as
herein contemplated, assuming each such U.S. Underwriter has no
notice of any adverse claim, each of the U.S. Underwriters will
receive good and marketable title to the Securities purchased by
it from such Selling Shareholder, free and clear of any security
interest, mortgage, pledge, lien, charge, claim, equity or
encumbrance of any kind.

(iii) Due Execution of Power of Attorney and Custody
Agreement. Such Selling Shareholder has duly executed and
delivered, in the form heretofore furnished to the U.S.
Representatives, the Power of Attorney and Custody Agreement with
[, or any of them,] as attorney(s)-in-fact (the
"Attorney(s)-in-Fact") and , as custodian (the "Custodian"); the
Custodian is authorized to deliver the Securities to be sold by
such Selling Shareholder hereunder and to accept payment therefor;
and each Attorney-in-Fact is authorized to execute and deliver
this Agreement and the certificate referred to in Section 5(f) or
that may be required pursuant to Sections 5(p) and 5(q) on behalf
of such Selling Shareholder, to sell, assign and transfer to the
U.S. Underwriters the Securities to be sold by such Selling
Shareholder hereunder, to determine the purchase price to be paid
by the U.S. Underwriters to such Selling Shareholder, as provided
in Section 2 hereof, to authorize the delivery of the Securities
to be sold by such Selling Shareholder hereunder, to accept
payment therefor, and otherwise to act on behalf of such Selling
Shareholder in connection with this Agreement.

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<PAGE> 19

(iv) Absence of Manipulation. Such Selling
Shareholder has not taken, and will not take, directly or
indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or
result in stabilization or manipulation of the price of any
security of the Company or any Subsidiary to facilitate the sale
or resale of the Securities.

(v) Absence of Further Requirements. No filing with,
or consent, approval, authorization, order, registration,
qualification or decree of, any court or governmental authority or
agency, domestic or foreign, is necessary or required for the
performance by such Selling Shareholder of its obligations
hereunder or in the Power of Attorney and Custody Agreement, or in
connection with the sale and delivery of the Securities hereunder
or the consummation of the transactions contemplated by this
Agreement and the International Purchase Agreement, except [(i)]
such as may have previously been made or obtained or as may be
required under the 1933 Act or the 1933 Act Regulations or state
securities laws [and (ii) such as have been obtained under the
laws and regulations of foreign jurisdictions in which the
Reserved Securities are offered outside the United States].

(vi) Restriction on Sale of Securities. During a
period of 180 days from the date of the Prospectuses, such Selling
Shareholder will not, without the prior written consent of the
Global Coordinator, (i) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase
or otherwise transfer or dispose of, directly or indirectly, any
share of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock or file any
registration statement under the 1933 Act with respect to any of
the foregoing or (ii) enter into any swap or any other agreement
or any transaction that transfers, in whole or in part, directly
or indirectly, the economic consequence of ownership of the Common
Stock, whether any such swap or transaction described in clause
(i) or (ii) above is to be settled by delivery of Common Stock or
such other securities, in cash or otherwise; provided that any
Pledgor Selling Shareholder may, at any time after 30 days from
the date of the Closing Time, pledge as security for borrowed
money (x) up to 50%, in the case of Daniel M. Snyder, and (y) all,
in the case of U.S. News & World Report, L.P., of the shares of
Common Stock then owned by such Pledgor Selling Shareholder to any
commercial banking institution that is a member of the Federal
Reserve System having combined capital and surplus in excess of
$500,000,000 (a "Pledgee") as long as such Pledgee shall have
agreed in writing to be bound by the obligations and restrictions
applicable to the Common Stock under this Section 1(b)(vi) and
the U.S. Representatives shall have received an agreement
substantially in the form of Exhibit D hereto signed by such
Pledgee. The foregoing sentence shall not apply to the Securities
to be sold hereunder.

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<PAGE> 20

(vii) Certificates Suitable for Transfer. Certificates
for all of the Securities to be sold by such Selling Shareholder
pursuant to this Agreement, in suitable form for transfer by
delivery or accompanied by duly executed instruments of transfer
or assignment in blank with signatures guaranteed, have been
placed in custody with the Custodian with irrevocable conditional
instructions to deliver such Securities to the U.S. Underwriters
pursuant to this Agreement.

(viii) No Association with NASD. Except as described in
the Registration Statement and the Prospectuses, neither such
Selling Shareholder nor any of its affiliates directly, or
indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, or has any other
association with (within the meaning of Article I, Section 1(m) of
the By-laws of the NASD), any member firm of the NASD

(c) Additional Representations and Warranties by the Executive
Selling Shareholders. Each Executive Selling Shareholder severally represents
and warrants to each U.S. Underwriter as of the date hereof, as of the Closing
Time, and, if the Selling Shareholder is selling U.S. Option Securities on a
Date of Delivery, as of each such Date of Delivery, and agrees with each U.S.
Underwriter, that, to the best knowledge of such Executive Selling Shareholder,
the representations and warranties of the Company and each Subsidiary contained
in Section 1(a) hereof are true and correct; such Executive Selling Shareholder
has reviewed and is familiar with the Registration Statement and the
Prospectuses and the Prospectuses do not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading and the Prospectuses and any preliminary prospectuses
comply or will comply in all material respects with any applicable laws or
regulations of foreign jurisdictions in which the Prospectuses and such
preliminary prospectuses, as amended or supplemented, if applicable, are
distributed in connection with the offer and sale of Reserved Securities; and
such Executive Selling Shareholder is not prompted to sell the Securities to be
sold by such Executive Selling Shareholder hereunder by any information
concerning any of the Company or any Subsidiary which is not set forth in the
Prospectuses.

(d) Officer's Certificates. Any certificate signed by any officer
of the Company or any Subsidiary delivered to the Global Coordinator, the U.S.
Representatives or to counsel for the U.S. Underwriters shall be deemed a
representation and warranty by the Company or such Subsidiary, as the case may
be, to each U.S. Underwriter as to the matters covered thereby; and any
certificate signed by or on behalf of any Selling Shareholder as such and
delivered to the Global Coordinator, the U.S. Representatives or to counsel for
the U.S. Underwriters pursuant to the terms of this Agreement shall be deemed a
representation and warranty by such Selling Shareholder to the U.S.
Underwriters as to matters covered thereby.

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<PAGE> 21

SECTION 2. Sale and Delivery to U.S. Underwriters; Closing.

(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company and the Initial Selling Shareholder, severally and not
jointly, agree to sell to each U.S. Underwriter, severally and not jointly,
and each U.S. Underwriter, severally and not jointly, agrees to purchase from
the Company and the Initial Selling Shareholder, at the price per share set
forth in Schedule C, that proportion of the number of Initial U.S. Securities
set forth in Schedule B opposite the name of the Company or the Initial Selling
Shareholder, as the case may be, which the number of Initial U.S. Securities
set forth in Schedule A opposite the name of such U.S. Underwriter, plus any
additional number of Initial U.S. Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof, bears to
the total number of Initial U.S. Securities, subject, in each case, to such
adjustments among the U.S. Underwriters as the U.S. Representatives in their
sole discretion shall make to eliminate any sales or purchases of fractional
securities.

(b) Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Option Selling Shareholders, acting severally
and not jointly, hereby grant an option to the U.S. Underwriters, severally and
not jointly, to purchase up to an additional 936,000 shares of Common Stock, as
set forth in Schedule B, at the price per share set forth in Schedule C, less
an amount per share equal to any dividends or distributions declared by the
Company and payable on the Initial U.S. Securities but not payable on the U.S.
Option Securities. The option hereby granted will expire 30 days after the
date hereof and may be exercised in whole or in part from time to time only
for the purpose of covering over-allotments which may be made in connection
with the offering and distribution of the Initial U.S. Securities upon notice
by the Global Coordinator to the Company and the Option Selling Shareholders
setting forth the number of U.S. Option Securities as to which the several U.S.
Underwriters are then exercising the option and the time and date of payment
and delivery for such U.S. Option Securities. Any such time and date of
delivery for the U.S. Option Securities (a "Date of Delivery") shall be
determined by the Global Coordinator, but shall not be later than seven full
business days after the exercise of said option, nor in any event prior to the
Closing Time, as hereinafter defined. If the option is exercised as to all or
any portion of the U.S. Option Securities, each of the U.S. Underwriters,
acting severally and not jointly, will purchase that proportion of the total
number of U.S. Option Securities then being purchased which the number of
Initial U.S. Securities set forth in Schedule A opposite the name of such U.S.
Underwriter bears to the total number of Initial U.S. Securities, subject in
each case to such adjustments as the Global Coordinator in its discretion shall
make to eliminate any sales or purchases of fractional shares.

(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
Debevoise & Plimpton, 875 Third

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<PAGE> 22

Avenue, New York, New York, or at such other place as shall be agreed upon by
the Global Coordinator and the Company, at 9:00 A.M. (Eastern time) on the
third (fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any
given day) business day after the date hereof (unless postponed in accordance
with the provisions of Section 10), or such other time not later than ten
business days after such date as shall be agreed upon by the Global Coordinator
and the Company (such time and date of payment and delivery being herein called
"Closing Time").

In addition, in the event that any or all of the U.S. Option Securities are
purchased by the U.S. Underwriters, payment of the purchase price for, and
delivery of certificates for, such U.S. Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by the
Global Coordinator and the Company, on each Date of Delivery as specified in
the notice from the Global Coordinator to the Company and the Option Selling
Shareholders.

Payment shall be made to the Company and the Selling Shareholders by wire
transfer of immediately available funds to bank account(s) designated by the
Company and the Custodian pursuant to each Selling Shareholder's Power of
Attorney and Custody Agreement, as the case may be, against delivery to the
U.S. Representatives for the respective accounts of the U.S. Underwriters of
certificates for the U.S. Securities to be purchased by them. It is understood
that each U.S. Underwriter has authorized the U.S. Representatives, for its
account, to accept delivery of, receipt for, and make payment of the purchase
price for, the Initial U.S. Securities and the U.S. Option Securities, if any,
which it has agreed to purchase. Merrill Lynch, individually and not as
representative of the U.S. Underwriters, may (but shall not be obligated to)
make payment of the purchase price for the Initial U.S. Securities or the U.S.
Option Securities, if any, to be purchased by any U.S. Underwriter whose funds
have not been received by the Closing Time or the relevant Date of Delivery, as
the case may be, but such payment shall not relieve such U.S. Underwriter from
its obligations hereunder.

(d) Denominations; Registration. Certificates for the Initial U.S.
Securities and the U.S. Option Securities, if any, shall be in such
denominations and registered in such names as the U.S. Representatives may
request in writing at least one full business day before the Closing Time or
the relevant Date of Delivery, as the case may be. The certificates for the
Initial U.S. Securities and the U.S. Option Securities, if any, will be made
available for examination and packaging by the U.S. Representatives in The City
of New York not later than 10:00 A.M. (Eastern time) on the business day prior
to the Closing Time or the relevant Date of Delivery, as the case may be.

(e) Appointment of Qualified Independent Underwriter. The Company, the
Subsidiaries and the Selling Shareholders hereby confirm their engagement of
Merrill Lynch as, and Merrill Lynch hereby confirms its agreement with the
Company, the Subsidiaries and the Selling Shareholders to render services as, a
"qualified independent underwriter" within the meaning of Rule 2720 of the
Conduct Rules of the NASD with

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<PAGE> 23

respect to the offering and sale of the U.S. Securities. Merrill Lynch, solely
in its capacity as qualified independent underwriter and not otherwise, is
referred to herein as the "Independent Underwriter".

SECTION 3. Covenants of the Company and the Subsidiaries. Each of the
Company and the Subsidiaries, jointly and severally, covenants with each U.S.
Underwriter as follows:

(a) Compliance with Securities Regulations and Commission
Requests. The Company and the Subsidiaries, subject to Section 3(b), will
comply with the requirements of Rule 430A or Rule 434, as applicable, and
will notify the Global Coordinator immediately, and confirm the notice in
writing, (i) when any post-effective amendment to the Registration
Statement, shall become effective, or any supplement to the Prospectuses or
any amended Prospectuses shall have been filed, (ii) of the receipt of any
comments from the Commission, (iii) of any request by the Commission for
any amendment to the Registration Statement or any amendment or supplement
to the Prospectuses or for additional information, and (iv) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of
any preliminary prospectus, or of the suspension of the qualification of
the Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such purposes. The
Company and the Subsidiaries will promptly effect the filings necessary
pursuant to Rule 424(b) and will take such steps as it deems necessary to
ascertain promptly whether the form of prospectus transmitted for filing
under Rule 424(b) was received for filing by the Commission and, in the
event that it was not, it will promptly file such prospectus. The Company
and the Subsidiaries will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.

(b) Filing of Amendments. The Company and the Subsidiaries
will give the Global Coordinator notice of the Company's intention to file
or prepare any amendment to the Registration Statement (including any
filing under Rule 462(b)), any Term Sheet or any amendment, supplement or
revision to either the prospectus included in the Registration Statement at
the time it became effective or to the Prospectuses, will furnish the
Global Coordinator with copies of any such documents a reasonable amount of
time prior to such proposed filing or use, as the case may be, and will not
file or use any such document to which the Global Coordinator or counsel
for the U.S. Underwriters shall object.

(c) Delivery of Registration Statements. The Company and the
Subsidiaries have furnished or will deliver to the U.S. Representatives and
counsel for the U.S. Underwriters, without charge, signed copies of the

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<PAGE> 24

Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein)
and signed copies of all consents and certificates of experts, and will
also deliver to the U.S. Representatives, without charge, a conformed copy
of the Registration Statement as originally filed and of each amendment
thereto (without exhibits) for each of the U.S. Underwriters. The copies
of the Registration Statement and each amendment thereto furnished to the
U.S. Underwriters will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the
extent permitted by Regulation S-T.

(d) Delivery of Prospectuses. The Company and the
Subsidiaries have delivered to each U.S. Underwriter, without charge, as
many copies of each preliminary prospectus as such U.S. Underwriter
reasonably requested, and the Company and the Subsidiaries hereby consent
to the use of such copies for purposes permitted by the 1933 Act. The
Company and the Subsidiaries will furnish to each U.S. Underwriter, without
charge, during the period when the U.S. Prospectus is required to be
delivered under the 1933 Act or the Securities Exchange Act of 1934 (the
"1934 Act"), such number of copies of the U.S. Prospectus (as amended or
supplemented) as such U.S. Underwriter may reasonably request. The U.S.
Prospectus and any amendments or supplements thereto furnished to the U.S.
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.

(e) Continued Compliance with Securities Laws. The Company
and the Subsidiaries will comply with the 1933 Act and the 1933 Act
Regulations so as to permit the completion of the distribution of the
Securities as contemplated in this Agreement, the International Purchase
Agreement and in the Prospectuses. If at any time when a prospectus is
required by the 1933 Act to be delivered in connection with sales of the
Securities, any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the U.S. Underwriters
or for the Company, to amend the Registration Statement or amend or
supplement any Prospectus in order that the Prospectuses will not include
any untrue statements of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the
light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of such counsel, at
any such time to amend the Registration Statement or amend or supplement
any Prospectus in order to comply with the requirements of the 1933 Act or
the 1933 Act Regulations, the Company and the Subsidiaries will promptly
prepare and file with the Commission, subject to Section 3(b), such
amendment or supplement as may be necessary to correct such statement or
omission or to make the Registration Statement or the Prospectuses comply
with such requirements, and the Company and the Subsidiaries will furnish
to the U.S. Underwriters such number of copies

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<PAGE> 25

of such amendment or supplement as the U.S. Underwriters may reasonably
request.

(f) Blue Sky Qualifications. The Company and the Subsidiaries
will use their best efforts, in cooperation with the U.S. Underwriters, to
qualify the Securities for offering and sale under the applicable
securities laws of such states and other jurisdictions (domestic or
foreign) as the Global Coordinator may designate and to maintain such
qualifications in effect for a period of not less than one year from the
later of the effective date of the Registration Statement and any Rule
462(b) Registration Statement; provided, however, that neither the Company
nor any Subsidiary shall be obligated to file any general consent to
service of process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any jurisdiction
in which it is not otherwise so subject. In each jurisdiction in which the
Securities have been so qualified, the Company and the Subsidiaries will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not
less than one year from the effective date of the Registration Statement
and any Rule 462(b) Registration Statement.

(g) Rule 158. The Company and the Subsidiaries will timely
file such reports pursuant to the 1934 Act as are necessary in order to
make generally available to its securityholders as soon as practicable an
earnings statement for the purposes of, and to provide the benefits
contemplated by, the last paragraph of Section 11(a) of the 1933 Act.

(h) Use of Proceeds. The Company and the Subsidiaries will
use the net proceeds received by the Company from the sale of the
Securities in the manner specified in the Prospectuses under "Use of
Proceeds".

(i) Listing. The Company and the Subsidiaries will use their
best efforts to effect the listing of the Common Stock (including the
Securities) on the New York Stock Exchange.

(j) Restriction on Sale of Securities. During a period of 180
days from the date of the Prospectuses, neither the Company nor any
Subsidiary will, without the prior written consent of the Global
Coordinator, (i) directly or indirectly, offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of any share of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock
or file any registration statement under the 1933 Act with respect to any
of the foregoing or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly,
the economic

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<PAGE> 26

consequence of ownership of the Common Stock, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise.
The foregoing sentence shall not apply to (A) the Securities to be sold
hereunder or under the International Purchase Agreement or (B) any options
to purchase Common Stock granted pursuant to existing employee benefit
plans of the Company referred to in the Prospectuses.

(k) Reporting Requirements. The Company and the Subsidiaries,
during the period when the Prospectuses are required to be delivered under
the 1933 Act or the 1934 Act, will file all documents required to be filed
with the Commission pursuant to the 1934 Act within the time periods
required by the 1934 Act and the rules and regulations of the Commission
thereunder.

(l) Compliance with NASD Rules. The Company and each
Subsidiary hereby agree that they will ensure that the Reserved Securities
will be restricted as required by the NASD or the NASD rules from sale,
transfer, assignment, pledge or hypothecation for a period of three months
following the date of the effectiveness of the Registration Statement. The
Underwriters will notify the Company as to which persons will need to be so
restricted. At the request of the Underwriters, the Company will direct
the transfer agent to place a stop transfer restriction upon such
securities for such period of time. Should the Company release, or seek to
release, from such restrictions any of the Reserved Securities, the Company
and the Subsidiaries, jointly and severally, agree to reimburse the
Underwriters for any reasonable expenses (including, without limitation,
legal expenses) they incur in connection with such release.

(m) Compliance with Rule 463. The Company and the
Subsidiaries will file with the Commission such reports on Form SR as may
be required pursuant to Rule 463 of the 1933 Act Regulations.

SECTION 4. Payment of Expenses. (a) Expenses. The Company and the
Subsidiaries, jointly and severally, will pay all expenses incident to the
performance of their obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the Underwriters of
this Agreement, any Agreement among Underwriters and such other documents as
may be required in connection with the offering, purchase, sale, issuance or
delivery of the Securities, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the Underwriters, including any stock or
other transfer taxes and any stamp or other duties payable upon the sale,
issuance or delivery of the Securities to the Underwriters and the transfer of
the Securities between the U.S. Underwriters and the International Managers,
(iv) the fees and disbursements of the Company's counsel, accountants and other
advisors, (v) the qualification of the Securities under securities

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<PAGE> 27

laws in accordance with the provisions of Section 3(f) hereof, including filing
fees and the reasonable fees and disbursements of counsel for the Underwriters
in connection therewith and in connection with the preparation of the Blue Sky
Survey and any supplement thereto, (vi) the printing and delivery to the
Underwriters of copies of each preliminary prospectus, any Term Sheets and of
the Prospectuses and any amendments or supplements thereto, (vii) the
preparation, printing and delivery to the Underwriters of copies of the Blue
Sky Survey and any supplement thereto, (viii) the fees and expenses of any
transfer agent or registrar for the Securities, (ix) the filing fees incident
to, and the reasonable fees and disbursements of counsel to the Underwriters in
connection with, the review by the NASD of the terms of the sale of the
Securities, (x) the fees and expenses incurred in connection with the listing
of the Securities on the New York Stock Exchange Securities in the Nasdaq
National Market, (xi) all costs and expenses of the Underwriters, including the
fees and disbursements of counsel for the Underwriters, in connection with
matters related to the Reserved Securities which are designated by the Company
for sale to eligible employees and other persons and (xii) the fees and
expenses of the Independent Underwriter.

(b) Expenses of the Selling Shareholders. The Selling Shareholders,
jointly and severally, will pay all expenses incident to the performance of
their respective obligations under, and the consummation of the transactions
contemplated by, this Agreement, including (i) any stamp duties, capital duties
and stock transfer taxes, if any, payable upon the sale of the Securities to
the U.S. Underwriters, and their transfer between Underwriters pursuant to any
agreement between Underwriters, and (ii) the fees and disbursements of their
respective counsel and accountants.

(c) Termination of Agreement. If this Agreement is terminated by the U.S.
Representatives in accordance with the provisions of Section 5, Section 9(a)(i)
or Section 11 hereof, the Company, the Subsidiaries and the Selling
Shareholders, jointly and severally, shall reimburse the U.S. Underwriters for
all of their out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the U.S. Underwriters.

(d) Allocation of Expenses. The provisions of this Section shall not
affect any agreement that the Company, the Subsidiaries and the Selling
Shareholders may make for the sharing of such costs and expenses.

SECTION 5. Conditions of U.S. Underwriters' Obligations. The
obligations of the several U.S. Underwriters hereunder are subject to the
accuracy of the representations and warranties of the Company, the Subsidiaries
and the Selling Shareholders contained in Section 1 hereof or in certificates
of any officer of the Company or any Subsidiary or by or on behalf of any
Selling Shareholder delivered pursuant to the provisions hereof, to the
performance by the Company and each Subsidiary of its covenants and other
obligations hereunder, and to the following further conditions:

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<PAGE> 28

(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any
request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of counsel to the U.S.
Underwriters. A prospectus containing the Rule 430A Information shall have
been filed with the Commission in accordance with Rule 424(b) (or a
post-effective amendment providing such information shall have been filed
and declared effective in accordance with the requirements of Rule 430A)
or, if the Company has elected to rely upon Rule 434, a Term Sheet shall
have been filed with the Commission in accordance with Rule 424(b).

(b) Opinion of Counsel for Company. At Closing Time, the U.S.
Representatives shall have received the favorable opinion, dated as of
Closing Time, of Shaw, Pittman, Potts & Trowbridge, counsel for the
Company, in form and substance satisfactory to counsel for the U.S.
Underwriters, together with signed or reproduced copies of such letter for
each of the other U.S. Underwriters to the effect set forth in Exhibit A
hereto and to such further effect as counsel to the U.S. Underwriters may
reasonably request.

(c) Opinion of Counsel for the Selling Shareholders. At
Closing Time, the U.S. Representatives shall have received the favorable
opinion, dated as of Closing Time, of Shaw, Pittman, Potts & Trowbridge,
counsel for the Selling Shareholders, in form and substance satisfactory to
counsel for the U.S. Underwriters, together with signed or reproduced
copies of such letter for each of the other U.S. Underwriters, to the
effect set forth in Exhibit B hereto and to such further effect as counsel
to the U.S. Underwriters may reasonably request.

(d) Opinion of Counsel for U.S. Underwriters. At Closing
Time, the U.S. Representatives shall have received the favorable opinion,
dated as of Closing Time, of Debevoise & Plimpton, counsel for the U.S.
Underwriters, together with signed or reproduced copies of such letter for
each of the other U.S. Underwriters with respect to the matters set forth
in clauses (i), (ii), (v), (vi) (solely as to preemptive or other similar
rights arising by operation of law or under the charter or by-laws of the
Company), (viii) through (x), inclusive, (xii), (xiv) (solely as to the
information in the Prospectus under "Description of Capital Stock -- Common
Stock") and the penultimate paragraph of Exhibit A hereto. In giving such
opinion such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York, the federal law
of the United States and the General Corporation Law of the State of
Delaware, upon the opinions of counsel satisfactory to the U.S.
Representatives. Such counsel may also state that, insofar as such opinion
involves factual matters, they have

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<PAGE> 29

relied, to the extent they deem proper, upon certificates of officers of
the Company and its subsidiaries and certificates of public officials.

(e) Officers' Certificate. At Closing Time, there shall not
have been, since the date hereof or since the respective dates as of which
information is given in the Prospectuses, any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and
the U.S. Representatives shall have received a certificate of each of (x)
the President or a Vice President of the Company and of the chief financial
or chief accounting officer of the Company, (y) the President or a Vice
President of SMS and of the chief financial or chief accounting officer of
SMS and (z) [specify designated officers] of the Partnership, in each case
dated as of Closing Time and to the effect that (i) there has been no such
material adverse change, (ii) the representations and warranties in Section
1(a) hereof are true and correct with the same force and effect as though
expressly made at and as of Closing Time, (iii) the Company, SMS or the
Partnership, as the case may be, has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or
prior to Closing Time, and (iv) no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or are contemplated by the
Commission.

(f) Certificate of Selling Shareholders. At the Closing Time,
the U.S. Representatives shall have received a certificate of an
Attorney-in-Fact on behalf of each Selling Shareholder, dated as of Closing
Time, to the effect that (i) the representations and warranties of each
Selling Shareholder contained in Section 1(b) and Section 1(c), as the case
may be, hereof are true and correct in all respects with the same force and
effect as though expressly made at and as of Closing Time and (ii) each
Selling Shareholder has complied in all material respects with all
agreements and all conditions on its part to be performed under this
Agreement at or prior to Closing Time.

(g) Accountant's Comfort Letter. At the time of the execution
of this Agreement, the U.S. Representatives shall have received from Arthur
Andersen L.L.P. a letter dated such date, in form and substance
satisfactory to the U.S. Representatives, together with signed or
reproduced copies of such letter for each of the other U.S. Underwriters
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectuses.

(h) Bring-down Comfort Letter. At Closing Time, the
Representatives shall have received from Arthur Andersen L.L.P. a letter,
dated as of Closing

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<PAGE> 30

Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (g) of this Section, except that the
specified date referred to shall be a date not more than three business
days prior to Closing Time.

(i) Approval of Listing. At Closing Time, the Securities
shall have been approved for listing on the New York Stock Exchange,
subject only to official notice of issuance.

(j) No Objection. The NASD shall not have raised any
objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.

(k) Lock-up Agreements. At the date of this Agreement, the
U.S. Representatives shall have received an agreement substantially in the
form of Exhibit C hereto signed by the persons listed on Schedule D hereto.

(l) Reorganization and Distribution. Prior to the time of
the execution of this Agreement, the Reorganization and the Distribution
shall have occurred.

(m) Form W-9. At or prior to Closing Time, the U.S.
Representatives shall have received from each Selling Shareholder a
properly completed and executed United States Treasury Form W-9.

(n) Securityholder Loans. At or prior to Closing Time, all
loans by the Company or any Subsidiary to its securityholders, described in
the Prospectuses, shall have been repaid in full.

(o) Purchase of Initial International Securities.
Contemporaneously with the purchase by the U.S. Underwriters of the Initial
U.S. Securities under this Agreement, the International Managers shall have
purchased the Initial International Securities under the International
Purchase Agreement.

(p) Conditions to Purchase of U.S. Option Securities. In
the event that the U.S. Underwriters exercise their option provided in
Section 2(b) hereof to purchase all or any portion of the U.S. Option
Securities, the representations and warranties of the Company, the
Subsidiaries and the Selling Shareholders contained herein and the
statements in any certificates furnished by the Company, the Subsidiaries
and the Selling Shareholders hereunder shall be true and correct as of each
Date of Delivery and, at the relevant Date of Delivery, and the U.S.
Representatives shall have received:

(i) Officers' Certificates. A certificate, dated such Date of
Delivery, of each of (x) the President or a Vice President of the
Company and of the

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<PAGE> 31

chief financial or chief accounting officer of the Company, (y)
the President or a Vice President of SMS and of the chief
financial or chief accounting officer of SMS and (z) [specify
designated officers] of the Partnership, in each case confirming
that the certificate delivered at the Closing Time pursuant to
Section 5(e) hereof remains true and correct as of such Date of
Delivery.

(ii) Certificate of the Selling Shareholders. A certificate, dated
such Date of Delivery, of an Attorney-in-Fact on behalf of each
Selling Shareholder confirming that the certificate delivered at
Closing Time pursuant to Section 5(f) remains true and correct as
of such Date of Delivery.

(iii) Opinion of Counsel for Company. The favorable opinion
of Shaw, Pittman, Potts & Trowbridge, counsel for the Company, in
form and substance satisfactory to counsel for the U.S.
Underwriters, dated such Date of Delivery, relating to the U.S.
Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section
5(b) hereof.

(iv) Opinion of Counsel for the Selling Shareholders. The
favorable opinion of Shaw, Pittman, Potts & Trowbridge, counsel
for the Selling Shareholders, in form and substance satisfactory
to counsel for the U.S. Underwriters, dated such Date of Delivery,
relating to the U.S. Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(c) hereof.

(v) Opinion of Counsel for U.S. Underwriters. The favorable
opinion of Debevoise & Plimpton, counsel for the U.S.
Underwriters, dated such Date of Delivery, relating to the U.S.
Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section
5(d) hereof.

(vi) Bring-down Comfort Letter. A letter from Arthur
Andersen L.L.P., in form and substance satisfactory to the U.S.
Representatives and dated such Date of Delivery, substantially in
the same form and substance as the letter furnished to the U.S.
Representatives pursuant to Section 5(g) hereof, except that the
"specified date" in the letter furnished pursuant to this
paragraph shall be a date not more than five days prior to such
Date of Delivery.

(q) Additional Documents. At Closing Time and at each Date of
Delivery, counsel for the U.S. Underwriters shall have been furnished with
such documents and opinions as they may require for the purpose of enabling
them to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of

27
<PAGE> 32

any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company, the
Subsidiaries and the Selling Shareholders in connection with the issuance
and sale of the Securities as herein contemplated shall be satisfactory in
form and substance to the U.S. Representatives and counsel for the U.S.
Underwriters.

(r) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement, or, in the case of any condition to the purchase of U.S.
Option Securities on a Date of Delivery which is after the Closing Time,
the obligations of the several U.S. Underwriters to purchase the relevant
Option Securities, may be terminated by the U.S. Representatives by notice
to the Company at any time at or prior to Closing Time or such Date of
Delivery, as the case may be, and such termination shall be without
liability of any party to any other party except as provided in Section 4
and except that Sections 1, 6, 7 and 8 shall survive any such termination
and remain in full force and effect.

SECTION 6. Indemnification.

(a) Indemnification of U.S. Underwriters. The Company, the
Subsidiaries and the Executive Selling Shareholders, jointly and severally,
agree to indemnify and hold harmless each U.S. Underwriter, its directors,
officers and employees, and each person, if any, who controls any U.S.
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act as follows:

(i) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, arising out of any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment
thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising
out of any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or the
Prospectuses (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;

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<PAGE> 33

contained in the supplement or prospectus wrapper material
distributed in in connection with the reservation and sale of
the Reserved Securities to eligible employees and other persons or
caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein, when considered in conjunction with the
Prospectuses or preliminary prospectuses, not misleading];

(iii) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue
statement or omission or in connection with any failure or
violation of the nature referred to in Section 6(a)(ii)(A) and (B)
hereof; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company,
the Subsidiaries and the Executive Selling Shareholders; and

(iv) against any and all expense whatsoever, as
incurred (including the fees and disbursements of counsel chosen
by Merrill Lynch), reasonably incurred in investigating, preparing
or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission or in connection with any failure or violation of the
nature referred to in Section 6(a)(ii)(A) and (B) hereof, to the
extent that any such expense is not paid under (i), (ii) or (iii)
above;

provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
U.S. Underwriter through the U.S. Representatives expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the U.S. Prospectus (or any amendment or supplement thereto).

In addition and without limitation to the Company's, each Subsidiary's and
each Executive Selling Shareholder's obligation to indemnify Merrill Lynch as
an Underwriter, the Company, the Subsidiaries and the Executive Selling
Shareholders, jointly and severally, also agree to indemnify and hold harmless
the Independent Underwriter and each person, if any, who controls the
Independent Underwriter within the meaning of either Section 15 of the 1933 Act
or Section 20 of the 1934 Act, from and against any and all losses, claims,
damages, liabilities and judgments incurred as a result of the Independent
Underwriter's participation as a "qualified independent underwriter"

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<PAGE> 34

within the meaning of Rule 2720 of the Conduct Rules the NASD in connection
with the offering of the Securities.

(b) Indemnification of U.S. Underwriters by the Non-Executive Selling
Shareholders. Each Non-Executive Selling Shareholder, severally and not
jointly, agrees to indemnify and hold harmless each U.S. Underwriter, its
directors, officers and employees, and each person, if any, who controls any
U.S. Underwriter within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, with respect to any untrue statement or omission, or
alleged untrue statement or omission, contained in the Registration Statement
(or any amendment thereto), including the Rule 430 Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectuses
(or any amendment or supplement thereto) in reliance upon and in conformity
with information furnished to the Company or any Subsidiary in writing by or on
behalf of such Non-Executive Selling Shareholder expressly for use therein;
provided, however, that (x) this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any U.S. Underwriter through the U.S. Representatives expressly for
use in the Registration Statement (or any amendment thereto), including the
Rule 430A Information and the Rule 434 Information, if applicable, or any
preliminary prospectus or the U.S. Prospectus (or any amendment or supplement
thereto) and (y) each Non-Executive Selling Shareholder's aggregate liability
under this Section 6(b) shall be limited to an amount equal to the net proceeds
(after deducting the underwriting discount, but before deducting expenses)
received by such Non-Executive Selling Shareholder from the sale of Securities
pursuant to this Agreement.

(c) Indemnification of Company, Directors and Officers. Each U.S.
Underwriter severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act, against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
U.S. prospectus or the U.S. Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such U.S. Underwriter through the U.S. Representatives
expressly for use in the Registration Statement (or any amendment thereto) or
such preliminary prospectus or the U.S. Prospectus (or any amendment or
supplement thereto).

30
<PAGE> 35

(d) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it
is not materially prejudiced as a result thereof and in any event shall not
relieve it from any liability which it may have otherwise than on account of
this indemnity agreement. In the case of parties indemnified pursuant to
Section 6(a) or (b) above, counsel to the indemnified parties shall be selected
by Merrill Lynch, and, in the case of parties indemnified pursuant to Section
6(c) above, counsel to the indemnified parties shall be selected by the
Company. An indemnifying party may participate at its own expense in the
defense of any such action; provided, however, that counsel to the indemnifying
party shall not (except with the consent of the indemnified party) also be
counsel to the indemnified party. In no event shall the indemnifying parties be
liable for fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances;
provided, that, if indemnity is sought pursuant to the second paragraph of
Section 6(a), then, in addition to such counsel for the indemnified parties, the
indemnifying party shall be liable for the reasonable fees and expenses of not
more than one separate counsel (in addition to any local counsel) for the
Independent Underwriter in its capacity as a "qualified independent underwriter"
and all persons, if any, who control the Independent Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of 1934 Act if, in the
reasonable judgment of the Independent Underwriter there may exist a conflict of
interest between the Independent Underwriter and the other indemnified parties.
In the case of any such separate counsel for the Independent Underwriter and
such control persons of the Independent Underwriter, such counsel shall be
designated in writing by the Independent Underwriter. No indemnifying party
shall, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.

31
<PAGE> 36

indemnifying party shall have received notice of the terms of such settlement
at least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.

(f) Other Agreements with Respect to Indemnification. The provisions
of this Section shall not affect any agreement among the Company, the
Subsidiaries and the Selling Shareholders with respect to indemnification.

SECTION 7. Contribution. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, the Subsidiaries and the Selling Shareholders on the one hand and the
U.S. Underwriters on the other hand from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company, the Subsidiaries and the Selling
Shareholders on the one hand and of the U.S. Underwriters on the other hand in
connection with the statements or omissions, or in connection with any failure
or violation of the nature referred to in Section 6(a)(ii)(A) and (B) hereof,
which resulted in such losses, liabilities, claims, damages or expenses, as
well as any other relevant equitable considerations.

The relative benefits received by the Company, the Subsidiaries and the
Selling Shareholders on the one hand and the U.S. Underwriters on the other
hand in connection with the offering of the U.S. Securities pursuant to this
Agreement shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of the U.S. Securities pursuant to this
Agreement (before deducting expenses) received by the Company, the Subsidiaries
and the Selling Shareholders and the total underwriting discount received by
the U.S. Underwriters, in each case as set forth on the cover of the U.S.
Prospectus, or, if Rule 434 is used, the corresponding location on the Term
Sheet, bear to the aggregate initial public offering price of the U.S.
Securities as set forth on such cover.

The relative fault of the Company, the Subsidiaries and the Selling
Shareholders on the one hand and the U.S. Underwriters on the other hand shall
be determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company, the
Subsidiaries or the Selling Shareholders or by the U.S. Underwriters and the
parties' relative intent, knowledge, access to information

32
<PAGE> 37

and opportunity to correct or prevent such statement or omission or any failure
or violation of the nature referred to in Section 6(a)(ii)(A) and (B) hereof.

The Company, the Subsidiaries, the Selling Shareholders and the U.S.
Underwriters agree that Merrill Lynch will not receive any additional benefits
hereunder for serving as the Independent Underwriter in connection with the
offering and sale of the U.S. Securities.

The Company, the Subsidiaries, the Selling Shareholders and the U.S.
Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation (even if the
U.S. Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable
considerations referred to above in this Section 7. The aggregate amount of
losses, liabilities, claims, damages and expenses incurred by an indemnified
party and referred to above in this Section 7 shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged
untrue statement or omission or alleged omission.

Notwithstanding the provisions of this Section 7, (x) no U.S. Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the U.S. Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such U.S. Underwriter has otherwise been required to pay by reason of any such
untrue or alleged untrue statement or omission or alleged omission , and (y) no
Non-Executive Selling Shareholder shall be required to contribute any amount in
excess of such Non-Executive Selling Shareholder's net proceeds (after
deducting the underwriting discount, but before deducting expenses) from the
sale of Securities pursuant to this Agreement.

No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.

For purposes of this Section 7, each person, if any, who controls a U.S.
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such U.S.
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company. The U.S.
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of Initial U.S. Securities set forth
opposite their respective names in Schedule A hereto and not joint.

33
<PAGE> 38

The provisions of this Section shall not affect any agreement among the
Company, the Subsidiaries and the Selling Shareholders with respect to
contribution.

SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any Subsidiary or
the Selling Shareholders submitted pursuant hereto, shall remain operative and
in full force and effect, regardless of any investigation made by or on behalf
of any U.S. Underwriter or controlling person, or by or on behalf of the
Company, the Subsidiaries or the Selling Shareholders, and shall survive
delivery of the Securities to the U.S. Underwriters.

SECTION 9. Termination of Agreement.

(a) Termination; General. The U.S. Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time
(i) if there has been, since the time of execution of this Agreement or since
the respective dates as of which information is given in the U.S. Prospectus,
any material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the
U.S. Representatives, impracticable to market the Securities or to enforce
contracts for the sale of the Securities, or (iii) if trading in any securities
of the Company has been suspended or materially limited by the Commission or
the New York Stock Exchange, or if trading generally on the American Stock
Exchange or the New York Stock Exchange or in the Nasdaq National Market has
been suspended or materially limited, or minimum or maximum prices for trading
have been fixed, or maximum ranges for prices have been required, by any of
said exchanges or by such system or by order of the Commission, the NASD or any
other governmental authority, or (iv) if a banking moratorium has been declared
by either Federal or New York authorities.

(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that
Sections 1, 6, 7 and 8 shall survive such termination and remain in full force
and effect.

SECTION 10. Default by One or More of the U.S. Underwriters. If one or
more of the U.S. Underwriters shall fail at Closing Time or a Date of Delivery
to purchase the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the U.S. Representatives shall have the
right, within 24 hours

34
<PAGE> 39

thereafter, to make arrangements for one or more of the non-defaulting U.S.
Underwriters, or any other underwriters, to purchase all, but not less than
all, of the Defaulted Securities in such amounts as may be agreed upon and upon
the terms herein set forth; if, however, the U.S. Representatives shall not
have completed such arrangements within such 24-hour period, then:

(a) if the number of Defaulted Securities does not exceed 10%
of the number of U.S. Securities to be purchased on such date, each of the
non-defaulting U.S. Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting U.S. Underwriters, or

(b) if the number of Defaulted Securities exceeds 10% of the
number of U.S. Securities to be purchased on such date, this Agreement or,
with respect to any Date of Delivery which occurs after the Closing Time,
the obligation of the U.S. Underwriters to purchase and of the Company to
sell the Option Securities to be purchased and sold on such Date of
Delivery shall terminate without liability on the part of any
non-defaulting U.S. Underwriter.

No action taken pursuant to this Section shall relieve any defaulting U.S.
Underwriter from liability in respect of its default.

In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the U.S.
Underwriters to purchase and the Company to sell the relevant U.S. Option
Securities, as the case may be, either the U.S. Representatives or the Company
shall have the right to postpone Closing Time or the relevant Date of Delivery,
as the case may be, for a period not exceeding seven days in order to effect
any required changes in the Registration Statement or Prospectus or in any
other documents or arrangements. As used herein, the term "U.S. Underwriter"
includes any person substituted for a U.S. Underwriter under this Section 10.

SECTION 11. Default by One or More of the Selling Shareholders or the
Company. (a) If a Selling Shareholder shall fail at Closing Time or at a Date
of Delivery to sell and deliver the number of Securities which such Selling
Shareholder or Selling Shareholders are obligated to sell hereunder, and the
remaining Selling Shareholders do not exercise the right hereby granted to
increase, pro rata or otherwise, the number of Securities to be sold by them
hereunder to the total number to be sold by all Selling Shareholders as set
forth in Schedule B hereto, then the U.S. Underwriters may, at the option of
the U.S. Representatives, by notice from the U.S. Representatives to the
Company and the non-defaulting Selling Shareholders, either (i) terminate this
Agreement without any liability on the fault of any non-defaulting party except
that the provisions of Sections 1, 4, 6, 7 and 8 shall remain in full force and
effect or (ii) elect to

35
<PAGE> 40

purchase the Securities which the non-defaulting Selling Shareholders and the
Company have agreed to sell hereunder. No action taken pursuant to this
Section 11 shall relieve any Selling Shareholder so defaulting from liability,
if any, in respect of such default.

In the event of a default by any Selling Shareholder as referred to in this
Section 11, each of the U.S. Representatives, the Company and the
non-defaulting Selling Shareholders shall have the right to postpone Closing
Time or Date of Delivery for a period not exceeding seven days in order to
effect any required change in the Registration Statement or Prospectuses or in
any other documents or arrangements.

(b) If the Company shall fail at Closing Time or at the Date of Delivery
to sell the number of Securities that it is obligated to sell hereunder, then
this Agreement shall terminate without any liability on the part of any
nondefaulting party; provided, however, that the provisions of Sections 1, 4,
6, 7 and 8 shall remain in full force and effect. No action taken pursuant to
this Section shall relieve the Company or any Subsidiary from liability, if
any, in respect of such default.

SECTION 12. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the U.S.
Underwriters shall be directed to the U.S. Representatives at North Tower,
World Financial Center, New York, New York 10281-1201, attention of [Syndicate
Operations]; notices to the Company and the Subsidiaries shall be directed to
the Company at Two Democracy Center, 6903 Rockledge Drive, Fifteenth Floor,
Bethesda, Maryland 20817, attention of ; and notices to the Selling
Shareholders shall be directed to , attention of .

SECTION 13. Parties. This Agreement shall each inure to the benefit of
and be binding upon the U.S. Underwriters, the Company, the Subsidiaries and the
Selling Shareholders and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the U.S. Underwriters, the Company, the
Subsidiaries and the Selling Shareholders and their respective successors and
the controlling persons and officers and directors referred to in Sections 6
and 7 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are
intended to be for the sole and exclusive benefit of the U.S. Underwriters, the
Company, the Subsidiaries and the Selling Shareholders and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm
or corporation. No purchaser of Securities from any U.S. Underwriter shall be
deemed to be a successor by reason merely of such purchase.

36
<PAGE> 41

SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.

SECTION 15. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.

37
<PAGE> 42

If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company and the Attorney-in-Fact for the Selling
Shareholders a counterpart hereof, whereupon this instrument, along with all
counterparts, will become a binding agreement among the U.S. Underwriters, the
Company, the Subsidiaries and the Selling Shareholders in accordance with its
terms.

Very truly yours,

SNYDER COMMUNICATIONS, INC.

By
-----------------------------
Name:
Title:

SNYDER MARKETING SERVICES, INC.

By
-----------------------------
Name:
Title:

SNYDER COMMUNICATIONS, L.P.

By
-----------------------------
Name:
Title:

38
<PAGE> 43

Gerald S. Snyder
Daniel M. Snyder
U.S. News & World Report, L.P.
Michele D. Snyder
Allen & Company Incorporated
Susan K. Allen
Susan Strauss Breen
Barry Diller
Paul A. Gould
HAGC Partners
Dan W. Lufkin
Robert Marston
Robert A. Strauss
Robert S. Strauss
Robert S. Strauss, Trustee, Helen J.
Strauss Trust

By
---------------------------
Name:
As Attorney-in-Fact acting on behalf
of of the Selling Shareholders
named in Schedule B hereto
CONFIRMED AND ACCEPTED,
as of the date first above written:

MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
ALLEN & COMPANY INCORPORATED
MONTGOMERY SECURITIES

By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED

By
--------------------------------------
Authorized Signatory

For themselves and as U.S. Representatives of the
other U.S. Underwriters named in Schedule A hereto.

39
<PAGE> 44

SCHEDULE A

Number of
Initial U.S.
Name of U.S. Underwriter Securities
------------------------ ----------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Donaldson, Lufkin & Jenrette
Securities Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allen & Company Incorporated . . . . . . . . . . . . . . . . . . . . . . . . . . .
Montgomery Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

---------

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,240,000
=========
</TABLE>

Sch A-1
<PAGE> 45

SCHEDULE B

<TABLE>
<CAPTION>
Maximum Number of
Number of Initial U.S. U.S. Option
Securities to be Sold Securities to be Sold
--------------------- ------------------------
<S> <C> <C>
Snyder Communications, Inc. . . . . . 0
Gerald S. Snyder . . . . . . . 0
Daniel M. Snyder . . . . . . . 0
U.S. News & World Report,
L.P. . . . . . . . . . . . . . . 0
Michele D. Snyder . . . . . . . . . 0
Allen & Company Incorporated. . . . 0
Susan K. Allen . . . . . . . . . . . 0
Susan Strauss Breen . . . . . . . . 0
Barry Diller . . . . . . . . . . . . 0
Paul Gould . . . . . . . . . . . . 0
HAGC Partners . . . . . . . . . . . 0
Dan Lufkin . . . . . . . . . . . . 0
Robert Marston . . . . . . . . . . . 0
Robert A. Strauss . . . . . . . . . 0
Robert S. Strauss . . . . . . . . . 0
Robert S. Strauss, Trustee,
Helen J. Strauss Trust . . . . . 0
--------- -------
Total . . . . . . . . . . . . . . . 6,240,000 936,000
========= =======
</TABLE>

Sch B-1
<PAGE> 46

SCHEDULE C

SNYDER COMMUNICATIONS, INC.

6,240,000 Shares of Common Stock

(Par Value $.001 Per Share)

The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $ .

The purchase price per share for the U.S. Securities to be paid by
the several U.S. Underwriters shall be $ , being an amount equal to the
initial public offering price set forth above less $ per share; provided
that the purchase price per share for any U.S. Option Securities purchased upon
the exercise of the over-allotment option described in Section 2(b) shall be
reduced by an amount per share equal to any dividends or distributions declared
by the Company and payable on the Initial U.S. Securities but not payable on
the U.S. Option Securities.

Sch C-1
<PAGE> 47

SCHEDULE D

[List of persons and entities
subject to lock-up]

Sch D-1
<PAGE> 48

Exhibit A

FORM OF OPINION OF SHAW, PITTMAN, POTTS & TROWBRIDGE
TO BE DELIVERED PURSUANT TO SECTION 5(b)

(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.

(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectuses and to enter into and perform its obligations under the U.S.
Purchase Agreement and the International Purchase Agreement.

(iii)The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.

(iv) The authorized, issued and outstanding capital stock of the Company
after giving effect to the Reorganization and the Distribution is as set forth
in the Prospectuses in the column entitled "Pro Forma" under the caption
"Capitalization" (except for subsequent issuances, if any, pursuant to the U.S.
Purchase Agreement and the International Purchase Agreement or pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectuses or pursuant to the exercise of convertible securities or options
referred to in the Prospectuses); the shares of issued and outstanding capital
stock of the Company, including the Securities to be purchased by the U.S.
Underwriters from the Selling Shareholders, have been duly authorized and
validly issued and are fully paid and non-assessable; and none of the
outstanding shares of capital stock of the Company was issued in violation of
the preemptive or other similar rights of any securityholder of the Company.

(v) The Securities to be purchased by the U.S. Underwriters and the
International Managers from the Company have been duly authorized for issuance
and sale to the Underwriters pursuant to the U.S. Purchase Agreement and the
International Purchase Agreement, respectively, and, when issued and delivered
by the Company pursuant to the U.S. Purchase Agreement and the International
Purchase Agreement, respectively, against payment of the consideration set forth
in the U.S. Purchase Agreement and the International Purchase Agreement, will
be validly issued and fully paid and non-assessable and no holder of the
Securities is or will be subject to personal liability by reason of being such a
holder.

A-1
<PAGE> 49

(vi) The issuance and sale of the Securities by the Company and the
sale of the Securities by the Selling Shareholders is not subject to the
preemptive or other similar rights of any securityholder of the Company.

(vii) Each Subsidiary has been duly organized and is validly existing
as a corporation or partnership, as the case may be, in good standing under the
laws of the State of Delaware, has corporate or partnership, as the case may be,
power and authority to own, lease and operate its properties and to conduct its
business as described in the Prospectuses and is duly qualified as a foreign
corporation or partnership, as the case may be, to transact business and is in
good standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good standing would
not result in a Material Adverse Effect; all of the issued and outstanding
capital stock of SMS has been duly authorized and validly issued, is fully paid
and non-assessable and is owned by the Company directly, and all of the
partnership interests of the Partnership have been duly authorized and validly
issued and are owned by the Company, directly or indirectly, in each case, free
and clear of any security interest, mortgage, pledge, lien, encumbrance, claim
or equity; none of the outstanding shares of capital stock of SMS or the
partnership interests of the Partnership was issued in violation of the
preemptive or similar rights of any securityholder of such Subsidiary. The only
subsidiaries of the Company are SMS and the Partnership.

(viii) The U.S. Purchase Agreement and the International Purchase
Agreement have been duly authorized, executed and delivered by the Company and
each Subsidiary. The perfor mance of the U.S. Purchase Agreement and the
International Purchase Agreement and the consummation of the transactions
contemplated in the U.S. Purchase Agreement, the International Purchase
Agreement and in the Registration Statement (including the issuance and sale of
the Securities and the use of the proceeds from the sale of the Securities as
described in the Prospec tuses under the caption "Use Of Proceeds" and the
consummation of the Reorganization and the Distribution) and compliance by the
Company and each Subsidiary with its obligations under the U.S. Purchase
Agreement and the International Purchase Agreement have been duly authorized by
the Company and each Subsidiary, respectively.

(ix) The Registration Statement, including any Rule 462(b) Registration
Statement, has been declared effective under the 1933 Act; any required filing
of the Prospectuses pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); and, to the best of our
knowledge, no stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued under the
1933 Act and no proceedings for that purpose have been instituted or are pending
or threatened by the Commission.

(x) The Registration Statement, including any Rule 462(b) Registration
Statement, the Rule 430A Information and the Rule 434 Information, as
applicable, the Prospectuses and each amendment or supplement to the
Registration Statement and the Prospectuses as of their respective effective or
issue dates (other than the financial statements and supporting schedules
includ-

A-2
<PAGE> 50

ed therein or omitted therefrom, as to which we need express no opinion)
complied as to form in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations.

(xi) If Rule 434 has been relied upon, the Prospectuses were not
"materially different," as such term is used in Rule 434, from the prospectuses
included in the Registration Statement at the time it became effective.

(xii) The form of certificate used to evidence the Common Stock
complies in all materi al respects with all applicable statutory requirements,
with any applicable requirements of the charter and by-laws of the Company and
the requirements of the New York Stock Exchange.

(xiii) To the best of our knowledge, there is not pending or threatened
any action, suit, proceeding, inquiry or investigation, to which the Company or
any Subsidiary is a party, or to which the property of the Company or any
Subsidiary is subject, before or brought by any court or governmental agency or
body, domestic or foreign, which might reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to materially and
ad versely affect the properties or assets thereof or the consummation of the
transactions contem plated in the U.S. Purchase Agreement and the International
Purchase Agreement or by the Reor ganization or the Distribution or the
performance by the Company or any Subsidiary of its obliga tions thereunder.

(xiv) The information in the Prospectuses under "Risk Factors --
Government Regu lation", "Risk Factors -- Shares Eligible for Future Sale;
Registration Rights", "Risk Factors -- Effect of Certain Charter and Bylaw
Provisions", "Business -- Services -- Consumer Markets -- Contractual
Relationship With AT&T", "Business -- Services -- Business Markets -- Con
tractual Relationship With MCI", Business -- Government Regulation", "Business
- -- Facilities", "Business -- Legal Proceedings", "Management -- Employment
Agreements", "Management -- Stock Option Plan", "Management -- Limitation of
Liability and Indemnification", "Certain Transactions", "Description of Capital
Stock", "Shares Eligible for Future Resale" and "Certain United States Federal
Income Tax Consequences to Non-United States Holders" and in the Regis tration
Statement under Item 14 and Item 15, to the extent that it constitutes matters
of law, sum maries of legal matters, the Company's charter and bylaws or legal
proceedings, or legal con clusions, has been reviewed by us and is correct in
all material respects.

(xv) To the best of our knowledge, there are no statutes or
regulations that are required to be described in the Prospectuses that are not
described as required.

(xvi) All descriptions in the Prospectuses of contracts and other
documents to which the Company or any Subsidiary is a party are accurate in all
material respects; to the best of our knowledge, there are no franchises,
contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as exhibits thereto,
and the descriptions thereof or references thereto are correct in all material
respects.

A-3
<PAGE> 51

(xvii) To the best of our knowledge, neither the Company nor any
Subsidiary is in violation of its charter or by-laws and no default by the
Company or any Subsidiary exists in the due performance or observance of any
material obligation, agreement, covenant or condition con tained in any
contract, indenture, mortgage, loan agreement, note, lease or other agreement or
instrument that is described or referred to in the Registration Statement or the
Prospectuses or filed or incorporated by reference as an exhibit to the
Registration Statement.

(xviii) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign (other than under the 1933 Act and the
1933 Act Regulations, which have been obtained, or as may be required under the
securities or blue sky laws of the various states, as to which we need express
no opinion) is necessary or required in connection with the due authorization,
execution and delivery of the U.S. Purchase Agreement and the International
Purchase Agreement or for the offering, issuance, sale or delivery of the
Securities.

(xix) The execution, delivery and performance of the U.S. Purchase
Agreement and the International Purchase Agreement and the consummation of the
transactions contemplated in the U.S. Purchase Agreement, the International
Purchase Agreement and in the Registration State ment (including the issuance
and sale of the Securities, and the use of the proceeds from the sale of the
Securities as described in the Prospectuses under the caption "Use Of Proceeds")
and com pliance by the Company and each Subsidiary with its obligations under
the U.S. Purchase Agree ment and the International Purchase Agreement do not and
will not, whether with or without the giving of notice or lapse of time or both,
conflict with or constitute a breach of, or default or Repayment Event (as
defined in Section 1(a)(x) of the Purchase Agreements) under or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any Subsidiary pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or any other
agreement or instrument, known to us, to which the Company or any Subsidiary, is
a party or by which any of them may be bound, or to which any of the property or
assets of the Company or any Subsidiary is subject (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not have a
Material Adverse Effect), nor will such action result in any violation of the
provisions of the charter or by-laws or partnership agreement, as the case may
be, of the Company or any Subsidiary or any applicable law, statute, rule,
regulation, judgment, order, writ or decree, known to us, of any government,
government instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any Subsidiary or any of their respective properties, assets
or operations.

(xx) To the best of our knowledge, there are no persons with
registration rights or other similar rights to have any securities registered
pursuant to the Registration Statement or otherwise registered by the Company
under the 1933 Act.

(xxi) The Company and each Subsidiary owns or has the exclusive right
to use the Intel lectual Property necessary to carry on the business now
operated by it and as proposed to be oper ated by it, and neither the Company
nor any Subsidiary has received any notice or is not other wise aware of any
infringement or violation of or conflict with asserted rights of others with

A-4
<PAGE> 52

respect to any Intellectual Property owned, licensed or used by the Company or
any Subsidiary or of any facts or circumstances which would render any
Intellectual Property necessary to carry on the business invalid or the
Company's or any Subsidiary's rights therein inadequate and to such counsel's
knowledge there is no infringement by others of the Intellectual Property owned
or used by the Company or any Subsidiary in the business.

(xxii) Each of the Reorganization and the Distribution has occurred, and
each has been consummated in accordance with all applicable laws, statutes,
rules and regulations.

(xxiii) Neither the Company nor any Subsidiary is an "investment
company" or an entity "controlled" by an "investment company," as such terms
are defined in the 1940 Act.

[(xxiv) The [Rights] under the Company's [Shareholder Rights Plan] to
which holders of the Securities will be entitled have been duly authorized and
validly issued.]

Nothing has come to our attention that would lead us to believe that
the Registration Statement or any amendment thereto, including the Rule 430A
Information and Rule 434 Infor mation (if applicable), (except for financial
statements and schedules and other financial data included therein or omitted
therefrom, as to which we need make no statement), at the time such
Registration Statement or any such amendment became effective, contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Prospectuses or any amendment or supple ment thereto
(except for financial statements and schedules and other financial data
included therein or omitted therefrom, as to which we need make no statement),
at the time the Prospec tuses were issued, at the time any such amended or
supplemented prospectus was issued or at the Closing Time, included or includes
an untrue statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in the light of the
circum stances under which they were made, not misleading.

In rendering such opinion, such counsel may rely, as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Com pany and the Subsidiaries and
public officials. Such opinion shall not state that it is to be gov erned or
qualified by, or that it is otherwise subject to, any treatise, written policy
or other docu ment relating to legal opinions, including, without limitation,
the Legal Opinion Accord of the ABA Section of Business Law (1991).

A-5
<PAGE> 53

Exhibit B

FORM OF OPINION OF COUNSEL FOR THE SELLING SHAREHOLDERS
TO BE DELIVERED PURSUANT TO SECTION 5(c)

(i) No filing with, or consent, approval, authorization, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign, (other than the issuance of the order
of the Commission declaring the Registration Statement effective and such
authorizations, approvals or consents as may be necessary under state
securities laws, as to which we need express no opinion) is necessary or
required to be obtained by the Selling Shareholders for the performance by each
Selling Shareholder of its obligations under the U.S. Purchase Agreement, the
International Purchase Agreement or in the Power of Attorney and Custody
Agreement, or in connection with the offer, sale or delivery of the Securities.

(ii) Each Power of Attorney and Custody Agreement has been duly
executed and delivered by the respective Selling Shareholders named therein
and constitutes the legal, valid and binding agreement of such Selling
Shareholder.

(iii) The U.S. Purchase Agreement and the International Purchase
Agreement have been duly authorized, executed and delivered by or on behalf of
each Selling Shareholder.

(iv) Each Attorney-in-Fact has been duly authorized by the Selling
Shareholders to deliver the Securities on behalf of the Selling Shareholders in
accordance with the terms of the U.S. Purchase Agreement and the International
Purchase Agreement.

(v) The execution, delivery and performance of the U.S. Purchase
Agreement, the International Purchase Agreement and the Power of Attorney and
Custody Agreement and the sale and delivery of the Securities and the
consummation of the transactions contemplated in the U.S. Purchase Agreement,
the International Purchase Agreement and in the Registration Statement and
compliance by the Selling Shareholders with their respective obligations under
the U.S. Purchase Agreement and the International Purchase Agreement have been
duly authorized by all necessary action on the part of the Selling Shareholders
and do not and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach of, or default
under or result in the creation or imposition of any tax, lien, charge or
encumbrance upon the Securities or any property or assets of the Selling
Shareholders pursuant to, any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, license, lease or other instrument or agreement
to which any Selling Shareholder is a party or by which [his/her/it/they] may
be bound, or to which any of the property or assets of the Selling
Shareholders may be subject nor will such action result in any violation of the
provisions of the charter or by-laws of the Selling Shareholders, if
applicable, or any law, administrative regulation, judgment or order of any
gov-

B-1
<PAGE> 54

ernmental agency or body or any administrative or court decree having
jurisdiction over such Selling Shareholder or any of its properties.

(vi) To the best of our knowledge, each Selling Shareholder has valid
and marketable title to the Securities to be sold by such Selling Shareholder
pursuant to the U.S. Purchase Agree ment and the International Purchase
Agreement, free and clear of any pledge, lien, security interest, charge,
claim, equity or encumbrance of any kind, and has full right, power and
authority to sell, transfer and deliver such Securities pursuant to the U.S.
Purchase Agreement and the International Purchase Agreement. By delivery of a
certificate or certificates therefor such Selling Shareholder will transfer to
the Underwriters who have purchased such Securities pursuant to the U.S.
Purchase Agreement and the International Purchase Agreement (without notice of
any defect in the title of such Selling Shareholder and who are otherwise bona
fide purchasers for purposes of the Uniform Commercial Code) valid and
marketable title to such Securities, free and clear of any pledge, lien,
security interest, charge, claim, equity or encumbrance of any kind.

[Nothing has come to our attention that would lead us to believe that
the Registration Statement or any amendment thereto, including the Rule 430A
Information and Rule 434 Information (if applicable), (except for financial
statements and schedules and other financial data included therein or omitted
therefrom, as to which we need make no statement), at the time such
Registration Statement or any such amendment became effective, contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Prospectuses or any amendment or supplement thereto
(except for financial statements and schedules and other financial data
included therein or omitted therefrom, as to which we need make no statement),
at the time the Prospectuses were issued, at the time any such amended or
supplemented prospectus was issued or at the Closing Time, included or includes
an untrue statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.]

B-2
<PAGE> 55

Exhibit C

FORM OF LOCK-UP FROM DIRECTORS, OFFICERS OR OTHER
SHAREHOLDERS PURSUANT TO SECTION 5(k)

, 1996

MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated,
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
ALLEN & COMPANY INCORPORATED
MONTGOMERY SECURITIES
as U.S. Representatives of the several
U.S. Underwriters to be named in the
within-mentioned U.S. Purchase Agreement
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209

Re: Proposed Public Offering by Snyder Communications, Inc.

Dear Sirs:

The undersigned, a stockholder [and an officer and/or director]* of
Snyder Communications, Inc., a Delaware corporation (the "Company"),
understands that Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch") and Donaldson, Lufkin & Jenrette Securities
Corporation, Allen & Company Incorporated and Montgomery Securities propose to
enter into a U.S. Purchase Agreement (the "U.S. Purchase Agreement") with the
Company and the other parties named therein providing for the public offering
of shares (the "Securities") of the Company's common stock, par value $.001 per
share (the "Common Stock"). In recognition of the benefit that such an
offering will confer upon the undersigned as a stockholder [and an officer
and/or director]* of the Company, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the undersigned agrees with each underwriter to be named in the U.S. Purchase
Agreement that, during a period of 180 days from the date of the U.S. Purchase
Agreement, the undersigned will not, without the

- ----------------------

* Delete or revise bracketed language as appropriate.

C-1
<PAGE> 56

prior written consent of Merrill Lynch, directly or indirectly, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant for
the sale of, or otherwise dispose of or transfer any shares of the Company's
Common Stock or any securities convertible into or exchangeable or exercisable
for Common Stock, whether now owned or hereafter acquired by the undersigned or
with respect to which the undersigned has or hereafter acquires the power of
disposition, or file any registration statement under the Securities Act of
1933, as amended, with respect to any of the foregoing or (ii) enter into any
swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction is to be settled by delivery
of Common Stock or other securities, in cash or otherwise.

[Notwithstanding the foregoing, the undersigned may, at any time after
30 days from the date of the Closing Time (as defined in the U.S. Purchase
Agreement), pledge as security for borrowed money [up to 50% of]* the shares of
Common Stock then owned by the undersigned to any commercial banking
institution that is a member of the Federal Reserve System having combined
capital and surplus in excess of $500,000,000 (a "Pledgee") as long as such
Pledgee shall have agreed in writing to be bound by the obligations and
restrictions applicable to the Common Stock under Section 1(b)(vi) of the U.S.
Purchase Agreement and the U.S. Representatives shall have received an
agreement substantially in the form of Exhibit D to the U.S. Purchase Agreement
signed by such Pledgee.]**

Very truly yours,

Signature:
-------------------------

Print Name:
------------------------

- ---------------------

* Include in the case of any lock-up agreement of Daniel M. Snyder.

** Include in the case of any lock-up agreement of Daniel M. Snyder
and U.S. News & World Report, L.P.

C-2
<PAGE> 57

Exhibit D

FORM OF LOCK-UP FROM PLEDGEE PURSUANT TO SECTION 1(b)(vi)

, [1996]

MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated,
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
ALLEN & COMPANY INCORPORATED
MONTGOMERY SECURITIES
as U.S. Representatives of the several
U.S. Underwriters named in the
within-mentioned U.S. Purchase Agreement
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209

Re: Public Offering by Snyder Communications, Inc.

Dear Sirs:

The undersigned, a pledgee of shares (the "Pledged Shares") of Common
Stock, par value $.001 per share, of Snyder Communications, Inc., a Delaware
corporation (the "Company"), understands that Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and Donaldson,
Lufkin & Jenrette Securities Corporation, Allen & Company Incorporated and
Montgomery Securities have entered into a U.S. Purchase Agreement, dated ,
1996 (the "U.S. Purchase Agreement"), with the Company and the other parties
named therein providing for the public offering of shares of the Company's
Common Stock. For good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the undersigned agrees with each underwriter
named in the U.S. Purchase Agreement that, during a period of 180 days from the
date of the U.S. Purchase Agreement, the undersigned will not, without the
prior written consent of Merrill Lynch, directly or indirectly, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant for
the sale of, or otherwise dispose of or transfer any Pledged Shares or any
securities convertible into or exchangeable or exercisable for any Pledged
Shares, whether now owned or hereafter acquired by the undersigned or with
respect to which the undersigned has or hereafter acquires the power of
disposition, or file any registration statement under the Securities Act of

D-1
<PAGE> 58

1933, as amended, with respect to any of the foregoing or (ii) enter into any
swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of any
Pledged Shares, whether any such swap or transaction is to be settled by
delivery of any Pledged Shares or other securities, in cash or otherwise.

Very truly yours,

[name of Pledgee]

By:
---------------------
Name:
Title:

D-2
<PAGE> 59

Annex A

FORM OF ACCOUNTANTS' COMFORT LETTER PURSUANT TO SECTION 5(g)

We are independent public accountants with respect to the Company within the
meaning of the 1933 Act and the applicable published 1933 Act Regulations

(i) in our opinion, the audited combined financial
statements and the related financial statement schedules included in
the Registration Statement and the Prospectuses comply as to form in
all material respects with the applicable accounting requirements of
the 1933 Act and the published rules and regulations thereunder;

(ii) on the basis of procedures (but not an examination in
accordance with generally accepted auditing standards) consisting of a
reading of the unaudited interim combined financial statements of
the Company for the six month periods ended June 30, 1995 and June 30,
1996, included in the Registration Statement and the Prospectuses
(collectively, the "Quarterly Financials"), a reading of the minutes of
all meetings of the securityholders, directors and partners of the
Company and its subsidiaries, as the case may be, and the
________________ Committee(s) of the Company's Board of Directors
[specify relevant SMS and Partnership management entities) since
December 31, 1995, inquiries of certain officials of the Company and
its subsidiaries responsible for financial and accounting matters, a
review of interim financial information in accordance with standards
established by the American Institute of Certified Public Accountants
in Statement on Auditing Standards No. 71, Interim Financial
Information ("SAS 71"), with respect to the six month periods ended
June 30, 1995 and June 30, 1996 and such other inquiries and
procedures as may be specified in such letter, nothing came to our
attention that caused us to believe that:

(A) the Quarterly Financials included in the
Registration Statement and the Prospectuses do not comply
as to form in all material respects with the applicable
accounting requirements of the 1933 Act and the 1933 Act
Regulations or any material modifications should be made
to the unaudited combined financial statements included
in the Registration Statement and the Prospectuses for
them to be in conformity with generally accepted
accounting principles;

(B) at a specified date not more than five days
prior to the date of this Agreement, there was any change
in the equity of the Company and its subsidiaries or any
decrease in the working capital or total assets of the
Company and its subsidiaries or any increase in the
long-term debt of the Company and its subsidiaries, in
each case as compared with amounts shown in the latest
balance sheet included in the Registration Statement,
except in each case for changes, decreases or increases
that the Registration Statement discloses have occurred
or may occur; or

Annex A-1
<PAGE> 60

(C) for the period from June 30, 1996 to a specified
date not more than five days prior to the date of this
Agreement, there was any decrease in revenues, income
from operations or net income, or any increase in cost of
services or selling, general and administrative expenses,
in each case as compared with the comparable period in
the preceding year, except in each case for any decreases
that the Registration Statement discloses have occurred
or may occur;

(iii) based upon the procedures set forth in clause (ii) above and a
reading of the Selected Financial and Operating Data included in the
Registration Statement and a reading of the financial statements from which
such data were derived, nothing came to our attention that caused us to believe
that the Selected Financial and Operating Data included in the Registration
Statement do not comply as to form in all material respects with the disclosure
requirements of Item 301 of Regulation S-K of the 1933 Act, that the amounts
included in the Selected Financial and Operating Data are not in agreement with
the corresponding amounts in the audited combined financial statements for the
respective periods or that the financial statements not included in the
Registration Statement from which certain of such data were derived are not
in conformity with generally accepted accounting principles;

(iv) we have compared the information in the Registration Statement
under selected captions with the disclosure requirements of Regulation S-K of
the 1933 Act and on the basis of limited procedures specified herein nothing
came to our attention that caused us to believe that this information does not
comply as to form in all material respects with the disclosure requirements of
Items 302, 402 and 503(d), respectively, of Regulation S-K;

(v) we are unable to and do not express any opinion on the pro forma
combined balance sheet and income statement information (the "Pro Forma
Statements") included in the Registration Statement or on the pro forma
adjustments applied to the historical amounts included in the Pro Forma
Statements; however, for purposes of this letter we have:

(A) read the Pro Forma Statements;

(B) performed an audit or a review in accordance
with SAS 71, as the case may be, of the financial
statements to which the pro forma adjustments were applied;

(C) made inquiries of certain officials of the
Company who have responsibility for financial and
accounting matters about the basis for their
determination of the pro forma adjustments and whether
the Pro Forma Statements comply as to form in all mate-

Annex A-2
<PAGE> 61

rial respects with the applicable accounting requirements
of Rule 11-02 of Regulation S-X; and

(D) proved the arithmetic accuracy of the application
of the pro forma adjustments to the historical amounts in
the Pro Forma Statements; and

on the basis of such procedures and such other inquiries and procedures as
specified herein, nothing came to our attention that caused us to believe that
the Pro Forma Statements included in the Registration Statement do not comply
as to form in all material respects with the applicable requirements of Rule
11-02 of Regulation S-X or that the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of those
statements; and

(vi) in addition to the procedures referred to in clause (ii)
above, we have performed other procedures, not constituting an audit, with
respect to certain amounts, percentages, numerical data and financial
information appearing in the Registration Statement, which are specified
herein, and have compared certain of such items with, and have found such items
to be in agreement with, the accounting and financial records of the Company
and its subsidiaries.

Annex A-3

<PAGE> 1
EXHIBIT 1.2

DRAFT-AUGUST 28, 1996

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SNYDER COMMUNICATIONS, INC.
(a Delaware corporation)

1,560,000 Shares of Common Stock

INTERNATIONAL PURCHASE AGREEMENT

Dated: September , 1996

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS

<TABLE>
<S> <C>
INTERNATIONAL PURCHASE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1. Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(a) Representations and Warranties by the Company and the Subsidiaries . . . . . . . . . . 4
(i) Compliance with Registration Requirements . . . . . . . . . . . . . . . . . . 4
(ii) Independent Accountants . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(iii) Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(iv) No Material Adverse Change in Business . . . . . . . . . . . . . . . . . . . 6
(v) Good Standing of the Company . . . . . . . . . . . . . . . . . . . . . . . . 6
(vi) Good Standing of Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . 7
(vii) Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(viii) Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(ix) Authorization and Description of Securities . . . . . . . . . . . . . . . . . 8
(x) Reorganization and Distribution . . . . . . . . . . . . . . . . . . . . . . . 8
(xi) Absence of Defaults and Conflicts . . . . . . . . . . . . . . . . . . . . . . 8
(xii) Absence of Labor Dispute . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(xiii) Absence of Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(xiv) Accuracy of Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(xv) Possession of Intellectual Property . . . . . . . . . . . . . . . . . . . . . 10
(xvi) Absence of Further Requirements . . . . . . . . . . . . . . . . . . . . . . . 10
(xvii) Possession of Licenses and Permits . . . . . . . . . . . . . . . . . . . . . 10
(xviii) Title to Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(xix) Compliance with Cuba Act . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(xx) Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(xxi) Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(xxii) Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(xxiii) Certain Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(xxiv) Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(xxv) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(xxvi) Securityholder Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(xxvii) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(b) Representations and Warranties by the Selling Shareholders . . . . . . . . . . . . . . 13
(i) Authorization of Agreements . . . . . . . . . . . . . . . . . . . . . . . . . 13
(ii) Good and Marketable Title . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(iii) Due Execution of Power of Attorney and Custody Agreement . . . . . . . . . . 14
(iv) Absence of Manipulation . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(v) Absence of Further Requirements . . . . . . . . . . . . . . . . . . . . . . . 15
(vi) Restriction on Sale of Securities . . . . . . . . . . . . . . . . . . . . . . 15
(vii) Certificates Suitable for Transfer . . . . . . . . . . . . . . . . . . . . . 16
(viii) No Association with NASD . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(c) Additional Representations and Warranties by the Executive Selling Shareholders . . . 16
(d) Officer's Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2. Sale and Delivery to International Managers; Closing. . . . . . . . . . . . . . . . . 17
(a) Initial Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(b) Option Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
</TABLE>

i
<PAGE> 3
<TABLE>
<S> <C> <C>
(c) Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
(d) Denominations; Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
(e) Appointment of Qualified Independent Underwriter. . . . . . . . . . . . . . . . . . .19
SECTION 3. Covenants of the Company and the Subsidiaries . . . . . . . . . . . . . . . . . . . .19
(a) Compliance with Securities Regulations and Commission Requests . . . . . . . . . . . .19
(b) Filing of Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
(c) Delivery of Registration Statements . . . . . . . . . . . . . . . . . . . . . . . . .20
(d) Delivery of Prospectuses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
(e) Continued Compliance with Securities Laws . . . . . . . . . . . . . . . . . . . . . .20
(f) Blue Sky Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
(g) Rule 158 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
(h) Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
(i) Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
(j) Restriction on Sale of Securities . . . . . . . . . . . . . . . . . . . . . . . . . .21
(k) Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
(l) Compliance with NASD Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
(m) Compliance with Rule 463 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
SECTION 4. Payment of Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
(a) Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
(b) Expenses of the Selling Shareholders . . . . . . . . . . . . . . . . . . . . . . . . .23
(c) Termination of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
(d) Allocation of Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
SECTION 5. Conditions of International Managers' Obligations . . . . . . . . . . . . . . . . . .24
(a) Effectiveness of Registration Statement . . . . . . . . . . . . . . . . . . . . . . .24
(b) Opinion of Counsel for Company . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
(c) Opinion of Counsel for the Selling Shareholders . . . . . . . . . . . . . . . . . . .24
(d) Opinion of Counsel for International Managers . . . . . . . . . . . . . . . . . . . .24
(e) Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
(f) Certificate of Selling Shareholders . . . . . . . . . . . . . . . . . . . . . . . . .25
(g) Accountant's Comfort Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
(h) Bring-down Comfort Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
(i) Approval of Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
(j) No Objection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
(k) Lock-up Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
(l) Reorganization and Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . .26
(m) Form W-9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
(n) Securityholder Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
(o) Purchase of Initial U.S. Securities . . . . . . . . . . . . . . . . . . . . . . . . .26
(p) Conditions to Purchase of International Option Securities . . . . . . . . . . . . . .27
(q) Additional Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
(r) Termination of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
SECTION 6. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
(a) Indemnification of International Managers. . . . . . . . . . . . . . . . . . . . . . .28
</TABLE>

ii
<PAGE> 4
<TABLE>
<S> <C>
(b) Indemnification of International Managers by the Non-Executive Selling Shareholders .. . 30
(c) Indemnification of Company, Directors and Officers . . . . . . . . . . . . . . . . . .. . 30
(d) Actions against Parties; Notification . . . . . . . . . . . . . . . . . . . . . . . .. . 31
(e) Settlement without Consent if Failure to Reimburse . . . . . . . . . . . . . . . . . .. . 32
(f) Other Agreements with Respect to Indemnification . . . . . . . . . . . . . . . . . . .. . 32
SECTION 7. Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . 32
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . 34
SECTION 9. Termination of Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . 34
(a) Termination; General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . 34
(b) Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . 35
SECTION 10. Default by One or More of the International Managers . . . . . . . . . . . . . . . . . . 35
SECTION 11. Default by One or More of the Selling Shareholders or the
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . 36
SECTION 12. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . 36
SECTION 13. Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . 36
SECTION 14. GOVERNING LAW AND TIME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . 37
SECTION 15. Effect of Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . 37

SCHEDULES
Schedule A - List of Underwriters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sch A-1
Schedule B - List of Selling Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sch B-1
Schedule C - Pricing Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sch C-1
Schedule D - List of Persons Subject to Lock-up . . . . . . . . . . . . . . . . . . . . . . . . .Sch D-1

EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel . . . . . . . . . . . . . . . . . . . . . . . . .. . A-1
Exhibit B - Form of Opinion of Selling Shareholders' Counsel . . . . . . . . . . . . . . . . . . .. . B-1
Exhibit C- Form of Lock-up Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . C-1
Exhibit D - Form of Pledgee Lock-up Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . D-1
</TABLE>

iii
<PAGE> 5

SNYDER COMMUNICATIONS, INC.

(a Delaware corporation)

1,560,000 Shares of Common Stock

(Par Value $.001 Per Share)

INTERNATIONAL PURCHASE AGREEMENT

September , 1996

MERRILL LYNCH INTERNATIONAL
Donaldson, Lufkin & Jenrette
Securities Corporation
Allen & Company Incorporated
Montgomery Securities
as Lead Managers of the several International Managers
c/o Merrill Lynch International
25 Ropemaker Street
London EC24 9LY
England

Ladies and Gentlemen:

Snyder Communications, Inc., a Delaware corporation (the "Company"),
Snyder Marketing Services, Inc., a Delaware corporation ("SMS"), Snyder
Communications, L.P., a Delaware limited partnership (the "Partnership" and,
together with SMS, the "Subsidiaries"), and the persons listed in Schedule B
hereto (collectively, the "Selling Shareholders") confirm their respective
agreements with Merrill Lynch International ("Merrill Lynch") and each of the
other international underwriters named in Schedule A hereto (collectively, the
"International Managers", which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), for whom Merrill
Lynch, Donaldson, Lufkin & Jenrette Securities Corporation, Allen & Company
Incorporated and Montgomery Securities are acting as representatives (in such
capacity, the "Lead Managers"), with respect to (i) the sale by the Company and
Gerald S. Snyder (the "Initial Selling Shareholder"), acting severally and not
jointly, and the purchase by the International Managers, acting severally and
not jointly, of the respective numbers of shares of Common Stock, par value
$.001 per share, of the Company ("Common Stock") set forth in Schedules A and B
hereto and (ii) the grant by the Selling Shareholders other than the Initial
Selling Shareholder (collectively, the "Option Selling Shareholders") to

<PAGE> 6

the International Managers, acting severally and not jointly, of the option
described in Section 2(b) hereof to purchase all or any part of 234,000
additional shares of Common Stock to cover over-allotments, if any. The
aforesaid 1,560,000 shares of Common Stock (the "Initial International
Securities") to be purchased by the International Managers and all or any part
of the 234,000 shares of Common Stock subject to the option described in
Section 2(b) hereof (the "International Option Securities") are hereinafter
called, collectively, the "International Securities".

It is understood that the Company, the Subsidiaries and the Selling
Shareholders are concurrently entering into an agreement dated the date hereof
(the "U.S. Purchase Agreement") providing for the offering by the Company and
the Initial Selling Shareholder, acting severally and not jointly, of an
aggregate of 6,240,000 shares of Common Stock (the "Initial U.S. Securities")
through arrangements with certain underwriters in the United States and Canada
(the "U.S. Underwriters") for which Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Donaldson, Lufkin & Jenrette Securities
Corporation, Allen & Company Incorporated and Montgomery Securities are acting
as representatives (the "U.S. Representatives") and the grant by the Option
Selling Shareholders to the U.S. Underwriters, acting severally and not
jointly, of an option to purchase all or any part of the U.S. Underwriters' pro
rata portion of up to 936,000 additional shares of Common Stock solely to cover
overallotments, if any (the "U.S. Option Securities" and, together with the
International Option Securities, the "Option Securities"). The Initial U.S.
Securities and the U.S. Option Securities are hereinafter called the "U.S.
Securities". It is understood that the Company is not obligated to sell and
the International Managers are not obligated to purchase, any Initial
International Securities unless all of the Initial U.S. Securities are
contemporaneously purchased by the U.S. Underwriters.

The International Managers and the U.S. Underwriters are hereinafter
collectively called the "Underwriters", the Initial International Securities
and the Initial U.S. Securities are hereinafter collectively called the
"Initial Securities", and the International Securities and the U.S. Securities
are hereinafter collectively called the "Securities".

Daniel M. Snyder and Michele D. Snyder, each an Option Selling
Shareholder, are hereinafter collectively called the "Executive Selling
Shareholders", the Initial Selling Shareholder and the Option Selling
Shareholders other than the Executive Selling Shareholders are hereinafter
collectively called the "Non-Executive Selling Shareholders", and Daniel S.
Snyder and U.S. News & World Report, L.P., each an Option Selling Shareholder,
are hereinafter collectively called the "Pledgor Selling Shareholders".

The Underwriters will concurrently enter into an Intersyndicate
Agreement of even date herewith (the "Intersyndicate Agreement") providing for
the coordination of certain transactions among the Underwriters under the
direction of Merrill Lynch & Co.,

2
<PAGE> 7
Merrill Lynch, Pierce, Fenner & Smith Incorporated (in such capacity, the
"Global Coordinator").

The Company, the Subsidiaries and the Selling Shareholders understand
that the International Managers propose to make an offering of the
International Securities as soon as the Lead Managers deem advisable after this
Agreement has been executed and delivered.

The Company, the Subsidiaries, the Selling Shareholders and the
International Managers understand that up to 234,000 shares of the Initial U.S.
Securities to be purchased by the U.S. Underwriters (the "Reserved Securities")
shall be reserved for sale at the public offering price by the U.S.
Underwriters to certain eligible employees and other persons, as part of the
distribution of the U.S. Securities by the U.S. Underwriters, subject to the
terms of the U.S. Purchase Agreement, the applicable rules, regulations and
interpretations of the National Association of Securities Dealers, Inc. (the
"NASD") and all other applicable laws, rules and regulations. To the extent
that such Reserved Securities are not orally confirmed for purchase by such
eligible employees and other persons by the end of the first business day after
the date of the U.S. Purchase Agreement, such Reserved Securities may be
offered to the public by the U.S. Underwriters as part of the public offering
contemplated by the U.S. Purchase Agreement.

The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-7495) covering the
registration of the Securities under the Securities Act of 1933, as amended
(the "1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will
either (i) prepare and file a prospectus in accordance with the provisions of
Rule 430A ("Rule 430A") of the rules and regulations of the Commission under
the 1933 Act (the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule
424(b)") of the 1933 Act Regulations or (ii) if the Company has elected to rely
upon Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term
sheet (a "Term Sheet") in accordance with the provisions of Rule 434 and Rule
424(b). Two forms of prospectus are to be used in connection with the offering
and sale of the Securities: one relating to the International Securities (the
"Form of International Prospectus") and one relating to the U.S. Securities
(the "Form of U.S. Prospectus"). The Form of International Prospectus is
identical to the Form of U.S. Prospectus, except for the front cover and back
cover pages and the information under the caption "Underwriting". The
information included in any such prospectus or in any such Term Sheet, as the
case may be, that was omitted from such registration statement at the time it
became effective but that is deemed to be part of such registration statement
at the time it became effective (a) pursuant to paragraph (b) of Rule 430A is
referred to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule
434 is referred to as "Rule 434 Information." Each Form of International
Prospectus and Form of U.S. Prospectus used before such registration statement
became effective, and any prospectus

3
<PAGE> 8
that omitted, as applicable, the Rule 430A Information or the Rule 434
Information, that was used after such effectiveness and prior to the execution
and delivery of this Agreement, is herein called a "preliminary prospectus."
Such registration statement, including the exhibits thereto and schedules
thereto at the time it became effective and including the Rule 430A Information
and the Rule 434 Information, as applicable, is herein called the "Registration
Statement." Any registration statement filed pursuant to Rule 462(b) of the
1933 Act Regulations is herein referred to as the "Rule 462(b) Registration
Statement," and after such filing the term "Registration Statement" shall
include the Rule 462(b) Registration Statement. The final Form of
International Prospectus and the final Form of U.S. Prospectus in the forms
first furnished to the Underwriters for use in connection with the offering of
the Securities are herein called the "International Prospectus" and the "U.S.
Prospectus," respectively, and collectively, the "Prospectuses." If Rule 434
is relied on, the terms "International Prospectus" and "U.S. Prospectus" shall
refer to the preliminary International Prospectus dated August , 1996 and
preliminary U.S. Prospectus dated August , 1996, respectively, each together
with the applicable Term Sheet and all references in this Agreement to the date
of such Prospectuses shall mean the date of the applicable Term Sheet. For
purposes of this Agreement, all references to the Registration Statement, any
preliminary prospectus, the International Prospectus, the U.S. Prospectus or
any Term Sheet or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("EDGAR").

Capitalized terms used herein without definition have the respective
meanings specified therefor in the Prospectuses.

SECTION 1. Representations and Warranties.

(a) Representations and Warranties by the Company and the
Subsidiaries. Each of the Company and the Subsidiaries, jointly and severally,
represents and warrants to each International Manager as of the date hereof, as
of the Closing Time referred to in Section 2(c) hereof, and as of each Date of
Delivery (if any) referred to in Section 2(b), hereof and agrees with each
International Manager, as follows:

(i) Compliance with Registration Requirements. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or,
to the knowledge of the Company or any Subsidiary, are contemplated by
the Commission, and any request on the part of the Commission for
additional information has been complied with.

4
<PAGE> 9
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments
thereto became effective and at the Closing Time (and, if any
International Option Securities are purchased, at the Date of
Delivery), the Registration Statement, the Rule 462(b) Registration
Statement and any amendments and supplements thereto complied and will
comply in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations and did not and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading [and the Prospectuses and any preliminary
prospectuses comply or will comply in all material respects with any
applicable laws or regulations of foreign jurisdictions in which the
Prospectuses and such preliminary prospectuses, as amended or
supplemented, if applicable, are distributed in connection with the
offer and sale of Reserved Securities]. Neither of the Prospectuses
nor any amendments or supplements thereto, at the time the
Prospectuses or any amendments or supplements thereto were issued and
at the Closing Time (and, if any International Option Securities are
purchased, at the Date of Delivery), included or will include an
untrue statement of a material fact or omitted or will omit to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading. If Rule 434 is used, the Company will comply with the
requirements of Rule 434 and the Prospectuses shall not be "materially
different", as such term is used in Rule 434, from the prospectuses
included in the Registration Statement at the time it became
effective. The representations and warranties in this subsection
shall not apply to statements in or omissions from the Registration
Statement or the International Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
International Manager through the Lead Managers expressly for use in
the Registration Statement or the International Prospectus.

Each preliminary prospectus and the prospectuses filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectuses
delivered to the Underwriters for use in connection with this offering
was identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted
by Regulation S-T.

(ii) Independent Accountants. The accountants who certified
the financial statements and supporting schedules included in the
Registration Statement are independent public accountants as required
by the 1933 Act and the 1933 Act Regulations.

5
<PAGE> 10
(iii) Financial Statements. The financial statements
included in the Registration Statement and the Prospectuses, together
with the related schedules and notes, present fairly the financial
position of the Company and its consolidated subsidiaries at the dates
indicated and the statement of operations, stockholders' equity and
cash flows of the Company and its consolidated subsidiaries for the
periods specified; said financial statements have been prepared in
conformity with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved. The
supporting schedules included in the Registration Statement present
fairly in accordance with GAAP the information required to be stated
therein. The selected financial data and the summary financial
information included in the Prospectuses present fairly the
information shown therein and have been compiled on a basis consistent
with that of the audited financial statements included in the
Registration Statement. The financial statements have been prepared
in accordance with the Commission's rules and guidelines with respect
to combined financial statements and have been properly compiled on
the bases described therein. The pro forma financial statements and
the related notes thereto and the other pro forma financial
information included in the Registration Statement and the
Prospectuses present fairly the information shown therein, have been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and have been properly
compiled on the bases described therein, and the assumptions used in
the preparation thereof are reasonable and the adjustments used
therein are appropriate to give effect to the transactions and
circumstances referred to therein.

(iv) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectuses, except as otherwise stated therein,
(A) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of
business (a "Material Adverse Effect"), (B) there have been no
transactions entered into by the Company or any of its subsidiaries,
other than those in the ordinary course of business, which are
material with respect to the Company and its subsidiaries considered
as one enterprise, and (C) there has been no dividend or distribution
of any kind declared, paid or made by the Company or any Subsidiary on
any class of its capital stock or any partnership interest, as the
case may be.

(v) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Delaware and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectuses and to enter into and
perform its obligations under this Agreement; and the

6
<PAGE> 11
Company is duly qualified as a foreign corporation to transact
business and is in good standing in each other jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect.

(vi) Good Standing of Subsidiaries. Each of the Subsidiaries
has been duly organized and is validly existing as a corporation or
partnership, as the case may be, in good standing under the laws of
the State of Delaware, has corporate or partnership, as the case may
be, power and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectuses and is duly
qualified as a foreign corporation or partnership, as the case may be,
to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect; all of the issued and outstanding
capital stock of SMS has been duly authorized and validly issued, is
fully paid and non-assessable and is owned by the Company directly,
and all of the partnership interests of the Partnership have been duly
authorized and validly issued and are owned by the Company, directly
or indirectly, in each case free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; none of the
outstanding shares of capital stock of SMS or partnership interests of
the Partnership was issued in violation of the preemptive or similar
rights of any securityholder of such Subsidiary. The only
subsidiaries of the Company are SMS and the Partnership.

(vii) Capitalization. The authorized, issued and outstanding
capital stock of the Company after giving effect to the Reorganization
and the Distribution is as set forth in the Prospectuses in the column
entitled "Pro Forma" under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectuses or pursuant to the exercise of convertible securities or
options referred to in the Prospectuses). The shares of issued and
outstanding capital stock of the Company, including the Securities to
be purchased by the Underwriters from the Selling Shareholders, have
been duly authorized and validly issued and are fully paid and
non-assessable; none of the outstanding shares of capital stock of the
Company, including the Securities to be purchased by the Underwriters
from the Selling Shareholders, was issued in violation of the
preemptive or other similar rights of any securityholder of the
Company.

(viii) Authorization. This Agreement and the U.S. Purchase
Agreement have been duly authorized, executed and delivered by the
Company and each Subsidiary. The performance of this Agreement and
the U.S. Purchase Agreement and the consummation of the transactions
contemplated in this

7
<PAGE> 12
Agreement, the U.S. Purchase Agreement and the Registration Statement
(including the issuance and sale of the Securities and the use of the
proceeds from the sale of the Securities as described in the
Prospectuses under the caption "Use Of Proceeds" and the consummation
of the Reorganization and the Distribution) and compliance by the
Company and each Subsidiary with its obligations under this Agreement
and the U.S. Purchase Agreement have been duly authorized by the
Company and each Subsidiary, respectively.

(ix) Authorization and Description of Securities. The
Securities to be purchased by the International Managers and the U.S.
Underwriters from the Company have been duly authorized for issuance
and sale to the International Managers pursuant to this Agreement and
the U.S. Underwriters pursuant to the U.S. Purchase Agreement,
respectively, and, when issued and delivered by the Company pursuant
to this Agreement and the U.S. Purchase Agreement, respectively,
against payment of the consideration set forth herein and the U.S.
Purchase Agreement, respectively, will be validly issued, fully paid
and non-assessable; the Common Stock conforms to all statements
relating thereto contained in the Prospectuses and such description
conforms to the rights set forth in the instruments defining the same;
no holder of the Securities will be subject to personal liability by
reason of being such a holder; and the issuance of the Securities is
not subject to the preemptive or other similar rights of any
securityholder of the Company.

(x) Reorganization and Distribution. The Reorganization and
the Distribution have occurred.

(xi) Absence of Defaults and Conflicts. Neither the Company
nor any Subsidiary is in violation of its charter or by-laws or
partnership agreement, as the case may be, or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company or any Subsidiary is a party or by
which any of them may be bound, or to which any of the property or
assets of the Company or any Subsidiary is subject (collectively,
"Agreements and Instruments") except for such defaults that would not
result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement and the U.S. Purchase Agreement and the
consummation of the transactions contemplated in this Agreement, the
U.S. Purchase Agreement and in the Registration Statement (including
the Reorganization and the Distribution, the issuance and sale of the
Securities and the use of the proceeds from the sale of the Securities
as described in the Prospectuses under the caption "Use of Proceeds")
and compliance by the Company and each Subsidiary with its obligations
under this Agreement and the U.S. Purchase Agreement have been duly
authorized by all necessary corporate or partnership, as the case may
be, action and do not and will not, whether with or

8
<PAGE> 13
without the giving of notice or passage of time or both, conflict with
or constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or
any Subsidiary pursuant to, the Agreements and Instruments (except for
such conflicts, breaches or defaults or liens, charges or encumbrances
that would not result in a Material Adverse Effect), nor will such
action result in any violation of the provisions of the charter or
by-laws or partnership agreement, as the case may be, of the Company
or any Subsidiary or any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any Subsidiary or any of their assets, properties
or operations. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment
of all or a portion of such indebtedness by the Company or any
Subsidiary.

(xii) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any Subsidiary exists or, to the knowledge
of the Company or any Subsidiary, is imminent, and neither the Company
nor any Subsidiary is aware of any existing or imminent labor
disturbance by the employees of any of its principal suppliers,
manufacturers, customers or contractors, which, in either case, might
reasonably be expected to result in a Material Adverse Effect.

(xiii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company or any Subsidiary, threatened, against or
affecting the Company or any Subsidiary, which is required to be
disclosed in the Registration Statement (other than as disclosed
therein), or which might reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to
materially and adversely affect the properties or assets thereof or
the consummation of the transactions contemplated in this Agreement
and the U.S. Purchase Agreement, the Reorganization, the Distribution
or the performance by the Company or any Subsidiary of its obligations
hereunder or thereunder; the aggregate of all pending legal or
governmental proceedings to which the Company or any Subsidiary is a
party or of which any of their respective property or assets is the
subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business,
could not reasonably be expected to result in a Material Adverse
Effect.

(xiv) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statement or the Prospectuses or

9
<PAGE> 14
to be filed as exhibits thereto which have not been so described and
filed as required.

(xv) Possession of Intellectual Property. The Company and
the Subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property")
necessary to carry on the business now operated by them, and neither
the Company nor any Subsidiary has received any notice or is otherwise
aware of any infringement of or conflict with asserted rights of
others with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Company or any Subsidiary
therein, and which infringement or conflict (if the subject of any
unfavorable decision, ruling or finding) or invalidity or inadequacy,
singly or in the aggregate, would result in a Material Adverse Effect.

(xvi) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company or
any Subsidiary of its obligations hereunder, in connection with the
offering, issuance or sale of the Securities under this Agreement and
the U.S. Purchase Agreement or the consummation of the transactions
contemplated by this Agreement and the U.S. Purchase Agreement, the
Reorganization or the Distribution except [(i)] such as have been
already obtained or as may be required under the 1933 Act or the 1933
Act Regulations and foreign or state securities or blue sky laws [and
(ii) such as have been obtained under the laws and regulations of
foreign jurisdictions in which the Reserved Securities are offered
outside the United States].

(xvii) Possession of Licenses and Permits. The Company and
the Subsidiaries possess such permits, licenses, approvals, consents
and other authorizations (collectively, "Governmental Licenses")
issued by the appropriate federal, state, local or foreign regulatory
agencies or bodies necessary to conduct the business now operated by
them; the Company and the Subsidiaries are in compliance with the
terms and conditions of all such Governmental Licenses, except where
the failure so to comply would not, singly or in the aggregate, have a
Material Adverse Effect; all of the Governmental Licenses are valid
and in full force and effect, except when the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to
be in full force and effect would not have a Material Adverse Effect;
and neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the
subject

10
<PAGE> 15
of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.

(xviii) Title to Property. The Company and the Subsidiaries
have good and marketable title to all real property owned by the
Company and the Subsidiaries and good title to all other properties
owned by them, in each case, free and clear of all mortgages, pledges,
liens, security interests, claims, restrictions or encumbrances of any
kind except such as (a) are described in the Prospectuses or (b) do
not, singly or in the aggregate, materially affect the value of such
property and do not interfere with the use made and proposed to be
made of such property by the Company or any Subsidiary; and all of the
leases and subleases material to the business of the Company and its
subsidiaries, considered as one enterprise, and under which the
Company or any Subsidiary holds properties described in the
Prospectuses, are in full force and effect, and neither the Company
nor any Subsidiary has any notice of any material claim of any sort
that has been asserted by anyone adverse to the rights of the Company
or any Subsidiary under any of the leases or subleases mentioned
above, or affecting or questioning the rights of the Company or any
Subsidiary to the continued possession of the leased or subleased
premises under any such lease or sublease.

(xix) Compliance with Cuba Act. Each of the Company and the
Subsidiaries has complied with, and is and will be in compliance with,
the provisions of that certain Florida act relating to disclosure of
doing business with Cuba, codified as Section 517.075 of the Florida
statutes, and the rules and regulations thereunder (collectively, the
"Cuba Act") or is exempt therefrom.

(xx) Investment Company Act. Neither the Company nor any
Subsidiary is, or upon the issuance and sale of the Securities as
herein contemplated and the application of the net proceeds therefrom
as described in the Prospectuses will be, an "investment company" or
an entity "controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended (the "1940
Act").

(xxi) Environmental Laws. Except as described in the
Registration Statement and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the
Company nor any Subsidiary is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code,
policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative
order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or
subsurface strata) or wildlife, including, without limitation, laws
and regulations relating to the release or threatened release of
chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum or

11
<PAGE> 16
petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and the Subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any
Subsidiary and (D) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any
Subsidiary relating to Hazardous Materials or any Environmental Laws.

(xxii) Registration Rights. Except as described in the
Registration Statement and the Prospectuses, there are no persons with
registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise
registered by the Company under the 1933 Act.

(xxiii) Certain Contracts. The Partnership's contract with
AT&T Communications, Inc. ("AT&T") dated as of February __, 1994, as
amended by amendments thereto dated as of September 27, 1994 (as
revised October 20, 1994), December 20, 1994 and December 22, 1995,
respectively, and each such amendment have been duly executed and
delivered by each of the Partnership and, to the best knowledge of the
Company and the Subsdiaries, by AT&T and are in full force and effect.
The Partnership's contract with MCI Telecommunications Corporation
("MCI") dated February 16, 1996 has been duly executed and delivered
by each of the Partnership and, to the best knowledge of the Company
and the Subsidiaries, by MCI and is in full force and effect. There
does not exist any default, event or condition that, after notice or
lapse of time or both, could give rise under either such contract to
any claim by any person against the Company or any Subsidiary or would
constitute a default thereunder on the part of the Company or any
Subsidiary or any other party thereto.

(xxiv) Compliance with Laws. Each of the Company and the
Subsidiaries is in compliance with all applicable laws, statutes,
ordinances, rules or regulations of any applicable jurisdiction, the
enforcement of which, singly or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect.

(xxv) Taxes. Each of the Company and the Subsidiaries has
filed all material federal, state, local and foreign income and
franchise tax returns required to be filed by it and has paid all
taxes shown as due thereon, other than taxes which are being contested
in good faith and for which adequate reserves have

12
<PAGE> 17
been established in accordance with GAAP; and neither the Company nor
any Subsidiary has knowledge of any tax deficiency which has been or
might be asserted or threatened against the Company or any Subsidiary.
Adequate charges, accruals and reserves have been provided for in the
financial statements referred to in Section 1(a)(iii) above in respect
of all material federal, state, local and foreign taxes for all
periods as to which the tax liability of the Company or any Subsidiary
has not been finally determined or remains open to examination by
applicable taxing authorities. SMS elected to be treated as an S
corporation under Section 1362(a) of the Code (an "S Corporation")
effective January 1, 1996, and has been an S Corporation at all times
since such effective date. The Partnership has not at any time been
treated as an association taxable as a corporation for federal, state,
local and foreign tax purposes, and is and has been since its
inception treated as a partnership for such purposes. No material
taxes have been or will be imposed on the Company or any Subsidiary in
connection with the consummation of the transactions contemplated in
this Agreement and the U.S. Purchase Agreement, the Reorganization,
the Distribution or the performance by the Company or any Subsidiary
of its obligations hereunder or thereunder.

(xxvi) Securityholder Loans. Except as described in the
Registration Statement and Prospectuses, there are no outstanding
loans to any securityholder of the Company or any Subsidiary.

(xxvii) Insurance. Each of the Company and the Subsidiaries
carries or is entitled to the benefits of insurance in such amounts
and covering such risks as it reasonably believes are sufficient to
cover potential losses or damages, and all such insurance is in full
force and effect.

(b) Representations and Warranties by the Selling Shareholders.
Each Selling Shareholder severally represents and warrants to each
International Manager as of the date hereof, as of the Closing Time, and, if
the Selling Shareholder is selling International Option Securities on a Date of
Delivery, as of each such Date of Delivery, and agrees with each International
Manager, as follows:

(i) Authorization of Agreements. Each Selling
Shareholder has the full right, power and authority to enter into this
Agreement and a Power of Attorney and Custody Agreement (the "Power of
Attorney and Custody Agreement") and to sell, transfer and deliver the
Securities to be sold by such Selling Shareholder hereunder. The
execution and delivery of this Agreement, the U.S. Purchase Agreement
and the Power of Attorney and Custody Agreement and the sale and
delivery of the Securities to be sold by such Selling Shareholder and
the consummation of the transactions contemplated herein, in the U.S.
Purchase Agreement and in the Registration Statement and compliance by
such Selling Shareholder with its obligations hereunder have been duly
authorized by such Selling Shareholder and do not and will not,
whether with or without the

13
<PAGE> 18
giving of notice or passage of time or both, conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any tax, lien, charge or encumbrance upon the Securities
to be sold by such Selling Shareholder or any property or assets of
such Selling Shareholder pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, license,
lease or other agreement or instrument to which such Selling
Shareholder is a party or by which such Selling Shareholder may be
bound, or to which any of the property or assets of such Selling
Shareholder is subject, nor will such action result in any violation
of the provisions of the charter or by-laws or other organizational
instrument of such Selling Shareholder, if applicable, or any
applicable treaty, law, statute, rule, regulation, judgment, order,
writ or decree of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over such Selling Shareholder
or any of its properties.

(ii) Good and Marketable Title. Such Selling Shareholder
has and will at the Closing Time and, if any International Option
Securities are purchased, on the Date of Delivery have good and
marketable title to the Securities to be sold by such Selling
Shareholder hereunder, free and clear of any security interest,
mortgage, pledge, lien, charge, claim, equity or encumbrance of any
kind, other than pursuant to this Agreement; and upon delivery of such
Securities and payment of the purchase price therefor as herein
contemplated, assuming each such International Manager has no notice
of any adverse claim, each of the International Manager's will receive
good and marketable title to the Securities purchased by it from such
Selling Shareholder, free and clear of any security interest,
mortgage, pledge, lien, charge, claim, equity or encumbrance of any
kind.

(iii) Due Execution of Power of Attorney and Custody
Agreement. Such Selling Shareholder has duly executed and delivered,
in the form heretofore furnished to the Lead Managers, the Power of
Attorney and Custody Agreement with [, or any of them,] as
attorney(s)-in-fact (the "Attorney(s)-in-Fact") and , as custodian
(the "Custodian"); the Custodian is authorized to deliver the
Securities to be sold by such Selling Shareholder hereunder and to
accept payment therefor; and each Attorney-in-Fact is authorized to
execute and deliver this Agreement and the certificate referred to in
Section 5(f) or that may be required pursuant to Sections 5(p) and
5(q) on behalf of such Selling Shareholder, to sell, assign and
transfer to the International Managers the Securities to be sold by
such Selling Shareholder hereunder, to determine the purchase price to
be paid by the International Managers to such Selling Shareholder, as
provided in Section 2 hereof, to authorize the delivery of the
Securities to be sold by such Selling Shareholder hereunder, to accept
payment therefor, and otherwise to act on behalf of such Selling
Shareholder in connection with this Agreement.

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<PAGE> 19
(iv) Absence of Manipulation. Such Selling Shareholder
has not taken, and will not take, directly or indirectly, any action
which is designed to or which has constituted or which might
reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company or any
Subsidiary to facilitate the sale or resale of the Securities.

(v) Absence of Further Requirements. No filing with, or
consent, approval, authorization, order, registration, qualification
or decree of, any court or governmental authority or agency, domestic
or foreign, is necessary or required for the performance by such
Selling Shareholder of its obligations hereunder or in the Power of
Attorney and Custody Agreement, or in connection with the sale and
delivery of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement and the U.S. Purchase
Agreement, except [(i)] such as may have previously been made or
obtained or as may be required under the 1933 Act or the 1933 Act
Regulations or state securities laws [and (ii) such as have been
obtained under the laws and regulations of foreign jurisdictions in
which the Reserved Securities are offered outside the United States].

(vi) Restriction on Sale of Securities. During a period
of 180 days from the date of the Prospectuses, such Selling
Shareholder will not, without the prior written consent of the Global
Coordinator, (i) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of, directly or indirectly, any share of Common
Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or file any registration statement under
the 1933 Act with respect to any of the foregoing or (ii) enter into
any swap or any other agreement or any transaction that transfers, in
whole or in part, directly or indirectly, the economic consequence of
ownership of the Common Stock, whether any such swap or transaction
described in clause (i) or (ii) above is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise; provided
that any Pledgor Selling Shareholder may, at any time after 30 days
from the date of the Closing Time, pledge as security for borrowed
money (x) up to 50%, in the case of Daniel M. Snyder, and (y) all, in
the case of U.S. News & World Report, L.P., of the shares of Common
Stock then owned by such Pledgor Selling Shareholder to any commercial
banking institution that is a member of the Federal Reserve System
having combined capital and surplus in excess of $500,000,000 (a
"Pledgee") as long as such Pledgee shall have agreed in writing to be
bound by the obligations and restrictions applicable to the Common
Stock under this Section 1(b)(vi) and the Lead Managers shall have
received an agreement substantially in the form of Exhibit D hereto
signed by such Pledgee. The foregoing sentence shall not apply to the
Securities to be sold hereunder.

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<PAGE> 20
(vii) Certificates Suitable for Transfer. Certificates for
all of the Securities to be sold by such Selling Shareholder pursuant
to this Agreement, in suitable form for transfer by delivery or
accompanied by duly executed instruments of transfer or assignment in
blank with signatures guaranteed, have been placed in custody with the
Custodian with irrevocable conditional instructions to deliver such
Securities to the International Managers pursuant to this Agreement.

(viii) No Association with NASD. Except as described in the
Registration Statement and the Prospectuses, neither such Selling
Shareholder nor any of its affiliates directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under
common control with, or has any other association with (within the
meaning of Article I, Section 1(m) of the By-laws of the NASD), any
member firm of the NASD

(c) Additional Representations and Warranties by the Executive
Selling Shareholders. Each Executive Selling Shareholder severally represents
and warrants to each International Manager as of the date hereof, as of the
Closing Time, and, if the Selling Shareholder is selling International Option
Securities on a Date of Delivery, as of each such Date of Delivery, and agrees
with each International Manager, that, to the best knowledge of such Executive
Selling Shareholder, the representations and warranties of the Company and each
Subsidiary contained in Section 1(a) hereof are true and correct; such
Executive Selling Shareholder has reviewed and is familiar with the
Registration Statement and the Prospectuses and the Prospectuses do not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading and the Prospectuses
and any preliminary prospectuses comply or will comply in all material respects
with any applicable laws or regulations of foreign jurisdictions in which the
Prospectuses and such preliminary prospectuses, as amended or supplemented, if
applicable, are distributed in connection with the offer and sale of Reserved
Securities; and such Executive Selling Shareholder is not prompted to sell the
Securities to be sold by such Executive Selling Shareholder hereunder by any
information concerning any of the Company or any Subsidiary which is not set
forth in the Prospectuses.

(d) Officer's Certificates. Any certificate signed by any officer
of the Company or any Subsidiary delivered to the Global Coordinator, the Lead
Managers or to counsel for the International Managers shall be deemed a
representation and warranty by the Company or such Subsidiary, as the case may
be, to each International Manager as to the matters covered thereby; and any
certificate signed by or on behalf of any Selling Shareholder as such and
delivered to the Global Coordinator, the Lead Managers or to counsel for the
International Managers pursuant to the terms of this Agreement shall be deemed
a representation and warranty by such Selling Shareholder to each International
Manager as to matters covered thereby.

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<PAGE> 21
SECTION 2. Sale and Delivery to International Managers; Closing.

(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company and the Initial Selling Shareholder, severally and not
jointly, agree to sell to each International Manager, severally and not
jointly, and each International Manager, severally and not jointly, agrees to
purchase from the Company and the Initial Selling Shareholder, at the price per
share set forth in Schedule C, that proportion of the number of Initial
International Securities set forth in Schedule B opposite the name of the
Company or the Initial Selling Shareholder, as the case may be, which the
number of Initial International Securities set forth in Schedule A opposite the
name of such International Manager, plus any additional number of Initial
International Securities which such International Manager may become obligated
to purchase pursuant to the provisions of Section 10 hereof, bears to the total
number of Initial International Securities, subject, in each case, to such
adjustments among the International Managers as the Lead Managers in their
sole discretion shall make to eliminate any sales or purchases of fractional
securities.

(b) Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Option Selling Shareholders, acting severally
and not jointly, hereby grant an option to the International Managers,
severally and not jointly, to purchase up to an additional 234,000 shares of
Common Stock, as set forth in Schedule B, at the price per share set forth in
Schedule C, less an amount per share equal to any dividends or distributions
declared by the Company and payable on the Initial International Securities but
not payable on the International Option Securities. The option hereby granted
will expire 30 days after the date hereof and may be exercised in whole or in
part from time to time only for the purpose of covering over-allotments which
may be made in connection with the offering and distribution of the Initial
International Securities upon notice by the Global Coordinator to the Company
and the Option Selling Shareholders setting forth the number of International
Option Securities as to which the several International Managers are then
exercising the option and the time and date of payment and delivery for such
International Option Securities. Any such time and date of delivery for the
International Option Securities (a "Date of Delivery") shall be determined by
the Global Coordinator, but shall not be later than seven full business days
after the exercise of said option, nor in any event prior to the Closing Time,
as hereinafter defined. If the option is exercised as to all or any portion of
the International Option Securities, each of the International Managers, acting
severally and not jointly, will purchase that proportion of the total number of
International Option Securities then being purchased which the number of
Initial International Securities set forth in Schedule A opposite the name of
such International Manager bears to the total number of Initial International
Securities, subject in each case to such adjustments as the Global Coordinator
in its discretion shall make to eliminate any sales or purchases of fractional
shares.

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<PAGE> 22
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
Debevoise & Plimpton, 875 Third Avenue, New York, New York, or at such other
place as shall be agreed upon by the Global Coordinator and the Company, at
9:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs after 4:30
P.M. (Eastern time) on any given day) business day after the date hereof
(unless postponed in accordance with the provisions of Section 10), or such
other time not later than ten business days after such date as shall be agreed
upon by the Global Coordinator and the Company (such time and date of payment
and delivery being herein called "Closing Time").

In addition, in the event that any or all of the International Option
Securities are purchased by the International Managers, payment of the purchase
price for, and delivery of certificates for, such International Option
Securities shall be made at the above-mentioned offices, or at such other place
as shall be agreed upon by the Global Coordinator and the Company, on each Date
of Delivery as specified in the notice from the Global Coordinator to the
Company and the Option Selling Shareholders.

Payment shall be made to the Company and the Selling Shareholders by
wire transfer of immediately available funds to bank account(s) designated by
the Company and the Custodian pursuant to each Selling Shareholder's Power of
Attorney and Custody Agreement, as the case may be, against delivery to the
Lead Managers for the respective accounts of the International Managers of
certificates for the International Securities to be purchased by them. It is
understood that each International Manager has authorized the Lead Managers,
for its account, to accept delivery of, receipt for, and make payment of the
purchase price for, the Initial International Securities and the International
Option Securities, if any, which it has agreed to purchase. Merrill Lynch,
individually and not as representative of the International Managers, may (but
shall not be obligated to) make payment of the purchase price for the Initial
International Securities or the International Option Securities, if any, to be
purchased by any International Manager whose funds have not been received by
the Closing Time or the relevant Date of Delivery, as the case may be, but such
payment shall not relieve such International Manager from its obligations
hereunder.

(d) Denominations; Registration. Certificates for the Initial
International Securities and the International Option Securities, if any, shall
be in such denominations and registered in such names as the Lead Managers may
request in writing at least one full business day before the Closing Time or
the relevant Date of Delivery, as the case may be. The certificates for the
Initial International Securities and the International Option Securities, if
any, will be made available for examination and packaging by the Lead Managers
in The City of New York not later than 10:00 A.M. (Eastern time) on the
business day prior to the Closing Time or the relevant Date of Delivery, as the
case may be.

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<PAGE> 23
(e) Appointment of Qualified Independent Underwriter. The Company,
the Subsidiaries and the Selling Shareholders hereby confirm their engagement
of Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch (NY)") as, and Merrill Lynch (NY) hereby confirms its agreement
with the Company, the Subsidiaries and the Selling Shareholders to render
services as, a "qualified independent underwriter" within the meaning of Rule
2720 of the Conduct Rules of the NASD with respect to the offering and sale of
the International Securities. Merrill Lynch (NY), solely in its capacity as
qualified independent underwriter and not otherwise, is referred to herein as
the "Independent Underwriter".

SECTION 3. Covenants of the Company and the Subsidiaries. Each
of the Company and the Subsidiaries, jointly and severally, covenants with each
International Manager as follows:

(a) Compliance with Securities Regulations and Commission
Requests. The Company and the Subsidiaries, subject to Section 3(b),
will comply with the requirements of Rule 430A or Rule 434, as
applicable, and will notify the Global Coordinator immediately, and
confirm the notice in writing, (i) when any post-effective amendment
to the Registration Statement, shall become effective, or any
supplement to the Prospectuses or any amended Prospectuses shall have
been filed, (ii) of the receipt of any comments from the Commission,
(iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the
Prospectuses or for additional information, and (iv) of the issuance
by the Commission of any stop order suspending the effectiveness of
the Registration Statement or of any order preventing or suspending
the use of any preliminary prospectus, or of the suspension of the
qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings
for any of such purposes. The Company and the Subsidiaries will
promptly effect the filings necessary pursuant to Rule 424(b) and will
take such steps as it deems necessary to ascertain promptly whether
the form of prospectus transmitted for filing under Rule 424(b) was
received for filing by the Commission and, in the event that it was
not, it will promptly file such prospectus. The Company and the
Subsidiaries will make every reasonable effort to prevent the issuance
of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.

(b) Filing of Amendments. The Company and the
Subsidiaries will give the Global Coordinator notice of the Company's
intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any Term Sheet or
any amendment, supplement or revision to either the prospectus
included in the Registration Statement at the time it became effective
or to the Prospectuses, will furnish the Global Coordinator with
copies of any such documents a reasonable amount of time prior to such
proposed filing or use,

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<PAGE> 24
as the case may be, and will not file or use any such document to
which the Global Coordinator or counsel for the International Managers
shall object.

(c) Delivery of Registration Statements. The Company and
the Subsidiaries have furnished or will deliver to the Lead Managers
and counsel for the International Managers, without charge, signed
copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated
by reference therein) and signed copies of all consents and
certificates of experts, and will also deliver to the Lead Managers,
without charge, a conformed copy of the Registration Statement as
originally filed and of each amendment thereto (without exhibits) for
each of the International Managers. The copies of the Registration
Statement and each amendment thereto furnished to the International
Managers will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the
extent permitted by Regulation S-T.

(d) Delivery of Prospectuses. The Company and the
Subsidiaries have delivered to each International Manager, without
charge, as many copies of each preliminary prospectus as such
International Manager reasonably requested, and the Company and the
Subsidiaries hereby consent to the use of such copies for purposes
permitted by the 1933 Act. The Company and the Subsidiaries will
furnish to each International Manager, without charge, during the
period when the International Prospectus is required to be delivered
under the 1933 Act or the Securities Exchange Act of 1934 (the "1934
Act"), such number of copies of the International Prospectus (as
amended or supplemented) as such International Manager may reasonably
request. The International Prospectus and any amendments or
supplements thereto furnished to the International Managers will be
identical to the electronically transmitted copies thereof filed with
the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.

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<PAGE> 25
Registration Statement or amend or supplement any Prospectus in order
that the Prospectuses will not include any untrue statements of a
material fact or omit to state a material fact necessary in order to
make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or
if it shall be necessary, in the opinion of such counsel, at any such
time to amend the Registration Statement or amend or supplement any
Prospectus in order to comply with the requirements of the 1933 Act or
the 1933 Act Regulations, the Company and the Subsidiaries will
promptly prepare and file with the Commission, subject to Section
3(b), such amendment or supplement as may be necessary to correct such
statement or omission or to make the Registration Statement or the
Prospectuses comply with such requirements, and the Company and the
Subsidiaries will furnish to the International Managers such number of
copies of such amendment or supplement as the International Managers
may reasonably request.

(f) Blue Sky Qualifications. The Company and the
Subsidiaries will use their best efforts, in cooperation with the
International Managers, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Global Coordinator may
designate and to maintain such qualifications in effect for a period
of not less than one year from the later of the effective date of the
Registration Statement and any Rule 462(b) Registration Statement;
provided, however, that neither the Company nor any Subsidiary shall
be obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it
is not otherwise so subject. In each jurisdiction in which the
Securities have been so qualified, the Company and the Subsidiaries
will file such statements and reports as may be required by the laws
of such jurisdiction to continue such qualification in effect for a
period of not less than one year from the effective date of the
Registration Statement and any Rule 462(b) Registration Statement.

(g) Rule 158. The Company and the Subsidiaries will
timely file such reports pursuant to the 1934 Act as are necessary in
order to make generally available to its securityholders as soon as
practicable an earnings statement for the purposes of, and to provide
the benefits contemplated by, the last paragraph of Section 11(a) of
the 1933 Act.

(h) Use of Proceeds. The Company and the Subsidiaries
will use the net proceeds received by the Company from the sale of the
Securities in the manner specified in the Prospectuses under "Use of
Proceeds".

(i) Listing. The Company and the Subsidiaries will use
their best efforts to effect the listing of the Common Stock
(including the Securities) on the New York Stock Exchange.

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<PAGE> 26
indirectly, offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase or otherwise transfer or
dispose of any share of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock or file any
registration statement under the 1933 Act with respect to any of the
foregoing or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Stock,
whether any such swap or transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not
apply to (A) the Securities to be sold hereunder or under the U.S.
Purchase Agreement or (B) any options to purchase Common Stock granted
pursuant to existing employee benefit plans of the Company referred to
in the Prospectuses.

(k) Reporting Requirements. The Company and the
Subsidiaries, during the period when the Prospectuses are required to
be delivered under the 1933 Act or the 1934 Act, will file all
documents required to be filed with the Commission pursuant to the
1934 Act within the time periods required by the 1934 Act and the
rules and regulations of the Commission thereunder.

(l) Compliance with NASD Rules. The Company and each
Subsidiary hereby agree that they will ensure that the Reserved
Securities will be restricted as required by the NASD or the NASD
rules from sale, transfer, assignment, pledge or hypothecation for a
period of three months following the date of the effectiveness of the
Registration Statement. The Underwriters will notify the Company as
to which persons will need to be so restricted. At the request of the
Underwriters, the Company will direct the transfer agent to place a
stop transfer restriction upon such securities for such period of
time. Should the Company release, or seek to release, from such
restrictions any of the Reserved Securities, the Company and the
Subsidiaries, jointly and severally, agree to reimburse the
Underwriters for any reasonable expenses (including, without
limitation, legal expenses) they incur in connection with such
release.

(m) Compliance with Rule 463. The Company and the
Subsidiaries will file with the Commission such reports on Form SR as
may be required pursuant to Rule 463 of the 1933 Act Regulations.

22
<PAGE> 27
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriters, including
any stock or other transfer taxes and any stamp or other duties payable upon
the sale, issuance or delivery of the Securities to the Underwriters and the
transfer of the Securities between the U.S. Underwriters and the International
Managers, (iv) the fees and disbursements of the Company's counsel, accountants
and other advisors, (v) the qualification of the Securities under securities
laws in accordance with the provisions of Section 3(f) hereof, including filing
fees and the reasonable fees and disbursements of counsel for the Underwriters
in connection therewith and in connection with the preparation of the Blue Sky
Survey and any supplement thereto, (vi) the printing and delivery to the
Underwriters of copies of each preliminary prospectus, any Term Sheets and of
the Prospectuses and any amendments or supplements thereto, (vii) the
preparation, printing and delivery to the Underwriters of copies of the Blue
Sky Survey and any supplement thereto, (viii) the fees and expenses of any
transfer agent or registrar for the Securities, (ix) the filing fees incident
to, and the reasonable fees and disbursements of counsel to the Underwriters in
connection with, the review by the NASD of the terms of the sale of the
Securities, (x) the fees and expenses incurred in connection with the listing
of the Securities on the New York Stock Exchange Securities in the Nasdaq
National Market, (xi) all costs and expenses of the Underwriters, including the
fees and disbursements of counsel for the Underwriters, in connection with
matters related to the Reserved Securities which are designated by the Company
for sale to eligible employees and other persons and (xii) the fees and
expenses of the Independent Underwriter.

(b) Expenses of the Selling Shareholders. The Selling Shareholders,
jointly and severally, will pay all expenses incident to the performance of
their respective obligations under, and the consummation of the transactions
contemplated by, this Agreement, including (i) any stamp duties, capital duties
and stock transfer taxes, if any, payable upon the sale of the Securities to
the International Managers, and their transfer between Underwriters pursuant to
any agreement between Underwriters, and (ii) the fees and disbursements of
their respective counsel and accountants.

(c) Termination of Agreement. If this Agreement is terminated by the
Lead Managers in accordance with the provisions of Section 5, Section 9(a)(i)
or Section 11 hereof, the Company, the Subsidiaries and the Selling
Shareholders, jointly and severally, shall reimburse the International Managers
for all of their out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the International Managers.

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<PAGE> 28
SECTION 5. Conditions of International Managers' Obligations.
The obligations of the several International Managers hereunder are subject to
the accuracy of the representations and warranties of the Company, the
Subsidiaries and the Selling Shareholders contained in Section 1 hereof or in
certificates of any officer of the Company or any Subsidiary or by or on behalf
of any Selling Shareholder delivered pursuant to the provisions hereof, to the
performance by the Company and each Subsidiary of its covenants and other
obligations hereunder, and to the following further conditions:

(a) Effectiveness of Registration Statement. The
Registration Statement, including any Rule 462(b) Registration
Statement, has become effective and at Closing Time no stop order
suspending the effectiveness of the Registration Statement shall have
been issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the International Managers.
A prospectus containing the Rule 430A Information shall have been
filed with the Commission in accordance with Rule 424(b) (or a
post-effective amendment providing such information shall have been
filed and declared effective in accordance with the requirements of
Rule 430A) or, if the Company has elected to rely upon Rule 434, a
Term Sheet shall have been filed with the Commission in accordance
with Rule 424(b).

(b) Opinion of Counsel for Company. At Closing Time, the
Lead Managers shall have received the favorable opinion, dated as of
Closing Time, of Shaw, Pittman, Potts & Trowbridge, counsel for the
Company, in form and substance satisfactory to counsel for the
International Managers, together with signed or reproduced copies of
such letter for each of the other International Managers to the effect
set forth in Exhibit A hereto and to such further effect as counsel to
the International Managers may reasonably request.

(c) Opinion of Counsel for the Selling Shareholders. At
Closing Time, the Lead Managers shall have received the favorable
opinion, dated as of Closing Time, of Shaw, Pittman, Potts &
Trowbridge, counsel for the Selling Shareholders, in form and
substance satisfactory to counsel for the International Managers,
together with signed or reproduced copies of such letter for each of
the other International Managers, to the effect set forth in Exhibit B
hereto and to such further effect as counsel to the International
Managers may reasonably request.

(d) Opinion of Counsel for International Managers. At
Closing Time, the Lead Managers shall have received the favorable
opinion, dated as of Closing Time, of Debevoise & Plimpton, counsel
for the International Managers, together with signed or reproduced
copies of such letter for each of the other International

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<PAGE> 29
Managers with respect to the matters set forth in clauses (i), (ii),
(v), (vi) (solely as to preemptive or other similar rights arising by
operation of law or under the charter or by-laws of the Company),
(viii) through (x), inclusive, (xii), (xiv) (solely as to the
information in the Prospectus under "Description of Capital Stock --
Common Stock") and the penultimate paragraph of Exhibit A hereto. In
giving such opinion such counsel may rely, as to all matters governed
by the laws of jurisdictions other than the law of the State of New
York, the federal law of the United States and the General Corporation
Law of the State of Delaware, upon the opinions of counsel
satisfactory to the Lead Managers. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to
the extent they deem proper, upon certificates of officers of the
Company and its subsidiaries and certificates of public officials.

(e) Officers' Certificate. At Closing Time, there shall
not have been, since the date hereof or since the respective dates as
of which information is given in the Prospectuses, any material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise, whether or not arising
in the ordinary course of business, and the Lead Managers shall have
received a certificate of each of (x) the President or a Vice
President of the Company and of the chief financial or chief
accounting officer of the Company, (y) the President or a Vice
President of SMS and of the chief financial or chief accounting
officer of SMS and (z) [specify designated officers] of the
Partnership, in each case dated as of Closing Time and to the effect
that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1(a) hereof are true and
correct with the same force and effect as though expressly made at and
as of Closing Time, (iii) the Company, SMS or the Partnership, as the
case may be, has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to
Closing Time, and (iv) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or are contemplated by the
Commission.

(f) Certificate of Selling Shareholders. At the Closing
Time, the Lead Managers shall have received a certificate of an
Attorney-in-Fact on behalf of each Selling Shareholder, dated as of
Closing Time, to the effect that (i) the representations and
warranties of each Selling Shareholder contained in Section 1(b) and
Section 1(c), as the case may be, hereof are true and correct in all
respects with the same force and effect as though expressly made at
and as of Closing Time and (ii) each Selling Shareholder has complied
in all material respects with all agreements and all conditions on its
part to be performed under this Agreement at or prior to Closing Time.

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<PAGE> 30
(g) Accountant's Comfort Letter. At the time of the
execution of this Agreement, the Lead Managers shall have received
from Arthur Andersen L.L.P. a letter dated such date, in form and
substance satisfactory to the Lead Managers, together with signed or
reproduced copies of such letter for each of the other International
Managers containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information
contained in the Registration Statement and the Prospectuses.

(h) Bring-down Comfort Letter. At Closing Time, the Lead
Managers shall have received from Arthur Andersen L.L.P. a letter,
dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (g) of
this Section, except that the specified date referred to shall be a
date not more than three business days prior to Closing Time.

(i) Approval of Listing. At Closing Time, the Securities
shall have been approved for listing on the New York Stock Exchange,
subject only to official notice of issuance.

(j) No Objection. The NASD shall not have raised any
objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.

(k) Lock-up Agreements. At the date of this Agreement,
the Lead Managers shall have received an agreement substantially in
the form of Exhibit C hereto signed by the persons listed on Schedule
D hereto.

(l) Reorganization and Distribution. Prior to the time
of the execution of this Agreement, the Reorganization and the
Distribution shall have occurred.

(m) Form W-9. At or prior to Closing Time, the Lead
Managers shall have received from each Selling Shareholder a properly
completed and executed United States Treasury Form W-9.

(n) Securityholder Loans. At or prior to Closing Time,
all loans by the Company or any Subsidiary to its securityholders,
described in the Prospectuses, shall have been repaid in full.

(o) Purchase of Initial U.S. Securities.
Contemporaneously with the purchase by the International Managers of
the Initial International Securities under this Agreement, the U.S.
Underwriters shall have purchased the Initial U.S. Securities under
the U.S. Purchase Agreement.

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<PAGE> 31
(p) Conditions to Purchase of International Option
Securities. In the event that the International Managers exercise
their option provided in Section 2(b) hereof to purchase all or any
portion of the International Option Securities, the representations
and warranties of the Company, the Subsidiaries and the Selling
Shareholders contained herein and the statements in any certificates
furnished by the Company, the Subsidiaries and the Selling
Shareholders hereunder shall be true and correct as of each Date of
Delivery and, at the relevant Date of Delivery, and the Lead Managers
shall have received:

(i) Officers' Certificates. A certificate, dated such Date
of Delivery, of each of (x) the President or a Vice President
of the Company and of the chief financial or chief accounting
officer of the Company, (y) the President or a Vice President
of SMS and of the chief financial or chief accounting officer
of SMS and (z) [specify designated officers] of the
Partnership, in each case confirming that the certificate
delivered at the Closing Time pursuant to Section 5(e) hereof
remains true and correct as of such Date of Delivery.

(ii) Certificate of the Selling Shareholders. A certificate,
dated such Date of Delivery, of an Attorney-in-Fact on behalf
of each Selling Shareholder confirming that the certificate
delivered at Closing Time pursuant to Section 5(f) remains
true and correct as of such Date of Delivery.

(iii) Opinion of Counsel for Company. The favorable opinion
of Shaw, Pittman, Potts & Trowbridge, counsel for the Company,
in form and substance satisfactory to counsel for the
International Managers, dated such Date of Delivery, relating
to the International Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the
opinion required by Section 5(b) hereof.

(iv) Opinion of Counsel for the Selling Shareholders. The
favorable opinion of Shaw, Pittman, Potts & Trowbridge,
counsel for the Selling Shareholders, in form and substance
satisfactory to counsel for the International Managers, dated
such Date of Delivery, relating to the International Option
Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by
Section 5(c) hereof.

(v) Opinion of Counsel for International Managers. The
favorable opinion of Debevoise & Plimpton, counsel for the
International Managers, dated such Date of Delivery, relating
to the International Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the
opinion required by Section 5(d) hereof.

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<PAGE> 32
(vi) Bring-down Comfort Letter. A letter from Arthur
Andersen L.L.P., in form and substance satisfactory to the
Lead Managers and dated such Date of Delivery, substantially
in the same form and substance as the letter furnished to the
Lead Managers pursuant to Section 5(g) hereof, except that the
"specified date" in the letter furnished pursuant to this
paragraph shall be a date not more than five days prior to
such Date of Delivery.

(q) Additional Documents. At Closing Time and at each Date of
Delivery, counsel for the International Managers shall have been furnished with
such documents and opinions as they may require for the purpose of enabling
them to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company, the Subsidiaries
and the Selling Shareholders in connection with the issuance and sale of the
Securities as herein contemplated shall be satisfactory in form and substance
to the Lead Managers and counsel for the International Managers.

(r) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement, or, in the case of any condition to the purchase of
International Option Securities on a Date of Delivery which is after the
Closing Time, the obligations of the several International Managers to purchase
the relevant Option Securities, may be terminated by the Lead Managers by
notice to the Company at any time at or prior to Closing Time or such Date of
Delivery, as the case may be, and such termination shall be without liability
of any party to any other party except as provided in Section 4 and except that
Sections 1, 6, 7 and 8 shall survive any such termination and remain in full
force and effect.

SECTION 6. Indemnification.

(a) Indemnification of International Managers. The Company, the
Subsidiaries and the Executive Selling Shareholders, jointly and severally,
agree to indemnify and hold harmless each International Manager, its directors,
officers and employees, and each person, if any, who controls any International
Manager within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act as follows:

(i) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto), including the
Rule 430A Information and the Rule 434 Information, if applicable, or
the omission or alleged omission therefrom of a material fact required
to be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus
or the Prospectuses (or any amendment or supplement thereto), or the
omission or

28
<PAGE> 33
alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading;

(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of (A) the failure of
eligible employees and other persons to pay for and accept delivery of
Reserved Securities which, immediately following the effectiveness of
the Registration Statement, were subject to a properly confirmed
agreement to purchase, [(B) the violation of any securities laws of
foreign jurisdictions where Reserved Securities have been offered and
(C) any untrue statement or alleged untrue statement of a material
fact contained in the supplement or prospectus wrapper material
distributed in o in connection with the reservation and sale of the
Reserved Securities to eligible employees and other persons or caused
by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein, when considered in conjunction with the Prospectuses or
preliminary prospectuses, not misleading];

(iii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission or in connection with any failure or violation of the nature
referred to in Section 6(a)(ii)(A) and (B) hereof; provided that
(subject to Section 6(d) below) any such settlement is effected with
the written consent of the Company, the Subsidiaries and the Executive
Selling Shareholders; and

(iv) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Merrill
Lynch), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission or in connection with any
failure or violation of the nature referred to in Section 6(a)(ii)(A)
and (B) hereof, to the extent that any such expense is not paid under
(i), (ii) or (iii) above;

provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
International Manager through the Lead Managers expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if

29
<PAGE> 34
applicable, or any preliminary prospectus or the International Prospectus (or
any amendment or supplement thereto).

In addition and without limitation to the Company's, each Subsidiary's
and each Executive Selling Shareholder's obligation to indemnify Merrill Lynch
(NY) as a U.S. Underwriter under the U.S. Purchase Agreement, the Company, the
Subsidiaries and the Executive Selling Shareholders, jointly and severally,
also agree to indemnify and hold harmless the Independent Underwriter and each
person, if any, who controls the Independent Underwriter within the meaning of
either Section 15 of the 1933 Act or Section 20 of the 1934 Act, from and
against any and all losses, claims, damages, liabilities and judgments incurred
as a result of the Independent Underwriter's participation as a "qualified
independent underwriter" within the meaning of Rule 2720 of the Conduct Rules
the NASD in connection with the offering of the Securities.

(b) Indemnification of International Managers by the Non-Executive
Selling Shareholders. Each Non-Executive Selling Shareholder, severally and
not jointly, agrees to indemnify and hold harmless each International Manager,
its directors, officers and employees, and each person, if any, who controls
any International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, with respect to any untrue statement or
omission, or alleged untrue statement or omission, contained in the
Registration Statement (or any amendment thereto), including the Rule 430
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectuses (or any amendment or supplement thereto) in
reliance upon and in conformity with information furnished to the Company or
any Subsidiary in writing by or on behalf of such Non-Executive Selling
Shareholder expressly for use therein; provided, however, that (x) this
indemnity agreement shall not apply to any loss, liability, claim, damage or
expense to the extent arising out of any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Company by any International Manager
through the Lead Managers expressly for use in the Registration Statement (or
any amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the International
Prospectus (or any amendment or supplement thereto) and (y) each Non-Executive
Selling Shareholder's aggregate liability under this Section 6(b) shall be
limited to an amount equal to the net proceeds (after deducting the
underwriting discount, but before deducting expenses) received by such
Non-Executive Selling Shareholder from the sale of Securities pursuant to this
Agreement.

(c) Indemnification of Company, Directors and Officers. Each
International Manager severally agrees to indemnify and hold harmless the
Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any and
all loss, liability, claim, damage and expense described in

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<PAGE> 35
the indemnity contained in subsection (a) of this Section, as incurred, but
only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any amendment
thereto), including the Rule 430A Information and the Rule 434 Information, if
applicable, or any preliminary International prospectus or the International
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such
International Manager through the Lead Managers expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary
prospectus or the International Prospectus (or any amendment or supplement
thereto).

(d) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it
is not materially prejudiced as a result thereof and in any event shall not
relieve it from any liability which it may have otherwise than on account of
this indemnity agreement. In the case of parties indemnified pursuant to
Section 6(a) or (b) above, counsel to the indemnified parties shall be selected
by Merrill Lynch, and, in the case of parties indemnified pursuant to Section
6(c) above, counsel to the indemnified parties shall be selected by the
Company. An indemnifying party may participate at its own expense in the
defense of any such action; provided, however, that counsel to the indemnifying
party shall not (except with the consent of the indemnified party) also be
counsel to the indemnified party. In no event shall the indemnifying parties
be liable for fees and expenses of more than one counsel (in addition to any
local counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances; provided, that, if indemnity is sought pursuant to the second
paragraph of Section 6(a), then, in addition to such counsel for the
indemnified parties, the indemnifying party shall be liable for the reasonable
fees and expenses of not more than one separate counsel (in addition to any
local counsel) for the Independent Underwriter in its capacity as a "qualified
independent underwriter" and all persons, if any, who control the Independent
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
1934 Act if, in the reasonable judgment of the Independent Underwriter there
may exist a conflict of interest between the Independent Underwriter and the
other indemnified parties. In the case of any such separate counsel for the
Independent Underwriter and such control persons of the Independent
Underwriter, such counsel shall be designated in writing by the Independent
Underwriter. No indemnifying party shall, without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 or Section 7 hereof (whether or not the indemnified
parties are actual or potential parties thereto), unless such settlement,
compromise or consent (i) includes an unconditional release of each

31
<PAGE> 36
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of
any indemnified party.

(e) Settlement without Consent if Failure to Reimburse. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(iii) effected without its written consent
if (i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.

(f) Other Agreements with Respect to Indemnification. The
provisions of this Section shall not affect any agreement among the Company,
the Subsidiaries and the Selling Shareholders with respect to indemnification.

SECTION 7. Contribution. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, the Subsidiaries and the Selling Shareholders on the one hand and the
International Managers on the other hand from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company, the Subsidiaries and the Selling
Shareholders on the one hand and of the International Managers on the other
hand in connection with the statements or omissions, or in connection with any
failure or violation of the nature referred to in Section 6(a)(ii)(A) and (B)
hereof, which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.

The relative benefits received by the Company, the Subsidiaries and
the Selling Shareholders on the one hand and the International Managers on the
other hand in connection with the offering of the International Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the International
Securities pursuant to this Agreement (before deducting expenses) received by
the Company, the Subsidiaries and the Selling Shareholders and the total
underwriting discount received by the International Managers, in each case as
set forth on the cover of the International Prospectus, or, if Rule 434 is
used, the

32
<PAGE> 37
corresponding location on the Term Sheet, bear to the aggregate initial public
offering price of the International Securities as set forth on such cover.

The relative fault of the Company, the Subsidiaries and the Selling
Shareholders on the one hand and the International Managers on the other hand
shall be determined by reference to, among other things, whether any such
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company, the Subsidiaries or the Selling Shareholders or by the International
Managers and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission or any failure or
violation of the nature referred to in Section 6(a)(ii)(A) and (B) hereof.

The Company, the Subsidiaries, the Selling Shareholders and the
International Managers agree that Merrill Lynch (NY) will not receive any
additional benefits hereunder for serving as the Independent Underwriter in
connection with the offering and sale of the International Securities.

The Company, the Subsidiaries, the Selling Shareholders and the
International Managers agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
(even if the International Managers were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 7. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 7 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged
untrue statement or omission or alleged omission.

Notwithstanding the provisions of this Section 7, (x) no International
Manager shall be required to contribute any amount in excess of the amount by
which the total price at which the International Securities underwritten by it
and distributed to the public were offered to the public exceeds the amount of
any damages which such International Manager has otherwise been required to pay
by reason of any such untrue or alleged untrue statement or omission or alleged
omission , and (y) no Non-Executive Selling Shareholder shall be required to
contribute any amount in excess of such Non-Executive Selling Shareholder's net
proceeds (after deducting the underwriting discount, but before deducting
expenses) from the sale of Securities pursuant to this Agreement.

No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.

33
<PAGE> 38
For purposes of this Section 7, each person, if any, who controls an
International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
International Manager, and each director of the Company, each officer of the
Company who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as the
Company. The International Managers' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the number of Initial
International Securities set forth opposite their respective names in Schedule
A hereto and not joint.

The provisions of this Section shall not affect any agreement among
the Company, the Subsidiaries and the Selling Shareholders with respect to
contribution.

SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any Subsidiary or
the Selling Shareholders submitted pursuant hereto, shall remain operative and
in full force and effect, regardless of any investigation made by or on behalf
of any International Manager or controlling person, or by or on behalf of the
Company, the Subsidiaries or the Selling Shareholders, and shall survive
delivery of the Securities to the International Managers.

SECTION 9. Termination of Agreement.

(a) Termination; General. The Lead Managers may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time
(i) if there has been, since the time of execution of this Agreement or since
the respective dates as of which information is given in the International
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or
economic conditions, in each case the effect of which is such as to make it, in
the judgment of the Lead Managers, impracticable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission or the New York Stock Exchange, or if trading generally on the
American Stock Exchange or the New York Stock Exchange or in the Nasdaq
National Market has been suspended or materially limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices have been
required, by any of said exchanges or by such system or by order of the
Commission, the NASD or any other governmental authority,

34
<PAGE> 39
or (iv) if a banking moratorium has been declared by either Federal or New York
authorities.

SECTION 10. Default by One or More of the International Managers. If
one or more of the International Managers shall fail at Closing Time or a Date
of Delivery to purchase the Securities which it or they are obligated to
purchase under this Agreement (the "Defaulted Securities"), the Lead Managers
shall have the right, within 24 hours thereafter, to make arrangements for one
or more of the non-defaulting International Managers, or any other
underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth; if, however, the Lead Managers shall not have completed such
arrangements within such 24-hour period, then:

(a) if the number of Defaulted Securities does not exceed
10% of the number of International Securities to be purchased on such
date, each of the non-defaulting International Managers shall be
obligated, severally and not jointly, to purchase the full amount
thereof in the proportions that their respective underwriting
obligations hereunder bear to the underwriting obligations of all
non-defaulting International Managers, or

(b) if the number of Defaulted Securities exceeds 10% of
the number of International Securities to be purchased on such date,
this Agreement or, with respect to any Date of Delivery which occurs
after the Closing Time, the obligation of the International Managers
to purchase and of the Company to sell the Option Securities to be
purchased and sold on such Date of Delivery shall terminate without
liability on the part of any non-defaulting International Manager.

No action taken pursuant to this Section shall relieve any defaulting
International Manager from liability in respect of its default.

In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Date of Delivery which is
after the Closing Time, which does not result in a termination of the
obligation of the International Managers to purchase and the Company to sell
the relevant International Option Securities, as the case may be, either the
Lead Managers or the Company shall have the right to postpone Closing Time or
the relevant Date of Delivery, as the case may be, for a period not exceeding
seven days in order to effect any required changes in the Registration
Statement or Prospectus or in any other documents or arrangements. As used
herein, the

35
<PAGE> 40
term "International Manager" includes any person substituted for an
International Manager under this Section 10.

SECTION 11. Default by One or More of the Selling Shareholders or the
Company. (a) If a Selling Shareholder shall fail at Closing Time or at a Date
of Delivery to sell and deliver the number of Securities which such Selling
Shareholder or Selling Shareholders are obligated to sell hereunder, and the
remaining Selling Shareholders do not exercise the right hereby granted to
increase, pro rata or otherwise, the number of Securities to be sold by them
hereunder to the total number to be sold by all Selling Shareholders as set
forth in Schedule B hereto, then the International Managers may, at the option
of the Lead Managers, by notice from the Lead Managers to the Company and the
non-defaulting Selling Shareholders, either (i) terminate this Agreement
without any liability on the fault of any non-defaulting party except that the
provisions of Sections 1, 4, 6, 7 and 8 shall remain in full force and effect
or (ii) elect to purchase the Securities which the non-defaulting Selling
Shareholders and the Company have agreed to sell hereunder. No action taken
pursuant to this Section 11 shall relieve any Selling Shareholder so defaulting
from liability, if any, in respect of such default.

In the event of a default by any Selling Shareholder as referred to in
this Section 11, each of the Lead Managers, the Company and the non-defaulting
Selling Shareholders shall have the right to postpone Closing Time or Date of
Delivery for a period not exceeding seven days in order to effect any required
change in the Registration Statement or Prospectuses or in any other documents
or arrangements.

(b) If the Company shall fail at Closing Time or at the Date of
Delivery to sell the number of Securities that it is obligated to sell
hereunder, then this Agreement shall terminate without any liability on the
part of any nondefaulting party; provided, however, that the provisions of
Sections 1, 4, 6, 7 and 8 shall remain in full force and effect. No action
taken pursuant to this Section shall relieve the Company or any Subsidiary from
liability, if any, in respect of such default.

SECTION 12. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
International Managers shall be directed to the Lead Managers at North Tower,
World Financial Center, New York, New York 10281-1201, attention of [Syndicate
Operations]; notices to the Company and the Subsidiaries shall be directed to
the Company at Two Democracy Center, 6903 Rockledge Drive, Fifteenth Floor,
Bethesda, Maryland 20817, attention of ; and notices to the Selling
Shareholders shall be directed to , attention of .

SECTION 13. Parties. This Agreement shall each inure to the benefit
of and be binding upon the International Managers, the Independent Underwriter,
the Company, the Subsidiaries and the Selling Shareholders and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any

36
<PAGE> 41
person, firm or corporation, other than the International Managers, the
Independent Underwriter, the Company, the Subsidiaries and the Selling
Shareholders and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or
in respect of this Agreement or any provision herein contained. This Agreement
and all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the International Managers, the Independent Underwriter,
the Company, the Subsidiaries and the Selling Shareholders and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm
or corporation. No purchaser of Securities from any International Manager
shall be deemed to be a successor by reason merely of such purchase.

SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.

SECTION 15. Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.

37
<PAGE> 42
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and the Attorney-in-Fact for
the Selling Shareholders a counterpart hereof, whereupon this instrument, along
with all counterparts, will become a binding agreement among the International
Managers, the Independent Underwriter, the Company, the Subsidiaries and the
Selling Shareholders in accordance with its terms.

Very truly yours,

SNYDER COMMUNICATIONS, INC.

By
---------------------------
Name:
Title:

SNYDER MARKETING SERVICES, INC.

By
---------------------------
Name:
Title:

SNYDER COMMUNICATIONS, L.P.

By
---------------------------
Name:
Title:

38
<PAGE> 43
Gerald S. Snyder
Daniel M. Snyder
U.S. News & World Report, L.P.
Michele D. Snyder
Allen & Company Incorporated
Susan K. Allen
Susan Strauss Breen
Barry Diller
Paul A. Gould
HAGC Partners
Dan W. Lufkin
Robert Marston
Robert A. Strauss
Robert S. Strauss
Robert S. Strauss, Trustee, Helen J.
Strauss Trust

By
---------------------------
Name:
As Attorney-in-Fact acting on
behalf of of the Selling
Shareholders named in
Schedule B hereto
CONFIRMED AND ACCEPTED,
as of the date first above written:

MERRILL LYNCH INTERNATIONAL
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
ALLEN & COMPANY INCORPORATED
MONTGOMERY SECURITIES

By: MERRILL LYNCH INTERNATIONAL

By
----------------------------------
Authorized Signatory

For themselves and as Lead Managers of the
other International Managers named
in Schedule A hereto.

39
<PAGE> 44
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED

By
---------------------------------------------
Authorized Signatory

Solely in its capacity as Independent Underwriter

40
<PAGE> 45
SCHEDULE A

<TABLE>
<CAPTION>
Number of
Initial
International
Name of International Manager Securities
----------------------------- ----------
<S> <C>
Merrill Lynch International . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Donaldson, Lufkin & Jenrette
Securities Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allen & Company Incorporated . . . . . . . . . . . . . . . . . . . . . . . . . . .
Montgomery Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

---------

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,560,000
=========
</TABLE>

Sch A-1
<PAGE> 46
SCHEDULE B

<TABLE>
<CAPTION>
Number of Initial Maximum Number of
International International Option
Securities to be Sold Securities to be Sold
--------------------- ------------------------
<S> <C> <C>
Snyder Communications, Inc. . . . . . 0

Gerald S. Snyder . . . . . . . . . . 0

Daniel M. Snyder . . . . . . . . . . 0

U.S. News & World Report,
L.P. . . . . . . . . . . . . . . 0

Michele D. Snyder . . . . . . . . . . 0

Allen & Company Incorporated. . . . . 0

Susan K. Allen . . . . . . . . . . . 0

Susan Strauss Breen . . . . . . . . . 0

Barry Diller . . . . . . . . . . . . 0

Paul A. Gould . . . . . . . . . . . . 0

HAGC Partners . . . . . . . . . . . . 0

Dan Lufkin . . . . . . . . . . . . . 0

Robert Marston . . . . . . . . . . . 0

Robert A. Strauss . . . . . . . . . . 0

Robert S. Strauss . . . . . . . . . . 0

Robert S. Strauss, Trustee,
Helen J. Strauss Trust . . . . . 0
--------- ---------

Total . . . . . . . . . . . . . . . . 1,560,000 234,000
========= =========
</TABLE>

Sch B-1
<PAGE> 47
SCHEDULE C

SNYDER COMMUNICATIONS, INC.

1,560,000 Shares of Common Stock

(Par Value $.001 Per Share)

1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $ .

2. The purchase price per share for the International Securities
to be paid by the several International Managers shall be $ , being an amount
equal to the initial public offering price set forth above less $ per share;
provided that the purchase price per share for any International Option
Securities purchased upon the exercise of the over-allotment option described in
Section 2(b) shall be reduced by an amount per share equal to any dividends or
distributions declared by the Company and payable on the Initial International
Securities but not payable on the International Option Securities.

Sch C-1
<PAGE> 48
SCHEDULE D

[List of persons and entities
subject to lock-up]

Sch D-1
<PAGE> 49
Exhibit A

FORM OF OPINION OF SHAW, PITTMAN, POTTS & TROWBRIDGE
TO BE DELIVERED PURSUANT TO SECTION 5(b)

(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware.

(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectuses and to enter into and perform its obligations under the
International Purchase Agreement and the U.S. Purchase Agreement.

(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.

(iv) The authorized, issued and outstanding capital stock of the
Company after giving effect to the Reorganization and the Distribution is as set
forth in the Prospectuses in the column entitled "Pro Forma" under the caption
"Capitalization" (except for subsequent issuances, if any, pursuant to the
International Purchase Agreement and the U.S. Purchase Agreement or pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectuses or pursuant to the exercise of convertible securities or options
referred to in the Prospectuses); the shares of issued and outstanding capital
stock of the Company, including the Securities to be purchased by the
International Managers from the Selling Shareholders, have been duly authorized
and validly issued and are fully paid and non-assessable; and none of the
outstanding shares of capital stock of the Company was issued in violation of
the preemptive or other similar rights of any securityholder of the Company.

(v) The Securities to be purchased by the International Managers
and the U.S. Underwriters from the Company have been duly authorized for
issuance and sale to the Underwriters pursuant to the International Purchase
Agreement and the U.S. Purchase Agreement, respectively, and, when issued and
delivered by the Company pursuant to the International Purchase Agreement and
the U.S. Purchase Agreement, respectively, against payment of the consideration
set forth in the International Purchase Agreement and the U.S. Purchase
Agreement, will be validly issued and fully paid and non-assessable and no
holder of the Securities is or will be subject to personal liability by reason
of being such a holder.

A-1
<PAGE> 50
(vi) The issuance and sale of the Securities by the Company and the
sale of the Securities by the Selling Shareholders is not subject to the
preemptive or other similar rights of any securityholder of the Company.

(viii) The International Purchase Agreement and the U.S. Purchase
Agreement have been duly authorized, executed and delivered by the Company and
each Subsidiary. The performance of the International Purchase Agreement and
the U.S. Purchase Agreement and the consummation of the transactions
contemplated in the International Purchase Agreement, the U.S. Purchase
Agreement and in the Registration Statement (including the issuance and sale of
the Securities and the use of the proceeds from the sale of the Securities as
described in the Prospectuses under the caption "Use Of Proceeds" and the
consummation of the Reorganization and the Distribution) and compliance by the
Company and each Subsidiary with its obligations under the International
Purchase Agreement and the U.S. Purchase Agreement have been duly authorized by
the Company and each Subsidiary, respectively.

(ix) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act; any
required filing of the Prospectuses pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b); and, to the best of
our knowledge, no stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued under the
1933 Act and no proceedings for that purpose have been instituted or are pending
or threatened by the Commission.

(x) The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule 434 Information,
as applicable, the Prospectuses and each amendment or supplement to the
Registration Statement and the Prospectuses as of their respective effective or
issue dates (other than the financial statements and supporting schedules
includ-

A-2
<PAGE> 51
ed therein or omitted therefrom, as to which we need express no opinion)
complied as to form in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations.

(xii) The form of certificate used to evidence the Common Stock
complies in all material respects with all applicable statutory requirements,
with any applicable requirements of the charter and by-laws of the Company and
the requirements of the New York Stock Exchange.

(xiii) To the best of our knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation, to which the
Company or any Subsidiary is a party, or to which the property of the Company or
any Subsidiary is subject, before or brought by any court or governmental agency
or body, domestic or foreign, which might reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to materially and
adversely affect the properties or assets thereof or the consummation of the
transactions contemplated in the International Purchase Agreement and the U.S.
Purchase Agreement or by the Reorganization or the Distribution or the
performance by the Company or any Subsidiary of its obligations thereunder.

(xiv) The information in the Prospectuses under "Risk Factors --
Government Regulation", "Risk Factors -- Shares Eligible for Future Sale;
Registration Rights", "Risk Factors -- Effect of Certain Charter and Bylaw
Provisions", "Business -- Services -- Consumer Markets -- Contractual
Relationship With AT&T", "Business -- Services -- Business Markets --
Contractual Relationship With MCI", Business -- Government Regulation",
"Business -- Facilities", "Business -- Legal Proceedings", "Management --
Employment Agreements", "Management -- Stock Option Plan", "Management --
Limitation of Liability and Indemnification", "Certain Transactions",
"Description of Capital Stock", "Shares Eligible for Future Resale" and "Certain
United States Federal Income Tax Consequences to Non-United States Holders" and
in the Registration Statement under Item 14 and Item 15, to the extent that it
constitutes matters of law, summaries of legal matters, the Company's charter
and bylaws or legal proceedings, or legal conclusions, has been reviewed by us
and is correct in all material respects.

(xv) To the best of our knowledge, there are no statutes or
regulations that are required to be described in the Prospectuses that are not
described as required.

A-3
<PAGE> 52
(xvii) To the best of our knowledge, neither the Company nor any
Subsidiary is in violation of its charter or by-laws and no default by the
Company or any Subsidiary exists in the due performance or observance of any
material obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument that is described or referred to in the Registration Statement or the
Prospectuses or filed or incorporated by reference as an exhibit to the
Registration Statement.

(xviii) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign (other than under the 1933 Act and the
1933 Act Regulations, which have been obtained, or as may be required under the
securities or blue sky laws of the various states, as to which we need express
no opinion) is necessary or required in connection with the due authorization,
execution and delivery of the International Purchase Agreement and the U.S.
Purchase Agreement or for the offering, issuance, sale or delivery of the
Securities.

(xix) The execution, delivery and performance of the International
Purchase Agreement and the U. S. Purchase Agreement and the consummation of the
transactions contemplated in the International Purchase Agreement, the U.S.
Purchase Agreement and in the Registration Statement (including the issuance and
sale of the Securities, and the use of the proceeds from the sale of the
Securities as described in the Prospectuses under the caption "Use Of Proceeds")
and compliance by the Company and each Subsidiary with its obligations under the
International Purchase Agreement and the U.S. Purchase Agreement do not and will
not, whether with or without the giving of notice or lapse of time or both,
conflict with or constitute a breach of, or default or Repayment Event (as
defined in Section 1(a)(x) of the Purchase Agreements) under or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any Subsidiary pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or any other
agreement or instrument, known to us, to which the Company or any Subsidiary, is
a party or by which any of them may be bound, or to which any of the property or
assets of the Company or any Subsidiary is subject (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not have a
Material Adverse Effect), nor will such action result in any violation of the
provisions of the charter or by-laws or partnership agreement, as the case may
be, of the Company or any Subsidiary or any applicable law, statute, rule,
regulation, judgment, order, writ or decree, known to us, of any government,
government instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any Subsidiary or any of their respective properties, assets
or operations.

(xxi) The Company and each Subsidiary owns or has the exclusive right
to use the Intellectual Property necessary to carry on the business now operated
by it and as proposed to be operated by it, and neither the Company nor any
Subsidiary has received any notice or is not otherwise aware of any infringement
or violation of or conflict with asserted rights of others with

A-4
<PAGE> 53
respect to any Intellectual Property owned, licensed or used by the Company or
any Subsidiary or of any facts or circumstances which would render any
Intellectual Property necessary to carry on the business invalid or the
Company's or any Subsidiary's rights therein inadequate and to such counsel's
knowledge there is no infringement by others of the Intellectual Property owned
or used by the Company or any Subsidiary in the business.

(xxii) Each of the Reorganization and the Distribution has occurred,
and each has been consummated in accordance with all applicable laws, statutes,
rules and regulations.

(xxiii) Neither the Company nor any Subsidiary is an "investment
company" or an entity "controlled" by an "investment company," as such terms are
defined in the 1940 Act.

[(xxiv) The [Rights] under the Company's [Shareholder Rights Plan]
to which holders of the Securities will be entitled have been duly authorized
and validly issued.]

Nothing has come to our attention that would lead us to believe that the
Registration Statement or any amendment thereto, including the Rule 430A
Information and Rule 434 Information (if applicable), (except for financial
statements and schedules and other financial data included therein or omitted
therefrom, as to which we need make no statement), at the time such Registration
Statement or any such amendment became effective, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectuses or any amendment or supplement thereto (except for financial
statements and schedules and other financial data included therein or omitted
therefrom, as to which we need make no statement), at the time the Prospectuses
were issued, at the time any such amended or supplemented prospectus was issued
or at the Closing Time, included or includes an untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.

In rendering such opinion, such counsel may rely, as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and the Subsidiaries and
public officials. Such opinion shall not state that it is to be governed or
qualified by, or that it is otherwise subject to, any treatise, written policy
or other document relating to legal opinions, including, without limitation, the
Legal Opinion Accord of the ABA Section of Business Law (1991).

A-5
<PAGE> 54
Exhibit B

FORM OF OPINION OF COUNSEL FOR THE SELLING SHAREHOLDERS
TO BE DELIVERED PURSUANT TO SECTION 5(c)

(i) No filing with, or consent, approval, authorization, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign, (other than the issuance of the order
of the Commission declaring the Registration Statement effective and such
authorizations, approvals or consents as may be necessary under state securities
laws, as to which we need express no opinion) is necessary or required to be
obtained by the Selling Shareholders for the performance by each Selling
Shareholder of its obligations under the International Purchase Agreement, the
U.S. Purchase Agreement or in the Power of Attorney and Custody Agreement, or in
connection with the offer, sale or delivery of the Securities.

(ii) Each Power of Attorney and Custody Agreement has been duly
executed and delivered by the respective Selling Shareholders named therein and
constitutes the legal, valid and binding agreement of such Selling Shareholder.

(iii) The International Purchase Agreement and the U.S. Purchase
Agreement have been duly authorized, executed and delivered by or on behalf of
each Selling Shareholder.

(iv) Each Attorney-in-Fact has been duly authorized by the Selling
Shareholders to deliver the Securities on behalf of the Selling Shareholders in
accordance with the terms of the International Purchase Agreement and the U.S.
Purchase Agreement.

(v) The execution, delivery and performance of the International
Purchase Agreement, the U.S. Purchase Agreement and the Power of Attorney and
Custody Agreement and the sale and delivery of the Securities and the
consummation of the transactions contemplated in the International Purchase
Agreement, the U.S. Purchase Agreement and in the Registration Statement and
compliance by the Selling Shareholders with their respective obligations under
the International Purchase Agreement and the U.S. Purchase Agreement have been
duly authorized by all necessary action on the part of the Selling Shareholders
and do not and will not, whether with or without the giving of notice or passage
of time or both, conflict with or constitute a breach of, or default under or
result in the creation or imposition of any tax, lien, charge or encumbrance
upon the Securities or any property or assets of the Selling Shareholders
pursuant to, any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, license, lease or other instrument or agreement to which any
Selling Shareholder is a party or by which [his/her/it/they] may be bound, or to
which any of the property or assets of the Selling Shareholders may be subject
nor will such action result in any violation of the provisions of the charter or
by-laws of the Selling Shareholders, if applicable, or any law, administrative
regulation, judgment or order of any governmental agency or body or any

B-1
<PAGE> 55
administrative or court decree having jurisdiction over such Selling Shareholder
or any of its properties.

(vi) To the best of our knowledge, each Selling Shareholder has
valid and marketable title to the Securities to be sold by such Selling
Shareholder pursuant to the International Purchase Agreement and the U.S.
Purchase Agreement, free and clear of any pledge, lien, security interest,
charge, claim, equity or encumbrance of any kind, and has full right, power and
authority to sell, transfer and deliver such Securities pursuant to the
International Purchase Agreement and the U.S. Purchase Agreement. By delivery
of a certificate or certificates therefor such Selling Shareholder will transfer
to the Underwriters who have purchased such Securities pursuant to the
International Purchase Agreement and the U.S. Purchase Agreement (without notice
of any defect in the title of such Selling Shareholder and who are otherwise
bona fide purchasers for purposes of the Uniform Commercial Code) valid and
marketable title to such Securities, free and clear of any pledge, lien,
security interest, charge, claim, equity or encumbrance of any kind.

[Nothing has come to our attention that would lead us to believe that
the Registration Statement or any amendment thereto, including the Rule 430A
Information and Rule 434 Information (if applicable), (except for financial
statements and schedules and other financial data included therein or omitted
therefrom, as to which we need make no statement), at the time such Registration
Statement or any such amendment became effective, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectuses or any amendment or supplement thereto (except for financial
statements and schedules and other financial data included therein or omitted
therefrom, as to which we need make no statement), at the time the Prospectuses
were issued, at the time any such amended or supplemented prospectus was issued
or at the Closing Time, included or includes an untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.]

B-2
<PAGE> 56
Exhibit C

FORM OF LOCK-UP FROM DIRECTORS, OFFICERS OR OTHER
SHAREHOLDERS PURSUANT TO SECTION 5(k)

, 1996

MERRILL LYNCH INTERNATIONAL
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
ALLEN & COMPANY INCORPORATED
MONTGOMERY SECURITIES
as Lead Managers of the several
International Managers to be named in the
within-mentioned International Purchase Agreement
c/o Merrill Lynch International

Ropemaker Place
25 Ropemaker Street
London EC24 9L4
England

Re: Proposed Public Offering by Snyder Communications, Inc.

Dear Sirs:

The undersigned, a stockholder [and an officer and/or director]* of
Snyder Communications, Inc., a Delaware corporation (the "Company"),
understands that Merrill Lynch International ("Merrill Lynch") and Donaldson,
Lufkin & Jenrette Securities Corporation, Allen & Company Incorporated and
Montgomery Securities propose to enter into an International Purchase Agreement
(the "International Purchase Agreement") with the Company and the other parties
named therein providing for the public offering of shares (the "Securities") of
the Company's common stock, par value $.001 per share (the "Common Stock"). In
recognition of the benefit that such an offering will confer upon the
undersigned as a stockholder [and an officer and/or director]* of the Company,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the undersigned agrees with each underwriter to
be named in the International Purchase Agreement that, during a period of 180
days from the date of the International Purchase Agreement, the undersigned
will not, without the prior written consent of Merrill Lynch, directly or
indirectly, (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant

- ----------------------------------
* Delete or revise bracketed language as appropriate.

C-1
<PAGE> 57
for the sale of, or otherwise dispose of or transfer any shares of the
Company's Common Stock or any securities convertible into or exchangeable or
exercisable for Common Stock, whether now owned or hereafter acquired by the
undersigned or with respect to which the undersigned has or hereafter acquires
the power of disposition, or file any registration statement under the
Securities Act of 1933, as amended, with respect to any of the foregoing or
(ii) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Stock, whether any such swap or
transaction is to be settled by delivery of Common Stock or other securities,
in cash or otherwise.

[Notwithstanding the foregoing, the undersigned may, at any time after
30 days from the date of the Closing Time (as defined in the International
Purchase Agreement), pledge as security for borrowed money [up to 50% of]* the
shares of Common Stock then owned by the undersigned to any commercial banking
institution that is a member of the Federal Reserve System having combined
capital and surplus in excess of $500,000,000 (a "Pledgee") as long as such
Pledgee shall have agreed in writing to be bound by the obligations and
restrictions applicable to the Common Stock under Section 1(b)(vi) of the
International Purchase Agreement and the Lead Managers shall have received an
agreement substantially in the form of Exhibit D to the International Purchase
Agreement signed by such Pledgee.]**

Very truly yours,

Signature:
----------------------------------

Print Name:
---------------------------------

- --------------------------------

* Include in the case of any lock-up agreement of Daniel M. Snyder.

** Include in the case of any lock-up agreement of Daniel M. Snyder and
U.S. News & World Report, L.P.

C-2
<PAGE> 58
Exhibit D

FORM OF LOCK-UP FROM PLEDGEE PURSUANT TO SECTION 1(b)(vi)

, 1996

MERRILL LYNCH INTERNATIONAL
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
ALLEN & COMPANY INCORPORATED
MONTGOMERY SECURITIES
as Lead Managers of the several
International Managers named in the
within-mentioned International Purchase Agreement
c/o Merrill Lynch International

Ropemaker Place
25 Ropemaker Street
London EC24 9L4
England

Re: Public Offering by Snyder Communications, Inc.

Dear Sirs:

The undersigned, a pledgee of shares (the "Pledged Shares") of Common
Stock, par value $.001 per share, of Snyder Communications, Inc., a Delaware
corporation (the "Company"), understands that Merrill Lynch International
("Merrill Lynch") and Donaldson, Lufkin & Jenrette Securities Corporation,
Allen & Company Incorporated and Montgomery Securities have entered into an
International Purchase Agreement, dated , 1996 (the "International Purchase
Agreement"), with the Company and the other parties named therein providing for
the public offering of shares of the Company's Common Stock. For good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned agrees with each underwriter named in the
International Purchase Agreement that, during a period of 180 days from the
date of the International Purchase Agreement, the undersigned will not, without
the prior written consent of Merrill Lynch, directly or indirectly, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant for
the sale of, or otherwise dispose of or transfer any Pledged Shares or any
securities convertible into or exchangeable or exercisable for any Pledged
Shares, whether now owned or hereafter acquired by the undersigned or with
respect to which the undersigned has or hereafter acquires the power of
disposition, or file any registration statement under the Securities Act of
1933, as amended, with respect to any of the foregoing or (ii) enter into any
swap or any other agreement or any transaction that

D-1
<PAGE> 59
transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of any Pledged Shares, whether any such swap or
transaction is to be settled by delivery of any Pledged Shares or other
securities, in cash or otherwise.

Very truly yours,

[name of Pledgee]

By:
---------------------
Name:
Title:

D-2
<PAGE> 60
Annex A

FORM OF ACCOUNTANTS' COMFORT LETTER PURSUANT TO SECTION 5(g)

We are independent public accountants with respect to the Company within the
meaning of the 1933 Act and the applicable published 1933 Act Regulations

(ii) on the basis of procedures (but not an examination in
accordance with generally accepted auditing standards) consisting of a
reading of the unaudited interim combined financial statements of the
Company for the six month periods ended June 30, 1995 and June 30,
1996, included in the Registration Statement and the Prospectuses
(collectively, the "Quarterly Financials"), a reading of the minutes
of all meetings of the securityholders, directors and partners of the
Company and its subsidiaries, as the case may be, and the
________________ Committee(s) of the Company's Board of Directors
[specify relevant SMS and Partnership management entities] since
December 31, 1995, inquiries of certain officials of the Company and
its subsidiaries responsible for financial and accounting matters, a
review of interim financial information in accordance with standards
established by the American Institute of Certified Public Accountants
in Statement on Auditing Standards No. 71, Interim Financial
Information ("SAS 71"), with respect to the six month periods ended
June 30, 1995 and June 30, 1996 and such other inquiries and
procedures as may be specified in such letter, nothing came to our
attention that caused us to believe that:

Annex A-1
<PAGE> 61
(C) for the period from June 30, 1996 to a
specified date not more than five days prior to the date
of this Agreement, there was any decrease in revenues,
income from operations or net income, or any increase in
cost of services or selling, general and administrative
expenses, in each case as compared with the comparable
period in the preceding year, except in each case for any
decreases that the Registration Statement discloses have
occurred or may occur;

(iii) based upon the procedures set forth in clause (ii)
above and a reading of the Selected Financial and Operating Data
included in the Registration Statement and a reading of the financial
statements from which such data were derived, nothing came to our
attention that caused us to believe that the Selected Financial and
Operating Data included in the Registration Statement do not comply as
to form in all material respects with the disclosure requirements of
Item 301 of Regulation S-K of the 1933 Act, that the amounts included
in the Selected Financial and Operating Data are not in agreement with
the corresponding amounts in the audited combined financial statements
for the respective periods or that the financial statements not
included in the Registration Statement from which certain of such data
were derived are not in conformity with generally accepted accounting
principles;

(iv) we have compared the information in the Registration
Statement under selected captions with the disclosure requirements of
Regulation S-K of the 1933 Act and on the basis of limited procedures
specified herein nothing came to our attention that caused us to
believe that this information does not comply as to form in all
material respects with the disclosure requirements of Items 302, 402
and 503(d), respectively, of Regulation S-K;

(v) we are unable to and do not express any opinion on
the pro forma combined balance sheet and income statement information
(the "Pro Forma Statements") included in the Registration Statement or
on the pro forma adjustments applied to the historical amounts
included in the Pro Forma Statements; however, for purposes of this
letter we have:

(A) read the Pro Forma Statements;

(B) performed an audit or a review in
accordance with SAS 71, as the case may be,
of the financial statements to which the pro
forma adjustments were applied;

(C) made inquiries of certain officials
of the Company who have responsibility for
financial and accounting matters about the
basis for their determination of the pro
forma adjustments and whether the Pro Forma
Statements comply as to form in all mate-

Annex A-2
<PAGE> 62
rial respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X;
and

(D) proved the arithmetic accuracy of
the application of the pro forma adjustments
to the historical amounts in the Pro Forma
Statements; and

on the basis of such procedures and such other inquiries and
procedures as specified herein, nothing came to our attention that
caused us to believe that the Pro Forma Statements included in the
Registration Statement do not comply as to form in all material
respects with the applicable requirements of Rule 11-02 of Regulation
S-X or that the pro forma adjustments have not been properly applied
to the historical amounts in the compilation of those statements; and

(vi) in addition to the procedures referred to in clause
(ii) above, we have performed other procedures, not constituting an
audit, with respect to certain amounts, percentages, numerical data
and financial information appearing in the Registration Statement,
which are specified herein, and have compared certain of such items
with, and have found such items to be in agreement with, the
accounting and financial records of the Company and its subsidiaries.

Annex A-3

<PAGE> 1

EXHIBIT 4.3

EXCHANGE AGREEMENT

THIS EXCHANGE AGREEMENT is entered into as of __________ ___, 1996
among SNYDER COMMUNICATIONS, INC., a Delaware corporation (the "Company"),
Snyder Marketing Services, Inc. (formerly known as Snyder Communications Inc.),
a Delaware corporation ("SMS"), DANIEL M. SNYDER, MICHELE D. SNYDER, Gerald S.
Snyder, ANTHONY O. ROBERTS, U.S. News College Marketing L.P., a Delaware
limited partnership ("USN"), Allen & Company Incorporated, a New York
corporation ("Allen & Co."), Susan K. Allen, Susan Strauss Breen, Barry Diller,
Paul A. Gould, HAGC Partners, Dan W. Lufkin, Robert Marston, Robert A. Strauss,
Robert S. Strauss, and Robert S. Strauss, as the Trustee of the Helen J.
Strauss Trust (the "HJS Trust").

WHEREAS, the Company was formed on June 25, 1996 to become the holding
company of Snyder Communications, L.P., a Delaware limited partnership (the
"Partnership"), and to consummate an initial public offering (the "IPO") of
common stock, par value $.001 per share, of the Company (the "Company Common
Stock");

WHEREAS, SMS is the sole general partner of the Partnership, holding a
63.85% interest in the Partnership, and has issued 2,000 shares of common
stock, par value $.001 per share (the "SMS Common Stock"), which represents all
the issued and outstanding shares of capital stock of SMS;

WHEREAS, set forth on Schedule A hereto are the names and the number
of shares of SMS Common Stock held by each stockholder of SMS (each, an "SMS
Stockholder" and collectively, the "SMS Stockholders"):

WHEREAS, as a result of the 63.85% interest held by SMS in the
Partnership, each issued and outstanding share of SMS Common Stock indirectly
represents a 0.0319% interest in the Partnership;

WHEREAS, set forth on Schedule B hereto are the names and the
percentage of limited partnership interest ("L.P. Interest") held by each of
the limited partners in the Partnership (each, a "Limited Partner" and
collectively, the "Limited Partners"):

WHEREAS, each of the SMS Stockholders wishes to exchange his or her
shares of SMS Common Stock for shares of Company Common Stock, and each of the
Limited Partners wish to exchange their L.P. Interests for shares of Company
Common Stock, on the terms and conditions set forth below, and the Company
wishes to exchange shares of Company Common Stock for all of the issued and
outstanding shares of SMS Common Stock and all of the L.P. Interests, on the
terms and conditions set forth below; and

WHEREAS, pursuant to the exchange ratios hereinafter set forth, the
rate at which each percentage interest in the Partnership will be exchanged for
shares of the Company Common Stock will be the same for each of the Limited
Partners and SMS, the corporate general partner;

<PAGE> 2
WHEREAS, following consummation of the exchange, the Company will hold
directly all of the limited partnership interests in the Partnership and all of
the issued and outstanding stock of SMS, which will remain the corporate
general partner of the Partnership, and SMS, as the sole general partner of the
Partnership and the Company, as the sole limited partner of the Partnership
wish to continue the Partnership under the terms of the Amended and Restated
Limited Partnership Agreement of Snyder Communications, L.P., dated as of
August 18, 1993, as amended by a First Amendment dated as of May 18, 1995 (as
amended, the "Partnership Agreement");

NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

1. EXCHANGE OF SMS COMMON STOCK AND L.P. INTERESTS FOR COMPANY
COMMON STOCK.

(a) Each of the SMS Stockholders hereby agrees to transfer to the
Company, as of the date and time of the effectiveness of the IPO (the
"Effective Time"), all of his or her right, title and interest in and to his or
her SMS Common Stock in exchange for shares of Company Common Stock, at the
rate of 9,404.59 shares of Company Common Stock for each share of SMS Common
Stock, rounded to the nearest whole number of shares of Company Common Stock.

(b) Each of the Limited Partners hereby agrees to transfer to the
Company, effective as of the Effective Time, all of his, her or its right,
title and interest in and to the L. P. Interest held by such person or entity
in exchange for shares of Company Common Stock, at the rate of 294,584 shares
of Company Common Stock for each one percent (1%) partnership interest in the
Partnership, rounded to the nearest whole number of shares of Company Common
Stock.

(c) As of the Effective Time, each share of Company Common Stock that
is issued and outstanding prior to the exchanges set forth in subsections (a)
and (b) above will be automatically canceled, without the payment of any
consideration to the holder thereof.

2. CONSENT TO TRANSFER; CONTINUATION OF PARTNERSHIP. USN and SMS
hereby consent to the transactions contemplated by Section 1 above and to the
admission of the Company as a limited partner in the Partnership. The Company
agrees to comply with the terms and provisions of the Partnership Agreement and
the Delaware Act (as such term is defined in the Partnership Agreement) upon
admission as a limited partner in the Partnership. SMS and the Company agree
to continue the Partnership on and after the Effective Time as a limited
partnership under the Partnership Agreement and the Delaware Revised Uniform
Limited Partnership Act.

3. REPRESENTATIONS AND WARRANTIES OF SMS STOCKHOLDERS. As a
material inducement to each other SMS Stockholder, each of the Limited Partners
and to the Company to enter into this Agreement, each of the SMS Stockholders,
severally but not jointly, represents and warrants to each other SMS
Stockholder, each Limited Partner and to the Company that each

-2-
<PAGE> 3
of the following representations and warranties is true and correct as of the
date hereof and as of the Effective Time (to the same extent as if then made).

3.1 AUTHORITY. Each of the SMS Stockholders represents and
warrants that he or she has full capacity and authority necessary to execute,
deliver and perform this Agreement and to perform his or her obligations
hereunder. This Agreement is a valid and legally binding obligation of each of
the SMS Stockholders, enforceable against each of them in accordance with its
terms, except as limited by the effect of bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the rights and
remedies of creditors generally or by general principles of equity (whether
applied in a proceeding at law or in equity).

3.2 CAPITALIZATION AND OWNERSHIP. The authorized capital stock of
SMS consists of 3,000 shares of common stock, without stated par value, of
which 2,000 shares are currently issued and outstanding. All of the issued and
outstanding shares of SMS Common Stock have been duly authorized, are validly
issued, fully paid and nonassessable, and are held of record and owned
beneficially by the SMS Stockholders, as set forth on Schedule A hereto, free
and clear of any restrictions on transfer (other than restrictions imposed by
federal or state securities laws), claims, taxes, security interests, options,
warrants, rights, contracts, calls, or commitments. Each of the SMS
Stockholders represents and warrants that there are no outstanding or
authorized options, warrants, rights, contracts, calls, puts, rights to
subscribe, conversion rights, rights of first refusal or first offer, or other
agreements or commitments to which SMS or such SMS Stockholder is a party or
which are binding upon SMS or such SMS Stockholder providing for the issuance,
disposition or acquisition of any of SMS's capital stock (other than this
Agreement). Each SMS Stockholder represents and warrants that there are no
voting trusts, proxies, or any other agreements or understandings with respect
to voting its capital stock of SMS.

3.3 NO VIOLATION OF LAWS OR AGREEMENTS. Each SMS Stockholder
represents and warrants that neither the execution and delivery of this
Agreement by such SMS Stockholder, nor the performance by such SMS Stockholder
of his or her obligations hereunder, will (i) violate any statute, regulation,
rule, judgment, order, decree, stipulation, injunction, charge or other
restriction of any government, governmental agency or court to which such SMS
Stockholder or SMS is subject, or (ii) conflict with or result in a breach of,
constitute a default under, result in the acceleration of, or create in any
person the right to accelerate, terminate, modify or cancel, or require notice
under any agreement or instrument to which such SMS Stockholder or SMS is a
party or by which such SMS Stockholder or any of SMS's assets are bound.

3.4 INVESTMENT INTENT. Each of the SMS Stockholders is acquiring
the shares of Company Common Stock for the purpose of investment and not with a
view to, or for resale in connection with, any distribution thereof in
violation of the Securities Act of 1933, as amended (the "Securities Act").
Each of the SMS Stockholders acknowledges that the shares of Company Common
Stock to be received in the exchange are not registered under the Securities
Act or any applicable state securities law, and that such Company Common Stock
may not be transferred or sold except pursuant to the registration provisions
of such Securities Act or pursuant to an applicable exemption therefrom and
pursuant to state securities laws and regulations as

-3-
<PAGE> 4
applicable, and that the certificate representing the shares of Company Common
Stock will bear appropriate legends to that effect.

4. REPRESENTATIONS AND WARRANTIES OF THE LIMITED PARTNERS. As a
material inducement to each other Limited Partner, each of the SMS Stockholders
and to the Company to enter into this Agreement, each of the Limited Partners,
severally but not jointly, represents and warrants to each other Limited
Partner, each of the SMS Stockholders and to the Company that each of the
following representations and warranties is true and correct as of the date
hereof and as of the Effective Time (to the same extent as if then made).

4.1 AUTHORITY. Each of the individual Limited Partners represents
and warrants that he or she has full capacity and authority necessary to
execute, deliver and perform this Agreement and to perform his or her
obligations hereunder. Each of the Limited Partners that is a corporation,
trust or other entity represents and warrants that it is duly organized,
validly existing and in good standing under the laws of the jurisdiction in
which it was formed and has the power and authority to execute and deliver this
Agreement and to perform its obligations hereunder. The execution, delivery
and performance of this Agreement by each of the Limited Partners that is an
entity has been duly authorized by all necessary corporate, trust or other
action on the part of such entity. This Agreement is a valid and legally
binding obligation of each of the Limited Partners, enforceable against each of
them in accordance with its terms, except as limited by the effect of
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the rights and remedies of creditors generally or by general
principles of equity (whether applied in a proceeding at law or in equity).

4.2 CAPITALIZATION AND OWNERSHIP. Each Limited Partner represents
and warrants that its L.P. Interest is held of record and owned beneficially by
such Limited Partner, as set forth on Schedule B hereto, free and clear of any
restrictions on transfer (other than restrictions imposed by federal or state
securities laws or the Partnership Agreement), claims, taxes, security
interests, options, warrants, rights, contracts, calls, or commitments. Each
Limited Partner represents and warrants that there are no outstanding or
authorized options, warrants, rights, contracts, calls, puts, rights to
subscribe, conversion rights, rights of first refusal or first offer, or other
agreements or commitments to which such Limited Partner is a party or which are
binding upon such Limited Partner providing for the issuance, disposition or
acquisition of an L.P. Interest in the Partnership (other than this Agreement).
Each Limited Partner represents and warrants that there are no voting trusts,
proxies, or any other agreements or understandings with respect to voting its
L.P. Interest in the Partnership.

4.3 NO VIOLATION OF LAWS OR AGREEMENTS. Each Limited Partner
represents and warrants that neither the execution and delivery of this
Agreement by such Limited Partner, nor the performance by such Limited Partner
of its obligations hereunder, will (i) violate any statute, regulation, rule,
judgment, order, decree, stipulation, injunction, charge or other restriction
of any government, governmental agency or court to which such Limited Partner
is subject, or (ii) conflict with or result in a breach of, constitute a
default under, result in the acceleration of, or create in any person the right
to accelerate, terminate, modify or cancel, or require notice under

-4-
<PAGE> 5
any agreement or instrument to which such Limited Partner is a party or by
which such Limited Partner is bound.

4.4 INVESTMENT INTENT. Each of the Limited Partners is acquiring
the shares of Company Common Stock for the purpose of investment and not with a
view to, or for resale in connection with, any distribution thereof in
violation of the Securities Act. Each of the Limited Partners acknowledges
that the shares of Company Common Stock to be received in the exchange are not
registered under the Securities Act or any applicable state securities law, and
that such Company Common Stock may not be transferred or sold except pursuant
to the registration provisions of such Securities Act or pursuant to an
applicable exemption therefrom and pursuant to state securities laws and
regulations as applicable, and that the certificate representing the shares of
Company Common Stock will bear appropriate legends to that effect.

5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. As a material
inducement to each of the Limited Partners, and to each of the SMS Stockholders
to enter into this Agreement, the Company represents and warrants to each
Limited Partner and to each SMS Stockholder that each of the following
representations and warranties is true and correct as of the date hereof and as
of the Effective Time (to the same extent as if then made).

5.1 AUTHORITY. The Company is a corporation, duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has the corporate power and authority to execute and deliver this Agreement
and to perform its obligations hereunder. The execution, delivery and
performance of this Agreement by the Company has been duly authorized by all
necessary corporate action on the part of the Company. This Agreement is a
valid and legally binding obligation of the Company, enforceable against it in
accordance with its terms, except as limited by the effect of bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
rights and remedies of creditors generally or by general principles of equity
(whether applied in a proceeding at law or in equity).

5.2 DUE ISSUANCE OF COMPANY COMMON STOCK. All of the issued and
outstanding shares of Company Common Stock have been duly authorized and, when
issued pursuant to the terms of this Agreement, the shares of Company Common
Stock to be issued pursuant to this Agreement will be validly issued, fully
paid and nonassessable, free and clear of any restrictions on transfer (other
than restrictions imposed by federal or state securities laws), claims, taxes,
security interests, options, warrants, rights, contracts, calls, or
commitments.

5.3 NO VIOLATION OF LAWS OR AGREEMENTS. Neither the execution and
delivery of this Agreement by the Company, nor the performance by it of its
obligations hereunder, will (i) violate any statute, regulation, rule,
judgment, order, decree, stipulation, injunction, charge or other restriction
of any government, governmental agency or court to which the Company is
subject, (ii) violate any provision of the Articles of Incorporation or Bylaws
of the Company, (iii) conflict with or result in a breach of, constitute a
default under, result in the acceleration of, or create in any person the right
to accelerate, terminate, modify or cancel, or require notice under any
agreement or instrument to which the Company is a party or by which the Company
is

-5-
<PAGE> 6
bound, or (iv) result in the creation or imposition of any lien, charge or
encumbrance, security interest or restriction with respect to the Company's
assets.

6. CLOSING.

6.1 DATE AND TIME OF CLOSING. The closing (the "Closing") of the
transactions contemplated in this Agreement will take place on the Effective
Time. The Closing will be held at the offices of Shaw, Pittman, Potts and
Trowbridge, 2300 N Street, N.W., Washington, D.C. 20037.

6.2 DELIVERIES AT CLOSING.

(a) At Closing, each of the SMS Stockholders will deliver to the
Company, free and clear of all liens, security interests, claim and
encumbrances, certificates for his or her shares of SMS Common Stock, duly
endorsed in negotiable form, with stock powers duly executed in blank and all
requisite stock transfer stamps attached.

(b) At Closing, each of the Limited Partners will deliver to the
Company an Assignment of Limited Partner Interest, in form reasonably
acceptable to the Company and the Limited Partner, evidencing the transfer by
each such Limited Partner of his, her or its L.P. Interest in the Partnership,
free and clear of all liens, security interests, claims, and encumbrances.

(c) At Closing, the Company will deliver to each of the Limited
Partners and to each of the SMS Stockholders, or as they may direct,
certificates representing the number of shares of Company Common Stock into
which the L.P. Interests held by such Limited Partner, or the SMS Common Stock
held by such SMS Stockholder, has been exchanged, as set forth on Schedule C
hereto, free and clear of all liens, security interests, claims, and
encumbrances.

6.3 IPO Pricing. The consummation of the IPO is subject to the
approval by the holders of record of at least 85 percent of the issued and
outstanding common stock of SMS (the identity of such holders to be determined
immediately before the consummation of the Reorganization) of the price at
which the Company Common Stock will be offered in the IPO.

7. FURTHER ASSURANCES. Each of the parties agrees to use all
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws, rules and regulations to consummate and make effective the transactions
contemplated by this Agreement, including but not limited to the recordation in
the Partnership books of the transfer of the L.P. Interests to the Company and
the admission of the Company as a limited partner of the Partnership.

8. MISCELLANEOUS.

8.1 AMENDMENT. This Agreement may be amended or modified only by
a written instrument executed by the parties hereto.

8.2 GOVERNING LAW. This Agreement shall be construed, interpreted
and enforced in accordance with the laws of the State of Maryland, without
regard to its conflicts of laws principles.

-6-
<PAGE> 7
8.3 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.

8.4 EXECUTION IN COUNTERPARTS. This Agreement may be executed in
any number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument.

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

SNYDER COMMUNICATIONS, INC.

-----------------------------------
By:
Its:

SNYDER MARKETING SERVICES, INC.

-----------------------------------
By:
Its:

------------------------------------
Daniel M. Snyder

------------------------------------
Michele D. Snyder

------------------------------------
Gerald S. Snyder

------------------------------------
Dr. Anthony O. Roberts

-7-
<PAGE> 8
U. S. NEWS COLLEGE MARKETING, L.P.

By: USN COLLEGE MARKETING, INC.
its General Partner

------------------------------------
By:
Its:

ALLEN & COMPANY INCORPORATED

------------------------------------
By:
Its:

------------------------------------
Susan K. Allen

------------------------------------
Susan Strauss Breen

------------------------------------
Barry Diller

------------------------------------
Paul A. Gould

------------------------------------
Dan W. Lufkin

------------------------------------
Robert Marston

------------------------------------
Robert A. Strauss

------------------------------------
Robert S. Strauss
Trustee, Helen J. Strauss Trust

-8-
<PAGE> 9

SCHEDULE A

Names and Numbers of Shares of Common Stock held by each of the
Stockholders of Snyder Marketing Services, Inc.

<TABLE>
<CAPTION>
----------------------------------------------------------------
NAME NUMBER OF SHARES
----------------------------------------------------------------
<S> <C>
Daniel M. Snyder 1,140
----------------------------------------------------------------
Michele D. Snyder 400
----------------------------------------------------------------
Gerald S. Snyder 400
----------------------------------------------------------------
Dr. Anthony O. Roberts 60
----------------------------------------------------------------
</TABLE>

-9-
<PAGE> 10
SCHEDULE B

Names and Percentage Interest in Snyder Communications, L.P. held by
each of the Limited Partners in the Partnership:

<TABLE>
<CAPTION>
--------------------------------------------------------------
NAME L.P. INTEREST
--------------------------------------------------------------
<S> <C>
USN 33.1500%
--------------------------------------------------------------
Allen & Co. 0.8875%
--------------------------------------------------------------
Susan K. Allen 0.4500%
--------------------------------------------------------------
HAGC Partners 0.4500%
--------------------------------------------------------------
Paul A. Gould 0.4375%
--------------------------------------------------------------
Barry Diller 0.3000%
--------------------------------------------------------------
Dan W. Lufkin 0.1500%
--------------------------------------------------------------
Robert Marston 0.1250%
--------------------------------------------------------------
Susan Strauss Breen 0.0500%
--------------------------------------------------------------
Robert A. Strauss 0.0500%
--------------------------------------------------------------
Robert S. Strauss 0.0500%
--------------------------------------------------------------
HJS Trust 0.0500%
--------------------------------------------------------------
</TABLE>

-10-
<PAGE> 11
SCHEDULE C

Names of SMS Stockholders and Limited Partners and the Number of
Shares of Company Common Stock into which each such holder's SMS Common Stock
or L.P. Interest, as the case may be, will be exchanged.

<TABLE>
<CAPTION>
------------------------------------------------------------------
NAME NUMBER OF SHARES
------------------------------------------------------------------
<S> <C>
Daniel M. Snyder 10,721,237
------------------------------------------------------------------
Michele D. Snyder 3,761,838
------------------------------------------------------------------
Gerald S. Snyder 3,761,838
------------------------------------------------------------------
Dr. Anthony O. Roberts 564,275
------------------------------------------------------------------
USN 9,765,460
------------------------------------------------------------------
Allen & Co. 259,234
------------------------------------------------------------------
Susan K. Allen 132,563
------------------------------------------------------------------
HAGC Partners 132,563
------------------------------------------------------------------
Paul A. Gould 129,617
------------------------------------------------------------------
Barry Diller 88,375
------------------------------------------------------------------
Dan W. Lufkin 44,188
------------------------------------------------------------------
Robert Marston 38,296
------------------------------------------------------------------
Susan Strauss Breen 14,729
------------------------------------------------------------------
Robert A. Strauss 14,729
------------------------------------------------------------------
Robert S. Strauss 14,729
------------------------------------------------------------------
HJS Trust 14,729
------------------------------------------------------------------
</TABLE>

-11-

<PAGE> 1
EXHIBIT 10.1

SNYDER COMMUNICATIONS, INC.

1996 STOCK INCENTIVE PLAN

1. Purposes.

The purposes of the Snyder Communications, Inc. 1996 Stock Incentive
Plan are to promote the long-term growth of Snyder Communications, Inc. and its
subsidiaries by rewarding key management employees of Snyder Communications,
Inc. and its subsidiaries with a proprietary interest in Snyder Communications,
Inc. for outstanding long-term performance and to attract, motivate and retain
highly qualified and capable employees.

2. Definitions.

Unless the context clearly indicates otherwise, the following terms
shall have the following meanings:

2.1 "Award" means an award granted to a Participant under the Plan
in the form of an Option, Restricted Stock, a Stock Appreciation Right, or any
combination of the foregoing.

2.2 "Board" means the Board of Directors of the Corporation.

2.3 "Change of Control" has the meaning set forth in Section 10.2.

2.4 "Code" means the Internal Revenue Code of 1986, as amended, or
any successor law.

2.5 "Commission" means the Securities and Exchange Commission or
any successor agency.

2.6 "Committee" means the committee administering the Plan as set
forth in Section 3, or, if such a committee has not been appointed, the Board.

2.7 "Consultant" means any person performing consulting or
advisory services for the Corporation or any Subsidiary, with or without
compensation, including a person or entity providing services pursuant to a
management services agreement with the Corporation, to whom the Corporation
chooses to grant a Non-Qualified Stock Option, Restricted Stock or Stock
Appreciation Right in accordance with the Plan, provided that bona fide
services must be rendered by such person and such services are not rendered in
connection with the sale of securities in a capital raising transaction.

2.8 "Corporation" means Snyder Communications, Inc., a Delaware
corporation, or any successor thereto.
<PAGE> 2

2.9 "Disability" means total disability as defined in Section
22(e)(3) of the Code.

2.10 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

2.11 "Fair Market Value" means, on any given date, the current fair
market value of shares as determined below:

(a) If the Shares are listed upon an established stock
exchange or exchanges, "Fair Market Value" means the closing price of Shares on
the exchange that trades the largest volume of Shares on the date of the Award.

(b) If the Shares are traded on the Nasdaq National
Market, "Fair Market Value" means the closing price of the Shares reported on
the Nasdaq National Market on the date of the Award, provided that if there
should be no sales of Shares reported on such date, the Fair Market Value of a
Share on such date shall be deemed equal to the closing price as reported by
the Nasdaq National Market for the last preceding date on which sales of Shares
were reported.

(c) In all other cases, "Fair Market Value" shall be
determined by the Committee using any reasonable method in good faith, provided
that, with respect to the initial public offering of Shares by the Corporation,
"Fair Market Value" means the initial offering price to the public of such
Shares.

2.12 "Incentive Stock Option" means an Option which meets the
requirements of Section 422 of the Code.

2.13 "Non-Qualified Stock Option" means an Option which does not
meet the requirements of Section 422 of the Code.

2.14 "Option" means an option awarded under Section 7 to purchase
Shares. An Option may be either an Incentive Stock Option or a Non-Qualified
Stock Option.

2.15 "Option Exercise Period" means the period from the Option
Grant Date to the date on which an Option expires.

2.16 "Option Grant Date" means the date upon which the Committee
grants an Option to an Optionee.

2.17 "Optionee" means an employee or Consultant of the Corporation
or any Subsidiary to whom an Option has been granted.

2.18 "Participant" means an employee or Consultant of the
Corporation or any Subsidiary to whom an Award has been granted which has not
terminated, expired or been fully exercised.

2
<PAGE> 3

2.19 "Plan" means this Snyder Communications, Inc. 1996 Stock
Incentive Plan, as it may be amended and restated from time to time.

2.20 "Restricted Period" means the period of time, which may be a
single period or multiple periods, during which Restricted Stock awarded to a
Participant remains subject to the Restrictions imposed on such Shares, as
determined by the Committee.

2.21 "Restricted Stock" means an award of Shares on which are
imposed Restricted Periods and Restrictions which subject the Shares to a
"substantial risk of forfeiture" as defined in Section 83 of the Code.

2.22 "Restricted Stock Agreement" means a written agreement between
a Participant and the Corporation evidencing an award of Restricted Stock.

2.23 "Restricted Stock Award Date" means the date on which the
Committee awards Restricted Shares to the Participant.

2.24 "Restrictions" means the restrictions and conditions imposed
on Restricted Stock award to a Participant, as determined by the Committee,
which must be satisfied in order for the Restricted Stock award to vest, in
whole or in part, in the Participant.

2.25 "Shares, except as specifically provided in Section 6, means
shares of the voting common stock, par value $0.001 per share, of the
Corporation.

2.26 "Stock Appreciation Right" means a right to receive the spread
or difference between the Fair Market Value of Shares subject to an Option and
the Option exercise price, either in stock or in cash, or in a combination
thereof.

2.27 "Stock Appreciation Rights Agreement" means a written
agreement between a Participant and the Corporation evidencing an award of
Stock Appreciation Rights.

2.28 "Stock Option Agreement" means a written agreement between a
Participant and the Corporation evidencing an award of an Option.

2.29 "Subsidiary" means any domestic or foreign corporation or
entity of which the Corporation owns, directly or indirectly, at least 50% of
the total combined voting power of such corporation or other entity.

2.30 "Ten Percent Shareholder" means an Optionee who, at the time
an Incentive Stock Option is granted, owns or is deemed to own stock possessing
more than 10% of the total voting power of all classes of stock of the
Corporation or any Subsidiary. For purposes of determining whether an Optionee
is a Ten Percent Shareholder, the ownership attribution rules of Section 424(d)
of the Code (or its successor) shall apply.

2.31 "Voting Stock" means all capital stock of the Corporation
which by its terms is entitled under ordinary circumstances to vote in the
election of directors.

3
<PAGE> 4

3. Administration of the Plan.

3.1 Administrator of Plan. The Plan shall be administered by the
Board, or if so appointed by the Board, a committee of the Board composed of at
least two (2) directors. If no committee of the Board is appointed to
administer the Plan, the Board shall constitute the committee.

3.2 Authority of Committee. The Committee shall have full power
and authority to:

(i) designate the Participants to whom Options,
Restricted Stock, or Stock Appreciation Rights may be
awarded from time to time;

(ii) determine the type of Award to be granted to each
Participant under the Plan and the number of Shares
subject thereto;

(iii) determine the duration of the Restricted Period and
the Restrictions to be imposed with respect to each
Award;

(iv) interpret and construe the Plan and adopt such rules
and regulations as it shall deem necessary and
advisable to implement and administer the Plan;

(v) approve the form and terms and conditions of the
Restricted Stock Agreement, Stock Option Agreement,
or Stock Appreciation Rights Agreement, as the case
may be, between the Corporation and the Participant;
and

(vi) designate persons other than members of the Committee
to carry out its responsibilities, subject to such
limitations, restrictions and conditions as it may
prescribe, provided that the Committee may not
delegate its authority with respect to the granting
of Awards to persons subject to Sections 16(a) and
16(b) of the Exchange Act if such delegation would
cause a grant of an Award under the Plan not qualify
as an exempt transaction under Rule 16b-3 under the
Exchange Act or any successor rule of the Commission.

The foregoing determinations shall be made in accordance with the Committee's
best business judgment as to the best interests of the Corporation and its
stockholders and in accordance with the purposes of the Plan.

3.3 Determinations of Committee. A majority of the Committee
shall constitute a quorum at any meeting of the Committee, and all
determinations of the Committee shall be made by a majority of its members.
Any action which the Committee shall take through a written instrument signed
by all of its members shall be as effective as though it had been taken at a
meeting duly called and held. The Committee shall report all actions taken by
it to the Board.

4
<PAGE> 5

3.4 Delegation. The Committee may delegate such non-discretionary
administrative duties under the Plan to one or more agents as it shall deem
necessary and advisable.

3.5 Effect of Committee Determinations. No member of the
Committee or the Board shall be personally liable for any action or
determination made in good faith with respect to the Plan, any Award or any
settlement of any dispute between a Participant and the Corporation. Any
decision made or action taken by the Committee or the Board with respect to an
Award or the administration or interpretation of the Plan shall be conclusive
and binding upon all persons.

4. Awards Under The Plan.

Awards to a Participant under the Plan may be in the form of a
Non-Qualified Stock Option, an Incentive Stock Option, Restricted Stock, a
Stock Appreciation Right, or a combination thereof, at the discretion of the
Committee. If an Option is designated as an Incentive Stock Option, the terms
of such Option shall be in conformance with Section 422 of the Code.

5. Eligibility.

The Participants in the Plan shall be the officers, key employees, and
Consultants of the Corporation and its Subsidiaries designated by the
Committee. A Participant who has been granted an Award under the Plan may be
granted additional Awards under the Plan under such circumstances, and at such
times, as the Committee may determine. Incentive Stock Options may be granted
only to employees of the Corporation and its Subsidiaries.

6. Shares Subject to Plan.

Subject to adjustment as provided in Section 15, the aggregate number
of Shares which may be issued upon the exercise of Options or Stock
Appreciation Rights and the award of Restricted Stock shall not exceed five
million (5,000,000) Shares. Any portion of such Shares may be issued under
Incentive Stock Options pursuant to the Plan. Subject to adjustment as
provided in Section 15, the aggregate number of Shares which may be granted
pursuant to Options or Stock Appreciation Rights under this Plan to any one
Participant during any calendar year under this Plan shall be one million
(1,000,000) Shares. If all or any portion of any outstanding Award under the
Plan for any reason expires or is terminated, the Shares allocable to the
unexercised or forfeited portion of such Award may again be subject to an Award
under the Plan.

7. Options.

7.1 Terms of Options. Options granted under the Plan shall be
subject to the following terms and conditions:

5
<PAGE> 6

(a) Option Price. The option price per Share under each
Option granted by the Committee (the "Option Price") may not be less than 100%
(110% in the case of a Ten Percent Shareholder) of the Fair Market Value per
Share on the Option Grant Date. In no event shall the Option Price be less
than the par value of such Share on the Option Grant Date.

(b) Vesting of Options. Except as provided in this
Section 7.1 and Section 10.1, Options granted by the Committee shall vest in
accordance with the terms provided by the Committee in the Option Agreement.
The Committee may accelerate the vesting of any Option in its discretion.

(c) Exercise of Options. Each Option shall be
exercisable on the dates and for the number of Shares as shall be provided in
the related Stock Option Agreement, provided that (i) unless provided otherwise
in the Option Agreement, an Option shall not be exercisable earlier than six
months after the Option Grant Date, and (ii) in no event shall the Option
Exercise Period exceed ten years from the Option Grant Date (five years in the
case of an Incentive Stock Option granted to a Ten Percent Shareholder).

Options may be exercised (in full or in part) only by written notice
delivered to the Corporation at its principal executive office, accompanied by
payment of the Option Price for the Shares as to which such Option is
exercised. The Option Price of each Share shall be paid in full at the time of
exercise (i) in cash, (ii) with Shares owned by the Participant, (iii) by
delivery to the Corporation of (x) irrevocable instructions to deliver directly
to a broker the stock certificates representing the Shares for which the Option
is being exercised, and (y) irrevocable instructions to such broker to sell
such Shares and promptly deliver to the Corporation the portion of the proceeds
equal to the Option Price and any amount necessary to satisfy the Corporation's
obligation for withholding taxes, or (iv) any combination thereof. For
purposes of making payment in Shares, such Shares shall be valued at their Fair
Market Value on the date of exercise of the Option and shall have been held by
the Participant for at least six months.

(d) Termination of Employment or Service of Optionee.
The Committee shall have authority to determine the circumstances under which
an Option will vest upon termination of the employment or service of the
Optionee for any reason. Unless the Optionee terminates employment or service
by reason of death or Disability, in the case of any Non-Qualified Stock
Option, the Committee shall provide that vesting of the Option shall cease on
the date of termination of employment and the Option shall terminate on the
date which is three months after the date on which the Optionee terminates
employment or service. In the event an Optionee terminates employment or
service by reason of the Optionee's death or Disability, the Committee shall
provide that the Non-Qualified Stock Options shall vest on the date on which
the Optionee dies or incurs a Disability, and the Option shall terminate one
year after the date on which the Optionee terminates employment or service as a
result of death or Disability. In any event, each Non-Qualified Stock Option
shall terminate no later than ten years after the

6
<PAGE> 7

Option Grant Date. Unless otherwise determined by the Committee, in the case of
any Incentive Stock Option, the Committee shall provide that the Option shall
terminate on the date three months (one year, in the event the Optionee
terminates employment by reason of the Optionee's death or Disability) after
the date on which the Optionee terminates employment, or, if earlier, ten years
after the Option Grant Date (five years in the case of an Incentive Stock
Option granted to a Ten Percent Stockholder). Such provisions shall be
contained in the Option Agreement given to each Optionee.

(e) Rights as a Stockholder. An Optionee or a transferee
of an Option shall have no rights as a stockholder with respect to any Shares
covered by any Option until the date of the issuance of a stock certificate to
such person evidencing such Shares. No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property) or
distributions or other rights for which the record date is prior to the date
such stock certificate is issued, except as provided in Section 15.

(f) Investment Purpose. The Corporation shall not be
obligated to sell or issue any Shares pursuant to any Option unless the Shares
with respect to which the Option is being exercised are at that time registered
or exempt from registration under the Securities Act of 1933, as amended.

(g) Assumption of Options. The Corporation may issue or
assume any stock option in any transaction or transactions upon such terms and
conditions and, in the case of any option so assumed, with such modifications
or adjustments therein, as shall be determined by the Committee. Any such
option so issued or assumed shall be deemed to be an Option granted under this
Plan, notwithstanding that any provision of this Plan would not, except for
this Section 7, permit the grant of an option having the terms and conditions,
including the option price, of such option as so issued or assumed.

(h) Incentive Stock Options. In the case of an Incentive
Stock Option granted under the Plan, the aggregate Fair Market Value
(determined at the Option Grant Date) of the Shares with respect to which
Incentive Stock Options are exercisable for the first time by an Optionee
during any calendar year under all incentive stock option plans of the
Corporation and its Subsidiaries may not exceed $100,000.

(i) Forfeiture of Options for Misconduct. If the
President of the Corporation or his or her designee reasonably believes an
Optionee (other than the President of the Corporation) has committed an act of
misconduct described in this subparagraph (i) or the Chairman of the Committee
reasonably believes the President of the Corporation has committed an act of
misconduct described in this subparagraph (i), the President or Chairman, as
appropriate, may suspend the Optionee's rights to exercise any Option pending a
determination by the Committee. If the Committee determines an Optionee has
committed an act of embezzlement, fraud, dishonesty, nonpayment of any
obligation owed to the Corporation, breach of fiduciary duty or deliberate
disregard of Corporation policy resulting in loss, damage, or injury to the
Corporation, or if an

7
<PAGE> 8

Optionee makes any unauthorized disclosure of any trade secret or confidential
information, breaches any written agreement with the Corporation, engages in
any conduct constituting unfair competition, induces any customer to breach a
contract with the Corporation, or solicits or attempts to solicit any employee
of the Corporation to terminate employment with the Corporation, neither the
Optionee nor the Optionee's estate shall be entitled to exercise any Option
whatsoever. In making such determination, the Committee shall act fairly and
shall give the Optionee an opportunity to appear and present evidence on his or
her behalf at a hearing before the Committee.

(j) Transferability of Options. Section 11 to the
contrary notwithstanding, if the Committee so provides in the Option Agreement,
an Option that is not an Incentive Stock Option may be transferred by a
Optionee to the Optionee's children, grandchildren, spouse, one or more trusts
for the benefit of such family members or a partnership in which such family
members are the only partners; provided, however, that Optionee may not receive
any consideration for the transfer. The holder of an Option transferred
pursuant to this section shall be bound by the same terms and conditions that
governed the Option during the period that it was held by the Participant. In
the event of any such transfer, the Option and any SAR that relates to such
Option must be transferred to the same person or persons or entity or entities.

(k) Notice of Disposition of Shares. An Optionee shall
give written notice to the Corporation of the Optionee's intent to make any
disposition of the Shares acquired upon the exercise of an Incentive Stock
Option if such disposition occurs within two years of the Option Grant Date or
within one year of the date the Incentive Stock Option was exercised. If the
Corporation or Subsidiary is required to withhold federal, state or local taxes
as a result of such disposition, the Optionee shall be required to make
appropriate arrangements with the Corporation or Subsidiary, as the case may
be, for satisfaction of any federal, state or local taxes the Corporation or
Subsidiary is required to withhold as a condition precedent to the transfer of
the Shares by the Corporation's transfer agent. Any Shares issued to a
Participant upon exercise of an Incentive Stock Option shall bear a legend
reflecting this restriction.

8. Restricted Stock.

8.1 Terms of Restricted Stock Awards. Subject to and consistent
with the provisions of the Plan, with respect to each Award of Restricted Stock
to a Participant, the Committee shall determine:

(a) the terms and conditions of the Restricted Stock
Agreement between the Corporation and the Participant evidencing the Award;

(b) the Restricted Period for all or a portion of the
Award;

(c) the Restrictions applicable to the Award, including,
but not limited to, continuous employment with the Corporation or any of its
Subsidiaries for a specified

8
<PAGE> 9

term or the attainment of specific corporate, divisional or individual
performance standards or goals, which Restricted Period and Restrictions may
differ with respect to each Participant;

(d) whether the Participant shall receive the dividends
and other distributions paid with respect to an Award of Restricted Stock as
declared and paid to the holders of the Shares during the Restricted Period or
shall be withheld by the Corporation for the account of the Participant until
the Restricted Periods have expired or the Restrictions have been satisfied,
and whether interest shall be paid on such dividends and other distributions
withheld, and if so, the rate of interest to be paid, or whether such dividends
may be reinvested in Shares;

(e) the percentage of the Award which shall vest in the
Participant in the event of such Participant's death or Disability prior to the
expiration of the Restricted Period or the satisfaction of the Restrictions
applicable to an award of Restricted Stock; or

(f) notwithstanding the Restricted Period and the
Restrictions imposed on the Restricted Shares, as set forth in a Restricted
Stock Agreement, whether to shorten the Restricted Period or waive any
Restrictions, if the Committee concludes that it is in the best interests of
the Corporation to do so.

8.2 Delivery of Shares. Upon an Award of Restricted Stock to a
Participant, the stock certificate representing the Restricted Stock shall be
issued and transferred to and in the name of the Participant, whereupon the
Participant shall become a stockholder of the Corporation with respect to such
Restricted Stock and shall be entitled to vote the Shares. Such stock
certificate shall be held in custody by the Corporation, together with stock
powers executed by the Participant in favor of the Corporation, until the
Restricted Period expires and the Restrictions imposed on the Restricted Stock
are satisfied.

9. Stock Appreciation Rights.

9.1 Grants of Stock Appreciation Rights. Stock Appreciation
Rights ("SARs") may be granted in conjunction with all or a part of any Option
granted under the Plan, either at the time of the grant of such Option or at
any subsequent time prior to the expiration of such Option; provided, however,
that SARs shall not be offered or granted in connection with a prior Option
without the consent of the holder of such Option. SARs may not be exercised by
an Optionee who is a director or officer (within the meaning of Rule 16a-1(f)
under the Exchange Act) of the Corporation within six months after the SAR is
granted, except that this limitation shall not be applicable in the event of
the death or Disability of such Optionee occurring prior to the expiration of
such six-month period.

9.2 Terms of Stock Appreciation Rights. All SARs shall be subject
to the following terms and conditions:

9
<PAGE> 10

(a) SARs shall be exercisable only at such time and to
the extent that the Option to which they relate (the "Related Option") shall be
exercisable. SARs and the Related Option may be exercised concurrently only
when the Related Option is a Non-Qualified Stock Option.

(b) Upon exercise of a SAR, the Optionee shall be
entitled to the difference between the Fair Market Value of one Share and the
Option Price of one Share specified in the Related Option times the number of
Shares in respect of which the SARs shall have been exercised (the "Economic
Value"). An Optionee, upon the exercise of SARs, shall receive the Economic
Value thereof, and the Committee in its sole discretion shall determine the
form in which payment of such Economic Value will be made, whether in cash,
Shares or any combination thereof. For purposes of this Section 9.2(b), the
Fair Market Value of the Shares shall be determined as of the date of exercise
of the SAR.

(c) An SAR may be exercised without exercising the
Related Option, but the Related Option shall be canceled for all purposes under
the Plan to the extent of the SAR exercise. A Related Option may be exercised
without exercising the SAR, but the SAR shall be canceled for all purposes
under the Plan to the extent of the Related Option exercise.

(d) In addition to the conditions set forth above, SARs
issued in connection with Incentive Stock Options shall meet the following
conditions:

(i) Each SAR must expire not later than the expiration of
the Related Option.

(ii) The SAR shall be transferable only when the Related
Option is transferable and under the same conditions.

(iii) The SAR may be exercised only when the Fair Market
Value of the Shares subject to the Related Option
exceeds the exercise price of the Related Option.

10. Change of Control.

10.1 Effect of Change of Control. Upon the occurrence of an event
constituting a "Change of Control," as defined below:

(a) any and all outstanding Options and Stock
Appreciation Rights shall become immediately exercisable;

(b) the Restricted Period and Restrictions imposed on the
Restricted Stock shall lapse, and the Restricted Stock shall vest in the
Participant to the extent determined by the Committee; and

10
<PAGE> 11

(c) within ten business days after the occurrence of a
Change of Control, the certificates representing the Restricted Stock so
vested, without any restrictions or legend referring to the Plan thereon, shall
be delivered to the Participant, and any dividends and distributions paid with
respect to the Restricted Stock which were escrowed during the Restricted
Period and the earnings thereon shall be paid to the Participant.

10.2 Definition of Change of Control. A "Change of Control" shall
occur when:

(a) a "person" or "group" (which terms, when used in this
Section 10.2, shall have the meaning they have when used in Section 13(d) of
the Exchange Act) (other than the Corporation, any trustee or other fiduciary
holding securities under an employee benefit plan of the Corporation, or any
corporation, owned, directly or indirectly, by the shareholders of the
Corporation in substantially the same proportions as their ownership of Voting
Stock of the Corporation) is or becomes (other than solely by reason of a
repurchase of Voting Stock by the Corporation), the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50%
or more of the total outstanding Voting Stock of the Corporation; or

(b) the Corporation consolidates with or merges with or
into another corporation or partnership or conveys, transfers or leases, in any
transaction or series of transactions, all or substantially all of its assets
to any corporation or partnership, or any corporation or partnership
consolidates with or merges with or into the Corporation, in any event pursuant
to a transaction in which the outstanding Voting Stock of the Corporation is
reclassified or changed into or exchanged for cash, securities or other
property, other than any such transaction where (I) the outstanding Voting
Stock of the Corporation is changed into or exchanged for voting stock of the
surviving corporation and (II) no "person" or "group" who did not beneficially
own 50% or more of the total outstanding Voting Stock of the Corporation
immediately prior to such transaction beneficially owns immediately after such
transaction 50% or more of the total outstanding voting stock of the surviving
corporation, or the Corporation is liquidated or dissolved or adopts a plan of
liquidation or dissolution; or

(c) during any consecutive two-year period, individuals
who at the beginning of such period constituted the Board (together with any
new directors whose election by the Board or whose nomination for election by
the stockholders of the Corporation was approved by a vote of 66-2/3% of the
directors then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board then in
office.

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<PAGE> 12

11. Non-Transferability of Awards.

Except as may be provided by the Committee in accordance with Section
7.1(j), Awards granted under the Plan shall not be transferable by the
Participant during the Participant's lifetime and may not be assigned,
exchanged, pledged, transferred or otherwise encumbered or disposed of except
pursuant to a qualified domestic relations order, by will or by the applicable
laws of descent and distribution. Except as may be provided by the Committee
in accordance with Section 7.1(j), Options and Stock Appreciation Rights shall
be exercisable during the Participant's lifetime only by the Participant or by
the Participant's guardian or legal representative.

12. Withholding of Taxes.

Federal, state or local law may require the withholding of taxes
applicable to income resulting from an Award. A Participant shall be required
to make appropriate arrangements with the Corporation or Subsidiary, as the
case may be, for satisfaction of any federal, state or local taxes the
Corporation or Subsidiary is required to withhold. The Committee may, in its
discretion and subject to such rules as it may adopt, permit the Participant to
pay all or a portion of the federal, state or local withholding taxes arising
in connection with an Award by electing to (i) have the Corporation withhold
Shares, (ii) tender back Shares received in connection with such Award or (iii)
deliver other previously owned Shares, under each election such Shares having a
Fair Market Value on the date specified in the rules adopted by the Committee
equal to the amount to be withheld. The Corporation shall be under no
obligation to issue Shares to the Participant unless the Participant has made
the necessary arrangements for payment of the applicable withholding taxes.

13. No Right to Continued Employment.

Neither the establishment of the Plan nor the granting of an Award
shall confer upon any Participant any right to continue in the employ of the
Corporation or any of its Subsidiaries or interfere in any way with the right
of the Corporation or any of its Subsidiaries to terminate such employment at
any time. No Award shall be deemed to be salary or compensation for the
purpose of computing benefits under any employee benefit, pension or retirement
plans of the Corporation or any of its Subsidiaries, unless the Committee shall
determine otherwise.

14. Amendment.

14.1 Amendment and Termination of Awards. The terms and conditions
applicable to any Award may thereafter be amended or modified by mutual
agreement between the Corporation and the Participant or such other persons as
may then have an interest therein. Also, by mutual agreement between the
Corporation and a Participant in the Plan or under any other present or future
plan of the Corporation, Options or other Awards may be granted to a
Participant in substitution and exchange

12
<PAGE> 13

for, and in cancellation of, any Awards previously granted to the Participant
under the Plan, or under any other future plan of the Corporation.

14.2 Amendment and Termination of Plan. The Board may amend the
Plan from time to time, except that, without approval of the stockholders of
the Corporation, no such revision or amendment shall change the number of
Shares subject to the Plan, change the designation of the classes of employees
or Consultants eligible to receive Options, decrease the price at which
Incentive Stock Options may be granted or remove the administration of the Plan
from the Committee. Unless sooner terminated as provided herein, the Plan
shall terminate on the tenth anniversary of its effective date. The Board may
terminate this Plan at any time it deems advisable, except that Options,
Restricted Stock and Stock Appreciation Rights granted under the Plan before
its termination shall continue to be administered under the Plan until such
Options and Stock Appreciation Rights are canceled, terminated, or are
exercised and the Restricted Stock is canceled, vested or is forfeited.

15. Changes in Capitalization.

Subject to any required action by the stockholders, the number of
Shares covered by each outstanding Award and the exercise price per each such
Share subject to an Option or Stock Appreciation Right shall be proportionately
adjusted for any increase or decrease in the number of issued Shares of the
Corporation resulting from a subdivision or consolidation of Shares or the
payment of a stock dividend (but only on the Shares) or any other increase or
decrease in the number of such Shares effected without receipt of consideration
by the Corporation.

If the Corporation merges or is consolidated with another corporation,
whether or not the Corporation is a surviving corporation, or if the
Corporation is liquidated or sells or otherwise disposes of substantially all
of its assets while unexercised Options remain outstanding under the Plan, (i)
after the effective date of the merger, consolidation, liquidation, sale or
other disposition, as the case may be, each holder of an outstanding Option
shall be entitled, upon exercise of that Option, to receive, in lieu of Shares,
the number and class or classes of shares of stock or other securities or
property to which the holder would have been entitled if, immediately prior to
the merger, consolidation, liquidation, sale or other disposition, the holder
had been the holder of record of a number of Shares equal to the number of
Shares as to which that Option may be exercised; or (ii) if Options have not
already become exercisable, the Committee may waive any limitations set forth
in or imposed pursuant to the Plan so that all Options, from and after a date
prior to the effective date of that merger, consolidation, liquidation, sale or
other disposition, as the case may be, specified by the Committee, shall be
exercisable in full.

If the Corporation is merged into or consolidated with another
corporation under circumstances where the Corporation is not the surviving
corporation (other than circumstances involving a mere change in the identity,
form or place of organization of

13
<PAGE> 14

the Corporation), or if the Corporation is liquidated or dissolved, or sells or
otherwise disposes of substantially all of its assets to another entity while
unexercised Options remain outstanding under the Plan, unless provisions are
made in connection with the transaction for the continuance of the Plan and/or
the assumption or substitution of Options with new options covering the stock
of the successor corporation, or the parent or subsidiary thereof, with
appropriate adjustments as to the number and kind of shares and exercise
prices, then all outstanding Options shall be canceled as of the effective date
of such merger, consolidation, liquidation, dissolution, or sale.

In the event of a change of all of the Corporation's authorized Shares
with par value into the same number of Shares with a different par value or
without par value, the Shares resulting from any such change shall be deemed to
be the Shares within the meaning of the Plan.

To the extent that the foregoing adjustments relate to stock or
securities of the Corporation, such adjustments shall be made by the Committee,
whose determination in that respect shall be final, binding and conclusive;
provided, that each Option which, upon grant of the Option, is specifically
designated as an Incentive Stock Option shall not be adjusted in a manner that
causes the Option to fail to continue to qualify as an Incentive Stock Option.

Except as hereinbefore expressly provided in this Section 15, the
Participant shall have no rights (i) by reason of any subdivision or
consolidation of shares of stock of any class, the payment of any stock
dividend or any other increase or decrease in the number of shares of stock of
any class, or (ii) by reason of any dissolution, liquidation, merger, or
consolidation, spin-off of assets or stock of another corporation, or any issue
by the Corporation of shares of stock of any class, nor shall any of these
actions affect, or cause an adjustment to be made with respect to, the number
or price of Shares subject to any Option.

The grant of any Award pursuant to the Plan shall not affect in any way
the right or power of the Corporation (i) to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure, (ii) to merge or consolidate, (iii) to dissolve, liquidate, or sell
or transfer all or any part of its business or assets or (iv) to issue any
bonds, debentures, preferred or other preference stock ahead of or affecting
the Shares. If any action described in the preceding sentence results in a
fractional Share for any Participant under any Award hereunder, such fraction
shall be completely disregarded and the Participant shall only be entitled to
the whole number of Shares resulting from such adjustment.

16. Governing Law.

The Plan and each Stock Option Agreement, Restricted Stock Agreement
and Stock Appreciation Rights Agreement shall be governed by, and construed in
accordance with, the laws of the State of Maryland.

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<PAGE> 15

17. Effective Date.

The Plan shall be effective on August ____, 1996, subject to the
approval of the Plan within one year of such date by a majority of the voting
shares represented and entitled to vote.

SNYDER COMMUNICATIONS, INC.

BY:
-------------------------------
DANIEL M. SNYDER
PRESIDENT AND CHIEF EXECUTIVE OFFICER

<PAGE> 1

EXHIBIT 10.5

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is entered into
this ____ day of August, 1996 by and among SNYDER COMMUNICATIONS, INC., a
Delaware corporation (the "Company"), DANIEL M. SNYDER, MICHELE D. SNYDER, U.S.
NEWS COLLEGE MARKETING L.P., a Delaware limited partnership ("USN"), and each
of the 1995 INVESTORS (as hereinafter defined) (Mr. Snyder, Ms. Snyder, USN,
and the 1995 Investors are collectively referred to herein as the "Original
Holders").

WHEREAS, the Company was formed to become the holding company for
Snyder Communications, L.P., a Delaware limited partnership (the
"Partnership"), and to consummate an initial public offering (the "Offering")
of common stock, par value $.001 per share, of the Company (the "Common
Stock");

WHEREAS, the Partnership was established in 1988 as a limited
partnership in which Snyder Marketing Services, Inc. (formerly known as Snyder
Communications Inc.), a Delaware corporation ("SMS"), was the corporate general
partner and USN, an entity owned by Mortimer B. Zuckerman and Fred Drasner, was
the sole limited partner, and in May 1995, the 1995 Investors purchased an
aggregate 3% limited partnership interest in the Partnership and were admitted
as additional limited partners of the Partnership;

WHEREAS, on or prior to the effectiveness of the Offering, the Company
will consummate a reorganization (the "Reorganization") pursuant to which,
among other things, _____ shares of Common Stock will be issued in exchange for
each percentage of limited partnership interest in the Partnership held by each
limited partner and _____ shares of Common Stock will be issued in exchange for
each share of SMS common stock held by each SMS stockholder, resulting in an
aggregate of _____ shares of Common Stock outstanding after consummation of the
Reorganization and completion of the Offering;

WHEREAS, upon consummation of the Reorganization, the Company will own
all of the limited partnership interests of the Partnership and all of the
issued and outstanding stock of SMS, the corporate general partner of the
Partnership; and

WHEREAS, the Company has agreed to provide certain registration rights
to each of the Holders, upon the terms and subject to the conditions set forth
herein, upon the completion of the Offering;

NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereby agree as follows:
<PAGE> 2
1. CERTAIN DEFINITIONS. As used in this Agreement, the following
terms shall have the following meanings:

"Demand Registration Request" shall have the meaning set forth in
Section 3.1 hereof.

"Demand Registration Rights" shall mean the rights of the Demand
Rights Holders to cause the Company to file a registration statement with
respect to the Registrable Securities held by the Demand Rights Holders in
accordance with the provisions of Section 3 hereof.

"Demand Rights Holder(s)" shall mean Daniel M. Snyder and the
Initiating 1995 Investors as a group.

"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

"Filing Notice" shall have the meaning set forth in Section 2.1
hereof.

"Holder" or "Holders" shall mean the Original Holders and any
person or entity to which the Registrable Securities are transferred and who
are entitled to exercise registration rights with respect to such Registrable
Securities pursuant to the terms of this Agreement, but in each case only so
long as such person or entity continues to hold any Registrable Securities.

"Independent Directors" shall mean the outside members of the
Board of Directors of the Company who are not employed by the Company.

"Initiating Demand Rights Holder(s)" shall mean the Demand
Rights Holder who initiates a Demand Registration Request pursuant to Section 3
of this Agreement.

"Initiating 1995 Investors" shall mean the 1995 Investors who
initiate a Demand Registration Right pursuant to this Agreement and who hold,
at such time, at least fifty percent (50%) in the aggregate of the then
outstanding Registrable Securities held by the 1995 Investors as a group.

"1995 Investors" shall mean, collectively, the following persons
and entities who were admitted as limited partners of the Partnership in May
1995: Allen & Company Incorporated, a New York corporation ("Allen &
Company"); Susan K. Allen; Susan Strauss Breen; Barry Diller; Paul A. Gould;
HAGC Partners, a __________ partnership; Dan W. Lufkin; Robert Marston; Robert
A. Strauss; Robert S. Strauss; and Robert S. Strauss, Trustee of the Helen J.
Strauss Trust. Any such investor is referred to herein as a "1995 Investor."

"Offering" shall have the meaning given such term in the recitals
to this Agreement.

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<PAGE> 3
"Original Holders" shall have the meaning given such term in the
preamble to this Agreement.

"Piggyback Registration Rights" shall mean the rights of the
Holders to have Registrable Securities included in a registration statement
filed by the Company with respect to the offering and sale of shares of Common
Stock, in accordance with the provisions of Section 2 hereof.

"Registrable Securities" shall mean the aggregate number of
shares of Common Stock issued by the Company to the Original Holders in the
Reorganization, and shall include (i) any and all equity securities of the
Company into which the Registrable Securities may be converted, (ii) any and
all equity securities which are distributed by the Company to Holders of
Registrable Securities by reason of their ownership of Registrable Securities,
and (iii) any and all equity securities received by Holders of Registrable
Securities pursuant to a recapitalization, reclassification, stock split,
merger, consolidation or other business combination or other similar
transaction involving the Company; provided, however, that such shares of
Common Stock shall cease to be treated as Registrable Securities if and when
(w) a registration statement filed pursuant to the Securities Act covering such
shares of Common Stock has been declared effective and they have been disposed
of pursuant to such effective registration statement, (x) such shares of Common
Stock are sold to the public pursuant to Rule 144 or 144A under the Securities
Act (or any similar provision then in force), (y) such shares are eligible to
be sold pursuant to Rule 144(k) under the Securities Act without limitation as
to the amount of securities to be sold or the manner of sale, or (z) such
shares are available for sale in the opinion of counsel to the Company in a
single transaction exempt from the registration and prospectus delivery
requirements of the Securities Act so that all transfer restrictions and
restrictive legends with respect thereto are or may be removed upon the
consummation of such sale.

"Registration Period" shall mean the period that commences on the
date that is 12 months following the date on which the Offering closes (unless
the Representatives agree in writing that the Registration Period shall
commence on an earlier date, in which event the Registration Period shall
commence on such earlier date) and ending on the date and at the time at which
all of the Holders cease to own any Registrable Securities.

"Representatives" shall mean Merrill Lynch & Co., Donaldson,
Lufkin & Jenrette Securities Corporation, Allen & Company and Montgomery
Securities.

"SEC" shall mean the United States Securities and Exchange
Commission.

"Securities Act" shall mean the Securities Act of 1933, as
amended.

"Transfer" shall mean any sale, offer to sell, pledge, sale,
transfer, contract of sale, option to acquire or other direct or indirect
disposition of any Registrable Securities.

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<PAGE> 4
2. PIGGYBACK REGISTRATION RIGHTS.

2.1 (a) If, at any time during the Registration
Period, the Company proposes to file a registration statement to register any
of its Common Stock under the Securities Act (other than a registration on Form
S-8, Form S-4 or any subsequent similar form), the Company shall promptly give
written notice (a "Filing Notice") to each Holder of the proposed filing. In
such event, each Holder may request, by written notice to the Company (which
notice shall specify the aggregate number of shares of Registrable Securities
proposed to be included by such Holder in such registration statement) within
20 days after receipt of the Filing Notice, that the Company include the
Registrable Securities of such Holder in the registration statement, and the
Company will use its best efforts to cause the Registrable Securities
designated by the Holders to be registered under the Securities Act.

(b) If the registration for which the Company
gives a Filing Notice pursuant to this Section 2.1 is for a registered public
offering involving an underwriting, the Company shall so advise the Holders as
part of the Filing Notice. In such event, the right of any Holder to include
Registrable Securities in such registration shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent herein provided. All
Holders proposing to distribute their securities through such underwriting
shall (together with the Company and any other securityholders distributing
their securities through such underwriting) enter into an underwriting
agreement in customary form with the managing underwriter selected for such
underwriting by the Company. Notwithstanding any other provision of this
Section 2.1, if the managing underwriter determines that marketing factors
require a limitation of the number of securities to be underwritten, the
managing underwriter may limit the Registrable Securities to be included in
such registration. The Company shall so advise all Holders participating that
the number of securities of Registrable Securities that may be included in the
registration and underwriting shall be reduced pro rata among such Holders
(based on the number of Registrable Securities requested to be included in the
registration), provided, however, that the percentage of the reduction of such
Registrable Securities shall be no greater than the percentage reduction of
securities of other selling securityholders, as such percentage reductions
shall be determined in the good faith judgment of the Company based on the
advice of the managing underwriter of the offering. If any Holder of
Registrable Securities or other securityholder disapproves of the terms of any
such underwriting, he, she or it may elect to withdraw therefrom by written
notice to the Company and the managing underwriter. Any securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration, and
shall not be transferred in a public distribution for a period beginning 30
days prior to and terminating 180 days after the effective date of the
registration statement relating thereto, or such other period of time as the
managing underwriters of the offering may require.

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<PAGE> 5
2.2 The rights of the Holders under this Section 2 are
solely piggyback in nature, and nothing in this Section 2 shall prevent the
Company from changing a decision to file a registration statement or from
withdrawing any such registration statement before it has become effective.

2.3 Except to the extent provided herein, the Holders
shall not be subject to any limitation on the number of times that they may
exercise the Piggyback Registration Rights granted pursuant to the provisions
of this Section 2 during the Registration Period.

3. DEMAND REGISTRATION RIGHTS.

3.1 In addition to the rights granted pursuant to Section
2 of this Agreement, each of the Demand Rights Holders shall have the right,
during the Registration Period, to request in writing that the Company prepare
and promptly file a registration statement, as may be required under the
Securities Act, in connection with the public offering, on a time-to-time basis
or otherwise, of all or a portion of the Registrable Securities held by such
Demand Rights Holder (each, a "Demand Registration Request")(provided that the
estimated aggregate offering price of all such Registrable Securities actually
included in the Demand Registration equals $5,000,000 or more); provided,
however, that if the Initiating 1995 Investors initiate a Demand Registration
Request, such Initiating 1995 Investors shall request the registration of at
least 50% of the Registrable Securities held by the 1995 Investors as a group
at such time. In case the Company shall receive from any Demand Rights Holder
a written request that the Company effect a registration under the Act pursuant
to this Section 3.1, the Company will promptly give a Filing Notice of the
proposed registration to all other Holders of Registrable Securities, which
Holders will have 20 days from the date of receipt of the notice to elect to
include the Registrable Securities in such offering. In connection therewith,
the Company shall be obligated to prepare and file such registration statement
on such form as the Company shall reasonably determine as soon as practicable
(but in no event more than 90 days after the receipt of any such initial
notice) and shall be further obligated to use its best efforts, including the
filing of any amendments or supplements thereto, to have any such registration
statement declared effective under the Act and the rules and regulations
promulgated thereunder as soon as practicable after the filing date thereof.
The Company shall also use its best efforts to keep any such registration
statement, and the accompanying prospectus, effective and current under the
Securities Act at its expense for a period of not less than six months (or such
shorter period as may be required for all of the securities covered by the
Registration Statement to be sold hereunder). The Company shall use its best
efforts to effect any such registration on Form S-3 or any comparable or
successor form or forms, if available.

The Company may defer the filing of a registration statement under
this Section 3.1 if the Company shall furnish to the Initiating Demand Rights
Holder(s) a certificate signed by the President and Chief Executive Officer
stating that in the good faith judgment of the Board of Directors of the
Company it would be detrimental to the Company for any reason for a
registration statement to be filed in the near future, in which case the
Company's obligation to use its best efforts to register, qualify or comply
under this Section 3.1 shall be deferred for a period not to exceed 120 days
from the date of receipt of the written request from the Initiating

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<PAGE> 6
Demand Rights Holder(s). If the Company shall so postpone the filing of a
registration statement, the Holders shall have the right to withdraw the Demand
Registration Request by giving written notice to the Company within 30 days
after receipt of the notice of postponement (and, in the event of such
withdrawal, such Demand Registration Request shall not be counted for purposes
of the Demand Registration Request to which the Holders are entitled pursuant
to Section 3 hereof).

In the event that a registration pursuant to this Section 3.1 is for a
registered public offering involving an underwriting, the Company shall so
advise the Holders of the Registrable Securities as part of the Filing Notice
given pursuant to this section. In such event, the right of any Holder to
registration pursuant to this Section 3.1 shall be conditioned upon such
Holder's participation in the underwriting arrangements required by this
Section 3.1, and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent requested shall be limited as provided herein.

The Company shall, together with all Holders of Registrable Securities
proposing to distribute his, her or its securities through such underwriting,
enter into an underwriting agreement in customary form with the managing
underwriter(s) selected for such underwriting. Notwithstanding any other
provision of this Section 3.1, if the managing underwriter(s) advises the
Company in writing that marketing factors require a limitation of the number of
securities to be underwritten, then the Company shall so advise all Holders
participating that the number of securities that may be included in the
registration and underwriting shall be allocated first, to the Initiating
Demand Rights Holder(s), second, to the Company (if the Company is distributing
securities in such underwriting) and third, to all other Holders who elect to
participate in such offering, including Holders of Piggyback Registration
Rights who exercise those rights, pro rata among such Holders (based upon the
number of Registrable Securities requested to be included in the registration).
If any Holder disapproves of the terms of the underwriting, such person may
elect to withdraw therefrom by written notice to the Company, the managing
underwriter and the Initiating Demand Rights Holder(s). The Registrable
Securities so withdrawn shall be withdrawn from registration, and such
Registrable Securities shall not be transferred in a public distribution for a
period beginning 30 days prior to and terminating 180 days after the effective
date of the registration, or such other period of time as the managing
underwriters of the offering may require.

The Company shall not be required to file any registration statement
pursuant to this Agreement in connection with a Demand Registration Request
made less than six months after the effective date of any registration
statement filed by the Company (other than registrations statements filed on
Form S-4, Form S-8, or any successor forms thereto).

3.2 The 1995 Investors' Demand Registration Rights are
exercisable pursuant to the terms of this Agreement during the Registration
Period. The Company shall not be obligated to effect, or to take any action to
effect, any such

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<PAGE> 7
registration pursuant to this Section 3 on behalf of the 1995 Investors after
the Company has effected one such registration pursuant to this Section 3 with
respect to which the Initiating 1995 Investors were the Initiating Demand
Rights Holders, and such registration has been declared or ordered effective
and remained effective for the period required herein. The Company shall not
be obligated to effect, or to take any action to effect, any such registration
pursuant to this Section 3 on behalf of Danile M. Snyder after the Company has
effected five such registration pursuant to this Section 3 with respect to
which the Mr. Snyder was the Initiating Demand Rights Holder, and such
registration has been declared or ordered effective and remained effective for
the period required herein. The Company shall only be required to file one
registration statement (as distinguished from supplements or pre-effective or
post-effective amendments thereto) in response to any single exercise (of the
six available exercises) by the Initiating Demand Rights Holders of a Demand
Registration Right pursuant to the provisions of this Section 3.

3.3 In the event that preparation of a registration
statement is commenced by the Company in response to the exercise by an
Initiating Demand Rights Holders of a Demand Registration Right, but such
registration statement is not filed with or declared effective by the SEC for
any reason, such Initiating Demand Rights Holders shall not be deemed to have
exercised a Demand Registration Right pursuant to this Section 3, provided,
however, that if such registration statement is not filed after the
commencement of preparation thereof at the request of the Initiating Demand
Rights Holders, then, at the election of such Holder either (i) the Initiating
Demand Rights Holders who filed such Demand Registration Request shall be
required to bear all fees, expenses and costs incurred in connection with the
preparation of the registration statement, or (ii) the Initiating Demand Rights
Holders shall be deemed to have exercised the Demand Registration Right
pursuant to this Section 3.

3.4 In the event that any registration statement filed
by the Company with the SEC pursuant to the provisions of this Section 3 is
withdrawn prior to the completion of the sale or other disposition of the
Registrable Securities included thereunder, then the following provisions,
whichever applicable, shall govern:

(a) if such withdrawal is effected at the request
of the Company for any reason other than the failure of one or more Holders to
comply with their obligations hereunder with respect to such registration, then
the filing thereof by the Company shall be excluded in determining whether the
Demand Rights Holders have exercised their Demand Registration Rights hereunder
with respect to the filing of such registration statement; and

(b) if such withdrawal is effected at the request
of the Initiating Demand Rights Holders, then the filing thereof by the Company
shall be deemed an exercise of a Demand Registration Right by such Initiating
Demand Rights Holders with respect to the filing of such registration
statement.

-7-
<PAGE> 8
3.5 Whenever a decision or election is required to be
made hereunder by the Initiating Demand Rights Holders or the Holders, such
decision or election shall be made by the vote of Holders holding not less than
a majority of the Registrable Securities owned by such Initiating Demand Rights
Holders or Holders, as the case may be.

4. CERTAIN PROVISIONS OF GENERAL APPLICABILITY.

4.1 Any registration statement referred to in Sections 2
or 3 hereof shall be prepared and processed in accordance with the following
terms and conditions:

(a) The Holders of Registrable Securities
participating in any offering pursuant to Sections 2 or 3 of this Agreement
(the "Participating Holders"), will cooperate in furnishing promptly to the
Company in writing any information requested by the Company in connection with
the preparation, filing and processing of such registration statement.

(b) To the extent requested by the Company in the
event of a non-underwritten offering or an underwriter of securities included
in the registration statement and offered by the Company, the Holders of
Registrable Securities will defer the sale or distribution of other securities
of the Company (other than Registrable Securities included in such registration
statement) for a period commencing thirty (30) days prior and terminating
one-hundred and eighty (180) days after the effective date of the registration
statement, provided, however, that (i) in the case of a registration pursuant
to Section 3, all securityholders of the Company who also have securities
included in the registration statement and who own other securities in amounts
equal to or in excess of that owned by such deferring holders will also defer
their sales for a similar period, and (ii) in the case of a registration
pursuant to Section 2 the Company shall use its best efforts to obtain the
agreement of all securityholders of the Company who also have securities
included in the registration statement and who own other securities in amounts
equal to or in excess of that owned by such deferring holders to also defer
their sales for a similar period.

(c) The Company will furnish to the Participating
Holders such number of prospectuses, registration statements, or other
documents incident to such registration as may from time to time be reasonably
requested, and use its best efforts to cause the securities to be qualified
under the blue-sky laws of those states reasonably requested by the
Participating Holders; provided, however, that the Company shall not be
required to register the securities in any states which require it to qualify
to do business in such states or subject itself to general service of process.
All information that is not publicly available that is included in
documentation provided to any Participating Holder, or to any underwriter,
attorney or agent of any Participating Holder, shall be kept strictly
confidential by such Holder, and by any underwriter or attorney or agent of
such Holder, until such information becomes publicly known through no breach of
this provision by the Participating Holder or his, her or its agents.

-8-
<PAGE> 9
4.2 (a) The Company will indemnify each Participating
Holder (and any officer, director or controlling person of the Participating
Holder) and any underwriters acting on behalf of the Participating Holder
against all claims, losses, expenses, damages and liabilities (or actions in
respect thereof) to which they may become subject under the Securities Act or
otherwise, arising out of or based upon any untrue or alleged untrue statement
of any material facts contained in any registration statement filed pursuant
hereto, or any document relating thereto, including all amendments and
supplements, or arising out of or based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein contained not misleading, and will reimburse the
Participating Holder (or such other aforementioned parties) or such
underwriters for any legal and all other expenses reasonably incurred in
accordance with investigating or defending any such claim, loss, damage,
liability or action; provided, however, that the Company will not be liable
where the untrue or alleged untrue statement or omission or alleged omission is
based upon information furnished in writing to the Company by the Participating
Holder or any underwriter expressly for use therein, or as a result of the
Participating Holder's or any such underwriter's failure to furnish to the
Company information duly requested in writing by the Company or counsel for the
Company specifically for use therein. This indemnity agreement shall be in
addition to any other liability the Company may have. The indemnity agreement
of the Company contained in this Section 4.2 shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
indemnified party and shall survive the delivery of and payment for the
Registrable Securities.

(b) Each Participating Holder will indemnify the
Company (and any officer, director or controlling person of the Company) and
any underwriters acting on behalf of the Company against all claims, losses,
expenses, damages and liabilities (or actions in respect thereof) to which they
may become subject under the Securities Act or otherwise, arising out of or
based upon any untrue or alleged untrue statement of any material facts
contained in any registration statement filed pursuant hereto, or any document
relating thereto, including all amendments, and supplements, or arising out of
or based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
contained not misleading, and will reimburse the Company (or such other
aforementioned parties) or such underwriters for any legal and other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability, or action; provided, however, that the
Participating Holder will be liable as aforesaid only to the extent that such
untrue or alleged untrue statement or omission or alleged omission is based
upon information furnished in writing to the Company by the Participating
Holder or any underwriter obtained by the Participating Holder expressly for
use therein, or as a result of its or such underwriter's failure to furnish the
Company with information duly requested in writing by the Company or counsel
for the Company specifically for use therein. This indemnity shall be in
addition to any other liability the Participating Holder may have. This
indemnity agreement contained in this Section 4.2 shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
any indemnified party and shall survive the delivery of and payment for the
Registrable Securities.

-9-
<PAGE> 10
(c) Promptly after receipt by an indemnified party
under Sections 4.2(a) or (b) of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against the
indemnifying party, promptly notify the indemnifying party of the commencement
thereof, but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under Sections 4.2(a) or (b) except to the extent the indemnifying party may be
prejudiced as a proximate result of the failure of the indemnified party to
provide such prompt notice. In case any such action is brought against any
indemnified party, the indemnifying party will be entitled to participate in,
and, to the extent that it may wish jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party of its election so to assume the defense thereof, the indemnifying party
will not be liable to such indemnified party under this Section 5.2 for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof, other than reasonable costs of
investigation or out-of-pocket expenses or losses or costs incurred in
collaborating in the defense. If such defense is not assumed by the
indemnifying party, the indemnifying party will not be subject to any liability
for any settlement made without its consent (which consent will not be
unreasonably withheld or delayed). An indemnifying party who elects not to
assume the defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim.

(d) If the indemnification provided for in this
Section 4.2 from the indemnifying party is applicable in accordance with its
terms but for any reason is held to be unavailable to an indemnified party
hereunder in respect of any claims, losses, damages and expenses referred to
herein, then the indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such claims, losses, damages and expenses in such proportion as
is appropriate to reflect the relative faults of the indemnifying party and
indemnified party in connection with the actions which resulted in such claims,
losses, damages and expenses, as well as any other relevant equitable
considerations. The relative faults of such indemnifying party and indemnified
party shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
indemnified party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the claims, losses, damages and expenses
referred to above shall be deemed to include, subject to the limitations set
forth elsewhere in this Section 4.2, any legal or other expenses reasonably
incurred by such party in connection with any investigation or proceeding.

The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 4.2 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person.

-10-
<PAGE> 11
4.3 Except as set forth in Sections 3.3 and 4.4, the
Company shall bear all costs and expenses incident to any registration pursuant
to this Agreement, including, without limitation, exchange listing fees and
expenses, legal fees of Company counsel (including blue sky counsel), printing
costs and any accounting or auditing costs.

4.4 The Participating Holders shall pay any and all
underwriters' discounts or commissions, brokerage fees and transfer taxes
incident to the sale of any securities sold by such Participating Holders
pursuant to this Agreement, the fees and expenses of any separate attorneys or
accountants retained by them, and shall pay any fees and expenses that may be
required to be paid by selling securityholders pursuant to applicable law and
regulation.

4.5 The Original Holders of the Registrable Securities
may Transfer the rights granted to each of them pursuant to this Agreement upon
a Transfer of such Registrable Securities to a transferee; provided, however,
that, as a condition to the right of such Transferee to exercise the rights
granted pursuant to this Agreement: (i) the Company is given written notice by
the Original Holder of the Transfer stating the name and address of the
transferee and indicating the general nature of the Transfer, including the
number of shares of Registrable Securities transferred, and (ii) any transferee
to whom Registrable Securities are transferred shall deliver to the Company a
written instrument by which such transferee agrees to be bound by the
obligations imposed upon holders under this Agreement, to the same extent as if
such transferee were a signatory hereto. Without limiting the generality of
the foregoing, the rights granted to Holders hereunder shall be transferable to
and exercisable by (y) any pledgee of Registrable Securities, and (z) any
person who acquires beneficial ownership of Registrable Securities in
connection with and upon a default with respect to a pledge, grant or
encumbrance of Registrable Securities, provided that the conditions set forth
in subsection (i) and (ii) above have been complied with. Mr. Daniel M.
Snyder's right to transfer his Demand Registration Rights in connection with an
agreement or arrangement relating to the Transfer (including a pledge) of the
Registrable Securities is expressly acknowledged. A transferee to whom rights
are transferred pursuant to this Section 4.5 may not again transfer such rights
to any other person or entity.

4.6 The Company will promptly notify each Participating
Holder of the occurrence of any event which renders any prospectus and/or
registration statement then being used to market and sell any Registrable
Securities to prospective purchasers misleading because such prospectus
contains an untrue statement of a material fact or omits to state a material
fact necessary to make the statements made, in light of the circumstances in
which they were made, not misleading, each Participating Holder will promptly
stop using any such prospectus and/or registration statement to market and sell
the Registrable Securities, and the Company will use its best efforts to
promptly amend the prospectus and registration statement so that it does not
contain any material misstatements or omissions and will deliver copies of such
amendments to each Participating Holder.

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<PAGE> 12
5. CONDITIONS TO COMPANY'S OBLIGATIONS. The obligation of the
Company to cause the Registrable Securities owned by the Holders to be
registered under the Securities Act pursuant to the terms of this Agreement is
subject to each of the following limitations, conditions and qualifications:

(a) The Company shall not be required to fulfill any
registration obligations under this Agreement, if the Company provides the
Holders with an opinion of counsel reasonably acceptable to such Holders
stating that the Holders are free to sell in the manner proposed by them the
Registrable Securities that they desired to register without registering such
Registrable Securities or such Registrable Securities can be sold under Rule
144 of the Securities Act or otherwise without registration in the open market
in compliance with the Securities Act without regard to volume restrictions.

(b) The Company shall not be obligated to file any
registration statement pursuant to this Agreement at any time if the Company
would be required to include financial statements audited as of any date other
than the end of its fiscal year, unless the Participating Holder(s) agree to
pay the cost of any such additional audit.

6. EXCHANGE LISTING. In the event any Registrable Securities are
included in a registration statement under Section 2 or 3 hereof, the Company
will exercise reasonable efforts to cause all such Registrable Securities to be
listed on any exchange(s) or quoted on any automated quotation system on which
the Common Stock is then listed or traded.

7. RULE 144. The Company covenants to each Holder that it shall use
its best efforts to file all reports required to be filed by it under the
Exchange Act and the rules and regulations adopted by the SEC thereunder, and
that it shall take such further actions as any Holder of Registrable Securities
may reasonably request, all to the extent required from time to time to enable
such Holder to sell the Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by (i) Rule 144
under the Securities Act, as such rule may be amended from time to time, or
(ii) any similar rule or regulation adopted by the SEC. The Company shall,
upon the written request of any Holder of Registrable Securities, deliver to
such Holder a written statement as to whether it has complied with such
requirements.

8. MISCELLANEOUS.

8.1 Amendments and Waivers. Subject to Section 8.2, this
Agreement may be modified or amended only by a writing signed by the Company
(with the approval of a majority of Independent Directors) and Holders who hold
a number of Registrable Securities at least equal to a majority of all
Registrable Securities then outstanding.

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<PAGE> 13
8.2 Third Party Beneficiaries. Any transferee shall be a
third party beneficiary or intended beneficiary of the Agreement so long as
such transferee holds Registrable Securities and has rights under this
Agreement, and any such third party beneficiary shall have the right to enforce
such Agreement directly to the extent it deems such enforcement necessary or
advisable. No Waiver. No failure to exercise and no delay in exercising, on
the Company's or the Holders' part, of any right, power or privilege hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided are cumulative and not exclusive of any rights or
remedies provided by law.

8.3 Survival of Agreements. All agreements,
representations and warranties contained herein or made in writing by or on
behalf of the Company in connection with the transactions contemplated hereby
shall survive the execution and delivery of this Agreement.

8.4 Binding Effect and Benefits. This Agreement shall be
binding upon and shall inure to the benefit of the Company, the Company's
successors or assigns, and the Holders, including their respective successors
and assigns.

8.5 Entire Agreement. This Agreement constitutes the
full and entire understanding and agreement between the parties with regard to
the subjects hereof.

8.6 Separability of Provisions. In case any provision of
this Agreement shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

8.7 Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be by telecopy,
facsimile transmission (receipt of which is confirmed by telephone and a copy
of which is sent by U.S. mail), telegraph, hand delivery, overnight courier
service or mailed by certified or registered mail postage prepaid, returned
receipt requested, to the addresses set forth below or to such other address as
any party may advise the other party in a written notice given in accordance
with this Section.

<TABLE>
<S> <C>
If to the Company: Snyder Communications, Inc.
6903 Rockledge Drive
15th Floor
Bethesda, Maryland 20817
Attention: Daniel M. Snyder,
Chairman, Chief Executive Officer and President

If to the Holders: At the respective addresses set
forth on the signature page hereto.
</TABLE>

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<PAGE> 14
Any notice or other communication so addressed and so mailed shall be deemed to
have been given when duly delivered or sent.

8.8 Construction and Headings. This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
without giving effect to the conflict of laws provisions thereof. The
descriptive headings of the several sections and subsections hereof are for
convenience only and shall not control or affect the meaning of construction of
any of the provisions hereof.

8.9 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed be an original, but all
of which together shall constitute a single original instrument.

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

SNYDER COMMUNICATIONS, INC.

By:
-------------------------------------
Name: Daniel M. Snyder
Title: Chairman, President and Chief
Executive Officer

-------------------------------------------
DANIEL M. SNYDER

Address For Notices:
----------------------
-------------------------------------------

-------------------------------------------
MICHELE D. SNYDER

Address For Notices:
----------------------
-------------------------------------------

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<PAGE> 15

U.S. NEWS COLLEGE MARKETING, L.P.

By:
-------------------------------------
Name:
Title:

Address For Notices:
-----------------------
-------------------------------------------

-------------------------------------------
MICHELE D. SNYDER
Address For Notices:
----------------------
-------------------------------------------

-------------------------------------------
SUSAN K. ALLEN
Address For Notices:
----------------------
-------------------------------------------

-------------------------------------------
SUSAN STRAUSS BREEN
Address For Notices:
----------------------
-------------------------------------------

-------------------------------------------
BARRY DILLER
Address For Notices:
-----------------
-------------------------------------------

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<PAGE> 16

-------------------------------------------
PAUL GOULD
Address For Notices:
----------------------
-------------------------------------------

-------------------------------------------
DAN LUFKIN
Address For Notices:
----------------------
-------------------------------------------

-------------------------------------------
ROBERT MARSTON
Address For Notices:
----------------------
-------------------------------------------

-------------------------------------------
ROBERT A. STRAUSS
Address For Notices:
----------------------
-------------------------------------------

-------------------------------------------
ROBERT S. STRAUSS
Address For Notices:
----------------------
-------------------------------------------

-------------------------------------------
ROBERT S. STRAUSS, TRUSTEE
Address For Notices:
----------------------
-------------------------------------------

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<PAGE> 17
ALLEN & COMPANY, INCORPORATED

By:
------------------------------------
Name:
Title:

Address For Notices:
----------------------
-------------------------------------------

HAGC PARTNERS

By:
------------------------------------
Name:
Title:
Address For Notices:
----------------------
-------------------------------------------

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<PAGE> 1

EXHIBIT 23.2

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our reports
(and all references to our firm) included in or made a part of this registration
statement.

ARTHUR ANDERSEN LLP

Washington, DC
August 30, 1996