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Delaware		2070		36-2495346
(State or Other Jurisdiction of Incorporation or Organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

Mary R. Korby Weil, Gotshal & Manges LLP 200 Crescent Court, Suite 300 Dallas, Texas 75201 (214) 746-7700		G.R. “Rick” Neumann Nyemaster Goode West Hansell & O’Brien PC 700 Walnut Street, Suite 1600 Des Moines, Iowa 50309 (515) 283-3100

Amount

Proposed Maximum

Proposed Maximum

Amount of

Title of Each Class of

to be

Offering Price

Aggregate

Registration

Securities to be Registered

Registered(1)

per Unit

Offering Price(2)

Fee

Common Stock, par value $0.01 per share

20,000,000

N/A

$70,500,000

$7,543.50

(1)	The shares of Common Stock to be registered consist of shares to be issued to National By-Products, LLC in consideration of the sale by National By-Products to the Registrant of substantially all of National By-Products’ assets. Under the terms of the asset purchase agreement between the Registrant and National By-Products, the number of shares to be issued cannot be determined until the date of such acquisition. Therefore, the number of shares to be issued is currently an estimate.
(2)	Pursuant to Rule 457(o), the maximum aggregate offering price is used to calculate the registration fee. The maximum aggregate offering price of the shares of Common Stock is based on the maximum aggregate stock consideration to be paid in the acquisition pursuant to the asset purchase agreement between the Registrant and National By-Products.

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Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This joint proxy statement/ prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under securities laws of such State.

Randall C. Stuewe		Mark A. Myers
Chairman and Chief Executive Officer		President
Darling International Inc.		National By-Products, LLC

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	1. approve and adopt the asset purchase agreement, dated as of December 19, 2005, by and among Darling, National By-Products, LLC and a wholly-owned subsidiary of Darling, and the transactions contemplated by the asset purchase agreement, including the issuance of shares of Darling common stock in accordance with the asset purchase agreement; and
	2. consider and vote upon a proposal to approve one or more adjournments of the special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting to approve the above proposal.

	By order of the board of directors,
	Joseph R. Weaver, Jr.
	Secretary

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	1. approve and adopt the asset purchase agreement, dated as of December 19, 2005, by and among Darling International Inc., National By-Products and a wholly-owned subsidiary of Darling, and the transactions contemplated by the asset purchase agreement, including an amendment to the articles of organization of National By-Products to change its name to West-end Liquidation, LLC effective upon closing of the acquisition; and
	2. consider and vote upon a proposal to approve one or more adjournments of the special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting to approve the above proposal.

	By order of the board of managers,

	Carlton T. King
	Secretary

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				Page
QUESTIONS AND ANSWERS ABOUT THE ACQUISITION					1
SUMMARY					4
SELECTED HISTORICAL FINANCIAL DATA OF DARLING					12
SELECTED HISTORICAL FINANCIAL DATA OF NATIONAL BY-PRODUCTS					14
SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA OF DARLING AND NATIONAL BY-PRODUCTS					16
HISTORICAL PRICES OF DARLING COMMON STOCK					17
RISK FACTORS					18
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS					34
THE SPECIAL MEETINGS					35
	Darling Special Meeting				35
		General; Date; Time and Place			35
		Purpose of the Special Meeting			35
		Board Recommendation			35
		Record Date; Voting Power			35
		Required Vote; Quorum			35
		How to Vote			36
		Revocation of Proxy			36
		Expenses of Solicitation			37
	National By-Products Special Meeting				38
		General; Date; Time and Place			38
		Purpose of the Special Meeting			38
		Board Recommendation			38
		Record Date; Voting Power			38
		Required Vote; Quorum			38
		How to Vote			39
		Revocation of Proxy			39
THE ACQUISITION					40
	General				40
	Background of the Acquisition				40
	Recommendation of the Board of Directors of Darling; Reasons for the Acquisition				43
	Opinion of Harris Nesbitt Corp.				44
	Recommendation of the Board of Managers of National By-Products; Reasons for the Acquisition				50
	Opinion of Philip Schneider & Associates, Inc.				51
	Interests of Certain Persons in the Acquisition				53
	Resale of Darling Common Stock				54
	Accounting Treatment				55
	Material U.S. Federal Income Tax Consequences of the Acquisition to National By-Products Unitholders				55
	Appraisal Rights				58
THE ASSET PURCHASE AGREEMENT					61
	General				61

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			Page
	Consideration			61
	Purchased Assets and Assumed Liabilities			64
	Excluded Assets and Liabilities			64
	Representations and Warranties			65
	Covenants			67
	Employees and Employee Benefits			70
	Conditions to the Asset Purchase Agreement			70
	Termination			73
	Indemnification and Escrow Fund			74
	Risk of Loss			75
	Amendment and Waiver			75
	Expected Timing			75
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS OF DARLING AND NATIONAL BY-PRODUCTS				76
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS				80
NATIONAL BY-PRODUCTS MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS				84
PRINCIPAL UNITHOLDERS OF NATIONAL BY-PRODUCTS				103
CERTAIN MANAGERS AND EXECUTIVE OFFICERS OF NATIONAL BY-PRODUCTS				104
EXECUTIVE COMPENSATION				104
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS OF NATIONAL BY-PRODUCTS				105
COMPARATIVE RIGHTS OF DARLING STOCKHOLDERS AND NATIONAL BY-PRODUCTS UNITHOLDERS				106
DESCRIPTION OF DARLING CAPITAL STOCK				113
STOCK EXCHANGE LISTING				114
EXPERTS				114
LEGAL MATTERS				115
WHERE YOU CAN FIND MORE INFORMATION				115
AUDITED FINANCIAL STATEMENTS OF NATIONAL BY-PRODUCTS, LLC				F-1
UNAUDITED FINANCIAL STATEMENTS OF NATIONAL BY-PRODUCTS, LLC				F-17
ANNEX A — Asset Purchase Agreement				A-1
ANNEX B — Opinion of Harris Nesbitt Corp.				B-1
ANNEX C — Opinion of Philip Schneider & Associates, Inc.				C-1
ANNEX D — Iowa Business Corporation Act Division XIII				D-1
Subsidiaries
Consent of KPMG LLP
Consent of Deloitte & Touche LLP
Form of Darling Proxy Card
Form of National By-Products Proxy Card

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Q1:	What is the proposed transaction for which I am being asked to vote?
A1:	If you are a Darling stockholder you are being asked to vote to approve an asset purchase agreement entered into among Darling International Inc., National By-Products, LLC and a wholly-owned subsidiary of Darling, and the transactions contemplated by the asset purchase agreement, including the issuance of shares of Darling common stock in accordance with the asset purchase agreement. If you are a National By-Products unitholder you are being asked to vote to approve the asset purchase agreement among Darling, National By-Products and a wholly-owned subsidiary of Darling, and the transactions contemplated by the asset purchase agreement, including an amendment to the articles of organization of National By-Products to change its name to West-end Liquidation, LLC effective upon closing of the acquisition. The asset purchase agreement contemplates the purchase of substantially all of the assets of National By-Products by a newly formed and wholly-owned subsidiary of Darling. When the acquisition occurs, National By-Products will receive the acquisition consideration and distribute the acquisition consideration, less certain amounts, to its unitholders. See “The Asset Purchase Agreement — Consideration” beginning on page 61.
Q2:	Why did the companies enter into the asset purchase agreement?
A2:	Darling and National By-Products entered into the asset purchase agreement with the expectation that the acquisition will result in mutual benefits including, among other things, increasing revenue, diversifying raw material supplies and creating a larger platform to grow the restaurant services segment.
Q3:	What vote is required for approval of the proposals under consideration at the special meetings?
A3:	The asset purchase agreement and the issuance of shares of Darling common stock in the acquisition must be approved by a majority of the outstanding shares of Darling common stock and the asset purchase agreement must be approved by a majority of the outstanding National By-Products membership units. Therefore, if you abstain or fail to vote, the effect will be the same as voting against the applicable proposal. You are entitled to vote on the applicable proposal if you held Darling common stock at the close of business on the Darling record date, which is [                    ], 2006, or National By-Products membership units at the close of business on the National By-Products record date, which is [                    ], 2006. On those dates, [                    ] shares of Darling common stock and 1,206,313 National By-Products membership units, respectively, were outstanding and entitled to vote. The adjournment proposal for each of the Darling stockholders and the National By-Products unitholders must be approved by the affirmative vote of a majority of the shares of Darling common stock or National By-Products membership units, as applicable, present in person or by proxy at the applicable special meeting, without regard to abstentions, even if there is no quorum at that meeting.
Q4:	What do I need to do now?
A4:	After carefully reading and considering the information contained in this joint proxy statement/ prospectus, please vote your shares or units, as applicable, as soon as possible so that your shares or units, as applicable, will be represented at your company’s special meeting. Please follow the instructions set forth on the proxy card or on the voting instruction form provided by the record holder if your shares or units, as applicable, are held in the name of your broker or other nominee.
Q5:	How do I vote?
A5:	If you are a Darling stockholder, you may vote before your special meeting in one of the following ways:

	•	use the toll-free number shown on your proxy card;
	•	visit the website shown on your proxy card to vote via the Internet; or
	•	complete, sign, date and return the enclosed proxy card in the enclosed postage prepaid envelope.

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	If you are a National By-Products unitholder, you may only vote before your special meeting by completing, signing, dating and returning the enclosed proxy card in the enclosed postage prepaid envelope.

Q6:	If my shares are held in “street name” by my broker or other nominee, will my broker or nominee vote my shares for me?
A6:	Your broker will vote your shares only if you provide instructions to your broker on how to vote. You should instruct your broker to vote your shares by following the directions provided to you by your broker. Without instructions, your broker will not vote any of your shares held in “street name” and the effect will be the same as a vote against the acquisition. See “The Special Meetings” beginning on page 35.
Q7:	What if I do not vote on the matters relating to the acquisition?
A7:	If you are a Darling stockholder and you fail to respond with a vote or fail to instruct your broker or other nominee how to vote on the acquisition proposal, it will have the same effect as a vote against the acquisition proposal. If you respond but do not indicate how you want to vote on the acquisition proposal, your proxy will be counted as a vote in favor of the acquisition proposal. If you respond and indicate that you abstain from voting on the acquisition proposal, your proxy will have the same effect as a vote against the acquisition proposal.

If you are a National By-Products unitholder and you fail to respond with a vote, it will have the same effect as a vote against the acquisition proposal. If you respond but do not indicate how you want to vote on the acquisition proposal, your proxy will be counted as a vote in favor of the acquisition proposal. If you respond and indicate that you abstain from voting on the acquisition proposal, your proxy will have the same effect as a vote against the acquisition proposal.

Q8:	May I change my vote after I have delivered my proxy card?
A8:	Yes. You can change your vote at any time before we vote your proxy at your special meeting. You can do so in one of the following ways:

	•	by sending a notice of revocation to the corporate secretary of Darling or National By-Products, as applicable;
	•	by sending a completed proxy card bearing a later date than your original proxy card; or
	•	by attending your special meeting and voting in person.

	If you are a Darling stockholder you can also change your vote at any time before we vote your proxy at your special meeting by logging onto the Internet website specified on your proxy card in the same manner you would to submit your proxy electronically or by calling the telephone number specified on your proxy card, in each case if you are eligible to do so and by following the instructions on the proxy card. Your attendance alone will not revoke any proxy.
	If you choose to change your vote using any of the methods above, other than by attending your special meeting and voting in person, you must take the described action no later than the beginning of your special meeting or no later than the time indicated on your proxy card. If your shares are held in an account at a broker or other nominee, you should contact your broker or other nominee to change your vote.

Q9:	If I hold National By-Products membership units, should I send them in order to receive the acquisition consideration?
A9:	No. You do not need to turn in your membership units or take other action to receive the acquisition consideration. The acquisition consideration will be sent to you by National By-Products subject to

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	retention of such amounts by National By-Products as determined by its board of managers to be appropriate for purposes of satisfying obligations of National By-Products.

Q10:	Why am I receiving this document?
A10:	We are delivering this document to you as both a joint proxy statement of Darling and National By-Products and a prospectus of Darling. It is a joint proxy statement because each of Darling’s board of directors and National By-Products’ board of managers is soliciting proxies from its stockholders and unitholders, respectively. It is a prospectus because Darling will issue shares of its stock to National By-Products in the acquisition.
Q11:	Who should I call if I have additional questions or need additional copies of the joint proxy documents?
A11:	If you are a Darling stockholder and you would like additional copies of this joint proxy statement/ prospectus or a new proxy card or if you have questions about the acquisition, you should contact Brad Phillips at (972) 717-0300.

	If you are a National By-Products unitholder and you would like additional copies of this joint proxy statement/ prospectus or a new proxy card or if you have questions about the acquisition, you should contact David Pace at (515) 288-2166.

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	Darling may be unable to successfully integrate National By-Products and achieve the benefits expected to result from the acquisition.

	•	Difficulties in integrating and managing personnel, financial reporting and other systems used by National By-Products into Darling;
	•	The failure of National By-Products’ operations to perform in accordance with Darling’s expectations;
	•	Any future goodwill impairment charges that Darling may incur with respect to the assets of National By-Products;
	•	Failure to achieve anticipated synergies between Darling’s business units and the business units of National By-Products;
	•	The loss of National By-Products’ customers; and
	•	The loss of any of the key employees of National By-Products.

	Darling will succeed to substantially all of National By-Products’ liabilities.

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	Darling may be unable to realize the expected cost savings from the acquisition.

	Failure to complete the acquisition could negatively impact the stock price of Darling common stock and the future business and financial results of Darling and National By-Products because of, among other things, the market disruption that would occur as a result of uncertainties relating to a failure to complete the acquisition.

	•	being required to pay the other company a termination fee of $4.23 million, which each company is required to do in certain circumstances relating to termination of the asset purchase agreement. See “The Asset Purchase Agreement — Termination” beginning on page 73; and
	•	having had the focus of management of each of the companies directed toward the acquisition and integration planning instead of on each company’s core business and other opportunities that could have been beneficial to the companies.

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	The asset purchase agreement limits National By-Products’ ability to pursue an alternative proposal to the acquisition and requires National By-Products to pay a termination fee of $4.23 million if it does.

	Darling may be required to pay a termination fee of $4.23 million if its board of directors withdraws or modifies its recommendation to the Darling stockholders.

	The need for governmental approvals may prevent or delay the completion of the acquisition or may diminish the benefits of the acquisition.

	Darling expects substantial transaction, consolidation and integration costs related to the acquisition.

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	National By-Products’ ability to distribute the consideration to be paid in the acquisition to its unitholders may be limited.

	Former National By-Products unitholders who become Darling stockholders in connection with the acquisition will have limited ability to influence Darling’s actions and decisions following the acquisition.

	Some individuals have unique interests in the consummation of the acquisition.

	Shares of Darling common stock issued in connection with the acquisition will be subject to all of the risks associated with Darling as combined with National By-Products.

	The pro forma financial data included in this joint proxy statement/ prospectus is preliminary and the combined company’s actual financial position and results of operations may differ significantly and adversely from the pro forma amounts included in this joint proxy statement/ prospectus.

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	Darling’s results of operations and cash flow may be reduced by decreases in the market price of its products.

	The most competitive aspect of Darling’s business is the procurement of raw materials.

	Darling may incur material costs and liabilities in complying with government regulations.

	•	the Food and Drug Administration (FDA), which regulates food and feed safety;
	•	the United States Department of Agriculture (USDA), including its agencies Animal and Plant Health Inspection Service (APHIS) and Food Safety and Inspection Service (FSIS), which regulates collection and production methods;
	•	the Environmental Protection Agency (EPA), which regulates air and water discharge requirements, as well as local and state agencies governing air and water discharge;
	•	State Departments of Agriculture, which regulate animal by-product collection and transportation procedures and animal feed quality;
	•	the United States Department of Transportation (USDOT), as well as local and state transportation agencies, which regulate the operation of Darling’s commercial vehicles; and

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	•	the Securities and Exchange Commission (SEC), which regulates securities and information required in annual and quarterly reports filed by publicly traded companies.

	Darling is highly dependent on natural gas and diesel fuel.

	Darling’s business may be negatively impacted by a significant outbreak of avian influenza (Bird Flu) in the U.S.

	Darling’s business may be affected by FDA regulations relating to Bovine Spongiform Encephalopathy or “BSE.”

	•	On December 23, 2003, a cow originally imported from Canada to the state of Washington was diagnosed to have BSE. The U.S. government subsequently banned downer animals and specified risk materials (SRM) from food and cosmetics. Cattle that are tested for BSE are also prohibited from entering the food or feed chains until the animals are verified to be negative for the disease. On January 26, 2004, the FDA announced intentions to modify its BSE Feed Rule. Subsequently, on July 14, 2004, the FDA and USDA jointly requested public comment on possible actions to further mitigate the risk of BSE. On September 30, 2004, the FDA published a guidance document indicating that, pursuant to Section 402(a)(5) of the Federal Food, Drug, and Cosmetic Act, animal feed and feed ingredients containing material from a BSE-positive animal will be considered adulterated and may not be fed to animals.
	•	On June 24, 2005, a 12-year-old U.S.-born cow was diagnosed to have BSE. The animal was born more than four years before the FDA implemented the BSE Feed Rule in 1997. The cow was

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		originally sampled at a pet food plant on November 18, 2004. Rapid screening tests for BSE were inconclusive and the carcass was incinerated so it did not enter the feed chain. Confirmation tests subsequently conducted by the USDA using immunohistochemistry (IHC) indicated the animal was negative for BSE. However, following an audit of the USDA’s enhanced BSE surveillance program by the Inspector General for USDA, the sample was retested on June 18, 2005 for BSE using the Western Blot technique, another internationally accepted confirmation test. The sample was positive for BSE using the Western Blot test. Because of the conflicting results obtained from the two test methods, the sample was sent to The Veterinary Laboratories Agency in Weybridge, England, where on June 24, 2005 it was confirmed to be positive for BSE. During the subsequent USDA investigation, 67 animals from the index herd were sacrificed, tested and found to be negative for BSE. In addition, the FDA investigation found the infected animal was fed in compliance to the BSE Feed Rule and did not receive MBM of ruminant animal origin after 1997, when the rule banning such practices went into effect. The FDA concluded the animal was most likely exposed to BSE before the BSE Feed Rule was promulgated.
	•	A few major beef packing companies have begun selling SRM-free MBM for a premium to specific customers, primarily pet food manufacturers.
	•	As a result of the first BSE case, many foreign countries banned imports of U.S.-produced beef and beef products, including MBM. Tallow exports were briefly banned, but this initial ban was relaxed to permit imports of U.S.-produced tallow with less than 0.15% impurities. As of January 11, 2006, many foreign markets were closed to U.S. beef following the discovery of the first U.S. case of BSE, had been reopened, although some, such as Hong Kong, permit only boneless beef from U.S. cattle less than 30 months of age to be imported. Steps towards regaining the major former export markets of Japan, the largest, and South Korea, the second largest, had also been made. On December 12, 2005, Japan eased its ban by permitting meat from U.S. cattle less than 21 months of age to be imported. Two days later, South Korea’s agriculture ministry concluded that U.S. beef was not a health concern, which may be an important step towards lifting that country’s ban. On January 20, 2006, however, Japan suspended imports of U.S. beef because one shipment contained vertebral column, in violation of the terms of the agreement between the U.S. and Japan. The USDA immediately implemented protocols to prevent such violations in the future and began negotiations with Japan to lift the suspension. Except for Indonesia, export markets for MBM containing beef material produced in the U.S. have generally remained closed. Indonesia reopened its border to pork-free MBM in March 2005, but re-initiated its ban on U.S. MBM following the announcement that a second case of BSE had been found in the U.S.
	•	In May 2003, the USDA closed the border to live cattle and beef from Canada after a cow with BSE was discovered there. Boneless beef derived from Canadian cattle under 30 months of age was later approved for importation into the U.S. Canadian officials found two additional cases of BSE in December 2004 and January 2005. On January 4, 2005, the USDA published a Final Rule establishing criteria for classifying geographic regions as presenting minimal-risk of introducing BSE into the U.S. This same rulemaking placed Canada into the minimal-risk category based on an extensive investigation by USDA veterinarians. Based on this classification, USDA announced its intent to reopen the Canadian border to live cattle under 30 months of age and beef from such cattle beginning March 7, 2005. Imports of SRM-free beef from cattle over 30 months of age were also to be allowed, but this action was tabled by the Secretary of Agriculture on February 9, 2005 to allow time for further study. The Ranchers — Cattlemen Action Legal Fund — United Stock Growers of America (R-CALF) sued the USDA and, on March 2, 2005, was granted a temporary injunction by the U.S. District Court for the District of Montana, which prevented implementation of the Minimal Risk Rule and kept the border closed to Canadian cattle. On July 14, 2005, the U.S. Ninth Circuit Court of Appeals agreed with the USDA and overturned the lower court’s temporary injunction, reopening the Canadian border to cattle less than 30 months of age. The first Canadian cattle were imported into the U.S. on July 18, 2005. The importation of SRM-free beef from Canadian cattle over 30 months of age continues to be banned.

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	•	On October 6, 2005, the FDA proposed to amend the agency’s regulations to prohibit certain cattle origin materials in the food or feed of all animals, which we refer to as the “Proposed Rule.” The materials that are proposed to be banned include: (1) the brain and spinal cord from cattle 30 months and older that are inspected and passed for human consumption; (2) the brain and spinal cord from cattle of any age not inspected and passed for human consumption; and (3) the entire carcass of cattle not inspected and passed for human consumption if the brains and spinal cords have not been removed. In addition, the Proposed Rule provides that tallow containing more than 0.15% insoluble impurities also be banned from all animal food and feed if such tallow is derived from the proposed prohibited materials. Proposed rules are not regulations and are not enforceable. Such proposals are published to obtain public comment on actions that the agency is considering. The 75-day public comment period for the Proposed Rule closed December 20, 2005. The FDA is currently reviewing the comments submitted and has not taken any further action. Darling’s management will continue to monitor this and other regulatory issues.
	•	Effective October 7, 2005, the FDA amended its July 14, 2004 interim final rule, which prohibited the use of SRM for human food and required that tallow intended for use in human food and cosmetics contain less than 0.15% impurities. The FDA amended its original interim final rule to remain consistent with rulemaking by the Food Safety Inspection Service of the USDA regarding SRM, which was also effective on October 7, 2005. In the amended final rule, the FDA permits the use of beef small intestine for human food, provided the last 80 inches (distal ileum) of small intestine is removed and the small intestine is derived from cattle that have been inspected and passed for human consumption. The FDA also amended its list of acceptable methods for measuring insoluble impurity levels in tallow to include the methods commonly used by the tallow industry. The impurities limit does not apply to tallow used to make tallow-derivatives (fatty acids).
	•	As of January 19, 2006, only one sample had tested positive for BSE out of more than 589,000 samples collected since June 1, 2004. Samples were collected from the highest risk cattle population, which includes non-ambulatory animals, dead cattle and healthy cattle.

	Certain of Darling’s 24 operating facilities are highly dependent upon a few suppliers.

	Darling’s success following consummation of the proposed acquisition will be dependent on Darling’s and National By-Products’ key personnel.

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	In certain markets Darling is highly dependent upon the continued and uninterrupted operation of a single operating facility.

	Darling has a history of net losses and Darling may incur net losses in the future that could adversely affect Darling’s ability to service its indebtedness.

	•	maintain adequate levels of raw material volumes;
	•	maintain its collection fees at levels sufficient to recover an adequate portion of collection costs;
	•	increase gross margins to the extent of cost increases;
	•	maintain its distribution capability;
	•	maintain competitiveness in pricing; and
	•	continue to manage its operating expenses, which includes the energy costs associated with natural gas and diesel fuel.

	Darling’s ability to pay any dividends on its common stock may be limited.

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	The market price of Darling’s common stock could be volatile.

	Darling may issue additional common stock or preferred stock, which could dilute your interests.

	As a result of the recapitalization, Darling’s ability to apply federal income tax net operating loss carryforwards will be limited.

	Darling has debt and interest payment requirements that could adversely affect its ability to operate its business.

	•	if the acquisition is consummated, Darling will be required to use approximately $8.9 million of its cash flow from operations in Fiscal 2006 to pay its indebtedness, thereby reducing the availability of its cash flow to fund the implementation of Darling’s business strategy, working capital, capital expenditures, product development efforts and other general corporate purposes;
	•	Darling’s interest expense could increase if interest rates in general increase because a portion of Darling’s debt will bear interest based on market rates;
	•	Darling’s level of indebtedness will increase its vulnerability to general adverse economic and industry conditions;
	•	Darling’s debt service obligations could limit Darling’s flexibility in planning for, or reacting to, changes in Darling’s business;

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	•	Darling’s level of indebtedness may place it at a competitive disadvantage compared to its competitors that have less debt; and
	•	a failure by Darling to comply with financial and other restrictive covenants in the agreements governing Darling’s indebtedness could result in an event of default and could have a material adverse effect on Darling.

	Darling may pursue other strategic alliances and acquisitions that could disrupt its operations or fail to result in the benefits that it anticipated.

	National By-Products’ results of operations and cash flow may be reduced by decreases in the market price of its products.

	The most competitive aspect of National By-Products’ business is the procurement of raw materials.

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	National By-Products may incur material costs and liabilities in complying with government regulations.

	•	the FDA, which regulates food and feed safety;
	•	the USDA, including its agencies APHIS and FSIS, which regulates collection and production methods;
	•	the EPA, which regulates air and water discharge requirements, as well as local and state agencies governing air and water discharge;
	•	State Departments of Agriculture, which regulate animal by-product collection and transportation procedures and animal feed quality; and
	•	the USDOT, as well as local and state agencies, which regulate the operation of National By-Products’ commercial vehicles.

	National By-Products is highly dependent on natural gas.

	National By-Products’ business may be affected by FDA regulations relating to BSE.

	•	On December 30, 2003, the Secretary of Agriculture announced new beef slaughter/meat processing regulations to assure of the safety of the meat supply. The regulations prohibit non-

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		ambulatory animals from entering the food chain, require removal of SRM at slaughter and prohibit carcasses from cattle tested for BSE from entering the food chain until the animals are shown negative for BSE.
	•	On January 26, 2004, the FDA announced intentions to modify its feed rule (21 CFR 589.2000) by removing the exemptions for certain products, including blood and blood products, and requiring dedicated processing lines for handling and processing restricted use and exempted proteins. On July 14, 2004, the FDA requested public comment on their intended modifications to the feed rule as well as regulations that would: 1) prohibit material derived from SRM and dead or non-ambulatory cattle in animal feed; 2) prohibit all animal proteins in feed for ruminant animals; and/or 3) require that only BFT either derived from SRM-free material or containing less than 0.15% impurities be allowed in animal feed. Only questions were posed in this announcement of proposed rulemaking, to which National By-Products, among others, responded in comments submitted to the FDA. No new regulations affecting animal feed or modifying the feed rule have been issued to date. This situation will likely continue to be fluid into Fiscal 2006.
	•	On January 26, 2004, the FDA announced its intent to ban the use of certain animal tissue derived materials in food and supplements. Subsequently, on July 14, 2004, the FDA published regulations prohibiting: 1) SRM from human food and cosmetics; and 2) SRM and non-ambulatory or dead cattle from cosmetics. BFT that is either derived from SRM-free raw materials or contains less than 0.15% hexane insoluble impurities will be permitted in human food, supplements and cosmetics. Derivatives of BFT (glycerin and fatty acids) are exempt from these regulations. On September 30, 2004, the FDA issued Guidance Document #174 , which cited the agency’s statutory authority to consider animal feed and feed ingredients derived from a BSE-positive animal to be adulterated and prohibit the use of adulterated material in animal feed.

	National By-Products’ success is dependent on National By-Products’ key personnel.

	In certain markets National By-Products is highly dependent upon the continued and uninterrupted operation of a single operating facility.

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	Restrictions imposed by National By-Products’ credit agreements and future debt agreements may limit its ability to finance future operations or capital needs or engage in other business activities that may be in National By-Products’ interest.

	•	incur additional indebtedness;
	•	pay distributions and make other distributions;
	•	make restricted payments;
	•	create liens;
	•	merge, consolidate or acquire other businesses;
	•	sell and otherwise dispose of assets;
	•	enter into transactions with affiliates;
	•	make investments, loans and advances;
	•	guarantee indebtedness or other obligations;
	•	enter into sale-leaseback, synthetic leases, or similar transactions;
	•	enter into hedge agreements;
	•	make changes to its corporate name, fiscal year, capital structure and constituent documents; and
	•	engage in new lines of business unrelated to National By-Products’ current businesses.

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	•	maintain adequate levels of raw material volumes;
	•	maintain its collection fees at levels sufficient to recover an adequate portion of collection costs;
	•	increase gross margins to the extent of cost increases;
	•	maintain its distribution capability;
	•	maintain competitiveness in pricing; and
	•	continue to manage its operating expenses.

	National By-Products’ ability to pay any distributions may be limited.

	The trading of National By-Products’ membership units is restricted and market value could fluctuate widely.

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	National By-Products may issue additional membership units, which could dilute your interests.

	National By-Products has limited borrowing capacity that could adversely affect its ability to operate its business.

	•	National By-Products’ limited borrowing capacity could limit National By-Products’ flexibility in planning for, or reacting to, changes in National By-Products’ business;
	•	a failure by National By-Products to comply with financial and other restrictive covenants in the agreements governing National By-Products’ indebtedness, which could result in an event of default and could have a material adverse effect on National By-Products; and
	•	National By-Products may need to pursue additional financing to fund the implementation of National By-Products’ business strategy, working capital, capital expenditures, product development efforts and other general corporate purposes.

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	•	statements relating to the benefits of the acquisition, including anticipated synergies and cost savings estimated to result from the acquisition;
	•	statements relating to future business prospects, revenue, income and financial condition of Darling, National By-Products and the resulting company;
	•	statements relating to revenues, number of customers and points of distribution of the resulting company after the acquisition; and
	•	statements preceded by, followed by or that include the words “estimate,” “may,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target” or similar expressions.

	•	the company’s continued ability to obtain sources of supply for its rendering operations;
	•	general economic conditions in the American, European and Asian markets;
	•	prices in the competing commodity markets which are volatile and are beyond Darling’s control;
	•	BSE and its impact on finished product prices, export markets, and government regulations that are still evolving and are beyond either of Darling’s or National By-Products’ control;
	•	expected cost savings from the acquisition, that may not be fully realized within the expected time frames or at all; and
	•	energy price volatility.

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	General; Date; Time and Place

	Purpose of the Special Meeting

	Board Recommendation

	Record Date; Voting Power

	Required Vote; Quorum

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	How to Vote

	•	submit a proxy by telephone;
	•	submit a proxy on the Internet; or
	•	complete the enclosed proxy card, sign and date it and return it in the enclosed postage prepaid envelope.

	Revocation of Proxy

	•	giving written notice of revocation;
	•	executing and returning a new proxy bearing a later date;
	•	submitting a proxy by telephone or the Internet at a later date; or
	•	attending the Darling special meeting and voting in person.

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	Expenses of Solicitation

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	General; Date; Time and Place

	Purpose of the Special Meeting

	Board Recommendation

	Record Date; Voting Power

	Required Vote; Quorum

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	How to Vote

	Revocation of Proxy

	•	giving written notice of revocation;
	•	executing and returning a new proxy bearing a later date; or
	•	attending the National By-Products special meeting and voting in person.

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	•	a draft of the asset purchase agreement dated December 14, 2005;
	•	audited financial statements of National By-Products for fiscal years 2001 through 2004;
	•	internal financial statements of National By-Products for fiscal years 2001 through 2004 and for the interim periods ended October 1, 2004 and September 30, 2005;
	•	projected financial statements of National By-Products for the fiscal years 2005 through 2010 prepared by Darling’s management;
	•	certain publicly available SEC filings of Darling including, but not limited to, the Form 10-K for the fiscal year ended January 1, 2005 and the Form 10-Q for the quarterly period ended October 1, 2005;
	•	projected financial statements of Darling for the fiscal years ended 2005 and 2006 prepared by management of Darling;
	•	a draft financial due diligence report dated November 10, 2005 provided by Darling and prepared by its financial due diligence advisor;
	•	independent third party research and estimates; and
	•	certain other information provided by National By-Products and Darling’s management.

	•	reviewed certain financial and stock market information for selected publicly traded companies that it deemed to be relevant;
	•	reviewed the financial terms, to the extent publicly available, of selected recent acquisitions of companies in Darling’s industry that it deemed to be relevant; and
	•	performed such other studies and analyses, and conducted such discussions, as it considered appropriate.

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	Selected Comparable Company Analysis

	•	Rendering Companies

	•	Darling International Inc.
	•	Omega Protein Corp.

	•	Protein Companies

	•	Tyson Foods Inc.
	•	Smithfield Foods, Inc.
	•	Pilgrim’s Pride Corp.
	•	Gold Kist Inc.
	•	Sanderson Farms, Inc.

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	•	Agribusiness Companies

	•	Archer-Daniels-Midland Co.
	•	Bunge Ltd.
	•	Corn Products International Inc.

	•	Enterprise Value/ Latest Twelve Months (referred to as “LTM”) Earnings before Interest, Taxes, Depreciation and Amortization (referred to as “EBITDA”)
	•	Enterprise Value/ Current Fiscal Year (referred to as “CFY”) Estimated EBITDA
	•	Enterprise Value/ Next Fiscal Year (referred to as “NFY”) Estimated EBITDA
	•	Enterprise Value/ Average EBITDA for the latest three full fiscal years (referred to as “3-year Avg. EBITDA”)

Implied

Enterprise Value

National-By

Products

Selected Comparable Company Multiple

Applied Range

(Millions)

Enterprise Value/ LTM EBITDA

5.5x

to

8.5x

$

141

to

$

218

Enterprise Value/ CFY EBITDA

5.3x

to

7.6x

$

138

to

$

198

Enterprise Value/ NFY EBITDA

4.9x

to

5.2x

$

116

to

$

123

Enterprise Value/ 3-year Avg. EBITDA

6.5x

to

6.9x

$

171

to

$

181

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	Selected Precedent Transaction Analysis

Target		Acquirer
Rica Foods Inc.		Avicola Campesinos Inc.
Farmland Foods Inc.		Smithfield Foods Inc.
ConAgra Foods Inc. Chicken Division		Pilgrims Pride Corp.
ConAgra Foods Inc. Fresh Beef and Pork Business		Investor Group led by Hicks, Muse, Tate & Furst Incorporated
Purina Mills Inc.		Land O’Lakes Inc.
Smithfield Cos. Inc.		Smithfield Foods Inc.
Jerome Foods Inc.		Hormel Foods Corp.
Agribrands International Inc.		Cargill Inc.
IBP Inc.		Tyson Foods Inc.
WLR Foods Inc.		Pilgrims Pride Corp.

	•	Enterprise Value/ LTM EBITDA
	•	Enterprise Value/ 3-year Avg. EBITDA
	•	Enterprise Value/ LTM Earnings before Interest and Taxes (referred to as “EBIT”)
	•	Enterprise Value/ Average EBIT for the latest three full fiscal years (referred to as “3-year Avg. EBIT”)

														Implied
														Enterprise Value
														National-By
Selected Comparable Company Multiple		Applied Range												Products
														(Millions)
Enterprise Value/ LTM EBITDA			7.0	x			to				9.0	x		$	180				to			$	231
Enterprise Value/ 3-year Avg. EBITDA			6.0	x			to				8.0	x		$	158				to			$	210
Enterprise Value/ LTM EBIT			10.5	x			to				12.5	x		$	203				to			$	241
Enterprise Value/ 3-year Avg. EBIT			10.5	x			to				12.5	x		$	197				to			$	234

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	Discounted Cash Flow Analysis

	General

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	•	a draft of the asset purchase agreement;
	•	certain information concerning the business of National By-Products;
	•	information concerning the business of certain other companies engaged in businesses comparable to those of National By-Products;
	•	current and historical market prices of the membership units of National By-Products and the common stock of Darling;
	•	recent audited financial statements of National By-Products and Darling for the year ended January 1, 2005;

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	•	the unaudited financial statements of National By-Products for the period ended October 28, 2005; and
	•	the unaudited financial statements of Darling for the period ended October 1, 2005.

	Asset-Based Approach

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	Income Approach

	Market Approach

	Summary of Valuation Methods

	Value to Be Received by National By-Products Unitholders

	1) Cash. Cash of $70.5 million will be paid by Darling to National By-Products less an estimated $1.9 million (determined as of December 16, 2005) to repay borrowed debt for a net cash payment of $68.6 million. Borrowed debt at closing may be more or less than this amount.
	2) Working Capital. Working capital was assumed by Schneider to be $5 million which will be paid by Darling to National By-Products. Working capital at closing may be more or less than this amount.
	3) Darling Stock. Schneider assumed 16,222,750 shares of Darling common stock would be issued to National By-Products with an assumed market value of $3.50 per share less a 5% marketability discount due to restrictions on the sale of Darling common stock by National By-Products unitholders. The result was a value of $53,940,644.
	4) True-up Provision. Additional shares of Darling common stock will be issued in the acquisition if the future value of Darling common stock is less than a specified target price, assumed to be $4.346 per share. Using the Black-Scholes option pricing model, Schneider determined the true-up provision had a value of approximately $6,231,417.

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	Employment Agreements Effective upon the Acquisition

	Non-Disclosure, Non-Solicitation and Non-Competition Agreement

	Appointment to the Darling Board of Directors

	Change of Control Payments under National By-Products’ Long-Term Incentive Plan

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	Partnership Status

	Consequences of the Acquisition to National By-Products

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	Consequences of the Acquisition to National By-Products Unitholders

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	•	deliver to National By-Products, before the vote is taken on the proposed acquisition, written notice of the unitholder’s intent to demand payment if the proposed acquisition is completed; and
	•	not vote, or cause or permit to be voted, any of his, her or its units in favor of the proposed acquisition.

	•	provide a form, which we refer to as the “appraisal form,” that specifies the date of the first announcement to unitholders of the principal terms of the acquisition and requires the unitholder asserting appraisal rights to certify whether or not beneficial ownership of those units for which appraisal rights are asserted was acquired before that date, and that the unitholder did not vote for the acquisition;

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	•	include the address where National By-Products will receive completed appraisal forms and where unit certificates will be deposited;
	•	include the date by which National By-Products must receive the appraisal form and the deposit of any certificates of its units, which cannot be less than 40 days nor more than 60 days after the delivery of the appraisal notice by National By-Products and state that the unitholder will have waived the right to demand appraisal with respect to his, her or its units unless the appraisal form is received by National By-Products by the specified due date;
	•	state National By-Products’ estimate of the fair value of the units;
	•	inform unitholders that if they make such a request in writing, National By-Products will provide to the unitholder, within ten days following the date the appraisal form is due, the number of unitholders who returned the appraisal form by the specified date and the total number of units owned by them;
	•	state the date by which notice to withdraw from the appraisal process must be received; and
	•	include a copy of Division XIII of the IBCA.

	•	National By-Products’ financial statements, consisting of a balance sheet as of the end of fiscal year not more than sixteen months before the date of payment, an income statement for that year, a statement of changes in unitholders’ equity for that year, and the latest available interim financial statements, if any;
	•	a statement of National By-Products’ estimate of the fair value of the units, which estimate must equal or exceed National By-Products’ estimate given in the appraisal notice; and
	•	a statement that the unitholders who complied with the process set forth in Division XIII of the IBCA have the right to demand further payment (as described below) and that if any such unitholder does not do so within the time period specified in this notice, such unitholder will be deemed to have accepted the payment to the unitholder in full satisfaction of National By-Products’ obligation under Division XIII of the IBCA.

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	•	the amount, if any, by which the court finds the fair value of the unitholder’s units, plus interest, exceeds the amount paid by National By-Products to the unitholder for such units; or
	•	the fair value, plus interest, of the unitholder’s units for which National By-Products elected to withhold payment.

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	Cash Consideration

	Stock Consideration

	Distribution of the Cash and Stock Consideration to the National By-Products Unitholders

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	Stock True-Up

																														Value of the
		Closing				Value of the				Target				True-Up				Remaining												Shares After
Closing Share		Issued				Shares at				Share				Market				Issued				Value				True-Up				the Stock
Price(1)		Shares(2)				Closing(3)				Price(4)				Price(5)				Shares(6)				Gap(7)				Shares(8)				True-Up
$4.25			16,413,592			$	69,757,766			$	4.295			$	4.25				16,413,592			$	742,234				174,643			$	70,500,000
$4.25			16,413,592			$	69,757,766			$	4.295			$	3.60				16,413,592			$	11,411,069				3,169,741			$	70,500,000
$4.25			16,413,592			$	69,757,766			$	4.295			$	3.40				16,413,592			$	11,411,069				3,169,741			$	66,583,332
$4.25			16,413,592			$	69,757,766			$	4.295			$	4.30				16,413,592			$	0				0			$	70,500,000

(1)	The Closing Share Price will be an amount equal to the per share closing price of Darling common stock on the AMEX (as reported by The Wall Street Journal, Eastern Edition, or if not reported thereby, any other authoritative source) for the trading day immediately preceding the closing date of the acquisition. The Closing Share Price cannot be determined until the closing of the acquisition. For purposes of this illustration, we used the per share closing price of Darling common stock on January 24, 2006.
(2)	The number of Closing Issued Shares cannot be determined until the closing of the acquisition. For purposes of this illustration, we used 20% of the outstanding shares of Darling common stock on January 24, 2006, calculated on a fully-diluted basis, assuming the issuance of the Closing Issued Shares.
(3)	The Value of the Shares at Closing is calculated by multiplying the Closing Share Price by the Closing Issued Shares. This number represents the aggregate value of the stock consideration issued to National By- Products immediately following the closing of the acquisition, and includes the $6.5 million in value of escrowed shares.
(4)	The Target Share Price is the per share price of Darling common stock that would cause the value of the stock consideration issued to National By-Products at closing to be $70.5 million. This number is

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	generated by dividing $70.5 million by the number of Closing Issued Shares. The Target Share Price in this example is $4.29522069.
(5)	These per share prices represent various reference prices for the true-up market price.
(6)	This illustration assumes that none of the National By-Products unitholders have transferred any of their Closing Issued Shares (except transfers by gift or into trust) and that no escrowed shares are released to Darling in accordance with the escrow agreement.
(7)	The Value Gap is calculated by multiplying (A) the Remaining Issued Shares by (B) the difference between (x) the Target Share Price and (y) the higher of the True-Up Market Price or $3.60; provided that the difference in (B) is a positive number, if not, then the Value Gap will be zero.
(8)	The number of True-Up Shares is determined by dividing (A) the Value Gap by (B) the higher of (x) the True-Up Market Price and (y) $3.60, rounded to the nearest whole number.

	Distribution of the Stock True-Up to the Eligible National By-Products Unitholders

	Illustration of the Potential Distributions to National By-Products Unitholders

Triggering Event		Amount of Distributions to Unitholders
Closing cash payment		$70.5 million less cash escrow of $3.5 million, less the amount of the then outstanding National By-Products credit facilities and plus or minus the amount of the working capital adjustment, less appropriate reserves to pay other National By-Products debts and obligations
Closing stock issuance		20% of the outstanding shares of common stock of Darling on the closing date on a fully diluted basis (16,413,592 shares as of January 24, 2006) less escrow of shares valued at $6.5 million
First release of cash escrow 90 days after closing, assuming no indemnity claims		$1,050,000, less appropriate reserves
First release of share escrow 90 days after closing, assuming no indemnity claims		Escrowed shares valued at $1,950,000
Second release of cash escrow 180 days after closing, assuming no indemnity claims		$1,050,000, less appropriate reserves
Second release of share escrow 180 days after closing, assuming no indemnity claims		Escrowed shares valued at $1,950,000
Final release of cash escrow thirteen months after closing, assuming no indemnity claims		$1,400,000, less appropriate reserves
Final release of share escrow thirteen months after closing, assuming no indemnity claims		Remaining escrowed shares

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Triggering Event		Amount of Distributions to Unitholders
Twentieth business day following the true-up date		The number of shares issued in the stock true-up, if any

	Impact of the Exercise of Appraisal Rights on the Distributions to National By-Products Unitholders

	•	all liabilities under purchased contracts;
	•	all accounts payable incurred in the ordinary course of business;
	•	liabilities arising in connection with certain indebtedness; and
	•	liabilities reflected on National By-Products’ balance sheet at closing.

	•	certain excluded contracts;
	•	shares of capital stock or equity National By-Products holds in other entities;
	•	the closed Pepcol inedible rendering plant located in Denver, Colorado and referred to by National By-Products as the “closed Pepcol Plant”;

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	•	a limited partnership interest in the Marriott Hotel located in downtown Des Moines, Iowa; and
	•	all ownership interests in International By Products, S. de R.L. de C.V.

	•	liabilities in respect of products sold and/or services performed by National By-Products on or before the date of closing;
	•	certain liabilities arising out of or relating to the employment of any individual on or before the date of closing;
	•	liabilities arising out of or in connection with any excluded contracts;
	•	liabilities relating to certain taxes;
	•	certain liabilities in respect of pending or threatened legal proceedings;
	•	liabilities arising out of disputes with customers existing as of the date of closing or arising out of events prior to the date of closing; and
	•	all liabilities relating to the business operations, assets or liabilities of any former or current National By-Products subsidiary arising out of events prior to the date of closing.

	•	organization, valid existence, good standing and similar corporate matters;
	•	authorization, execution, delivery, performance and enforceability of the asset purchase agreement;
	•	vote of the National By-Products’ unitholders necessary to adopt and approve the asset purchase agreement;
	•	the absence of any conflict with National By-Products’ operating agreement or by-laws, with any contract or permit to which National By-Products is a party, with any order applicable to National By-Products or with any applicable law;
	•	the absence of any consent, waiver, approval, permit or authorization of any person or governmental body;
	•	the delivery of certain of National By-Products’ financial statements and the accuracy, in all material respects, of information contained in these statements in addition to their conformity with generally accepted accounting principles;
	•	the accuracy of the books and records of National By-Products;
	•	maintenance of internal financial controls;
	•	the absence of undisclosed liabilities;
	•	good title to each of the assets to be purchased in the acquisition and the sufficiency of these assets to conduct its business;
	•	conduct of the business in the ordinary course and absence of certain events expected to have a material adverse affect on National By-Products;
	•	tax matters;
	•	real property interests;
	•	personal property interests;

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	•	ownership and validity of intellectual property rights;
	•	material contracts;
	•	labor matters and employee benefit plans;
	•	the absence of pending or threatened litigation;
	•	compliance with all applicable foreign, federal, state and local laws;
	•	possession of all material permits required for the operation of the business;
	•	environmental matters;
	•	insurance;
	•	inventories;
	•	accounts and notes receivable and payable;
	•	absence of related party transactions;
	•	customers and suppliers;
	•	product warranty and products liability;
	•	banks in which National By-Products has accounts or safe deposit boxes;
	•	absence of misleading or untrue statements of a material fact;
	•	finder’s and broker’s fees related to the transaction;
	•	absence of payments to obtain favorable treatment for the business;
	•	the accuracy of information supplied by National By-Products and included in this joint proxy statement/ prospectus; and
	•	its financial condition.

	•	the organization, valid existence, good standing and similar corporate matters of each;
	•	authorization, execution, delivery, performance and enforceability of the asset purchase agreement;
	•	Darling’s capital structure;
	•	the absence of any conflict with Darling or Darling National’s certificate of incorporation and by-laws (or similar organizational documents), with any contract or permit to which Darling or Darling National is a party, with any order applicable to Darling or Darling National or with any applicable law;
	•	the absence of any consent, waiver, approval, permit or authorization of any person or governmental body;
	•	the absence of pending or threatened litigation;
	•	finder’s and broker’s fees related to the transaction;
	•	vote of Darling’s stockholders necessary to approve the issuance of shares of Darling common stock in accordance with the asset purchase agreement;
	•	Darling’s SEC filings;
	•	the accuracy of information supplied by Darling or Darling National and included in this joint proxy statement/ prospectus;

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	•	environmental matters;
	•	the financing necessary to consummate the acquisition; and
	•	absence of misleading or untrue statements of a material fact.

	Mutual Covenants

	•	notify the other of any circumstance or events likely to cause any of its representations or warranties in the asset purchase agreement to be untrue or inaccurate;
	•	notify the other of material failures to comply with or satisfy a covenant, condition or agreement;
	•	notify the other of the institution or threat of institution of legal proceedings;
	•	prepare and file with the SEC this joint proxy statement/ prospectus;
	•	use commercially reasonable efforts to prepare and file materials under the HSR Act and cooperate in all respects with each other in connection with any filing or submission with a governmental entity;
	•	use commercially reasonable efforts to resolve any objections that may be asserted by a governmental entity or other person with respect to the asset purchase agreement; and
	•	use commercially reasonable efforts to take or cause to be taken all actions necessary or appropriate to fulfill their respective obligations under the asset purchase agreement.

	National By-Products Covenants

	•	increase the salary or other compensation of any director or employee of National By-Products except for normal year-end increases in the ordinary course of business;
	•	incur any indebtedness;
	•	subject to any lien or otherwise encumber any assets;
	•	acquire any material property;
	•	enter into or agree to enter into any merger or consolidation with any person or entity;
	•	cancel any debt or claim, or waive or release any material right;
	•	enter into, modify or terminate any labor or collective bargaining agreements;
	•	introduce any material change in operations of the business other than in the ordinary course of business;
	•	enter into any transactions or contracts or modify or renew any contract not in the ordinary course of business;
	•	enter into any contract that restricts the ability of the National By-Products’ business, or the ability of Darling or Darling National, to compete with or conduct any business in any geographic area or solicit the employment of any person;

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	•	terminate, amend, restate, supplement or waive any rights under any material contract, real property lease, personal property lease or intellectual property license, other than in the ordinary course or business;
	•	settle or compromise any pending or threatened legal proceeding expected to be greater than $25,000;
	•	change or modify its credit, collection or payment policies procedures or practices;
	•	take any action that would adversely affect the ability of the parties to consummate the transaction;
	•	amend the operating agreement or bylaws of National By-Products; and
	•	do anything that would make the representations and warranties of National By-Products untrue or incorrect in any material respect or that could result in any condition of closing not being satisfied or that could reasonably be expected to have a material adverse effect on National By-Products.

	•	conduct its business in the ordinary course of business;
	•	use commercially reasonable efforts to preserve its present business operations and relationships;
	•	maintain all assets consistent with past practice and maintain insurance for all assets;
	•	maintain the books, accounts and records of National By-Products in the ordinary course of business, continue to collect accounts receivable and pay accounts payable, and comply with all contractual obligations;
	•	comply with National By-Products’ 2005 capital expenditure plan;
	•	comply in all material respects with all applicable laws;
	•	renew all permits in a timely manner prior to their lapse; and
	•	pay all maintenance and similar fees to prevent the abandonment, loss or impairment of all intellectual property.

	•	obtain required consents, waivers, approval and notices from certain third parties;
	•	not to own, manage, operate, control or participate in the ownership, management, operation or control of any business engaged in the rendering business or that otherwise competes with the rendering business for a period of five years following the closing;
	•	not to (i) solicit any employees of National By-Products to leave the employment or hire any employees of National By-Products or (ii) encourage any actual or prospective client, customer, supplier or licensor of National By-Products or Darling to terminate or modify any actual or prospective relationship, for a period of five years following closing;
	•	not to disclose any confidential information from and after the date of the asset purchase agreement;
	•	grant Darling the use of the name “National By-Products” and any service mark, trade names, d/b/a names, fictitious names, identifying symbols, logos, emblems or signs containing or comprising the name National By-Products;
	•	permit Darling and its environmental consultant to conduct investigations of the environmental conditions of any real property owned, operated or leased by or for National By-Products;

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	•	provide assistance and cooperate with Darling in connection with obtaining the necessary financing to consummate the acquisition;
	•	file all materials required by environmental laws;
	•	hold a special meeting of its unitholders solely for the purpose of obtaining their approval of the asset purchase agreement and the transactions contemplated by the asset purchase agreement;
	•	provide Darling with monthly financial statements for each calendar month from December 19, 2005 to closing;
	•	subject to certain exceptions, make all cash dividends prior to closing, if any, in the ordinary course of business;
	•	terminate the National By-Products’ rights agreement dated as of January 1, 1999 immediately prior to closing;
	•	not to dissolve or otherwise terminate its limited liability company existence and to withhold sufficient funds to meet its obligations under the asset purchase agreement, until the later to occur of the date that is fifteen months following the closing date of the acquisition and the date on which all unresolved indemnification claims asserted by Darling against National By-Products have been resolved in accordance with the asset purchase agreement and the escrow agreement between Darling and National By-Products;
	•	deliver to Darling National certificates of title to the assets to be transferred to Darling National;
	•	deliver to Darling a list identifying all persons who it believes may be deemed to be “affiliates” of National By-Products as the term is used in Rule 145 of the Securities Act;
	•	update and amend the National By-Products’ disclosure schedules to reflect any events or circumstances occurring before closing that would have required listing on the schedules if the event or condition had existed prior to the signing of the asset purchase agreement; and
	•	use its insurance company’s actuary to value its liabilities related to potential workers’ compensation claims for the fiscal year ended 2005 at its own expense.

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	Darling and Darling National Covenants

	•	preserve and keep records relating to National By-Products’ business for a period equal to the time it would keep its own records and to make the records available to National By-Products;
	•	permit National By-Products and its environmental consultant to conduct investigations of the environmental conditions of any real property owned, operated or leased by or for Darling International;
	•	take actions reasonably necessary to elect Dean Carlson and one other nominee of National By-Products to Darling’s board of directors;
	•	hold a special meeting of its stockholders solely for the purpose of obtaining their approval of the issuance of shares of Darling common stock in accordance with the asset purchase agreement; and
	•	engage a reputable third-party actuary to value National By-Products liability with respect to workers’ compensation claims for fiscal year ending 2005.

	Mutual Conditions

	•	no order by a governmental body of competent jurisdiction restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated by the asset purchase agreement will have been entered;
	•	the SEC will have declared the Form S-4 effective;
	•	National By-Products unitholders and Darling stockholders will have approved the acquisition; and
	•	the AMEX will have approved for listing the shares of Darling common stock deliverable to National By-Products unitholders.

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	National By-Products Conditions

	•	the representations and warranties of Darling and Darling National set forth in the asset purchase agreement qualified as to materiality will be true and correct, and those not so qualified will be true and correct in all material respects, as of the date of the asset purchase agreement and as of the closing of the acquisition as though made at and as of the closing of the acquisition, except to the extent the representations and warranties expressly relate to an earlier date (in which case the representations and warranties qualified as to materiality will be true and correct, and those not so qualified will be true and correct in all material respects, on and as of such earlier date); provided, however, in the event of any breach of a representation or warranty of Darling or Darling National set forth in the asset purchase agreement, the condition will be deemed satisfied unless the effect of all the breaches of representations and warranties taken together could reasonably be expected to have a material adverse effect on Darling;
	•	Darling and Darling National will have performed and complied in all material respects with all obligations and agreements required by the asset purchase agreement;
	•	no event, change, occurrence or circumstance will have occurred that, individually or in the aggregate with any other events, changes, occurrences or circumstances, has had or which could reasonably be expected to have a material adverse effect on Darling;
	•	the Chief Executive Officer of Darling and Darling National will deliver to National By-Products a signed certificate certifying that the above conditions have been fulfilled;
	•	Darling will have obtained any required consents;
	•	Darling will have delivered evidence of delivery of the cash consideration to National By-Products;
	•	Darling National will have delivered a duly executed assignment and assumption agreement;
	•	Darling and Darling National will have delivered an opinion of its counsel, Weil, Gotshal & Manges LLP; and
	•	Philip Schneider & Associates, Inc. will not have withdrawn or materially modified the opinion it delivered to National By-Products’ board of managers on December 16, 2005 due solely to a material adverse effect on Darling.

	Darling and Darling National Conditions

	•	the representations and warranties of National By-Products set forth in the asset purchase agreement qualified as to materiality will be true and correct, and those not so qualified will be true and correct in all material respects, as of the date of the asset purchase agreement and as of the closing of the acquisition as though made at and as of the closing of the acquisition, except to the extent the representations and warranties expressly relate to an earlier date (in which case the representations and warranties qualified as to materiality will be true and correct, and those not so qualified will be true and correct in all material respects, on and as of such earlier date); provided, however, in the event of any breach of a representation or warranty of National By-Products set forth in the asset purchase agreement, the condition will be deemed satisfied unless the effect of all

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		the breaches of representations and warranties taken together could reasonably be expected to have a material adverse effect on National By-Products;
	•	National By-Products will have performed and complied in all material respects with all obligations and agreements required by the asset purchase agreement;
	•	no event, change, occurrence or circumstance will have occurred that, individually or in the aggregate with any other events, changes, occurrences or circumstances, has had or could reasonably be expected to have a material adverse effect on National By-Products;
	•	the President of National By-Products will deliver to Darling a signed certificate certifying that the above conditions have been fulfilled;
	•	Darling will have received a binding commitment from a title company to issue a policy of title insurance on National By-Products’ owned property;
	•	Darling will have received an ALTA/ ACSM Class A Land Title Survey with respect to each of National By-Products’ owned property, which does not reveal any fact or condition that has not been previously disclosed and that is otherwise reasonably satisfactory to Darling;
	•	National By-Products will have delivered to Darling’s title company any certifications, gap and lien indemnities and title and survey affidavits in connection with the issuance of title insurance for Darling or its lenders, together with copies of formation documents, incumbency certificates, certificates of good standing and consents or resolutions as are requested by the title company;
	•	National By-Products will have obtained any required governmental consents as well as any required consents under all antitrust laws;
	•	National By-Products will have provided Darling with an affidavit of non-foreign status;
	•	Each of Mark Myers, David Pace, and Larry Angotti will have entered into employment agreements on terms satisfactory to Darling;
	•	Dean Carlson will have executed and delivered a noncompetition and nonsolicitation agreement;
	•	Darling National will have obtained financing proceeds sufficient to consummate the acquisition;
	•	Darling will have received the appropriate consents under its senior credit facility and subordinated debt facility;
	•	National By-Products will have delivered a bill of sale and other documents and instruments of transfer reasonably requested by Darling or its title company;
	•	National By-Products will have delivered duly executed general warranty deeds for each of its owned real properties and, if requested by Darling International, separate assignments for National By-Products’ real property leases, except that National By-Products may deliver special warranty deeds for certain real property if title insurance has been obtained;
	•	National By-Products will have obtained the issuance, reissuance or transfer of all permits for Darling to conduct the operations of National By-Products’ business as of the closing date, and National By-Products will have satisfied all property transfer requirements arising under law;
	•	National By-Products will have delivered a duly executed assignment and assumption agreement and duly executed assignments of the registrations and applications included in the purchased intellectual property;
	•	National By-Products will have delivered a duly executed power of attorney;
	•	National By-Products will have delivered an opinion of its counsel, Nyemaster, Goode, West, Hansell & O’Brien PC;

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	•	National By-Products will have delivered all instruments and documents necessary to release all liens, other than certain permitted exceptions, on purchased assets;
	•	National By-Products will have received appropriate payoff letters relating to its senior indebtedness;
	•	Harris Nesbitt Corp. will not have withdrawn or materially modified the opinion it delivered to Darling’s board of directors on December 16, 2005 due solely to a material adverse effect on National By-Products;
	•	National By-Products will have delivered the required consents; and
	•	National By-Products will have delivered to Darling other documents that Darling reasonably requests.

	Reasons for Termination

	•	by either National By-Products or Darling on or after May 15, 2006 if the closing has not occurred by the close of business on that date;
	•	by mutual consent of National By-Products and Darling;
	•	by either Darling or National By-Products if an event has occurred that has had or could reasonably be expected to have a material adverse effect on the non-terminating party;
	•	by either Darling or National By-Products in the event of a final nonappealable order prohibiting the consummation of the acquisition, so long as the order was not caused by the terminating party’s failure to perform an obligation under the asset purchase agreement;
	•	by either Darling or National By-Products if the other fails to perform or breaches any of its representations, warranties, covenants or agreements set forth in the asset purchase agreement, the breach is incapable of being cured within fifteen days following receipt of notice of the breach and the aggregate of such failures and breaches would allow the non-breaching party refuse to close;
	•	by Darling if (i) National By-Products’ board of managers (A)withdraws or modifies, in a manner adverse to Darling or Darling National, its recommendation to approve the asset purchase agreement or its approval or declaration of advisability of the asset purchase agreement and the transactions contemplated by the asset purchase agreement or (B) approves or recommends any takeover proposal, (ii) National By-Products’ board has not rejected a takeover proposal within 15 business days of the receipt of the proposal or (iii) National By-Products’ board fails to publicly reconfirm its recommendation to approve the asset purchase agreement within 15 business days after Darling requests them to do so if the request is made following the making of any takeover proposal;
	•	by Darling or National By-Products (subject to certain exceptions) if the National By-Products unitholder approval is not obtained;
	•	by National By-Products or Darling (subject to certain exceptions) if the Darling stockholder approval is not obtained; or
	•	by Darling or National By-Products on or before February 28, 2006 upon an unfavorable environmental assessment or operational due diligence review by the terminating party.

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	Effect of Termination

	Termination Fee Payable to National By-Products

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	Distribution of the Escrowed Cash and/or Darling Common Stock to the National By-Products Unitholders

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							National				Pro Forma								Pro Forma
			Darling				By-Products				Adjustments				Notes				Combined
			(In thousands)
Assets
Cash and cash equivalents			$	36,739			$	—			$	(30,000	)			(a	)		$	6,739
Restricted cash				2,355				—				—								2,355
Accounts receivables, net				24,320				13,064				—								37,384
Inventories				7,700				7,606				—								15,306
Prepaid expenses				4,524				—				—								4,524
Deferred income taxes				4,409				—				—								4,409
Other current assets				6				759				—								765
	Total current assets			80,053				21,429				(30,000	)							71,482
Property, plant and equipment, net				81,773				36,542				—								118,315
Collection routes and contracts, net				13,105				—				53,540				(b	)			66,645
Goodwill				4,429				2,560				46,314				(b	)			53,303
Deferred loan costs				3,008				—				192				(c	)			3,200
Other assets				2,429				523				—								2,952
Total assets			$	184,797			$	61,054			$	70,046							$	315,897
Liabilities and Stockholders’ Equity
Current portion of long-term debt			$	5,026			$	—			$	1,000				(d	)		$	6,026
Accounts payable				9,264				7,589				—								16,853
Accrued expenses				30,282				4,847				—								35,129
Accrued interest				63				—				—								63
	Total current liabilities			44,635				12,436				1,000								58,071
Long-term debt				45,759				2,600				45,650				(d	)			94,009
Other non-current liabilities				17,136				2,923				—								20,059
Deferred income taxes				3,744				—				(1,143	)			(c	)			2,601
Total liabilities				111,274				17,959				45,507								174,740
Stockholders’ Equity:
Common stock				644				—				164				(e	)			808
Additional paid in capital				79,364				—				70,336				(e	)			149,700
Treasury stock				(172	)			—				—								(172	)
Accumulated other comprehensive loss				(7,134	)			(1,001	)			—								(8,135	)
Retained earnings				2,366				—				(1,865	)			(c	)			501
Unearned compensation				(1,545	)			—				—								(1,545	)
Member’s capital				—				44,096				(44,096	)			(f	)			—
	Total stockholders’ equity			73,523				43,095				24,539								141,157
Total Liabilities and Equity			$	184,797			$	61,054			$	70,046							$	315,897

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								National				Pro Forma								Pro Forma
				Darling				By-Products				Adjustments				Notes				Combined
				(In thousands, except per share data)
Condensed Combined Statements of Operations Data:
Net sales				$	320,229			$	198,326				—							$	518,555
Cost of sales and operating expenses					237,925				160,813				—								398,738
Selling, general and administrative					36,509				9,364				—								45,873
Depreciation and amortization					15,224				6,973				2,866				(g	)			25,063
Loss on disposals of property & equipment					—				(41	)			—								(41	)
Total operating expenses					289,658				177,109				2,866								469,633
Operating Income					30,571				21,217				(2,866	)							48,922
Interest expense					(6,759	)			(165	)			(2,586	)			(h	)			(9,510	)
Other income/(expense), net					(299	)			21				—								(278	)
	Total other income/(expense)				(7,058	)			(144	)			(2,586	)							(9,788	)
Income/(loss) from continuing operations before income taxes					23,513				21,073				(5,452	)							39,134
Income tax expense/(benefit)					9,245				—				5,936				(i	)			15,181
Income/(loss) from continuing operations				$	14,268			$	21,073			$	(11,388	)						$	23,953
Per share data:
	Income from continuing operations per share:
		Basic		$	0.22															$	0.30
		Diluted		$	0.22															$	0.30
	Weighted average number of shares outstanding:
		Basic			63,840								16,414								80,254
		Diluted			64,463								16,589				(j	)			81,052

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								National				Pro Forma								Pro Forma
				Darling				By-Products				Adjustments				Notes				Combined
				(In thousands, except per share data)
Condensed Combined Statements of Operations Data:
Net sales				$	231,959			$	141,798				—							$	373,757
Cost of sales and operating expenses					182,014				115,086				—								297,100
Selling, general and administrative					26,158				6,514				—								32,672
Depreciation and amortization					11,390				4,553				2,150				(g	)			18,093
Loss on disposals of property & equipment					—				289				—								289
Total operating expenses					219,562				126,442				2,150								348,154
Operating Income					12,397				15,356				(2,150	)							25,603
Interest expense					(4,707	)			(108	)			(2,029	)			(h	)			(6,844	)
Other income/(expense), net					891				27				—								918
	Total other income/(expense)				(3,816	)			(81	)			(2,029	)							(5,926	)
Income/(loss) from continuing operations before income taxes					8,581				15,275				(4,179	)							19,677
Income tax expense/(benefit)					3,002				—				4,216				(i	)			7,218
Income/(loss) from continuing operations				$	5,579			$	15,275			$	(8,395	)						$	12,459
Per share data:
	Income from continuing operations per share:
		Basic		$	0.09															$	0.16
		Diluted		$	0.09															$	0.15
	Weighted average number of shares outstanding:
		Basic			63,922								16,414								80,336
		Diluted			64,528								16,589				(j	)			81,117

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1.	Basis of Presentation and New Accounting Pronouncements

2.	Purchase Price and Financing Considerations

	Purchase Price

		(In thousands)
Share consideration (see Financing Considerations below)		$	70,500
Cash consideration			70,500
Working capital adjustment (additional cash consideration)			2,550
Estimated transaction costs			6,200
Estimated purchase price		$	149,750

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			(In thousands)
Book value of net assets acquired at October 1, 2005			$	44,136
Remaining allocation:
	Deferred financing costs			3,200
	Identifiable intangible assets at fair value(1)			53,540
	Goodwill			48,874
Estimated purchase price			$	149,750

(1)	Darling estimates that substantially all of the acquired identifiable intangible assets will be attributable to the following categories:

Estimated Fair

Estimated Useful

Estimated Annual

Value

Lives

Amortization

(In thousands)

(In thousands)

Non-compete Agreements

$

140

5 years

$

28

Permits

43,300

20 years

2,165

Customer Relationships

10,100

15 years

673

	Financing Considerations

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3.	Pro Forma Adjustments

	Pro Forma Balance Sheet Adjustments

	Pro Forma Statements of Operations Adjustments

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4.	Cost Savings

5.	Pro Forma Income from Continuing Operations Per Share

		October 1,
		2005
Pro forma income from continuing operations		$	12.5
Basic weighted average shares			80.3
Diluted weighted average shares			81.1
Pro forma basic income from continuing operations per common share		$	0.16
Pro forma diluted income from continuing operations per common share		$	0.15

		January 1,
		2005
Pro forma income from continuing operations		$	24.0
Basic weighted average shares			80.3
Diluted weighted average shares			81.1
Pro forma basic income from continuing operations per common share		$	0.30
Pro forma diluted income from continuing operations per common share		$	0.30

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	Bovine Spongiform Encephalopathy (“BSE”)

	Other Known Trends

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	Summary of Critical Issues Faced by National By-Products during the First Nine Months of 2005

	Results of Operations Nine Months Ended October 1, 2005 Compared to Nine Months Ended October 2, 2004

	Summary of Key Factors Impacting First Nine Months 2005 Results

	•	lower finished product prices; and
	•	higher natural gas and diesel fuel expenses.

	•	higher raw material volumes;
	•	improved recovery of collection expenses; and
	•	operating cost improvements.

	Summary of Key Indicators of First Nine Months 2005 Performance

	•	finished product commodity prices (quoted on the Jacobsen index);
	•	raw material volume;
	•	production volume and related yield of finished product; and
	•	collection fees and collection operating expense.

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		Avg. Price First				Avg. Price First
		Nine Months				Nine Months								%
		2005				2004				Decrease				Decrease
MBM (Illinois)		$	174.02/ton			$	205.76/ton			$	(31.74/ton)				(15.4)%
BFT (Chicago)		$	17.51/cwt			$	18.72/cwt			$	(1.21/cwt)				(6.5)%
YG (Illinois)		$	14.31/cwt			$	15.68/cwt			$	(1.37/cwt)				(8.7)%

	Net Sales

		Sales
Lower finished goods prices		$	(6.0	)
Increased raw material volume			3.7
Lower production yields			(0.4	)
Other sales increases			0.6
Increased collection expense recovery			0.6
Decreased purchase of finished product for resale			(12.4	)
		$	13.9

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	Cost of Sales

		Cost of Sales
Lower raw material prices		$	(2.5	)
Increased raw material volume			3.2
Increased operating costs, primarily energy			1.5
Decreased purchase of finished product for resale			(12.4	)
		$	(10.2	)

	Selling, General and Administrative Expenses

	Depreciation and Amortization

	Gain (Loss) on Disposal of Property and Equipment

	Interest Expense

	Income Taxes

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	Summary of Critical Issues Faced by National By-Products during Fiscal 2004

	Results of Operations Fiscal 2004 Compared to Fiscal 2003

	Summary of Key Factors Impacting Fiscal 2004 Results

	•	higher overall finished goods prices, driven primarily by yellow grease; and
	•	improved efficiency of collection and factory operations.

	•	higher diesel fuel and natural gas expense; and
	•	lower hide and meat and bone meal blending margins.

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	Summary of Key Indicators of Fiscal 2004 Performance

	•	finished product commodity prices quoted on the Jacobsen index;
	•	raw material volume;
	•	production volume and related yield of finished product;
	•	natural gas prices quoted on the NYMEX index;
	•	collection fees and collection operating expense; and
	•	factory operating expenses.

		Avg. Price				Avg. Price				Increase/				%
		Fiscal 2004				Fiscal 2003				(Decrease)				Change
MBM (Illinois)		$	190.36/ton			$	194.01/ton			$	(3.65)/ton				(1.9	)%
BFT (Chicago)		$	17.95/cwt			$	18.26/cwt			$	(0.31)/cwt				(1.7	)%
YG (Illinois)		$	15.12/cwt			$	13.39/cwt			$	1.73/cwt				12.9	%

Avg. Price

Avg. Price

%

Fiscal 2004

Fiscal 2003

Increase

Increase

Natural gas

$

6.14/mmbtu

$

5.39/mmbtu

$

0.75/mmbtu

13.9

%

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	Net Sales

		Sales
Higher finished goods prices		$	2.6
Increased raw material volume			1.5
Lower production yields			(0.2	)
Other sales decreases			(1.2	)
Decreased collection expense recovery			(0.1	)
Decreased purchase of finished product for resale			(5.8	)
		$	(3.2	)

	Cost of Sales

		Cost of Sales
Higher raw material prices		$	0.9
Increased raw material volume			1.2
Decreased operating costs, net of increased energy costs			(1.4	)
Decreased purchase of finished product for resale			(5.8	)
		$	(5.1	)

	Selling, General and Administrative Expenses

	Depreciation and Amortization

	Interest Expense

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	Summary of Critical Issues Faced by National By-Products during Fiscal 2003

	•	Higher finished product commodity prices were experienced, especially in the fourth quarter of 2003, as a result of a tightening in supplies of and demand for fats, oils and proteins worldwide. In addition, a single case of BSE in Canada in late spring of 2003 caused a dramatic price increase for U.S.-produced MBM. High finished product prices were favorable to National By-Products’ sales revenue, but this favorable result was partially offset by the negative impact on raw material cost, due to National By-Products’ formula pricing arrangements with raw material suppliers, which index raw material cost to the prices of finished products derived from the raw material. The financial impact of the increase of finished goods prices on sales revenue and raw material cost is summarized below in Results of Operations.
	•	High energy prices for both natural gas and diesel fuel persisted throughout Fiscal 2003. National By-Products’ management believes that high prices were due in part to fears of potential natural gas shortages resulting from severe winter weather in February and March 2003, and from fears of potential crude oil shortages resulting from war in Iraq and ongoing strife in the Middle East. National By-Products attempts to manage natural gas price risk by occasionally entering into forward purchase agreements with all of its natural gas suppliers that permit such contracts, in order to purchase natural gas for future months when prices are relatively low. National By-Products has limited diesel fuel storage capabilities at its plant locations and regional suppliers have not been willing to enter forward purchase agreements on terms acceptable to National By-Products. The financial impact of higher natural gas and diesel fuel prices is summarized below in “Results of Operations Fiscal 2003 Compared to Fiscal 2002.”

	Results of Operations Fiscal 2003 Compared to Fiscal 2002

	Summary of Key Factors Impacting Fiscal 2003 Results

	•	higher finished goods prices;
	•	improved efficiency of collection and factory operations; and
	•	higher diesel fuel and natural gas expense.

	Summary of Key Indicators of Fiscal 2003 Performance

		Avg. Price				Avg. Price								%
		Fiscal 2003				Fiscal 2002				Increase				Increase
MBM (Illinois)		$	194.01/ton			$	165.65/ton			$	28.36/ton				17.20%
BFT (Chicago)		$	18.26/cwt			$	13.47/cwt			$	4.79/cwt				35.60%
YG (Illinois)		$	13.39/cwt			$	9.31/cwt			$	4.08/cwt				43.90%

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Avg. Price

Avg. Price

%

Fiscal 2003

Fiscal 2002

Increase

Increase

Natural gas

$

5.39/mmbtu

$

3.22/mmbtu

$

2.17/mmbtu

67.4

%

	Net Sales

		Sales
Higher finished goods prices		$	15.7
Increased raw material volume			(0.3	)
Lower production yields			(2.6	)
Other sales increases			0.2
Decreased collection expense recovery			(1.7	)
Increased purchase of finished product for resale			10.6
		$	21.9

	Cost of Sales

		Cost of Sales
Higher raw material prices		$	6.7
Decreased raw material volume			(0.3	)
Increased operating costs, net of increased energy costs			2.6
Increased purchase of finished product for resale			10.6
		$	19.6

	Selling, General and Administrative Expenses

	Depreciation and Amortization

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	Interest Expense

	Income Tax Benefit

	1. Amendment #1, dated September 30, 2000 — to decrease the restrictive covenant on tangible net worth from $23.0 million to $18.0 million.
	2. Amendment #2, dated January 28, 2002 — to allow for the conversion of National By-Products to a limited liability company; to allow for a supplemental term loan facility of $6.0 million to be used for capital gains tax distributions and purchases of equity interests; and to eliminate the 25% prepayment requirement of free cash flow, among other changes.
	3. Amendment #3, dated March 31, 2003 — to allow for special distributions up to 100% of free cash flow limited to $10.0 million; to increase the tangible net worth restrictive covenant to $31.0 million; and to eliminate the liens on National By-Products’ tractors and trailers, among other changes.
	4. Amendment #4, dated July 2, 2004 — to eliminate the $10.0 million limitation on special distributions; to extend the term by two years to June 30, 2007; and to increase the revolving credit facility from $16.0 million to $21.0 million, among other changes.

	•	Financing facilities, consisting of a $27.0 million term loan facility, a $6.0 million supplemental term loan facility, and a $21.0 million revolving facility, which includes a $5.0 million letter of credit subfacility. Proceeds of the new term loan facility were used to pay off the outstanding balance of the prior term loan facility of approximately $27.0 million.
	•	Term of seven years maturing on June 30, 2007.
	•	Scheduled amortization payments on the term loan facility of $1.0 million, due each quarter during the original five-year term of the amended and restated credit. The term loan facility was paid in full during 2003.
	•	Interest rate that may be based upon either prime or LIBOR or a combination of both rates, plus a margin that may be adjusted quarterly based upon the leverage ratio of National By-Products, as defined by the amended and restated credit agreement. Amounts available that are not borrowed by National By-Products incur a variable commitment fee.
	•	Increased availability and liquidity, an extended term, lower bank margins and more flexible capital investment limitations than the prior credit agreement dated December 14, 1994.

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	•	Restrictive covenants permit National By-Products, within limitations defined in the amended and restated credit agreement, to incur additional indebtedness; pay distributions; create liens; merge, consolidate, or acquire other businesses; sell and dispose of assets; make investments; and require the maintenance of certain minimum financial ratios.

Amended and Restated Credit Agreement			October 1, 2005				January 1, 2005				January 3, 2004
Term Loan			$	0			$	0			$	0
Revolving credit facility
	Maximum availability		$	21,000			$	21,000			$	16,000
	Borrowings outstanding			2,600				—				6,400
	Letters of credit issued			1,779				1,904				2,475
	Availability		$	16,621			$	19,096			$	7,125

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							Less than												More than
			Total				1 Year				1-3 Years				3-5 Years				5 Years
Contractual obligations:
Long-term obligations			$	2,600			$	—			$	2,600			$	—			$	—
Operating lease obligations				3,002				673				971				624				734
Purchase commitments				5,688				5,688				—				—				—
Pension funding obligations(a)				207				207				—				—				—
Other long-term liabilities				2,283				1,027				424				233				599
	Total		$	13,780			$	7,595			$	3,995			$	857			$	1,333

(a)	Pension funding requirements are determined annually, based upon a third party actuarial estimate. National By-Products is not able to estimate pension funding requirements beyond the next twelve months. The accrued pension benefit liability was approximately $1.2 million at the end of Fiscal 2004.

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	Accounts Receivable and Allowance for Doubtful Accounts

	Inventories

	Long-Lived Assets Depreciation and Amortization Expense and Valuation

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	Goodwill Valuation

	Accrued Medical Claims Liability

	Self Insurance, Environmental and Legal Reserves

	Pension Liability

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	Income Taxes

	Long-Term Incentive Plan

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		Units of National				Percentage of
		By-Products				National By-Products
Name		Beneficially Owned				Units Outstanding
James S. Cownie, Manager			170,561				14.1	%
Daniel M. Kelly			123,939				10.3
4401 Westown Parkway, Suite 202
West Des Moines, IA 50266
Farm Bureau Mutual Insurance Co.			120,000				9.9
Attn: LouAnn Sandburg, VP-Investments 5400 University Ave West Des Moines, IA 50266
C. Dean Carlson, Manager			116,159	(1)			9.6
Donald F. Lamberti, Manager			29,772				2.5
Mark A. Myers, President and Chief Executive Officer, Manager			16,731				1.4
Larry J. Angotti, Regional Manager			8,326				*
Carlton T. King, Manager			8,770				*
David A. Pace, Chief Financial Officer			6,595				*
Richard A. Matthes, Manager			4,419				*
Harold Thorne, Manager			3,809				*
Marlyn L. Jorgensen, Manager			1,500				*
William J. Gannon, Manager			1,000				*
All managers and executive officers as a group(2)			367,642				30.0	%

	*	Less than 1%

(1)	This number includes 5,400 units owned by Carlson Foundation.
(2)	The 11 individuals represented are: Larry J. Angotti, C. Dean Carlson, James S. Cownie, William J. Gannon, Marlyn L. Jorgensen, Carlton T. King, Donald F. Lamberti, Richard A. Matthes, Mark A. Myers, David A. Pace and Harold Thorne.

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Name		Age				Principal Occupation
C. Dean Carlson, Manager			[   ]			Mr. Carlson has served as Chairman of National By-Products’ board of managers since January 1990. From January 1990 to January 2001 Mr. Carlson also served as President and Chief Executive Officer. Mr. Carlson served in several other positions at National By-Products from 1964 to 1989.
Mark A. Myers			[   ]			Mr. Myers has served as National By-Products’ President and Chief Executive Officer since January 2001. From July 1999 to January 2001, Mr. Myers served as Chief Operating Officer. From March 1997 to July 1999, Mr.  Myers served as Regional Manager. Mr. Myers served in several other positions at National By-Products from 1970 to 1998.

																			Long-Term
							Annual Compensation												Compensation
Name and															Other Annual				LTIP
Principal Position			Year				Salary				Bonus				Compensation(1)				Payouts
Mark Myers				2005			$	400,268			$	125,000			$	36,051			$	2,880
President and Chief				2004				373,732				130,000				32,040
	Executive Officer			2003				355,324				118,000				34,382

(1)	These amounts include 401(k) matching contributions, profit sharing retirement plan contributions, “gross-up” compensation to offset self-employment taxes, excess life insurance and a motor vehicle allowance in the amount of $700 per month plus operating expenses.

Number of

Period Until

Name

Units

Payout

Estimated Future Payouts

Mark Myers

420

(a)

(a)

(a)

These shadow units were awarded under National By-Products’ 2003 Long-Term Incentive Plan. National By-Products determines this award in January following each Fiscal Year. The awards vest 20% per year each at December 31 after the award is granted. The vested portion of the award entitles the grantee to compensation equal to any special distribution paid by National By-Products on a per unit basis during his employment. Upon normal retirement or change in control of National

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	By-Products, the shadow units automatically vest 100% and are subject to payout at their then current market value, over five years in the case of retirement and immediately in the case of a change of control.

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		Darling Stockholder Rights		National By-Products Unitholder Rights
Authorized Capital Stock:		The authorized capital stock of Darling currently consists of (i) 100,000,000 shares of common stock, par value $0.01 per share, and (ii) 1,000,000 shares of preferred stock, par value $0.01 per share.		The total number of units of all classes of National By-Products currently consists of (i) 15,000,000 common units and (ii) 5,000,000 preferred units.
Number of Directors:		The Darling board of directors currently consists of six directors. The number of directors is established from time to time by resolution of the Darling board of directors, although there must be a minimum of five and not more than eleven directors.		The National By-Products board of managers consists of nine managers. The number of managers may not be less than three or more than nine, the number within the range to be determined from time to time by a majority vote of the entire board.
Election of Directors/Managers:		Directors are elected by a plurality of the votes cast at a meeting of the stockholders entitled to vote in the election of the directors. The Chairman of the Board is selected by a majority of the board of directors.		If a quorum is present, managers are elected by a majority of the units represented at the meeting and entitled to vote. Nominations of managers by members may be made only in accordance with procedures set forth in the bylaws.
Classes and Term of Directors/Managers:		Directors are elected at the annual meeting of the		Managers are divided into three classes, each class to be as nearly

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		Darling Stockholder Rights		National By-Products Unitholder Rights
		stockholders. Each serves until his successor is elected and qualified, or until his earlier death, resignation, retirement, disqualification or removal.		equal in number as possible. The terms of office of managers of the first class expire at the first annual meeting of members after their election, the terms of office of managers in the second class expire at the second annual meeting of members after their election, and the terms of office of the managers of the third class expire at the third annual meeting of members after their election. At each annual meeting of members, the number of managers equal to the number of the class whose term expires at the time of the meeting will be elected to hold office until the third succeeding meeting.
Removal of Directors/Managers:		Not addressed in Darling’s certificate of incorporation or the bylaws. Delaware law provides that the holders of a majority of the shares then entitled to vote at an election of directors may remove, with or without cause, any director or the entire board of directors.		At a meeting called expressly for that purpose, any manager may be removed at any time, with or without cause, by vote of the members holding at least two- thirds of the outstanding units.
Vacancies on the Board:		Vacancies in Darling’s board of directors and newly created directorships resulting from any increase in the authorized number thereof may be filled by a majority of the remaining directors then in office, although less than a quorum, or by a sole remaining director, and the directors so elected will hold office until the next annual stockholders meeting and until their successors are duly elected and qualified, or until their earlier death, resignation, retirement, disqualification or removal.		Vacancies in National By- Products’ board of managers occurring prior to the expiration of the term of a manager or as a result of new managerships created by an increase in the number of managers will only be filled by a majority vote of the remaining managers constituting the board. An additional manager holds office until his or her successor is designated as manager and is elected and qualified or his or her earlier death, resignation or removal.
Board Quorum and Vote Requirements:		At all meetings of Darling’s board of directors, a majority of directors constitutes a quorum for the transaction of business, and the act of a majority present at any meeting at which there is quorum is the act of the board of directors.		A quorum for a meeting of the board of managers consists of a majority of all managers. At all meetings of the board of managers, a quorum being present, the act of a majority of the managers present at the meeting will be the act of the board of managers, unless the vote of a greater number is

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		Darling Stockholder Rights		National By-Products Unitholder Rights
				otherwise affirmatively and expressly required by the Iowa Limited Liability Company Act or other applicable law.
Board Action without a Meeting:		Any action required or permitted to be taken at any meeting of Darling’s board of directors (or a committee) may be taken without a meeting if all members of the board of directors or committee consent to the action in writing, and that writing or those writings are filed with the minutes of proceedings of the board of directors or committee.		Any action required or permitted to be taken at any meeting of National By-Products’ board of managers may be taken without a meeting if the action is taken by all managers and if one or more consents in writing describing the action so taken will be signed by each manager and included in the minutes or filed with National By-Products’ records reflecting the action taken. Any written consent will be effective when the last manager signs the consent, unless the consent specifies a different effective date.
Stockholder/Unitholder Meetings:		All meetings of Darling’s stockholders for the election of directors are held at the place as may be fixed from time to time by the board. Meetings of Darling’s stockholders for any other purpose are held at the time and place, either within or without the State of Delaware, as stated in the notice of the meeting. Annual meetings are held on the second Monday of May, if not a legal holiday, otherwise the next regular business day, at 10:00 a.m., or at another date and time as designated from time to time by the board.		An annual meeting of the members for the purpose of electing managers and for the transaction of other business as may come before the meeting will be held each year on the third Tuesday in May, at 10:00 a.m.; provided that the board of managers may fix some other date or time for the meeting. If the day designated above or fixed by the board of managers for the annual meeting will be a Sunday or other legal holiday in the state where held, the meeting will be held on the next succeeding business day.
		Special meetings of the stockholders of Darling for any purpose or purposes may be called at any time by the board of directors, the chief executive officer, the president or the holders of at least ten percent of Darling’s outstanding shares of capital stock.		Special meetings of National By- Products’ members, for any purpose, may be called by (i) the chairman of the board of managers, (ii) the president or (iii) the board of managers, and will be called by the board of managers at the request of any member or members holding at least ten percent of the outstanding units entitled to vote at the meeting.
Quorum Requirements:		The holders of a majority of outstanding shares of Darling stock entitled to vote on a matter, present in person or		Members holding at least a majority of the outstanding units entitled to vote, represented in person or by proxy, will

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		Darling Stockholder Rights		National By-Products Unitholder Rights
		represented by proxy, constitutes a quorum; provided that at any meeting of stockholders at which the holders of any class of Darling stock will be entitled to vote separately as a class, the holders of a majority in number of the total outstanding shares of the class, present in person or represented by proxy, will constitute a quorum for purposes of the class vote.		constitute a quorum at any meeting of the members.
Stockholder/Unitholder Proposals:		Business transacted at any special meeting of stockholders is limited to the purposes stated in the notice unless all of the stockholders are present in person or by proxy, in which case any and all business may be transacted at the meeting even though the meeting is held without notice.		For business to be properly brought before an annual meeting by a member, business must be (i) specified in the notice of meeting (or supplement thereto) given by or at the direction of the board of managers, (ii) otherwise properly brought before the meeting by or at the direction of the board of managers, or (iii) otherwise properly brought before the meeting by a member in accordance with National By-Products’ bylaws. Business may be properly brought before an annual meeting by a member only if written notice of the member’s intent to propose the business has been delivered, either by personal delivery, United States mail, first class postage prepaid, or other comparable means to National By-Products’ Secretary not later than the close of business on the tenth day following the day on which notice of the date of the meeting was first mailed to members.
Action of Stockholders and Unitholders by Written Consent:		Any action required or permitted to be taken by Darling’s stockholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, will be signed by the holders of the outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take the action at a meeting at which all shares		Action required or permitted to be taken at a meeting of members may be taken without a meeting and without notice if the action is evidenced by one or more written consents describing the action taken, signed by members holding at least ninety percent of the outstanding units entitled to vote and delivered to the board of managers for inclusion in the minutes or for filing with National By-Products’

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		Darling Stockholder Rights		National By-Products Unitholder Rights
		entitled to vote thereon were present and voted.		records. Action taken in this manner will be effective when a sufficient number of members to take the action have signed the consent, unless the consent specifies the effective date.
Voting Rights:		Each outstanding share, regardless of class, has the right to one vote on each matter submitted to a vote at a meeting of stockholders.		Except as may be provided with regard to series preferred units, members have one vote for each unit and are entitled to vote on any matter on which the vote of the members is taken.
Dividend/Distribution Rights:		Darling’s ability to pay any cash or non-cash dividends on its common stock is subject to applicable provisions of state law and to the terms of its credit agreements. Under Delaware law, Darling is permitted to pay cash or accumulated dividends on Darling’s capital stock, including Darling’s common stock, only out of surplus, or if there is no surplus, out of Darling’s net profits for the fiscal year in which a dividend is declared or for the immediately preceding fiscal year. Surplus is defined as the excess of a company’s total assets over the sum of its total liabilities plus the par value of its outstanding capital stock. In order to pay dividends, Darling must have surplus or net profits equal to the full amount of the dividends at the time the dividend is declared. In determining Darling’s ability to pay dividends, Delaware law permits Darling’s board of directors to revalue Darling’s assets and liabilities from time to time to their fair market values in order to establish the amount of surplus.		National By-Products’ operating agreement provides that the board of managers will not declare a distribution if, after the distribution is made: (a) National By-Products would not be able to pay its debts as they come due in the usual course of business, (b) National By-Products’ total assets would be less than the sum of its total liabilities, plus the amount that would be needed (if any), if National By-Products were to be dissolved at the time of the distribution, to satisfy preferential rights upon dissolution of members whose preferential rights are superior to the rights of members receiving the distribution or (c) the payment of the distribution would be a default by National By-Products under its credit agreement. Because income of National By- Products is allocated to its members for income tax purposes, on or before April 15 of each year, National By- Products is required to distribute cash to its members in at least the amount estimated to equal the income taxes payable by its members.
Appraisal Rights:		Under Delaware General Corporation Law § 262, Darling’s stockholders have rights to seek appraisal of the fair value of shares in certain circumstances, which do not apply to this acquisition.		Members have the same appraisal rights as shareholders of an Iowa corporation. Under the Iowa Business Corporation Act § 490.1302 National By-Products’ unitholders have rights to seek appraisal of the fair value of units in certain circumstances,

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		Darling Stockholder Rights		National By-Products Unitholder Rights
				including the proposed acquisition by Darling.
Amendment of Certificate of Incorporation/Articles of Organization:		Not addressed in Darling’s certificate of incorporation or its bylaws; however, the Delaware General Corporation Law provides that the board of directors will adopt a resolution setting forth the amendment proposed and declaring its advisability. Stockholders will either vote at the next annual meeting or at a special meeting, as determined by the board. The board of directors must send notice of the meeting that sets forth the amendment in full or a brief summary of the changes. To pass the proposed amendment, a majority of the outstanding stock must be voted in favor of the amendment.		An amendment to National By- Products’ articles of organization requires a majority vote of the outstanding units entitled to vote.
Amendment of Bylaws/Operating Agreement:		Darling’s bylaws may be amended, altered or repealed or new bylaws may be adopted by the stockholders or by the board of directors at any regular meeting of the stockholders or board of directors or any special meeting of the stockholders or board of directors if notice of the alteration, amendment, repeal or adoption of new bylaws is contained in the notice of the special meeting.		An amendment to National By- Products’ operating agreement requires a majority vote of the outstanding units entitled to vote. Its bylaws may be amended by its board of managers.
Exculpation of Directors:		Darling’s certificate of incorporation provides that a director will not be personally liable to Darling or its stockholders for monetary damages for breach of fiduciary duty as a director; except for liability (i) for any breach of the director’s duty of loyalty to Darling or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law (relating to unlawful payment of dividends or unlawful stock purchase or redemption), or (iv) for any transaction from		A manager of National By- Products will not be personally liable to National By-Products or to its members for monetary damages for breach of fiduciary duty as manager, except for liability (i) for breach of the manager’s duty of loyalty to National By-Products or to its members, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, or (iii) for a transaction from which the manager derives an improper personal benefit or a wrongful distribution in violation of the Iowa Limited Liability Company Act.

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		Darling Stockholder Rights		National By-Products Unitholder Rights
		which the director derived an improper personal benefit.
Indemnification of Directors/Managers, Officers and Employees:		Darling will indemnify its officers, directors, employees and other agents, and those who served at the request of Darling as an officer, director, employee, or agent of another entity who are a party to or are threatened to be made a party to any threatened, pending or completed action, suit or proceeding.		National By-Products will indemnify each person who is or was a manager or officer who was or is made a party to or a witness in, or is threatened to be made a party to or a witness in any threatened, pending or completed claim, action, suit or proceeding, whether civil, criminal, administrative or investigative (including a grand jury proceeding) and whether formal or informal, by reason of the fact that the person (i) is or was a manager or officer of National By-Products or (ii) while a manager or officer of National By-Products, is or was serving at the request of the company as a manager, member, director, officer, partner, trustee, employee or agent of another individual, person or entity.
		Expenses (including attorneys’ fees) incurred by an officer or director in defending a civil, criminal, administrative or investigative action, suit or proceeding will be paid by Darling in advance of the final disposition of the action, suit or proceeding upon receipt of an undertaking by or on behalf of the director or officer to repay the amount if it is ultimately determined that he is not entitled to be indemnified by Darling. Expenses (including attorneys’ fees) incurred by other employees and agents may be so paid upon the terms and conditions, if any, as the board of directors deems appropriate.		National By-Products will reimburse reasonable expenses incurred in connection with any claim, action, suit or proceeding in advance of its final disposition; provided however, that the payment or reimbursement of the expenses in advance of the final disposition of the claim, action, suit or proceeding will be made only upon delivery to National By-Products of (i) a written undertaking by or on behalf of the person claiming indemnification to repay all amounts so advanced if it is ultimately determined that the person is not entitled to be indemnified and (ii) a written affirmation of the person’s good faith belief that the person has met the applicable standard of conduct necessary to require indemnification by National By-Products.
Anti-Takeover Provisions:
Transfer Restrictions		Darling shareholders (other than “affiliates”) are not subject to any transfer restrictions, and the		National By-Products unitholders are prohibited from transfering their units on an established

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		Darling Stockholder Rights		National By-Products Unitholder Rights
		shares are traded on the AMEX.		securities market or secondary market.
Business Combination Act		Darling is subject to Section 203 of the Delaware General Corporation Law prohibiting specified business combinations by 15% or greater stockholders without satisfying requisite conditions.		The Iowa Limited Liability Company Act to which National By-Products is subject does not contain a provision of this nature.
Charter Documents		Darling has adopted no provisions in its certificate of incorporation or bylaws not already described above that specifically impact changes of control.		National By-Products has adopted no provisions in its articles of organization, operating agreement, or bylaws not already described above that specifically impact changes of control.

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DARLING FILINGS WITH THE SEC		PERIOD AND/ OR FILING DATE
Annual Report on Form 10-K		Fiscal year ended January 1, 2005, as filed March 17, 2005
Quarterly Report on Form 10-Q		Quarters ended April 2, 2005, July 2, 2005 and October 1, 2005, as filed May 12, 2005, August 11, 2005 and November 10, 2005, respectively
Current Report on Form 8-K		Filed November 10, 2005 and December 20, 2005

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Independent Auditors’ Report			F-2
Balance Sheet as of January 1, 2005 and January 3, 2004			F-3
Statements of Income for the Years Ended January 1, 2005, January 3, 2004 and December 28, 2002			F-4
Statements of Changes in Members’ Equity for the Three Years Ended January 1, 2005, January 3, 2004 and December 28, 2002			F-5
Statements of Cash Flows for the Three Years Ended January 1, 2005, January 3, 2004 and December 28, 2002			F-6
Notes to Financial Statements for Three Years Ended January 1, 2005, January 3, 2004 and December 28, 2002			F-7

F-1

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F-2

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				January 1,				January 3,
				2005				2004
				(In thousands)
Assets
Current Assets:
	Trade receivables (net of allowances of $812 and $665, respectively)			$	10,952			$	13,217
	Inventories (Note 2)				7,689				9,992
	Other current assets				1,438				1,500
		Total current assets			20,079				24,709
Property and Equipment, Net (Note 3)					39,093				41,666
Other Assets:
	Goodwill				2,560				2,560
	Other (Note 4)				436				501
		Total other assets			2,996				3,061
Total Assets				$	62,168			$	69,436
Liabilities and Members’ Equity
Current Liabilities:
	Cash overdraft			$	1,851			$	2,290
	Accounts payable				4,999				6,841
	Accrued expenses (Note 5 and 13)				4,301				4,385
	Notes payable (Note 7)				—				650
		Total current liabilities			11,151				14,166
Line of Credit (Note 7)					—				6,400
Other Liabilities (Notes 6, 8, 9 and 13)					2,690				2,193
		Total liabilities			13,841				22,759
Members’ Equity (Note 10)
	Members’ equity and retained earnings (Note 15)				49,328				47,553
	Accumulated other comprehensive loss (Note 8)				(1,001	)			(876	)
		Total members’ equity			48,327				46,677
Total Liabilities and Members’ Equity				$	62,168			$	69,436

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				Year Ended
				January 1,				January 3,				December 28,
				2005				2004				2002
								(In thousands)
Net Revenues				$	198,326			$	201,485				179,591
Operating Expenses:
	Cost of sales				160,813				165,923				146,279
	Selling, general and administrative				9,364				9,383				8,751
	Depreciation and amortization				6,973				7,585				8,085
	Equity in loss of joint venture (Note 1)				—				—				152
	(Gain)/loss on disposals of property and equipment				(41	)			196				543
		Total operating expenses			177,109				183,087				163,810
Operating Income					21,217				18,398				15,781
Other Income (Expense):
	Interest income				21				10				19
	Interest expense				(165	)			(905	)			(1,313	)
		Total other expense			(144	)			(895	)			(1,294	)
Income Before Income Taxes					21,073				17,503				14,487
Income Tax Benefit (Note 12)					—				—				8,591
Net Income				$	21,073			$	17,503				23,078

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																			Accumulated Other
																			Comprehensive Loss
			Common												Members’				Additional
			Stock Shares/								Additional				Equity/				Minimum								Total
			Membership				Common				Paid-In				Retained				Pension				Interest				Members’
			Units				Stock				Capital				Earnings				Liability				Rate Swap				Equity
			(In thousands except for unit and per unit data)
Balances, December 29, 2001				1,261,862			$	13			$	3,380			$	30,129			$	—			$	(479	)		$	33,043
Comprehensive income:
	Net income															23,078												23,078
	Additional minimum pension liability																			(1,102	)							(1,102	)
	Net change in unrealized loss on interest rate swap																							(259	)			(259	)
	Reclassification adjustment for interest rate swap...
	expense realized in net income																							349				349
Total comprehensive income																												22,066
Purchase and retirement of common stock				(55,549	)			(1	)			(1,277	)															(1,278	)
Conversion to limited liability corporation								(12	)			(2,103	)			2,115
Distributions to members ($10.75 per unit)																(12,968	)											(12,968	)
Balances, December 28, 2002				1,206,313				—				—				42,354				(1,102	)			(389	)			40,863
Comprehensive income:
	Net income															17,503												17,503
	Additional minimum pension liability																			226								226
	Net change in unrealized loss on interest rate swap																							(257	)			(257	)
	Reclassification adjustment for interest rate swap...
	expense realized in net income																							646				646
Total comprehensive income																												18,118
Distributions to members ($10.20 per unit)																(12,304	)											(12,304	)
Balances, January 3, 2004				1,206,313				—				—				47,553				(876	)			—				46,677
Comprehensive income:
	Net income															21,073												21,073
	Additional minimum pension liability																			(125	)							(125	)
Total comprehensive income																												20,948
Distributions to members ($16.00 per unit)																(19,298	)											(19,298	)
Balances, January 1, 2005				1,206,313			$	—			$	—			$	49,328			$	(1,001	)		$	—			$	48,327

F-5

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Table of Contents

						Year Ended
						January 1,				January 3,				December 28,
						2005				2004				2002
						(In thousands)
Cash Flows From Operating Activities:
	Net income					$	21,073			$	17,503			$	23,078
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation expense					6,929				7,501				7,786
		Amortization expense					44				84				299
		(Gain)/loss on disposals of property and equipment					(41	)			196				543
		Unit based compensation expense					356				243				—
		Deferred income taxes					—				—				(3,453	)
		Equity in loss of joint venture					—				—				152
		Changes in assets and liabilities:
			Trade receivables				2,265				2,029				(1,377	)
			Inventories				2,303				(1,649	)			894
			Other assets				60				4,211				(4,552	)
			Accounts payable				(1,842	)			613				405
			Accrued expenses				(84	)			251				301
			Other liabilities				39				(1,120	)			(45	)
				Net cash provided by operating activities			31,102				29,862				24,031
Cash Flows From Investing Activities:
	Purchases of property and equipment						(4,930	)			(4,288	)			(5,357	)
	Proceeds from sales of property and equipment						615				182				310
	Net proceeds from joint venture						—				—				41
				Net cash used in investing activities			(4,315	)			(4,106	)			(5,006	)
Cash Flows From Financing Activities:
	Net change in cash overdraft.						(439	)			(1,630	)			979
	Net change in revolving line of credit						(6,400	)			4,900				(2,000	)
	Principal payments on long-term debt						—				(16,000	)			(8,000	)
	Principal payments on notes payable						(650	)			(722	)			(758	)
	Distributions paid to members						(19,298	)			(12,304	)			(12,968	)
	Issuance of long-term debt						—				—				5,000
	Purchase and retirement of common stock						—				—				(1,278	)
				Net cash used in financing activities			(26,787	)			(25,756	)			(19,025	)
Net Change in Cash and Cash Equivalents							—				—				—
Cash and Cash Equivalents, Beginning of Year							—				—				—
Cash and Cash Equivalents, End of Year						$	—			$	—			$	—
Supplemental Disclosures of Cash Flow Information:
	Interest paid					$	(204	)		$	(1,015	)		$	(1,363	)
	Income taxes refunded					$	45			$	4,126			$	1,525
Supplemental Schedule of Non-Cash Investing and Financing Activities:
	Transfer of property from joint venture													$	200

F-6

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1.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

	Nature of Business

	Fiscal Year

	Cash Equivalents

	Inventories

	Property and Equipment

Land improvements			15 years
Buildings			30 to 35 years
Machinery, office furniture and equipment			3 to 15 years
Vehicles			3 to 10 years

	Goodwill

F-7

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	Other Assets

	Joint Venture

	Derivative Instruments

	Revenue Recognition

	Income Taxes

	Fair Value of Financial Instruments

F-8

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	Use of Estimates

	Risks and Uncertainties

2.	INVENTORIES

		January 1,				January 3,
		2005				2004
Feed		$	4,198			$	4,501
Hides			1,558				3,243
Grease			935				1,376
Pet food			630				563
Other			368				309
		$	7,689			$	9,992

3.	PROPERTY AND EQUIPMENT, NET

		January 1,				January 3,
		2005				2004
Land and land improvements		$	5,560			$	5,487
Buildings			24,676				23,895
Machinery, office furniture and equipment			72,111				72,036
Vehicles			25,816				24,839
Construction-in-progress			1,137				558
			129,300				126,815
Accumulated depreciation			(90,207	)			(85,149	)
		$	39,093			$	41,666

F-9

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		January 1,				January 3,
		2005				2004
Noncompete agreements		$	151			$	191
Debt issuance costs			—				100
			151				291
Accumulated amortization			(121	)			(217	)
			30				74
Pension-related assets			186				208
Insurance deposits			220				219
		$	436			$	501

5.	ACCRUED EXPENSES

		January 1,				January 3,
		2005				2004
Compensation and benefits		$	2,061			$	2,080
Self-insurance			1,424				1,444
Property taxes			654				639
Other			162				222
		$	4,301			$	4,385

6.	OTHER LIABILITIES

		January 1,				January 3,
		2005				2004
Pension-related		$	1,187			$	1,085
Other compensation and benefits			784				445
Self-insurance			476				549
Other			243				114
		$	2,690			$	2,193

7.	LINE OF CREDIT AND NOTES PAYABLE

F-10

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Description			Amount				Rates
Revolving lines of credit:
	Prime		$	1,900				4.00%
	30 day LIBOR plus 1.25%			4,500				2.37% - 2.42%
			$	6,400

	Interest Rate Swap

	Notes Payable

8.	PENSION PLAN

	Pension Plan

F-11

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		January 1,				January 3,
		2005				2004
Projected benefit obligation		$	(5,554	)		$	(4,948	)
Fair value of plan assets			4,320				3,773
Funded status		$	(1,234	)		$	(1,175	)
Accumulated benefit obligation		$	(5,554	)		$	(4,948	)
		January 1,				January 3,				December 28,
		2005				2004				2002
Benefit expense		$	349			$	426			$	261
Employer contributions		$	392			$	968			$	—
Amounts recognized in the accompanying consolidated balance sheets at January 1, 2005 and January 3, 2004 consist of:
		January 1,				January 3
		2005				2004
Other noncurrent asset		$	186			$	208
Accrued expenses		$	47			$	90
Other noncurrent liability		$	1,187			$	1,085
Accumulated other comprehensive loss		$	1,001			$	876
The significant assumptions used were as follows:
		January 1,				January 3,
		2005				2004
Discount rate to determine obligation			5.75%				6.00%
Discount rate to determine benefit expense			6.00%				6.50%
Expected long-term return on plan assets			7.00%				7.00%

January 1, 2005 — December 31, 2005		$	243
January 1, 2006 — December 31, 2006			262
January 1, 2007 — December 31, 2007			285
January 1, 2008 — December 31, 2008			308
January 1, 2009 — December 31, 2009			320
January 1, 2010 — December 31, 2014			1,892

F-12

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			December 31,				December 31,
			2004				2003				Target
Cash and cash equivalents				5.2	%			0.1	%			1.0	%
Equities				94.8				99.9				99.0
	Total			100.0	%			100.0	%			100.0	%

	Multi-Employer Plans

9.	OTHER EMPLOYEE BENEFIT PLANS

	Retirement Savings Plan

	Unit Incentive Plan

F-13

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	Employee Shareholders/ LLC Conversion

	Supplemental Retirement Plans

		January 1,				January 3,
		2005				2004
Supplemental retirement benefits		$	85			$	86
Postretirement medical benefits		$	100			$	115

10.	MEMBERS’ EQUITY

11.	OPERATING LEASES

2005			$	660
2006				484
2007				465
2008				335
2009				305
Thereafter				897
	Total		$	3,146

F-14

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Table of Contents

12.	INCOME TAXES

13.	OTHER CONTINGENCIES

	Environmental

F-15

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Table of Contents

	Self Insured Risks

14.	NEW ACCOUNTING PRONOUNCEMENTS

15.	SUBSEQUENT EVENT

F-16

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Table of Contents

Balance Sheet as of October 1, 2005			F-18
Statements of Income for the Nine Month Periods Ended October 1, 2005 and October 2, 2004			F-19
Statements of Changes in Members Equity for the Nine Month Periods ended October 1, 2005 and October 2, 2004			F-20
Statements of Cash Flows for the Nine Month Periods Ended October 1, 2005 and October 2, 2004			F-21
Notes to Financial Statements for the Nine Month Periods Ended October 1, 2005 and October 2, 2004			F-22

F-17

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				October 1, 2005
				(In thousands)
Assets
Current Assets:
	Trade receivables (net of allowances of $646 and $665, respectively)			$	13,064
	Inventories				7,606
	Other current assets				759
		Total current assets			21,429
Property And Equipment, Net					36,542
Other Assets:
	Goodwill				2,560
	Other				523
		Total other assets			3,083
Total Assets				$	61,054
Liabilities and Members’ Equity
Current Liabilities:
	Cash overdraft			$	1,476
	Accounts payable				6,113
	Accrued expenses				4,847
		Total current liabilities			12,436
Line Of Credit					2,600
Other Liabilities					2,923
		Total liabilities			17,959
Members’ Equity:
	Members’ equity				44,096
	Accumulated other comprehensive loss				(1,001	)
		Total members’ equity			43,095
Total Liabilities And Members’ Equity				$	61,054

F-18

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				Nine Months Ended
				October 1,				October 2,
				2005				2004
				(In thousands)
Net Revenues				$	141,798			$	155,740
Operating Expenses:
	Cost of sales				115,086				125,264
	Selling, general and administrative				6,514				6,398
	Depreciation and amortization				4,553				5,307
	(Gain)/loss on disposals of property and equipment				289				(363	)
		Total operating expenses			126,442				136,606
Operating Income					15,356				19,134
Other Income (Expense):
	Interest income				27				17
	Interest expense				(108	)			(140	)
		Total other expense			(81	)			(123	)
Net Income				$	15,275			$	19,011

F-19

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Table of Contents

											Accumulated Other
											Comprehensive Loss
											Additional
											Minimum				Total
			Membership				Members’				Pension				Members’
			Units				Equity				Liability				Equity
			(In thousands, except for unit and per unit data)
Balances, January 3, 2004				1,206,313			$	47,553			$	(876	)		$	46,677
	Net income							19,011								19,011
	Distributions to members ($13.55 per unit)							(16,346	)							(16,346	)
Balances, October 2, 2004				1,206,313			$	50,218			$	(876	)		$	49,342
Balances, January 1, 2005				1,206,313			$	49,328			$	(1,001	)		$	48,327
	Net income							15,275								15,275
	Distributions to members ($17.00 per unit)							(20,507	)							(20,507	)
Balances, October 1, 2005				1,206,313			$	44,096			$	(1,001	)		$	43,095

F-20

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						Nine Months Ended
						October 1,				October 2,
						2005				2004
						(In thousands)
Cash Flows From Operating Activities:
	Net income					$	15,275			$	19,011
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation expense					4,525				5,272
		Amortization expense					28				35
		(Gain)/loss on disposals of property and equipment					289				(363	)
		Changes in assets and liabilities:
			Trade receivables				(2,112	)			(468	)
			Inventories				83				132
			Other assets				664				572
			Accounts payable				1,114				(1,295	)
			Accrued expenses				546				583
			Other liabilities				233				(16	)
				Net cash provided by operating activities			20,645				23,463
Cash Flows From Investing Activities:
	Cash paid for acquisition of a business						(100	)			—
	Purchases of property and equipment						(2,332	)			(2,564	)
	Proceeds from sales of property and equipment						69				612
		Net cash used in investing activities					(2,363	)			(1,952	)
Cash Flows From Financing Activities:
	Net change in cash overdraft.						(375	)			185
	Net change in revolving line of credit						2,600				(4,700	)
	Principal payments on notes payable						—				(650	)
	Distributions paid to members						(20,507	)			(16,346	)
		Net cash used in financing activities					(18,282	)			(21,511	)
Net Change In Cash And Cash Equivalents							—				—
Cash And Cash Equivalents, Beginning Of Year							—				—
Cash And Cash Equivalents, End Of Period...						$	—			$	—
Supplemental Disclosures Of Cash Flow Information:
	Interest paid					$	103			$	174
	Income taxes refunded					$	31			$	45

F-21

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Table of Contents

1.	MANAGEMENT’S REPRESENTATIONS

	General

	Nature of Business

	Fiscal Year

	Acquisition

	Revenue Recognition

F-22

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Table of Contents

	Risks and Uncertainties

2.	INVENTORIES

		October 1,
		2005
Feed		$	4,496
Hides			1,279
Grease			954
Pet food			620
Other			257
		$	7,606

3.	LINE OF CREDIT

Description			Amount				Rates
Revolving lines of credit:
	Prime		$	1,600				6.75	%
	30 day LIBOR plus 1.25%			1,000				4.93	%
			$	2,600

F-23

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4.	PENSION PLANS

	Pension Plan

		October 1,				October 2,
		2005				2004
Benefit expense		$	274			$	262

	Multi-Employer Plans

5.	UNIT BASED COMPENSATION

	Unit Incentive Plan

	Employee Shareholders/ LLC Conversion

F-24

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Table of Contents

6.	MEMBERS’ EQUITY

7.	CONTINGENCIES

	Income Taxes

	Environmental

F-25

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Table of Contents

			October 1,				October 2,
			2005				2004
Liability balance, beginning			$	452			$	44
	Environmental-related expenses			244				667
	Payments for environmental obligations			(382	)			(259	)
Liability balance, ending			$	314			$	452

	Self Insured Risks

	Other

8.	RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

F-26

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Table of Contents

F-27

---

Table of Contents

9.	SUBSEQUENT EVENTS

F-28

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Table of Contents

				Page
Article I		DEFINITIONS			A-1
1.1		Certain Definitions			A-1
1.2		Terms Defined Elsewhere in this Agreement			A-7
1.3		Other Definitional and Interpretive Matters			A-9
Article II		PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES			A-10
2.1		Purchase and Sale of Assets			A-10
2.2		Excluded Assets			A-11
2.3		Assumption of Liabilities			A-11
2.4		Excluded Liabilities			A-12
2.5		Further Conveyances and Assumptions; Consent of Third Parties			A-12
2.6		Bulk-Sales Laws			A-13
2.7		Purchase Price Allocation			A-13
2.8		Right to Control Payment			A-13
2.9		Proration of Certain Expenses			A-13
2.10		Accounts Receivable			A-14
Article III		CONSIDERATION			A-14
3.1		Consideration			A-14
3.2		Payment of Purchase Price			A-14
3.3		Indemnity Escrow			A-14
3.4		Closing Statement			A-15
3.5		Purchase Price Adjustment			A-15
3.6		Additional Contingent Consideration			A-17
Article IV		CLOSING AND TERMINATION			A-18
4.1		Closing Date			A-18
4.2		Termination of Agreement			A-18
4.3		Procedure upon Termination			A-20
4.4		Effect of Termination			A-20
4.5		Termination Fee			A-20
Article V		REPRESENTATIONS AND WARRANTIES OF SELLER			A-21
5.1		Organization and Good Standing; No Subsidiaries			A-21
5.2		Authorization of Agreement			A-21
5.3		Conflicts; Consents of Third Parties			A-22
5.4		Financial Statements			A-22
5.5		No Undisclosed Liabilities			A-23
5.6		Title to Purchased Assets; Sufficiency			A-23
5.7		Absence of Certain Developments			A-23
5.8		Taxes			A-24
5.9		Real Property			A-26
5.10		Tangible Personal Property			A-27
5.11		Intellectual Property			A-28
5.12		Material Contracts			A-29

A-i

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				Page
5.13		Employee Benefits			A-31
5.14		Labor			A-33
5.15		Litigation			A-33
5.16		Compliance with Laws; Permits			A-34
5.17		Environmental Matters			A-34
5.18		Insurance			A-35
5.19		Inventories			A-35
5.20		Accounts and Notes Receivable and Payable			A-36
5.21		Related Party Transactions			A-36
5.22		Customers and Suppliers			A-36
5.23		Product Warranty; Product Liability			A-36
5.24		Banks			A-37
5.25		Full Disclosure			A-37
5.26		Financial Advisors			A-37
5.27		Certain Payments			A-37
5.28		Information Supplied			A-37
5.29		Seller’s Financial Condition			A-37
5.30		Limitation of Representations and Warranties			A-38
Article VI		REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER			A-38
6.1		Organization and Good Standing			A-38
6.2		Capital Structure			A-38
6.3		Authorization of Agreement			A-39
6.4		Conflicts; Consents of Third Parties			A-39
6.5		Litigation			A-39
6.6		Financial Advisors			A-39
6.7		Voting Requirements			A-40
6.8		Parent SEC Documents			A-40
6.9		Information Supplied			A-40
6.10		Environmental Matters			A-40
6.11		Financing			A-41
6.12		Full Disclosure			A-41
Article VII		COVENANTS			A-42
7.1		Access to Information			A-42
7.2		Conduct of the Business Pending the Closing			A-42
7.3		Consents			A-44
7.4		Regulatory Approvals			A-44
7.5		Further Assurances			A-45
7.6		No Solicitation by Seller; Etc.			A-45
7.7		Non-Competition; Non-Solicitation; Confidentiality			A-47
7.8		Preservation of Records			A-48
7.9		Publicity			A-48
7.10		Use of Name			A-49
7.11		Environmental Matters			A-49

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				Page
7.12		Cooperation with Financing			A-49
7.13		Monthly Financial Statements			A-49
7.14		Notification of Certain Matters			A-50
7.15		Parent Board of Directors			A-50
7.16		Preparation of the Form S-4 and the Joint Proxy Statement; Stockholder Meetings			A-50
7.17		Dividends			A-51
7.18		Amendment of Rights Plan			A-51
7.19		No Dissolution of Seller			A-51
7.20		Transfer of Certificates of Title			A-51
7.21		Agreements of Rule 145 Affiliates			A-51
7.22		Updating of Schedules			A-52
7.23		Engagement of Actuary			A-52
Article VIII		EMPLOYEES AND EMPLOYEE BENEFITS			A-52
8.1		Employment			A-52
8.2		Standard Procedure			A-52
8.3		Employee Benefits			A-52
8.4		Withdrawal Liability			A-53
Article IX		CONDITIONS TO CLOSING			A-54
9.1		Conditions Precedent to Obligations of Parent and Purchaser			A-54
9.2		Conditions Precedent to Obligations of Seller			A-56
Article X		INDEMNIFICATION			A-57
10.1		Survival of Representations and Warranties			A-57
10.2		Indemnification			A-57
10.3		Indemnification Procedures			A-58
10.4		Limitations on Indemnification for Breaches of Representations and Warranties			A-59
10.5		Tax Treatment of Indemnity Payments			A-60
Article XI		TAXES			A-60
11.1		Transfer Taxes			A-60
11.2		Prorations			A-60
11.3		Cooperation on Tax Matters			A-60
Article XII		RISK OF LOSS			A-60
Article XIII		MISCELLANEOUS			A-61
13.1		Expenses			A-61
13.2		Specific Performance			A-61
13.3		Submission to Jurisdiction; Consent to Service of Process; Arbitration			A-61
13.4		Entire Agreement; Amendments and Waivers			A-62
13.5		Governing Law			A-62
13.6		Notices			A-62
13.7		Severability			A-63
13.8		Binding Effect; Assignment			A-63
13.9		Non-Recourse			A-64
13.10		Counterparts			A-64

A-iii

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Exhibits
	Exhibit  A			Form of Escrow Agreement
	Exhibit  B			Form of Rule 145 Affiliate Agreement
	Exhibit  C			Form of Noncompetition and Nonsolicitation Agreement
	Exhibit  D			Form of Bill of Sale
	Exhibit  E			Form of Assignment and Assumption Agreement
	Exhibit  F			Form of Power of Attorney
	Exhibit  G			Form of Opinion of Seller’s Counsel
	Exhibit  H			Form of Opinion of Parent’s Counsel

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	“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person, and the term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by contract or otherwise.
	“Business” means the business of Seller, including (i) the collection and conversion of animal and poultry by-products from the meat processing and restaurant industries into fats and protein meal products, (ii) the collection, processing and marketing of animal hides, and (iii) the sale of the processed products to livestock and pet food manufacturers, among other customers, throughout the United States and internationally.
	“Business Day” means any day of the year on which national banking institutions in Dallas, Texas are open to the public for conducting business and are not required or authorized to close.
	“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
	“Code” means the Internal Revenue Code of 1986 and the regulations promulgated thereunder, as amended from time to time.
	“commercially reasonable efforts” means the efforts, time and costs a prudent person desirous of achieving a result would use, expend or incur in similar circumstances to achieve such results as expeditiously as possible; provided that such person is not required to expend funds or assume liabilities beyond those that are (i) commercially reasonable in nature and amount in the context of the transaction or (ii) otherwise required to be expended or assumed pursuant to the terms of this Agreement.

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	“Contract” means any written or oral contract, agreement, indenture, note, bond, debenture, mortgage, loan, instrument, lease, license, commitment or other obligation.
	”Documents” means all files, documents, instruments, papers, books, reports, records, tapes, microfilms, photographs, letters, budgets, forecasts, ledgers, journals, title policies, lists of past, present and/or prospective customers, supplier lists, regulatory filings, operating data and plans, technical documentation (design specifications, functional requirements, operating instructions, logic manuals, flow charts, etc.), user documentation (installation guides, user manuals, training materials, release notes, working papers, etc.), marketing documentation (sales brochures, flyers, pamphlets, web pages, etc.), and other similar materials related to the Business and the Purchased Assets, in each case whether or not in electronic form.
	“Employee” means all individuals (including common law employees, independent contractors and individual consultants), as of the date hereof, who are employed or engaged by Seller in connection with the Business, together with individuals who are hired in respect of the Business after the date hereof.
	“Environmental Costs and Liabilities” means, with respect to any Person, all Liabilities and Remedial Actions incurred as a result of any claim or demand by any other Person or in response to any violation of Environmental Law or to the extent based upon, related to, or arising under or pursuant to any Environmental Law, Environmental Permit, order or agreement with any Governmental Body or other Person, or which relates to any environmental, health or safety condition, violation of Environmental Law or a Release or threatened Release of Hazardous Materials, whether known or unknown, accrued or contingent, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute.
	“Environmental Law” means any foreign, federal, state or local law (including common law), statute, code, ordinance, rule, regulation or other legal requirement or obligation in any way relating to pollution, odors, noise, or the protection of human health and safety, the environment or natural resources, including the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. § 9601 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. App. § 1801 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq.), the Clean Water Act (33 U.S.C. § 1251 et seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. § 136 etseq.), and the Occupational Safety and Health Act (29 U.S.C. § 651 et seq.), as each has been amended and the regulations promulgated pursuant thereto.
	“Environmental Permit” means any Permit required by Environmental Laws for the operation of the Business.
	“ERISA” means the Employment Retirement Income Security Act of 1974, as amended.
	“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
	“Excluded Contracts” means the following Contracts and any amendments thereto: (i) the Letter Agreement, by and between First Union Securities, Inc. and Seller, dated as of August 1, 2001; (ii) the Matching Service Agreement, by and between DM Kelly & Company and Seller, dated as of August 9, 2002; (iii) the Unit Appreciation Agreement; (iv) the Seller’s Rights Agreement, dated as of January 1, 1999; and (v) any Contract that cannot be assigned by law or its terms.
	“Former Employee” means all individuals (including common law employees, independent contractors and individual consultants) who were employed or engaged by Seller in connection with the Business but who are no longer so employed or engaged on the date hereof.
	“Fully Diluted Basis” means accounting for all outstanding securities generally entitled to vote in the election of directors of Parent on a fully diluted basis, after giving effect to the exercise or conversion of all options, warrants, rights and other securities exercisable or convertible into such

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	voting securities, which shall include any shares of Parent Common Stock to be issued to Seller on the Closing Date, but not include any stock options for which the exercise price exceeds the Closing Share Price.
	“Furniture and Equipment” means all furniture, furnishings, equipment, vehicles, leasehold improvements not deemed real estate by applicable Laws, and other tangible personal property, including all artwork, desks, chairs, tables, Hardware, copiers, telephone lines and numbers, telecopy machines and other telecommunication equipment, cubicles and miscellaneous office furnishings and supplies, including but not limited to those assets listed on Company Disclosure Schedule 1.1.
	“GAAP” means generally accepted accounting principles in the United States as of the date hereof.
	“Governmental Body” means any government or governmental or regulatory body thereof, or political subdivision thereof, whether foreign, federal, state, or local, or any agency, instrumentality or authority thereof, or any court or arbitrator (public or private).
	“Hardware” means any and all computer and computer-related hardware, including, but not limited to, computers, file servers, facsimile servers, scanners, color printers, laser printers and networks.
	“Hazardous Material” means any substance, material or waste that is regulated, classified, or otherwise characterized under or pursuant to any Environmental Law as “hazardous,” “toxic,” “pollutant,” “contaminant,” “radioactive,” or words of similar meaning or effect, including petroleum and its by-products, asbestos, polychlorinated biphenyls, radon, mold or other fungi and urea formaldehyde insulation.
	“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.
	“Indebtedness” of any Person means, without duplication, (i) the principal, accreted value, accrued and unpaid interest, prepayment and redemption premiums or penalties (if any), unpaid fees or expenses and other monetary obligations in respect of (A) indebtedness of such Person for money borrowed and (B) indebtedness evidenced by notes, debentures, bonds or other similar instruments for the payment of which such Person is responsible or liable; (ii) all obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations of such Person and all obligations of such Person under any title retention agreement (but excluding trade accounts payable and other accrued current liabilities arising in the Ordinary Course of Business); (iii) all obligations of such Person under leases required to be capitalized in accordance with GAAP; (iv) all obligations of such Person for the reimbursement of any obligor on any letter of credit, banker’s acceptance or similar credit transaction that has been drawn upon, including any fees related to such obligations whether or not drawn upon; (v) all obligations of such Person under interest rate or currency swap transactions (valued at the termination value thereof); (vi) the liquidation value, accrued and unpaid dividends and prepayment or redemption premiums and penalties (if any), unpaid fees or expense and other monetary obligations in respect of any and all redeemable preferred stock of such Person; (vii) all checks issued by Seller prior to the Closing Date that remain outstanding as of the Closing Date; (viii) all obligations of the type referred to in clauses (i) through (vii) of any Persons for the payment of which such Person is responsible or liable, directly or indirectly, as obligor, guarantor, surety or otherwise, including guarantees of such obligations; and (ix) all obligations of the type referred to in clauses (i) through (viii) of other Persons secured by (or for which the holder of such obligations has an existing right, contingent or otherwise, to be secured by) any Lien on any property or asset of such Person (whether or not such obligation is assumed by such Person).
	“Intellectual Property” means all right, title and interest in or relating to intellectual property, whether protected, created or arising under the laws of the United States or any other jurisdiction, including: (i) all patents and applications therefor, including all continuations, divisionals and continuations-in-part and patents issuing thereon, along with all reissues, reexaminations, substitutions

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	and extensions thereof (collectively, “Patents”); (ii) all trademarks, service marks, trade names, trade dress, logos, corporate names and other source or business identifiers, together with the goodwill associated with any of the foregoing, along with all applications, registrations, renewals and extensions thereof (collectively, “Marks”); (iii) all Internet domain names; (iv) all copyrights, works of authorship and moral rights, and all registrations, applications, renewals, extensions and reversions of any of the foregoing (collectively, “Copyrights”); (v) trade secrets (“Trade Secrets”); and (vi) all other intellectual property rights arising from or relating to Technology.
	“Intellectual Property Licenses” means (i) any grant by Seller to another Person of any right, permission, consent or non-assertion relating to or under any of the Purchased Intellectual Property and (ii) any grant by another Person to Seller of any right, permission, consent or non-assertion relating to or under any third Person’s Intellectual Property.
	“IRS” means the United States Internal Revenue Service and, to the extent relevant, the United States Department of Treasury.
	“Knowledge of Parent” means the knowledge that Bill McMurtry has or could reasonably be expected to have acquired in the course of performance of his duties for Parent.
	“Knowledge of Seller” means the knowledge that Mark Myers, David Pace, Todd Ferrell and Larry Angotti have or could reasonably be expected to have acquired in the course of performance of their respective duties for Seller.
	“Law” means any foreign, federal, state or local law (including common law), statute, code, ordinance, rule, regulation or other legal requirement or obligation.
	“Legal Proceeding” means any judicial, administrative or arbitral actions, suits, mediations, investigations, inquiries, proceedings or claims (including counterclaims) by or before a Governmental Body.
	“Liability” means any debt, loss, damage, adverse claim, fines, penalties, liability or obligation (whether direct or indirect, known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, matured or unmatured, determined or determinable, disputed or undisputed, liquidated or unliquidated, or due or to become due, and whether in contract, tort, strict liability or otherwise), and including all costs and expenses relating thereto (including all fees, disbursements and expenses of legal counsel, experts, engineers and consultants and costs of investigation).
	“Lien” means any lien, encumbrance, pledge, mortgage, deed of trust, security interest, claim, lease, charge, option, right of first refusal, easement, servitude, proxy, voting trust or agreement, transfer restriction under any shareholder or similar agreement, encumbrance or any other restriction or limitation whatsoever.
	“Material Adverse Effect” means a material adverse effect on (i) the business, assets, properties, prospects, results of operations or financial condition of Seller or of the Business; (ii) the value of the Purchased Assets or a material increase in the amount of Assumed Liabilities; or (iii) the ability of Seller to consummate the transactions contemplated by this Agreement or perform its obligations under this Agreement or the Seller Documents, except Material Adverse Effect shall not include matters affecting the rendering business generally or general economic conditions.
	“Order” means any order, injunction, judgment, doctrine, decree, ruling, writ, assessment or arbitration award of a Governmental Body.
	“Ordinary Course of Business” means the ordinary and usual course of normal day-to-day operations of the Business, as conducted by Seller, through the date of determination consistent with past practice.
	“Parent Common Stock” means the common stock, par value $0.01 per share, of Parent.

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	“Parent Material Adverse Effect” means a material adverse effect on (i) the business, assets, properties, prospects, results of operations or financial condition of Parent or of the business of Parent; or (ii) the ability of Parent or Purchaser to consummate the transactions contemplated by this Agreement or perform its obligations under this Agreement or the Purchaser Documents, except Parent Material Adverse Effect shall not include matters affecting the rendering business generally or general economic conditions.
	“Permits” means any approvals, authorizations, consents, licenses, permits or certificates of a Governmental Body.
	“Permitted Exceptions” means (i) statutory liens for current Taxes, assessments or other governmental charges not yet delinquent or the amount or validity of which is being contested in good faith by appropriate proceedings, provided an appropriate reserve has been established therefor in the Financial Statements in accordance with GAAP; (ii) mechanics’, carriers’, workers’ and repairers’ Liens that do not, individually or in the aggregate, have a Material Adverse Effect and which if filed are being contested in a timely manner pursuant to applicable Law and are properly reserved against in Seller’s books and records in accordance with GAAP; (iii) zoning, entitlement and other land use and environmental regulations by any Governmental Body, provided that if such regulations have been violated, such violations, individually or in the aggregate, do not have a Material Adverse Effect; and (iv) easements, covenants, restrictions and encumbrances which do not, individually or in the aggregate, have a Material Adverse Effect.
	“Person” means any individual, corporation, limited liability company, partnership, firm, joint venture, association, joint-stock company, trust, unincorporated organization, Governmental Body or other entity.
	“Purchased Contracts” means all Contracts of Seller related to the Business other than the Excluded Contracts.
	“Purchased Intellectual Property” means all Intellectual Property (i) owned by Seller and related to the Business or (ii) used by Seller in connection with the Business.
	“Purchased Technology” means all Technology (i) owned by Seller and related to the Business or (ii) used by Seller in connection with the Business, including, without limitation, all Software and other Technology developed by Seller and relating to employees and payroll.
	“Release” means any release, spill, emission, leaking, pumping, pouring, injection, deposit, dumping, emptying, disposal, discharge, dispersal, leaching or migration into the indoor or outdoor environment, or into or out of any property.
	“Remedial Action” means all actions including any capital expenditures undertaken to (i) clean up, remove, treat or in any other way address any Hazardous Material; (ii) prevent the Release or threat of Release, or minimize the further Release of any Hazardous Material so it does not endanger or threaten to endanger public health or welfare or the indoor or outdoor environment; (iii) perform pre-remedial studies and investigations or post-remedial monitoring and care; or (iv) correct a condition of noncompliance with Environmental Laws.
	“SEC” means the United States Securities and Exchange Commission.
	“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
	“Software” means any and all (i) computer programs, including any and all software implementations of algorithms, models and methodologies, whether in source code or object code; (ii) databases and compilations, including any and all data and collections of data, whether machine readable or otherwise; (iii) descriptions, flow-charts and other work product used to design, plan, organize and develop any of the foregoing, screens, user interfaces, report formats, firmware,

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	development tools, templates, menus, buttons and icons; and (iv) all documentation, including user manuals and other training documentation, related to any of the foregoing.
	“Subsidiary” means, with respect to any Person, any other Person of which (i) a majority of the outstanding share capital, voting securities or other equity interests are owned, directly or indirectly, by such Person or (ii) such Person is entitled, directly or indirectly, to appoint a majority of the board of directors or managers or comparable supervisory body of the other Person.
	“Tax” or “Taxes” means (i) any and all federal, state, local or foreign taxes, charges, fees, imposts, levies or other assessments, including, without limitation, all net income, gross receipts, capital, sales, use, ad valorem, value added, transfer, franchise, profits, inventory, capital stock, license, withholding, payroll, employment, social security, unemployment, excise, severance, stamp, occupation, property and estimated taxes, customs duties, fees, assessments and charges of any kind whatsoever; (ii) all interest, penalties, fines, additions to tax or additional amounts of any kind imposed by any Taxing Authority in connection with any item described in clause (i); and (iii) any liability in respect of any items described in clauses (i) and/or (ii) payable by reason of Contract, assumption, transferee liability, operation of law, Treasury Regulation Section 1.1502-6(a) (or any predecessor or successor thereof or any analogous or similar provision under law) or otherwise.
	“Taxing Authority” means the IRS and any other Governmental Body responsible for the administration of any Tax.
	“Tax Return” means any return, report or statement filed or required to be filed with respect to any Tax (including any elections, declarations, schedules or attachments thereto, and any amendment thereof), including any information return, claim for refund, amended return or declaration of estimated Tax, and including, where permitted or required, combined, consolidated or unitary returns for any group of entities that includes Seller or any of its Affiliates.
	“Technology” means, collectively, all Software, information, designs, formulae, algorithms, procedures, methods, techniques, ideas, know-how, research and development, technical data, programs, subroutines, tools, materials, specifications, processes, inventions (whether patentable or unpatentable and whether or not reduced to practice), apparatus, creations, improvements, works of authorship and other similar materials, and all recordings, graphs, drawings, reports, analyses, and other writings, and other tangible embodiments of the foregoing, in any form whether or not specifically listed herein, and all related technology, that are used in, incorporated in, embodied in, displayed by or related to, or are used in connection with the foregoing.
	“Unit Appreciation Agreement” means that certain letter agreement, dated as of December 12, 2001, from Seller to certain employees of Seller, whereby Seller agreed to, among other things, pay a lump sum payment to each such employee upon the termination of his or her employment with Seller for any reason in the amount of (i) the difference between the market value of one membership unit of Seller at the time of such termination and $23, multiplied by (ii) the number of shares of Seller’s capital stock such employee was required to sell as a result of Seller’s conversion from a corporation to a limited liability company on January 11, 2002, as such agreement may have been amended or supplemented.
	“WARN” means the Worker Adjustment and Retraining Notification Act of 1988, as amended, and the rules and regulations promulgated thereunder.

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Term		Section
AAA		13.3(a)
Adjusted Closing Cash Payment		3.4
Agreed Principles		3.4
Agreement		Introductory Paragraph
Antitrust Division		7.4(a)
Antitrust Laws		7.4(b)
Asset Acquisition Statement		2.7
Assumed Liabilities		2.3
Balance Sheet		5.4(a)
Balance Sheet Date		5.4(a)
Basket		10.4(a)
Cash Escrow Amount		3.3
Closing		4.1
Closing Balance Sheet		3.5(a)
Closing Cash Payment		3.1(a)
Closing Date		4.1
Closing Issued Shares		3.1(a)
Closing Share Price		3.1(b)
Closing Statement		3.5(a)
Closing Working Capital		3.5(a)
Company Disclosure Schedule		Article V Introductory Paragraph
Confidential Information		7.7(c)
Confidentiality Agreement		7.1
Copyrights		1.1 (in Intellectual Property definition)
Employee Benefit Plans		5.13(a)
ERISA Affiliate		5.13(a)
ERISA Affiliate Plans		5.13(a)
Escrow Agent		3.3
Escrow Agreement		3.3
Escrowed Shares		3.3
Estimate Statement		3.4
Estimate Statement Delivery Date		3.4
Estimated Closing Balance Sheet		3.4
Excluded Assets		2.2
Excluded Liabilities		2.4
Excluded Properties		5.9(a)
Expenses		4.5(a)
Final Closing Balance Sheet		3.5(e)
Final Working Capital		3.5(e)
Financial Statements		5.4(a)
Financing		9.1(q)
FIRPTA Affidavit		9.1(n)

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Term		Section
Form S-4		5.28
FTC		7.4(a)
Indemnity Escrow Amount		3.3
Independent Accountant		3.5(c)
Initial Closing Working Capital		3.4
Joint Proxy Statement		5.28
Labor Contracts		5.14(a)
Loss and Losses		10.2(a)
Marks		1.1 (in Intellectual Property definition)
Material Contracts		5.12(a)
Monthly Financial Statements		7.13
Multiemployer Plans		5.13(a)
Multiple Employer Plans		5.13(a)
Negative Adjustment		3.4
Net Working Capital		3.4
Nonassignable Assets		2.5(b)
Owned Property and Owned Properties		5.9(a)
Parent		Introductory Paragraph
Parent Disclosure Schedule		Article VI Introductory Paragraph
Parent’s Environmental Assessment		7.11(a)
Parent Indemnified Parties		10.2(a)
Parent Preferred Stock		6.2
Parent SEC Documents		6.8
Parent Stock Plan		6.2
Parent Stockholder Approval		6.7
Parent Stockholders Meeting		7.16(c)
Patents		1.1 (in Intellectual Property definition)
PBGC		5.13(e)
Payoff Indebtedness Amount		3.1(a)
Personal Property Leases		5.10(b)
Plan		8.4(a)
Positive Adjustment		3.4
Purchase Price		3.1(a)
Purchased Assets		2.1
Purchaser		Introductory Paragraph
Purchaser Documents		6.3
Purchaser Plans		8.3
Qualified Plans		5.13(c)
Real Property Lease and Real Property Leases		5.9(a)
Related Persons		5.21
Remaining Issued Shares		3.6(b)(ii)
Representatives		7.6(a)
Restricted Business		7.7(a)
Rule 145 Affiliate		7.21

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Term		Section
Seller		Introductory Paragraph
Seller’s Environmental Assessment		7.11(b)
Seller Adverse Recommendation Change		7.6(c)
Seller Adverse Recommendation Notice		7.6(c)
Seller Board Recommendation		7.16(b)
Seller Documents		5.2(a)
Seller Indemnified Parties		10.2(b)
Seller Marks		7.10
Seller Permits		5.16(b)
Seller Property and Seller Properties		5.9(a)
Seller Unitholder Approval		5.2(b)
Seller Unitholders Meeting		7.16(b)
Superior Proposal		7.6(d)
Survival Period		10.1
Takeover Proposal		7.6(d)
Target Share Price		3.6(b)(i)
Target Working Capital		3.4
Term Sheet		6.11
Termination Date		4.2(a)
Termination Fee		4.5(a)
Third Party Claim		10.3(b)
Total Consideration		3.1(a)
Trade Secrets		1.1 (in Intellectual Property definition)
Transaction		Recitals
Transfer Taxes		11.1
Transferred Employees		8.1
True-Up Date		3.6(a)
True-Up Market Price		3.6(a)
True-Up Shares		3.6(b)(iii)
Unitholders		3.2(b)
Unresolved Claims		3.3
Value Gap		3.6(b)(ii)

	Calculation of Time Period. When calculating the period of time before which, within which or following which, any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded. If the last day of such period is a non-Business Day, the period in question shall end on the next succeeding Business Day.
	Dollars. Any reference in this Agreement to $ shall mean U.S. dollars.
	Gender and Number. Any reference in this Agreement to gender shall include all genders, and words imparting the singular number only shall include the plural and vice versa.

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	Headings. The provision of a Table of Contents, the division of this Agreement into Articles, Sections and other subdivisions and the insertion of headings are for convenience of reference only and shall not affect or be utilized in construing or interpreting this Agreement. All references in this Agreement to any “Section” are to the corresponding Section of this Agreement unless otherwise specified.
	Herein. The words such as “herein,” “hereinafter,” “hereof,” and “hereunder” refer to this Agreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires.
	Including. The word “including” or any variation thereof means (unless the context of its usage requires otherwise) “including, but not limited to,” and shall not be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it.

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	(a) the Excluded Contracts;
	(b) all minute books, organizational documents, stock registers and such other books and records of Seller as pertain to ownership, organization or existence of Seller and duplicate copies of such records as are necessary to enable Seller to file tax returns and reports;
	(c) except as set forth on Company Disclosure Schedule 2.2(c), all shares of capital stock or other equity securities of Seller or held by Seller with respect to any other Person;
	(d) the real estate in Denver, Colorado referred to by Seller as the “closed Pepcol plant,” which is described more fully on Company Disclosure Schedule 2.2(d);
	(e) a limited partnership interest in the Marriott Hotel located at 7th and Grand, Des Moines, Iowa, which is described more fully on Company Disclosure Schedule 2.2(e); and
	(f) all ownership interests in International By Products, S. de R.L. de C.V.

	(a) all liabilities of Seller under the Purchased Contracts;
	(b) all accounts payable incurred in the Ordinary Course of Business;
	(c) all Liabilities arising out of, under or in connection with any Indebtedness of Seller and accounted for in the calculation of Final Working Capital hereunder; and
	(d) all Liabilities reflected, including reserves therefor, on the Final Closing Balance Sheet, excluding all Liabilities referred to in Section 2.4.

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	(a) all Liabilities in respect of any products sold and/or services performed by Seller on or before the Closing Date;
	(b) except to the extent specifically provided in Article VIII, all Liabilities arising out of, relating to or with respect to (i) the employment or performance of services, or termination of employment or services by Seller or any of its Affiliates of any individual on or before the Closing Date, (ii) workers’ compensation claims against Seller that relate to the period on or before the Closing Date, irrespective of whether such claims are made prior to or after the Closing, (iii) any Employee Benefit Plan, (iv) Seller’s Long-Term Incentive Plan;
	(c) all Liabilities arising out of, under or in connection with Excluded Contracts and, with respect to Purchased Contracts, Liabilities in respect of a breach by or default of Seller accruing under such Contracts with respect to any period prior to Closing;
	(d) all Liabilities for (i) Seller’s portion of Transfer Taxes, (ii) Taxes of Seller or any Subsidiary (or any predecessor thereof), (iii) Taxes that relate to the Purchased Assets or the Assumed Liabilities for taxable periods (or portions thereof) ending on or before the Closing Date, including, without limitation, Taxes allocable to Seller pursuant to Section 11.2, and (iv) payments under any Tax allocation, sharing or similar agreement (whether oral or written);
	(e) all Liabilities in respect of any pending or threatened Legal Proceeding, or any claim arising out of, relating to or otherwise in respect of (i) the operation of the Business to the extent such Legal Proceeding or claim relates to such operation on or prior to the Closing Date, or (ii) any Excluded Asset;
	(f) all Liabilities relating to any dispute with any client or customer of the Business existing as of the Closing Date or based upon, relating to or arising out of events, actions, or failures to act prior to the Closing Date; and
	(g) all Liabilities or obligations of Seller relating to the business, operations, assets or Liabilities of any Subsidiary or former Subsidiary of Seller based upon, relating to or arising out of events, actions or failures to act prior to the Closing Date.

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	(i) First, the “Target Share Price” shall be determined by dividing (A) $70.5 million by (B) the aggregate number of Closing Issued Shares (as adjusted for any stock split, stock dividend, combination or recapitalization);
	(ii) Second, the “Value Gap” shall be determined by multiplying (A) the aggregate number of Closing Issued Shares (including without duplication the Escrowed Shares, but excluding any Escrowed Shares released to Parent in accordance with the terms of the Escrow Agreement, and as adjusted for any stock split, stock dividend, combination or recapitalization), less the number of any such Closing Issued Shares (as so adjusted) transferred by the Unitholders (except transfers by gift or into trust) on or after the Closing Date (the “Remaining Issued Shares”) by (B) the difference between (x) the Target Share Price and (y) the higher of the True-Up Market Price or $3.60 (as adjusted for any stock split, stock dividend, combination or recapitalization); provided that the difference in subclause (B) is a positive number, if not, then the “Value Gap” shall be zero; and
	(iii) Third, the number of additional shares of Parent Common Stock to be issued in accordance with this Section 3.6 (the “True-Up Shares”) shall be determined by dividing (A) the Value Gap by (B) the higher of (x) the True-Up Market Price and (y) $3.60 (as adjusted for any stock split, stock dividend, combination or recapitalization), rounded to the nearest whole number.

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	(a) At the election of Seller or Parent on or after May 15, 2006 (such date, as it may be extended under this Section 4.2(a), the “Termination Date”) if the Closing shall not have occurred by the close of business on such date; provided, that the terminating party is not in material default of any of its obligations hereunder; and provided further, that (A) either Parent or Seller shall have the option to extend, from time to time, the Termination Date for additional periods of time, not to exceed 60 days in the aggregate (or such longer period as Parent and Seller may mutually agree) if all other conditions to the Closing are satisfied or capable of then being satisfied and the sole reason that the Closing has not been consummated is that the condition set forth in Section 7.4 has not been satisfied due to the failure to obtain the necessary consents and approvals under applicable Laws or an Order of a Governmental Body of competent jurisdiction shall be in effect and Parent, Purchaser or Seller are still attempting to obtain such necessary consents and approvals under applicable Laws, or are contesting (x) the refusal of the relevant Governmental Body to give such consents or approvals, or (y) the entry of any such Order, in court or through other applicable proceedings; and (B) the right to terminate this Agreement pursuant to this Section 4.2(a) shall not be available to any party whose breach of any provision of this Agreement has been the cause of, or resulted, directly or indirectly, in, the failure of the Closing to be consummated by the Termination Date;
	(b) by mutual written consent of Seller and Parent;
	(c) by written notice (i) from Parent to Seller that there has been an event, change, occurrence or circumstance that, individually or in the aggregate, with any other events, changes, occurrences or circumstances, has had or could reasonably be expected to have a Material Adverse Effect or (ii) from Seller to Parent that there has been an event, change, occurrence or circumstance that, individually or in the aggregate, with any other events, changes, occurrences or circumstances, has had or could reasonably be expected to have a Parent Material Adverse Effect;
	(d) by Seller or Parent if there shall be in effect a final nonappealable Order of a Governmental Body of competent jurisdiction restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated hereby; provided, however, that the right to terminate this Agreement under this Section 4.2(d) shall not be available to a party if such Order was primarily due to the failure of such party to perform any of its obligations under this Agreement;
	(e) by Parent, if Seller shall have breached or failed to perform any of its representations, warranties, covenants or agreements set forth in this Agreement, or if any representation or warranty of Seller shall have become untrue, in either case such that the conditions set forth in Section 9.1(a) or 9.1(b) would not be satisfied and such breach is incapable of being cured or, if capable of being

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	cured, shall not have been cured within fifteen days following receipt by Seller of notice of such breach from Parent;
	(f) by Seller, if Parent shall have breached or failed to perform any of its representations, warranties, covenants or agreements set forth in this Agreement, or if any representation or warranty of Parent shall have become untrue, in either case such that the conditions set forth in Section 9.2(a) or 9.2(b) would not be satisfied and such breach is incapable of being cured or, if capable of being cured, shall not have been cured within fifteen days following receipt by Parent of notice of such breach from Seller;
	(g) by Parent if (i) a Seller Adverse Recommendation Change shall have occurred or (ii) the Board of Managers of Seller or any committee thereof (x) shall not have rejected any Takeover Proposal within fifteen (15) Business Days of the making thereof (including, for these purposes, by taking no position with respect to the acceptance by Seller’s unitholders of a tender offer or exchange offer, which shall constitute a failure to reject such Takeover Proposal) or (y) shall have failed to publicly reconfirm the Seller Board Recommendation within fifteen (15) Business Days after receipt of a written request from Parent that it do so if such request is made following the making by any Person of a Takeover Proposal;
	(h) by Seller or Parent if the Seller Unitholder Approval shall not have been obtained at the Seller Unitholders Meeting duly convened therefor or at any adjournment or postponement thereof; provided, however, that the right of Seller to terminate this Agreement under this Section 4.2(h) shall not be available to it if it has failed to comply in all material respects with its obligations under Section 7.6 or 7.16(b);
	(i) by Seller or Parent if the Parent Stockholder Approval shall not have been obtained at the Parent Stockholders Meeting duly convened therefor or at any adjournment or postponement thereof; provided, however, that the right of Parent to terminate this Agreement under this Section 4.2(i) shall not be available to it if it has failed to comply in all material respects with its obligations under Section 7.16(c);
	(j) by Parent on or before February 28, 2006, if (i) Parent’s Environmental Assessment (as defined in Section 7.11(a) below) at Seller’s properties shall have revealed any circumstances that could reasonably be expected to result in (A) the criminal prosecution of Seller or any director, officer or employee of Seller under Environmental Laws, (B) any suspension or closure of operations at Seller’s properties or facilities or the revocation or termination of any material Environmental Permits or (C) any Environmental Costs and Liabilities that, individually or in the aggregate, will or could reasonably be expected to result in expenditures to cure in excess of the amounts reserved therefor on the Balance Sheet by at least $2.75 million, or (ii) Parent’s operational due diligence review of Seller shall have revealed any deficiencies in the Purchased Assets that indicate that Parent would not be able to continue to operate the combined businesses of Parent and Seller for the year following Closing at a capital expenditure cost equal to or less than 150% of the current annual capital expenditure budgets of Parent and Seller, on a combined basis; or
	(k) by Seller on or before February 28, 2006, if (i) Seller’s Environmental Assessment (as defined in Section 7.11(b) below) at Parent’s properties shall have revealed any circumstances that could reasonably be expected to result in (A) the criminal prosecution of Parent or any director, officer or employee of Parent under Environmental Laws, (B) any suspension or closure of operations at Parent’s properties or facilities or the revocation or termination of any material Environmental Permits or (C) any Environmental Costs and Liabilities that, individually or in the aggregate, will or could reasonably be expected to result in expenditures to cure in excess of the amounts reserved therefor on Parent’s balance sheet as at October 1, 2005 by at least $2.75 million, or (ii) Seller’s operational due diligence review of Parent shall have revealed any deficiencies in Parent’s assets that indicate that Parent would not be able to continue to operate the combined businesses of Parent and Seller for the year following Closing at a capital expenditure cost equal to or less than 150% of the current annual capital expenditure budgets of Parent and Seller, on a combined basis.

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	(i) there has not been any damage, destruction or loss, whether or not covered by insurance, with respect to the Purchased Assets having a replacement cost of more than $500,000 for any single loss or $1.0 million for all such losses;
	(ii) other than in the Ordinary Course of Business, Seller has not awarded or paid any bonuses to Former Employees or Employees of Seller, except to the extent accrued on the Balance Sheet, or

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	entered into any employment, deferred compensation, long-term incentive, severance, stay bonus, bonus, or similar agreement (nor amended any such agreement) or agreed to increase the compensation payable or to become payable by it to any of Seller’s directors, officers, employees, agents or representatives or agreed to increase the coverage or benefits available under any severance pay, termination pay, vacation pay, company awards, salary continuation for disability, sick leave, deferred compensation, bonus or other incentive compensation, insurance, pension or other employee benefit plan, payment or arrangement made to, for or with such directors, officers, employees, agents or representatives;
	(iii) there has not been any change by Seller in accounting or Tax reporting principles, methods or policies;
	(iv) Seller has not failed to promptly pay and discharge current Liabilities except for Liabilities not material in amount that are disputed in good faith by appropriate proceedings and for which proper reserve has been made on the Balance Sheet;
	(v) Seller has not made any capital investment in, any loan to, or any acquisition of the securities or assets of, any other Person, other than advances to Employees in the Ordinary Course of Business;
	(vi) Seller has not mortgaged, pledged or subjected to any Lien any of its assets, or acquired any assets or sold, assigned, transferred, conveyed, leased or otherwise disposed of any assets of Seller, except for assets acquired or sold, assigned, transferred, conveyed, subjected to any Lien or otherwise disposed of in the Ordinary Course of Business;
	(vii) Seller has not discharged or satisfied any Lien, or paid any Liability, except in the Ordinary Course of Business;
	(viii) Seller has not canceled or compromised any debt or claim or amended, modified, canceled, terminated, relinquished, waived or released any Contract or right except in the Ordinary Course of Business and which, in the aggregate, would not be material to Seller;
	(ix) Seller has not issued, created, incurred, assumed or guaranteed any Indebtedness, except in the Ordinary Course of Business;
	(x) Seller has not made or committed to make any capital expenditures (a) in excess of planned capital expenditures budgeted for the current fiscal year and as reasonably deemed to be necessary by Seller for next fiscal year consistent with prior practice or (b) which require any payment that may or will extend beyond the Closing Date;
	(xi) Seller has not instituted or settled any material Legal Proceeding resulting in a loss of revenue in excess of $50,000 individually or in amounts exceeding $100,000 in the aggregate;
	(xii) Seller has not granted any license or sublicense of any rights under or with respect to any Purchased Intellectual Property or Purchased Technology;
	(xiii) Seller has not made any loan to, or entered into any other transaction with, any of its Unitholders, Affiliates, officers, directors, partners or employees, except for any advances made to Employees in the Ordinary Course of Business; and
	(xiv) Seller has not agreed, committed, arranged or entered into any understanding to do anything set forth in this Section 5.7.

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	(i) Contracts with any current or former officer, director, member or Affiliate of Seller;
	(ii) Contracts with any labor union or association representing any Employee of Seller;
	(iii) Contracts for the sale of any of the assets of Seller other than in the Ordinary Course of Business or for the grant to any Person of any preferential rights to purchase any of its assets;
	(iv) Contracts for joint ventures, strategic alliances, partnerships, or sharing of profits or proprietary information;
	(v) Contracts containing covenants of Seller not to compete in any line of business or with any Person in any geographical area or not to solicit or hire any Person with respect to employment or

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	covenants of any other Person not to compete with Seller in any line of business or in any geographical area or not to solicit or hire any Person with respect to employment;
	(vi) Contracts relating to the acquisition (by merger, purchase of stock or assets or otherwise) by Seller of any operating business or material assets or the capital stock of any other Person;
	(vii) Contracts relating to the incurrence, assumption or guarantee of any Indebtedness or imposing a Lien on any of the assets of Seller, including indentures, guarantees, loan or credit agreements, sale and leaseback agreements, purchase money obligations incurred in connection with the acquisition of property, mortgages, pledge agreements, security agreements, or conditional sale or title retention agreements;
	(viii) each purchase Contract giving rise to Liabilities of Seller in excess of $100,000;
	(ix) each Contract providing for payments by or to Seller in excess of $100,000 in any fiscal year or $250,000 in the aggregate during the term thereof;
	(x) all Contracts obligating Seller to provide or obtain products or services for a period of one year or more or requiring Seller to purchase or sell a stated portion of its requirements or outputs;
	(xi) Contracts under which Seller has made advances or loans to any other Person, except advances to Employees of Seller in the Ordinary Course of Business;
	(xii) Contracts providing for severance, retention, change in control or other similar payments;
	(xiii) Contracts for the employment of any individual on a full-time, part-time or consulting or other basis providing annual compensation in excess of $100,000;
	(xiv) management Contracts and Contracts with independent contractors or consultants (or similar arrangements) in excess of $100,000 that are not cancelable without penalty or further payment and without more than 30 days’ notice;
	(xv) outstanding Contracts of guaranty, surety or indemnification, direct or indirect, by Seller;
	(xvi) Contracts (or group of related contracts) which involve the expenditure of more than $100,000 annually or $250,000 in the aggregate or require performance by any party more than one year from the date hereof;
	(xvii) All Intellectual Property Licenses, royalty Contracts and other Contracts relating to any Intellectual Property (except licenses pertaining to “off-the-shelf” commercially available Software used pursuant to shrink-wrap or click-through license grants on reasonable terms for a license fee of no more than $10,000); and
	(xviii) Contracts that are otherwise material to Seller.

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	(a) the operations of Seller, with respect to the Business, are and have been in compliance with all applicable Environmental Laws, which compliance includes obtaining, maintaining in good standing and complying with all Environmental Permits necessary to operate the Business except for non-compliance that would not reasonably be expected to result in the Business incurring material Environmental Costs and Liabilities and no action or proceeding is pending or, to the Knowledge of Seller, threatened to revoke, modify or terminate any such Environmental Permit, which is necessary and material to the operation of the Business, and, to the Knowledge of Seller, no facts, circumstances or conditions currently exist that could adversely affect such continued material compliance with Environmental Laws and Environmental Permits or require currently unbudgeted capital expenditures to achieve or maintain such continued material compliance with Environmental Laws and Environmental Permits;
	(b) with respect to the Business, Seller is not the subject of any outstanding written Order or Contract with any Governmental Body or Person respecting (i) Environmental Laws, (ii) Remedial Action or (iii) any Release or threatened Release of a Hazardous Material;
	(c) no claim is pending or to the Knowledge of Seller, threatened against Seller, alleging, with respect to the Business, that Seller may be in violation of any Environmental Law or any Environmental Permit or may have any Liability under any Environmental Law including, but not limited to, claims relating to noise or odors, other than such claims that are routine in nature and would not, individually or in the aggregate, result in the Business incurring material Environmental Costs and Liabilities;
	(d) to the Knowledge of Seller, no facts, circumstances or conditions exist with respect to the Business or any property currently or formerly owned, operated or leased by Seller or any property to which Seller arranged for the disposal or treatment of Hazardous Materials that could reasonably be expected to result in the Business incurring unbudgeted material Environmental Costs or Liabilities;

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	(e) to the Knowledge of Seller, there are no investigations of the Business, or currently or previously owned, operated or leased property of Seller pending or threatened which could reasonably be expected to lead to the imposition of any material Environmental Costs or Liabilities or Liens under Environmental Law;
	(f) the transactions contemplated hereunder do not require the consent of or filings with any Governmental Body with jurisdiction over Seller and environmental matters, and none of the Owned Property or Real Property Leases is located in New Jersey or Connecticut;
	(g) there is not located at any of the Owned Property or Real Property Leases, or at any property previously owned, operated or leased by Seller during Seller’s ownership, operation or lease, any (i) underground storage tanks, (ii) landfill, (iii) surface impoundment, (iv) asbestos-containing material or (v) equipment containing polychlorinated biphenyls;
	(h) Seller with respect to the Business has no residual liability with respect to abandoned or former properties, including any obligation to remove or demolish on-site structures or close wastewater lagoons or ponds, and, to the Knowledge of Seller, no Owned Property or Real Property Leases have any structures or features, including abandoned buildings or wastewater lagoons or ponds (other than those being used in compliance with Environmental Laws) requiring removal, demolition, or closure; and
	(i) Seller has made or will make available to Parent prior to January 15, 2006 all material environmentally related audits, studies, reports, analyses and results of investigations that have been performed with respect to any currently or previously owned, leased or operated properties of Seller or material documentation relating to pending or threatened claims or investigations pursuant to Environmental Laws, to the extent such materials are in the possession, custody or control of Seller.

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(a) the operations of Parent, with respect to its business, are and have been in compliance with all applicable Environmental Laws, which compliance includes obtaining, maintaining in good standing and complying with all Environmental Permits necessary to operate its business except for non-compliance that would not reasonably be expected to result in the Business incurring material Environmental Costs and Liabilities and no action or proceeding is pending or, to the Knowledge of

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	Parent, threatened to revoke, modify or terminate any such Environmental Permit, which is necessary and material to the operation of the Business, and, to the Knowledge of Parent, no facts, circumstances or conditions currently exist that could adversely affect such continued material compliance with Environmental Laws and Environmental Permits or require currently unbudgeted capital expenditures to achieve or maintain such continued material compliance with Environmental Laws and Environmental Permits;
	(b) with respect to its business, Parent is not the subject of any outstanding written Order or Contract with any Governmental Body or Person respecting (i) Environmental Laws, (ii) Remedial Action or (iii) any Release or threatened Release of a Hazardous Material;
	(c) no claim is pending or to the Knowledge of Parent, threatened against Parent, alleging, with respect to its business, that Parent may be in violation of any Environmental Law or any Environmental Permit or may have any Liability under any Environmental Law including, but not limited to, claims relating to noise or odors, other than such claims that are routine in nature and would not, individually or in the aggregate, result in the Business incurring material Environmental Costs and Liabilities;
	(d) to the Knowledge of Parent, no facts, circumstances or conditions exist with respect to its business or any property currently or formerly owned, operated or leased by Parent or any property to which Parent arranged for the disposal or treatment of Hazardous Materials that could reasonably be expected to result in Parent’s business incurring unbudgeted material Environmental Costs or Liabilities;
	(e) to the Knowledge of Parent, there are no investigations of its business, or currently or previously owned, operated or leased property of Parent pending or threatened which could reasonably be expected to lead to the imposition of any material Environmental Costs or Liabilities or Liens under Environmental Law;
	(f) there is not located at any of Parent’s owned or leased real property, or at any property previously owned, operated or leased by Parent during Parent’s ownership, operation or lease, any (i) underground storage tanks, (ii) landfill, (iii) surface impoundment, (iv) asbestos-containing material or (v) equipment containing polychlorinated biphenyls;
	(g) Parent with respect to its business has no residual liability with respect to abandoned or former properties, including any obligation to remove or demolish on-site structures or close wastewater lagoons or ponds, and, to the Knowledge of Parent, none of Parent’s owned or leased real property have any structures or features, including abandoned buildings or wastewater lagoons or ponds (other than those being used in compliance with Environmental Laws) requiring removal, demolition, or closure; and
	(h) Parent has made or will make available to Seller prior to January 15, 2006 all material environmentally related audits, studies, reports, analyses and results of investigations that have been performed with respect to any currently or previously owned, leased or operated properties of Parent or material documentation relating to pending or threatened claims or investigations pursuant to Environmental Laws, to the extent such materials are in the possession, custody or control of Parent.

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	(i) conduct the Business only in the Ordinary Course of Business;
	(ii) use its commercially reasonable efforts to (A) preserve the present business operations, organization (including officers and Employees) and goodwill of Seller and (B) preserve the present relationships with Persons having business dealings with Seller (including customers and suppliers);
	(iii) maintain (A) all of the assets and properties of, or used by, Seller consistent with past practice, and (B) insurance upon all of the assets and properties of Seller in such amounts and of such kinds comparable to that in effect on the date of this Agreement;
	(iv) (A) maintain the books, accounts and records of Seller in the Ordinary Course of Business, (B) continue to collect accounts receivable and pay accounts payable utilizing normal procedures and without discounting or accelerating payment of such accounts, and (C) comply with all contractual and other obligations of Seller;

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	(v) comply with the capital expenditure plan of Seller for 2005 set forth on Company Disclosure Schedule 7.2(a)(v), including making such capital expenditures in the amounts and at the times set forth in such plan;
	(vi) comply in all material respects with all applicable Laws;
	(vii) take steps to renew all Permits in a timely manner prior to their lapse; and
	(viii) pay all maintenance and similar fees and take all other appropriate actions as necessary to prevent the abandonment, loss or impairment of all Purchased Intellectual Property.

	(i) (A) increase the salary or other compensation of any director or Employee of Seller except for normal year-end increases in the Ordinary Course of Business, (B) grant any bonus, benefit or other direct or indirect compensation to any Employee or director, (C) increase the coverage or benefits available under any (or create any new) severance pay, termination pay, vacation pay, company awards, salary continuation for disability, sick leave, deferred compensation, bonus or other incentive compensation, insurance, pension or other employee benefit plan or arrangement made to, for, or with any of the directors, officers, Employees, agents or representatives of Seller or otherwise modify or amend or terminate any such plan or arrangement or (D) enter into any employment, deferred compensation, stay bonus, severance, special pay, consulting, non-competition or similar agreement or arrangement with any directors or officers of Seller (or amend any such agreement) to which Seller is a party;
	(ii) (A) create, incur, assume, guarantee, endorse or otherwise become liable or responsible with respect to (whether directly, contingently or otherwise) any Indebtedness except as set forth on Company Disclosure Schedule 5.7; (B) except in the Ordinary Course of Business, pay, repay, discharge, purchase, repurchase or satisfy any Indebtedness issued or guaranteed by Seller; (C) modify the terms of any Indebtedness or other Liability; or (D) make any loans, advances of capital contributions to, or investments in, any other Person;
	(iii) subject to any Lien or otherwise encumber or, except for Permitted Exceptions, permit, allow or suffer to be subjected to any Lien or otherwise encumbered, any of the properties or assets (whether tangible or intangible) of Seller;
	(iv) acquire any material properties or assets or sell, assign, license, transfer, convey, lease or otherwise dispose of any of the Purchased Assets (except for fair consideration in the Ordinary Course of Business) of Seller;
	(v) enter into or agree to enter into any merger or consolidation with any Person, and not engage in any new business or invest in, make a loan, advance or capital contribution to, or otherwise acquire the securities of any Person;
	(vi) cancel or compromise any debt or claim, or waive or release any material right of Seller except in the Ordinary Course of Business;
	(vii) enter into, modify or terminate any labor or collective bargaining agreement or, through negotiation or otherwise, make any commitment or incur any Liability to any labor organization with respect to any Employee;
	(viii) introduce any material change with respect to the operation of the Business, including any material change in the types, nature, composition or quality of products or services, or, other than in the Ordinary Course of Business, make any change in product specifications or prices or terms of distributions of such products;
	(ix) enter into any transaction or enter into, modify or renew any Contract which by reason of its size or otherwise is not in the Ordinary Course of Business;

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	(x) enter into any Contract, understanding or commitment that restrains, restricts, limits or impedes the ability of the Business, or the ability of Parent or Purchaser, to compete with or conduct any business or line of business in any geographic area or solicit the employment of any persons;
	(xi) terminate, amend, restate, supplement or waive any rights under any (A) Material Contract, Real Property Lease, Personal Property Lease or Intellectual Property License, other than in the Ordinary Course of Business or (B) Permit;
	(xii) settle or compromise any pending or threatened Legal Proceeding or any claim or claims for, or that would result in a loss of revenue of, an amount that could, individually or in the aggregate, reasonably be expected to be greater than $25,000;
	(xiii) change or modify its credit, collection or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) or fail to pay or delay payment of payables or other liabilities;
	(xiv) take any action which would adversely affect the ability of the parties to consummate the transactions contemplated by this Agreement;
	(xv) amend the operating agreement or By-laws of Seller; or
	(xvi) agree to do anything (A) prohibited by this Section 7.2, (B) that would make any of the representations and warranties of Seller in this Agreement or any of the Seller Documents untrue or incorrect in any material respect or could result in any of the conditions to the Closing not being satisfied or (C) that could be reasonably expected to have a Material Adverse Effect.

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	“Takeover Proposal” means any inquiry, proposal or offer from any Person or “group” (as defined in Section 13(d) of the Exchange Act), other than Parent and its Subsidiaries, relating to any (i) direct or indirect acquisition (whether in a single transaction or a series of related transactions) of assets of Seller equal to 15% or more of Seller’s assets or to which 15% or more of Seller’s revenues or earnings are attributable, (ii) direct or indirect acquisition (whether in a single transaction or a series of related transactions) of 15% or more of any class of equity securities of Seller, (iii) tender offer or exchange offer that if consummated would result in any Person or “group” (as defined in Section 13(d) of the Exchange Act) beneficially owning 15% or more of any class of equity securities of Seller or (iv) merger, consolidation, share exchange, business combination, recapitalization, liquidation, dissolution or similar transaction involving Seller; in each case, other than the transactions contemplated by this Agreement.
	“Superior Proposal” means a bona fide written offer, obtained after the date hereof and not in breach of this Agreement, to acquire, directly or indirectly, for consideration consisting of cash and/or securities, all of the equity securities of Seller or all or substantially all of the assets of Seller, made by a third party, which is otherwise on terms and conditions which the Board of Managers of Seller determines in its good faith and reasonable judgment (after consultation with outside counsel and a financial advisor) to be more favorable to Seller’s unitholders from a financial point of view than the transactions contemplated by this Agreement, taking into account at the time of determination any changes to the terms of this Agreement that as of that time had been proposed by Parent in writing and the ability of the Person making such proposal to consummate the transactions contemplated by such proposal (based upon, among other things, the availability of financing and the expectation of obtaining required approvals).

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	(a) the representations and warranties of Seller set forth in this Agreement qualified as to materiality shall be true and correct, and those not so qualified shall be true and correct in all material respects, as of the date of this Agreement and as of the Closing as though made at and as of the Closing, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties qualified as to materiality shall be true and correct, and those not so qualified shall be true and correct in all material respects, on and as of such earlier date); provided, however, in the event of any breach of a representation or warranty of Seller set forth in this Agreement, the condition set forth in this Section 9.1(a) shall be deemed satisfied unless the effect of all such breaches of representations and warranties taken together could reasonably be expected to have a Material Adverse Effect.
	(b) Seller shall have performed and complied in all material respects with all obligations and agreements required in this Agreement to be performed or complied with by it on or prior to the Closing Date;
	(c) there shall not have been or occurred any event, change, occurrence or circumstance that, individually or in the aggregate, with any other events, changes, occurrences or circumstances, has had or which could reasonably be expected to have a Material Adverse Effect;
	(d) Parent shall have received a certificate signed by the Chief Executive Officer of Seller, in form and substance reasonably satisfactory to Parent, dated the Closing Date, to the effect that each of the conditions specified above in Sections 9.1(a)-(c) have been satisfied in all respects;
	(e) With respect to each Owned Property, Parent shall have received a binding commitment from a title company of Parent’s choice , the costs of which will be borne one-half by Parent and one-half by Seller, to issue a policy of title insurance on such Owned Property, which shall show title thereto to be in the condition represented by Seller herein, and shall otherwise be reasonably satisfactory to Parent, shall contain exceptions only for Permitted Exceptions (all Liens, other than Permitted Exceptions, including all Liens set forth on Company Disclosure Schedule 5.9(a)(i)(A)), being satisfied by Seller prior to Closing, and satisfactory evidence thereof provided to Parent and its title company on or before Closing), and shall show no rights of occupancy or use by third parties other than tenants under Real Property Leases, no encroachments, and no gaps in the chain of title, the cost of the cure of which shall be borne by Seller;
	(f) Parent shall have received, from Parent’s surveyor, an ALTA/ ACSM Class A Land Title Survey with respect to each Owned Property, which does not reveal any fact or condition which has not been previously disclosed to Parent and which is otherwise reasonably satisfactory to Parent, the cost of which surveys shall be borne equally by Seller and Parent;
	(g) Seller shall have delivered to Parent’s title company any certifications, gap and lien indemnities and title and survey affidavits, commonly delivered in transactions involving the sale of real property in which title insurance is purchased, as may be requested by the title company in connection with the issuance of title insurance for Parent or its lenders, together with copies of formation documents, incumbency certificates, certificates of good standing and consents or resolutions as are requested by said title company;
	(h) there shall not be in effect any Order by a Governmental Body of competent jurisdiction restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated hereby;

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	(i) (i) the waiting period under the HSR Act shall have expired and Seller shall have obtained any consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Body set forth on Company Disclosure Schedule 5.3(b) required to be obtained or made in connection with the execution and delivery of this Agreement or the performance of the transactions contemplated hereby and (ii) Seller shall have obtained all consents waivers and approvals under all Antitrust Laws and those consents, waivers and approvals referred to in Section 5.3(b) hereof in a form satisfactory to Parent;
	(j) the Form S-4 shall have become effective under the Securities Act and no stop order suspending the effectiveness of the Form S-4 shall have been issued and no proceedings for that purpose shall have been initiated or threatened by the SEC;
	(k) the Seller Unitholder Approval shall have been obtained in accordance with applicable Law and the operating agreement and By-laws of Seller;
	(l) the Parent Stockholder Approval shall have been obtained in accordance with applicable Law and the certificate of incorporation and by-laws of Parent;
	(m) the shares of Parent Common Stock deliverable to the Unitholders as contemplated by this Agreement shall have been approved for listing on The American Stock Exchange, subject to official notice of issuance;
	(n) Seller shall have provided Parent with an affidavit of non-foreign status of Seller that complies with Section 1445 of the Code (a “FIRPTA Affidavit”);
	(o) Each of Mark Myers, David Pace and Larry Angotti shall have entered into an employment agreement on terms satisfactory to Parent, and such employment agreements shall be in full force and effect;
	(p) Dean Carlson shall have executed and delivered a noncompetition and nonsolicitation agreement substantially in the form attached hereto as Exhibit C;
	(q) Purchaser shall have obtained proceeds from the financing set forth in the Term Sheet on the terms and conditions set forth therein (or otherwise reasonably satisfactory to Parent) (the “Financing”);
	(r) Parent shall have received the appropriate consents required under Parent’s senior credit facility and subordinated debt facility;
	(s) Seller shall have delivered, or caused to be delivered, to Purchaser a duly executed bill of sale in the form of Exhibit D hereto and other documents and instruments of transfer reasonably requested by Purchaser or Purchaser’s title company;
	(t) Seller shall have delivered, or cause to be delivered, to Purchaser duly executed general warranty deeds in forms appropriate for each state in which Owned Real Property is located (other than for the Excluded Properties) and, if requested by Purchaser, separate assignments for the Real Property Leases; provided, however, that Seller may deliver special warranty deeds in lieu of general warranty deeds for certain Owned Real Property if title insurance has been obtained for such Owned Real Property;
	(u) Seller shall have obtained the issuance, reissuance or transfer of all Permits (including Environmental Permits) set forth on Company Disclosure Schedule 5.16(b) for Purchaser to conduct the operations of Business as of the Closing Date, and Seller shall have satisfied all property transfer requirements arising under Law, including Environmental Laws;
	(v) Seller shall have delivered, or caused to be delivered, to Purchaser a duly executed assignment and assumption agreement in the form of Exhibit E hereto and duly executed assignments of the registrations and applications included in the Purchased Intellectual Property, in a form reasonably acceptable to Purchaser and suitable for recording in the U.S. Patent and Trademark

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	Office, U.S. Copyright Office or equivalent foreign agency, as applicable, and general assignments of all other Purchased Intellectual Property;
	(w) Seller shall have delivered, or caused to be delivered, to Purchaser, a duly executed power of attorney in the form of Exhibit F hereto;
	(x) Seller shall have delivered, or caused to be delivered, to Parent an opinion of Nyemaster, Goode, West, Hansell & O’Brien PC, counsel to Seller, in substantially the form of Exhibit G hereto and permitting reliance thereupon by Parent’s lenders;
	(y) Seller shall have delivered all instruments and documents necessary to release any and all Liens, other than Permitted Exceptions, on the Purchased Assets, including appropriate UCC financing statement amendments (termination statements);
	(z) appropriate payoff letters relating to the Payoff Indebtedness Amount in form and substance reasonably satisfactory to Parent;
	(aa) the opinion of Harris Nesbitt Corp. dated as of December 16, 2005 delivered to the Board of Directors of Parent shall not have been withdrawn or materially modified due solely to a Material Adverse Effect;
	(bb) Seller shall have delivered, or caused to be delivered, to Purchaser copies of all consents, waivers and approvals referred to in Section 9.1(i)(ii); and
	(cc) Seller shall have delivered, or caused to be delivered, to Parent such other documents as Parent may reasonably request.

	(a) the representations and warranties of Parent and Purchaser set forth in this Agreement qualified as to materiality shall be true and correct, and those not so qualified shall be true and correct in all material respects, as of the date of this Agreement and as of the Closing as though made at and as of the Closing, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties qualified as to materiality shall be true and correct, and those not so qualified shall be true and correct in all material respects, on and as of such earlier date); provided, however, in the event of any breach of a representation or warranty of Parent or Purchaser set forth in this Agreement, the condition set forth in this Section 9.2(a) shall be deemed satisfied unless the effect of all such breaches of representations and warranties taken together could reasonably be expected to have a Parent Material Adverse Effect;
	(b) Parent and Purchaser shall have performed and complied in all material respects with all obligations and agreements required by this Agreement to be performed or complied with by Parent and Purchaser on or prior to the Closing Date;
	(c) there shall not have occurred any event, change, occurrence or circumstance that, individually or in the aggregate with any other events, changes, occurrences or circumstances, has had or which could reasonably be expected to have a Parent Material Adverse Effect;
	(d) Seller shall have received certificates signed by the Chief Executive Officer of each of Parent and Purchaser, in form and substance reasonably satisfactory to Seller, dated the Closing Date, to the effect that each of the conditions specified above in Sections 9.2(a)-(c) have been satisfied in all respects;
	(e) there shall not be in effect any Order by a Governmental Body of competent jurisdiction restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated hereby;

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	(f) the waiting period under the HSR Act shall have expired and Parent shall have obtained or made any other consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Body set forth on Parent Disclosure Schedule 6.4 required to be obtained or made by it in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby;
	(g) the Form S-4 shall have become effective under the Securities Act and no stop order suspending the effectiveness of the Form S-4 shall have been issued and no proceedings for that purpose shall have been initiated or threatened by the SEC;
	(h) the Seller Unitholder Approval shall have been obtained in accordance with applicable Law and the operating agreement and by-laws of Seller;
	(i) the Parent Stockholder Approval shall have been obtained in accordance with applicable Law and the certificate of incorporation and by-laws of Parent;
	(j) the shares of Parent Common Stock deliverable to the Unitholders as contemplated by this Agreement shall have been approved for listing on The American Stock Exchange, subject to official notice of issuance;
	(k) Parent shall have delivered, or caused to be delivered, to Seller evidence of the wire transfer referred to in Section 3.2 hereof;
	(l) Purchaser shall have delivered, or caused to be delivered, to Seller a duly executed assignment and assumption agreement in the form attached hereto as Exhibit E hereto;
	(m) Parent and Purchaser shall have delivered, or caused to be delivered, to Seller an opinion of Weil, Gotshal & Manges LLP, counsel to Parent and Purchaser, in substantially the form of Exhibit H hereto; and
	(n) the opinion of Philip Schneider & Associates, Inc. dated as of December 16, 2005 delivered to the Board of Managers of Seller shall not have been withdrawn or materially modified due solely to a Parent Material Adverse Effect.

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	(i) based upon, attributable to or resulting from the failure of any of the representations or warranties made by Seller in this Agreement or in any Seller Document to be true and correct in all respects at and as of the date hereof and at and as of the Closing Date;
	(ii) based upon, attributable to or resulting from the breach of any covenant or other agreement on the part of Seller under this Agreement or in any Seller Document;
	(iii) any Liability of Seller under WARN arising on or before the Closing Date; and
	(iv) arising out of, based upon or relating to any Excluded Asset or any Excluded Liability.

	(i) based upon, attributable to or resulting from the failure of any of the representations or warranties made by Parent or Purchaser in this Agreement or in any Purchaser Document to be true and correct in all respects at the date hereof and as of the Closing Date;
	(ii) based upon, attributable to or resulting from the breach of any covenant or other agreement on the part of Parent or Purchaser under this Agreement or any Purchaser Document; and
	(iii) arising out of, based upon or relating to any Assumed Liability.

	For greater clarity and subject to the limitations contained in this Article X, Losses can be recovered on behalf of the Unitholders by Seller.

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	National By-Products, LLC
	1020 Locust Street
	Des Moines, IA 50303
	Attention: Mark A. Myers, President
	Facsimile: 888-937-6556

	Nyemaster, Goode, West, Hansell & O’Brien PC
	700 Walnut Street, Suite 1600
	Des Moines, IA 50309-3899
	Attention: Carlton T. King
	Facsimile: 525-283-3108

	Darling International Inc.
	251 O’Connor Ridge Blvd., Suite 300
	Irving, Texas 75038
	Facsimile: 972-281-4475
	Attn: General Counsel

	Weil, Gotshal & Manges LLP
	200 Crescent Court, Suite 300
	Dallas, Texas 75201
	Facsimile: 214-746-7777
	Attention: Mary R. Korby, Esq.

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	DARLING INTERNATIONAL INC.

	By:	/s/ Randall C. Stuewe

	Randall C. Stuewe
	Chief Executive Officer
	DARLING NATIONAL LLC

	By:	/s/ Randall C. Stuewe

	Randall C. Stuewe
	Chief Executive Officer
	NATIONAL BY-PRODUCTS, LLC

	By:	/s/ Mark A. Myers

	Mark A. Myers
	President

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		Harris Nesbitt Corp. 111 West Monroe Street Chicago, IL 60603
		www.harrisnesbitt.com

	•	The draft Asset Purchase Agreement;
	•	Audited financial statements of the Seller for fiscal years 2001 through 2004;

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	•	Internal financial statements of the Seller for fiscal years 2001 through 2004 and for the interim periods ended October 1, 2004 and September 30, 2005;
	•	Projected financial statements of Seller for the fiscal years 2005 through 2010 prepared by the Company’s management;
	•	Certain publicly available SEC filings of the Company including, but not limited to the Form 10-K for the fiscal year ended January 1, 2005 and the Form 10-Q for the quarterly period ended October 1, 2005;
	•	Projected financial statements of the Company for the fiscal years 2005 and 2006 prepared by management of the Company;
	•	A draft financial due diligence report dated November 10, 2005 provided by the Company and prepared by its financial due diligence advisor;
	•	Independent third party research and estimates; and
	•	Certain other information provided by the Seller and the Company’s management.

	•	Reviewed certain financial and stock market information for selected publicly traded companies that we deemed to be relevant;
	•	Reviewed the financial terms, to the extent publicly available, of selected recent acquisitions of companies in the Company’s industry which we deemed to be relevant; and
	•	Performed such other studies and analyses, and conducted such discussions, as we considered appropriate.

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	490.1301 Definitions.

	1. “Affiliate” means a person that directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with another person or is a senior executive thereof. For purposes of section 490.1302, subsection 2, paragraph “d”, a person is deemed to be an affiliate of its senior executives.
	2. “Beneficial shareholder” means a person who is the beneficial owner of shares held in a voting trust or by a nominee on the beneficial owner’s behalf.
	3. “Corporation” means the issuer of the shares held by a shareholder demanding appraisal. In addition, for matters covered in sections 490.1322 through 490.1331, “corporation” includes the surviving entity in a merger.
	4. “Fair value” means the value of the corporation’s shares determined according to the following:

	a. Immediately before the effectuation of the corporate action to which the shareholder objects.
	b. Using customary and current valuation concepts and techniques generally employed for similar businesses in the context of the transaction requiring appraisal.
	c. Without discounting for lack of marketability or minority status except, if appropriate, for amendments to the articles pursuant to section 490.1302, subsection 1, paragraph “e.”

	5. “Interest” means interest from the effective date of the corporate action until the date of payment, at the rate of interest on judgments in this state on the effective date of the corporate action.
	6. “Preferred shares” means a class or series of shares whose holders have preference over any other class or series with respect to distributions.
	7. “Record shareholder” means the person in whose name shares are registered in the records of the corporation or the beneficial owner of shares to the extent of the rights granted by a nominee certificate on file with the corporation.
	8. “Senior executive” means the chief executive officer, chief operating officer, chief financial officer, and anyone in charge of a principal business unit or function.
	9. “Shareholder” means both a record shareholder and a beneficial shareholder.

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	490.1302 Shareholders’ right to appraisal.

	a. Consummation of a merger to which the corporation is a party if either of the following apply:

	(1) Shareholder approval is required for the merger by section 490.1104 and the shareholder is entitled to vote on the merger, except that appraisal rights shall not be available to any shareholder of the corporation with respect to shares of any class or series that remain outstanding after consummation of the merger.
	(2) The corporation is a subsidiary and the merger is governed by section 490.1105.

	b. Consummation of a share exchange to which the corporation is a party as the corporation whose shares will be acquired, if the shareholder is entitled to vote on the exchange, except that appraisal rights shall not be available to any shareholder of the corporation with respect to any class or series of shares of the corporation that is not exchanged.
	c. Consummation of a disposition of assets pursuant to section 490.1202 if the shareholder is entitled to vote on the disposition.
	d. An amendment of the articles of incorporation with respect to a class or series of shares that reduces the number of shares of a class or series owned by the shareholder to a fraction of a share if the corporation has the obligation or right to repurchase the fractional share so created.
	e. Any other amendment to the articles of incorporation, merger, share exchange, or disposition of assets to the extent provided by the articles of incorporation, bylaws, or a resolution of the board of directors.

	a. Appraisal rights shall not be available for the holders of shares of any class or series of shares:

	(1) Listed on the New York stock exchange or the American stock exchange or designated as a national market system security on an interdealer quotation system by the national association of securities dealers, inc.
	(2) Not so listed or designated, but has at least two thousand shareholders and the outstanding shares of such class or series has a market value of at least twenty million dollars, exclusive of the value of such shares held by its subsidiaries, senior executives, directors, and beneficial shareholders owning more than ten percent of such shares.

	b. The applicability of paragraph “a” shall be determined according to the following:

	(1) The record date fixed to determine the shareholders entitled to receive notice of, and to vote at, the meeting of shareholders to act upon the corporate action requiring appraisal rights.
	(2) The day before the effective date of such corporate action if there is no meeting of shareholders.

c. Paragraph “a” shall not be applicable and appraisal rights shall be available pursuant to subsection 1 for the holders of any class or series of shares who are required by the terms of the corporate action requiring appraisal rights to accept for such shares anything other than cash or shares of any class or any series of shares of any corporation, or any other proprietary interest of any other entity, that satisfies the standards set forth in paragraph “a,” at the time the corporate action becomes effective.

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	d. Paragraph “a” shall not be applicable and appraisal rights shall be available pursuant to subsection 1 for the holders of any class or series of shares where any of the following applies:

	(1) Any of the shares or assets of the corporation are being acquired or converted, whether by merger, share exchange, or otherwise, pursuant to the corporate action by a person, or by an affiliate of a person, who fulfills either of the following:

	(a) Is, or at any time in the one-year period immediately preceding approval by the board of directors of the corporate action requiring appraisal rights was, the beneficial owner of twenty percent or more of the voting power of the corporation, excluding any shares acquired pursuant to an offer for all shares having voting power if such offer was made within one year prior to the corporate action requiring appraisal rights for consideration of the same kind and of a value equal to or less than that paid in connection with the corporate action.
	(b) Directly or indirectly has, or at any time in the one-year period immediately preceding approval by the board of directors of the corporation of the corporate action requiring appraisal rights had, the power, contractually or otherwise, to cause the appointment or election of twenty-five percent or more of the directors to the board of directors of the corporation.

(2) Any of the shares or assets of the corporation are being acquired or converted, whether by merger, share exchange, or otherwise, pursuant to such corporate action by a person, or by an affiliate of a person, who is, or at any time in the one-year period immediately preceding approval by the board of directors of the corporate action requiring appraisal rights was, a senior executive or director of the corporation or a senior executive of any affiliate thereof, and that senior executive or director will receive, as a result of the corporate action, a financial benefit not generally available to other shareholders as such, other than any of the following:

	(a) Employment, consulting, retirement, or similar benefits established separately and not as part of or in contemplation of the corporate action.
	(b) Employment, consulting, retirement, or similar benefits established in contemplation of, or as part of, the corporate action that are not more favorable than those existing before the corporate action or, if more favorable, that have been approved on behalf of the corporation in the same manner as is provided in section 490.832.
	(c) In the case of a director of the corporation who will, in the corporate action, become a director of the acquiring entity in the corporate action or one of its affiliates, rights and benefits as a director that are provided on the same basis as those afforded by the acquiring entity generally to other directors of such entity or such affiliate.

e. For the purposes of paragraph “d” only, the term “beneficial owner” means any person who, directly or indirectly, through any contract, arrangement, or understanding, other than a revocable proxy, has or shares the power to vote, or to direct the voting of, shares, provided that a member of a national securities exchange shall not be deemed to be a beneficial owner of securities held directly or indirectly by such member on behalf of another person solely because the member is the record holder of such securities if the member is precluded by the rules of such exchange from voting without instruction on contested matters or matters that may affect substantially the rights or privileges of the holders of the securities to be voted. When two or more persons agree to act together for the purpose of voting their shares of the corporation, each member of the group formed thereby shall be deemed to have acquired beneficial ownership, as of the date of such agreement, of all voting shares of the corporation beneficially owned by any member of the group.

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	a. It was not effectuated in accordance with the applicable provisions of division X, XI, or XII or the corporation’s articles of incorporation, bylaws, or board of directors’ resolution authorizing the corporate action.
	b. It was procured as a result of fraud or material misrepresentation.

	490.1303 Assertion of rights by nominees and beneficial owners.

	a. Submits to the corporation the record shareholder’s written consent to the assertion of such rights no later than the date referred to in section 490.1322, subsection 2, paragraph “b,” subparagraph (2).
	b. Does so with respect to all shares of the class or series that are beneficially owned by the beneficial shareholder.

	490.1320 Notice of appraisal rights.

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	490.1321 Notice of intent to demand payment.

	a. Deliver to the corporation before the vote is taken written notice of the shareholder’s intent to demand payment if the proposed action is effectuated.
	b. Not vote, or cause or permit to be voted, any shares of such class or series in favor of the proposed action.

	490.1322 Appraisal notice and form.

	a. Be accompanied by a form that specifies the date of the first announcement to shareholders of the principal terms of the proposed corporate action and requires the shareholder asserting appraisal rights to certify whether or not beneficial ownership of those shares for which appraisal rights are asserted was acquired before that date, and that the shareholder did not vote for the transaction.
	b. State all of the following:

	(1) Where the form must be sent and where certificates for certificated shares must be deposited and the date by which those certificates must be deposited, which date shall not be earlier than the date for receiving the required form under subparagraph (2).
	(2) A date by which the corporation must receive the form, which date shall not be fewer than forty nor more than sixty days after the date the appraisal notice and form are sent under subsection 1, and state that the shareholder shall have waived the right to demand appraisal with respect to the shares unless the form is received by the corporation by such specified date.
	(3) The corporation’s estimate of the fair value of the shares.
	(4) That, if requested in writing, the corporation will provide, to the shareholder so requesting, within ten days after the date specified in subparagraph (2) the number of shareholders who return the forms by the specified date and the total number of shares owned by them.
	(5) The date by which the notice to withdraw under section 490.1323 must be received, which date must be within twenty days after the date specified in subparagraph (2).

	c. Be accompanied by a copy of this division.

	490.1323 Perfection of rights — right to withdraw.

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	490.1324 Payment.

	a. Financial statements of the corporation that issued the shares to be appraised, consisting of a balance sheet as of the end of a fiscal year ending not more than sixteen months before the date of payment, an income statement for that year, a statement of changes in shareholders’ equity for that year, and the latest available interim financial statements, if any.
	b. A statement of the corporation’s estimate of the fair value of the shares, which estimate must equal or exceed the corporation’s estimate given pursuant to section 490.1322, subsection 2, paragraph “b,” subparagraph (3).
	c. A statement that shareholders described in subsection 1 have the right to demand further payment under section 490.1326 and that if any such shareholder does not do so within the time period specified therein, such shareholder shall be deemed to have accepted the payment to the shareholder pursuant to subsection 1 in full satisfaction of the corporation’s obligations under this chapter.

	490.1325 After-acquired shares.

	a. Of the information required by section 490.1324, subsection 2, paragraph “a.”
	b. Of the corporation’s estimate of fair value pursuant to section 490.1324, subsection 2, paragraph “b.”

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	c. That they may accept the corporation’s estimate of fair value, plus interest, in full satisfaction of their demands or demand appraisal under section 490.1326.
	d. That those shareholders who wish to accept such offer must notify the corporation of their acceptance of the corporation’s offer within thirty days after receiving the offer.
	e. That those shareholders who do not satisfy the requirements for demanding appraisal under section 490.1326 shall be deemed to have accepted the corporation’s offer.

	490.1326 Procedure if shareholder dissatisfied with payment or offer.

	490.1330 Court action.

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	a. The amount, if any, by which the court finds the fair value of the shareholder’s shares, plus interest, exceeds the amount paid by the corporation to the shareholder for such shares.
	b. The fair value, plus interest, of the shareholder’s shares for which the corporation elected to withhold payment under section 490.1325.

	490.1331 Court costs and counsel fees.

	a. Against the corporation and in favor of any or all shareholders demanding appraisal if the court finds the corporation did not substantially comply with the requirements of section 490.1320, 490.1322, 490.1324, or 490.1325.
	b. Against either the corporation or a shareholder demanding appraisal, in favor of any other party, if the court finds that the party against whom the fees and expenses are assessed acted arbitrarily, vexatiously, or not in good faith with respect to the rights provided by this chapter.

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	Article 10

	Article 11

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	Section 1.

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	Section 2.

	Section 3.

	Section 4.

	Section 5.

	Section 6.

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	Section 7.

	Section 8.

	Section 9.

Item 21.	Exhibits and Financial Statement Schedules

Item 22.	Undertakings

	(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:

	(a) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
	(b) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective Registration Statement; and
	(c) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

	(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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	(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
	The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
	The undersigned Registrant hereby undertakes as follows:
	(1) that prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other Items of the applicable form;
	(2) that every prospectus: (i) that is filed pursuant to paragraph (1) immediately preceding, or (ii) that purports to meet the requirements of section 10(a)(3) of the Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

	The undersigned Registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request; and
	The undersigned Registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

II-5

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	DARLING INTERNATIONAL INC.

	By:	/s/ John O. Muse

	John O. Muse
	Executive Vice President -
	Finance and Administration

Signature				Title		Date
/s/ Randall C. Stuewe Randall C. Stuewe				Chairman of the Board and Chief Executive Officer (Principal Executive Officer		February 2, 2006
/s/ John O. Muse John O. Muse				Executive Vice President - Finance and Administration (Principal Financing and Accounting Officer)		February 2, 2006
/s/ O. Thomas Albrecht O. Thomas Albrecht				Director		February 2, 2006
/s/ Kevin S. Flannery Kevin S. Flannery				Director		February 2, 2006
/s/ Fredric J. Klink Fredric J. Klink				Director		February 2, 2006
/s/ Charles Macaluso Charles Macaluso				Director		February 2, 2006
/s/ Michael Urbut Michael Urbut				Director		February 2, 2006

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Exhibit No.				Description of Exhibit
	2	.1		Asset Purchase Agreement, dated as of December 19, 2005, among Darling International Inc., Darling National LLC and National By-Products, LLC (included as Annex A to the joint proxy statement/ prospectus included in this Registration Statement).
	4	.1		Specimen Common Stock Certificate (filed as Exhibit 4.1 to the Company’s Registration Statement on Form S-1 filed May 27, 1994 and incorporated herein by reference).
	5	.1*		Opinion of Weil, Gotshal & Manges, LLP as to the validity of the securities being registered.
	21	.1		Subsidiaries of the Registrant (filed herewith).
	23	.1		Consent of KPMG LLP (filed herewith).
	23	.2		Consent of Deloitte & Touche LLP (filed herewith).
	23	.3*		Consent of Weil, Gotshal & Manges LLP (included as part of Exhibit 5.1 to this Registration Statement).
	23	.4*		Consent of Harris Nesbitt Corp.
	23	.5*		Consent of Philip Schneider & Associates, Inc.
	99	.1		Form of Darling Proxy Card (filed herewith).
	99	.2		Form of National By-Products Proxy Card (filed herewith).

*	To be filed by amendment.