PROMISSORY NOTE

Exhibit 10.1

PROMISSORY NOTE

FOR VALUE RECEIVED, NatureWell, Incorporated, a Delaware corporation, and all of its subsidiaries (the "Company") (OTC BB: NAWL) hereby promises to pay to the order of DUTCHESS PRIVATE EQUITIES FUND, LP (the "Holder") by the Maturity Date, or earlier, the Face Amount of Five Hundred and Seventy-Two Thousand Dollars ($572,000) U.S., (this "Note") in such amounts, at such times and on such terms and conditions as are specified herein (sometimes hereinafter the Company and the Holder are referred to collectively as "the Parties").

Any capitalized term not defined in this Note are defined in the Investment Agreement for the Equity Line of Credit ("Investment Agreement") between Dutchess Private Equities Fund, LP (as the "Investor") and the Company dated March 31, 2006 (the "Equity Line"), which definitions the Company and the Holder incorporate herein by reference.     

1.             Method of Payment
2. 1. Payments made to the Holder by the Company in satisfaction of this Note (referred to as a "Payment," or "Payments") shall be drawn from each Put under the Equity Line of Credit provided by the Investor to the Company. The Company shall make Payments to the Holder in the amount of the greater of a) forty-seven thousand six hundred and sixty-six dollars ($47,666) per month or b) one hundred percent (100%) of each Put (as defined in the Investment Agreement) given to the Investor from the Company (both a) and b) referred to as the "Payment Amount") until the Face Amount is paid in full, minus any fees due. The first Payment will be due on January 14, 2007 and each subsequent Payment will be made in part or in whole at the Closing of the next subsequent Puts ("Payment Date" or "Payment Dates") until this Note is paid in full, with a minimum amount of forty-seven thousand six hundred and sixty-six dollars ($47,666) due to the Holder per month. Notwithstanding any provision to the contrary in this Note, the Company may prepay, in whole or in part, the Face Amount of this Note, or any balance remaining thereon, in readily available funds at any time and from time to time without penalty.
   2. Payments pursuant to this Note shall be drawn directly from the Closing of each Put. The Company agrees to fully execute and diligently carry out Puts to the Investor, on the terms set forth in the Investment Agreement. The Company agrees that the Put Amount shall be for the maximum amount allowed under the Investment Agreement. Further, the Company agrees to issue Puts to the Investor for the maximum frequency allowed under the Investment Agreement. Failure to comply with the terms of the Investment Agreement with respect to the Puts will result in an Event of Default as defined in this Agreement in Article 4.
   3. In order to assist the Company in meeting its obligations under this Note, the Company hereby authorizes the Investor to transfer funds from each Put directly to the Holder. A Put shall be deemed closed after the funds are transferred to the Holder.
   4. After Closing, the Company must make a Prepayment to the Holder when the aggregate amount of financing ("Financing") received by the Company is in excess of one dollar ($1.00) ("Threshold Amount"). The Company agrees to pay one hundred percent (100%) of any proceeds raised by the Company over the Threshold Amount toward the Prepayment of the Note and any penalties until the Face Amount is paid in full. The Prepayments shall be made to the Holder within one (1) business day of the Company's receipt of the Financing. Failure to do so will result in an Event of Default. Financing includes the net proceeds from the sale, transfer or disposal of any assets owned by the Company except for assets sold, transferred or disposed of in the ordinary course of business.

            Section 1.5                    The Company shall pay twelve percent (12%) annual coupon on the unpaid Face Amount of this Note. The Interest shall compound daily, pro rata for partial periods.

2. Collateral
3. 1. The Company does hereby agree to allow the Holder to use as Collateral, the fifty (50) signed Put Notices consistent with the conditions set forth in Section 12 of the May 16, 2006 Note between the Company and the Holder ("Prior Note"). In the event, the Holder uses the Collateral in full, the Company shall immediately deliver to the Holder additional Put Sheets as requested by the Holder.
   2. Upon the completion of the Company's obligation to the Holder of the Face Amount of this Note, the Company will not be under any further obligation to complete additional Puts. All remaining Put sheets shall be marked "VOID" by the Holder and returned to the Company at the Company's request.
   3. As further security and collateral for this Note the Company will grant to Holder a security interest in the properties, assets and rights named in that certain Intercreditor Agreement dated as of September 2, 2003 (the "Additional Collateral"). The Parties hereby agree that the terms of the Intercreditor Agreement shall only govern Holder's rights and remedies as they relate to the Additional Collateral and that the Intercreditor Agreement shall be of no force and effect against any other rights, remedies or terms contained in this Note, including, but not limited to Sections 15, 18 and 19 of the Intercreditor Agreement.

3. Unpaid Amounts
4. 1. In the event that on the Maturity Date the Company has any remaining amounts unpaid on this Note (the "Residual Amount"), the Holder can exercise its right to increase the Face Amount by ten percent (10%) as an initial penalty and an additional two and one-half percent (2.5%) per month paid, pro rata for partial periods, compounded daily, as liquidated damages ("Liquidated Damages"). If a Residual Amount remains, the Company is in Default and the Holder may elect remedies as set forth in Article 4, below. The Parties acknowledge that Liquidated Damages are not interest and should not constitute a penalty.

4.             Defaults and Remedies
5. 1. Events of Default. An "Event of Default" occurs if any one of the following occur:
   2. 1. The Company does not make a Payment within two (2) business days of (i) the Closing of a Put; or (ii) a Payment Date; or, (iii) a Residual Amount on the Note exists on the Maturity Date; or
      2. The Company, pursuant to or within the meaning of any Bankruptcy Law (as hereinafter defined): (i) commences a voluntary case; (ii) consents to the entry of an order for relief against it in an involuntary case; (iii) consents to the appointment of a Custodian (as hereinafter defined) of the Company or for its property; (iv) makes an assignment for the benefit of its creditors; or (v) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (A) is for relief against the Company in an involuntary case; (B) appoints a Custodian of the Company or for its property; or (C) orders the liquidation of the Company, and the order or decree remains unstayed and in effect for sixty (60) calendar days; or
      3. The Company's $0.00001 par value regular common stock (the "Common Stock") is suspended or is no longer listed on any recognized exchange, including an electronic over-the-counter bulletin board, for in excess of two (2) consecutive trading days; or
      4. Either the registration statement for the underlying shares in the Investment Agreement is not effective for any reason and is not cured within five (5) days; or,
      5. Any of the Company's representations or warranties contained in this Agreement were knowingly and materially false when made; or,
      6. The Company breaches this Agreement, and such breach, if and only if such breach is subject to cure, continues for a period of five (5) business days.

As used in this Section 4.1 (b), the term "Bankruptcy Law" means Title 11 of the United States Code or any similar federal or state law for the relief of debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.

4. 2. Remedies. In the Event of Default, the Holder may elect to garnish Revenue from the Company in an amount that will repay the Holder on the schedules outlined in this Agreement and fully enforce the Security Agreement dated May 16, 2006, between the Holder and the Company.

            For each and every Event of Default, as outlined in this Agreement, the Holder can exercise its right to increase the Face Amount of the Note by ten percent (10%) as an initial penalty, provided however, the amount of such initial penalty shall not exceed the greater of 1) 100% of the remaining Face Amount or 2) $150,000. In addition, the Holder may elect to increase the Face Amount of the Note by two and one-half percent (2.5%) per month as Liquidated Damages, compounded daily. The Parties acknowledge that Liquidated Damages are not interest under the terms of this Agreement, and shall not constitute a penalty.

            In the event of a Default hereunder, the Holder, at its sole election, shall have the right, but not the obligation, to either:

                        a) Switch the Residual Amount to a three-year ("Convertible Maturity Date"), eighteen percent (18%) interest bearing convertible debenture at the terms described hereinafter (the "Convertible Debenture"). In the event of Default, the Convertible Debenture shall be considered closed ("Convertible Closing Date"), as of the date that Holder notifies the Company (in writing) of its decision to switch the Residual Amount to the Convertible Debenture (the "Notice of Convertible Debenture"). The Company shall have twenty (20) business days after receiving a Notice of Convertible Debenture to file a registration statement covering an amount of shares equal to three hundred percent (300%) of the Residual Amount. Such registration statement shall be declared effective under the Securities Act of 1933, as amended (the "Securities Act"), by the Securities and Exchange Commission (the "Commission") within sixty (60) business days of the Convertible Closing Date. In the event the Company does not file such registration statement within twenty (20) business days of the Holder's request, or such registration statement is not declared by the Commission to be effective under the Securities Act within the time period described above, the Residual Amount shall increase by five thousand dollars ($5,000) per day. In the event the Company is given the option for accelerated effectiveness of the registration statement, the Company will cause such registration statement to be declared effective as soon as reasonably practicable and will not take any action to delay the registration to become effective. In the event that the Company is given the option for accelerated effectiveness of the registration statement, but chooses not to cause such registration statement to be declared effective on such accelerated basis, the Residual Amount shall increase by five thousand dollars ($5,000) per day commencing on the earliest date as of which such registration statement would have been declared to be effective if subject to accelerated effectiveness; or

                          b) The Holder may increase the Payment Amount described under Article 1 to fulfill the repayment of the Residual Amount. The Company shall provide full cooperation to the Holder in directing funds owed to the Holder on any Put made by the Company to the Investor. The Company agrees to diligently carry out the terms outlined in the Investment Agreement for delivery of any such shares. In the event the Company is not diligently fulfilling its obligation to direct funds owed to the Holder from Puts to the Investor, as reasonably determined by the Holder, the Holder may, after giving the Company two (2) business days advance notice to cure the same, elect to increase the Face Amount of the Note by 2.5% each day, compounded daily, in additional to and on top of additional remedies available to the Holder under this Note.

4. 3. Conversion Privilege
   4. 1. The Holder shall have the right to convert the Convertible Debenture into shares of Common Stock at any time following the Convertible Closing Date and before the close of business on the Convertible Maturity Date. The number of shares of Common Stock issuable upon the conversion of the Convertible Debenture shall be determined pursuant to Section 4.4, but the number of shares issuable shall be rounded up to the nearest whole share.
      2. The Holder may convert the Convertible Debenture in whole or in part, at any time and from time to time.
      3. In the event all or any portion of the Convertible Debenture remains outstanding on the Convertible Maturity Date (the "Debenture Residual Amount"), the unconverted portion of such Convertible Debenture will automatically be converted into shares of Common Stock on such date in the manner set forth in Section 4.4.
   5. Conversion Procedure.                                                
   6. 1. The Holder may elect to convert the Residual Amount in whole or in part any time and from time to time following the Convertible Closing Date. Such conversion shall be effectuated by providing the Company, or its attorney, with that portion of the Convertible Debenture to be converted together with a facsimile or original of the signed notice of conversion (the "Notice of Conversion"). The date on which the Notice of Conversion is effective ("Conversion Date") shall be deemed to be the date on which the Holder has delivered to the Company a facsimile or original of the signed Notice of Conversion, as long as the original Convertible Debenture(s) to be converted are received by the Company within five (5) business days thereafter. When the Convertible Debenture has been provided to the Company, the Holder can elect to either have the Company reissue the remaining amount of Convertible Debenture (not previously converted), or continually convert the existing Debenture until it has been fully converted. Any Notice of Conversion faxed by the Holder to the Company on a particular day shall be deemed to have been received no later than the following business day (receipt being via a confirmation of the time such facsimile to the Company is received).
      2. C ommon Stock to be Issued.   Upon the conversion of any Convertible Debentures by the Holder, the Company shall instruct its transfer agent to issue stock certificates without restrictive legends or stop transfer instructions, if, at that time, the aforementioned registration statement described in Section 4.2 has been declared effective (or with proper restrictive legends if the registration statement has not as yet been declared effective), in specified denominations representing the number of shares of Common Stock issuable upon such conversion. The Parties hereby agree that the date that the Company received consideration for the Debenture shall be the Issuance Date of this Note. If required, the Company shall provide an opinion letter from counsel within two (2) business days of written request by the Holder. In the event the Company does not deliver the opinion letter within two business days, the Fixed Conversion Price shall immediately decrease by two percent (2%) for each business day an opinion letter fails to be delivered. In the event that counsel to the Company fails or refuses to render an opinion as required to issue the Shares in accordance with this paragraph (either with or without restrictive legends, as applicable), then the Company irrevocably and expressly authorizes counsel to the Holder to render such opinion and shall authorize the Transfer Agent to accept and to rely on such opinion for the purposes of issuing the Shares. The Company is responsible for all costs associated with the issuance of the shares, including but not limited to opinions of counsel, FedEx of the certificates and any other costs that arise. The Company warrants that no instructions have been given or will be given to the transfer agent which limit, or otherwise prevent resale and that the Common Stock shall otherwise be freely resold, except as may be set forth herein or subject to applicable law.
      3. Conversion Rate. The Holder is entitled to convert the Convertible Debenture, or the Debenture Residual Amount, in whole or in part, plus accrued interest and penalties, anytime following the Convertible Closing Date, at a conversion price equal to the seventy-five percent (75%) of the lowest closing bid price during the fifteen (15) trading days immediately preceding the Notice of Conversion for the portion of the Debenture being converted, or (ii) 100% of the lowest bid price for the twenty (20) trading days immediately preceding the Convertible Closing Date ("Fixed Conversion Price"). No fractional shares or scrip representing fractions of shares will be issued on conversion, but the number of shares issuable shall be rounded up to the nearest whole share.
      4. Nothing contained in the Convertible Debenture shall be deemed to establish or require the Company to pay interest to the Holder at a rate in excess of the maximum rate permitted by applicable law. In the event that the rate of interest required to be paid exceeds the maximum rate permitted by governing law, the rate of interest required to be paid thereunder shall be automatically reduced to the maximum rate permitted under the governing law and such excess shall be returned with reasonable promptness by the Holder to the Company. In the event this Section 4.4(d) applies, the Parties agree that the terms of this Note shall remain in full force and effect except as is necessary to make the interest rate comply with applicable law.
      5. The Holder shall be treated as a shareholder of record on the date the Company is required to issue the Common Stock to the Holder. If prior to the issuance of stock certificates, the Holder designates another person as the entity in the name of which the stock certificates requesting the Convertible Debenture are to be issued, the Holder shall provide to the Company evidence that ei