AGREEMENT

                                  AGREEMENT

IT IS AGREED this 11 day of December, 1999, effective December 15, 1999, by
and between Xxxxxx X. Xxxxxx ("EAH") and Bion Environmental Technologies, Inc.
("BION") as follows:

WHEREAS BION is entering into an agreement ("D2 AGREEMENT") with D2 CO. ("D2")
concerning management, consulting and financing; and

WHEREAS D2 requires that BION and certain major shareholders and/or creditors
of BION, including EAH, agree to certain conditions as partial consideration
for the D2 AGREEMENT with BION; and

WHEREAS EAH considers the D2 AGREEMENT to be in the best interests of BION and
is willing to accept the following conditions;

NOW THEREFORE, IN CONSIDERATION of the mutual promises and covenants herein:

1) EAH agrees to exchange all $2.25 Warrants (56,000 as of 11/30/99) for $2.25
options under the 1994 Incentive Plan and to exercise the options by canceling
existing long term promissory note ($130,346.65 as of 11/30/99) subsequent to
$3,000,000 net additional funding of BION. Any excess to the promissory note
balance will result in additional shares being issued as if the number of
options were greater, or will be paid in cash at closing at the option of
Bion.

2) EAH agrees to recommend and support a registered exchange including BION
Class X Warrants and BION Class Z Warrants with tentative exchange ratios as
follows:
          1 Class X Warrant = 0.3 registered BION common shares; and
          1 Class Z Warrant = 0.15 registered BION common shares;
provided, however, that based on events subsequent hereto the proposed
exchange ratios may need to be adjusted to insure fairness to all holders or
BION may elect to not proceed with the proposed exchange on any terms.

3) EAH acknowledges that D2 AGREEMENT will entail material management
re-arrangement at all levels of BION, both immediately and over time which may
alter the services required by BION from EAH; and EAH agrees to cooperate with
BION and D2 in all transitions.

Bion Environmental Technologies, Inc.       Xxxxxx X. Xxxxxx

By: /s/ Xxxx X. Xxxxx                       by: /s/ Xxxxxx X. Xxxxxx
    Authorized Officer                         Xxxxxx X. Xxxxxx