AUGMENT SYSTEMS
                                 2 Robbins Road
                         Westford, Massachusetts 01886


                                                                  August 3, 1998


Adolf Komorsky Hoffman & Associates, LTD
245 Saw Mill Road
Hawthorne, New York 10532


Gentlemen:

         The  undersigned,  Augment Systems,  Inc., a Delaware  corporation (the
"Company"),  proposes to issue to certain lenders (the "Lenders") (i) $1,500,000
of principal  amount of 8% Convertible  Promissary  Notes  (the"Notes") and (ii)
five year  warrants  to purchase up to 750,000  shares of the  Company's  common
stock $.01 par value per share  ("common  stock"),  at an exercise price of $.40
per share (the "Warrants").  The notes and Warrants are collectively hereinafter
referred  to as the  "Securities".  The sale of  Securities  to the  Lenders  is
hereinafter referred to as the "Bridge Financing".

         The Bridge  Financing  is  governed  by the terms and  conditions  of a
certain Subscription Agreement ("Subscription  Agreement"),  Loan Agreement (the
"Loan  Agreement")  and Notes  acceptable  to you and your  counsel and shall be
secured by certain  collateral as set forth in a certain  Security  Agreement by
and between the Company and the Lenders  (the  "Security  Agreement").  The Loan
Agreement,  Notes and the Security Agreement are collectively referred to as the
"Loan  Documents".  The  Warrants  will be in form  acceptable  to you and  your
counsel.

         The Company  acknowledges  that AKH is  responsible  for  locating  the
Lenders who are purchasing Securities issued by the Company. This agreement sets
forth,  inter alia the  compensation  to be paid to AKH in  connection  with the
Bridge Financing.

         1.  Representations  and Warranties of the Company.  The Company hereby
incorporates  by reference  all of the  representations  and  warranties  of the
Company as set forth in Section 5 of the  Subscription  Agreement  with the same
force and effect as if specifically set forth herein,  and such  representations
and  warranties  are made to induce  AKH to enter  into this  Agreement  and the
transactions contemplated hereby.








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August 3, 1998
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2. CLOSING FEES

         (a) CLOSING.  The closing of the  purchase and sales of the  Securities
("Closing")  shall take place at the offices of AKH, or such mutually  agreeable
location,  at a time and date agreed upon  between AKH and the  Company.  At the
Closing,  payment for the Securities  shall be made pursuant to the terms of the
Subscription  Agreement  against  delivery  of the Notes and  Warrants to AKH on
behalf of the Lenders.

         (b)  PROCEDURES AT CLOSING.  At the Closing,  the Company shall provide
AKH with copies of all closing documentation  provided to the parties including,
but not  limited to,  officer  certificates  and an executed  opinion of Company
counsel, dated the Closing Date.

         (c) PLACEMENT FEE AND NON-ACCOUNTABLE  EXPENSE ALLOWANCE. In accordance
with  the  terms of this  section  2(c),  simultaneously  with  payment  for and
delivery of the Securities as provided in Section 2(a) above,  the Company shall
at Closing pay AKH via wire  transfer (i) a selling  commission  equal to 10% of
the  aggregate  gross  proceeds  from  the  sale of the  Securities  and  (ii) a
non-accountable  expense  allowance  equal to 1% of the aggregate gross proceeds
from the sales of the Securities.

         (d)  ISSUANCE  OF  WARRANTS  TO AKH.  In  addition  to the  fees of AKH
provided in Section 2(c) hereof, simultaneously with payment for and delivery of
the Securities,  the Company shall at Closing issue to AKH or its designees, for
nominal  consideration,  five-year Warrants (the AKH Warrants") to acquire up to
1,000,000  shares of Common Stock (assuming the sale of all the Securities being
offered)  at an  exercise  price  of $0.40  per  share  on the  same  terms  and
conditions as the Warrants.  The AKH Warrants  shall be in the form of Exhibit A
hereto.  The  Certificates  representing  the  AKH  Warrants  will  be  in  such
denominations and such names as AKH may request prior to the Closing.

         (e) CONSULTING AGREEMENT. On or prior to the Closing, the Company shall
enter into a consulting  agreement with AKH, which will provide that the Company
will pay AKH a  monthly  fee of $5,000  for the 12 month  period  following  the
Closing,  for AKH's  agreement  to  provide  investment  banking  and  financial
advisory services as the Company may from time to time reasonably request,  such
as advice  relating  to  corporate  management,  strategic  planning,  financial
planning  and   relationships   with  banks,   securities  firms  and  financial
institutions. The first monthly fee shall be payable at the closing (retroactive
to July 1, 1998) and  subsequent  monthly  fees shall be due and  payable on the
first day of each  succeeding  month  thereafter  for the remaining  term of the
consulting agreement.  The consulting agreement shall be cancelable upon 30 days
written notice after January 1, 1999.

     3.   COVENANTS OF THE COMPANY

         (a)  EXPENSES OF  OFFERING.  Anything  set forth herein to the contrary
notwithstanding,  the  Company  shall  bear  all  expenses  incurred  by  it  in
connection  with the  Bridge  Financing,  including,  but not  limited  to,  the
following:  filing fees,  registrar and transfer agent fees, its own counsel and
accounting fees, and issue and transfer





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August 3, 1998
Page 3


taxes if any,  blue sky fees and  expenses  and  costs of  supplying  sufficient
copies  of the  documents  related  to the  Bridge  Financing.  As  promptly  as
predictable  after the Closing,  the Company  shall  prepare at its own expense,
"bound volumes" relating to the Bridge Financing and will distribute  volumes to
AKH and its  legal  counsel.  AKH  shall  be  responsible  for its own  expenses
incurred in connection with the Bridge Financing.

         (b) DUE  DILIGENCE.  The  Company  will  cooperate  with AKH by  making
available to AKH's  representatives  such  information  as may be appropriate in
making a reasonable  investigation of the Company and its affairs.  Prior to the
Closing, the Company will make available such materials relating to the Company,
and shall provide AKH or the Lenders with access to such employees,  as shall be
reasonably requested.

         (c)  RESERVATION  OF COMMON  STOCK.  The Company  will reserve and keep
available that maximum  number of its  authorized but unissued  shares of common
stock  that  are  issuable  upon  exercise  of any of the  Warrants  or the  AKH
Warrants.

         (d) INFORMATION  RIGHTS. The Company shall provide AKH within three (3)
business  days, of the filing or  preparation  thereof,  with such financial and
other  statements,   including,  without  limitation,   documents  sent  to  the
shareholders,  management letters and consolidated  financial  statements as are
provided to any other  lenders to or  security  holders of the  Company.  In the
event any current officer, director, employee,  consultant or other agent ceases
subsequent to the date hereof, to have such  relationships  with the Company and
such  cessation  has, or is likelyto  have,  a material  effect on the  Company,
taking as a whole,  the Company shall promptly  notify AKH of such event,  which
notification  shall  comprehensively  describe  such  circumstances,  including,
without limitation, the plan to attempt to reverse such material adverse effect.
The Company shall,  on a regular  basis,  provide to AKH updates of any material
litigation  and/or  governmental  proceedings  that may have a material  adverse
effect on the business of the Company. The Company shall promptly provide to AKH
notice of any event of default  under any  agreement or other  document with any
lender or holder of any  security  of the  Company,  or any other  event that is
reasonably likely to have a material adverse effect on the Company.

     4.   INDEMNIFICATION

         (a) The Company and its successors agree to indemnify and hold harmless
AKH and its agents,  stockholders,  officers,  employees, and directors and each
person, if any, who controls AKH, as follows.

            (i)  against  any and all losses  liabilities,  claims,  damages and
     expenses  whatsoever  arising out of any untrue statement or alleged untrue
     statement  of a fact  set  forth  in the  Subscription  Agreement  or  Loan
     Documents or th omission or alleged  omission of a fact  necessary in order
     to make the statements  therein,  in light of the circumstances under which
     they were made, not misleading  unless such statement or omissions was made
     in reliance on and in conformity with written information furnished




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     to the Company by AKH expressly for inclusion in the Subscription Agreement
     or Loan Documents.

            (ii) against any and all losses,  liabilities,  claims,  damages and
     expenses whatsoever to th extent of the aggregate amount paid in settlement
     of any litigation  commenced or threatened,  or any claim  whatsoever based
     upon any such  untrue  statement  or omission  or any such  alleged  untrue
     statement or omission  unless such statement was made in reliance on and in
     reliance on and in  conformity  with written  information  furnished to the
     Company by AKH  expressly for  inclusion in the  Subscription  Agreement or
     Loan Documents; and

            (iii)   against  any  and  all  expenses   whatsoever   incurred  in
     investigating,  preparing or defending against any litigation, commenced or
     threatened, or any claim whatsoever based upon any such untrue statement or
     omission or any alleged  untrue  statement or omission,  to the extent that
     any such  expense is not paid under  clause (i) or (ii) above  unless  such
     statement  or  omission  was made in  reliance  on and in  conformity  with
     written information furnished to the Company by AKH expressly for inclusion
     in the Subscription Agreement or Loan Documents.

         (b) The Company and its successors agree to indemnify and hold harmless
AKH and its agents, stockholders,  officers, employees, and cash person, if any,
who controls AKH to the same extent as the forgoing  indemnity,  against any and
all losses,  liabilities,  claims damages and expenses whatsoever arising out of
the  exercise by any person of any right under the  Securities  Act of 1933,  as
amended,  the Securities  Exchange Act of 1934, as amended, or the securities or
Blue Sky Laws of any state on  account  of  violations  of the  representations,
warranties or agreements set forth in Sections 1 and 2 hereof.

         (c)  If any  action  is  brought  against  AKH  or any of its  officers
directors, stockholders, employees, agents, advisors, consultants and counsel or
any controlling  persons of AKH (each an "Indemnified  Party" and  collectively,
"Indemnified  Parties"), in respect of which indemnity may be sought against the
Company  pursuant to Sections 4(a) or 4(b) above,  each such  Indemnified  Party
shall promptly notify the Company (the  "Indemnifying  Party") in writing of the
institution  of such  action  (but  failure to so notify  shall not  relieve the
Indemnifying  Party from any  liability  it may have under this section 4 unless
such failure  results in the  imposition of a default  judgment  which cannot be
reopened),  and the Indemnifying Party shall promptly assume the defense of such
action,  including the employment of counsel  (reasonably  satisfactory  to each
such Indemnified Party), and payment of expenses in connection  therewith.  Each
such Indemnified  Party shall be at the expense of each such  Indemnified  Party
unless the  employment of such counsel shall have been  authorized in writing by
the  Indemnifying  Party in  connection  with the  defense of such action or the
Indemnifying  Party shall have not have  promptly  employed  counsel  reasonably
satisfactory to each such Indemnified Party shall have reasonably concluded that
there  may be one or more  legal  defenses  available  to it or them or to other
Indemnified Parties which are different from or additional to those available to
one or more







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of the Indemnified  Parties and it would be inappropiate for the same counsel to
represent both parties due to actual or potential  differing  interests  between
them,  in any of  which  events  such  fees and  expenses  shall be borne by the
Indemnifying Party and the Indemnifying Party shall not have the right to direct
the defense of such action on behalf of each Indemnified Party. Anything in this
Section 4(c) to the contrary  notwithstanding,  the Indemnifying Party shall not
be liable for any  settlement of any such claim or action  effected  without its
written consent,  which consent shall not be unreasonably  withheld. The Company
agrees  to  promptly  notify  AKH  of the  commencement  of  any  litigation  or
proceedings  against  the  Company  or any  of  its  officers  or  directors  in
connection with the sale of Securities.

     5.   MISCELLANEOUS

         (a)  SURVIVAL.   Any  termination  of  the  Bridge  Financing   without
consummation thereof shall be without obligation on the part of any party except
that the provisions of Sections 3(a) hereof and the  indemnification  provisions
provided in Section 4 hereof shall survive any termination.

         (b) REPRESENTATIONS,  Warranties and Covenants to Survive Delivery. The
representations,   warranties,  indemnities,  agreements,  covenants  and  other
statements of the Company shall survive execution of this Agreement and delivery
of the Securities,  except that the representations and warranties shall survive
for a period of only 24 months.

         (c) NO OTHER  BENEFICIARIES.  Except as  provided  in  Section  4, this
Agreement is intended for the sole  exclusive  benefit of the parties hereto and
their respective successors and controlling persons and no other person, firm or
corporation shall have any third-party beneficiary or other rights hereunder.

         (d) GOVERNING LAW. This agreement shall be governed by and construed in
accordance  with the laws of the State of New York. The parties  hereby;  (i) in
any  legal  proceeding   brought  in  connection  with  this  Agreement  or  the
transactions  contemplated  hereby,  irrevocably  submit to the  nonexclusive in
personsm   jurisdiction   of  (A)  any  state  or  Federal  court  of  competent
jurisdiction  sitting in the State of New York, County of New York or (B) in the
event that any third party  defendant in any legal  proceeding in ehich it seeks
to join the other as a  third-party  defendant,  any state or  Federal  court in
which such  proceeding  has properly  been brought and consents to suit therein;
and (ii) waive any objection  that it may now or hereafter  have to the venue of
such  proceeding  in any such court or that such  proceeding  was  brought in an
inconvenient court.

         (e) NOTICES.  All notices,  requests,  demands and other communications
which are  required or may be given  hereunder  shall be in writing and shall be
deemed  to  have  been  duly  given  (i)  when  delivered  personally,   receipt
acknowledged,  (ii) five (5) days after being sent by  registered  or  certified
mail, return receipt  requested  postage prepaid,  (iii) one (1) day after being
sent via  overnight  courier,  receipt  acknowledged,  (iv) via  telecopy,  upon
written  confirmation  of  receipt  thereof.  All  notices  shall be made to the
parties at the addresses designated below or at





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Adolf Komorsky Hoffman & Associates, LTD
August 3, 1998
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such other or different  addresses which a party may  subsequently  provide with
notice thereof, and to their respective legal counsel, as follows:

                    (i) If to AKH, to:

                        Adolf Komorsky Hoffman & Associates, LTD
                        245 Saw Mill Road
                        Hawthorne, New York 10532
                        Attn: Mark Komorsky, Secetary & Treasurer
                        Telecopy: 914-769-4599

                    -with a copy to-

                        Breslow & Walker, LLP
                        767 Third Avenue
                        New York, New York 10017
                        Attn: Joel M. Walker, Esquire
                        Telecopy: 212-888-4955

                    (ii) If to the Company to:

                        Augment Systems, Inc.
                        2 Robbins Road
                        Westford, MA 01886
                        Attn: Laurence S. Liebson, Chief Executive Officer
                        Telecopy: 978-392-8636

                    -with a copy to-

                        Epstein Becker & Green, P.C.
                        75 State Street
                        Boston, Massachusetts 02109
                        Attn: Gabor Garai, Esquire
                        Telecopy: 617-342-4001

or to such persons or addresses as either party shall furnish to the other party
in writing.

         (f) Counterparts. This agreement may be signed in counterparts with the
same effect as if both parties had signed one and the same instrument.

         (g) Entire Agreement.  This agreement  constitutes the entire agreement
between the  parties  hereto in  pertaining  to the  subject  matter  hereof and
supersedes all prior and contemporaneous agreements, understandings,  documents,
negotiations and discussions, whether oral or written, of the parties hereto.



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Adolf Komorsky Hoffman & Associates, LTD
August 3, 1998
Page 7

                  If  you  find  the   forgoing  is  in   accordance   with  our
understanding, kindly sign and return to us a counterpart hereof, whereupon this
instrument along with all counterparts  will become a binding  agreement between
us.


                                              Very Truly Yours,


                                              By:_______________________________
                                                 Laurence S. Liebson,
                                                 Chief Executive Officer



Agreed:

ADOLF KOMORSKY HOFFMAN & ASSOCIATES, LTD



By:________________________________
   Authorized Officer