8-K

                                UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549

                                   FORM 8-K

                                CURRENT REPORT

                      Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                                 March 1, 2011
               ------------------------------------------------
               Date of Report (date of earliest event reported)

                    BION ENVIRONMENTAL TECHNOLOGIES, INC.
             ----------------------------------------------------
             Exact name of Registrant as Specified in its Charter

         Colorado                 000-19333                84-1176672
---------------------------    ---------------   ---------------------------
State or Other Jurisdiction    Commission File   IRS Employer Identification
     of Incorporation              Number                  Number

           Box 566/1774 Summitview Way, Crestone, Colorado 81131
         ----------------------------------------------------------
         Address of Principal Executive Offices, Including Zip Code

                                (212) 758-6622
             --------------------------------------------------
             Registrant's Telephone Number, Including Area Code

                                 Not applicable
          -----------------------------------------------------------
          Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act
    (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
    (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
    Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
    Exchange Act (17 CFR 240.13e-4(c))









ITEM 7.01  REGULATION FD DISCLOSURE.

     On March 15, 2011, the Company issued an "operational update" press
release regarding the construction and start-up of its Kreider Farms #1
project.  The press release and related photos have been posted on our
websites: www.biontech.com and www.bionpa.com.

ITEM 8.01 OTHER EVENTS.

     On March 5, 2011 the Company executed a five year employment agreement
with James Morris, the Company's Chief Technology Officer. A copy of the
agreement(without exhibits) is attached hereto as Exhibit 10.1.

     On March 1, 2011 the Company executed a two year employment agreement
with John R. Grabowski who joins the Company as a Director of Business
Development.  A copy of the agreement (without exhibits) is attached hereto
as Exhibit 10.2.

     On March 8, 2011 the Company entered into a Clarification Agreement with
Kreider Farms (copy attached hereto as Exhibit 10.3).

ITEM 9.01  FINANCIAL STATEMENTS AND EXHIBITS.

     (a)  Financial Statements of Businesses Acquired.

          Not Applicable.

     (b)  Pro Forma Financial Information

          Not Applicable.

     (c)  Shell Company Transactions

          Not Applicable.

     (d)  Exhibits

Exhibit No.     Description

 10.1           James Morris Employment Agreement*

 10.2           John R. Grabowski Employment Agreement*

 10.3           Kreider Farms Clarification Agreement*

 99.1           Operational Update Press Release re Kreider Farms System
                (& other matters) (dated March 15, 2011)*

* Filed electronically herewith.




                                  SIGNATURE

     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.



Date:  March 16, 2011             By: /s/ Mark A. Smith
                                      Mark A. Smith, President

EX-10

EXHIBIT 10.1

                   BION ENVIRONMENTAL TECHNOLOGIES, INC.
                               P.O. Box 323
                        Old Bethpage, New York 11804
                              (516) 249-5682

                           EMPLOYMENT AGREEMENT


     This Agreement effective as of February 1, 2011, by and between Bion
Environmental Technologies, Inc.  ("Company"), and James W. Morris, Ph.D.,
P.E. ("Employee").

     WHEREAS, the Company desires to retain the services of Employee as an
employee upon the conditions contained in this Agreement; and

     WHEREAS, Employee desires to provide services to the Company, as an
employee, under such conditions;

     NOW THEREFORE, in consideration of the mutual covenants and conditions
hereinafter set forth, the Company does hereby agree to engage Employee and
Employee does hereby agree to be engaged by the Company, upon the terms and
conditions set forth in the following paragraphs:

     1.   Employment Period.

     a)  The Company hereby engages Employee for a five-year period
commencing February 1, 2010 and ending January 31, 2015 ("Employment Period")
to serve as Chief Technical Officer ("CTO") of the Company (and its
subsidiaries, as required) and to render such other services in an executive
capacity as the Company shall reasonably require.  Employee hereby agrees to
remain in the employ of the Company for the Employment Period, subject to the
provisions of this Agreement.  Employee may terminate his employment with the
Company upon three months' written notice to the Company.  Upon the date of
termination (three months after notice) this Agreement shall terminate
without liability one to the other upon the date specified by Employee,
PROVIDED, HOWEVER, that if Employee elects to terminate for other than
reasons of ill health or other disability as agreed by the Company, 50% of
the any granted Options in the Employee's compensation package (defined
below) that vested and were not exercised during the 12 months prior to the
termination date, shall be cancelled; and any bonuses to be paid after the
termination date (whether in cash or securities) accruing during the 12
months prior to the termination date shall be cancelled and shall not be paid
to the Employee.

     b)  Employee and Company shall, commencing at the beginning of the 49th
month of this Agreement, negotiate in good faith regarding renewal and/or
extension of this Agreement.  In the event that no renewal/extension
agreement is executed, by the end of the 54th month, then contract will
expire at end of term.

     2.   Duties/Exclusivity/Non-Compete/Work Product/Proprietary
Materials/Confidentiality.




     a)  Employee agrees that at all times during the Employment Period he
will faithfully and diligently endeavor to promote the business and business
interests of the Company while performing the duties set forth at Exhibit A
hereto.

     b)  At all times during the Employment Period Employee shall work
exclusively for the Company except as to the minor efforts set forth in
Exhibit D hereto.  Employee shall be based out of his own office space in his
existing facilities.

     c)  Non-Compete

          i)  At no time during the Employment Period or during a two (2)
year period following the termination of the Employment Period shall Employee
compete with the Company in any business in which the Company is actively
engaged or has established plans to enter during such period.  A list of such
businesses shall be provided to Employee by the Company within thirty days of
the termination of the Employment Period.

          ii)  At no time during the Employment Period or during any period
thereafter shall Employee utilize or disclose any of the Company's Core
Technical Knowledge (CTK) as defined in Exhibit E, except on behalf of the
Company (and/or its successors and/or assigns) as long as the Company is
active or plans to be active in the biologically based processing of wastes
or nutrient management business or air emissions management business based in
whole or in part on the application of that CTK.

     d)  All work products, inventions, etc. of Employee during the term of
this agreement shall be the sole property of the Company and Employee shall
execute such assignments and/or other documents as may be required to fully
vest such ownership in the company.

     e)  All proprietary information and other information concerning the
Company acquired pursuant to Employee's service to the Company shall at all
times be and remain the sole property of the Company regardless of how such
proprietary information is stored and upon termination of Employee's service
to the Company (on whatever basis) (w/o retaining copies) return all such
proprietary information to the Company on whatever medium it is evidenced
(including w/o limitation paper files, computer memory media, etc).

     f)  The existing six-page Confidential and Proprietary Information
Agreement (version 2/10/09) between Employee and the Company attached hereto
as Exhibit C shall remain in full force and effect; to the extent that any of
the provisions of such existing Confidentiality Agreement are in conflict
with the provisions of Paragraph 2 herein, the terms of the Confidentiality
Agreement shall control for a period of three (3) years from the later of
termination of the Employment Period or the date on which Recipient obtains
such Confidential Information.

     3.  Salary and Benefits.  Subject to the provisions of this Agreement,
during the Employment Period, Employee shall be compensated as follows:

     a)   Employee shall earn a salary of $150,000 per annum, payable in
monthly installments, subject to customary payroll deductions for Federal,
State, and local taxes and to such other deductions as are required by law or
by mutual agreement of the Company and Employee. Employee shall earn a salary




of $180,000 per annum beginning on July 1, 2011 contingent upon Company
completing a cash financing with in excess of $ 3 million of net proceeds to
the Company for operating capital.

     b)  HOWEVER if such financing is not secured by that date the salary
increase difference of an additional $30,000 per annum shall begin to accrue
on July 1, 2011 and shall continue to accrue pending reimbursement when such
financing is obtained.  Employee's salary shall be reviewed annually and will
be included in Bion's senior management bonus pool, which salary shall be re-
evaluated during the first quarter annually.

     c)  Employee shall receive a cash bonus of $87,716 based on the action
of the Bion Board of Directors on January 3, 2007 and as notified in a letter
of January 22, 2007 for deferred compensation period ending 9/30/05.  The
bonus principal amount of $87,716 is the total due as of 2/1/11, said amount
shall continue to accrue interest from 2/1/11 at an annual rate of 5%  (5%
apr) with principal and interest to be paid a such time that the Company
completes the financing set forth at paragraph 3)a) above.  Such compensation
may be received as a lump sum payment or at the Company's discretion may be
made in up to six equal twice monthly payments over a three month period.

     d)  Employee's 300,000 existing options to purchase Company's common
stock, contingent stock grant and stock bonus grant from all dates through
December 31, 2010 as detailed in Exhibit F of this agreement shall remain in
full force and effect and shall vest as set forth therein, provided, however,
that any and all options and/or stock grants which would have vested at
earlier dates had Employee already executed an employment agreement with the
Company shall immediately vest on the effective date of this Agreement, and
that the expiration dates of all 300,000 existing stock options shall have an
expiration date of December 31, 2014 and exercise price as detailed in
Exhibit F of this agreement.

     e)  The Company hereby grants Employee, effective February 1, 2011,
250,000 additional Options pursuant to the Company's 2006 Consolidated
Incentive Plan (as amended), each exercisable to purchase shares of the
Company's common stock at an exercise price of $3.00 per share (the opening
price on December 14, 2010, the date on which Company agreed in principle to
the basic terms of this extension, and $.10 above the last bid price on
January 1, 2011 on which date the Board authorized management to complete
this agreement, and which Options shall have a cashless exercise, purchase
and immediate sale option available pursuant to the Company's effective Form
S-8 registration statement) through December 31, 2018 ('Options'), which
Options shall vest at a rate of 50,000 annually on the first day of February
2011 and on the first day of January each year commencing January 2012 so
long as Employee is performing the services to the Company set forth in this
Agreement.

     f)  A stock bonus of 25,000 shares of Bion Common Stock granted January
2010 shall vest and be issued upon signing of this agreement and be available
for sale (without securities law restriction) by the Employee commencing
August 1, 2011.  An additional stock bonus of 20,000 shares that was declared
on December 31, 2010 which bonus shares shall vest the first date after
execution of this Agreement in 2011.




     g)  The Board of Directors of the Company will review Employee's salary
no less than once per year with a view to making such increases in Employee's
salary or declaring such bonuses or other benefits as may be merited and
warranted in light of factors considered pertinent by the Board of Directors.

     h)  Employee shall receive the Company's standard executive health,
hospitalization and life insurance benefits, provided, however, the amount
which the Company would have paid for health insurance premiums shall be
applied to premiums for a life insurance policy for Employee and/or
supplemental health insurance (major medical, disability, etc); as well as
such other benefits as the Board may deem appropriate from time to time.  At
the time of this agreement, at Employee's election, payments of approximately
$3,100 annually are being paid for premiums on a long term disability health
insurance with Employee and Employee's spouse as covered beneficiaries.

     i)  Employee shall be entitled to four (4) weeks of vacation, two (2)
weeks of sick time and all National Holidays at full pay each year, to be
taken at such times as to not interfere with the performance of his duties
hereunder.  Any unused days upon the end of each year shall be a factor in
the review at subparagraph (c.) above.

     4.  Expenses.  All reasonable and necessary expenses incurred by
Employee in the performance of his duties under this Agreement, including but
not limited to expenses for entertainment, travel, and similar items, shall
be paid or reimbursed monthly by the Company upon receipt of appropriate
documentation of such expenses.  Employee shall provide his own office space
in his existing facilities.  The items set forth in, but not limited to,
those set forth in Exhibit B hereto are stipulated to be bona fide expenses
of Employee.

     5.  Disability of Employee.  In the event of the disability of Employee
(as defined herein) prior to the expiration of the Employment Period,
Employee shall nevertheless continue to be compensated at his then designated
annual rate and with such benefits provided for in Paragraph 3 hereof.  For
purposes of this Agreement, Employee shall be deemed to be fully disabled if,
because of illness or other physical or mental condition; he is unable to
fully perform all of his duties under this Agreement for two successive
months.  In the event that he is unable to perform all or a portion of the
duties required under this Agreement for short periods of time aggregating
over two months in any twelve successive calendar months, he shall be deemed
to be partially disabled.  The compensation and benefit period shall run from
the time disability commenced until Employee's condition improves
sufficiently to permit him to fully perform his duties, after which date he
must be available at the Company's option.  The Company may require such
evidence of disability, as it deems appropriate.  Notwithstanding any other
provision herein, the maximum aggregate period of disability payment
obligation of the Company for disability compensation to Employee shall be 12
months of compensation.

     6.  Termination Upon Death and Disability.  The Employment Period shall
automatically terminate upon the death of Employee; provided, however, that
in the event of the Employee's death, all compensation Employee is receiving
under Paragraph 3 of this Agreement at the time of his death shall be paid to
his legal representative for a period of one year following the date of
Employee's death or the remainder of the Employment Period, whichever occurs
first.  At the discretion of the Board of Directors, the Employment Period




may terminate upon the Disability of Employee (as defined in Paragraph 5
above); provided, however, that Employee shall continue to receive
compensation in accordance with Paragraph 5 above.

     7.  Termination for Cause.  Upon the occurrence of any of the events
listed below, the Company may terminate the Employee without further
obligation under this Agreement:

     a)  Employee's conviction of any criminal act directly related to
Employee's duties hereunder including, without limitation, misappropriation
of funds or property of the Company or any other felony criminal act.

     b)  Employee's misfeasance or malfeasance in office, which shall mean
fraud, dishonesty, willful misconduct or gross neglect of duties.

     c)  Breach by Employee of any material provision of this Agreement.

     8.  Termination Without Cause.  In the event Employee is terminated by
the Company for any reason, except as set forth in Paragraph 7 above, he
shall continue to be compensated for six months.

     9.  Termination Upon Change of Control.  In the event that a change in
control of the Company shall occur at any time during the Employment Period,
as a result of which the Board of Directors appoints a person other than
Employee to serve in the capacity for which Employee is employed hereunder,
Employee nevertheless shall be entitled to the benefits of and subject to all
of the terms and conditions set forth herein, including, without limitation,
the right to receive compensation and benefits as provided in Paragraphs 3,
4, 5 and 6 hereof for the balance of the term of this Agreement or a period
of three months, whichever is shorter, regardless of whether Employee
continues to perform any services for the Company.

    10.  Vesting in the Event of Termination.  In the event that the Employee
is terminated upon death or disability (Paragraph 6), terminated without
cause (Paragraph 8), or terminated upon change in control (Paragraph 9), all
warrants, options or shares issued but unvested at the date of termination
shall become fully vested as of the date of termination.

    11. Parties in Interest.  This Agreement shall be binding upon and shall
inure to the benefit of the Company and its successors and assigns and any
person acquiring, whether by merger, consolidation, liquidation, purchase of
assets or otherwise, all or substantially all of the Company's equity or
assets and business.

    12.  Choice of Law.  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 New York 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 New York 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.




    13.  Severance of Invalid Provisions.  In the event that any one or more
of the provisions of this Agreement or any portions thereunder 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.  Further, such
provisions, to the extent they were found unenforceable due to length of term
or breadth of scope, shall remain in full force and effect to the fullest
extent enforceable in law or equity.

    14.  Integrated Agreement.  This Agreement shall constitute the entire
agreement between the parties hereto relating to the Employment of Employee.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
on its behalf by its duly authorized officer and Employee has executed this
Agreement, effective as of the date and year first above written.

                                  BION ENVIRONMENTAL TECHNOLOGIES, INC.


                                  By: /s/ Mark A. Smith
                                      Authorized Officer


                                  EMPLOYEE


                                  /s/ James W. Morris
                                  James W. Morris, Ph.D., P.E.

EX-10

EXHIBIT 10.2

                                   AGREEMENT


THIS AGREEMENT is executed as set forth below effective as of the 1st day of
March 2011 by, between and among Bion Environmental Technologies, Inc.
('Bion') (collectively Bion and the subsidiaries of Bion, are sometimes
referred to as the 'Bion Companies') and John R. Grabowski ('JRG').

WHEREAS the Bion Companies desire to receive the services of JRG upon the
terms and conditions set forth in this agreement;

AND WHEREAS JRG desires to continue to provide to the Bion Companies with his
services and is willing to do so 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 do hereby agree to employ JRG, and
(with the express consent of JRG as evidenced by his signature below), upon
the terms and conditions set forth in the following paragraphs:

     1)  The Term of this Agreement shall run from March 1, 2011
('Commencement Date'), through a date two years after the Commencement Date
('Term'), during which Term JRG shall provide to the Bion Companies his full-
time services as set forth in the following provisions:

         a)  JRG shall provide his full-time services to the Bion Companies
with the Title:  'Director of Business Development' with duties as set forth
in Exhibit A hereto;

         b)  JRG shall be eligible for reimbursement for reasonable medical
insurance premiums For his family and shall have the right to participate in
existing or subsequently Adopted 401 (k) plans;

         c)  JRG shall initially have 3 weeks of paid vacation per year (not
including national holidays) which vacation time shall be scheduled with the
senior management of the Bion Companies.

     2)  Compensation during the Term of this Agreement (all compensation
items herein and this entire Agreement presume that Bion is receiving and JRG
is providing the services as set forth above):

         a)  Cash compensation from the Bion Companies to JRG for services
provided by JRG during the Term shall be $125,000.00 per year for the first
year and $138,000 for the second year, which shall be payable in twice
monthly installments; PROVIDED, HOWEVER, that payment for the month of March
2011 shall include & be integrated with the March 1, 2011 consulting payment
which shall become part of JRG's employee compensation for the period;

         b)  JRG shall be evaluated for bonus compensation at least annually;





         c)  Additionally, Bion hereby grants JRG a final, fully vested
warrant to purchase 7500 shares of Bion's common stock pursuant to prior
consulting arrangements (delivered March 1, 2011) plus options to purchase
62,500 shares of Bion's common stock at a price of $3.15 per share (the
opening price on March 2, 2011, the date on which the Company and JRG agreed
to the terms of this Agreement) until March 31, 2016 ('Options'), which
Options shall vest at a rate of 22,500 on January 31, 2012 and 40,000 on
January 31, 2013 so long as JRG is still providing the Bion Companies with
the services required by this Agreement on such dates:

         d)  To the extent that Bion develops policies regarding vesting of
Options and/or bonuses in the event of a 'change of control' in the future,
JRG will be treated in the same manner as all other employees & consultants
pursuant to such policies; and

         e)  JRG shall be reimbursed for reasonable home office, cell phone
and other expenses incurred in the performance of his duties pursuant to this
Agreement.

     3)  JRG will abide by the terms and provisions of a
Confidentiality/Proprietary Information Agreement (copy attached hereto as
Exhibit B) and further agrees that, unless expressly waived by the Bion
Companies in writing, JRG will require any and all persons who have access to
confidential information of the Bion Companies to execute copies of
agreements substantially similar to Exhibit B and that notwithstanding any
other terms herein, Exhibit B shall remain in full force and effect; and JRG
expressly agree that:

         a)  at no time during the Term or during a two (2) year period
following the end of the Term (including any extensions thereto) shall JRG
compete with the Bion Companies;

         b) all work product, inventions, etc. of JRG made during JRG's
employment pursuant to this Agreement shall be the sole property of the Bion
Companies and JRG, as applicable, shall execute such assignments and/or other
documents as may be required to fully vest such ownership in the Bion
Companies; and

         c) all proprietary information and other information concerning the
Bion Companies acquired pursuant to the service of JRG to the Bion Companies
shall at all times be and remain the sole property of the Bion Companies
regardless of how such proprietary information is stored and upon termination
of this Agreement (w/o retaining copies), JRG shall return all such
proprietary information to the Bion Companies on whatever medium it is
evidenced (including w/o limitation paper files, computer memory media, etc.)

     4)

         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,
with 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 here 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


                                /s/ John R. Grabowski
                                John R. Grabowski

EX-10

EXHIBIT 10.3

                            CLARIFICATION AGREEMENT

     This  Clarification Agreement is made effective this __ day of February,
2011 by, between and among Ronald Kreider ('K') and Kreider Farms ('KF')
(collectively K and KF are 'Kreider') and Bion Environmental Technologies,
Inc. ('B') and Bion PA 1, LLC ('LLC') (collectively B and LLC are
'Bion')(and, collectively Kreider and Bion are the 'Parties'), to clarify and
amend the provisions of all of the  prior written agreements among the
Parties ('Prior Agreements'), each of which Prior Agreements (including the
Lease) remains in full force and effect except to the extent that any term of
any part of the Prior Agreements differs from the terms set forth in this
Clarification Agreement. In the event of any conflict or difference in the
terms set forth in this Clarification Agreement and any part of the Prior
Agreements, the terms of this Clarification Agreement shall control and shall
be followed.

     NOW THEREFORE, in consideration of the mutual covenants, promises and
conditions set forth in this Clarification Agreement and the Prior Agreements
(collectively this Clarification Agreement and the Prior Agreements as
modified and amended by this Clarification Agreement are the 'Agreement'),
the Parties do hereby agree as follows:

     1)     Any deadlines earlier than December 31, 2011 set forth in the
Prior Agreements, including without limitation the deadline to achieve
agreement with the Pennsylvania Department of Environmental Protection
('DEP') regarding the nutrient credit protocols related to Kreider's poultry
litter and the 'renewable energy facilities' ('REF') as discussed in the
Prior Agreements  are extended to December 31, 2011.

     2)     The following terms shall be defined as follows:

     a.      LLC and the dairy system under construction by Bion at Kreider's
Mannheim Dairy are the 'KF#1 System' or 'KF#1'.

     b.     The poultry facilities, including REF (in whatever form and at
whatever location) and any entity in which REF is developed and/or operated,
as governed by Prior Agreements shall be referenced as KF#2;

     c.     All of the Nutrient Reduction Credits and any other credits
and/or other things of value generated (now and in the future) from KF#1,
KF#2  and/or any other activities related to Bion's treatment and/or handling
of Kreider's livestock waste are the 'Credits';

     d.     Collectively LLC, KF#1, KF#2 and Credits are the 'Assets'.

     3)     Bion and Kreider agree that they will each place 100% of the
entire interests in the 'Assets 'and  activities as defined above into a new
LLC ('NEW LLC'); and

     a.     Kreider shall have the option to purchase an Equity Interest in
NEW LLC ('Equity Interest') for $1.00 on any date through December 31, 2013
('KF Option') which Equity Interest shall entitle Kreider to participation in
Distributable Net Cash Flow of New LLC (defined below).



     b.     Upon exercise of the KF Option, payments to Kreider for its
poultry litter will terminate, but such litter provided subsequent to
exercise shall be valued in accordance with the formula utilized prior to
exercise of KF Option ("Litter Value") as set forth at Exhibit A hereto.
Ownership distributions (after exercise of Kreider Option) from the New LLC
to Kreider or any additional member (as to its Equity Interest) and to Bion
(as to its interest) shall be subordinated to Bion's right to be reimbursed
for its investment in the Assets and New LLC ('Bion Investment') until
Kreider's Litter Value shall equal 25% of the unreimbursed Bion Investment.
Subsequent to this milestone, such ownership distributions shall continue to
be subordinated to reimbursements of the remaining portion of "Bion
Investment" investment and "Litter Value", which reimbursements shall be made
proportionately.  Once the "Bion Investment" and Kreider "Litter Value have
been reimbursed, distributions may be made according to Sharing Terms (as
defined in paragraph 3.c. below).

     c.     Kreider's  Equity Interest shall entitle Kreider to participate
in distribution of Distributable Net Cash Flow (after exercise of Kreider
Option and recoupment of Bion's investment in the Assets and New LLC), which
shall be determined after a reasonable reserve of working/operating capital
needs has been set aside by the Manager of New LLC, with such distributions
based on the terms of the existing sharing agreements for dairy and poultry
set forth in the Prior Agreements (as modified by the October 25, 2008
agreement related to the New Poultry Barns)('Sharing Terms'); and New LLC
will distribute such Distributable Net Cash Flow  annually from the combined
operations of New LLC (and its subsidiaries) based upon the percentage of
credits (and net revenues therefrom) that Kreider dairy and poultry waste
streams, respectively, generated during each business year.

     d.     Bion will be the operating principal ('Manager') of New LLC (and
its subsidiaries).  KF will be granted 1 seat on the Board of New LLC out of
3 upon exercise of Kreider Option.

     e.     It is not possible to accurately predict at the present time how
the dairy coarse solids and poultry will be combusted initially and on a long
term basis as there could be one or multiple transactions with one or
multiple partners over various time frames which transactions could
potentially include processing litter from facilities other than Kreider to
achieve sufficient scale to economically justify such investment.  As a
result, Bion, as manager of New LLC, shall use its commercially reasonable
best efforts to negotiate such transaction(s) on behalf of New LLC in a
manner which endeavors to insure that New LLC's (and, therefore, Kreider's)
interest in the expanded REF revenue stream appropriately reflects New LLC's
contributions to the venture and Bion acknowledges its fiduciary obligations
to Kreider and New LLC in the context of such negotiations; and

     f.     All economic return to Kreider (except for payment for poultry
litter prior to exercise of Kreider option as discussed herein and in Exhibit
A hereto) from the activities discussed in this Clarification Agreement and
the Prior Agreements will be through exercise of KF Option and its
participation in New LLC, provided, however, this provision shall be
construed to mean that Kreider will receive its net share of the Net
Distributable Income from Nutrient Credits generated by the New Poultry
Barn's technology (as described in the October 25, 2008 agreement) through
its Ownership Interest in New LLC as set forth herein upon exercise of the KF
Option.



     4)     As to payment/credit of Litter Value to Kreider for its poultry
litter as set forth in the Prior Agreements and above) and, Kreider and Bion
agree that:

     a.     The formula for calculation of such payments shall be adjusted to
insure that it equitable reflects all of Kreider's costs related to
processing the poultry litter for the fertilizer market;

     b.     Such payments shall terminate upon exercise of the KF Option set
forth above, and

     5)

     a.  In the event of any dispute between Kreider and Bion over any
provision of this Agreement (including the Prior Agreements), Kreider and
Bion agree that if they cannot resolve such dispute in 60 days (from written
notice), such dispute shall be subject to resolution through binding
arbitration (in Pennsylvania), which arbitration shall be by a mutually
agreeable arbitrator (if the parties cannot agree on a mutual acceptable
arbitrator, each shall nominate an independent third party and such third
parties shall chose an arbitrator without consultation with Kreider and Bion
which arbitrator shall be deemed to be mutually acceptable).  The parties
shall split the costs related to such arbitration.

     b. All other provisions of the Prior Agreements remain unchanged and in
full effect except to the extent that such provisions contradict the intent
and/or performance of the terms set forth above or prevent or hinder the
carrying out of the terms set forth above.

     c. The Parties expressly acknowledge and agree that they each understand
that it is likely that Kreider and Bion shall each be required to execute
and/or amend one or more agreements with the DEP and/or other regulatory
authorities (collectively 'DEP Agreements') in connection with issuance of
the DEP permit(s) for the Bion System and/or REF (each as defined above and
in the Prior Agreements) and Kreider and Bion each hereby agree that they
will cooperate in the negotiation and execution of such DEP Agreements as the
DEP and/or other regulatory authorities shall require related to permitting,
construction and/or operation of the System.  This paragraph should not be
construed to mean that Kreider will be required to assume any liability or
modify its operations without reasonable compensation.

                                  Bion Environmental Technologies, Inc.


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


                                  Bion PA 1 LLC


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

                                  'Kreider'

                                  By:/s/ Ronald Kreider

                                     Ronald Kreider, individually and as
                                     controlling shareholder/partner of all
                                     entities defined as Kreider and/or
                                     Kreider Farms herein, including without
                                     limitation, Noah A. Kreider & Sons, a
                                     partnership, all of which shall be bound
                                     by the signature above.

EX-99

EXHIBIT 99.1

                     BION ENVIRONMENTAL TECHNOLOGIES, INC.

Bion Gives Kreider Farm Project Update

March 15, 2011.  New York, New York.  Bion Environmental Technologies, Inc.
(OTC BB and OTCQB: BNET) announced today that construction of its initial
Kreider Farm Project has proceeded on schedule and will be largely completed
by the end of the month.  The project is now transitioning into the equipment
testing/shakedown stage.

Bion's technical personnel and engineers are now working with Primus
Engineering, the Project's General Contractor, to establish operational
protocols and ensure a smooth transition to full operations.  Based on the
early startup of the bioreactor in January, Bion estimates it will take only
an additional 90 days to fully stabilize the system biology to reach initial
system startup efficiencies.  At that time, monitoring and testing to verify
the nitrogen and phosphorus credits (already certified under Pennsylvania's
nutrient credit trading program) will commence.  Bion anticipates that over
the next year the system performance will continue to improve beyond its
initial startup efficiencies.

Construction photos taken at Kreider have been posted periodically and can be
viewed on the Bion PA website at www.bionpa.com/photos.

             ______________________________________________________

About Bion: Bion Environmental Technologies has provided environmental
treatment solutions to the agriculture and livestock industry since 1990.
Bion's patented next-generation technology provides a unique comprehensive
treatment of livestock waste that achieves substantial reductions in nitrogen
and phosphorus, ammonia, greenhouse and other gases, as well as pathogens,
hormones, herbicides and pesticides. Bion's process simultaneously recovers
cellulosic biomass from the waste stream to produce renewable energy.

Bion's technology enables development of large scale livestock facilities in
strategic locations that provide greater efficiencies and dramatically
reduced transportation costs but were previously impracticable due to their
environmental impact.  These environmentally-responsible, large scale
facilities can be integrated with existing or new food processing and
renewable energy production operations to substantially reduce risk and
improve the economics of all partners.  For more information, see Bion's
websites: www.biontech.com and www.bionpa.com.

This material includes forward-looking statements based on management's
current reasonable business expectations. In this document, the word
'expect', 'will', 'proposed' and similar expressions identify certain
forward-looking statements. 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.

Contact information:

Mark A. Smith                               Craig Scott
President                                   Vice President-Capital Markets/IR
719-256-5329                                303-843-6191 direct