8-K

                      SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON DC  20549

                                  FORM 8-K



               Current Report Pursuant to Section 13 or 15(d) of
                       The Securities Exchange Act of 1934




                          Date of Report: April 26, 2001
                        ----------------------------------
                        (Date of earliest event reported)




                      Bion Environmental Technologies, Inc.
              -----------------------------------------------------
              (Exact Name of Registrant as Specified in its Charter




           Colorado                  0-19333                 84-1176672
    ------------------------    ---------------------    -------------------
    (State of Incorporation)    (Commission File No.)    (I.R.S. Employer
                                                          Identification No.)




             18 East 50th Street 10th Floor New York, NY 10022
           -----------------------------------------------------
           (Address and Zip Code of Principal Executive Offices)




      Registrant's telephone number including area code: (212) 758-6622
                                                         --------------











ITEM 5.  OTHER EVENTS

     1.  We recently received aggregate gross proceeds of approximately $2.6
million from the private sale of convertible bridge notes and warrants.  The
notes bear interest at the rate of ten percent per year and mature on April
30, 2002.  We can prepay the notes at any time with no penalty.  In general,
if we issue equity securities prior to April 29, 2002, each note will convert
into the number of shares that is obtained by dividing the aggregate principal
amount of each note plus accrued but unpaid interest by the price of one share
of the equity security which triggers the conversion; provided, however, that
in no event may the conversion price be greater than $2.50 per share.  If
prior to midnight on April 29, 2002 the notes are not paid in cash or
converted into shares of common stock as the result of an offering, then at
that time each note will be automatically converted into the number of shares
that is obtained by dividing the aggregate principal amount of each note plus
accrued but unpaid interest by the average of the closing bid prices of the
common stock for the preceding 20 business days; provided, however, that in no
event may the conversion price be greater than $2.50 per share.  We have
agreed that, within nine months after the final closing of the offering that
we recently completed, we will use our best efforts to file a registration
statement with the Securities and Exchange Commission and to include in such
registration statement the shares of common stock underlying the conversion of
the notes and the exercise of the warrants.

          For each $250,000 worth of notes purchased, each holder also
received the right to purchase for $0.05 per warrant up to 75,000 warrants to
purchase one additional share of our common stock at an exercise price of
$1.50 per share.  An aggregate of 758,138 such warrants were issued pursuant
to the offering.  We have the right to redeem the warrants under certain
circumstances.  The warrants became exercisable upon issuance and will expire
on December 31, 2005.  See Exhibits 10.1, 10.2 and 10.3 for the form of the
Note and Warrant Purchase Agreement, the Convertible Bridge Note and the
Bridge Warrant, respectively.

     2.  As of May 15, 2001, our Colorado office was relocated to 26 West Dry
Creek Circle, Suite 600, Littleton, Colorado 80120 (phone 303-738-0845).

     3.  Effective May 2, 2001, Bart Chilton joined us as our Senior Vice
President (see Exhibit 99.1 attached).  He will be working on all aspects of
federal, state and local government relations as well as various management
and marketing matters.  In connection with his employment, Mr. Chilton
received options to purchase 100,000 shares of our unrestricted common stock
at $1.50 per share, with 33,334 shares currently vested; 33,333 shares vesting
on May 2, 2002; and 33,333 shares vesting on May 2, 2003; and each of the
options is exercisable for a two year period commencing on the date on which
it becomes vested.

     4.  On April 26, 2001, our Board of Directors accepted the resignation of
Jon Northrop as Chief Financial Officer effective February 28, 2001.
Effective that same date, David Fuller became our Principal Accounting Officer
handling all accounting and financial operations as well as certain
administrative functions in the New York City office.  Mr. Fuller received
options to purchase 40,000 shares of unrestricted common stock at $1.85 per
share, with 13,334 shares vested on June 1, 2001; 13,333 vesting on March 1,
2002; and 13,333 shares vesting on December 1, 2002; and all shares are
exercisable until December 31, 2003.

                                   2


     5.  Effective June 6, 2001, Joseph R. Wright, Jr. was elected to our
Board of Directors (see Exhibit 99.2 attached).  Mr. Wright received options
to purchase 20,000 shares of unrestricted common stock at $1.50 per share,
with 10,000 shares vesting on June 6, 2002 and 10,000 shares vesting on June
6, 2003, and all shares are exercisable until December 31, 2005.

     6.  On June 6, 2001, our Board of Directors authorized the formation of
an Advisory Board to consist of up to 15 members and determined that up to
300,000 options, in aggregate, be made available as compensation for Advisory
Board members over the next two years, subject to Board of Directors'
ratification on a case-by-case basis.

ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.

      Listed below are the exhibits filed as a part of this report.

      EXHIBITS:

      Exhibit
      Number                        Description
      -------                       -----------

      10.1              Note and Warrant Purchase Agreement
      10.2              Convertible Bridge Note
      10.3              Bridge Warrant
      99.1              Press Release dated May 15, 2001
      99.2              Press Release dated May 22, 2001


























                                   3


                                  SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                 BION ENVIRONMENTAL TECHNOLOGIES, INC.



                                 By:  /s/  Mark A. Smith
Date: June 27, 2001                   ---------------------------------
                                      Mark A. Smith
                                      Chairman and Secretary






































                                  4

EX-10

EXHIBIT 10.1


                     NOTE AND WARRANT PURCHASE AGREEMENT

     NOTE AND WARRANT PURCHASE AGREEMENT (this "Agreement") dated as of
______________, 2001, by and between BION ENVIRONMENTAL TECHNOLOGIES, INC., a
Colorado corporation (the "Company"), and the other parties executing
signature pages hereto (collectively, the "Purchasers").

     WHEREAS, in a series of transactions and upon and subject to the terms
and conditions hereinafter set forth, the Company desires to issue and sell to
the Purchasers, and the Purchasers desire to purchase from the Company (i) a
minimum of $1,000,000 and a maximum of $2,000,000 aggregate face amount of
2001 Series Convertible Bridge Notes (the "Bridge Notes") in the form attached
hereto as Exhibit A and (ii) a minimum of an aggregate of 300,000 a maximum of
an aggregate of 600,000 Bridge Warrants (the "Bridge Warrants") in the form
attached as Exhibit B, each of which shall entitle the holder thereof to
purchase one share of the Common Stock of the Company.

     NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein, the Purchasers and the Company hereby agree as
follows:

     1.   Purchase of Company Securities.

     1.1.   Purchase and Sale of the Bridge Notes and the Bridge Warrants.
Subject to the terms and conditions set forth herein, the Company hereby
agrees to issue and sell to the Purchasers, and each Purchaser, hereby agrees
to purchase from the Company, such number of Units (as defined below) at the
Closing (as such term is defined in Section 2.1 hereof) as is listed on its
signature page.  Each "Unit" shall consist of $250,000 face amount of Bridge
Notes and 75,000 Bridge Warrants.  The aggregate purchase price for the Units
sold pursuant to this Agreement shall be equal to the sum of $1.00 for each
$1.00 principal amount of Bridge Notes and $.05 for each Bridge Warrant.

     2.   Closing.

     2.1.   Closing.  The initial closing and each additional closing of the
purchase and sale of the Units will take place at the offices of Bion.  Such
closings (each, a "Closing" and collectively, the "Closings") will take place
at 10:00 A.M., local time, on such dates as may be mutually agreed upon by the
Company and the Purchasers.  The date of each Closing is referred to herein as
a "Closing Date."  The date of the first Closing shall hereafter be referred
to as the "Initial Closing Date" and the date of the final Closing shall
hereafter be referred to as the "Final Closing Date."  At each Closing, the
Company will deliver to the Purchasers the Bridge Notes and the Bridge
Warrants purchased as set forth in Section 1 hereof, against payment of the
Purchase Price, by wire transfer payable to the Company.  The Bridge Notes and
the Bridge Warrants shall be registered in each Purchaser's name or the name
of its nominee(s) in such denominations as the Purchaser shall request
pursuant to instructions delivered to the Company not less than two days prior
to such Closing Date.

     3.   Conditions to the Obligations of Purchasers at the Closing.  The
obligation of each Purchaser to purchase and pay for the Units to be purchased
by it at a Closing is subject to the satisfaction on or prior to the Closing
Date of the following conditions, which may only be waived by written consent
of Purchasers:

     3.1.   Opinion of Counsel to the Company.  Purchaser shall have received
from counsel for the Company, its opinion dated the Initial Closing Date in
the form of Exhibit A hereto.

     3.2.   Representations and Warranties.  All of the representations and
warranties of the Company contained in this Agreement shall be true and
correct at and as of such Closing Date, except for changes caused by the
transactions contemplated hereby.

     3.3.   Performance of  Covenants.  All of the covenants and agreements of
the Company contained in this Agreement and required to be performed on or
prior to the Closing Date shall have been performed in a manner satisfactory
in all respects to Purchasers.

     3.4.   Legal Action.  No injunction, order, investigation, claim, action
or proceeding before any court or governmental body shall be pending or
threatened wherein an unfavorable judgment, decree or order would restrain,
impair or prevent the carrying out of this Agreement or any of the
transactions contemplated hereby, declare unlawful the transactions
contemplated by this Agreement or cause any such transaction to be rescinded.

     3.5.   Consents.  The Company shall have obtained in writing or made all
consents, waivers, approvals, orders, permits, licenses and authorizations of,
and registrations, declarations, notices to and filings and applications with,
any governmental authority or any other person or entity (including, without
limitation, securityholders and creditors of the Company) required to be
obtained or made in order to enable the Company to observe and comply with all
its obligations under this Agreement and to consummate the transactions
contemplated hereby.

     3.6.   Closing Documents.  The Company shall have delivered to the
Purchasers the following:

          (a)   an incumbency certificate, dated the Initial Closing Date, for
the officers of the Company executing this Agreement, the Bridge Notes and the
Bridge Warrants and any other documents or instruments delivered in connection
with this Agreement at the Closing;

          (b)   a certificate of the Secretary or Assistant Secretary of the
Company, dated the Initial Closing Date, as to the continued and valid
existence of the Company, certifying the attached copy of the By-laws of the
Company, the authorization of the execution, delivery and performance of this
Agreement, and the resolutions adopted by the Board of Directors of the
Company authorizing the actions to be taken by the Company under this
Agreement;

          (c)   a certificate executed by the President or Chief Executive
Officer of the Company, dated the Closing Date, stating that the conditions
set forth in Sections 3.2 through 3.5 have been satisfied and that there have
been no changes in circumstance that would be reflected in the certificates
delivered pursuant to subsections (a) or (b);

          (d)   a certificate of the Secretary of State of the State of
Colorado, dated a recent date, to the effect that the Company is in good
standing in the State of Colorado and that all annual reports, if any, have
been filed as required and that all taxes and fees have been paid in
connection therewith;

          (e)   a certified copy of the Articles of Incorporation of the
Company as filed with the Secretary of State of the State of Colorado and any
amendments thereto;

          (f)   such certificates, other documents and instruments as
Purchasers and their counsel may reasonably request in connection with, and to
effect, the transactions contemplated by this Agreement.

     4.   Conditions to the Obligations of the Company at the Closing.  The
obligation of the Company to issue and sell the Bridge Notes and the Bridge
Warrants to the Purchasers at a Closing is subject to the satisfaction on or
prior to the Closing Date of the following conditions, any of which may be
waived by the Company:

     4.1.   Representations and Warranties.  The representations and
warranties of the Purchasers contained in this Agreement shall be true and
correct at and as of the Closing Date.

     4.2.   Legal Action.  No injunction, order, investigation, claim, action
or proceeding before any court or governmental body shall be pending or
threatened wherein an unfavorable judgment, decree or order would restrain,
impair or prevent the carrying out of this Agreement or any of the
transactions contemplated hereby, declare unlawful the transactions
contemplated by this Agreement or cause any such transaction to be rescinded.

     5.   Representations and Warranties of the Company.  The Company hereby
represents and warrants to the Purchasers:

     5.1.   Organization.  The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Colorado.
The Company has all requisite corporate power and authority, and holds all
licenses, permits and other required authorizations from governmental
authorities, necessary to conduct its business as it is now being conducted or
proposed to be conducted and to own or lease the properties and assets it now
owns or holds under lease.  Except where such failure to qualify could not
reasonably be deemed to have a material adverse effect on the Company, the
Company is duly qualified or licensed and in good standing as a foreign
corporation in each jurisdiction wherein the character of its properties or
the nature of the activities conducted by it makes such qualification or
licensing necessary.

     5.2.   Capitalization.  The Company's authorized capitalization is set
forth in the SEC Documents (as defined below). All outstanding securities of
the Company are validly issued, fully paid and nonassessable. No shareholder
of the Company is entitled to any preemptive rights with respect to the
purchase or sale of any securities by the Company.  Except as has been set
forth in the SEC Documents, there are no outstanding options, warrants or
other rights, commitments or arrangements, written or oral, to purchase or
otherwise acquire any authorized but unissued shares of capital stock of the
Company or any security directly or indirectly convertible into or
exchangeable for any capital stock of the Company or under which any such
option, warrant or convertible security may be issued in the future, and there
are no voting trusts or agreements, shareholders' agreements, pledge
agreements, buy-sell, rights of first offer, negotiation or refusal or proxies
or similar arrangements relating to any securities of the Company to which the
Company is a party, and to the best knowledge of the Company after due
investigation there are no such trusts, agreement, rights, proxies or similar
arrangements as to which the Company is not a party.  Except as set forth in
the SEC Documents and as contemplated herein, none of the shares of capital
stock of the Company is reserved for any purpose, and the Company is neither
subject to any obligation (contingent or otherwise), nor has any option to
repurchase or otherwise acquire or retire any shares of its capital stock.
The SEC Documents set forth (i) the number of shares of Common Stock
authorized for issuance under the Company's Fiscal Year 1994 Incentive Plan,
the Company's 1996 Non-employee Director Stock Plan and the Company's 2000
Incentive Plan; (ii) the number of shares of Common Stock as to which options
under such plan have been (a) reserved for issuance and (b) exercised; and
(iii) the exercise prices for all outstanding options under such plan.  Except
as set forth in the SEC Documents, no antidilution adjustments with respect to
the outstanding securities of the Company will be triggered by the issuance of
the securities contemplated hereby.

     5.3.   Due Authorization, Valid Issuance, Etc..  The Bridge Notes have
been duly authorized and, when issued in accordance with this Agreement upon
the Closing Date, will be free and clear of all liens imposed by or through
the Company.  The Bridge Warrants have  been duly authorized and, when issued
in accordance with this Agreement upon the Closing Date, will be validly
issued and free and clear of all liens imposed by or through the Company.  The
shares of capital stock, issuable upon conversion of the Bridge Notes, have
been duly authorized and shares of Common Stock have been reserved, and upon
the conversion of the Bridge Notes will be validly issued, fully paid and
nonassessable and will be free and clear of all liens imposed by or through
the Company.  The shares of Common Stock issuable upon the exercise of the
Bridge Warrants have been duly authorized and reserved, and upon the exercise
of the Bridge Warrants in accordance with the terms and conditions thereof and
this Agreement, will be validly issued, fully paid and nonassessable shares of
Common Stock and will be free and clear of all liens imposed by or through the
Company. Except as set forth in the SEC Documents, the issuance, sale and
clear delivery of the Bridge Notes, the Bridge Warrants and the Common Stock
or other capital stock of the Company issuable upon the exercise of the Bridge
Warrants and conversion of the Bridge Notes will not be subject to any
preemptive right of shareholders of the Company or to any right of first
refusal or other right in favor of any person.

     5.4.   Authorization; No Breach.  The Company has the full corporate
power and authority to execute, deliver and enter into this Agreement and to
perform its obligations hereunder, and the execution, delivery and performance
of this Agreement, the Bridge Notes, the Bridge Warrants, and any related
financing statement and all other transactions contemplated hereby have been
duly authorized by the Company, and this Agreement constitutes a legal, valid
and binding obligation of the Company, enforceable in accordance with its
terms except as the enforceability hereof may be limited by (a) bankruptcy,
insolvency, moratorium and similar laws affecting creditors' rights generally
and (b) the availability of remedies under general equitable principles and
(c) to the extent the indemnification provisions contained in Section 8.5
hereof may be limited by applicable federal or state securities laws.  To the
Company's knowledge, the execution and delivery by the Company of this
Agreement, the offering, sale and issuance of the Bridge Notes and the Bridge
Warrants pursuant to this Agreement, and the performance and fulfillment of
the Company of its obligations under this Agreement, the Bridge Notes and the
Bridge Warrants, do not and will not (i) conflict with or result in a breach
of the terms, conditions or provisions of, (ii) constitute a default under, or
event which, with notice or lapse of time or both, would constitute a breach
of or default under, (iii) result in the creation of any lien, security
interest, adverse claim, charge or encumbrance upon the capital stock or
assets of the Company pursuant to, (iv) give any third party the right to
accelerate any obligation under or terminate, (v) result in a violation of,
(vi) result in the loss of any license, certificate, legal privilege or legal
right enjoyed or possessed by the Company under, or (vii) except for filings
required to be made with the Securities and Exchange Commission, require any
authorization, consent, approval, exemption or other action by or notice to
any court or administrative or governmental body pursuant to or require the
consent of any other person under, the Articles of Incorporation or By-Laws of
the Company or any law, statute, rule or regulation to which the Company is
subject or by which any of its properties are bound, or any agreement,
instrument, order, judgment or decree to which the Company is subject or by
which its properties are bound.

     5.5   Financial Statements and SEC Documents.

          (a)   Incorporated by reference herein are (i) the audited
financial statements of the Company for the fiscal year ended June 30, 2000,
including the balance sheet as at the end of such fiscal year and the related
statements of operations, shareholders' equity (deficit) and cash flows for
such fiscal year, certified by BDO Seidman, LLP and (ii) the December 31
Financial Statements (the financial statements referred to in clauses (i) and
(ii) are referred to herein collectively as the "Financial Statements").  For
purposes of this Agreement, December 31, 2000, shall be hereinafter referred
to as the "Balance Sheet Date."  The Financial Statements have been prepared
in accordance with the books and records of the Company and generally accepted
accounting principles, applied consistently with the past practices of the
Company (except as otherwise noted in such Financial Statements), reflect all
liabilities and obligations of the Company, as of their respective dates, and
present fairly the financial position of the Company and the results of its
operations as of the time and for the periods indicated therein.

          (b)   Incorporated by referenced herein are the Form 10-KSB of the
Company for the fiscal year ended June 30, 2000 and each report, schedule,
registration statement and definitive proxy statement filed by the Company
with the Securities and Exchange Commission thereafter (as such documents have
since the time of their filing been amended, the "SEC Documents") which are
all the documents (other than preliminary material) that the Company was
required to file with the Securities and Exchange Commission since such date.
As of their respective dates, the SEC Documents complied in all respects with
the requirements of the Securities Act (as defined in Section 9.7) and/or the
Securities Exchange Act (as defined in Section 9.8) as the case may be, and
the rules and regulations of the Securities and Exchange Commission thereunder
applicable to such SEC Documents and none of the SEC Documents contained any
untrue statement of a material fact or omitted to statement of material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.  The
financial statements of the Company included in the SEC Documents comply as to
form in all material respects with applicable accounting requirements and with
the published rules and regulations of the Securities and Exchange Commission
with respect thereto, have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto or, in the case of
the unaudited statements, as permitted by Form 10-QSB of the Securities and
Exchange Commission) and fairly present (subject, in the case of the unaudited
statements, to normal, recurring audit adjustments) the financial position of
the Company as at the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended.

     5.6.   No Material Adverse Changes.  Except as set forth in  the SEC
Documents, since the Balance Sheet Date there has not at any time been (a) any
material adverse change in the financial condition, operating results,
business prospects, employee relations or customer relations of the Company,
or (b) other adverse changes, which in the aggregate have been materially
adverse to the Company.

     5.7.   Litigation.  Except as set forth in the SEC Documents, there are
no actions, suits, proceedings, orders, claims, or, to the Company's
knowledge, investigations pending or, to the Company's knowledge, threatened
against or affecting the Company, at law or in equity or before or by any
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality; there are no arbitration proceedings
pending under collective bargaining agreements or otherwise; and, to the
knowledge of the Company, there is no basis for any of the foregoing.

     5.8.   Compliance with Law.  To the Company's knowledge, the Company has
complied in all material respects with all applicable statutes and regulations
of the United States and of all states, municipalities and applicable agencies
and foreign jurisdictions or bodies in respect of the conduct of its business
and operations, and the failure, if any, by the Company to have fully complied
with any such statute or regulation does not and will not materially adversely
affect the business or operations of the Company.

     5.9.   Undisclosed Liabilities.  To the Company's knowledge, the Company
has no obligation or liability (whether accrued, absolute, contingent,
unliquidated, or otherwise, whether due or to become due) arising out of
transactions entered into at or prior to the Closing of this Agreement, or any
action or inaction at or prior to the Closing of this Agreement, or any state
of facts existing at or prior to the Closing of this Agreement, except (a)
liabilities reflected on the Company Balance Sheet; (b) liabilities incurred
in the ordinary course of business since the Balance Sheet Date (none of which
is a liability for breach of contract, breach of warranty, torts,
infringements, claims or lawsuits); and (c) liabilities or obligations
disclosed in the SEC Documents.

     5.10.   Disclosure.  Neither this Agreement nor any of the schedules,
exhibits, written statements, documents or certificates prepared or supplied
by the Company with respect to the transactions contemplated hereby contain
any untrue statement of a material fact or omit a material fact necessary to
make the statements contained herein or therein not misleading in light of the
circumstances under which made.  Except as disclosed in the SEC Documents and
except for matters effecting the industry of the Company as a whole, there
exists no fact or circumstance which, to the knowledge of the Company upon due
inquiry, materially adversely affects, or which could reasonably be
anticipated to have a material adverse effect on, the existing or expected
financial condition, operating results, assets, customer relations, employee
relations or business prospects of the Company. The Purchasers acknowledge
that the industry of the Company is subject to extensive regulation by
national, state and local authorities and that a change in any such
regulations or the institution of any litigation effecting the industry of the
Company in general, could have a material adverse effect on the Company.

     5.11.   Compliance with the Securities Laws. Assuming the accuracy and
truth of each of the Purchasers' representations set forth in Section 6 of
this Agreement, all securities of the Company heretofore sold and issued by it
were sold and issued, and the Bridge Notes and the Bridge Warrants were
offered and will be sold and issued, in compliance with all applicable federal
and state securities laws.

     6.   Representations and Warranties of Purchasers.  Each of the
Purchasers hereby severally represents and warrants to the Company as follows:

     6.1.   Investment Intent.  Each of the Purchasers is an "accredited
investor" within the meaning of Regulation D under the Securities Act.  Each
of the Purchasers has experience in making investments in development stage
technology companies and is acquiring the Bridge Notes and the Bridge Warrants
for its own account and not with a present view to, or for sale in connection
with, any distribution thereof in violation of the registration requirements
of the Securities Act.  Each of the Purchasers consents to the placing of a
legend on the certificates representing the Bridge Notes and the Bridge
Warrants to the effect that the shares of Common Stock or other Stock issuable
upon exercise or conversion, as the case may be, of the Bridge Warrants and
the Bridge Notes have not been registered under the Securities Act and may not
be transferred except in accordance with applicable securities laws or an
exception therefrom.

     6.2.   Authorization.  Each of the Purchasers has the power and authority
to execute and deliver this Agreement and to perform its obligations
hereunder, having obtained all required consents, if any, and this Agreement,
when executed and delivered, will constitute a legal valid and binding
obligation of such Purchaser.

     6.3.   Suitability.  Each Purchaser acknowledges that he is a person who
is able to bear the economic risk of this investment and has adequate means of
providing for his current needs and possible personal contingencies with no
need for liquidity of this investment.  In making this statement,
consideration has been given as to whether the Purchaser could afford to hold
his investment in the Company for an indefinite period of time and, whether,
at this time, he could afford a complete loss of his investment, without such
loss affecting his ability to maintain his lifestyle.

     6.4.   Risks.  Each Purchaser acknowledges that this investment is
speculative in nature and involves a high degree of risk, that the Purchaser
may not be able to liquidate this investment and that transferability is
extremely limited.

     6.5.   Due Inquiry.  Each Purchaser acknowledges receipt of all
information regarding the Company which he has requested or desired to know;
that all documents which could be reasonably provided have been made available
for his inspection and review; and that the Purchaser has been afforded the
opportunity to ask questions of and receive answers from duly authorized
officers or other representatives of the Company concerning the Company and an
investment therein, and any additional information which he has requested.

     7.   Covenants of the Company.  Until such time as the Registration
Statement (as defined below) is declared effective under the Securities Act,
the Company covenants and agrees with Purchasers as follows:

     7.1.   Books and Accounts.  The Company will make and keep books, records
and accounts, which, in reasonable detail, accurately and fairly reflect its
transactions, including without limitation, dispositions of its assets.

     7.2.   Reports.  The Company will make such filings as may be required
under the Securities Act.

     7.3.   Use of Proceeds.  The Company shall use the net proceeds from the
sale of the Bridge Notes and Bridge Warrants for its working capital needs.

     7.4.   Corporate Existence, Licenses and Permits; Maintenance of
Properties; New Businesses.  The Company will at all times conduct its
business in the ordinary course and cause to be done all things necessary to
maintain, preserve and renew its existence and will preserve and keep in force
and effect, all licenses, permits and authorizations necessary to the conduct
of its business. The Company will also maintain and keep its properties in
good repair, working order and condition, and from time to time, to make all
needful and proper repairs, renewals and replacements, so that the business
carried on in connection therewith may be properly conducted at all times.

     7.5.   Other Material Obligations.  The Company will comply with (a) all
material obligations which it is subject to, or becomes subject to, pursuant
to any contract or agreement, whether oral or written, as such obligations are
required to be observed or performed, unless and to the extent that the same
are being contested in good faith and by appropriate proceedings and the
Company  has set aside on its books adequate reserves with respect thereto,
and (b) all applicable laws, rules, and regulations of all governmental
authorities, the violation of which could have a material adverse effect upon
the business of the Company.

     7.6.   Amendment to the Articles of Incorporation and the By-Laws.  The
Company will perform and be in compliance with and observe all of the
provisions set forth in its Articles of Incorporation and By-Laws to the
extent that the performance of such obligations is legally permissible;
provided that the fact that performance is not legally permissible will not
prevent such nonperformance from constituting an event of default under this
Agreement.  The Company will not amend its Articles of Incorporation or
By-Laws so as to adversely affect the rights of the Purchasers under this
Agreement, the Articles of Incorporation, the By-Laws, the Bridge Warrants or
the Bridge Notes.

     7.7.   Dividends; Distributions; Repurchases of Common Stock; Treasury
Stock.  The Company shall not declare or pay any dividends on, or make any
other distribution with respect to, its capital stock, whether now or
hereafter outstanding, or purchase, acquire, redeem or retire any shares of
its capital stock, without the prior written consent of the Purchasers,
provided, however, the foregoing shall not prohibit the Company issuing shares
of its capital stock in exchange for extinguishing debt owed to any person, or
from repurchasing any shares of its Common Stock from any present or former
officer, Director or employee of the Company, or from repurchasing any
outstanding warrants.

     7.8.   Taxes and Liens.  The Company will duly pay and discharge when
payable, all taxes, assessments and governmental charges imposed upon or
against the Company or its properties, or any part thereof or upon the income
or profits therefrom, in each case before the same become delinquent and
before penalties accrue thereon, as well as all claims for labor, materials or
supplies which if unpaid might by law become a lien upon any of its property,
unless and to the extent that the same are being contested in good faith and
by appropriate proceedings and the Company has set aside on its books adequate
reserves with respect thereto.

     7.9.   Restrictive Agreement.  The Company covenants and agrees that
subsequent to the Closing, it will not be a party to any agreement or
instrument which by its terms would restrict the Company's performance of its
obligations pursuant to this Agreement, the Articles of Incorporation,
By-laws, the Bridge Warrants or the Bridge Notes.

     8.   Registration of Common Stock.

     8.1.   Registration.  Not later than nine months following the Final
Closing Date, the Company will file a registration statement (the
"Registration Statement") with respect to the resale of the Registrable
Securities with the Securities and Exchange Commission.  The Company will use
commercially reasonable efforts to effect,  no later than 12 months following
the Final Closing Date, the registrations, qualifications or compliances
(including, without limitation, the execution of any required undertaking to
file post-effective amendments, appropriate qualifications under applicable
blue sky or other state securities laws and appropriate compliance with
applicable securities laws, requirements or regulations) as may be reasonably
requested and as would permit or facilitate the sale and distribution of all
Registrable Securities until the distribution thereof is complete. In the
event the Registration Statement has not been declared effective under the
Securities Act within 12 months of the Final Closing Date, then, for each 90
days thereafter that the Registration Statement has not been declared
effective, the Company shall pay a penalty to each of the Purchasers equal to
5% of the principal amount of the Bridge Notes held by it. This penalty, which
shall be payable at the Company's option in either cash or shares of
registered Common Stock, shall be paid by the Company to the Purchasers within
10 days following the effective date of the Registration Statement, or, in the
event the Registration Statement has still not been declared effective or has
been withdrawn by the Company, no later than the second anniversary of the
Final Closing Date. No penalties will accrue under this Section 8.1 after the
earliest date on which the Registrable Securities cease to be Registrable
Securities.

     8.2.   Registration Procedures.  In connection with the registration of
any Registrable Securities under the Securities Act as provided in this
Section 8, the Company will use its best efforts, as expeditiously as possible
to:

          (a)   Prepare and file with the Securities and Exchange Commission
the Registration Statement with respect to such Registrable Securities and use
its best efforts to cause such Registration Statement to become effective;

          (b)   Prepare and file with the Securities and Exchange Commission
such amendments and supplements to such Registration Statement and the
prospectus used in connection therewith as may be necessary to keep such
Registration Statement effective until the earlier to occur of December 31,
2005 or such time as the Bridge Warrants have been redeemed pursuant to the
terms therein, and to comply with the provisions of the Securities Act (to the
extent applicable to the Company) with respect thereto;

          (c)   Furnish to each seller of such Registrable Securities such
number of copies of such Registration Statement and of each such amendment and
supplement thereto (in each case including all exhibits), such number of
copies of the prospectus included in such Registration Statement (including
each preliminary prospectus), in conformity with the requirements of the
Securities Act, and such other documents, as such seller may reasonably
request, in order to facilitate the disposition of the Registrable Securities
owned by such seller;

          (d)   Use its best efforts to register or qualify such Registrable
Securities covered by such Registration Statement under such other securities
or blue sky laws of such jurisdictions as any seller reasonably requests, and
do any and all other acts and things which may be reasonably necessary or
advisable to enable such seller to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such seller, except that
the Company will not for any such purpose be required to qualify generally to
do business as a foreign corporation in any jurisdiction wherein it would not,
but for the requirements of this Section 8.2(d) be obligated to be qualified,
to subject itself to taxation in any such jurisdiction, or to consent to
general service of process in any such jurisdiction;

          (e)   Provide a transfer agent and registrar for all such
Registrable Securities covered by such Registration Statement not later than
the effective date of such Registration Statement;

          (f)   Notify each seller of such Registrable Securities at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such Registration Statement contains an untrue
statement of a material fact or omits any fact necessary to make the
statements therein not misleading, and, at the request of any such seller, the
Company will prepare a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus will not contain an untrue statement of a material fact or omit to
state any fact necessary to make the statements therein not misleading;

          (g)   Cause all such Registrable Securities to be listed on each
securities exchange or quoted on each automated over-the-counter trading
system on which similar securities issued by the Company are then listed or
quoted, as applicable;

          (h)   Enter into such customary agreements and take all such other
actions as reasonably required in order to expedite or facilitate the
disposition of such Registrable Securities; and

          (i)   Make available for inspection by any seller of Registrable
Securities, all financial and other records, pertinent corporation documents
and properties of the Company, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such seller in
connection with the Registration Statement pursuant to Section 8.1.

     8.3.   Registration and Selling Expenses.

          (a)   All expenses incurred by the Company in connection with the
Company's performance of or compliance with this Section 8, including, without
limitation (i) all registration and filing fees (including all expenses
incident to filing with the National Association of Securities Dealers, Inc.),
(ii) blue sky fees and expenses, (iii) all necessary printing and duplicating
expenses and (iv) all fees and disbursements of counsel and accountants for
the Company (including the expenses of any audit of financial statements),
retained by the Company (all such expenses being herein called "Registration
Expenses"), will be paid by the Company except as otherwise expressly provided
in this Section 8.3. The term "Registration Expenses" shall not include any
underwriting discounts or commissions incurred by a Purchaser, which shall be
the responsibility of such Purchaser.

          (b)   The Company will, in any event, in connection with any
registration statement, pay its internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal, accounting or other duties in connection therewith and expenses of
audits of year-end financial statements), the expense of liability insurance
and the expenses and fees for listing the securities to be registered on one
or more securities exchanges or automated over-the-counter trading systems on
which similar securities issued by the Company are then listed.

     8.4.   NASD.  In the event any Purchaser is deemed to be a member or an
affiliate of a member of the National Association of Securities Dealers, Inc.
("NASD") and as a result the Registrable Securities held by such Purchaser
cannot be included in the Registration Statement, then such Purchaser shall no
longer be entitled to the registration rights granted under this Section 8.
The Company may, however, in its sole discretion, include the Purchaser's
Registrable Securities in a future registration statement, to the extent
permitted by the NASD or the Securities and Exchange Commission.

     8.5.   Indemnification.

          (a)   The Company hereby agrees to indemnify, to the extent
permitted by law, each holder of Registrable Securities, its officers and
directors, if any, and each person, if any, who controls such holder within
the meaning of the Securities Act, against all losses, claims, damages,
liabilities and expenses (under the Securities Act or common law or otherwise)
caused by any untrue statement or alleged untrue statement of a material fact
contained in any registration statement or prospectus (and as amended or
supplemented if the Company has furnished any amendments or supplements
thereto) or any preliminary prospectus, which registration statement,
prospectus or preliminary prospectus shall be prepared in connection with the
registration contemplated by this Section 8, 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 not misleading, except
insofar as such losses, claims, damages, liabilities or expenses are caused by
any untrue statement or alleged untrue statement contained in or by any
omission or alleged omission from information furnished in writing by such
holder to the Company in connection with the registration contemplated by this
Section 8, provided the Company will not be liable pursuant to this Section
8.5 if such losses, claims, damages, liabilities or expenses have been caused
by any selling security holder's failure to deliver a copy of the registration
statement or prospectus, or any amendments or supplements thereto, after the
Company has furnished such holder with the number of copies required by
Section 8.2(c).

          (b)   In connection with any registration statement in which a
holder of Registrable Securities is participating, each such holder shall
furnish to the Company in writing such information as is reasonably requested
by the Company for use in any such registration statement or prospectus and
shall severally, but not jointly,  indemnify, to the extent permitted by law,
the Company, its directors and officers and each person, if any, who controls
the Company within the meaning of the Securities Act, against any losses,
claims, damages, liabilities and expenses resulting from any untrue statement
or alleged untrue statement of a material fact or any omission or alleged
omission of a material fact required to be stated in the registration
statement or prospectus or any amendment thereof or supplement thereto or
necessary to make the statements therein not misleading, but only to the
extent such losses, claims, damages, liabilities or expenses are caused by an
untrue statement or alleged untrue statement contained in or by an omission or
alleged omission from information so furnished in writing by such holder in
connection with the registration contemplated by this Section 8. If the
offering pursuant to any such registration is made through underwriters, each
such holder agrees to enter into an underwriting agreement in customary form
with such underwriters and to indemnify such underwriters, their officers and
directors, if any, and each person who controls such underwriters within the
meaning of the Securities Act to the same extent as hereinabove provided with
respect to indemnification by such holder of the Company.  Notwithstanding the
foregoing or any other provision of this Agreement, in no event shall a holder
of Registrable Securities be liable for any such losses, claims, damages,
liabilities or expenses in excess of the net proceeds received by such holder
in the offering.

          (c)   Promptly after receipt by an indemnified party under Section
8.5 (a) or (b) of notice of the commencement of any action or proceeding, such
indemnified party will, if a claim in respect thereof is made against the
indemnifying party under such Section, notify the indemnifying party in
writing 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 such Section. In case any such
action or proceeding is brought against any indemnified party, and it notifies
the indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein, and, to the extent that it wishes,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel approved by such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election
so to assume the defense thereof, the indemnifying party will not be liable to
such indemnified party under such Section for any legal or any other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof (other than reasonable costs of investigation) unless incurred at the
written request of the indemnifying party. Notwithstanding the above, the
indemnified party will have the right to employ counsel of its own choice in
any such action or proceeding if the indemnified party has reasonably
concluded that there may be defenses available to it which are different from
or additional to those of the indemnifying party, or counsel to the
indemnified party is of the opinion that it would not be desirable for the
same counsel to represent both the indemnifying party and the indemnified
party because such representation might result in a conflict of interest (in
either of which cases the indemnifying party will not have the right to assume
the defense of any such action or proceeding on behalf of the indemnified
party or parties and such legal and other expenses will be borne by the
indemnifying party). An indemnifying party will not be liable to any
indemnified party for any settlement of any such action or proceeding effected
without the consent of such indemnifying party.

          (d)   If the indemnification provided for in Section 8.5(a) or (b)
is unavailable under applicable law to an indemnified party in respect of any
losses, claims, damages or liabilities referred to therein, then each
applicable 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 losses, claims, damages or liabilities in such proportion as is
appropriate to reflect the relative fault of the Company on the one hand and
of the holders of Registrable Securities on the other in connection with the
statements or omissions which resulted in such losses, claims, damages, or
liabilities, as well as any other relevant equitable considerations. The
relative fault of the Company on the one hand and of the holders of
Registrable Securities on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission to state a material fact relates to information supplied
by the Company or by the holders of Registrable Securities and the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission. The amount paid or payable by a party
as a result of the losses, claims, damages and liabilities referred to above
shall be deemed to include, subject to the limitations set forth in Section
8.5(c), any legal or other fees or expenses reasonably incurred by such party
in connection with investigating or defending any action or claim. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) will be entitled to contribution from any person who is
not guilty of such fraudulent misrepresentation.

          (e)   Promptly after receipt by the Company or any holder of
Securities of notice of the commencement of any action or proceeding, such
party will, if a claim for contribution in respect thereof is to be made
against another party (the "contributing party"), notify the contributing
party of the commencement thereof; but the omission so to notify the
contributing party will not relieve it from any liability which it may have to
any other party other than for contribution hereunder. In case any such
action, suit, or proceeding is brought against any party, and such party
notifies a contributing party of the commencement thereof, the contributing
party will be entitled to participate therein with the notifying party and any
other contributing party similarly notified.

     9.   Certain Definitions.  For the purposes of this Agreement the
following terms have the respective meanings set forth below:

     9.1.   "Affiliate" means any person, corporation, firm or entity which
directly or indirectly controls, is controlled by, or is under common control
with the indicated person, corporation, firm or entity.

     9.2.   "Common Stock" means the Company's no par value Common Stock.

     9.3.   "Generally Accepted Accounting Principles" means generally
accepted accounting principles consistently applied.

     9.4.   "Officers' Certificate" means a certificate executed on behalf of
the Company by its President, Chairman of the Board, Chief Executive Officer,
Chief Financial Officer, Secretary and/or one of its other Vice-Presidents.

     9.5.   "Registrable Securities" means (i) the Common Stock or other Stock
issuable upon conversion of the Bridge Notes and exercise of the Bridge
Warrants purchased pursuant to Section 1.1 or (ii) any other shares of Common
Stock now owned or hereafter acquired by Purchasers  (whether Common Stock
owned directly or underlying convertible securities of the Company); provided,
however, that such securities shall cease to be Registrable Securities when
(A) a registration statement with respect to the sale of such securities shall
have become effective under the Securities Act and such securities shall have
been disposed of under such registration statement, (B) such securities have
been sold in an open market transaction pursuant to Rule 144 promulgated by
the SEC under the Securities Act ("Rule 144"), (C) as to any Purchaser holding
not more than 1% of the Company's then issued and outstanding shares of Common
Stock (computed on a fully-diluted basis), such securities shall become
eligible for sale to the public pursuant to Rule 144, (D) as to any Purchaser,
such securities shall become eligible for sale to the public pursuant to Rule
144(k) promulgated by the SEC under the Securities Act or (E) they shall have
ceased to be outstanding.

     9.6.   "Securities" means the Bridge Notes, the Bridge Warrants and any
other capital stock or Common Stock underlying the foregoing whether issued at
the Closing or thereafter.

     9.7.   "Securities Act" means, as of any given time, the Securities Act
of 1933, as amended, or any similar federal law then in force.

     9.8.   "Securities Exchange Act" means, as of any given time, the
Securities Exchange Act of 1934, as amended, or any similar federal law then
in force.

     9.9.   "Securities and Exchange Commission" includes any governmental
body or agency succeeding to the functions thereof.

     9.10.   "Stock" means any series of stock other than Common Stock issued
upon conversion of the Bridge Notes.

     9.11.   "Subsidiary" means any person, corporation, firm or entity at
least the majority of the equity securities (or equivalent interest) of which
are, at the time as of which any determination is being made, owned of record
or beneficially by the Company, directly or indirectly, through any Subsidiary
or otherwise.

     10.   Company Indemnities.  The Company agrees to indemnify, defend and
hold the Purchasers and their officers, directors, partners, employees,
consultants and agents (the "Purchasers' Indemnitees") harmless from and
against any liability, obligation, claim, cost, loss, judgment, damage or
expense (including reasonable legal fees and expenses) (collectively,
"Liabilities") incurred or suffered by any of the Purchasers' Indemnitees as a
result of or arising out of or in connection with the Company's breach of any
representation, warranty, covenant or agreement of the Company contained
herein.

     11.   Miscellaneous.

     11.1.   Termination; Survival of Representations, Warranties and
Covenants. Except as therwise provided for in this Agreement all
representations, warranties, covenants and agreements contained in this
Agreement, or in any document, exhibit, schedule or certificate by any party
delivered in connection herewith shall survive the execution and delivery of
this Agreement and the Closing Date and the consummation of the transactions
contemplated hereby, regardless of any investigation made by the Purchasers or
on their behalf.

     11.2.   Expenses.  The Company shall pay all its own expenses in
connection with this Agreement and the transactions contemplated herein. The
Company agrees to pay promptly and save the Purchasers harmless against
liability for the payment all expenses incurred by the Company and the
Purchasers in connection with the preparation, printing and filing with the
Securities and Exchange Commission the Registration Statement and amendments,
post-effective amendments, and supplements thereto; preparing, printing and
delivering exhibits thereto and copies of the preliminary, final and
supplemental prospectuses; preparing, printing and delivering all selling
documents, including but not limited to the stock and warrant certificates
(the "Bridge Loan Costs").  The "Bridge Loan Costs" shall not include any
underwriting discounts or commissions incurred by a Purchaser or costs and
expenses under Section 8, including, without limitation, the Registration
Costs Exchange Commission the Registration Statement and amendments,
post-effective amendments, and supplements thereto and  preparing, printing
and delivering exhibits thereto and copies of the preliminary, final and
supplemental prospectuses which such costs shall in all cases be paid by the
Company.

     11.3.   Amendments; Waivers; Forbearance from Suit and Damages.  This
Agreement and all exhibits and schedules hereto set forth the entire agreement
and understanding among the parties as to the subject matter hereof and merges
and supersedes all prior discussions, agreements and understandings of any and
every nature among them.  This Agreement may be amended only by mutual written
agreement of the Company and the holders of a majority of principal amount of
the Bridge Notes (the "Majority Purchasers"), and the Company may take any
action herein prohibited or omit to take any action herein required to be
performed by it, and any breach of any covenant, agreement, warranty or
representation may be waived, only if the Company has obtained the written
consent or waiver of Majority Purchasers.  No course of dealing between or
among any persons having any interest in this Agreement will be deemed
effective to modify, amend or discharge any part of this Agreement or any
rights or obligations of any person under or by reason of this Agreement. In
addition, (A) no Purchaser shall institute any suit or proceeding for the
enforcement of the payment of principal or interest under the Bridge Notes or
for the enforcement of any other provision of this Agreement, the Bridge Notes
or the Bridge Warrants unless the holders of at least a majority in principal
amount of all of the outstanding Bridge Notes join in such suit or proceeding
and (B) except as set forth in Section 8.1 above, each Purchaser hereby waives
any claims for damages other than principal and interest due on the Bridge
Notes, including but not limited to punitive damages claims.

     11.4.   Successors and Assigns.  This Agreement may not be assigned by
the Company except with the prior written consent of the holders of a majority
of principal value of the Bridge Notes.  This Agreement shall be binding upon
and inure to the benefit of the Company and its permitted successors and
assigns and Purchasers and their successors and assigns.  The provisions
hereof which are for Purchasers' benefit as purchasers or holders of the
Bridge Notes and the Bridge Warrants are also for the benefit of, and
enforceable by, any subsequent holder of such Bridge Notes and Bridge
Warrants.

     11.5.   Notices.  All notices, demands and other communications to be
given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given personally or when
mailed by certified or registered mail, return receipt requested and postage
prepaid, and addressed to the addresses of the respective parties set forth
below or to such changed addresses as such parties may have fixed by notice;
provided, however, that any notice of change of address shall be effective
only upon receipt:

     If to the Company:

     Bion Environmental Technologies, Inc.
     18 East 50th Street
     New York, NY 10022
     Attn: David Mitchell

     With a Copy to:

     RubinBaum, LLP
     30 Rockefeller Plaza
     New York, NY  10112
     Attn:  Michael J. Emont, Esq.

     If to the Purchasers:

     At the address specified on their signature page hereto.

     11.6.   Governing Law.  The validity, performance, construction and
effect of this Agreement shall be governed by the internal laws of the State
of New York without giving effect to such State's principles of conflict of
laws.

     11.7.   Counterparts.  This Agreement may be executed in any number of
counterparts and, notwithstanding that any of the parties did not execute the
same counterpart, each of such counterparts shall, for all purposes, be deemed
an original, and all such counterparts shall constitute one and the same
instrument binding on all of the parties thereto. Any signature received by
facsimile transmission shall, for all purposes, be deemed an original
signature.

     11.8.   Headings.  The headings of the Sections hereof are inserted as a
matter of convenience and for reference only and in no way define, limit or
describe the scope of this Agreement or the meaning of any provision hereof.

     11.9.   Severability.  In the event that any provision of this Agreement
or the application of any provision hereof is declared to be illegal, invalid
or otherwise unenforceable by a court of competent jurisdiction, the remainder
of this Agreement shall not be affected except to the extent necessary to
delete such illegal, invalid or unenforceable provision unless the provision
held invalid shall substantially impair the benefit of the remaining portion
of this Agreement.

     11.10.   Rights of Holders Inter Se.   Each Holder of securities shall
have the absolute right to exercise or refrain from exercising any right or
rights which such Holder may have by reason of this Agreement or any security
including, without limitation, the right to consent to the waiver of any
obligation of the Company under this Agreement and to enter into an agreement
with the Company for the purpose of modifying this Agreement or any agreement
effecting such modification, and such Holder shall not incur any liability to
any other Holder or Holders of securities with respect to exercising or
refraining from exercising any such right or rights.

     11.11.   Exculpation Among Purchasers and Holders.  Each Purchaser
acknowledges and agrees that it is not relying upon any other Purchaser, or
any officer, director, employee partner or affiliate of any such other
Purchaser, in making its investment or decision to invest in the Company or in
monitoring such investment.  Each Purchaser agrees that no Purchaser nor any
controlling person, officer, director, shareholder, partner, agent or employee
of any Purchaser shall be liable for any action heretofore or hereafter taken
or omitted to be taken by any of them relating to or in connection with the
Company or the securities, or both.

     11.12.   Actions by Purchasers; Waiver.  Any actions permitted to be
taken by holders or Purchasers of Bridge Notes and/or Bridge Warrants and any
consents required to be obtained from the same under this Agreement, may be
taken or given only by, in the case of consents or actions requiring approval
of the Purchasers, by the Purchasers, and in all other cases, only by holders
of a majority of (i) in the case of the Bridge Notes, the Majority Purchasers
and (ii)  in the case of the Bridge Warrants, the number of underlying shares
of Common Stock, and if such holders constituting a majority the ("Majority
Holders") as set forth in (i) or (ii) above or the Purchasers take any action
or grant any consent, such action or consent shall be deemed given or taken by
all holders or Purchasers' who shall be bound by the decision or action taken
by the Majority Holders or the Purchasers without any liability on the part of
the Majority Holders or the Purchasers to any other holder of securities
hereto.

     11.13.   Arbitration.  In the event that any dispute arises hereunder
which cannot be settled by the parties, the parties agree that any such
controversy or claim arising out of or relating to this Agreement or the
breach hereof shall be settled by Arbitration before three arbitrators
selected as hereinafter provided (the "Arbitrators"), conducted in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
("AAA") then in effect.  The Arbitration shall take place in New York, New
York.  Each of the Company and the Majority Purchasers shall select one
Arbitrator and the Company and the Majority Purchasers shall in good faith
attempt to agree upon a third Arbitrator.  If they are unable to agree upon
the third Arbitrator within thirty (30) days of any request for Arbitration,
such Arbitrator shall be selected by the AAA, upon application of the Company
or the Majority Purchasers.  The persons selected as Arbitrators need not be
professional arbitrators, and persons such as lawyers, accountants, brokers
and bankers shall be acceptable.  Before undertaking to resolve the dispute,
each of the Arbitrators shall be duly sworn faithfully and fairly to hear and
examine the matters in controversy and to make a just award according to the
best of his or her understanding.  The written decision of the Arbitrators
shall be final, conclusive and binding on the Company and the Purchasers.
Each party shall bear its own costs and expenses (including legal fees and
expenses) relating to the Arbitration proceeding, except that the fees of the
Arbitrators and other related costs of the arbitration shall be shared equally
by the Company and the Purchasers.  Judgment on the award, if it is not paid
within thirty (30) days, may be entered in any court having jurisdiction over
the matter.  The Arbitrators shall be limited, in granting any relief, to
comply with any express provisions of this Agreement relating to damages or
the limitation thereof.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

                                   BION ENVIRONMENTAL TECHNOLOGIES, INC.



                                   By:____________________________________
                                      Name:
                                      Title:


                              PURCHASER SIGNATURE PAGE




Units Subscribed For:                    ______________________________
                                         PURCHASER NAME

                                         Address:
                                         ______________________________
______________________________
                                         ______________________________

Aggregate Purchase Price:
                                         By:___________________________
                                              Name:
                                              Title:
__________________________

EX-10

EXHIBIT 10.2


THIS NOTE IS NOT TRANSFERABLE WITHOUT THE EXPRESS WRITTEN CONSENT OF BION
ENVIRONMENTAL TECHNOLOGIES, INC. (THE "COMPANY").  THE SECURITIES REPRESENTED
BY THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY
APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT
OR AN EXEMPTION THEREFROM.  ANY SUCH TRANSFER MAY ALSO BE SUBJECT TO
APPLICABLE STATE SECURITIES LAWS.

                      BION ENVIRONMENTAL TECHNOLOGIES, INC.
                                                                  No. BN-__

                           2001 Convertible Bridge Note
$__________                                                New York, New York
                                                               ________, 2001
     Bion Environmental Technologies, Inc. a Colorado corporation (the
"Company"), for value received, hereby promises to pay to ___________________
or registered assigns (the "Holder"), the principal sum of ___________________
Dollars ($__________), with interest from the date of issuance of this
Convertible Bridge Note on the unpaid principal balance at a rate equal to ten
percent (10%) per annum, on April 30, 2002 (the "Maturity Date").  Payment
shall be made at such place as designated by the Holder upon surrender of this
Convertible Bridge Note, and shall be in such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts.  Interest shall be computed on the basis
of a 360-day year of twelve 30-day months.  This Convertible Bridge Note is
one of a duly authorized issue of Bion Environmental Technologies, Inc. 10%
Convertible Bridge Notes in a private offering of a minimum aggregate
principal amount of $1,000,000 and a maximum aggregate principal amount of
$2,000,000 (individually a "Note" and collectively the "Notes") issued
pursuant to a Note and Warrant Purchase Agreement of even date herewith
between the Company, the Holder and the other parties thereto (the "Purchase
Agreement").

ARTICLE 1. Prepayment

     This Note (including interest accrued on the principal hereof) may be
prepaid by the Company, at any time without penalty or premium.

ARTICLE 2. Mandatory Prepayment or Conversion

     (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 for an aggregate purchase price of at least $5,000,000 (exclusive
of the sale of the Notes and the conversion of any securities convertible into
Stock which are currently outstanding), 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 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 of
the Notes 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 of the Notes, 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.

     (b)   Conversion Procedures.  Each Holder of Notes shall surrender the
Notes at the offices of the Company, which Notes shall be accompanied by
irrevocable written notice to the Company specifying the name or names (with
address) in which a certificate or certificates evidencing shares of Stock are
to be issued.

     The Company shall deliver to the holder of the Notes, or to the nominee
or nominees of such person, certificates evidencing the number of full shares
of Stock to which such person shall be entitled as aforesaid, together with a
cash adjustment of any fraction of a share as hereinafter provided.  Subject
to the following provisions of this paragraph, such conversion shall be deemed
to have been made as of the date of such notice and the person or persons
entitled to receive Stock deliverable upon conversion of such Notes shall be
treated for all purposes as the record holder or holders of such Stock on such
date; provided, however, that the Company shall not be required to convert any
Notes while the stock transfer books of the Company are closed for any
purpose, but the giving of notice during any period while such books are so
closed shall become effective for conversion immediately upon the reopening of
such books as if the notice had been given on the date of such reopening, and
the conversion shall be at the conversion rate in effect on such date.

     (c)   Protection in Case of a Merger, Etc.  (i) In case of any capital
reorganization or reclassification, or any consolidation or merger to which
the Company is a party other than a merger or consolidation in which the
Company is the continuing corporation, or in case of any sale or conveyance to
another entity of the property of the Company as an entirety or substantially
as a entirety, or in the case of any statutory exchange of securities with
another corporation (including any exchange effected in connection with a
merger of a third corporation into the Company), the Holder of this Note shall
have the right thereafter to receive on the conversion of this Note the kind
and amount of securities, cash or other property which the Holder would have
owned or have been entitled to receive immediately after such reorganization,
reclassification, consolidation, merger, statutory exchange, sale or
conveyance had this Note been converted into shares of Common Stock
immediately prior to the effective date of such reorganization,
reclassification, consolidation, merger, statutory exchange, sale or
conveyance and in any such case, if necessary, appropriate adjustment shall be
made in the application of the provisions set forth in this Section 2 with
respect to the rights and interests thereafter of the Holder of this Note to
the end that the provisions set forth in this Section 2 shall thereafter
correspondingly be made applicable, as nearly as may reasonably be, in
relation to any shares of stock or other securities or property thereafter
deliverable on the Note.  The above provisions of this Subsection (c)(i) shall
similarly apply to successive reorganizations, reclassifications,
consolidations, mergers, statutory exchanges, sales or conveyances.  The
Company shall require the issuer of any shares of stock or other securities or
property thereafter deliverable on the exercise of this Note to be responsible
for all of the agreements and obligations of the Company hereunder.  Notice of
any such reorganization, reclassification, consolidation, merger, statutory
exchange, sale or conveyance and of said provisions so proposed to be made,
shall be mailed to the Holders of the Notes not less than 30 days prior to
such event.  A sale of all or substantially all of the assets of the Company
for a consideration consisting primarily of securities shall be deemed a
consolidation or merger for the foregoing purposes.

          (ii)   In case any event shall occur as to which the other provision
of this Section 2 is not strictly applicable but as to which the failure to
make any adjustment would not fairly protect the conversion rights represented
by this Note in accordance with the essential intent and principles hereof
then, in each such case, the Holders of Notes may appoint a firm of
independent public accountants of recognized national standing reasonably
acceptable to the Company, which shall give their opinion as to the
adjustment, if any, on a basis consistent with the essential intent and
principles established herein, necessary to preserve the conversion rights.
Upon receipt of such opinion, the Company will promptly mail a copy thereof to
the Holder of this Note and shall make the adjustments described therein.  The
fees and expenses of such independent public accountants shall be borne by the
Company.

     (d)   Reservation of Shares; Transfer Taxes; Etc.  The Company shall at
all times reserve and keep available, out of its authorized and unissued
shares of Common Stock, solely for the purpose of effecting the conversion of
the Notes, such number of shares of its Common Stock as shall be sufficient to
effect the conversion of all Notes from time to time outstanding.  The Company
shall use its best efforts from time to time, in accordance with the laws of
the State of Colorado, to increase the authorized number of shares of Common
Stock if at any time the number of shares of Common Stock not outstanding
shall not be sufficient to permit the conversion of all the then-outstanding
Notes.  In the event the Company intends to offer Stock other than Common
Stock, the Company shall authorize the issuance of sufficient shares of such
Stock to permit the conversion of all the then-outstanding Notes.

     The Company shall pay any and all issue or other taxes that may be
payable in respect of any issue or delivery of shares of Stock on conversion
of the Notes.  The Company shall not, however, be required to pay any tax
which may be payable in respect of any transfer involved in the issue or
delivery of Stock (or other securities or assets) in a name other than that in
which the Notes so converted were registered, and no such issue or delivery
shall be made unless and until the person requesting such issue has paid to
the Company the amount of such tax or has established, to the satisfaction of
the Company, that such tax has been paid.

ARTICLE 3. Fractional Shares

     The Company shall not be required to issue fractions of shares of Common
Stock or other Stock of the Company upon the conversion of the Note.  If any
fraction of a share would be issuable on the Conversion of the Note, the
Company shall purchase such fraction for an amount in cash equal to the same
fraction of the closing price for the Common Stock on the trading date
immediately preceding the date of exercise of the conversion or the fair
market value of such other Stock, as determined in good faith by the Board of
Directors of the Company.

ARTICLE 4. Affirmative Covenants of the Company.

     The Company covenants and agrees that until the payment in full of this
Note, the Company shall:

     (a)   Existence; Business. (i) Preserve, renew and keep in full force and
effect its legal existence and (ii) obtain, preserve, renew, extend and keep
in full force and effect the licenses, permits, authorizations, patents,
trademarks and trade names material to its business.

     (b)   Use of Proceeds.  Use the proceeds of the Notes of this issue
solely as set forth in Section 7.3 of the Purchase Agreement.

     (c)   Notice of Events of Default.  Furnish to the Holder prompt written
notice of any Event of Default, specifying the nature and extent thereof and
corrective action, if any, proposed to be taken with respect thereto.

     (d)   Authorization of Stock Issuable Upon Conversion.  Authorize and
reserve a sufficient number of its shares of Stock and Common Stock for
issuance upon Conversion of the Note.

ARTICLE 5. Negative Covenants of the Company.

     The Company covenants and agrees with the Holder that until the payment
in full of this Note, the Company shall not:

     (a)   Dividends and Distributions.  Declare or pay, directly or
indirectly, any dividend or make any other distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, with respect to any shares of its capital stock or directly or
indirectly redeem, purchase, retire or otherwise acquire for value any shares
of any class of its capital stock or set aside any amount for any such
purpose, except as permitted by Section 7.14 of the Purchase Agreement.

     (b)   No Impairment.  By amendment of its charter or through
reorganization, consolidation, merger, dissolution, sale of assets or any
other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Note, but will at all times in good faith assist
in the carrying out of all such terms and in the taking of all such action as
may be necessary or appropriate in order to protect the rights of the Holder
of this Note against impairment.

ARTICLE 6. Events of Default Defined.

     The following shall each constitute an "Event of Default" hereunder:

     (a)   the failure of the Company to make any payment of principal of or
interest on this Note when due and payable;

     (b)   the failure of the Company to observe or perform any covenant in
this Note or in the Purchase Agreement, and such failure shall have continued
unremedied for a period of five (5) days;

     (c)   if the Company shall:

               (1)   admit in writing its inability to pay its debts generally
                     as they become due,
               (2)   file a petition in bankruptcy or a petition to take
                     advantage of any insolvency act,

               (3)   make an assignment for the benefit of its creditors,

               (4)   consent to the appointment of a receiver of itself or of
                     the whole or any substantial part of its property,

               (5)   on a petition in bankruptcy filed against, be adjudicated
                     a bankrupt, or

               (6)   file a petition or answer seeking reorganization or
                     arrangement under the federal bankruptcy laws or any other
                     applicable law or statute of the United States of America
                     or any state thereof;

     (d)   if a court of competent jurisdiction shall enter an order, judgment
or decree appointing, without the consent of the Company, a receiver of the
Company or of the whole or any substantial part of its property, or approving
a petition filed against it seeking reorganization or arrangement of the
Company under the federal bankruptcy laws or any other applicable law or
statute of the United States of America or any State thereof, and such order,
judgment or decree shall not be vacated or set aside or stayed within thirty
(30) days from the date of entry thereof;

     (e)   if, under the provisions of any other law for the relief or aid of
debtors, any court of competent jurisdiction shall assume custody or control
of the Company or the whole or any substantial part of its property and such
custody or control shall not be terminated or stayed within thirty (30) days
from the date of assumption of such custody or control;

     (f)   the liquidation, dissolution or winding up of the Company;

     (g)   the failure of the shareholders to authorize and approve the
issuance of these Notes or the issuance of the Stock underlying these Notes,
the Bridge Warrants (as such terms are defined in the Purchase Agreement), or
any Common Stock underlying the foregoing to the extent such authorization is
necessary pursuant to the rules of the Nasdaq National Market or any other
applicable law, rule or regulation; or

     (h)   A final judgment or judgments for the payment of money in excess of
$100,000 in the aggregate shall be rendered by one or more courts,
administrative or arbitral tribunals or other bodies having jurisdiction
against the Company and the same shall not be discharged (or provision shall
not be made for such discharge), or a stay of execution thereof shall not be
procured, within 30 days from the date of entry thereof and the Company shall
not, within such 30-day period, or such longer period during which execution
of the same shall have been stayed, appeal therefrom and cause the execution
thereof to be stayed during such appeal.

ARTICLE 7. Remedies upon Event of Default.

     (a)   Upon the occurrence of an Event of Default, (i) the entire
principal amount of, and all accrued and unpaid interest on, this Note shall
automatically become immediately due and payable without presentment, demand,
protest or other formalities of any kind, all of which are hereby expressly
waived by the Company.  In addition, the Holder may take any action available
to it under the Purchase Agreement or at law or in equity or by statute or
otherwise.

     (b)   No remedy herein conferred upon the Holder of this Note is intended
to be exclusive of any other remedy and each and every such remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or
now or hereafter existing at law or in equity or by statute or otherwise.

ARTICLE 8. Note Register.

     (a)   The Company shall keep at its principal executive office a register
(herein sometimes referred to as the "Note Register"), in which, subject to
such reasonable regulations as it may prescribe, but at its expense (other
than transfer taxes, if any), the Company shall provide for the registration
and transfer of this Note.

     (b)   Whenever this Note shall be surrendered at the principal executive
office of the Company for transfer or exchange, accompanied by a written
instrument of transfer in form reasonably satisfactory to the Company duly
executed by the Holder hereof or his attorney duly authorized in writing, the
Company shall execute and deliver in exchange therefor a new Note or Notes, as
may be requested by such Holder, in the same aggregate unpaid principal amount
and payable on the same date as the principal amount of the Note or Notes so
surrendered; each such new Note shall be dated as of the date to which
interest has been paid on the unpaid principal amount of the Note or Notes so
surrendered and shall be in such principal amount and registered in such name
or names as such Holder may designate in writing.

     (c)   Upon receipt by the Company of evidence reasonably satisfactory to
it of the loss, theft, destruction or mutilation of this Note and of indemnity
reasonably satisfactory to it, and upon reimbursement to the Company of all
reasonable expenses incidental thereto, and upon surrender and cancellation of
this Note (in case of mutilation) the Company will make and deliver in lieu of
this Note a new Note of like tenor and unpaid principal amount and dated as of
the date to which interest has been paid on the unpaid principal amount of
this Note in lieu of which such new Note is made and delivered.

ARTICLE 9. Registration Under Securities Act of 1933.

     The Holder of this Note shall have registration rights as provided in
Section 8 of the Purchase Agreement, with respect to the Securities issuable
upon conversion of the Notes.  If the Holder is not a party to the Purchase
Agreement, by acceptance of this Note, the Holder agrees to comply with
provisions of Section 8 of the Purchase Agreement to the same extent as if it
were a party thereto.

ARTICLE 10. Miscellaneous.

     (a)   Amendments and Waivers.  The holders of a majority in principal
amount of outstanding Notes of this issue may waive or otherwise consent to
the amendment of any of the provisions hereof.

     (b)   Restrictions on Transferability.  In addition to the restrictions
set forth in Section 9 of this Note, the securities represented by this Note
have been acquired for investment and have not been registered under the
Securities Act of 1933, as amended, or the securities laws of any state or
other jurisdiction.  Without such registration, such securities may not be
sold, pledged, hypothecated or otherwise transferred, except pursuant to
exemptions from the Securities Act of 1933, and the securities laws of any
state or other jurisdiction.  Notwithstanding the above, the holder of this
Note has been provided the registration rights contained in Section 8 of the
Purchase Agreement with respect to the shares of the Company's Common Stock
which may be acquired upon the Conversion of the Note.

     (c)   Forbearance from Suit.  No holder of Notes of this issue shall
institute any suit or proceeding for the enforcement of the payment of
principal or interest unless the holders of at least a majority in principal
amount of all of the outstanding Notes of this issue join in such suit or
proceeding.

     (d)   Governing Law.  This Note shall be governed by and construed in
accordance with the laws of the State of New York, excluding the body of law
relating to conflict of laws.  Notwithstanding anything to the contrary
contained herein, in no event may the effective rate of interest collected or
received by the Holder exceed that which may be charged, collected or received
by the Holder under applicable law.

     (e)   Interpretation.  If any term or provision of this Note shall be
held invalid, illegal or unenforceable, the validity of all other terms and
provisions hereof shall in no way be affected thereby.

     (f)   Successors and Assigns.  This Note shall be binding upon the
Company and its successors and assigns and shall inure to the benefit of the
Holder and its successors and assigns.

     (g)   Notices.  All notices, requests, consents and demands shall be made
in writing and shall be mailed postage prepaid, or delivered by hand, to the
Company or to the Holder thereof at their respective addresses set forth below
or to such other address as may be furnished in writing to the other party
hereto:

     If to the Holder:   At the address shown on Schedule A attached hereto.

     If to the Company:  Bion Environmental Technologies, Inc.
                         18 East 50th Street
                         New York, NY  10022
                         Attention:  Chief Executive Officer

     (h)   Saturdays, Sundays, Holidays.  If any date that may at any time be
specified in this Note as a date for the making of any payment of principal or
interest under this Note shall fall on Saturday, Sunday or on a day which in
New York shall be a legal holiday, then the date for the making of that
payment shall be the next subsequent day which is not a Saturday, Sunday or
legal holiday.

     (i)   Purchase Agreement.  This Note is subject to the terms contained in
the Purchase Agreement dated the date hereof between the Company and the
purchasers of the Notes and the holder of this Note is entitled to the
benefits of such Purchase Agreement and may, in addition to any rights
hereunder, enforce the agreements of the Company contained therein and
exercise the remedies provided for thereby or otherwise available in respect
thereof.

     IN WITNESS WHEREOF, this Note has been executed and delivered as a sealed
instrument on the date first above written by the duly authorized
representative of the Company.

ATTEST:                                    BION ENVIRONMENTAL
                                           TECHNOLOGIES, INC.


______________________________             By: _____________________________
                                               Name:
                                               Its:

(Corporate Seal)


                                     Schedule A

EX-10

EXHIBIT 10.3

THIS BRIDGE WARRANT HAS BEEN ISSUED IN RELIANCE UPON THE REPRESENTATION OF THE
HOLDER THAT IT HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TOWARDS THE RESALE OR OTHER DISTRIBUTION THEREOF. NEITHER THIS BRIDGE WARRANT
NOR THE SHARES ISSUABLE UPON THE EXERCISE OF THIS BRIDGE WARRANT HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.


                     BION ENVIRONMENTAL TECHNOLOGIES, INC.

                             2001 Bridge Warrant

Bridge Warrant to Subscribe                                    ________, 2001
for ______ shares

                         Void After December 31, 2005

     THIS CERTIFIES that, for value received, ___________________, or its
registered assigns ("Holder"), is entitled to subscribe for and purchase from
Bion Environmental Technologies, Inc., a Colorado corporation (hereinafter
called the "Company"), at the price of $1.50 per share (such price as from
time to time adjusted as hereinafter provided being hereinafter called the
"Warrant Price"), at any time prior to December 31, 2005 (the "Warrant
Expiration Date"), up to ______ (subject to adjustment as hereinafter
provided) fully paid and nonassessable shares of Common Stock, no par value
per share, of the Company (hereinafter called the "Common Stock"), subject,
however, to the provisions and upon the terms and conditions hereinafter set
forth. This Bridge Warrant was issued pursuant to a certain Note and Warrant
Purchase Agreement, dated as of ________, 2001 (the "Purchase Agreement"),
among the Company and certain other parties and the rights and benefits
contained therein shall inure to the benefit of all subsequent holders of this
Bridge Warrant. The Bridge Warrants issued pursuant to the Purchase Agreement
and any warrant or warrants subsequently issued upon exchange or transfer
thereof are hereinafter collectively called the "Bridge Warrants.""Registered
Holder" shall mean, as to any Bridge Warrant and as of any particular date the
person in whose name the certificate representing the Bridge Warrant shall be
registered on that date on the books maintained by the Company pursuant to
Section 3(b).

     Section 1.   Exercise of Bridge Warrant.

          (a)   Method of Exercise.  The rights represented by this Warrant
may be exercised by the holder hereof, in whole at any time or from time to
time in part, but not as to a fractional share of Common Stock, by the
surrender of this Warrant (properly endorsed) at the office of the Company as
it may designate by notice in writing to the holder hereof at the address of
such holder appearing on the books of the Company, and as further provided
below in this Section 1 by payment to the Company of the Warrant Price in cash
or by certified or official bank check, for each share being purchased.

          (b)   Delivery of Certificates. Etc.  In the event of any exercise
of the rights represented by this Bridge Warrant, a certificate or
certificates for the shares of Common Stock so purchased, registered in the
name of the holder, shall be delivered to the holder hereof within a
reasonable time, not exceeding ten days, after the rights represented by this
Bridge Warrant shall have been so exercised; and, unless this Bridge Warrant
has expired, a new Bridge Warrant representing the number of shares (except a
remaining fractional share), if any, with respect to which this Bridge Warrant
shall not then have been exercised shall also be issued to the holder hereof
within such time. The person in whose name any certificate for shares of
Common Stock is issued upon exercise of this Bridge Warrant shall for all
purposes be deemed to have become the holder of record of such shares on the
date on which the Bridge Warrant was surrendered and payment of the Warrant
Price and any applicable taxes was made, except that, if the date of such
surrender and payment is a date on which the stock transfer books of the
Company are closed, such person shall be deemed to have become the holder of
such shares at the close of business on the next succeeding date on which the
stock transfer books are open.

     Section 2.   Reservation of Shares; Listing; Payment of Taxes; etc.

          (a)   The Company covenants that it will at all times reserve and
keep available out of its authorized Common Stock, solely for the purpose of
issue upon exercise of Bridge Warrant, such number of shares of Common Stock
as shall then be issuable upon the exercise of all outstanding Bridge Warrant.
The Company covenants that all shares of Common Stock which shall be issuable
upon exercise of the Bridge Warrant shall, at the time of delivery (assuming
full payment of the purchase price thereof), be duly and validly issued, fully
paid, nonassessable and free from all issuance taxes, liens and charges with
respect to the issue thereof including, without limitation, adverse claims
whatsoever (with the exception of claims arising through the acts of the
Registered Holders themselves and except as arising from applicable Federal
and state securities laws), that the Company shall have paid all taxes, if
any, in respect of the original issuance thereof and that upon issuance such
shares, to the extent applicable, shall be listed on, or included in, the
Stock Market. As used herein, "Stock Market" shall mean the principal national
securities exchange on which the Common Stock is listed or admitted to trading
or, if the Common Stock is not listed or admitted to trading on any national
securities exchange, shall mean NASDAQ or, if the Common Stock is not quoted
on Nasdaq, shall mean the OTC Bulletin Board or, if the Common Stock is not
quoted on the OTC Bulletin Board, shall mean the over-the-counter market as
furnished by any NASD member firm selected from time to time by the Company
for that purpose.

          (b)   The Company covenants that if any securities to be reserved
for the purpose of exercise of the Bridge Warrant hereunder require
registration with, or the approval of, any governmental authority under any
federal securities law before such securities may be validly issued or
delivered upon such exercise, then the Company will in good faith and as
expeditiously as reasonably possible, endeavor to secure such registration or
approval.  The Company will use reasonable efforts to obtain appropriate
approvals or registrations under state "blue sky" securities laws; provided,
that the Company shall not be required to qualify as a foreign corporation or
file a general or limited consent to service of process in any such
jurisdictions or make any changes in its capital structure or any other
aspects of its business or enter into any agreements with blue sky
commissions, including any agreement to escrow shares of its capital stock.
With respect to any such securities, however, Bridge Warrants may not be
exercised by, or shares of Common Stock issued to, any Registered Holder in
any state in which such exercise would be unlawful.

          (c)   The Company shall pay all documentary, stamp or similar taxes
and other similar governmental charges that may be imposed with respect to the
issuance of Bridge Warrants, or the issuance or delivery of any shares upon
exercise of the Bridge Warrants; provided, however, that if the shares of
Common Stock are to be delivered in a name other than the name of the
Registered Holder on any Bridge Warrant being exercised, then no such delivery
shall be made unless the person requesting the same has paid to the Company
the amount of transfer taxes or charges incident thereto, if any.

     Section 3.   Exchange and Registration of Transfer.

          (a)   This Bridge Warrant may be exchanged for another Bridge
Warrant representing an equal aggregate number of Bridge Warrants of the same
class or may be transferred in whole or in part, by surrendering it to the
Company at its corporate office.  Upon satisfaction of the terms and
provisions hereof, the Company shall execute, and the Company shall  sign,
issue and deliver in exchange therefor, such new Bridge Warrant or Bridge
Warrants that the Registered Holder making the exchange shall be entitled to
receive.

          (b)   The Company shall keep at its office books in which, subject
to such reasonable regulations as it may prescribe, it shall register Bridge
Warrants and any transfers thereof in accordance with its regular practice.
Upon due presentment for registration of transfer of any Bridge Warrant at
such office, the Company shall execute and the Company shall issue and deliver
to the transferee or transferees a new Bridge Warrant or Bridge Warrants
representing an equal aggregate number of Bridge Warrants.

          (c)   With respect to all Bridge Warrants presented for registration
or transfer, or for exchange or exercise, the subscription form attached
hereto shall be duly endorsed, or be accompanied by a written instrument or
instruments of transfer and subscription, in form satisfactory to the Company,
duly executed by the Registered Holder or his attorney-in-fact duly authorized
in writing.

          (d)   Prior to due presentment for registration of transfer thereof,
the Company may deem and treat the Registered Holder of any Bridge Warrant as
the absolute owner thereof (notwithstanding any notations of ownership or
writing thereon made by anyone other than a duly authorized officer of the
Company) for all purposes and shall not be affected by any notice to the
contrary.  The Bridge Warrants, which are being offered in Units with the
Bridge Notes pursuant to the Purchase Agreement, will immediately be
detachable and separately transferable from the Bridge Notes.

     Section 4.   Loss or Mutilation.  Upon receipt by the Company of evidence
satisfactory to it of the ownership of and loss, theft, destruction or
mutilation of any Bridge Warrant and (in case of loss, theft or destruction)
of indemnity satisfactory to it, and (in the case of mutilation) upon
surrender and cancellation thereof, the Company shall execute, sign and
deliver to the Registered Holder in lieu thereof a new Bridge Warrant of like
tenor representing an equal aggregate number of Bridge Warrants.

     Section 5.   Redemption.

          (a)   At any time after the six month anniversary of the Final
Closing Date (as defined in the Purchase Agreement), so long as the Company
has caused the Registrable Securities to become registered in accordance with
Section 8 of the Purchase Agreement, the Company may, at its option, redeem
the Bridge Warrants at a price of $0.05 per share of Common Stock, as may
adjusted pursuant to Section 6 (the Redemption Price"), provided the Closing
Bid Price exceeds $3.50 per share of Common Stock for at least 20 trading days
in any 30 consecutive trading day period ending three days prior to the date
of notice of redemption (which shall be the date of mailing of such notice).
All outstanding Bridge Warrants must be redeemed if any are redeemed.  The
date fixed for redemption of the Bridge Warrants is referred to herein as the
"Redemption Date."  For purposes hereof, the "Closing Bid Price" for each
trading day shall be the reported per share closing bid price of the Common
Stock regular way on the Stock Market on such trading day.

          (b)   If the conditions set forth in Subsection 5(a) are met, and
the Company desires to exercise its right to redeem the Bridge Warrants, it
shall mail a notice of redemption to each of the Registered Holders of the
Bridge Warrants to be redeemed, first class, postage prepaid, not later than
the sixtieth day before the date fixed for redemption, at their last address
as shall appear on the records maintained pursuant to Subsection 3(b).  Any
notice mailed in the manner provided herein shall be conclusively presumed to
have been duly given whether or not the Registered Holder receives such
notice.

          (c)   The notice of redemption shall specify (i) the Redemption
Price, (ii) the Redemption Date, (iii) the place where the Bridge Warrants
shall be delivered and the redemption price paid and  (iv) that the right to
exercise the Bridge Warrants shall terminate at 5:00 P.M. (New York time) on
the business day immediately preceding the Redemption Date.  No failure to
mail such notice nor any defect therein or in the mailing thereof shall affect
the validity of the proceedings for such redemption except as to a Registered
Holder (a) to whom notice was not mailed or (b) whose notice was defective.
An affidavit of the Secretary or an Assistant Secretary of the Company that
notice of redemption has been mailed shall, in the absence of fraud, be prima
facie evidence of the facts stated therein.

          (d)   Any right to exercise a Bridge Warrant shall terminate at 5:00
P.M. (New York time) on the business day immediately preceding the Redemption
Date.  On and after the Redemption Date, Holders of the Bridge Warrants shall
have no further rights except to receive, upon surrender of the Bridge
Warrants, the Redemption Price.

          (e)   From and after the Redemption Date, the Company shall, at the
place specified in the notice of redemption, upon presentation and surrender
to the Company by or on behalf of the Registered Holder thereof of one or more
Bridge Warrants to be redeemed, deliver or cause to be delivered to or upon
the written order of such Holder a sum in cash equal to the redemption price
of such Bridge Warrants.  From and after the Redemption Date and upon the
deposit or setting aside by the Company of a sum sufficient to redeem all the
Bridge Warrants called for redemption, such Bridge Warrants shall expire and
become void and all rights hereunder, except the right to receive payment of
the Redemption Price, shall cease.

     Section 6.   Adjustment of Warrant Price and Number of Shares of Common
Stock or Bridge Warrants.  Upon each adjustment of the Warrant Price pursuant
to this Section 6, the total number of shares of Common Stock purchasable upon
the exercise of each Bridge Warrant shall (subject to the provisions contained
in Subsection 6(c)) be such number of shares (calculated to the nearest tenth)
purchasable at the Warrant Price in effect immediately prior to such
adjustment multiplied by a fraction, the numerator of which shall be the
Warrant Price in effect immediately prior to such adjustment and the
denominator of which shall be the Warrant Price in effect immediately after
such adjustment.

          (a)   Except as otherwise provided herein, in the event the Company
shall, at any time or from time to time after the date hereof, (i) sell or
issue any shares of Common Stock for a consideration per share less than the
Warrant Price in effect on the date of such sale or issuance, (ii) issue any
shares of Common Stock as a stock dividend to the holders of Common Stock, or
(iii) subdivide or combine the outstanding shares of Common Stock into a
greater or fewer number of shares (any such sale, issuance, subdivision or
combination being herein called a "Change of Shares"), then, and thereafter
upon each further Change of Shares, the Warrant Price in effect immediately
prior to such Change of Shares shall be changed to a price (rounded to the
nearest cent) determined by multiplying the Warrant Price in effect
immediately prior thereto by a fraction, the numerator of which shall be (x)
the sum of (A) the number of shares of Common Stock outstanding immediately
prior to the sale or issuance of such additional shares or such subdivision or
combination plus (B) the number of shares of Common Stock that the aggregate
consideration received (determined as provided in Paragraph 6(g)(v)) for the
issuance of such additional shares would purchase at the Warrant Price in
effect on the date of such issuance and the denominator of which shall be (y)
the number of shares of Common Stock outstanding immediately after the sale or
issuance of such additional shares or such subdivision or combination.  Such
adjustment shall be made successively whenever any such issuance is made.

          (b)   In case of any reclassification, capital reorganization or
other change of outstanding shares of Common Stock, or in case of any
consolidation or merger of the Company with or into another entity (other than
a consolidation or merger in which the Company is the continuing entity and
which does not result in any reclassification, capital reorganization or other
change of outstanding shares of Common Stock other than the number thereof),
or in case of any sale or conveyance to another entity of the property of the
Company as, or substantially as, an entirety (other than a sale/leaseback,
mortgage or other financing transaction), the Company shall cause effective
provision to be made so that each holder of a Bridge Warrant then outstanding
shall have the right thereafter, by exercising such Bridge Warrant, upon the
terms and conditions specified in the Bridge Warrant and in lieu of the shares
of Common Stock immediately theretofore purchasable upon exercise of the
Bridge Warrant, to purchase the kind and number of shares of stock or other
securities or property (including cash) receivable upon such reclassification,
capital reorganization or other change, consolidation, merger, sale or
conveyance by a holder of the number of shares of Common Stock that might have
been purchased upon exercise of such Bridge Warrant immediately prior to such
reclassification, capital reorganization or other change, consolidation,
merger, sale or conveyance.  Any such provision shall include provision for
adjustments that shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 6.  The Company shall not effect any
such consolidation, merger or sale unless prior to, or simultaneously with,
the consummation thereof the successor (if other than the Company) resulting
from such consolidation or merger or the entity purchasing assets or other
appropriate entity shall assume, by written instrument executed and delivered
to the Company, the obligation to deliver to the holder of each Bridge Warrant
such shares of stock, securities or assets as, in accordance with the
foregoing provisions, such holders may be entitled to purchase and the other
obligations under this Bridge Warrant.  The foregoing provisions shall
similarly apply to successive reclassifications, capital reorganizations and
other changes of outstanding shares of Common Stock and to successive
consolidations, mergers, sales or conveyances.

          (c)   If, at any time or from time to time, the Company shall issue
or distribute to the holders of shares of Common Stock evidence of its
indebtedness, any other securities of the Company or any cash, property or
other assets (excluding an issuance or distribution governed by one of the
preceding Subsections of this Section 6 and also excluding cash dividends or
cash distributions paid out of net profits legally available therefor in the
full amount thereof (any such non-excluded event being herein called a
"Special Dividend")), then in each case the Registered Holders of the Bridge
Warrants shall be entitled to a proportionate share of any such Special
Dividend as though they were the holders of the number of shares of Common
Stock of the Company for which their Bridge Warrants are exercisable as of the
record date fixed for the determination of the holders of Common Stock of the
Company entitled to receive such Special Dividend.

          (d)   The Company may elect, upon any adjustment of the Warrant
Price hereunder, to adjust the number of Bridge Warrants outstanding, in lieu
of the adjustment in the number of shares of Common Stock purchasable upon the
exercise of each Bridge Warrant as hereinabove provided, so that each Bridge
Warrant outstanding after such adjustment shall represent the right to
purchase one share of Common Stock.  Each Bridge Warrant held of record prior
to such adjustment of the number of Bridge Warrants shall become that number
of Bridge Warrants (calculated to the nearest tenth) determined by multiplying
the number one by a fraction, the numerator of which shall be the Warrant
Price in effect immediately prior to such adjustment and the denominator of
which shall be the Warrant Price in effect immediately after such adjustment.
Upon each adjustment of the number of Bridge Warrants pursuant to this Section
6, the Company shall, as promptly as practicable, cause to be distributed to
each Registered Holder of Bridge Warrants on the date of such adjustment
Bridge Warrants evidencing, subject to Section 7, the number of additional
Bridge Warrants to which such Holder shall be entitled as a result of such
adjustment or, at the option of the Company, cause to be distributed to such
Holder in substitution and replacement for the Bridge Warrants held by him
prior to the date of adjustment (and upon surrender thereof, if required by
the Company) new Bridge Warrants evidencing the number of Bridge Warrants to
which such Holder shall be entitled after such adjustment.

          (e)   Irrespective of any adjustments or changes in the Warrant
Price or the number of shares of Common Stock purchasable upon exercise of the
Bridge Warrants, the Bridge Warrants theretofore and thereafter issued shall,
unless the Company shall exercise its option to issue new Bridge Warrants
pursuant to Subsection 3(a), continue to express the same Warrant Price per
share, number of shares purchasable thereunder and Redemption Price therefor
as when the same were originally issued.

          (f)   After each adjustment of the Warrant Price pursuant to this
Section 6, the Company will promptly prepare a certificate signed by the
Chairman or President, and by the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary, of the Company setting forth: (i) the
Warrant Price as so adjusted, (ii) the number of shares of Common Stock
purchasable upon exercise of each Bridge Warrant after such adjustment, and,
if the Company shall have elected to adjust the number of Bridge Warrants
pursuant to Subsection 6(d), the number of Bridge Warrants to which the
registered holder of each Bridge Warrant shall then be entitled, and the
adjustment in Redemption Price resulting therefrom, and (iii) a brief
statement of the facts accounting for such adjustment.  The Company will cause
a brief summary thereof to be sent by ordinary first class mail to each
Registered Holder of Bridge Warrants at his or her last address as it shall
appear on the registry books.  No failure to mail such notice nor any defect
therein or in the mailing thereof shall affect the validity of such
adjustment.  The affidavit the Secretary or an Assistant Secretary of the
Company that such notice has been mailed shall, in the absence of fraud, be
prima facie evidence of the facts stated therein.

          (g)   For purposes of Subsections 6(a) and 6(d), the following
provisions (i) to (v) shall also be applicable:

               (i)   the number of shares of Common Stock deemed outstanding
at any given time shall include all shares of capital stock convertible into,
or exchangeable for, Common Stock (on an as converted basis) as well as all
shares of Common Stock issuable upon the exercise of (x) any convertible debt,
(y) warrants outstanding on the date hereof and (z) options outstanding on the
date hereof.

               (ii)   No adjustment of the Warrant Price shall be made unless
such adjustment would require an increase or decrease of at least $.01 in such
price; provided that any adjustments which by reason of this Paragraph (ii)
are not required to be made shall be carried forward and shall be made at the
time of and together with the next subsequent adjustment which, together with
adjustments so carried forward, shall require an increase or decrease of at
least $.01 in the Warrant Price then in effect hereunder.

               (iii)   In case of (1) the sale by the Company (including as a
component of a unit) of any rights or warrants to subscribe for or purchase,
or any options for the purchase of, Common Stock or any securities convertible
into or exchangeable for Common Stock (such securities convertible,
exercisable or exchangeable into Common Stock being herein called "Convertible
Securities"), or (2) the issuance by the Company, without the receipt by the
Company of any consideration therefor, of any rights or warrants to subscribe
for or purchase, or any options for the purchase of, Common Stock or
Convertible Securities, whether or not such rights, warrants or options, or
the right to convert or exchange such Convertible Securities, are immediately
exercisable, and the consideration per share for which Common Stock is
issuable upon the exercise of such rights, warrants or options or upon the
conversion or exchange of such Convertible Securities (determined by dividing
(x) the minimum aggregate consideration, as set forth in the instrument
relating thereto without regard to any antidilution or similar provisions
contained therein for a subsequent adjustment of such amount, payable to the
Company upon the exercise of such rights, warrants or options, plus the
consideration received by the Company for the issuance or sale of such rights,
warrants or options, plus, in the case of such Convertible Securities, the
minimum aggregate amount, as set forth in the instrument relating thereto
without regard to any antidilution or similar provisions contained therein for
a subsequent adjustment of such amount, of additional consideration, if any,
other than such Convertible Securities, payable upon the conversion or
exchange thereof, by (y) the total maximum number, as set forth in the
instrument relating thereto without regard to any antidilution or similar
provisions contained therein for a subsequent adjustment of such amount, of
shares of Common Stock issuable upon the exercise of such rights, warrants or
options or upon the conversion or exchange of such Convertible Securities
issuable upon the exercise of such rights, warrants or options) is less than
the Warrant Price of the Common Stock as of the date of the issuance or sale
of such rights, warrants or options, then such total maximum number of shares
of Common Stock issuable upon the exercise of such rights, warrants or options
or upon the conversion or exchange of such Convertible Securities (as of the
date of the issuance or sale of such rights, warrants or options) shall be
deemed to be "Common Stock" for purposes of Subsections 6(a) and 6(d) and
shall be deemed to have been sold for an amount equal to such consideration
per share and shall cause an adjustment to be made in accordance with
Subsections 6(a) and 6(d).

               (iv)   In case of the sale or other issuance by the Company of
any Convertible Securities, whether or not the right of conversion or exchange
thereunder is immediately exercisable, and the price per share for which
Common Stock is issuable upon the conversion or exchange of such Convertible
Securities (determined by dividing (x) the total amount of consideration
received by the Company for the sale of such Convertible Securities, plus the
minimum aggregate amount, as set forth in the instrument relating thereto
without regard to any antidilution or similar provisions contained therein for
a subsequent adjustment of such amount, of additional consideration, if any,
other than such Convertible Securities, payable upon the conversion or
exchange thereof, by (y) the total maximum number, as set forth in the
instrument relating thereto without regard to any antidilution or similar
provisions contained therein for a subsequent adjustment of such amount, of
shares of Common Stock issuable upon the conversion or exchange of such
Convertible Securities) is less than the Warrant Price of the Common Stock as
of the date of the sale of such Convertible Securities, then such total
maximum number of shares of Common Stock issuable upon the conversion or
exchange of such Convertible Securities (as of the date of the sale of such
Convertible Securities) shall be deemed to be "Common Stock" for purposes of
Subsections 6(a) and 6(d) and shall be deemed to have been sold for an amount
equal to such consideration per share and shall cause an adjustment to be made
in accordance with Subsections 6(a) and 6(d).

               (v)   In case the Company shall modify the rights of
conversion, exchange or exercise of any of the securities referred to in
Paragraphs (iii) or (iv) of this Subsection 6(g) or any other securities of
the Company convertible, exchangeable or exercisable for shares of Common
Stock, for any reason other than an event that would require adjustment to
prevent dilution, so that the consideration per share received by the Company
after such modification is less than the Warrant Price as of the date prior to
such modification, then such securities, to the extent not theretofore
exercised, converted or exchanged, shall be deemed to have expired or
terminated immediately prior to the date of such modification and the Company
shall be deemed, for purposes of calculating any adjustments pursuant to this
Section 6, to have issued such new securities upon such new terms on the date
of modification.  Such adjustment shall become effective as of the date upon
which such modification shall take effect.  On the expiration or cancellation
of any such right, warrant or option or the termination or cancellation of any
such right to convert or exchange any such Convertible Securities, the Warrant
Price then in effect hereunder shall forthwith be readjusted to such Warrant
Price as would have obtained (a) had the adjustments made upon the issuance or
sale of such rights, warrants, options or Convertible Securities been made
upon the basis of the issuance of only the number of shares of Common Stock
theretofore actually delivered (and the total consideration received therefor)
upon the exercise of such rights, warrants or options or upon the conversion
or exchange of such Convertible Securities and (b) had adjustments been made
on the basis of the Warrant Price as adjusted under clause (a) of this
sentence for all transactions (which would have affected such adjusted Warrant
Price) made after the issuance or sale of such rights, warrants, options or
Convertible Securities.

               (vi)   In case of the sale of any shares of Common Stock, any
Convertible Securities, any rights or warrants to subscribe for or purchase,
or any options for the purchase of, Common Stock or Convertible Securities,
the consideration received by the Company therefor shall be deemed to be the
gross sales price therefor without deducting therefrom any expense paid or
incurred by the Company or any underwriting discounts or commissions or
concessions paid or allowed by the Company in connection therewith.  In the
event that any securities shall be issued in connection with any other
securities of the Company, together comprising one integral transaction in
which no specific consideration is allocated among the securities, then each
of such securities shall be deemed to have been issued for such consideration
as the Board of Directors of the Company determines in good faith; provided,
however that if holders of more than of 10% of the then outstanding Bridge
Warrants disagree with such determination, the Company shall retain an
independent investment banking firm for the purpose of obtaining an appraisal.

          (h)   Notwithstanding any other provision hereof, no adjustment to
the Warrant Price of the Bridge Warrants or to the number of shares of Common
Stock purchasable upon the exercise of each Bridge Warrant will be made:

               (i)   upon the exercise of any of the options outstanding on
the date hereof under the Company's existing stock option plans; or

               (ii)   upon the issuance or exercise of options which may
hereafter be granted with the approval of the Board of Directors, or
exercised, under any employee benefit plan of the Company to officers,
directors, consultants or employees, but only with respect to such options as
are exercisable at prices no lower than the Closing Bid Price (or, if the
price referenced in the definition of Closing Bid Price cannot be determined,
the Fair Market Value (as defined below)) of the Common Stock as of the date
of grant thereof; or

               (iii)   upon the issuance or sale of Common Stock or
Convertible Securities pursuant to the exercise of any rights, options or
warrants to receive, subscribe for or purchase, or any options for the
purchase of, Common Stock or Convertible Securities, whether or not such
rights, warrants or options were outstanding on the date of the original sale
of the Bridge Warrants or were thereafter issued or sold, provided that an
adjustment was either made or not required to be made in accordance with
Subsections 6(a) and 6(d) in connection with the issuance or sale of such
securities or any modification of the terms thereof; or

               (iv)   upon the issuance or sale of Common Stock upon
conversion or exchange of any Convertible Securities, provided that any
adjustments required to be made upon the issuance or sale of such Convertible
Securities or any modification of the terms thereof were so made, and whether
or not such Convertible Securities were outstanding on the date of the
original sale of the Bridge Warrants or were thereafter issued or sold.

Paragraph 6(g)(iv) shall nevertheless apply to any modification of the rights
of conversion, exchange or exercise of any of the securities referred to in
Paragraphs (i) and (ii) of this Subsection 6(h). For purposes hereof, "Fair
Market Value" shall mean the average Closing Bid Price for twenty (20)
consecutive trading days, ending with the trading day prior to the date as of
which the Fair Market Value is being determined, (with appropriate adjustments
for subdivisions or combinations of shares effected during such period)
provided that if the prices referred to in the definition of Closing Bid Price
cannot be determined for such period, "Fair Market Value" shall be the fair
market value as determined by the Board of Directors  in good faith.

          (i)   As used in this Section 6, the term "Common Stock" shall mean
and include the Company's Common Stock authorized on the date of the original
issue of the Units and shall also include any capital stock of any class of
the Company thereafter authorized which shall not be limited to a fixed sum or
percentage in respect of the rights of the holders thereof to participate in
dividends and in the distribution of assets upon the voluntary liquidation,
dissolution or winding up of the Company; provided, however, that the shares
issuable upon exercise of the Bridge Warrants shall include only shares of
such class designated in the Company's Certificate of Incorporation, as
amended, as Common Stock on the date of the original issue of the Units or
(i), in the case of any reclassification, change, consolidation, merger, sale
or conveyance of the character referred to in Subsection 6(c), the stock,
securities or property provided for in such section or (ii), in the case of
any reclassification or change in the outstanding shares of Common Stock
issuable upon exercise of the Bridge Warrants as a result of a subdivision or
combination or consisting of a change in par value, or from par value to no
par value, or from no par value to par value, such shares of Common Stock as
so reclassified or changed.

          (j)   Any determination as to whether an adjustment in the Warrant
Price in effect hereunder is required pursuant to Section 6, or as to the
amount of any such adjustment, if required, shall be binding upon the holders
of the Bridge Warrants and the Company if made in good faith by the Board of
Directors of the Company.

          (k)   If and whenever the Company shall grant to the holders of
Common Stock, as such, rights or warrants to subscribe for or to purchase, or
any options for the purchase of, Common Stock or securities convertible into
or exchangeable for or carrying a right, warrant or option to purchase Common
Stock, the Company may at its option elect concurrently therewith to grant to
each Registered Holder as of the record date for such transaction of the
Bridge Warrants then outstanding, the rights, warrants or options to which
each Registered Holder would have been entitled if, on the record date used to
determine the shareholders entitled to the rights, warrants or options being
granted by the Company, the Registered Holder were the holder of record of the
number of whole shares of Common Stock then issuable upon exercise of his or
her Bridge Warrant.  If the Company shall so elect under this Subsection 6(k),
then such grant by the Company to the holders of the Bridge Warrants shall be
in lieu of any adjustment which otherwise might be called for pursuant to this
Section 6.

     Section 7.   Fractional Warrants and Fractional Shares.  If the number of
shares of Common Stock purchasable upon the exercise of each Bridge Warrant is
adjusted pursuant to Section 6, the Company nevertheless shall not be required
to issue fractions of shares, upon exercise of the Bridge Warrant or
otherwise, nor to distribute certificates that evidence fractional shares.
With respect to any fraction of a share called for upon any exercise hereof,
the Company shall pay to the Registered Holder an amount in cash equal to such
fraction multiplied by the Fair Market Value of one share of Common Stock as
of the date of exercise.

     Section 8.   Warrant Holders Not Deemed Shareholders.  No holder of
Bridge Warrants shall, as such, be entitled to vote or to receive dividends or
be deemed the holder of Common Stock that may at any time be issuable upon
exercise of such Bridge Warrants for any purpose whatsoever, nor shall
anything contained herein be construed to confer upon the holder of Bridge
Warrants, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issue or reclassification
of stock, change of par value or change of stock to no par value,
consolidation, merger or conveyance or otherwise), or to receive notice of
meetings, or to receive dividends or subscription rights, until such Holder
shall have exercised such Bridge Warrants and been issued shares of Common
Stock in accordance with the provisions hereof.

          (a)    Rights of Action.  All rights of action with respect to this
Agreement are vested in the respective Registered Holders of the Bridge
Warrants, and any Registered Holder of a Bridge Warrant, without consent of
the holder of any other Bridge Warrant, may, in his own behalf and for his own
benefit, enforce against the Company his right to exercise his Bridge Warrant
for the purchase of shares of Common Stock in the manner provided herein;
provided, however, that no Registered Holder shall institute any suit or
proceeding for the enforcement of any of the Bridge Warrants unless the
Registered Holders of at least a majority of the Bridge Warrants outstanding
join in such suit or proceeding.

     Section 9.   Agreement of Warrant Holders.  Every holder of any Bridge
Warrant, by his acceptance thereof, consents and agrees with the Company and
every other holder of any Bridge Warrant that:

               (i)   The Bridge Warrants are transferable only on the registry
books of the Company by the Registered Holder thereof in person or by his or
her attorney duly authorized in writing and only if such Bridge Warrants are
surrendered at the office of the Company, duly endorsed or accompanied by a
proper instrument of transfer satisfactory to the Company, in its sole
discretion, together with payment of any applicable transfer taxes; and

               (ii)   The Company may deem and treat the person in whose name
the Bridge Warrant is registered as the holder and as the absolute, true and
lawful owner thereof for all purposes, and the Company shall not be affected
by any notice or knowledge to the contrary, except as otherwise expressly
provided in Section 3.

     Section 10.   Investment Representation and Legend. The holder, by
acceptance of the Bridge Warrants, represents and warrants to the Company that
it is acquiring the Bridge Warrants and the shares of Common Stock (or other
securities) issuable upon the exercise hereof for investment purposes only and
not with a view towards the resale or other distribution thereof and agrees
that the Company may affix upon this Bridge Warrant the following legend:

          "This Warrant has been issued in reliance upon the representation
          of the holder that it has been acquired for investment purposes
          and not with a view towards the resale or other distribution
          thereof. Neither this Warrant nor the shares issuable upon the
          exercise of this Warrant have been registered under the Securities
          Act of 1933, as amended."

The holder, by acceptance of this Bridge Warrant, further agrees that the
Company may affix the following legend to certificates for shares of Common
Stock issued upon exercise of this Bridge Warrant:

          "The securities represented by this certificate have been issued
          in reliance upon the representation of the holder that they have
          been acquired for investment and not with a view toward the resale
          or other distribution thereof, and have not been registered under
          the Securities Act of 1933, as amended. Neither the securities
          evidenced hereby, nor any interest therein, may be offered, sold,
          transferred, encumbered or otherwise disposed of unless either (i)
          there is an effective registration statement under said Act
          relating thereto or (ii) the Company has received an opinion of
          counsel, reasonably satisfactory in form and substance to the
          Company, stating that such registration is not required."

     Section 11.   Cancellation of Bridge Warrants.  If the Company shall
purchase or acquire any Bridge Warrant or Bridge Warrants, by redemption or
otherwise, each such Bridge Warrant shall thereupon be and canceled by it and
retired.  The Company shall also cancel the Bridge Warrant or Bridge Warrants
following exercise of any or all thereof or delivered to it for transfer,
split up, combination or exchange.

     Section 12.   Modification of Bridge Warrant. The terms of the Bridge
Warrants shall not be modified, supplemented or altered in any respect except
with the consent in writing of the Registered Holders representing at least a
majority of the Bridge Warrants then outstanding.

     Section 13.   Notices.  All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
made when delivered or mailed by means of first class registered or certified
mail, postage prepaid as follows: if to the Registered Holder of a Bridge
Warrant, at the address of such holder as shown on the registry books
maintained by the Company; if to the Company, at 18 East 50th Street, New
York, NY 10022, or at such other address as may have been furnished to the
Registered Holder in writing by the Company.

     Section 14.   Governing Law.  This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, without
reference to principles of conflict of laws.

     Section 15.   Binding Effect.  This Agreement shall be binding upon and
inure to the benefit of the Company, the Registered Holder and their
respective successors and assigns, and the holders from time to time of the
Bridge Warrants.  Nothing in this Bridge Warrant is intended nor shall be
construed to confer upon any other person any right, remedy or claim, in
equity or at law, or to impose upon any other person any duty, liability or
obligation.

     Section 16.   Registration Rights. The rights of the holder hereof with
respect to the registration under the Securities Act of 1933, as amended, of
the shares of Common Stock issuable upon the exercise of this Bridge Warrant
are set forth in the Purchase Agreement.

     IN WITNESS WHEREOF, the Company has caused this Bridge Warrant to be duly
executed as of the date first above written.

                                     BION ENVIRONMENTAL
                                     TECHNOLOGIES, INC.


                                     By: ________________________________
                                           Authorized Officer



                            SUBSCRIPTION FORM

                  To Be Executed by the Registered Holder
                    in Order to Exercise Bridge Warrant

     The undersigned Registered Holder hereby irrevocably elects to exercise
__________ Bridge Warrants represented by this certificate, and to purchase
the securities issuable upon the exercise of such Bridge Warrants, and
requests that certificates for such securities shall be issued in the name of

        PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
          ______________________________________________________
          ______________________________________________________
          ______________________________________________________
          ______________________________________________________
                 [please print or type name and address]
and be delivered to
         ______________________________________________________
         ______________________________________________________
         ______________________________________________________
         ______________________________________________________
                 [please print or type name and address]

and if such number of Bridge Warrants shall not be all the Bridge Warrants
evidenced by this Warrant Certificate, that a new Bridge Warrant for the
balance of such Bridge Warrants be registered in the name of, and delivered
to, the Registered Holder at the address stated below.

     The undersigned represents that the exercise of the within Bridge Warrant
was solicited by a member of the National Association of Securities Dealers,
Inc. If not solicited by an NASD member, please write "unsolicited" in the
space below.


                                      ___________________________________
                                      (Name of NASD Member)

Dated: __________________________     ___________________________________
                                      ___________________________________
                                      ___________________________________
                                                    Address


                                      ___________________________________
                                        Taxpayer Identification Number


                                      ___________________________________
                                            Signature Guaranteed



                               ASSIGNMENT

                  To Be Executed by the Registered Holder

                      In Order to Assign Bridge Warrant


FOR VALUE RECEIVED,       hereby sells, assigns and transfers unto

            PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
             ______________________________________________________
             ______________________________________________________
             ______________________________________________________
                    [please print or type name and address]


________________________________ of the Bridge Warrants represented hereby,
and hereby irrevocably constitutes and appoints


__________________________________________________________________________
Attorney to transfer this Bridge Warrant on the books of the Company, with
full power of substitution in the premises.


Dated: ________________________            _______________________________
                                                 Signature Guaranteed


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EX-99

EXHIBIT 99.1



        Bion Environmental Technologies, Inc. Hires Bart Chilton as
                         Senior Vice President

     NEW YORK, May 15 /PRNewswire/ -- Bion Environmental Technologies, Inc.
(Bion, a publicly-traded company,) (OTC Bulletin Board: BION) a leader in
innovative agricultural environmental systems is pleased to announce that Bart
Chilton, a 16-year veteran Capitol Hill and Administration staffer, and most
recently the former Deputy Chief of Staff & Senior Policy Director for the
U.S. Department of Agriculture (USDA) will join the company as Senior Vice
President.

     At USDA, Chilton reported directly to the U.S. Secretary of Agriculture
on policy and politics, and assisted in management and oversight of 35 USDA
agencies with a workforce of 110,000 employees and a $70 billion annual
budget. Last year, Chilton headed up USDA and the Forest Services' efforts in
addressing the worst fire season in 50 year.

     "We are pleased to add Bart's significant Washington experience to our
senior management team," said David Mitchell, Bion's CEO. "His agriculture,
rural development and conservation experience will be a tremendous asset to
Bion as we move forward."

     Prior to his last position, Chilton served as the Senior Policy Director
for Rural Development at USDA for four years, preceded by ten years on Capitol
Hill as a Legislative Director for three Members of Congress: Reps. Earl
Pomeroy (ND), Jill Long (IN) and Jim Jontz (IN).

     Chilton will be working on Bion's federal, state and local government
relations as well as various management and marketing matters. Bion
Environmental Technologies, designs and operates biological treatment systems
that eliminate the odors and nutrient leaching from waste produced on hog and
dairy farms. The systems, which can be monitored from remote locations,
convert the waste into BionSoil, a nutrient-rich, soil enhancement or
fertilizer material. With offices in New York, Colorado, North Carolina and
Florida, the company currently operates systems for Smithfield Foods, Inc.,
and Conti Group Companies, as well as many individual clients. Inquires may be
directed to David Mitchell at 212-486-4444.

     This material includes forward-looking statements based on management's
current reasonable business expectations. These statements are made in
reliance on the Private Securities Litigation Reform Act, Section 27A of the
Securities Act of 1933, as amended. There are numerous risks and uncertainties
that could result in actual results differing materially from expected
outcomes. The material should be read in conjunction with the Company's
current annual and quarterly reports filed with the SEC, which contain
discussions of currently known factors that could significantly impact the
company's future expectations.

EX-99

EXHIBIT 99.2


                     Joseph Wright Joins Bion's Board


NEW YORK--(BUSINESS WIRE)--May 22, 2001--Bion Environmental Technologies, Inc.
("Bion," a publicly traded company)(OTCBB:BION - news), which develops and
markets innovative agricultural environmental systems and soils products, is
pleased to announce that Joseph R. Wright, Jr., will join the company as a
director.

Mr. Wright is a seasoned business executive who currently serves as Vice
Chairman and Director of Terremark Worldwide Inc., Vice Chairman/Director of
Jefferson Consulting Group, Co-Chairman/Director of Baker & Taylor Holdings
and  as a member of AT&T Government Markets Advisory Board. From 1989 through
1992, Mr. Wright served as Vice Chairman, Executive Vice President and
Director of W.R. Grace & Company, Chairman and Director of Grace Energy
Corporation and President of Grace Environmental Company. Additionally, he
served extensively in the Federal Government, culminating with service as
Director of the Federal Office of Management and Budget under President
Reagan.

"Joe Wright's extensive management experience in public companies of national
and international scope, along with his long and senior tenure with the
Federal Government, will greatly strengthen our Board of Directors. We
strongly believe Mr. Wright will make important contributions toward
implementation of Bion's growth strategy," said David Mitchell, Bion's CEO.

From the beginning of 2000 through Mr. Wright's addition to the Board, Bion
has strengthened its management and technical team with the addition of: (a)
Rod Farrentino, our Director of Soil Research, formerly of Cornell University,
(b) George Bloom, our Director of Engineering, formerly Chief Engineer with
the engineering firm Woodard and Curran, Inc., (c) Bart Chilton, our Senior
Vice President, the immediate past Senior Policy Director for Rural
Development at the USDA, and (d) Dr. James Morris, Senior Technology Advisor,
who is the Principal of J.W. Morris and Associates, an environmental
consulting firm.  Bion designs and operates biologically based treatment
systems that eliminate the negative effects (air, water and soil pollution)
associated with waste produced on CAFO (Concentrated Animal Feeding
Operations). The systems, which can be monitored from remote locations,
convert the waste into BionSoil, a nutrient-rich, environmentally friendly,
non-leaching, soil enhancement or fertilizer material while mitigating odors
and cleaning the air and water associated with such operations. With offices
in New York, Colorado, North Carolina and Florida, the company currently
operates eighteen systems, in six states, for Smithfield Foods, Inc., and
ContiGroup Companies, as well as many private clients. Inquires may be
directed to David Mitchell, CEO, at 212/758-6622.

This material includes forward-looking statements based on management's
current reasonable business expectations. These statements are made in
reliance on the Private Securities Litigation Reform Act, Section 27A of the
Securities act of 1933, as amended. There are numerous risks and uncertainties
that could result in actual results differing materially from expected
outcomes. The material should be read in conjunction with the Company's
current annual and quarterly reports filed with the SEC, which contain
discussions of currently known factors that could significantly impact the
Company's future expectations.


Contact:

     Bion Environmental Technologies, Inc.
     David Mitchell, 212/758-6622