<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
<PAGE>
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.
