EXHIBIT 10.1



                             February 6, 2001



Dear _________________,

     Bion Environmental Technologies, Inc. (the "Company") is proposing a
second amendment to the Bion Environmental Technologies, Inc. Convertible
Bridge Notes (first amended in August 2000) issued pursuant to the Private
Placement Memorandum dated December 29, 1999 (the "Notes"), as well as the
introductory paragraph of the Bion Environmental Technologies, Inc. Bridge
Warrants (first amended in August 2000) (the "Warrants") issued as part of the
same offering. According to our records, you hold such Notes and Warrants as
set forth on the attached Exhibit A.  Capitalized terms utilized herein and
not otherwise defined shall have the meanings given to them in the Notes.

     The introductory paragraph of the Notes currently states that the
Maturity Date of the Notes shall be July 1, 2001.  The Maturity Date in the
introductory paragraph of the Notes will be amended to read April 30, 2002,
rather than July 1, 2001.

     Section 2(a) of the Notes currently states as follows:

          "(a)     Prepayment or Conversion   (i) In the event the Company
shall issue any capital stock (or instrument convertible into capital stock)
("Stock") of the Company subsequent to the issuance of at least $1,000,000 of
Convertible Bridge Notes pursuant to the offering in which this Note was
issued, for an aggregate purchase price of at least $5,000,000 (exclusive of
the sale of the Notes), pursuant to a public or private offering (an
"Offering"), then the Notes shall be converted ("Conversion") into such number
of shares of the Stock of the Company as is equal to the Conversion Amount (as
defined below) divided by the then current Conversion Price (as defined
below).  The Conversion Amount shall be the aggregate principal value of the
Notes held by such Holder plus any accrued and unpaid interest.  Subject to
the limitation that in no event shall the Conversion Price be greater than
$5.00 per share (irrespective of the price paid for one share of Stock in the
Offering), the Conversion Price shall be the price paid for one share of Stock
issued in the Offering, subject to adjustment as provided below.

     (ii)     Should this Note not be converted into shares of Stock of the
Company pursuant to this Section 2(a) prior to one year from the date of
issuance of this Note, then the Note shall, at that time, be automatically
converted ("Conversion") on the date that occurs one year after the date of
issuance of this Note into such number of shares of Common Stock of the
Company as is equal to the Conversion Amount (as defined above) divided by the
then current Conversion Price (as defined below).  Subject to the limitation
that in no event shall the Conversion Price be greater than $5.00 per share
(irrespective of the market price of the Company's Common Stock at the time of
conversion), the Conversion Price shall be an amount equal to the Market Price
of the Company's Common Stock.  For the purposes hereof, Market Price shall
mean an amount not in excess of a maximum of $5 per share that is equal to the
average of the closing bid prices of the Company's Common Stock for the 20




business days immediately preceding the date of conversion as quoted for such
security on any licensed securities exchange or, if such security is not then
quoted on any licensed securities exchange, on the NASD electronic bulletin
board.  In the event such calculation cannot be made and the Company and a
majority of the Holders are unable to agree upon the fair market value of the
Common Stock, then such dispute shall be resolved by an investment banking
firm mutually acceptable to the Company and a majority of the Holders, and any
fees and costs associated therewith shall be paid by the Company; provided,
however, that in no event shall the Conversion Price be greater than $5 per
share."

     This paragraph will be amended to read as follows:

          "(a)     Prepayment or Conversion     (i) In the event the Company
shall issue any capital stock (or instrument convertible into capital stock)
("Stock") of the Company subsequent to the issuance of at least $1,000,000 of
Convertible Bridge Notes pursuant to the offering in which this Note was
issued, for an aggregate purchase price of at least $5,000,000 (exclusive of
the sale of the Notes), pursuant to a public or private offering (an
"Offering"), then the Notes shall be converted ("Conversion") into such number
of shares of the Stock of the Company as is equal to the Conversion Amount (as
defined below) divided by the then current Conversion Price (as defined
below).  The Conversion Amount shall be the aggregate principal value of the
Notes held by such Holder plus any accrued and unpaid interest.  Subject to
the limitation that in no event shall the Conversion Price be greater than
$2.50 per share (irrespective of the price paid for one share of Stock in the
Offering), the Conversion Price shall be the price paid for one share of Stock
issued in the Offering, subject to adjustment as provided below.

          (ii)     Should this Note not be converted into shares of Stock of
the Company pursuant to this Section 2(a) prior to midnight on April 29, 2002,
then the Note shall, at that time, be automatically converted ("Conversion")
into such number of shares of Common Stock of the Company as is equal to the
Conversion Amount (as defined above) divided by the then current Conversion
Price (as defined below).  Subject to the limitation that in no event shall
the Conversion Price be greater than $2.50 per share (irrespective of the
market price of the Company's Common Stock at the time of conversion), the
Conversion Price shall be an amount equal to the Market Price of the Company's
Common Stock.  For the purposes hereof, Market Price shall mean an amount not
in excess of a maximum of $2.50 per share that is equal to the average of the
closing bid prices of the Company's Common Stock for the 20 business days
immediately preceding the date of conversion as quoted for such security on
any licensed securities exchange or, if such security is not then quoted on
any licensed securities exchange, on the NASD electronic bulletin board.  In
the event such calculation cannot be made and the Company and a majority of
the Holders are unable to agree upon the fair market value of the Common
Stock, then such dispute shall be resolved by an investment banking firm
mutually acceptable to the Company and a majority of the Holders, and any fees
and costs associated therewith shall be paid by the Company; provided,
however, that in no event shall the Conversion Price be greater than $2.50 per
share."

     The introductory paragraph of the Warrants states that the Warrant
(exercise) Price of such Warrants is $2.00.  As an inducement to Holders to
agree to the above-described amendment to the Notes, the Company agrees to





amend this paragraph in the Warrant of each Holder whose Note is amended as
set forth above to provide that the Warrant Price shall be $1.50 rather than
$2.00.  The call price of the Warrants shall be reduced from $5.90 per share
to $3.50 per share.

     In order to amend your Warrant and Note, the Company must receive your
written approval of such amendments. Therefore, please sign a copy of this
letter in the space provided below and return it to the Company no later than
February 15, 2001.  The Note and Warrant of every Holder whose consent to the
amendments is received by February 15, 2001 will be deemed amended.  Any
consents received after that date will not be accepted.  However, in
accordance with Section 10(a) of the Notes, should a majority in principal
amount of outstanding Notes consent to the amendments on or prior to February
15, 2001, then the Notes of all Holders will be deemed amended.

     It is important for you to note that you will be required to pay income
tax on the difference, if any, between the new exercise price of the Warrants
and the market price of the underlying shares on the date of the exchange to
the extent that the market price is greater than the exercise price.

     If you have any questions, please contact me.  Copies of the Company's
latest Form 10-KSB, Form 10-QSB and Form 8-K are available at the office of
the Company.


                         BION ENVIRONMENTAL TECHNOLOGIES, INC.


                         By: ________________________________
                                Mark A. Smith, Chairman


     I have reviewed the proposed amendments to the Notes and Warrants  and
agree to such  amendments to my Notes and Warrants.



                              ______________________________



                              ______________________________
                              Please print or type name
                              of signatory above