INDEMNITY AGREEMENT

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Exhibit 10.01

INDEMNITY AGREEMENT

This Indemnity Agreement (this "AGREEMENT"), dated as of

____________________ 2005, is made by and between Diamond Foods, Inc., a

Delaware corporation (the "COMPANY"), and ________________________, a director

and/or officer of the Company (the "INDEMNITEE").

RECITALS

A. The Company is aware that competent and experienced persons are

increasingly reluctant to serve as directors or officers of corporations unless

they are protected by comprehensive liability insurance and/or indemnification,

due to increased exposure to litigation costs and risks resulting from their

service to such corporations, and because the exposure frequently bears no

reasonable relationship to the compensation of such directors and officers;

B. Based on their experience as business managers, the Board of Directors

of the Company ("BOARD") has concluded that, to retain and attract talented and

experienced individuals to serve as officers and directors of the Company, and

to encourage such individuals to take the business risks necessary for the

success of the Company, it is necessary for the Company contractually to

indemnify officers and directors and to assume for itself maximum liability for

expenses and damages in connection with claims against such officers and

directors in connection with their service to the Company;

C. Section 145 of the General Corporation Law of Delaware under which the

Company is organized ("LAW"), empowers the Company to indemnify by agreement its

officers, directors, employees and agents, and persons who serve, at the request

of the Company, as directors, officers, employees or agents of other

corporations or enterprises, and expressly provides that the indemnification

provided by the Law is not exclusive; and

D. The Company desires and has requested the Indemnitee to serve or

continue to serve as a director or officer of the Company free from undue

concern for claims for damages arising out of or related to such services to the

Company.

NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby

agree as follows:

1. DEFINITIONS.

1.1 AGENT. For the purposes of this Agreement, "AGENT" of the Company

means any person who is or was a director or officer of the Company or a

subsidiary of the Company; or is or was serving at the request of, for the

convenience of, or to represent the interest of the Company or a subsidiary of

the Company, including without limitation, Diamond Walnut Growers, Inc., a

California incorporated non-profit cooperative marketing association, as a

director or officer of another foreign or domestic corporation, partnership,

joint venture, trust or other enterprise or an affiliate of the Company; or was

a director or officer of a foreign or domestic corporation which was a

predecessor corporation of the Company, or was a director or

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officer of another enterprise or affiliate of the Company at the request of, for

the convenience of, or to represent the interests of such predecessor

corporation. The term "ENTERPRISE" includes any employee benefit plan of the

Company, its subsidiaries, affiliates and predecessor corporations.

1.2 EXPENSES. For purposes of this Agreement, "EXPENSES" includes all

direct and indirect costs of any type or nature whatsoever (including, without

limitation, all attorneys' fees and related disbursements and other

out-of-pocket costs) actually and reasonably incurred by the Indemnitee in

connection with the investigation, defense or appeal of a proceeding or

establishing or enforcing a right to indemnification or advancement of expenses

under this Agreement, the Law or otherwise.

1.3 PROCEEDING. For the purposes of this Agreement, "PROCEEDING" means

any threatened, pending or completed action, suit or other proceeding, whether

civil, criminal, administrative, investigative or any other type whatsoever.

1.4 SUBSIDIARY. For purposes of this Agreement, "SUBSIDIARY" means any

corporation of which more than fifty percent (50%) of the outstanding voting

securities is owned directly or indirectly by the Company, by the Company and

one or more of its subsidiaries or by one or more of the Company's subsidiaries.

2. AGREEMENT TO SERVE. The Indemnitee agrees to serve and/or continue to

serve as an agent of the Company, at the will of the Company (or under separate

agreement, if such agreement exists), in the capacity the Indemnitee currently

serves as an agent of the Company, faithfully and to the best of his ability, so

long as he or she is duly appointed or elected and qualified in accordance with

the applicable provisions of the charter documents of the Company or any

subsidiary of the Company; provided, however, that the Indemnitee may at any

time and for any reason resign from such position (subject to any contractual

obligation that the Indemnitee may have assumed apart from this Agreement), and

the Company or any subsidiary shall have no obligation under this Agreement to

continue the Indemnitee in any such position.

3. DIRECTORS' AND OFFICERS' INSURANCE. The Company shall, to the extent

that the Board determines it to be economically reasonable, maintain a policy of

directors' and officers' liability insurance ("D&O INSURANCE"), on such terms

and conditions as may be approved by the Board.

4. MANDATORY INDEMNIFICATION. Subject to Section 9 below, the Company shall

indemnify the Indemnitee:

4.1 THIRD PARTY ACTIONS. If the Indemnitee is a person who was or is a

party or is threatened to be made a party to any proceeding (other than an

action by or in the right of the Company) by reason of the fact that he is or

was an agent of the Company, or by reason of anything done or not done by him in

any such capacity, against any and all expenses and liabilities of any type

whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes

or penalties and amounts paid in settlement) actually and reasonably incurred by

him in connection with the investigation, defense, settlement or appeal of such

proceeding if he acted in good faith and in a manner he reasonably believed to

be in, or not opposed to, the best interests

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of the Company and, with respect to any criminal action or proceeding, had no

reasonable cause to believe his conduct was unlawful;

4.2 DERIVATIVE ACTIONS. If the Indemnitee is a person who was or is a

party or is threatened to be made a party to any proceeding by or in the right

of the Company to procure a judgment in its favor by reason of the fact that he

is or was an agent of the Company, or by reason of anything done or not done by

him in any such capacity, against any amounts paid in settlement of any such

proceeding and all expenses actually and reasonably incurred by him in

connection with the investigation, defense, settlement or appeal of such

proceeding if he acted in good faith and in a manner he reasonably believed to

be in, or not opposed to, the best interests of the Company; except that no

indemnification under this subsection shall be made in respect of any claim,

issue or matter as to which such person shall have been finally adjudged to be

liable to the Company by a court of competent jurisdiction due to willful

misconduct of a culpable nature in the performance of his duty to the Company,

unless and only to the extent that the Court of Chancery or the court in which

such proceeding was brought shall determine upon application that, despite the

adjudication of liability but in view of all the circumstances of the case, such

person is fairly and reasonably entitled to indemnity for such amounts which the

Court of Chancery or such other court shall deem proper; and

4.3 EXCEPTION FOR AMOUNTS COVERED BY INSURANCE. Notwithstanding the

foregoing, the Company shall not be obligated to indemnify the Indemnitee for

expenses or liabilities of any type whatsoever (including, but not limited to,

judgments, fines, ERISA excise taxes or penalties and amounts paid in

settlement) to the extent such have been paid directly to the Indemnitee by D&O

Insurance.

5. PARTIAL INDEMNIFICATION AND CONTRIBUTION.

5.1 PARTIAL INDEMNIFICATION. If the Indemnitee is entitled under any

provision of this Agreement to indemnification by the Company for some or a

portion of any expenses or liabilities of any type whatsoever (including, but

not limited to, judgments, fines, ERISA excise taxes or penalties and amounts

paid in settlement) incurred by him or her in the investigation, defense,

settlement or appeal of a proceeding but is not entitled, however, to

indemnification for all of the total amount thereof, then the Company shall

nevertheless indemnify the Indemnitee for such total amount except as to the

portion thereof to which the Indemnitee is not entitled to indemnification.

5.2 CONTRIBUTION. If the Indemnitee is not entitled to the

indemnification provided in Section 4 for any reason other than the statutory

limitations set forth in the Law, then in respect of any threatened, pending or

completed proceeding in which the Company is jointly liable with the Indemnitee

(or would be if joined in such proceeding), the Company shall contribute to the

amount of expenses (including attorneys' fees), judgments, fines and amounts

paid in settlement actually and reasonably incurred and paid or payable by the

Indemnitee in such proportion as is appropriate to reflect (i) the relative

benefits received by the Company on the one hand and the Indemnitee on the other

hand from the transaction from which such proceeding arose and (ii) the relative

fault of the Company on the one hand and of the Indemnitee on the other hand in

connection with the events which resulted in such expenses, judgments, fines or

settlement amounts, as well as any other relevant equitable considerations.

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The relative fault of the Company on the one hand and of the Indemnitee on the

other hand shall be determined by reference to, among other things, the parties'

relative intent, knowledge, access to information and opportunity to correct or

prevent the circumstances resulting in such expenses, judgments, fines or

settlement amounts. The Company agrees that it would not be just and equitable

if contribution pursuant to this Section 5 were determined by pro rata

allocation or any other m