Exhibit 10.3 January 8, 1997 Mark A. Smith, President LoTayLingKyur, Inc. Dorje Dzong 1345 Spruce St., Suite I Boulder, CO 80302 Dear Mr. Smith: BionSoil, Inc. ("BSI") and Bion Environmental Technologies, Inc. ("Biet") hereby accept the terms of the...

                                                     Exhibit 10.3








                                        January 8, 1997





Xxxx X. Xxxxx, President
LoTayLingKyur, Inc.
Dorje Dzong
0000 Xxxxxx Xx., Xxxxx X
Xxxxxxx, XX 00000

Dear Xx. Xxxxx:

BionSoil, Inc. ("BSI") and Bion Environmental Technologies,  Inc.
("Biet")  hereby accept the terms of the loan from LoTayLingKyur,
Inc. ("LTLK") on the terms and conditions outlined in your letter
of January 8, 1997 (attached hereto as Exhibit 1).


                                        Very truly yours,

                                         /s/ Xxx Xxxxxxxx

                                        Xxx Xxxxxxxx
                                        Chief Executive Officer