AUGMENT SYSTEMS, INC.

                          REGISTRATION RIGHTS AGREEMENT

                           for 1998 Private Placement



         THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made by Augment
Systems, Inc., a corporation formed under the laws of the State of Delaware (the
"Company"),  for the  benefit  of the  investors  listed  on  Schedule  I hereto
(collectively, the "Investors" and, individually, an "Investor").


                                    RECITALS


         A.       The  Investors  desire to purchase  from the Company,  and the
                  Company desires to issue and sell to the Investors,  a minimum
                  of $4,000,000  and a maximum of $8,000,000 in shares of Common
                  Stock,  par value $0.01 (the "Shares") in a private  placement
                  (the "Private  Placement")  conducted in  accordance  with the
                  Securities  Act  of  1933,  as  amended,  and  the  rules  and
                  regulations thereunder  (collectively,  the "Securities Act").
                  The Shares  referenced in this Recital A are herein called the
                  "Shares".

         B.       As further inducement for the Investors to purchase the Shares
                  from the Company, the Company desires to undertake to register
                  under the Securities  Act, the Shares,  in accordance with the
                  terms hereof.


                                   AGREEMENTS


         The Company and the Investors covenant and agree as follows:

         1.       DEFINITIONS.  For the purposes of this Agreement:

         (a) The terms "register,"  "registered" and  "registration"  refer to a
registration  effected  by  preparing  and filing a  registration  statement  or
statements or similar  documents in compliance  with the Securities Act, and the
declaration  or ordering of  effectiveness  of such  registration  statement  or
document by the Securities and Exchange Commission (the "SEC").




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         (b) The term  "Registrable  Securities" means (i) the Investors' Shares
(as defined in the Subscription  Agreement, if any), (ii) Shares, if any, issued
to Sunrise  Securities  Corp.  in  satisfaction  of the selling  commission  and
expense  allowance  and  (iii)  any  Shares  issued  as (or  issuable  upon  the
conversion  or exercise of any  convertible  security,  warrant,  right or other
security which is issued as) a dividend or other  distribution  with respect to,
or in exchange for or in replacement of the Shares,  including,  but not limited
to, the shares underlying the Placement  Agent's Warrants,  and excluding in all
cases, however, any Registrable  Securities sold by an Investor in a transaction
in which its registration  rights under this Agreement are not assigned pursuant
to Section 9 of this Agreement.

         (c) The term  "Investor"  includes (i) each Investor (as defined above)
and  (ii)  each  person  who  is a  permitted  transferee  or  assignee  of  the
Registrable Securities pursuant to Section 9 of this Agreement.

         2.       DEMAND REGISTRATION.

         (a) REQUEST FOR  REGISTRATION  ON FORM OTHER THAN FORM S-3.  Subject to
the terms of this  Agreement,  in the event that the Company  shall receive from
the holders of at least fifty percent (50%) of the  Registrable  Securities (the
"Initiating Holders"), at any time after the earlier of (i) five (5) years after
the  initial  closing  date of the Private  Placement,  or (ii) ninety (90) days
after the effective date of any public  offering under the Securities Act of the
Shares by the Company for its account (the "Public Offering"), a written request
that the Company  effect any  registration  with respect to all or a part of the
Registrable  Securities on an applicable Securities Act form other than Form S-3
for an offering  covering the  registration of Registrable  Securities  having a
reasonably  anticipated aggregate offering price to the public in excess of five
million dollars ($5,000,000), the Company shall (A) promptly give written notice
of the proposed registration to all other holders of the Registrable Securities,
and (B) as soon as  practicable,  and in any event within ninety (90) days after
such request,  use its best efforts to effect  registration  of the  Registrable
Securities specified in such request,  together with any Registrable  Securities
of any holder  thereof  joining in such  request as are  specified  in a written
request given within twenty (20) days after written notice from the Company. The
Company  shall  not  be  obligated  to  take  any  action  to  effect  any  such
registration  pursuant to this Section 2(a): (i) within six (6) months after the
effective date of a registration of the Shares initiated by the Company; or (ii)
after the Company has effected two such  registrations  pursuant to this Section
2(a) and such  registrations  have been  declared  effective  by the SEC and, if
underwritten, have closed.

         (b) RIGHT OF DEFERRAL OF  REGISTRATION  ON FORM OTHER THAN FORM S-3. If
the Company  shall  furnish to all the  holders of  Registrable  Securities  who
joined  in the  request  for  registration  pursuant  to  Section  2(a)  above a
certificate  signed by the  President of the Company  stating  that, in the good
faith  judgment of the Board of Directors of the Company,  it would be seriously
detrimental  to the Company  for any  registration  to be effected as  requested
under Section 2(a), then the Company shall have the right to defer the filing of
a registration statement under the Securities Act with respect to such requested
offering  for a period of not more than  ninety  (90) days from  delivery of the
request of the Initiating Holders;  provided,  however, that the Company may not
utilize this right more than once in any twelve-month period.

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<PAGE>

                  (c) REQUEST FOR REGISTRATION ON FORM S-3. Subject to the terms
of  this  Agreement,  if  the  Company  receives  from  holders  of  Registrable
Securities,  at a time when the Company is eligible to register securities for a
secondary  offering by its  stockholders  on SEC Securities Act Form S-3 (or any
successor form to Form S-3,  regardless of its  designation),  a written request
that the Company effect any  registration  on Form S-3 (or any successor form to
Form  S-3,  regardless  of its  designation)  for  an  offering  of  Registrable
Securities the reasonably  anticipated aggregate offering price to the public of
which would exceed $500,000,  then the Company will promptly give written notice
of the proposed  registration  to all the holders of Registrable  Securities and
will, as soon as practicable, use its best efforts to effect registration of the
Registrable  Securities  specified in such  request,  together  with all or such
portion of the  Registrable  Securities of any holder joining in such request as
are specified in a written  request  delivered to the Company within twenty (20)
days after written notice from the Company of the proposed registration.

                  (d) REGISTRATION OF OTHER  SECURITIES IN DEMAND  REGISTRATION.
Any  registration  statement  filed  pursuant to the  request of the  Initiating
Holders under this Section 2 may,  subject to the  provisions of Sections  2(e),
(f), (g), (h) and (i), include  securities of the Company other than Registrable
Securities.

                  (e) NOTICE OF UNDERWRITING.  If the Initiating  Holders intend
to distribute the Registrable Securities covered by their request by means of an
underwriting,  they shall so advise the Company as a part of their  request made
pursuant to this Section 2, and the Company  shall include such  information  in
the  written  notice  referred  to in Section  2(a).  The right of any holder to
registration  pursuant to Section 2(a) shall be  conditioned  upon such holder's
agreement to participate in such underwriting and the inclusion of such holder's
Registrable  Securities in the underwriting (unless otherwise mutually agreed by
a majority in interest of the Initiating Holders and such holder with respect to
such participation and inclusion).

                  (f) INCLUSION OF OTHER HOLDERS IN DEMAND REGISTRATION.  If the
Company,  officers or  directors  of the Company  holding the Shares  other than
Registrable  Securities  or  holders of  securities  of the  Company  other than
Registrable  Securities shall request inclusion in such  registration,  then, on
behalf of all holders of Registrable  Securities,  the Initiating  Holders shall
offer (to the extent they deem advisable and  consistent  with the goals of such
registration and subject to the allocation  provisions of Section 3(b) below) to
any or all of the Company,  such officers or directors and such holders of other
securities,  to include such  securities held thereby in the  underwriting.  The
Initiating Holders may condition such offer on the acceptance by such persons of
the terms of this Section 2.

                  (g)  SELECTION  OF  UNDERWRITER  IN DEMAND  REGISTRATION.  The
Company  shall  (together  with  all  holders   proposing  to  distribute  their
securities  through such  underwriting)  enter into and perform its  obligations
under  an   underwriting   agreement  in  usual  and  customary  form  with  the
representative   of  the   underwriter  or  underwriters   (the   "Underwriter's
Representative")  selected for such underwriting by the holders of a majority of
the  Registrable  Securities  being  registered  by the  Initiating  Holders and
consented to by the Company (which consent shall not be unreasonably withheld).



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<PAGE>

                  (h) MARKETING LIMITATION IN DEMAND REGISTRATION.  In the event
the Underwriter's  Representative advises the Initiating Holders in writing that
market factors (including,  without  limitation,  the aggregate number of Shares
requested to be registered,  the general condition of the market, and the status
of the  persons  proposing  to sell  securities  pursuant  to the  registration)
require a  limitation  of the  number of  shares  to be  underwritten,  then the
Initiating  Holders shall so advise all holders of Registrable  Securities,  and
the  number of shares of  Registrable  Securities  that may be  included  in the
registration  and   underwriting   shall  be  allocated  among  all  holders  in
proportion,  as nearly as  practicable,  to the number of shares  proposed to be
included in such  registration  by such  holders;  provided,  however,  that the
number of shares of Registrable  Securities to be included in such  underwriting
shall not be reduced unless all other securities (including those proposed to be
included by the Company) are first entirely excluded from the  underwriting.  No
Registrable  Securities or other  securities  excluded from the  underwriting by
reason of this Section 2(h) shall be included in such Registration Statement.

                  (i) RIGHT OF WITHDRAWAL IN DEMAND REGISTRATION.  If any holder
of  Registrable  Securities,  or a holder  of other  securities  entitled  (upon
request) to be included in such  registration,  disapproves  of the terms of the
underwriting,  such person may elect to withdraw  therefrom by written notice to
the Company, the underwriter and the Initiating Holders delivered at least seven
(7)  days  prior  to the  effective  date  of the  registration  statement.  The
securities so withdrawn shall also be withdrawn from the Registration Statement.

         3.       PIGGYBACK REGISTRATION.

                  (a)  NOTICE  OF  PIGGYBACK   REGISTRATION   AND  INCLUSION  OF
REGISTRABLE SECURITIES. Subject to the terms of this Agreement, in the event the
Company decides to register any of its Shares (either for its own account or the
account  of a  security  holder or  holders  (other  than in  connection  with a
registration  being effected  pursuant to Section 2 hereof)) on an SEC form that
would be suitable for a registration  involving solely  Registrable  Securities,
the  Company  will:  (i)  promptly  give each holder of  Registrable  Securities
written notice thereof (which shall include a list of the jurisdictions in which
the Company intends to qualify such securities  under the applicable Blue Sky or
other state securities laws) and (ii) include in such  registration  (and in any
related  qualification  under Blue Sky laws or other state securities laws), and
in any underwriting  involved therein, all the Registrable  Securities specified
in a written  request  delivered  to the  Company by any  holder of  Registrable
Securities  within twenty (20) days after  delivery of such written  notice from
the Company.

                  (b) NOTICE OF UNDERWRITING IN PIGGYBACK  REGISTRATION.  If the
registration of which the Company gives notice pursuant to Section 3(a) is for a
registered public offering involving an underwriting,  then the Company shall so
advise the holders of  Registrable  Securities  as a part of the written  notice
given  pursuant to Section 3(a). In such event,  the right of any such holder to
registration  shall be conditioned  upon such  underwriting and the inclusion of
such holder's Registrable Securities in such underwriting to the extent provided
in this Section 3. All holders of Registrable Securities proposing to distribute
their securities  through such underwriting shall (together with the Company and
the other holders distributing their securities through such underwriting) enter
into an underwriting  agreement with the Underwriter's  Representative  for such
offering;  provided that such holders of  Registrable  Securities  shall have no
right to  participate  in the  selection  of the  underwriters  for an  offering
pursuant to this Section 3.

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<PAGE>

                  (c)  MARKETING  LIMITATION IN PIGGYBACK  REGISTRATION.  In the
event the Underwriter's  Representative advises the holders seeking registration
of  Registrable  Securities  pursuant to this  Section 3 in writing  that market
factors (including, without limitation, the aggregate number of Shares requested
to be  registered,  the general  condition of the market,  and the status of the
persons  proposing to sell securities  pursuant to the  registration)  require a
limitation  of the  number  of  shares  to be  underwritten,  the  Underwriter's
Representative  may limit the number of shares of  Registrable  Securities to be
included in such  registration  and underwriting to not less than twenty percent
(20%) of the total  number of shares  included in such  registration.  In either
such event, the Underwriter's  Representative shall so advise all holders of the
number of shares of Registrable  Securities (if any) that may be included in the
registration and underwriting. The number of shares of Registrable Securities to
be so  included  shall not be reduced  unless all other  securities  (other than
those  to be  sold  by  the  Company)  are  first  entirely  excluded  from  the
underwriting.  No Registrable  Securities or other securities  excluded from the
underwriting  by reason of this Section 3(c) shall be included in the applicable
Registration Statement.

                  (d)  Withdrawal  in Piggyback  Registration.  If any holder of
Registrable Securities,  or a holder of other securities entitled (upon request)
to be  included  in such  registration,  disapproves  of the  terms  of any such
underwriting, then such holder may elect to withdraw therefrom by written notice
to the Company and the  underwriter  delivered  at least seven (7) days prior to
the effective date of the registration statement.  Any Registrable Securities or
other securities excluded or withdrawn from such underwriting shall be withdrawn
from such registration.

              4.      OBLIGATIONS  OF  THE  COMPANY.   In  connection  with  the
registration  of the  Registrable  Securities  pursuant to this  Agreement,  the
Company shall, as expeditiously as reasonably possible:

                  (a)  Prepare  and file with the SEC,  within  thirty (30) days
after  (i) the  close of the  Company's  Private  Placement  or (ii) the date of
issuance of any Registrable Securities issued thereafter,  as the case may be, a
registration statement or registration statements (the "Registration Statement")
with respect to all Registrable  Securities  included therein,  and use its best
efforts  to cause the  Registration  Statement  to become  effective  as soon as
reasonably  possible  after such filing,  and, with respect to any  registration
that  does not  involve  an  underwriting,  to keep the  Registration  Statement
effective pursuant to Rule 415 under the Securities Act for a period of at least
two years after the close of the Company's  Private  Placement,  or such shorter
period as prescribed by Rule 144 promulgated  under the Securities Act or during
which  the  Registrable   Securities  are  sold,  which  Registration  Statement
(including  any  amendments or supplements  thereto and  prospectuses  contained
therein)  shall not contain any untrue  statement of a material  fact or omit to
state a material  fact  required to be stated  therein or  necessary to make the
statements  therein,  in light of the circumstances in which they were made, not
misleading.


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<PAGE>

                  (b) Prepare and file with the SEC such  amendments  (including
post-effective amendments) and supplements to the Registration Statement and any
prospectus  used  in  connection  with  the  Registration  Statement  as  may be
necessary to keep the  Registration  Statement  effective (i) for such period as
may be required by the Securities Act with respect to an  underwritten  offering
and (ii)  for at least  two  years  after  the  close of the  Company's  Private
Placement,  or such shorter  period as prescribed by Rule 144, with respect to a
non-underwritten offering, and during such periods to comply with the provisions
of the Securities Act with respect to the disposition of all securities  covered
by the Registration Statement

                  (c)  Furnish  promptly  to  each  Investor  whose  Registrable
Securities are included in the Registration Statement such number of copies of a
prospectus,   including  a  preliminary  prospectus,   and  all  amendments  and
supplements thereto, and of such other documents as such Investor may reasonably
request in order to facilitate the disposition of Registrable  Securities  owned
by such Investor.

                  (d) Use its  reasonable  efforts to  register  and qualify the
Registrable  Securities  covered by the Registration  Statement under such other
securities  or Blue  Sky  laws of  such  jurisdiction  as  shall  be  reasonably
requested by the  Investors  who hold a majority in interest of the  Registrable
Securities  covered  by  the  Registration  Statement  and,  with  respect  to a
non-underwritten   offering,  prepare  and  file  in  those  jurisdictions  such
amendments  (including  post-effective  amendments)  and supplements and to take
such  other  actions as may be  necessary  to  maintain  such  registration  and
qualification  in effect  at all times for a period of at least two years  after
the  close  of the  Company's  Private  Placement,  or such  shorter  period  as
prescribed by Rule 144 or during which the Registrable  Securities are sold, and
to take all other actions  necessary or advisable to enable the  disposition  of
such securities in such jurisdictions; provided, however, that the Company shall
not be required in connection therewith or as a condition thereto to (i) qualify
to do business,  file a general  consent to service of process or subject itself
to general  taxation in any such  states or  jurisdictions  or (ii)  provide any
undertaking or make any change in its Certificate of Incorporation or bylaws.

                  (e) If the Registration  Statement  relates to an underwritten
offering,   enter  into  and  perform  its  obligations  under  an  underwriting
agreement, in usual and customary form, including, without limitation, customary
indemnification   and   contribution   obligations,   with   the   Underwriter's
Representative.

                  (f) Notify the Investors who hold Registrable Securities being
sold  (or  in  the  event  of  an  underwritten   offering,   the  Underwriter's
Representative),   at  any  time  when  a  prospectus  relating  to  Registrable
Securities  covered by the  Registration  Statement  is required to be delivered
under the Securities Act, of the happening of any event as a result of which the
prospectus included in the Registration  Statement,  as then in effect, includes
an  untrue  statement  of a  material  fact or omits to  state a  material  fact
required to be stated  therein or necessary to make the  statements  therein not
misleading in light of the  circumstances  then existing.  The Company shall use
its best efforts promptly to amend or supplement the  Registration  Statement to
correct any such untrue statement or omission.



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                  (g) Notify the Investors who hold Registrable Securities being
sold  (or  in  the  event  of  an  underwritten   offering,   the  Underwriter's
Representative)  of the  issuance  by the SEC of any stop order  suspending  the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose.  The Company 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 time.

                  (h) Permit a single  firm of  counsel,  designated  as selling
shareholders'  counsel  by  the  holders  of  a  majority  in  interest  of  the
Registrable  Securities being sold, to review the Registration Statement and all
amendments and  supplements  thereto a reasonable  period of time prior to their
filing,  and  shall  not  file any  document  in a form to  which  such  counsel
reasonably objects.

                  (i) Make generally  available to its security  holders as soon
as  practicable,  but not later than forty five (45) days after the close of the
period  covered  thereby,  an earnings  statement  (in form  complying  with the
provisions of Rule 158 under the Securities Act) covering a twelve-month  period
beginning  not later than the first day of the  Company's  fiscal  quarter  next
following the effective date of the Registration Statement.

                  (j) At the  request of the  Investors  who hold a majority  in
interest of the Registrable  Securities being sold, furnish to the underwriters,
if  any,  on  the  date  that  Registrable   Securities  are  delivered  to  the
underwriters  for  sale  in  connection  with a  registration  pursuant  to this
Agreement  (i) an  opinion,  dated such date,  of the counsel  representing  the
Company  for the  purposes of such  registration,  in form and  substance  as is
customarily given to underwriters in an underwritten public offering,  addressed
to the  underwriters,  and (ii) a letter,  dated such date, from the independent
certified  public  accountants  of the  Company,  in form  and  substance  as is
customarily given by independent certified public accountants to underwriters in
an underwritten public offering, addressed to the underwriters.

                  (k)  Make  available  for   inspection  by  any   underwriters
participating  in the  offering  and the  counsel,  accountants  or other agents
retained  by such  underwriter,  all  pertinent  financial  and  other  records,
corporate  documents  and  properties  of the Company,  and cause the  Company's
officers, directors and employees to supply all information reasonably requested
by such underwriters in connection with the Registration Statement.

                  (l) If the  Shares are then  listed on a  national  securities
exchange,  use its best efforts to cause the Registrable Securities to be listed
on such exchange if the listing of such Registrable Securities is then permitted
under the rules of such  exchange,  or if the  Shares  are not then  listed on a
national securities  exchange,  use its best efforts to facilitate the quotation
of the Shares on NASDAQ,  and use its best efforts to cause continued listing of
the  Shares  so  long as the  Registration  Statement  is in  effect  under  the
Securities Act.


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                  (m)  Provide a transfer  agent and  registrar,  which may be a
single entity, for the Registrable  Securities not later than the effective date
of the Registration Statement.

                  (n) Take all actions  reasonably  necessary to facilitate  the
timely  preparation  and delivery of  certificates  (not bearing any restrictive
legend)   representing   the   Registrable   Securities  sold  pursuant  to  the
Registration   Statement  and  to  enable  such   certificates  to  be  in  such
denominations  and registered in such names as the Investors or any underwriters
may reasonably request.

                  (o) Take all other  actions  reasonably  necessary to expedite
and  facilitate  disposition  by the  Investors  of the  Registrable  Securities
pursuant to the Registration Statement.

                  (p)  Notwithstanding  anything  contained in this Section 4 to
the contrary,  the Company shall have no obligation  pursuant to Sections 2 or 3
for the  registration  of Registrable  Securities held by any Investor (i) where
such  Investor  would  then be  entitled  to sell  under  Rule  144  within  any
three-month  period (or such other unitary period  prescribed  under Rule 144 as
may be provided by amendment  thereof) all of the  Registrable  Securities  then
held by such Investor,  and (ii) where the number of Registrable Securities held
by such Investor is within the volume  limitations  under  paragraph (e) of Rule
144  (calculated as if such Investor were an affiliate of the Company within the
meaning of Rule 144).

               5.     OBLIGATIONS  OF THE  INVESTORS.  In  connection  with  the
registration  of the  Registrable  Securities  pursuant to this  Agreement,  the
Investors shall have the following obligations:

                  (a) It shall be a condition  precedent to the  obligations  of
the Company to take any action  pursuant to this  Agreement with respect to each
Investor  that such  Investor  shall  furnish to the  Company  such  information
regarding  itself,  the  Registrable  Securities  held by it,  and the  intended
methods of  disposition  of such  securities as shall be reasonably  required to
effect the  registration  of the  Registrable  Securities and shall execute such
documents in connection  with such  registration  as the Company may  reasonably
request. At least thirty (30) days prior to the first anticipated filing date of
the  Registration  Statement,  the Company  shall  notify  each  Investor of the
information  the  Company  requires  from each  such  Investor  (the  "Requested
Information") if it elects to have any of his Registrable Securities included in
the Registration Statement. If within seven (7) business days of the filing date
the Company has not received the Requested Information from an Investor (a "Non-
Responsive  Investor"),  then the  Company may file the  Registration  Statement
without including Registrable Securities of such Non-Responsive Investor.

                  (b)  Each  Investor  by  his  acceptance  of  the  Registrable
Securities  agrees  to  cooperate  with  the  Company  in  connection  with  the
preparation  and filing of any  Registration  Statement  hereunder,  unless such
Investor  has  notified the Company in writing of its election to exclude all of
its Registrable Securities from the Registration Statement.



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<PAGE>

                  (c) In the event  Investors  holding a majority in interest of
the Registrable  Securities select underwriters for the offering,  each Investor
agrees  to  enter  into  and  perform  its  obligations  under  an  underwriting
agreement, in usual and customary form, including, without limitation, customary
indemnification and contribution  obligations and market stand-off  obligations,
with the managing underwriter of such offering and to take such other actions as
are reasonably  required in order to expedite or facilitate  the  disposition of
the  Registrable  Securities,  unless such  Investor has notified the Company in
writing of its election to exclude all of his  Registrable  Securities  from the
Registration Statement.

                  (d) Each Investor agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section 4(f),
such Investor will immediately discontinue disposition of Registrable Securities
pursuant to the  Registration  Statement  covering such  Registrable  Securities
until  such  Investor's  receipt of the  copies of the  supplemented  or amended
prospectus  contemplated by Section 4(f) and, if so desired by the Company, such
Investor shall deliver to the Company (at the expense of the Company) or destroy
(and deliver to the Company a certificate of such destruction) all copies, other
than the  permanent  file  copies  then in such  Investor's  possession,  of the
prospectus  covering such Registrable  Securities current at the time of receipt
of such notice.

                  (e)  No  Investor   may   participate   in  any   underwritten
registration  hereunder  unless such Investor (i) agrees to sell such Investor's
Registrable  Securities on the basis provided in any  underwriting  arrangements
approved by the Investors entitled hereunder to approve such arrangements,  (ii)
completes  and executes  all  questionnaires,  powers of attorney,  indemnities,
underwriting  agreements and other documents reasonably required under the terms
of such underwriting  arrangements,  and (iii) agrees to pay such Investor's pro
rata portion of all underwriting discounts and commissions.

              6.      Expenses  of   Registration.   All  expenses   other  than
underwriting discounts and commissions incurred in connection with registration,
filings or  qualifications  pursuant  to  Sections 2 and 3,  including,  without
limitation,  all registration,  listing, filing and qualification fees, printers
and accounting  fees, the fees and  disbursements of counsel for the Company and
the reasonable fees and  disbursements  of one firm of counsel for the Investors
shall be borne by the Company.

              7.      Indemnification.  In the event any Registrable  Securities
are included in a Registration Statement under this Agreement:

                  (a) To the extent permitted by law, the Company will indemnify
and hold harmless each Investor,  the directors,  if any, of such Investor,  the
officers,  if any, of such Investor who sign the  Registration  Statement,  each
person,  if any, who controls such Investor,  any underwriter (as defined in the
Securities Act) for the Investors and each person, if any, who controls any such
underwriter within the meaning of the Securities Act or the Securities  Exchange
Act of 1934,  as amended  (the  "Exchange  Act"),  against any  losses,  claims,
damages,  expenses  or  liabilities,  joint or several) to which any of them may
become  subject under the  Securities  Act, the Exchange  Act,  other federal or
state law or otherwise,  insofar as such losses,  claims,  damages,  expenses or
liabilities  (or actions or  proceedings,  whether  commenced or threatened,  in
respect thereof, arise out of or are based upon any of the following statements,
omissions or violations (collectively,  a "Violation"): (i) any untrue statement



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<PAGE>

or alleged  untrue  statement of a material fact  contained in the  Registration
Statement,  including any preliminary  prospectus or final prospectus  contained
therein or any amendments or supplements  thereto,  (ii) the omission or alleged
omission  to state  therein a material  fact  required  to be stated  therein or
necessary to make the statements therein, in light of the circumstances in which
they were made,  not  misleading or (iii) any violation or alleged  violation by
the Company of the Securities Act, the Exchange Act, any state securities law or
any rule or regulation promulgated under the Securities Act, the Exchange Act or
any state  securities law. Subject to the restrictions set forth in Section 7(c)
with  respect to the number of legal  counsel,  the Company will  reimburse  the
Investors and each such  underwriter  or  controlling  person,  promptly as such
expenses are incurred,  for any legal or other expenses  reasonably  incurred by
them in connection with investigating or defending any such loss, claim, damage,
liability,  action or  proceeding.  Notwithstanding  anything  contained in this
Agreement to the  contrary,  the  indemnity  agreement  contained  above in this
Section  7(a):  (I) shall not apply to amounts  paid in  settlement  of any such
loss, claim, damage,  liability or action if such settlement is effected without
the  prior  written  consent  of  the  Company,   which  consent  shall  not  be
unreasonably withheld,  (II) shall not apply to any such case for any such loss,
claim,  damage,  liability  or action  arising  out of or based upon a Violation
which  occurs  in  reliance  upon and in  conformity  with  written  information
furnished  expressly  for  use  in  connection  with  such  registration  by the
Investors or any such underwriter or controlling person, as the case may be, and
(III) with respect to any preliminary prospectus, shall not inure to the benefit
of any  person  from whom the person  asserting  any such  claim  purchased  the
Registrable  Securities  that are the subject  thereof (or to the benefit of any
person  controlling such person) if the untrue statement or omission of material
fact contained the preliminary  prospectus was corrected in the  prospectus,  as
then  amended or  supplemented.  Such  indemnity  shall remain in full force and
effect regardless of any investigation  made by or on behalf of the Investors or
any such underwriter or controlling person and shall survive the transfer of the
Registrable Securities by an Investor pursuant to Section 9.

                  (b) To the extent  permitted by law, each Investor,  severally
and not jointly, will indemnify and hold harmless, to the same extent and in the
same manner set forth in Section 7(a), the Company, each of its directors,  each
of its officers who have signed the Registration Statement, each person, if any,
who  controls  the  Company  within  the  meaning of the  Securities  Act or the
Exchange  Act, any  underwriter  and any other  stockholder  selling  securities
pursuant to the  Registration  Statement or any of its  directors or officers or
any person who controls such holder or underwriter,  against any losses, claims,
damages  or  liabilities,  joint or  several)  to which  any of them may  become
subject,  under the Securities Act, the Exchange Act, other federal or state law
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect  thereof) arise out of or are based upon any Violation,  in each case
to the extent (and only to the extent)  that such  Violation  occurs in reliance
upon and in  conformity  with written  information  furnished  by such  Investor
expressly for use in connection with such  registration;  and such Investor will
reimburse  any legal or other  expenses  reasonably  incurred  by any of them in
connection  with  investigating  or  defending  any such  loss,  claim,  damage,
liability or action; provided,  however, that the Investor shall be liable under
this  Section  7(b)  for  only  that  amount  of  losses,  claims,  damages  and
liabilities  as does not exceed the proceeds to such Investor as a result of the
sale of Registrable  Securities  pursuant to such  registration.  Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on


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<PAGE>

behalf  of  such  indemnified  party  and  shall  survive  the  transfer  of the
Registrable Securities by the Investors pursuant to Section 9. The Company shall
be entitled to receive  indemnities from underwriters,  selling brokers,  dealer
managers and similar  securities  industry  professionals  participating  in the
distribution,  to the same extent as provided above, with respect to information
about  such  persons so  furnished  in writing  by such  persons  expressly  for
inclusion in the Registration Statement

                  (c) Promptly after receipt by an indemnified  party under this
Section  7  of  notice  of  the  commencement  of  any  action   (including  any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made  against any  indemnifying  party under this Section 7, deliver to
the  indemnifying  party a written notice of the commencement  thereof,  and the
indemnifying  party shall have the right to  participate  in, and, to the extent
the indemnifying  party so desires,  jointly with any other  indemnifying  party
similarly  noticed,  to assume  control  of the  defense  thereof  with  counsel
satisfactory to the indemnifying party;  provided,  however, that an indemnified
party shall have the right to retain its own counsel, with the fees and expenses
to be paid by the indemnifying  party, if, in the reasonable  opinion of counsel
for the indemnifying  party,  representation  of such  indemnified  party by the
counsel retained by the indemnifying  party would be inappropriate due to actual
or potential  differing  interests  between such indemnified party and any other
party represented by such counsel in such proceeding.  The Company shall pay for
only one legal counsel for the  Investors.  Such legal counsel shall be selected
by the Investors  holding a majority in interest of the Registrable  Securities.
The  failure  to  deliver  written  notice to the  indemnifying  party  within a
reasonable  time of the  commencement  of any such  action  shall  relieve  such
indemnifying  party of any liability to the indemnified party under this Section
7 only to the extent  prejudicial to its ability to defend such action,  but the
omission so to deliver written notice to the indemnifying party will not relieve
it of any liability  that it may have to any  indemnified  party  otherwise than
under section 7. The indemnification required by this Section 7 shall be made by
periodic  payments of the amount thereof during the course of the  investigation
or defense,  promptly as such expense, loss, damage or liability is incurred and
is due and payable.

                  (d) To the extent any indemnification by an indemnifying party
is  prohibited  or limited by law,  the  indemnifying  party  agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable under this Section 7 to the extent permitted by law;  provided,  however,
that (i) no contribution shall be made under circumstances where the maker would
not have been liable for indemnification  under the fault standards set forth in
this Section 7, (ii) no seller of  Registrable  Securities  guilty of fraudulent
misrepresentation (within the meaning of Section 11 of the Securities Act) shall
be entitled to  contribution  from any seller of Registrable  Securities who was
not guilty of such fraudulent  misrepresentation,  and (iii) contribution by any
seller of Registrable Securities shall be limited in amount to the net amount of
proceeds received by such seller from the sale of such Registrable Securities.

              8.     REPORTS UNDER SECURITIES  EXCHANGE ACT OF 1934. With a view
to making available to the Investors the benefits of Rule 144 and any other rule
or  regulation  of the SEC that may at any time  permit  the  Investors  to sell
securities of the Company to the public without registration, the Company agrees
to:


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<PAGE>

                  (a) Make and keep public information available, as those terms
are  understood  and defined in Rule 144,  at all times  after  ninety (90) days
after  the  effective  date of the  first  registration  statement  filed by the
Company for the offering of its securities to the general public.

                  (b) File with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act.

                  (c) Furnish to each  Investor,  so long as such  Investor owns
any Registrable  Securities,  forthwith upon request (i) a written  statement by
the Company that it has complied with the reporting requirements of Rule 144 (at
any time  after 90 days  after  the  effective  date of the  first  registration
statement filed by the Company), the Securities Act and the Exchange Act (at any
time after it has become subject to such reporting requirements), (ii) a copy of
the most recent annual or quarterly report of the Company and such other reports
and documents so filed by the Company,  and (iii) such other  information as may
be  reasonably  requested in availing the Investors of any rule or regulation of
the SEC which permits the selling of any such securities without registration.

              9.     ASSIGNMENTS OF REGISTRATION  RIGHTS. The rights to have the
Company  register  securities  pursuant to this Agreement may be assigned by the
Investors to transferees or assignees of such  securities  provided that (i) the
Company is, within a reasonable time after such transfer, furnished with written
notice of the name and address of such transferee or assignee and the securities
with respect to which such  registration  rights are being  assigned,  (ii) such
assignment is in accordance with and permitted by all other  agreements  between
the Company and the transferor or assignor,  and (iii) such assignments shall be
effective only if immediately following such transfer the further disposition of
such securities by the transferee or assignee is restricted under the Securities
Act. The term  "Investors"  as used in this  Agreement  shall include  permitted
assignees.

            10.      MISCELLANEOUS.

                  (a) Notices  required or permitted to be given hereunder shall
be in  writing  and shall be deemed to be  sufficiently  given  when  personally
delivered or sent by registered mail, return receipt requested, addressed (i) if
to the Company,  Augment Systems, Inc., 2 Robbins Road, Westford,  Massachusetts
01886,  Attention:  President,  and (ii) if to an  Investor,  at the address set
forth  under  his or her name in the  subscription  agreement  executed  by such
Investor in  connection  with its  investment,  or at such other address as each
such party furnishes by notice given in accordance with this Section 10(a).

                  (b) Failure of any party to exercise any right or remedy under
this  Agreement or otherwise,  or delay by a party in  exercising  such right or
remedy, will not operate as a waiver thereof. No waiver will be effective unless
and until it is in writing and signed by the party giving the waiver.


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<PAGE>

                  (c) This Agreement  shall be enforced,  governed and construed
in all respects in  accordance  with the laws of the State of New York,  as such
laws are  applied  by New  York  courts  to  agreements  entered  into and to be
performed in New York by and between residents of New York. This Agreement shall
be binding upon each  Investor  and its heirs,  estate,  legal  representatives,
successors and permitted assignees and shall inure to the benefit of the Company
and its  successors  and  assigns.  In the  event  that  any  provision  of this
Agreement is invalid or  unenforceable  under any applicable  statute or rule of
law, then such provision  shall be deemed  inoperative to the extent that it may
conflict  therewith and shall be deemed modified to conform with such statute or
rule of law. Any provision hereof which may prove invalid or unenforceable under
any law shall not affect the validity or  enforceability  of any other provision
hereof.

                  (d) This Agreement  constitutes the entire  agreement  between
the parties hereto with respect to the subject  matter hereof.  Any provision of
this Agreement may be amended and the  observance  thereof may be waived (either
generally   or  in  a   particular   instance   and  either   retroactively   or
prospectively), only by a writing executed by the Company and Investors who hold
a majority in interest of the  Registrable  Securities.  Any amendment or waiver
effected  in  accordance  with this  Section  10(d)  shall be binding  upon such
Investor and the Company.

                  (e) Any such  person is  deemed to be a holder of  Registrable
Securities  whenever  such  person or entity  owns of  record  such  Registrable
Securities.  If  the  Company  receives  conflicting  instructions,  notices  or
elections  from  two or more  persons  or  entities  with  respect  to the  same
Registrable Securities, then the Company shall be entitled to act upon the basis
of the  instructions,  notice or election  received from the registered owner of
such Registrable Securities.

Dated this ___ day of June, 1998.

                                     AUGMENT SYSTEMS, INC.


                                        By:_____________________________________
                                           Name:
                                           Title:



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