Heat oven to 350. Beat first 5 ingredients with mixer on low speed just until moistened and stopping frequently to scrape the bottom and sides of the bowl. Beat on medium speed for 2 minutes. Pour into a greased and floured 13x9 inch pan.
Bake 35 minutes or until toothpick inserted in the center comes out clean. Beat cream cheese and butter with the mixture until well blended. Gradually beat in the sugar.
Remove cake from the pan. Carefully cut the cake crosswise in half using a serrated knife. Place 1 cake half top side down on a plate and spread with some of the frosting. Top with the remaining half top side up. Spread top and sides with the remaining frosting. Press nuts into the sides. Keep refrigerated.