INTRODUCTION
This Amendment No. 3 to the Transaction Statement on Schedule 13E-3 (as originally filed on June
1, 2022 and amended on July 1, 2022 and July 7, 2022, and together with all exhibits thereto and hereto, this “Amended Transaction Statement”), is being filed with the Securities and Exchange Commission (the “SEC”) by
(i) Blueknight Energy Partners, L.P., a Delaware limited partnership (the “Partnership”), (ii) Blueknight Energy Partners G.P., L.L.C., a Delaware limited liability company and the general partner of the Partnership (the “General
Partner”), (iii) Ergon, Inc., a Mississippi corporation (“Ergon”), (iv) Ergon Asphalt & Emulsions, Inc., a Mississippi corporation and wholly owned subsidiary of Ergon (“Parent”) and (v) Merle, LLC, a Delaware
limited liability company and wholly owned subsidiary of Parent (“Merger Sub”). Collectively, the persons filing this Amended Transaction Statement are referred to as the “filing persons.”
Except as otherwise set forth below, the information set forth in the Amended Transaction Statement remains unchanged and is incorporated by
reference into this Amendment No. 3.
This Amended Transaction Statement relates to the Agreement and Plan of Merger, dated as of
April 21, 2022, by and among Parent, Merger Sub, the General Partner and the Partnership (the “Merger Agreement”). Pursuant to the Merger Agreement, Merger Sub merged with and into the Partnership, with the Partnership surviving as a
wholly owned subsidiary of Parent (the “Merger”). Under the terms of the Merger Agreement, at the effective time of the Merger, (i) each issued and outstanding common unit representing a limited partner interest in the Partnership
(each, a “Common Unit”) other than Common Units owned by Parent, the Partnership and their subsidiaries (each, a “Public Common Unit”) was converted into the right to receive $4.65 in cash without any interest thereon (the
“Common Unit Merger Consideration”), and (ii) each issued and outstanding Series A Preferred Unit of the Partnership (each, a “Preferred Unit”), other than Preferred Units owned by Parent, the Partnership and their
subsidiaries (each, a “Public Preferred Unit”) was converted into the right to receive $8.75 in cash without any interest thereon (the “Preferred Unit Merger Consideration” and, together with the Common Unit Merger Consideration,
the “Merger Consideration”). In connection with the Merger, (i) the General Partner’s non-economic general partner interest in the Partnership, (ii) the incentive distribution rights
held by the General Partner and (iii) the Common Units and the Preferred Units owned by Parent and its subsidiaries, in each case, were not cancelled, were not converted into the right to receive the Merger Consideration and remain outstanding
following the Merger. Immediately prior to the effective time of the Merger, all restricted units and phantom units outstanding immediately prior to the effective time fully vested, and each holder of such units received an amount equal to the
Merger Consideration with respect to each such unit that vested pursuant to the terms of the Merger Agreement.
A committee (the “GP
Conflicts Committee”) of the board of directors of the General Partner (the “GP Board”) consisting of three directors who meet the qualifications set forth in the Fourth Amended and Restated Agreement of Limited Partnership of the
Partnership, dated as of September 14, 2011 (the “Partnership Agreement”), for membership on the Conflicts Committee, has unanimously and in good faith (i) determined that the Merger Agreement and the transactions contemplated
thereby, including the Merger, are (A) fair and reasonable to the holders of the Public Common Units (the “Partnership Unaffiliated Common Unitholders”) and (B) in the best interest of the Partnership and the Partnership
Unaffiliated Common Unitholders, (ii) approved the Merger Agreement and the transactions contemplated thereby, including the Merger (the foregoing actions described in clauses (i) and (ii) constituting Special Approval (as defined in the
Partnership Agreement)), (iii) recommended that the GP Board approve the Merger Agreement, the execution, delivery and performance of the Merger Agreement and the consummation of the transactions contemplated thereby, including the Merger,
(iv) recommended that the GP Board submit the Merger Agreement and the Merger to a vote of the unitholders, and (v) recommended approval of the Merger Agreement and the Merger by the Partnership Unaffiliated Common Unitholders. The GP
Board reserved for itself the determination of whether the proposed transaction was fair and reasonable to the Partnership Unaffiliated Preferred Unitholders as the GP Conflicts Committee could not represent the interests of both the Partnership
Unaffiliated Common Unitholders and the Partnership Unaffiliated Preferred Unitholders and as the Preferred Units are a security with a fixed return and a fixed conversion ratio that do not participate in the growth or other upside of the
Partnership.
Following the receipt of the recommendation of the GP Conflicts Committee, the GP Board unanimously and in good faith
(i) determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, are (A) fair and reasonable to the Partnership Unaffiliated Common Unitholders and the Partnership Unaffiliated Preferred Unitholders
and (B) in the best interest of the Partnership, (ii) approved the Merger Agreement, the execution, delivery and performance of the Merger Agreement and the consummation of the transactions contemplated thereby, including the Merger,
(iii) resolved to submit the Merger Agreement and the Merger to a vote of the limited partners (including the holders of Preferred Units) and (iv) recommended approval of the Merger Agreement and the Merger by the limited partners
(including the holders of Preferred Units).
Completion of the Merger was subject to certain customary conditions, including, among
others, approval of the Merger Agreement and the Merger, which required (i) the affirmative vote of holders of a majority of the issued and outstanding Common Units and Preferred Units (voting on an “as if” converted to Common Unit
basis), voting as a single class based on one vote per Unit, and (ii) the affirmative vote of holders of a majority of the issued and outstanding Preferred Units, voting separately as a class based on one vote per Preferred Unit (such
approvals, collectively, the “Partnership Unitholder Approval”). Pursuant to the Partnership Agreement, the Preferred Units are convertible on a one-to-one
basis into Common Units at the option of the unitholder.
Concurrently with the execution of the Merger Agreement, the Partnership entered
into a support agreement (the “Support Agreement”) with Parent whereby Parent agreed to vote or cause the 2,745,837 Common Units and 20,801,757 Preferred Units (voting on an “as if” converted basis) it owns to be voted in favor
of the Merger, the adoption of the Merger Agreement and any other matter necessary or desirable for the consummation of the transactions contemplated by the Merger Agreement, including the Merger.
The Partnership filed with the SEC a definitive proxy statement (the “Proxy Statement”) under Section 14(a) of the Act with
respect to the special meeting of Unitholders, at which Unitholders were asked to consider and vote on, among other things, the proposal to approve the Merger Agreement and transactions contemplated thereby, including the Merger. The Proxy Statement
was first mailed to Unitholders on or about July 8, 2022. The special meeting of Unitholders was convened on August 16, 2022 and on such date, the Unitholders voted to approve the Merger Agreement and the transactions contemplated thereby,
including the Merger.