Document:

<PAGE>
                                                                   EXHIBIT 10.21
                                  [DIAMOND FOODS LOGO]

                                             DIAMOND FOODS, INC.
                                            WALNUT PURCHASE AGREEMENT

Grower Name:
                  --------------------------------------------------------------

Grower Address:
                  --------------------------------------------------------------

                  --------------------------------------------------------------

                 Telephone:                          Email:
                           -------------------------       ---------------------

Grower Orchards: [See description on reverse side of this page.]

Date of Agreement:                               , 2005
                   ------------------------------

         This Walnut Purchase Agreement is made between Diamond Foods, Inc., a
Delaware corporation ("Diamond") and the Grower named above ("Grower").

1.   Sale and Purchase. During the Term of this Agreement, Grower will sell and
     Diamond will buy Growers entire production of walnuts from the Grower
     Orchards described on the reverse side of this page.

2.   Term. The Initial Term of this Agreement will commence on the date set
     forth above and will continue for the remainder of Grower's term under the
     Marketing Agreement contained in the Diamond Walnut Growers, Inc. Bylaws
     PLUS (check one)

     [ ] three additional Crop Years

     [ ] five additional Crop Years

     [ ] ten additional Crop Years

     (Thus, if a grower had one Crop Year remaining under the old Marketing
     Agreement and the grower elected a term of three additional Crop Years, the
     Initial Term would be four Crop Years). A Crop Year will commence on August
     1 of the year in which the harvest is delivered (thus, the 2005 Crop Year
     commences on the August 1 preceding delivery of the harvest in the Fall of
     2005), and will continue until July31 of the following year).

     After the Initial Term, this Agreement will be automatically renewed for
     successive three-year terms (each, an "Extension Term") unless and until
     either party terminates the Agreement using the procedure described in
     paragraph 6.a. of the General Terms and Condition.

3.       Price. By March31 following a harvest, Diamond will announce a final
         nominal purchase price for the year's walnut crop (the "Final Price").
         The Final Price will be determined by Diamond in good faith, taking
         into account market conditions, quality, variety, and other relevant
         factors. The actual

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         purchase price (the "Purchase Price") will determined by applying to
         Grower's deliveries the Final Price, as adjusted for various bonuses
         and price adjustments relating to variety, grade, early delivery,
         suitability for sale as in-shell, shelling quality, insect
         classification, and other factors, all as announced by Diamond from
         time to time in the Growers Guidelines.

Payment Terms. Diamond will pay the Purchase Price as follows

     First Payment                A payment determined by Diamond in its
     (To be paid within 14 days   discretion. Historically, Diamond has made
     averaging after              First Payments approximately 35% to 45% of
     delivery)                    the final value of the crop.

     Second Payment               A payment determined by Diamond in its
     (To be paid by February 15   discretion. Historically, Diamond has made
     following delivery)          Second payments averaging approximately 10%
                                  to 15% of the final value of the crop.

     Third Payment                The Third Payment will be an amount equal to
     (To be paid by August 15     65% of the Purchase Price (based upon the
     following delivery)          Final Price announced on March 31), minus the
                                  cumulative amount paid in the First and
                                  Second Payments.

     Fourth and Final Payment
     (To be paid by December 15   35% of the Purchase Price.
     of the year following the
     year of delivery)

     Grower's Walnut Marketing Board and California Walnut Commission fees and
     assessments will be deducted from the First Payment paid to Grower.

5.   General Terms and Conditions and Grower Guidelines. The attached General
     Terms and Conditions and Grower Guidelines are incorporated by this
     reference into this Agreement. Diamond may amend the Grower Guidelines from
     time to time, and the amended Grower Guidelines will be deemed incorporated
     into this Agreement from and after the time such Guidelines are delivered
     to Grower.

6.   Entire Agreement. This Agreement, the Designation of Grower Orchards on the
     reverse side hereof, the attached General Terms and Conditions, and the
     Grower Guidelines (as amended by Diamond from time to time), comprise the
     entire agreement between Grower and Diamond, and all prior or
     contemporaneous agreements and understandings are merged herein and
     superseded hereby.

GROWER:                              DIAMOND FOODS, INC., a Delaware corporation

By:                                  By:
    ---------------------------           --------------------------------------

Name:                                Name:
      -------------------------           --------------------------------------

Its:                                 Its:
     --------------------------           --------------------------------------

                                        2

<PAGE>

                         DESIGNATION OF GROWER ORCHARDS
Orchard     County    Variety     Year     Acres     Trees/Acre     Owned/Leased
Location                           Planted

         "Grower Orchards" includes all walnut orchards as to which Grower or
Grower's Affiliates have the right to sell the production. "Grower Orchards"
include (i) orchards owned now or in the future by Grower or Grower's
Affiliates, and (ii) orchards that Grower or its Affiliates now or in the future
sharecrop or lease from the orchard owner, if Grower or its Affiliates control
the sale of the crop. Grower will notify Diamond in writing if after the date of
this Agreement Grower or any of its Affiliates acquire, sharecrop, or lease
additional Grower Orchards. Grower represents and warrants to Diamond that the
above list of Grower Orchards is complete.

         An "Affiliate" of Grower is any corporation, limited liability company,
partnership, limited partnership, or other entity controlled by Grower, or which
controls Grower, or which is commonly controlled with Grower. A person or entity
"controls" another entity when the person owns more than 50% of the voting or
equity interests in such entity, or otherwise has the power to direct the
management and policies of such entity. A revocable living trust of which Grower
is the grantor will also be considered an Affiliate of Grower.

         If Grower sells a Grower Orchard or terminates the arrangement under
which Grower sharecropped or lease such Grower Orchard, it will cease to be
considered a Grower Orchard after Diamond receives written notice of such event.
Thereafter, the purchaser of the orchard will be free to enter into other
arrangements for the sale of production from such orchard. If Grower leases a
Grower Orchard to a third party or enters into a sharecropping arrangement with
respect thereto, the orchard will continue to be considered a Grower Orchard,
the production of which is committed to Diamond under this Agreement. If Grower
takes a Grower Orchard out of production, Grower will give Diamond prompt
written notice of such event. Thereafter, such orchard will cease to be a Grower
Orchard covered by this Agreement.

                                                 3
<PAGE>

                            WALNUT PURCHASE AGREEMENT
                          GENERAL TERMS AND CONDITIONS

1. Price. Grower acknowledges that Diamond will set the Final Price for walnuts
by March31 of the year following delivery of each harvest. Diamond's good faith
determination of the Final Price will be conclusive and binding upon the
parties. Title to the walnuts will pass to Diamond upon delivery notwithstanding
that the Purchase Price will be determined at a later date. Grower expressly
waives the provisions of California Food and Agriculture Code Sections 62801,
which provides in part

                  "...unless the parties agree otherwise, every contract for the
                  sale of edible nuts shall be in writing and shall state the
                  full purchase price in a definite sum which is to be paid in
                  accordance with the terms of the contract.

2. Assignment of Payments. Grower may assign to a third party in whole or in
part its right to receive payment by giving Diamond written notice of such
assignment. Diamond will be justified in relying upon such notice until it
receives written notice terminating or changing such assignment.

3. Waiver of Producer's Lien. Grower expressly waives the provisions of
   California Food and Agriculture Code Section 55631, which provides in part

                 "Every producer of any farm product that sells any product
                 which is grown by him to any processor... has a lien upon such
                 product and upon all processed or manufactured forms of such
                 farm product for his labor, care, and expense in growing and
                 harvesting such product."

The producer's lien under Section 55631 is a first priority lien on the farm
product sold. A person waiving the benefits of Section 55631 would be in the
position of a general creditor of Diamond, instead of a secured creditor.

4.   Delivery and Acceptance; Title.
     -------------------------------

             a. Subject to Diamond's right to regulate time of delivery by
reasonable notice, Grower will harvest, hull, and deliver the walnuts in
accordance with Diamond's Grower Guidelines.

             b. Upon the delivery of Grower's walnuts to Diamond's processing
facility, Diamond will inspect, weigh, grade, and sort the walnuts.

             c. If Grower participates in Diamond's Ranch Pick-Up Program,
Grower will deliver the walnuts to Diamond's common carrier for transportation
to Diamond's processing facility. In such event, title to the walnuts will pass
to Diamond when the walnuts are loaded on the common carrier's truck (subject,
however, to Diamond's right to inspect, reject, and return to Grower loads of
walnuts that are not merchantable).

             d. If Grower does not participate in Diamond's Ranch Pick-Up
Program, but rather transports walnuts using Grower's own carrier, title to the
walnuts will pass to Diamond upon delivery of the walnuts to Diamond's facility
and acceptance by Diamond.

             e.  Prior to transfer of title, Grower will bear all risk of loss,
damage, or depreciation of the walnuts.

             f. Diamond will have no obligation to purchase Willson Wonder,
Bijou, Klondyke, Gant, and other walnut varieties that Diamond determines to be
uncommercial.

                                        1

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5.   Grower Warranties.
     -----------------

             a. Grower warrants that upon delivery Diamond will acquire good and
merchantable title to the walnuts. Grower will promptly notify Diamond of the
existence of any security interest granted in the walnuts. Grower will provide
to Diamond upon request proof of release of any liens on delivered walnuts
arising out of crop financing. Grower further warrants that the holders of any
liens, claims, or encumbrances affecting the walnuts have granted to Grower
permission to sell the walnuts to Diamond. Grower will indemnify, defend, and
hold Diamond harmless from any loss or liability relating to the claim of any
person claiming a lien in the walnuts.

             b. Grower warrants that the walnuts will be dry and clean, and of
good marketable quality, with levels of mold, insects, and other damage that do
not render the walnuts unmarketable. The walnuts will be free of pesticide
residues or other substances in a quantity prohibited by local state, or federal
law. If the walnuts fail to meet these standards, Diamond may, at its option and
in its sole discretion, either (i) do whatever is commercially reasonable to
make the walnuts meet these standards, charging all related costs to Grower;
(ii) decline acceptance of such walnuts before or upon delivery or within a
reasonable time after delivery and return the walnuts to Grower at Grower's
expense; or (iii) notify Grower and hold the walnuts subject to Grower's orders
and expense.

             c. Grower warrants that (i) Grower's delivery obligations under
this Agreement will not conflict with any duty Grower may have under agreements
with third parties; and (ii) none of the walnuts delivered by Grower to Diamond
hereunder will originate in orchards other than Grower Orchards.

             d. Grower agrees to conform to (i) the provisions of the pure food
and drug laws and other present or future laws of the State of California, and
(ii) the provisions of the Federal Pure Food and Drugs Act of the United States
of June 30, 1906, and all amendments thereto. Grower warrants that walnuts
delivered under this contract will not on the date of delivery be adulterated or
misbranded within the meaning of any applicable law of the State of California,
or the Federal Food, Drug, and Cosmetic Act. Grower further warrants that the
walnuts have not been subjected to any pesticides or chemicals that may
detrimentally affect the natural state of such walnuts or the saleability
thereof. All products delivered hereunder will be produced in compliance with
the requirements of section 12 of the Fair Labor Standards Act of 1938, as
amended, and all other requirements of the Act so far as they may be applicable.

6.   Term and Termination.
     --------------------

             a. The Initial Term will expire at the end of the last Crop Year of
such period. Thereafter, the term of the Agreement will automatically be renewed
for successive additional three-year terms (each, an "Extension Term"), unless a
party terminates the Agreement through the following procedure. (The Initial
Term and all Extension Terms will be referred to as the "Term.") Either Grower
or Diamond may terminate by giving written notice (a "Termination Notice") to
the other party before February 28 of the final Crop Year of the then-current
Term. If a Termination Notice has been delivered, this Agreement will terminate
at the end of the then-current Term, and will not be automatically renewed.

             b. Grower may terminate this Agreement effective 30 days after
giving written notice to Diamond if Grower sells all of its Grower Orchards or
takes all of the Grower Orchards out of commercial production.

                                        2

<PAGE>

              c. In the event that either party is in material breach of its
obligations hereunder, the other party may give notice to the party in breach,
specifying in detail the nature of the breach. This Agreement will terminate 30
days after the date of such notice, unless the breaching party substantially
cures its breach within the 30-day period (or, if the breach is not capable of
being cured within such period, if the party in breach commences such cure
during such period and thereafter diligently prosecutes such cure to
completion). It shall be considered a material breach of this Agreement if
Grower breaches its obligation to sell to Diamond during the Term of this
Agreement all of its production from Grower Orchards.

             d. Diamond may terminate this Agreement effective upon 30 days
prior written notice to Grower if over 3 consecutive years Grower's deliveries
are not of commercial quality. "Commercial quality" means that at least 80% of
Grower's deliveries are Class I Insect Level and that no more than 12% of the
delivered pounds are classified as "offgrade."

7. Grower Guidelines. Grower and Diamond will be subject to the terms and
conditions set forth in Diamond's Grower Guidelines. Each Crop Year, Diamond
will amend and republish the Grower Guidelines. Diamond will send to Grower or
post on its website in a manner accessible to Grower the Grower Guidelines that
will be applicable to the upcoming harvest.

8. Dispute Resolution.
   ------------------

             a. Any controversy or claim arising out of or relating to this
Agreement will be settled by arbitration conducted in Stockton, California in
accordance with the rules of the American Arbitration Association. The
arbitrator selected to hear the matter must have a minimum of five years of
experience as a judge or arbitrator, or both. At least thirty days before the
arbitration hearing, the parties will allow each other reasonable written
discovery including the inspection and copying of documents and other tangible
items relevant to the issues that are to be presented at the arbitration
hearing. The arbitrator will decide any disputes regarding the scope of
discovery. Fees for the arbitrator or arbitrators will be divided equally
between the parties, and the parties will be individually responsible for the
payment of the fees. The prevailing party in any arbitration, proceeding or
legal action arising out of or relating to this Agreement will be entitled to
recover its reasonable attorneys' fees and costs incurred in connection with
such arbitration, proceeding or legal action. The arbitrator will determine who
is the prevailing party for this purpose.

             b. The award rendered by the arbitrator will be final and binding
upon both parties. The California State Superior Court located in Stockton,
California will have exclusive jurisdiction over disputes between the parties in
connection with such arbitration and the enforcement thereof. The parties
consent to the jurisdiction and venue of the California State Superior Court
located in Stockton, California. Notwithstanding that the parties have agreed to
binding arbitration of disputes, neither party will be prevented from seeking
ancillary or equitable relief from the California State Superior Court,
including us pendens, injunctive relief and specific performance.

             c. The parties will keep confidential the outcome of any mediation,
arbitration, proceeding or legal action. Each dispute will be resolved based
upon its own facts and merits, and no procedure in the nature of class actions
will be permitted. Further, no collateral estoppel effect will be accorded to
any judgment, decision, or award from any prior arbitration, proceeding or legal
action against the other party unless both parties were parties to such prior
proceeding.

9.       Force Majeure: Ouarantines and Embargoes; Reservation of Crop.

                                        3

<PAGE>

             a. Either party's obligation to perform under this Agreement will
be excused to the extent it is prevented by fire, storm, flood, earthquake,
explosion, action of the elements, total or partial failure of transportation or
delivery facilities, shortage of labor, materials or supplies, interruption of
power, Act of God, the elements, war, civil disturbance, governmental or
regulatory actions, labor disturbances, or any other event beyond the party's
reasonable control.

             b. If, before delivery hereunder is completed, any quarantine,
embargo, or other laws or regulations or restrictions of federal state, or other
public or governmental authority or officers would prevent or substantially
interfere with shipment of any walnuts deliverable hereunder to the nearest
walnut packing or receiving station of Grower or from such plant, or would
render any such walnuts subject to detention, seizure, or condemnation, Diamond
at its option, by written notice to Grower, may either terminate this Agreement
as to all walnuts not theretofore delivered by Grower, or may postpone the time
for delivery hereunder while such laws, regulations, or restrictions so operate.

             c. Grower acknowledges that pursuant to Federal Marketing Order
(984) covering walnuts grown in California, Diamond may be required to withhold
from the saleable market that portion of Grower's crop which is declared
reserved or surplus by the Walnut Marketing Board and ordered withheld from the
salable market by the United States Secretary of Agriculture. Price and payment
for Grower's reserve walnuts may be on a basis different than for the salable
portion of Grower's crop. Diamond will have no obligation to pay for Grower's
reserve walnuts, until such reserve walnuts are released for sale by the Walnut
Marketing Board.

10. Remedies for Grower's Breach of Obligation to Sell Entire Production. The
parties acknowledge and agree that (i) this contract is a requirements contract
obligating Grower to sell to Diamond its entire production of walnuts from
Grower Orchards; and (ii) Grower is not entitled to sell walnuts to Diamond that
are from orchards other than Grower Orchards. The parties further acknowledge
and agree that these obligations are fundamental to the commercial understanding
between the parties, and that if Grower breaches either of these obligations,
Diamond will suffer damages that would be impracticable or extremely difficult
to determine. Accordingly, the parties agree that in the event that Grower
breaches either of the above obligations, Grower shall become obligated to pay
to Diamond liquidated damages equal to 50% of the market value of production
that Grower sells to buyers other than Diamond, or 50% of the market value of
production sold to Diamond that originated from orchards other than Grower
Orchards. The foregoing right to recover liquidated damages will be in addition
to, and not in substitution of, all other available remedies for breach of this
Agreement, including equitable relief.

11. General
    -------
             a. Effect of Reorganization of Old Diamond. Grower is currently a
member of Diamond Walnut Growers, Inc., a grower-owned California cooperative
("Old Diamond"). As a member, Grower is subject to the "Marketing Agreement"
contained in Diamond's Bylaws, which deals with the same subject matter as this
Agreement. Old Diamond is contemplating a corporate reorganization in which Old
Diamond will be merged into Diamond, a newly-formed Delaware corporation. Old
Diamond has elected to terminate all Marketing Agreements under the Bylaws,
effective upon Diamond's merger into New Diamond. The effectiveness and
operation of this Agreement will be suspended until termination of the Marketing
Agreements under the Bylaws. If the Marketing Agreements under the Bylaws are
not terminated prior to December 31, 2005, Diamond will have the option to
terminate this Agreement effective upon the giving of written notice to Grower.

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<PAGE>

             b.  Assignment.
                 ----------

                      (i)     Upon giving written notice, Grower may assign its
rights and obligations to a person who acquires by purchase a controlling
interest in all or substantially all of Grower's Grower Orchards, provided that
the assignee agrees in writing to be bound by the terms of this Agreement. In
such a case, no other walnut orchards owned by the assignee will be considered
Grower Orchards unless Diamond agrees in writing to such designation.

                      (ii)    Upon giving written notice, Diamond may assign its
rights and obligations under this Agreement to an acquiror of all or
substantially all Diamond's assets and business operations.

             c. Notices. All notices under this Agreement must be in writing and
will be effective (i) immediately upon delivery in person or by messenger to the
address stated above, or (ii) the next business day after deposit with a
commercial courier or delivery service for next business day delivery, or (iii)
upon receipt by facsimile as established by evidence of successful transmission,
provided a copy of the notice is mailed by first class the same day, or (iv)
three business days after deposit with the United States Postal Service,
certified mail, return receipt requested, postage prepaid. All notices must be
properly addressed to Grower at the address set forth above, or to Diamond at
1050 5. Diamond Street, Stockton, CA 95205-7087, or at such other addresses as
either party may subsequently designate by written notice given in the manner
provided in this Section.

             d. Severability. If any provision of this Agreement or its
application to any person or circumstances is held to be invalid or
unenforceable, the remainder of this Agreement and the application of such term
or provision to other persons or circumstances will not be affected, and each
term of this Agreement will be valid and enforceable to the fullest extent
permitted by law.

             e.  Amendment. This Agreement may only be amended in a writing
signed by both parties; provided, however, that Diamond may amend the Grower
Guidelines from time to time by giving written notice to Grower.

             f.  Binding Agreement. The Agreement will be binding upon, and will
inure to the benefit of, the heirs, executors, administrators, successors,
assigns, and grantees of the parties hereto.

             g.  Governing Law. This Agreement will be governed by the laws of
the State of California, as applied to contracts entered into and performed
completely within California.

                                        5<PAGE>
                                                                   Exhibit 10.22

                                  BLUE DIAMOND
                                        &
                                   DIAMOND OF
                                   CALIFORNIA

                                    TRADEMARK
                                    AGREEMENT

<PAGE>

             BLUE DIAMOND/DIAMOND OF CALIFORNIA TRADEMARK AGREEMENT

      THIS AGREEMENT is made effective as of the 1st day of July, 2002 by and
between CALIFORNIA ALMOND GROWERS EXCHANGE, a California agricultural
cooperative corporation of Sacramento, California doing business as BLUE DIAMOND
GROWERS ("Blue Diamond"), and DIAMOND WALNUT GROWERS, INC., a California
agricultural cooperative corporation of Stockton, California doing business as
DIAMOND OF CALIFORNIA ("Diamond of California").

                                    RECITALS

      A. Blue Diamond and Diamond of California previously entered into an
agreement dated September 9, 1998 (the "1998 Agreement") with respect to the use
and registration of their respective trademarks throughout the world for the
purpose of avoiding confusion between , their respective trademarks. By
amendment to the 1998 Agreement dated August 1, 2001, the parties agreed to
extend the termination date of the 1998 Agreement from September 8, 2001 until
June 30, 2002.

      B. Blue Diamond and Diamond of California desire to enter into a new
Agreement with respect to the use and registration of their respective
trademarks for the primary and ongoing purpose of avoiding confusion between
their respective trademarks and for the further purpose of providing for certain
additional uses by the parties of their trademarks not permitted under the 1998
Agreement for a ten (10) year term without prejudice to their existing trademark
rights with respect to each other.

                                    AGREEMENT

      NOW, THEREFORE, the parties agree as follows:

1.    Definitions.

      As used in this Agreement, the following terms shall have the following
meanings:

      (a) The term "BLUE DIAMOND marks" shall mean the word mark BLUE DIAMOND
and the marks shown in United States Registration Nos. 141,883; 159,301;
855,648; 873,150; 1,271,726; 1,308,186; 1,371,549; 1,831,464; 1,838,037;
2,001,151; and 2,018,640, all owned by Blue Diamond.

      (b) The term "DIAMOND marks" shall mean the word marks DIAMOND, DIAMOND OF
CALIFORNIA, DIAMOND WALNUT KITCHENS and the marks shown in United States
Registration Nos. 130,162; 511,213; 724,880; 1,299,723; 1,299,727; 1,365,849;
1,801,304; and 1,890,026, all owned by Diamond of California.

      (c) The term "raw" with reference to nuts, whether shelled or inshell,
shall mean nuts which are neither roasted nor seasoned.

<PAGE>

2.    Registration of Trademarks.

      (a) Blue Diamond may register its BLUE DIAMOND marks throughout the world
for all types of nuts, for products in which nuts are the principal ingredient
and for services relating thereto.

      (b) Diamond of California my register its DIAMOND marks throughout the
world for all types of nuts, for products in which nuts are the principal
ingredient and for services relating thereto.

3.    Blue Diamond Use of Trademarks.

      (a) Except as provided in sections 3(b) through 3(e), inclusive, below,
Blue Diamond may use its BLUE DIAMOND marks throughout the world for all types
of nuts, for products in which nuts are the principal ingredient and for
services relating thereto.

      (b) Blue Diamond may not use its BLUE DIAMOND marks anywhere in the world
for walnuts, for products in which walnuts are the principal ingredient or for
services relating thereto except as provided in section 3(c) below; provided any
such use of its BLUE DIAMOND marks as permitted under section 3(c) shall be
subject to the licensing provisions of section 3(d) below.

      (c) Subject to the licensing provisions of section 3(d) below, Blue
Diamond may use its BLUE DIAMOND marks anywhere in the world for the following:

            (i) Roasted and/or seasoned walnuts

      (d) Blue Diamond acknowledges and agrees that Diamond of California's
DIAMOND marks have long been identified with walnuts and products in which
walnuts are the principal ingredient and, except as permitted under this
Agreement, Diamond of California would oppose and could prevent any use by Blue
Diamond of its BLUE DIAMOND marks on walnuts, products in which walnuts are the
principal Ingredient and services relating thereto. Accordingly, Blue Diamond
acknowledges and agrees any such permitted use by it of its BLUE DIAMOND marks
hereunder with respect to walnuts, products in which walnuts are the principal
ingredient and services relating thereto, shall be equivalent to that of a user
under a nonexclusive, nontransferable license granted to Blue Diamond by Diamond
of California for the limited purpose of this Agreement Blue Diamond agrees that
it will not challenge in any manner the validity of the provisions of this
section 3(d) and Diamond of California's right to preclude Blue Diamond from the
use of its BLUE DIAMOND marks on such products except under license from Diamond
of California as provided in this section 3(d).

      (e) Notwithstanding anything in the foregoing to the contrary, Blue
Diamond shall not use its BLUE DIAMOND marks anywhere in the world for the
following:

            (i) Raw inshell nuts except almonds and hazelnuts in packages or
containers consisting solely of almonds or solely of hazelnuts; and

                                       2
<PAGE>

            (ii) Raw shelled nuts except almonds, hazelnuts and macadamia nuts
in packages or containers consisting solely of almonds, or solely of hazelnuts
or solely of macadamia nuts.

4.    Diamond of California Use of Trademark.

      (a) Except as provided in sections 4(b) through 4(e), inclusive, below,
Diamond of California may use its DIAMOND marks throughout the world for all
types of nuts, for products in which nuts are the principal ingredient and for
services relating thereto.

      (b) Diamond of California may not use its DIAMOND marks anywhere in the
world for almonds, for products in which almonds are the principal ingredient or
for services relating thereto except as provided in section 4(c) below; provided
any such use of its DIAMOND marks as permitted under section 4(c) shall be
subject to the licensing provisions of section 4(d) below.

      (c) Subject to the licensing provisions of section 4(d) below, Diamond of
California may use its DIAMOND marks anywhere in the world for the following:

            (i) Raw shelled almonds in packages or containers of three pounds (3
lbs.) or less; and

            (ii) Raw inshell Peerless variety almonds, unless the sources of
supply of the Peerless variety are not sufficient to meet the commercial
requirements of Diamond of California, in which event it may use its DIAMOND
marks on such other varieties of raw inshell almonds as Blue Diamond shall
approve.

      (d) Diamond of California acknowledges and agrees as follows:

            (i) Diamond of California acknowledges and agrees that the parties
do not intend that Diamond of California use the DIAMOND marks on raw shelled
almonds intended to be eaten as a snack. Accordingly, Diamond of California
shall use commercially reasonable efforts to prevent such use.

            (ii) Diamond of California acknowledges and agrees that Blue
Diamond's BLUE DIAMOND marks have long been identified with almonds and products
in which almonds are the principal ingredient and, except as permitted under
this Agreement, Blue Diamond would oppose and could prevent any use by Diamond
of California of its DIAMOND marks on almonds and products in which almonds are
the principal ingredient and services relating thereto. Accordingly, Diamond of
California acknowledges and agrees that any such permitted use by it of its
DIAMOND marks hereunder with respect to almonds, products in which almonds are
the principal ingredient and services relating thereto shall be equivalent to
that of a user under a nonexclusive, nontransferable license granted to Diamond
of California by Blue Diamond for the limited purpose of this Agreement. Diamond
of California agrees that it will not challenge in any manner the validity of
the provisions of this section 4(d) and Blue Diamond's right to preclude Diamond
of California from the use of its DIAMOND marks on such products except under
license from Blue Diamond as provided in this section 4(d).

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<PAGE>

      (e) Notwithstanding anything in the foregoing to the contrary, Diamond of
California shall not use its DIAMOND marks anywhere in the world for the
following:

            (i) Roasted and/or seasoned shelled nuts except walnuts and pecans
in packages or containers consisting solely of walnuts or solely of pecans; and

            (ii) Roasted and/or seasoned inshell almonds and roasted and/or
seasoned inshell hazelnuts.

5.    Additional Cross-License Provisions.

      The parties further agree as follows with respect to the cross-licensing
provisions of sections 3(d) and 4(d) above:

      (a) The covenants and agreements of Blue Diamond under section 3(d) above
and Diamond of California under section 4(d) above shall survive the termination
of this Agreement, irrespective of the cause for such termination. All licenses
under sections 3(c) and 4(c) above shall terminate on termination of this
Agreement.

      (b) Neither Blue Diamond nor Diamond of California shall assign, or grant
sublicenses of, its rights under sections 3(c) and 4(c) above, respectively.

      (c) Blue Diamond and Diamond of California shall maintain control over the
quality of products licensed under sections 3(c) and 4(c) above, respectively,
which are distributed by the other party as licensees thereunder. To this end,
Blue Diamond and Diamond of California each has not only the right, but the
obligation, to inspect and review the quality of the products which are
distributed under sections 3(c) and 4(c), respectively; and, when deemed
necessary or appropriate, each of Blue Diamond and Diamond of California has the
right and obligation to advise and instruct the other party to take such
additional steps as may be considered necessary by Blue Diamond and Diamond of
California, respectively, to maintain effective quality control over the
products distributed under the provisions of sections 3(c) and 4(c),
respectively. Without limiting the foregoing rights and obligations of the
parties, the parties agree that a minimum quality of walnut products and almond
products be used in the repackaging and distribution of products for which each
of Blue Diamond and Diamond of California is licensed under sections 3(c) and
4(c) above, respectively. For walnut products, a minimum quality shall be
"combination halves and pieces" or "combination pieces" or similar quality as
specified by DFA. For almond products, a minimum quality shall be the Blue
Diamond quality specification for manufactured almonds sold to its three (3)
largest industrial almond rebagger customers for repacking and distribution
through Retail Trade Channels as Cooking and Baking Almonds. The parties
acknowledge and agree that each has complied with the foregoing obligations
during the period from September 9, 1998 through the effective date of this
Agreement.

6.    General Provisions.

      The parties agree that the following provisions shall apply to the use and
registration of their trademarks with respect to the distribution of all
products governed by this Agreement.

      (a) Blue Diamond may not feature the color red in its BLUE DIAMOND marks.

                                       4
<PAGE>

      (b) Blue Diamond may not use the word "DIAMOND" except in conjunction with
the word "BLUE" of substantially similar size and prominence.

      (c) Diamond of California may not feature the color blue in its DIAMOND
marks, and may not use the word "BLUE" in conjunction with the word "DIAMOND.

      (d) The Agreement shall not preclude either party from using or
registering marks not confusingly similar to the DIAMOND and BLUE DIAMOND marks
for any type of nuts, nut products and services.

      (e) This Agreement shall define the parties' rights in their DIAMOND and
BLUE DIAMOND marks only with respect to nuts and products in which nuts are the
principal ingredient and services relating thereto. It does not define the
parties' rights concerning other products which may contain nuts, such as
cookies, bread, ice cream and chocolate candy.

      (f) In the interest of facilitating registration of their respective marks
throughout the world and of complying with the terms of this Agreement, each
party shall have the right to request the cooperation of the other, the basis
being stated in writing, in such matters as consent, deletions, acceptance of
conditions in a pending application of the other, and withdrawals of opposition
and cancellation proceedings. It is further agreed that each such request shall
be made and acted upon a country-by-country basis so that the arrangement
reached in one country shall not be dependent or conditional upon that in
another. In the event of such request for cooperation, the other shall refuse
only for good cause stated in writing.

      (g) In the event this Agreement is terminated or not renewed, the parties'
trademark rights with respect to each other shall not be prejudiced by any use
of their respective marks during the term hereof; but, on expiration or
termination, Blue Diamond shall cease using its BLUE DIAMOND marks on walnuts
and products in which walnuts are a principal ingredient and Diamond of
California shall cease using its DIAMOND marks on almonds and products in which
almonds are a principal ingredient, subject, however, to section 7(h) below.

      (h) In the event of termination of this Agreement pursuant to section 7(a)
below, each party shall have up to one (1) year from the date of termination to
service existing shelf space (including pegboard) contracts with respect to
distribution of products subject to licensing by the other party under sections
3(c) and 4(c) above. In the event of termination of this Agreement pursuant to
section 7(b) below, only the party not in material breach shall have such
rights.

      (i) Neither party shall assign or grant sublicenses of its rights under
this Agreement. Subject to the foregoing, this Agreement shall be binding on and
inure to the benefit of the successors of each of the parties hereto.

7.    Term.

      (a) Subject to section 7(b) below, the term of this Agreement shall be for
an original term of ten (10) years from the effective date hereof unless
extended as provided in section 7(c) below.

                                       5
<PAGE>

      (b) This Agreement may be terminated by either party at any time in the
event of a material breach by the other party which is not remedied within
ninety (90) days of the receipt of written notice specifying the breach.

      (c) The term of this Agreement shall be renewed and extended for an
additional ten (10) year period upon expiration of the original term unless
either party shall give the other party written notice of its intent to
terminate the Agreement at least one (1) year prior to the expiration date of
the original ten (10) year term.

8.    Other Provisions.

      (a) Equitable Remedies. Each of the parties understands and acknowledges
that a breach of any material provision of this Agreement by one party will
cause irreparable harm to the other party, the amount of which may be difficult
to ascertain, and each party therefore consents to a court of competent
jurisdiction granting an order in favor of the other party for specific
performance and/or an order restraining and enjoining any such further breach
and for such other relief as such court shall deem appropriate. Such right shall
be in addition to the remedies otherwise available to each party at law or in
equity. Each party expressly waives the defense that a remedy in damages will be
adequate and any requirement in an action for specific performance or injunction
for the posting of a bond by the party seeking such remedy or remedies.

      (b) Attorneys' Fees. If any legal action or proceeding is brought arising
out of or in connection with this Agreement, the prevailing party shall be
entitled to recover reasonable attorneys' fees and costs incurred in connection
with such legal action or proceeding, in addition to any other relief to which
such party may be entitled.

      (c) Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of California without regard to its choice
of law rules which direct the application of the laws of another jurisdiction.

      (d) Entire Agreement and Amendment. This Agreement constitutes the entire
Agreement, written or oral, between the parties with respect to the subject
matter hereof. This Agreement may not be amended except in a writing signed by a
duly authorized representative of each of the respective parties to this
Agreement.

      (e) Severability. Any provision of this Agreement that is invalid, illegal
or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability,
without affecting in any way the remaining provisions hereof in such
jurisdiction or rendering that or any other provision of this Agreement invalid,
illegal or unenforceable in any other jurisdiction.

      (f) Waiver. The failure of either party to enforce any right resulting
from the breach of any provision of this Agreement by the other party will not
be deemed a waiver of any right related to a subsequent breach of such provision
or any other right hereunder.

                                       6
<PAGE>

      IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first written above

CALIFORNIA ALMOND GROWERS EXCHANGE,      DIAMOND WALNUT GROWERS, INC.,
doing business as                        doing business as
BLUE DIAMOND GROWERS                     DIAMOND OF CALIFORNIA

By:/s/ Douglas B. Youngdahl              By:/s/ Michael J. Mendes
   -----------------------------------      ------------------------------------
         Douglas B. Youngdahl                     Michael J. Mendes
         President and                            President and
         Chief Executive Officer                  Chief Executive Officer

                                       7

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