EXHIBIT 10.1

AGREEMENT

THIS EXTENSION AGREEMENT is made effective July 27, 2010 by, between and among Bion Environmental Technologies, Inc. ('Bion') (collectively Bion, together with the other subsidiaries of Bion, are sometimes referred to as the 'Bion Companies') and Mark A. Smith ('MAS').

WHEREAS MAS has provided the services to the Bion Companies continually since 2003 (and for most periods since 1992) and most recently pursuant to the agreement of September 30, 2009 (collectively, 'Existing Agreement');

AND WHEREAS Bion wishes to have MAS continue to provide services to the Bion Companies) and MAS is willing to continue to provide such services upon the terms and conditions set forth in this Agreement:

NOW THEREFORE, in consideration of the mutual covenants and conditions hereinafter set forth, the Bion Companies and MAS do hereby agree as set forth below upon the terms and conditions set forth in the following paragraphs:

1) Pursuant to the terms of the existing Agreement and this Agreement, MAS shall continue to hold the positions of Director, President and General Counsel of Bion and each of its subsidiaries through a date no later than December 31, 2011, with the proviso that Bion will seek to hire personnel to replace MAS on or before February 1, 2011 with MAS becoming a consultant to the Bion Companies following a transition period after such hiring(s).

2) Bion shall compensate MAS as follows:

a) Monthly compensation of $19,000 per month commencing September 2010 shall be paid to MAS in cash;

b) A bonus of $20,000 cash payable on January 1, 2011;

c) Bion hereby grants to MAS a $20,000 bonus which bonus shall be satisfied by issuing to MAS a warrant to purchase 200,000 shares of Bion's common stock which Warrant shall be valued at $20,000 and shall be exercisable at a price of $2.00 per share until January 15, 2019 ('Warrant').

d) All terms in any other options previously granted to MAS by the Company which shorten the exercise period of such any such options upon the termination of MAS' service to the Bion Companies are hereby waived by Bion.

e) Bion acknowledges and reaffirms its long-standing agreement that, at the request of MAS, Bion will file with the SEC and process to effectiveness, at Bion's sole cost, a registration statement covering the Warrant and all warrants previously issued to MAS (most now held by MAS' donees) (collectively 'Warrants') and the common stock underlying the exercise of the Warrants (plus any other securities which Bion elects to register), which registration statement shall be filed within 30 days after the next periodic SEC filing made by Bion after MAS' request and which registration statement shall be kept effective by Bion for a period of time not less than 12 months.

f) MAS' full-time services to the Bion Companies shall be structured so that MAS will be available to the Bion Companies not less than 20 days per month but will not be available to the Bion Companies (in person or by phone or electronically) for one week each month; and

g) Due to prior commitments made by MAS before the Bion Companies requested this extension, MAS will be on vacation from August 1 - August 20, 2010 (during which period MAS will make himself available to Bion by email and cell phone as needed).

3) Miscellaneous:

a) This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns and any person acquiring, whether by Merger, consolidation, liquidation, purchase of assets or otherwise, all or substantially all of a party's equity or assets and business.

b) It is the intention of the parties hereto that this Agreement and the performance hereunder and all suits and special proceedings connected herewith be construed in accordance with and pursuant to the laws of the State of Colorado and that in any action, special proceeding or other proceeding that may be brought arising out of, in connection with, or by reason of this Agreement, the laws of the State of Colorado shall be applicable and shall govern to the exclusion of the law of any other forum, without regard to the jurisdiction in which any action or special proceeding may be instituted.

c) Any claim or controversy, which arises out of or relates to this Agreement, or breach of it, shall be settled by arbitration.

d) Should any party hereto waive breach of any provision of this Agreement, that waiver shall not operate or be construed as a waiver of any further breach of this Agreement.

e) In the event that any one or more of the provisions of this Agreement or any portions there under is determined to be invalid, illegal, or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby.

f) This Agreement shall constitute the entire agreement between the parties hereto oral modifications of the Agreement shall have no effect. This Agreement may be altered only by a written agreement signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought.

Bion Environmental Technologies, Inc.

By: /s/ Mark A. Smith
   Mark A. Smith


/s/ Mark A. Smith
Mark A. Smith, individually

EXHIBIT 10.2

From: Ed Schafer [mailto:ed@schafer.net] Sent: Thursday, August 12, 2010 10:16 AM To: 'Mark A Smith'
Subject: RE: #4: Ed Schafer/Bion agreement (material terms)

Yes! E

Ed Schafer
4426 Carrie Rose Lane
Fargo, ND 58104
701.367.4344
ed@schafer.net

From: Mark A Smith [mailto:mas@biontech.com] Sent: Monday, August 09, 2010 8:20 AM
To: 'Dominic Bassani'
Cc: 'Ed Schafer'; 'Mark A. Smith'
Subject: Ed Schafer/Bion agreement (material terms)

Dear Ed,

Per our meetings/discussions and your further discussion with Dom Bassani ('Dom') last week (as summarized in Dom's email below), effective immediately (subject to execution and board ratification), Bion Environmental Technologies, Inc. ('Bion') and you ('Schafer') have agreed as follows:

1-Commencing on or about September 1, 2010 you will join Bion on a part-time consulting basis (title to be determined) through approximately December 31, 2010 to assist Bion with its various initiatives with initial focus on aiding Bion's efforts related to: a) development/pre-development process re large scale integrated ag/renewable energy projects ('Integrated Projects') in PA, NYS & the mid-continent (including to north central region-Ohio through Michigan---and the Midwest) & b) political, regulatory & legislative initiatives at state/federal/local levels related to Integrated Projects & ag trading programs, & c) interactions/negotiations with major ag industry entities.

2-As compensation during the interim period, Bion shall pay you $7500 per month: 1/2 in cash & 1/2 in restricted its common stock at a price of $2.25 per share (1500 shares per month).

3-During this interim period you will work primarily with Dom while reporting to me and the Board-subsequent to the interim period you shall continue to work with Dom and under the supervision of me (and the Board) and whoever may succeed to my positions as I phase out over the next 12-18 months.

4-Assuming that the interim period goes well (by mutual agreement), commencing approximately January 1, 2011, your time commitment to Bion will increase to between 50%-75% of real 'full time' with compensation increasing to a $250,000 annual rate---$150,000 in cash and $100,000 in Bion's restricted common stock which stock shall be priced for each quarter under a formula to be determined and which stock issuances shall be part of a 'deferred compensation plan' to be put in place by Bion prior to January 1, 2011, and:

a) The agreement shall run for 3 years from January 1, 2011 through December 31, 2013.

b) Bion will immediately grant Schafer options to purchase an aggregate of 300,000 shares of its common stock pursuant to its existing Incentive Plan which options shall:

i) be exercisable at a price of $2.25 per share (subject to normal adjustments for splits, dividends, etc.),

ii) from the date of vesting for a period ending January 15, 2018, &

iii) subject to annual vesting (based on continued satisfactory service to Bion) of 100,000 options on each of January 1, 2012, 2013 & 2014.

5-Your long term titles within Bion shall be determined over the next 4 months with the likelihood that you will become Chairman or Vice-Chairman.

6-It is intended that you will join the Board and become a Director of Bion during 2011.

If the terms set forth above accurately summarize the material items to which we have agreed and are acceptable to you, please confirm by reply email and we will have 'shaken hands' and the bare bones version of our agreement will be effective and in place. Over the next couple of weeks we can incorporate these material terms into a more formal (but still simple) agreement.

I look forward to working with you.

Mark

Mark A. Smith
President & General Counsel
Bion Environmental Technologies, Inc.
303-517-5302(cel)/719-256-5329(hm off)/425-984-9702(fax)

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