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As Filed with the Securities and Exchange Commission on April 5, 2001

Registration No. 333-  



SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM S-4
REGISTRATION STATEMENT
Under
The Securities Act of 1933


ARGOSY GAMING COMPANY
(Exact name of Registrant as specified in its charter)

Delaware       37-1304247
(State or other jurisdiction of
incorporation or organization)
      (I.R.S. Employer
Identification No.)
    and its Guarantor Subsidiaries    
Illinois   Alton Gaming Company   37-1261292
Iowa   Argosy of Iowa, Inc.   37-1333417
Louisiana   Argosy of Louisiana, Inc.   72-1265121
Louisiana   Catfish Queen Partnership in Commendam   72-1274791
Louisiana   Centroplex Centre Convention Hotel, L.L.C.   72-1452613
Indiana   The Indiana Gaming Company   37-1314871
Indiana   Indiana Gaming Holding Company   36-4420489
Indiana   Indiana Gaming Company, L.P.   37-1314886
Indiana   Indiana Gaming II, L.P.   36-4420492
Iowa   Iowa Gaming Company   37-1329487
Iowa   Belle of Sioux City, L.P.   42-1428577
Louisiana   Jazz Enterprises, Inc.   72-1214771
Missouri   The Missouri Gaming Company   37-1311505
(State of other jurisdiction of
incorporation or organization)
  (Exact name of Registrant as specified in its charter)   (I.R.S. Employer
Identification Number)

219 Piasa Street
Alton, Illinois 62002
(618) 474-7500
(Address, including zip code, and telephone number, including area code, of Registrant's principal executive office)


James B. Perry
President and Chief Executive Officer
Argosy Gaming Company
219 Piasa Street
Alton, Illinois 62002
(618) 474-7500
(Name, address, including zip code, and telephone number, including area code, of agent for service)


Copy to:

R. Cabell Morris, Jr.
Winston & Strawn
35 West Wacker Drive
Chicago, Illinois 60601
(312) 558-5600


   Approximate date of commencement of proposed sale to public: As soon as practicable after this Registration Statement becomes effective.


   If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box: / /

   If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: / /

   If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: / /


CALCULATION OF REGISTRATION FEE


Title of Each Class of
Securities to be Registered

  Amount to
be Registered

  Proposed Maximum
Offering Price
Per Security(1)

  Proposed Maximum
Aggregate Offering Price

  Amount of
Registration Fee


103/4% Senior Subordinated Notes due 2009   $150,000,000   100%   $150,000,000   $37,500

Guarantee of the 103/4% Senior Subordinated Notes due 2009   $150,000,000   None(2)   None(2)   None(2)

(1)
Estimated in accordance with Rule 457 under the Securities Act of 1933, as amended, solely for purpose of computing the registration fee.
(2)
Pursuant to Rule 457(n) under the Securities Act of 1933, no separate fee is payable for the guarantee.


   The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.




The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

PROSPECTUS (Subject to Completion, Dated April 5, 2001)

LOGO

OFFER TO EXCHANGE

$150,000,000 OF OUR 103/4% SENIOR SUBORDINATED NOTES DUE 2009


    The notes mature on June 1, 2009.

    The notes (1) rank equally with all of our other unsecured senior subordinated indebtedness, (2) are junior to our senior indebtedness, and (3) are guaranteed by substantially all of our wholly-owned subsidiaries, which guarantees will be junior in right of payment to the senior indebtedness of each of those subsidiaries.

    The notes bear interest at the rate of 103/4% per year, payable on June 1 and December 1 of each year.

    The terms of the registered notes we will issue in the exchange offer will be substantially identical to the terms of the restricted notes, except that transfer restrictions and registration rights relating to the restricted notes will not apply to the registered notes.

    The exchange offer expires at 5:00 p.m., New York City time,             , 2001, unless we extend it.

    All restricted notes that are validly tendered in the exchange offer and not withdrawn will be exchanged.

    Tenders of restricted notes may be withdrawn at any time before the expiration of the exchange offer.

    There is no public market for the notes.

    We will not receive any proceeds from the exchange offer. We will pay the expenses of the exchange offer.


Before participating in this exchange offer, please refer to the section in this prospectus entitled "Risk Factors," beginning on page 12.


Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these registered notes or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is             , 2001.



TABLE OF CONTENTS

Disclosure Regarding Forward-Looking Statements   ii
Where You Can Find More Information   iii
Incorporation of Documents by Reference   iii
Summary   1
Risk Factors   12
Capitalization   20
Selected Historical Consolidated Financial Data   21
Pro Forma Consolidated Financial Data   23
Management's Discussion and Analysis of Financial Condition and Results of Operations   28
The Exchange Offer   35
The Company   45
Management   54
Description of Certain Indebtedness   56
Description of Notes   57
Certain United States Federal Income Tax Considerations   104
Plan of Distribution   104
Legal Matters   106
Experts   106
Index to Financial Statements   F-1

    You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information different from that contained in this prospectus. We are offering to sell, and seeking offers to buy, the registered notes only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of the registered notes.


    Market data and certain industry forecasts used throughout this prospectus were obtained from internal surveys, market research, publicly available information and industry publications. Industry publications generally state that the information contained therein has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed. Similarly, internal surveys, industry forecasts and market research, while believed to be reliable, have not been independently verified, and Argosy Gaming Company makes no representation as to the accuracy of such information.


    Neither Argosy Gaming Company nor any of its representatives is making any representation to you regarding the legality of an investment in the registered notes by you under applicable legal investment or similar laws. You should consult with your own advisors as to legal, tax, business, financial, and related aspects of a purchase of the registered notes.

i



DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

    The information contained in this prospectus and in the other documents referenced or incorporated herein contains forward-looking statements that involve a number of risks and uncertainties. All statements regarding our expected financial position, business, strategies and financing plans under the headings "Summary," "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "The Company" and elsewhere in this prospectus or in the other documents referenced or incorporated herein are forward-looking statements. In addition, you can identify forward-looking statements in those and other portions of this prospectus or in the other documents referenced or incorporated herein by the use of terminology such as "believes," "estimates," "plans," "intends," "expects," "may," "will," "should," "seeks," "pro forma" or "anticipates," or other variations thereof (including their use in the negative), or by discussions of strategies, plans or intentions. Although we believe that the expectations reflected in the forward-looking statements are reasonable, and have based these expectations on our beliefs as well as assumptions we have made, such expectations may prove to be incorrect. A number of factors could cause results to differ materially from those anticipated by the forward-looking statements. Among these factors are:

    general economic conditions in our markets;

    increased competition in our markets, including the legalization of gaming in states adjacent to our operations;

    our dependence on our Lawrenceburg, Indiana casino;

    our substantial leverage; and

    changes in laws or regulations, joint venture relations or decisions of courts, regulators and governmental bodies.

    The information contained in this prospectus and in the other documents referenced or incorporated in this prospectus, including the Risk Factors section, identifies important factors that could cause actual results to differ from the expectations stated in the forward-looking statements. You are urged to consider these factors carefully in evaluating the forward-looking statements contained in this prospectus or in the other documents referenced or incorporated herein.

    All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by our cautionary statements. The forward-looking statements included in this prospectus are made only as of the date of this prospectus. We do not intend, and undertake no obligation, to update these forward-looking statements.

ii



WHERE YOU CAN FIND MORE INFORMATION

    We file annual, quarterly and special reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the internet at the SEC's website at www.sec.gov. You may also read and copy any document we file with the SEC at its public reference facilities at 450 Fifth Street, N.W., Washington, D.C. 20549, at 7 World Trade Center, Suite 1300, New York, New York 10048, and at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. You can also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of its public reference facilities. Our SEC filings are also available at the office of the New York Stock Exchange. For further information on obtaining copies of our public filings at the New York Stock Exchange, you should call (212) 656-5060.

    You may request a free copy of these filings (other than an exhibit to a filing unless that exhibit is specifically incorporated by reference into that filing) or any of the documents referred to in this prospectus by writing to or telephoning us at the following address: G. Dan Marshall, Vice President, Treasurer and Director of Investor Relations, Argosy Gaming Company, 219 Piasa Street, Alton, Illinois 62002, telephone (618) 474-7500.

    You should not assume that the information in this prospectus is accurate as of any date other than the date of this prospectus regardless of the time of delivery of this prospectus. You should rely only on the information provided in this prospectus. We have not authorized anyone else to provide you with different information.

    We have filed with the SEC in Washington, D.C., a registration statement on Form S-4 under the Securities Act with respect to the registered notes offered by this prospectus. This prospectus does not contain all of the information contained in the registration statement, as permitted by the rules and regulations of the SEC.


INCORPORATION OF DOCUMENTS BY REFERENCE

    Our Annual Report on Form 10-K for the year ended December 31, 2000, and Current Reports on Form 8-K filed with the SEC on February 1, 2001, February 6, 2001 and March 9, 2001, are incorporated in this prospectus by reference.

    Any statement contained in a document incorporated or deemed to be incorporated by reference in this prospectus shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus modifies or supersedes that statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.

    We will provide without charge to each person, including to whom a prospectus is delivered, upon written or oral request of that person, a copy of any and all of the information that has been referenced in this prospectus other than exhibits to these documents. Requests for these copies should be directed to Corporate Secretary, Argosy Gaming Company, 219 Piasa Street, Alton, Illinois 62002, telephone number (618) 474-7500.

iii



SUMMARY

    Except where otherwise noted, the words, "we," "us," "our" and similar terms, as well as references to "Argosy" or the "Company" refer to Argosy Gaming Company and all of its subsidiaries. With respect to the discussion of the terms of the registered notes on the cover page and in the section entitled "Summary — The Exchange Offer" "we," "our," and "us" refer only to Argosy Gaming Company and not to any of its subsidiaries. The following summary contains basic information about the exchange offer. It likely does not contain all the information that is important to you. For a more complete understanding of the exchange offer, we encourage you to read this entire document and the documents we have referred to you.


THE COMPANY

    We are a leading owner and operator of five riverboat casinos located in emerging gaming markets of the central United States. We pioneered riverboat gaming in St. Louis, Kansas City, Baton Rouge and Sioux City by opening the first casino in each of those markets. Our riverboat casino that serves the Cincinnati market from Lawrenceburg, Indiana is one of the largest revenue producing riverboats in the United States gaming industry. In the first quarter of 2001, we purchased our minority partners' collective 42.5% minority interest in the Lawrenceburg casino for an aggregate of $365 million using the net proceeds from our offering of the restricted notes, together with borrowings under our amended senior credit facility.

    We are a Delaware corporation. Our principal executive offices are located at 219 Piasa Street, Alton, Illinois 62002 and our telephone number is (618) 474-7500. You may obtain additional information about us at our website, www.argosycasinos.com.

    The following summarizes our casino properties:

Casino Name

  Principal Metropolitan
Markets Served

  2000 Net Revenues
  Approximate Gaming Positions
 
   
  (in thousands)

   
Argosy Casino Lawrenceburg   Cincinnati-Dayton-Columbus, Ohio   $ 367,743   2,680
Alton Belle Casino   St. Louis, Missouri     115,732   1,100
Argosy Casino of Greater Kansas City   Kansas City, Missouri     101,791   1,310
Argosy Casino — Baton Rouge   Baton Rouge, Louisiana     72,995   1,020
Belle of Sioux City Casino   Sioux City, Iowa     35,814   540

    Over the past several years, we have been implementing a strategic plan that has helped transform us from a company focused on developing casino properties to one recognized for achieving superior operational performance. Our strategy emphasizes increasing revenues and profits through expanding direct marketing programs, investing in state-of-the-art gaming products, such as new slot machines and player tracking systems, and improving cost controls.

    Our initiatives have had the greatest impact at our four western casinos in Alton, Kansas City, Baton Rouge and Sioux City. For the year ended December 31, 2000, net revenues at the western casinos combined increased 25% to $326 million, EBITDA (earnings before interest, taxes, depreciation and amortization) increased 49% to $86 million and income from operations increased 66% to $69 million. At Lawrenceburg, net revenues for the year ended December 31, 2000 grew 11% to $368 million, EBITDA increased 8% to $133 million and income from operations increased 8% to $112 million. Overall, we reported record results for the year ended December 31, 2000 with a 17% increase in net revenues to $695 million, a 24% increase in EBITDA to $194 million and a 294% increase in net income to $45 million.

1


Casino Properties

Argosy Casino Lawrenceburg

    The Lawrenceburg casino is located on the Ohio River in Lawrenceburg, Indiana approximately 15 miles west of Cincinnati and is the closest casino to the Cincinnati metropolitan area. The casino principally draws customers from the major metropolitan areas of Cincinnati, Dayton and Columbus, Ohio and, to a lesser extent, Indianapolis, Indiana and Lexington, Kentucky. Casinos operating in the Cincinnati market generated $511 million of gaming revenues in 2000, a 13% increase from 1999. The Lawrenceburg casino's 2000 gaming revenues grew 12% to $344 million, representing approximately 67% of total gaming revenues reported by the three riverboat casinos operating in the Cincinnati market.

    The Lawrenceburg casino is one of the largest riverboats in the United States with 74,300 square feet of gaming space on three levels with approximately 2,100 slot machines and 100 table games. The vessel can accommodate 4,400 passengers and crew; however, to enhance our customers' comfort and enjoyment, we operate at a self-imposed capacity of 3,600 passengers. The complex also includes a 300 room hotel, a 200,000 square foot land-based entertainment pavilion and support facility featuring a 350 seat buffet restaurant, two specialty restaurants, an entertainment lounge and an 1,800 space parking garage. In 2000, we spent approximately $6 million on capital improvements including $3.1 million on slot machines and related systems.

Alton Belle Casino

    The Alton Belle Casino is located on the Mississippi River in Alton, Illinois approximately 20 miles northeast of downtown St. Louis. The casino draws its customers largely from the northern and eastern regions of the greater St. Louis metropolitan area, as well as portions of central and southern Illinois. The riverboat casinos operating in the St. Louis market generated $684 million of gaming revenues in 2000, a 10% increase from 1999. The Alton Belle Casino's 2000 gaming revenues grew 32% to $112 million, representing approximately 16% of total gaming revenues reported by the six riverboat casinos operating in the St. Louis market. As an Illinois licensee, the Alton Belle Casino is not subject to Missouri's $500 loss limit and therefore has a competitive advantage in attracting high-end customers over competitors operating under Missouri licenses.

    The Alton Belle Casino consists of a riverboat with 26,500 square feet of gaming space, approximately 950 slot machines and 30 table games. In December 1999, we replaced our existing 37,000 square foot entertainment pavilion with a 60,000 square foot facility. The new entertainment pavilion features a newly designed entrance, 130 additional slot machines, larger and improved food and beverage venues and a new 400 seat main showroom. During 2000, we spent an additional $2 million to improve the Alton landing and added an additional 100 slot machines.

Argosy Casino of Greater Kansas City

    The Argosy Casino of Greater Kansas City is located on the Missouri River in Riverside, Missouri on a 55-acre site approximately five miles from downtown Kansas City. The casino primarily attracts customers who reside in the northern and western regions of the Kansas City metropolitan market. Casinos operating in the Kansas City market generated $535 million of gaming revenues in 2000, an 8% increase from 1999. Our Kansas City casino's 2000 gaming revenues grew 14% to $97 million, representing approximately 18% of Kansas City total gaming revenues reported by the four riverboat casinos operating in the Kansas City market.

    The Kansas City casino features 36,000 square feet of gaming space, approximately 1,110 slot machines and 35 table games. The riverboat casino is complemented by an 85,000 square foot land-based entertainment facility featuring specialty and buffet restaurants, a sports/entertainment

2


lounge and 8,000 square feet of banquet/conference facilities. A parking garage and surface parking areas with 2,027 spaces are located adjacent to the pavilion.

Argosy Casino — Baton Rouge

    The Baton Rouge casino is located on the Mississippi River in Baton Rouge, Louisiana. The casino draws customers primarily from the Baton Rouge metropolitan area. Casinos operating in the Baton Rouge market generated $164 million of gaming revenues in 2000, an 18% increase from 1999. The Baton Rouge casino's 2000 gaming revenues increased 33% to $71 million, representing 43% of total gaming revenues reported by the two riverboat casinos operating in Baton Rouge. We expect that 2001 operating results at our Baton Rouge casino will benefit from the recent passage in Louisiana of legislation that permits dockside gaming.

    The Baton Rouge casino features 28,000 square feet of gaming space, approximately 790 slot machines and 40 table games. The riverboat casino is complemented by our adjacent real estate development known as Catfish Town. Catfish Town includes a 50,000 square foot glass-enclosed atrium, entertainment/sports lounge, buffet/coffee shop, conference facilities and approximately 150,000 square feet of retail space that is currently available for lease. On February 5, 2001, we opened our $23 million, 300 room convention hotel in the Catfish Town complex. A 733-space parking garage and a 271-space surface parking lot are located adjacent to Catfish Town.

Belle of Sioux City

    The Belle of Sioux City is located on the Missouri River in downtown Sioux City, Iowa. The casino draws customers from the Sioux City metropolitan area and competes with two Native American casinos that are not required to report gaming market data. The Sioux City casino's 2000 gaming revenues grew 24% to $35 million. The riverboat features 12,500 square feet of gaming space, approximately 430 slot machines and 20 table games. The casino is complemented by adjacent barge facilities featuring buffet dining facilities, meeting space and administrative support offices. We have significantly upgraded our Sioux City gaming product so that by the end of 1999 we had replaced 95% of our electronic gaming devices over a two year period. In July 2000, we purchased the 30% minority interest in the Belle of Sioux City Casino.


RECENT DEVELOPMENTS

    Acquisition of Lawrenceburg Casino Minority Interests

    In the first quarter of 2001, we acquired the minority interests in Indiana Gaming Company L.P., the Indiana partnership that owns and operates the Lawrenceburg casino. Prior to such acquisition, we, through our wholly-owned subsidiary, The Indiana Gaming Company, were the 57.5% majority partner in Indiana Gaming Company L.P. Conseco Entertainment, L.L.C. held a 29% limited partnership interest in the partnership and Centaur, Inc. held a 13.5% limited partnership interest. Under the terms of the Lawrenceburg partnership agreement, after December 10, 1999, each of Conseco and Centaur had the right to sell its entire interest in the partnership to the remaining partners. On April 28, 2000, Conseco exercised its put rights with respect to its 29% interest. On September 18, 2000, Centaur also exercised its put rights for its 13.5% interest.

    The Lawrenceburg partnership agreement provided that after a partner gave its sale notice, the other partners had 60 days to attempt in good faith to negotiate a purchase price for the selling partner's interest. If, at the end of the 60-day period, the parties were unable to agree upon a purchase price, the partnership agreement required that the purchase price be determined by an appraisal process.

3


    We were unable to agree upon a purchase price with Conseco within the 60-day time period and commenced the appraisal process. The appraisal process was characterized by numerous disputes that culminated in multiple lawsuits being filed in Indiana and Illinois by both Conseco and us. These disputes continued through December 2000, when we reached an agreement with Conseco to purchase its 29% limited partnership interest for $260 million, including the repayment of Conseco's preferred equity interest and outstanding partner loans. In connection with the December agreement, we agreed to settle all pending litigation between Conseco and us. We completed our purchase of Conseco's minority interest on February 22, 2001.

    In January 2001, we reached an agreement with Centaur to purchase its 13.5% limited partnership interest for $105 million. We completed our purchase of Centaur's minority interest on March 8, 2001. In connection with the purchase of Conseco's and Centaur's limited partnership interests, we amended and restated our credit facility to, among other things, increase borrowing availability to $400 million. Funds available from the proceeds of our offering of the restricted notes and from borrowings under the amended and restated credit facility were used to finance the purchase of Conseco's and Centaur's limited partnership interests.


SUMMARY OF THE EXCHANGE OFFER

    The following summary is provided solely for your convenience. This summary is not intended to be complete. You should read the full text and more specific details contained elsewhere in this prospectus. For a more detailed description of the registered notes, see "Description of Notes."

The Exchange Offer   We are offering to exchange up to $150,000,000 in aggregate principal amount of our 103/4% Senior Subordinated Notes due 2009. We issued and sold the restricted notes on February 8, 2001, in reliance on an exemption from registration under the Securities Act. The restricted notes are, and the registered notes will be, an additional issuance of our 103/4% Senior Subordinated Notes due 2009, of which $200,000,000 originally were issued in 1999 and currently are outstanding.

 

 

We believe that the registered notes may be offered for resale, resold and otherwise transferred by you without compliance with the registration or prospectus delivery provisions of the Securities Act if:

 

 

• you are acquiring the registered notes in the ordinary course of your business;

• you are not participating, do not intend to participate, and have no arrangement or understanding with any person to participate, in the distribution of the registered notes issued to you; and

• you are not an affiliate, under Rule 405 of the Securities Act, of ours.

Expiration Date

 

The exchange offer will expire at 5:00 p.m., New York City time, on      , 2001, unless we decide to extend the expiration date.

Conditions to the Exchange Offer

 

We may end or amend the exchange offer if:

 

 

• any legal proceeding, government action or other adverse development materially impairs our ability to complete the exchange offer;



 

 

4



 

 

• any SEC rule, regulation or interpretation materially impairs the exchange offer; or

• we have not obtained all necessary governmental approvals with respect to the exchange offer.

 

 

Please refer to the section in this prospectus entitled "The Exchange Offer—Conditions to the Exchange Offer." We may waive any or all of these conditions. At this time, there are no adverse proceedings, actions or developments pending or, to our knowledge, threatened against us and no governmental approvals are necessary to complete the exchange offer.

Withdrawal Rights

 

You may withdraw the tender of your restricted notes at any time before 5:00 p.m., New York City time, on      , 2001.

Procedures for Tendering Restricted Notes

 

To participate in the exchange offer, you must:

• complete, sign and date the accompanying letter of transmittal, or a facsimile copy of the letter of transmittal; or

• tender restricted notes following the procedures for book-entry transfer described on pages .

 

 

You must mail or otherwise deliver the documentation and your restricted notes to Bank One Trust Company, NA, as exchange agent, at one of the addresses listed on the letter of transmittal.

Special Procedures for Beneficial Owners

 

If you hold restricted notes registered in the name of a broker, dealer, commercial bank, trust company or other nominee, you should contact that person promptly if you wish to tender restricted notes. Please refer to the section in this prospectus entitled, "The Exchange Offer—Procedures for Tendering Restricted Notes."

Guaranteed Delivery Procedures

 

If you wish to tender your restricted notes and you cannot get required documents to the exchange agent on time, or you cannot complete the procedure for book-entry transfer on time, you may tender your restricted notes according to the guaranteed delivery procedures described in this prospectus under the heading "The Exchange Offer—Procedures for Tendering Restricted Notes."

Federal Income Tax Consequences

 

The exchange of notes will not be a taxable event to you for United States federal income tax purposes. Please refer to the section in this prospectus entitled "Certain U.S. Federal Tax Considerations."

Exchange Agent

 

Bank One Trust Company, NA is serving as exchange agent in the exchange offer. Please refer to the section in this prospectus entitled "The Exchange Offer—Exchange Agent."


SUMMARY OF THE REGISTERED NOTES

    We use the term "notes" when describing provisions that apply to the original notes, the restricted notes and the registered notes. The registered notes will evidence the same debt as the restricted notes. The same indenture will govern the original notes, the restricted notes and the registered notes. Please refer to the section in this prospectus entitled "Description of Notes."

5


Issuer   Argosy Gaming Company.

Notes Offered

 

$150,000,000 aggregate principal amount of 103/4% Senior Subordinated Notes.

Maturity Date

 

June 1, 2009.

Interest Rate

 

103/4% per year.

Interest Payment Dates

 

June 1 and December 1, beginning on June 1, 2001. Interest will accrue from the issue date of the restricted notes.

Subsidiary Guarantees

 

Substantially all of our wholly-owned operating subsidiaries guarantee the original notes and the restricted notes and will guarantee the registered notes. In addition, any of our subsidiaries that become guarantors under our senior credit facility will guarantee the notes. If Argosy Gaming Company cannot make payments on the notes when they are due, the subsidiary guarantors must make them instead.

Ranking

 

The registered notes and subsidiary guarantees will be, and the original notes, the restricted notes and existing subsidiary guarantees are, unsecured senior subordinated obligations of Argosy Gaming Company and the subsidiary guarantors, respectively. The registered notes will rank, and the original notes and the restricted notes rank, junior to all of the senior indebtedness of Argosy Gaming Company, including borrowings under our credit facility, and the subsidiary guarantees will rank junior to the senior indebtedness of the subsidiary guarantors.

Optional Redemption

 

We may redeem some or all of the notes beginning on June 1, 2004, at the redemption prices described in the "Description of Notes" section under the heading "Optional Redemption," plus accrued interest to the date of redemption. Before June 1, 2002, we may redeem up to 35% of the notes with the proceeds of one or more public offerings of our capital stock at the redemption price listed in the section "Description of Notes" under the heading "Optional Redemption." However, we may only make such redemptions if at least 65% of the aggregate principal amount of notes remains outstanding after each redemption.

Mandatory Offer to Repurchase

 

If we experience specific kinds of changes of control, or under certain circumstances, if we sell assets, we must offer to repurchase the notes at the prices listed in "Description of Notes."


Certain Covenants


 


The indenture contains covenants that limit our ability to:

• borrow money;

• pay dividends on, redeem or repurchase our capital stock;

• make investments;

• incur liens on our assets to secure debt;

• merge or consolidate with another company; and

• transfer or sell our assets.

 

 

These covenants are subject to important exceptions and qualifications that are described in "Description of Notes" under the heading "Certain Covenants."


 

 

6



Covenants Relating to Sale of Lawrenceburg Interests

 

The indenture provides that upon certain sales of our partnership interest in, or the assets of, the Lawrenceburg partnership, we must either make an offer to repurchase an amount of notes such that the Debt to EBITDA Ratio would be no greater than 3.5 to 1, or we may call all, but not less than all of the notes, in each case at the prices listed in the section "Description of Notes—Covenants—Repurchase of Notes in Connection with Sale of Lawrenceburg Interest." Certain other sales of such partnership interest or assets will require us to comply with the covenant described below under "Description of Notes—Covenants—Limitation on Asset Sales."

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SUMMARY CONSOLIDATED FINANCIAL DATA

    The following summary consolidated financial data has been derived from our consolidated financial statements and should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and consolidated financial statements and notes thereto, included elsewhere in this prospectus. The summary pro forma consolidated financial data have been derived from the unaudited pro forma consolidated financial statements included elsewhere in this prospectus, which have been prepared by applying certain pro forma adjustments resulting from the offering of the restricted notes, borrowings of $213.6 million under the credit facility and the purchase of the minority interests in the Lawrenceburg casino for $365 million. The pro forma data assumes that these transactions occurred on January 1, 2000, in the case of Statements of Operations Data for the year ended December 31, 2000, and as of December 31, 2000, in the case of the Balance Sheet Data. The pro forma consolidated financial statements are presented for information purposes only and have been derived from, and should be read in connection with, our consolidated financial statements, including the notes thereto. For additional information regarding the pro forma consolidated financial statements see "Pro Forma Consolidated Financial Data" included elsewhere in this prospectus.

 
  Years Ended December 31,
   
 
 
  Pro
Forma
2000

 
 
  1998
  1999
  2000
 
 
  (in thousands)

 
Statements of Operations Data:                          
Casino revenues   $ 473,505   $ 559,147   $ 658,883   $ 658,883  
Net revenues     506,668     594,554     694,844     694,844  
Income from operations     87,811     123,025     151,556     150,891  
Interest expense     57,487     48,594     34,768     69,224  
Minority interests     (26,205 )   (34,975 )   (40,466 )   (677 )
Net income     6,561     11,506     45,375     48,176  
Other Data:                          
EBITDA(a)   $ 121,247   $ 157,083   $ 194,450   $ 201,102  
Adjusted EBITDA(b)     81,535     111,312     144,976     201,102  
Depreciation and amortization     33,436     34,058     36,094     43,411  
Capital expenditures     34,051     37,162     33,229     33,229  
Cash provided by (used in):                          
  Operating activities     81,663     126,653     157,787        
  Investing activities     (14,181 )   (37,144 )   (43,998 )      
  Financing activities     (36,979 )   (132,276 )   (101,505 )      
Ratio of EBITDA to interest expense     2.1 x   3.2 x   5.6 x   2.9 x
Ratio of total debt to LTM EBITDA     3.5 x   2.4 x   1.4 x   3.2 x
Ratio of Adjusted EBITDA to Adjusted Interest Expense(b)     1.7 x   2.6 x   4.7 x   2.9 x
Ratio of Adjusted Total Debt to Adjusted LTM EBITDA(b)     4.5 x   3.1 x   1.8 x   3.2 x
Ratio of earnings to fixed charges(c)     1.5 x   2.4 x   3.9 x   2.1 x
 
  As of December 31,
   
 
  Pro Forma
2000

 
  1998
  1999
  2000
 
  (in thousands)

Balance Sheet Data:                        
Cash and cash equivalents   $ 89,857   $ 47,090   $ 59,374   $ 59,374
Total assets     562,752     566,860     537,236     838,738
Long-term debt including current maturities     424,000     379,373     276,336     639,898
Total stockholders' equity     40,863     58,245     103,952     103,952

See footnotes on following page.

8



(a)
EBITDA is defined as earnings before interest, taxes, depreciation and amortization. EBITDA should not be construed as an alternative to operating income or net income (as determined in accordance with generally accepted accounting principles) as an indicator of the Company's operating performance, or as an alternative to cash flows generated by operating, investing and financing activities (as an indicator of cash flow or a measure of liquidity). EBITDA is presented solely as a supplemental disclosure because management believes that it is a widely used measure of operating performance in the gaming industry and for companies with a significant amount of depreciation and amortization. EBITDA may not be comparable to similarly titled measures reported by other companies. The Company has other significant uses of cash flows, including debt service and capital expenditures, which are not reflected in EBITDA.

(b)
The following table reflects adjustments necessary to calculate Adjusted EBITDA, Adjusted Total Debt and Adjusted Interest Expense after consideration of the Lawrenceburg minority interests. Adjusted EBITDA is presented to reflect the elimination of that portion of EBITDA that is attributable to the minority partners of the Lawrenceburg casino. Similarly, Adjusted Total Debt and total interest expense eliminate that portion of total debt and total interest expense owed or attributable to the minority partners of the Lawrenceburg casino. The pro forma other data reflects no adjustments as we will own 100% of the Lawrenceburg casino.

 
  Years Ended December 31,
 
 
  1998
  1999
  2000
 
 
  (in thousands)

 
EBITDA                    
As reported   $ 121,247   $ 157,083   $ 194,450  
Deduct EBITDA attributable to Lawrenceburg minority interests     (39,712 )   (45,771 )   (49,474 )
   
 
 
 
Adjusted EBITDA   $ 81,535   $ 111,312   $ 144,976  
   
 
 
 

Total Debt

 

 

 

 

 

 

 

 

 

 
As reported   $ 424,000   $ 379,373   $ 276,336  
Deduct Lawrenceburg partner loans     (45,196 )   (28,911 )   (9,081 )
Deduct 42.5% Lawrenceburg vessel loan     (9,225 )   (7,622 )   (5,960 )
   
 
 
 
Adjusted Total Debt   $ 369,579   $ 342,840   $ 261,295  
   
 
 
 

Total Interest Expense

 

 

 

 

 

 

 

 

 

 
As reported   $ 57,487   $ 48,594   $ 34,768  
Deduct interest on Lawrenceburg partner loans     (8,166 )   (5,121 )   (2,915 )
Deduct 42.5% of interest on Lawrenceburg vessel loan     (945 )   (807 )   (723 )
   
 
 
 
Adjusted Total Interest Expense   $ 48,376   $ 42,666   $ 31,130  
   
 
 
 
(c)
The ratio of earnings to fixed charges has been computed by dividing earnings available for fixed charges (income before income taxes plus fixed charges less capitalized interest and preferred equity return to Lawrenceburg partner, if applicable) by fixed charges (interest expense plus capitalized interest plus preferred equity return to Lawrenceburg partner, if applicable, and one third of rental expense (the portion deemed representative of the interest factor)).

9



SUMMARY OPERATING DATA

 
  As of December 31, 2000
 
  Casino
Square Footage

  Slot and Video
Poker Machines

  Gaming Tables
Property            
Argosy Casino Lawrenceburg   74,300   2,100   100
Alton Belle Casino   26,500   950   30
Argosy Casino of Greater Kansas City   36,000   1,110   35
Argosy Casino — Baton Rouge   28,000   790   40
Belle of Sioux City Casino   12,500   430   20
   
 
 
  Total   177,300   5,380   225
   
 
 
 
  Years Ended December 31,
 
 
  1998
  1999
  2000
 
 
  (in thousands)

 
Casino Revenues                    
Argosy Casino Lawrenceburg   $ 264,352   $ 308,316   $ 344,013  
Alton Belle Casino     67,798     84,664     112,077  
Argosy Casino of Greater Kansas City     71,955     84,892     97,049  
Argosy Casino — Baton Rouge     46,828     53,262     70,943  
Belle of Sioux City Casino     22,572     28,013     34,801  
   
 
 
 
  Total   $ 473,505   $ 559,147   $ 658,883  
   
 
 
 
Net Revenues                    
Argosy Casino Lawrenceburg   $ 284,721   $ 332,235   $ 367,743  
Alton Belle Casino     72,064     88,079     115,732  
Argosy Casino of Greater Kansas City     76,960     89,813     101,791  
Argosy Casino — Baton Rouge     49,054     55,110     72,995  
Belle of Sioux City Casino     23,526     28,889     35,814  
Other     343     428     769  
   
 
 
 
  Total   $ 506,668   $ 594,554   $ 694,844  
   
 
 
 
Income (loss) from Operations                    
Argosy Casino Lawrenceburg   $ 87,907   $ 103,295   $ 111,991  
Alton Belle Casino     13,850     23,115     32,155  
Argosy Casino of Greater Kansas City     5,369     12,564     17,803  
Argosy Casino — Baton Rouge     (3,381 )   1,129     11,947  
Belle of Sioux City Casino     1,919     4,570     6,708  
Jazz(a)     (6,312 )   (5,118 )   (5,103 )
Corporate     (9,990 )   (15,113 )   (15,516 )
Other     (1,551 )   (1,417 )   (1,629 )
   
 
 
 
  Total(b)   $ 87,811   $ 123,025   $ 158,356  
   
 
 
 
EBITDA(c):                    
Argosy Casino Lawrenceburg   $ 105,674   $ 123,083   $ 133,039  
Alton Belle Casino     17,835     27,388     38,016  
Argosy Casino of Greater Kansas City     11,293     18,252     23,368  
Argosy Casino — Baton Rouge     1,891     6,348     16,384  
Belle of Sioux City Casino     3,016     5,838     8,277  
Jazz(a)     (3,633 )   (2,417 )   (2,385 )
Corporate     (9,436 )   (15,082 )   (15,142 )
Lawrenceburg financial advisory fee(d)     (5,200 )   (6,154 )   (6,652 )
Other     (193 )   (173 )   (455 )
   
 
 
 
  Total(b)   $ 121,247   $ 157,083   $ 194,450  
   
 
 
 

See footnotes on following page.

10



(a)
Jazz Enterprises, Inc. is our wholly-owned subsidiary that owns Catfish Town.

(b)
Excludes a $6.8 million pre-tax charge related to the write-off of the landing facility previously used at our Alton property for the year ended December 31, 2000.

(c)
EBITDA is defined as earnings before interest, taxes, depreciation and amortization. EBITDA should not be construed as an alternative to operating income or net income (as determined in accordance with generally accepted accounting principles) as an indicator of the Company's operating performance, or as an alternative to cash flows generated by operating, investing and financing activities (as an indicator of cash flow or a measure of liquidity). EBITDA is presented solely as a supplemental disclosure because management believes that it is a widely used measure of operating performance in the gaming industry and for companies with a significant amount of depreciation and amortization. EBITDA may not be comparable to similarly titled measures reported by other companies. The Company has other significant uses of cash flows, including debt service and capital expenditures, which are not reflected in EBITDA.

(d)
Through February 22, 2001, our Lawrenceburg subsidiary paid a financial advisory fee equal to 5.0% of its EBITDA to a minority partner.

11



RISK FACTORS

    You should carefully consider the following factors and other information in this prospectus before deciding to tender your restricted notes in the exchange offer.

    Our substantial indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations under these additional registered notes.

    After we borrowed under the amended and restated credit facility and sold our restricted notes to fund our acquisitions of the Lawrenceburg casino minority partnership interests, we had a substantial amount of indebtedness. The following chart shows certain important credit statistics and is presented assuming we had borrowed under our credit facility and sold our restricted notes as of the date or at the beginning of the period specified below and applied the proceeds as described under "Capitalization," included elsewhere in this prospectus:

 
  December 31, 2000
(unaudited)

 
  Actual
  Pro Forma
As Adjusted

 
  (in thousands)

Long term debt, including current portion   $ 276,336   $ 639,898
Stockholders' equity     103,952     103,952
Debt to capitalization ratio     .73x     .86x
Ratio of earnings to fixed charges     3.9x     2.1x

    Our substantial indebtedness could have important consequences to you. For example, it could:

    make it more difficult for us to perform our obligations with respect to these registered notes;

    increase our vulnerability to general adverse economic and industry conditions;

    require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing amounts available for working capital, capital expenditures and other general corporate purposes;

    limit our flexibility in planning for, or reacting to changes in our business and the industry in which we operate;

    place us at a competitive disadvantage compared to our competitors that have less debt; and

    limit our ability to borrow additional funds.

    We will require a significant amount of cash to service our indebtedness. Our ability to generate cash depends on many factors beyond our control.

    Our ability to make payments on and to refinance our indebtedness, including the notes and the credit facility, will depend on our ability to generate cash in the future. Our ability to generate cash is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.

    We cannot assure you that our business will generate sufficient cash flow or that future borrowings will be available to us in an amount sufficient to enable us to pay our indebtedness, including these registered notes, or to fund our other liquidity needs including the possible expansions and maintenance of our riverboat casinos and future developments. We may need to refinance all or a portion of our indebtedness, including the notes and the credit facility, on or before maturity. We cannot assure you that we will be able to refinance any of our indebtedness, including the notes and our credit facility, on commercially reasonable terms or at all.

12


    Despite our significant indebtedness, we and our subsidiaries may still be able to incur substantially more debt. This could further exacerbate the risks described above.

    We and our subsidiaries may be able to incur substantial additional indebtedness in the future. In connection with the purchases of Conseco's and Centaur's minority interests in the Lawrenceburg partnership, we amended and restated our credit facility to, among other things, increase the borrowing availability to fund these purchases. All of the borrowings under our amended and restated credit facility will be senior to the notes and the guarantees of our subsidiary guarantors. If additional new debt is added to our current debt levels, the related risks that we now face could intensify.

    Your right to receive payments on these registered notes will be junior to the credit facility and possibly all of our future borrowings. Further, the guarantees of these registered notes will be junior to all of the guarantor subsidiaries' existing indebtedness to the subsidiaries' guarantees of the credit facility and possibly to all of their future borrowings.

    These registered notes will be, and the original notes and restricted notes are, junior to all of our existing and future indebtedness, other than trade payables and any future indebtedness that expressly provides that it ranks equal with or junior to the notes. The guarantees will be junior to all of the guarantor subsidiaries' existing and future indebtedness, other than trade payables and any future indebtedness that expressly provides that it ranks equal with or junior to the guarantees. As a result, upon any distribution to our creditors in a bankruptcy, liquidation or reorganization or similar proceeding relating to us or a subsidiary guarantor, the holders of senior indebtedness will be entitled to be paid in full in cash before any payment may be made on the notes or the guarantees.

    In addition, all payments on the notes and the guarantees will be blocked in the event of a payment default under the credit facility and may be blocked for up to 179 of 360 consecutive days in the event of non-payment defaults on senior debt. In the event of a default on the notes and any resulting acceleration of the notes, the holders of senior indebtedness then outstanding will be entitled to payment in full in cash of all obligations in respect of such senior indebtedness before any payment or distribution may be made with respect to the notes.

    In the event of a bankruptcy, liquidation or reorganization or similar proceeding relating to us or the subsidiary guarantors, you will participate with trade creditors and all other holders of subordinated indebtedness in the assets remaining after we have paid all of the senior debt. However, because the indenture requires that amounts otherwise payable to holders of the notes in a bankruptcy or similar proceeding be paid to holders of senior debt instead, you may receive less, ratably, than holders of trade payables in any such proceeding. In any of these cases, we may not have sufficient funds to pay all of our creditors and holders of notes may receive less, ratably, than the holders of senior debt.

    Assuming we had amended and restated the credit facility to increase the borrowing availability to $400 million, completed this offering and purchased the minority interests in our Lawrenceburg casino as of December 31, 2000, the notes would have been subordinated to $275.1 million of senior debt, including $261.0 million under the amended and restated credit facility, and approximately $139.0 million would have been available for borrowing as additional senior debt under the amended and restated credit facility. Since some of our subsidiaries will not guarantee the notes, the notes will be effectively junior to all debt and other liabilities of these non-guarantor subsidiaries. In the event of a bankruptcy, liquidation, reorganization or similar proceeding relating to any of our non-guarantor subsidiaries, holders of their debt and their trade creditors will generally be entitled to payment of their claims from the assets of those subsidiaries before any assets are made available for distribution to our creditors. The notes will be effectively junior to the debt and other liabilities, including trade payables, of our non-guarantor subsidiaries. As of December 31, 2000, after giving pro forma effect to our acquisition of the Lawrenceburg minority interests, our non-guarantor subsidiaries would have had no outstanding debt and other liabilities. We also will be permitted to borrow substantial additional indebtedness, including senior debt, in the future under the terms of the indenture governing the notes.

13


    In addition to the registered notes being junior to our credit facility and possibly all of our future borrowings, the registered notes will not be secured by any of our assets. Further, our assets secure our credit facility and possibly other debt.

    In addition to being subordinated to all of our existing and future indebtedness, other than trade payables and any future indebtedness that expressly provides that it ranks equal with, or subordinated in right of payment to, the notes, these registered notes will not be, and the original notes and restricted notes are not, secured by any of our assets or any of the assets of our guarantor subsidiaries. Our obligations under the credit facility are secured by liens on substantially all of our assets. If we become insolvent or are liquidated, or if payment under the credit facility or of other secured obligations is accelerated, the lenders under the credit facility or the obligees with respect to the other secured obligations will be entitled to exercise the remedies available to a secured lender under applicable law and the applicable agreements and instruments. Accordingly, our secured lenders will have a prior claim with respect to our pledged assets and the assets of the guarantor subsidiaries and there may not be sufficient assets remaining to pay amounts due on the notes then outstanding or to satisfy the obligations under the guarantees.

    Restrictive covenants in our credit facility and the indenture may restrict our ability to pursue our business strategies. Our ability to comply with these restrictions depends on many factors beyond our control.

    The indenture and our credit facility include certain restrictive covenants that, among other things, restrict our ability to:

    borrow money;

    pay dividends on, redeem or repurchase our capital stock;

    make investments;

    incur liens on our assets to secure debt;

    merge or consolidate with another company; and

    transfer or sell our assets.

    We are also required by our credit facility to maintain certain financial ratios, including maximum debt to EBITDA ratios and minimum fixed charge coverage ratios. All of these restrictive covenants may restrict our ability to make capital expenditures or to pursue other business strategies. Our ability to comply with these and other provisions of the indenture and the credit facility may be affected by changes in business condition or results of operations, adverse regulatory developments or other events beyond our control. The breach of any of these covenants could result in a default under our indebtedness, which could cause those obligations to become due and payable. If we default under our credit facility, we could be prohibited from making payments with respect to the notes until the default is cured or all indebtedness under the credit facility or other senior debt is paid in full. If our indebtedness were to be accelerated, there can be no assurance that we would be able to repay it.

    Our ability to service our debt is substantially dependent on the continued success of our Lawrenceburg casino.

    During the year ended December 31, 2000, the Lawrenceburg casino represented 53% of our net revenues and 65% of our EBITDA, after taking into consideration management fees paid to a minority partner. Our ability to meet our operating and debt service requirements is substantially dependent upon the continued success of the Lawrenceburg casino. The Lawrenceburg casino's operations could be adversely affected by numerous factors including,

    increased competition;

14


    changes in applicable gaming or taxation regulations;

    adoption of gaming in the adjacent states of Ohio or Kentucky; and

    the occurrence of natural disasters, including flooding along the Ohio River.

    We face intense competition in each of our gaming markets.

    The United States gaming industry is intensely competitive and features many participants, including riverboat casinos, dockside casinos, land-based casinos, video lottery and poker machines not located in casinos, Native American gaming and other forms of gambling in the United States. Gaming competition is particularly intense in each of the markets where we operate. Historically, we have been an early entrant in each of our markets; however, as competing properties have opened, our operating results in each of these markets have been negatively affected. Many of our competitors have more gaming industry experience, are larger and have significantly greater financial and other resources. In addition, some of our direct competitors in certain markets may have superior facilities and/or operating conditions in terms of: (1) amenities offered at the gaming facility and the related support and entertainment facilities; (2) convenient parking facilities; (3) a location more favorably situated to the population base of a market and ease of accessibility to the casino site; and (4) favorable tax or regulatory factors.

    There could be further competition in our markets as a result of the upgrading or expansion of facilities by existing market participants, the entrance of new gaming participants into a market or legislative changes. We expect each market in which we participate to be highly competitive. The following paragraphs summarize the specific competitive environment in which each of our riverboat casinos operate.

    Argosy Casino Lawrenceburg.  The Lawrenceburg casino currently faces competition from two riverboat casinos in the Cincinnati market, the most recent of which opened in October 2000 approximately 40 miles from Lawrenceburg in Switzerland County, Indiana. In addition, a riverboat casino operates in the Louisville, Kentucky area approximately 100 miles from Lawrenceburg.

    Alton Belle Casino.  Our Alton casino faces competition from five riverboat casino companies currently operating in the St. Louis area. Four of these competitors are located in Missouri and one is located in Illinois.

    Argosy Casino of Greater Kansas City.  Our casino in Kansas City faces competition from three casinos in the Kansas City area.

    Argosy Casino — Baton Rouge.  Our Baton Rouge casino faces competition from a casino located in downtown Baton Rouge, a nearby Native American casino and operators of video poker machines in non-casino locations in certain contiguous East Baton Rouge parishes.

    Belle of Sioux City.  We compete with certain providers and operators of video gaming in the neighboring state of South Dakota. In addition, we face competition from two land-based Native American casinos, slot machines at a pari-mutuel race track in Council Bluffs, Iowa and two riverboat casinos in the Council Bluffs, Iowa/Omaha, Nebraska market.

    Potential for Future Competition.  Casino gaming is currently prohibited or restricted in several states adjacent to Indiana, Iowa and Missouri. As a result, residents of these states, principally Ohio, Kentucky, Nebraska and Kansas, comprise a significant portion of the patrons at our Lawrenceburg, Sioux City and Kansas City casinos. The legalization of casino gaming in Ohio or Kentucky would increase competition with respect to the Lawrenceburg casino because a substantial portion of the Lawrenceburg casino's customers live in Ohio and Kentucky. The legalization of casino gaming in

15


Kansas would increase competition with respect to our Kansas City casino because residents of Kansas comprise a significant portion of our target market.

    Our operations are strictly regulated by state and local authorities.

    Licensing and Regulation by Gaming and Local Authorities.  The ownership and operation of casino gaming facilities are subject to extensive state and local regulation. These regulations apply not only to us, but also to our subsidiaries, stockholders and officers and directors. The Illinois Gaming Board, the Indiana Gaming Commission, the Iowa Racing and Gaming Commission, the Louisiana Gaming Control Board and the Missouri Gaming Commission (herein collectively referred to as "Applicable Gaming Commissions") have broad discretion to, among other things, limit, condition, suspend, fail to renew or revoke a gaming license or approval to own an equity interest in us or our subsidiaries, for any cause they deem reasonable. The suspension, failure to renew or revocation of any of our licenses or the levy on us of substantial fines or forfeiture of assets would have a material adverse effect on our business.

    To date, we have obtained all governmental licenses, registrations, permits and approvals necessary for the operation of our current gaming activities. Gaming licenses and related approvals are deemed to be privileges under the laws of our licensing states. We cannot assure you that the Applicable Gaming Commissions will renew or not revoke our existing licenses or that they will grant us any new licenses, permits or approvals that may be required in the future. In addition, the loss of a license in one jurisdiction could trigger the loss of a license or affect our eligibility for a license in another jurisdiction.

    The approval of the Applicable Gaming Commissions is required for any material debt or equity financing. Although we obtained approval for the issuance of the restricted notes, we cannot assure you that we will obtain the required approvals for future financings.

    Risk of Adverse Changes in Laws and Regulations.  Regulations governing the conduct of gaming activities and the obligations of gaming companies in any jurisdiction in which we have gaming operations are subject to change and could impose additional operating, financial or other burdens on the way we conduct our business. Moreover, legislation to prohibit or limit gaming may be introduced in the future in states where gaming has been legalized. The enactment of any such legislation or adverse regulatory changes in jurisdictions where we operate gaming facilities could have a material adverse effect on our business.

    Gaming Taxation and Fees.  We believe that the prospect of significant additional tax revenue is one of the primary reasons why new jurisdictions have legalized gaming. As a result, gaming operators are typically subject to significant taxes and fees in addition to normal federal and state corporate income taxes. These taxes and fees are subject to increase at any time. We pay substantial taxes and fees with respect to our operations and will likely incur similar burdens in any other jurisdiction in which we conduct gaming operations in the future. Any material increase, or the adoption of additional taxes or fees, could have a material adverse effect on our future financial results.

    For example, on January 25, 2001, the Indiana House of Representatives approved a bill that if enacted would, among other things, significantly increase the amount of taxes we pay on gaming revenues generated by our Lawrenceburg casino. The proposed legislation calls for a graduated tax structure on gaming revenues with a top bracket tax of 32.5% on gaming revenues above $125 million. The bill also calls for an increase in the per person admission tax for riverboat operations from $3 to $4. In addition to the tax increases, the proposed legislation would eliminate existing restrictions on owning more than one Indiana casino and allow each riverboat county to hold a referendum to allow dockside gaming in that county. After being heard and amended in the Indiana Senate Rules Committee, the amended bill was defeated on March 28, 2001. Nonetheless, provisions of the bill as it passed the Indiana House of Representatives are eligible for inclusion in existing bills during the

16


forthcoming conference committee process. During this process, the bill's provisions, including the level, if any, of any tax increases, may be altered. The Indiana General Assembly's regular session must adjourn by April 29, 2001. If the bill were enacted into law in its current form, it would have a material adverse effect on our future operating results. For example, assuming the legislation was effective January 1, 2000, the Lawrenceburg casino's 2000 EBITDA would have been reduced by approximately $41 million. This estimated impact gives no effect to additional gaming revenues that could be generated through dockside operations because approval of dockside gaming by county referendum, if obtained, would not be likely to occur before 2002. In our experience, early stage bills are subject to numerous changes as they proceed through the legislative process. As a result, we are unable to predict whether the House bill will be enacted into law, if at all, in its current form or with significant modifications.

    In similar fashion, on March 27, 2001, the governor of Louisiana signed into law a bill that will increase the gaming tax on all riverboat operators in the state from 18.5% to 21.5%, effective April 1, 2001. The new law also permits dockside gaming, allowing our customers unlimited ingress and egress, and eliminating the three hour cruising requirements. In the event that the incremental benefit from increased revenues generated by anticipated additional customers would be insufficient to fund the payment of these additional taxes, this tax increase would adversely affect our operations.

    A successful challenge to the 1999 Illinois legislation authorizing dockside gaming could require us to eliminate dockside gaming operations.

    In June 1999, Illinois passed an amendment to the Illinois Riverboat Gambling Act to permit casinos to offer continuous dockside gaming with unlimited ingress and egress. In addition to legalizing dockside gaming, the amendment authorized the grant of a gaming license to certain persons to develop and operate a casino in Rosemont, Illinois. A group of plaintiffs filed a lawsuit requesting the court to declare that the 1999 amendment violates the Illinois and U.S. constitutions because the grant of the Rosemont license amounted to "special legislation." If a court invalidates the grant of the Rosemont license, all of the provisions of the 1999 amendment, including the provisions legalizing dockside gaming, would be invalidated. In such event, we would be required to resume cruising and suspend our dockside gaming activities at our Alton casino until such time as the Illinois legislature passed a law reauthorizing dockside gaming. On January 25, 2001, the court dismissed the lawsuit concluding that the plaintiffs lacked standing and on January 30, 2001, the Illinois Gaming Board denied the Rosemont group's application for an Illinois gaming license. Because we anticipate that both groups will appeal these rulings, we are unable to determine what the ultimate resolution of these matters will be. The loss of dockside gaming at our Alton casino, however, would adversely affect our financial results.

    Federal and state statutes allow courts, under specific circumstances, to void guarantees and require noteholders to return payments received from guarantors.

    Under the federal bankruptcy law and comparable provisions of state fraudulent transfer laws, a guarantee could be voided, or claims in respect of a guarantee could be subordinated to all other debts of that guarantor if the guarantor at the time it incurred the indebtedness evidenced by its guarantee:

    received less than reasonably equivalent value or fair consideration for the incurrence of such guarantee and was insolvent or rendered insolvent by reason of such incurrence;

    was engaged in a business or transaction for which the guarantor's remaining assets constituted unreasonably small capital; or

    intended to incur, or believed that it would incur, debts beyond its ability to pay such debts as they mature.

17


    In addition, any payment by that guarantor pursuant to its guarantee could be voided and required to be returned to the guarantor, or to a fund for the benefit of the creditors of the guarantor.

    The measures of insolvency for purposes of these fraudulent transfer laws will vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer has occurred. Generally, however, a guarantor would be considered insolvent if:

    the sum of its debts, including contingent liabilities, was greater than the fair saleable value of all of its assets;

    if the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and mature; or

    it could not pay its debts as they become due.

    The indenture requires that future subsidiaries guarantee the notes. These considerations will also apply to these guarantees.

    On the basis of historical financial information, recent operating history and other factors, we believe that each guarantor, after giving effect to its guarantee of the notes, and its guarantee of our credit facility will not be insolvent, will not have unreasonably small capital for the business in which it is engaged and will not have incurred debts beyond its ability to pay such debts as they mature. We cannot assure you, however, as to what standard a court would apply in making such determinations or that a court would agree with our conclusions in this regard.

    Our credit facility prohibits us from purchasing any notes. Further, we may not have the ability to raise the funds necessary to finance the change of control offer required by the indenture.

    Upon the occurrence of change of control events specified in the indenture, we are required to offer to repurchase all outstanding notes. Certain important corporate events such as leveraged recapitalizations, do not constitute a change of control under the indenture. The terms of our credit facility generally prohibit us from purchasing any notes and also provide that specific change of control events will be a default under that agreement. Any future credit or other debt agreements to which we become a party may contain similar restrictions and provisions. If a change of control occurs at a time when we are prohibited from purchasing notes, we could seek the consent of our lenders to purchase the notes or we could attempt to refinance the debt that contains that prohibition. However, we cannot assure you that we will be able to obtain lender consent or refinance those borrowings. Even if such a consent were obtained or the debt is refinanced, it is possible that we will not have sufficient funds at the time of the change of control to make the required repurchase of notes. Our failure to purchase the notes would be a default under the indenture that would, in turn, be a default under our credit facility and, potentially, other senior debt. If the senior debt were to be accelerated, we may be unable to repay these amounts and make the required repurchase of notes. See "Description of Notes — Repurchase at the Option of Holders."

    Acquisitions could have a material adverse effect on our business, results of operations or financial condition.

    We may, from time to time, pursue acquisitions of businesses that complement or expand our existing business. We evaluate potential acquisition opportunities from time to time, including those that could be material in size and scope. There can be no assurance that the anticipated economic, operational and other benefits of any future acquisition will be achieved. In addition, acquisitions may involve the expenditure of significant funds and involve a number of risks, including diversion of management attention, unanticipated problems, liabilities or contingencies and risks of entering markets in which we have limited or no direct expertise. The occurrence of some or all of these events could have a material adverse effect on our business, results of operations or financial condition. We cannot

18


assure you that if one or more acquisitions are completed, the acquired businesses will generate sufficient revenue to offset the associated costs or other adverse effects.

    Flooding, mechanical failure, severe weather conditions or collision could decrease attendance, increase expenses and interrupt service at our riverboat casinos.

    Our revenues are generated primarily by gaming operations conducted on riverboat casinos, which are supplemented by dockside entertainment and support facilities. A riverboat or dockside facility could be lost from service for a variety of reasons, including casualty, forces of nature, mechanical failure or extended or extraordinary maintenance. In addition, our riverboats are subject to risks generally associated with the movement of vessels on inland waterways, including risks of collision or casualty due to river turbulence and traffic.

    The areas in which our riverboats operate are subject to periodic flooding that has caused us to experience decreased attendance and increased operating expenses. Any flood or other severe weather condition could lead to the loss of use of a riverboat or dockside facility for an extended period. Although we have business interruption insurance at our properties and our land-based assets are covered by flood insurance, the loss of any riverboat from service, the inability to use a dockside facility or the loss of parking or land-based facilities could have a material adverse effect on our financial results.

    U.S. Coast Guard regulations require a hull inspection for all riverboats at five-year intervals. In the event that one of our riverboats failed its inspection, the regulations would require us to remove the vessel from service for repairs.

    You may find it difficult to sell your registered notes because no public trading market for these registered notes exists.

    No public market exists for the registered notes, and a market offering liquidity may never develop. The registered notes will be registered under the Securities Act, but we do not intend to list the registered notes on any national securities exchange or to seek the admission of the registered notes for quotation through the Nasdaq Stock Market, Inc. In addition, the registered notes will not be eligible for trading on the PORTAL Market. If the registered notes are traded after their initial issuance, they may trade at a discount from their initial offering price, depending upon prevailing interest rates, the market for similar securities, our performance and other factors. You cannot be sure that an active trading market will develop for these registered notes. You also should be aware that you may be required to bear the financial risks of such investment for an indefinite period of time.

    General declines in the market for similar securities may also adversely affect the liquidity of, and trading market for, the registered notes. Such a decline may adversely affect such liquidity and trading markets independent of our financial performance and prospects.

    If you do not exchange your restricted notes for registered notes, your notes will continue to have restrictions on transfer.

    If you do not exchange your restricted notes for registered notes in the exchange offer, or if your restricted notes are tendered but not accepted, your notes will continue to have restrictions on transfer. In general, you may offer or sell any restricted notes only if the notes are registered under the Securities Act and applicable state laws, or resold under an exemption from these laws. We do not intend to register the restricted notes under the Securities Act, other than in the limited circumstances described in the registration rights agreement discussed in the section "Description of Notes — Registration Rights."

    The issuance of the registered notes may adversely affect the market for restricted notes.

    If restricted notes are tendered for exchange, the trading market for untendered and tendered but unaccepted restricted notes could be adversely affected. Please refer to the section in this prospectus entitled "The Exchange Offer — Consequences of Failure to Exchange."

19



CAPITALIZATION

    The following table sets forth our capitalization as of December 31, 2000, and on a pro forma as adjusted basis to give effect to the issuance of the restricted notes, additional borrowings under the amended and restated credit facility and application of proceeds to purchase the minority interests in our Lawrenceburg casino as described in this prospectus as if they had occurred on December 31, 2000. See "Pro Forma Consolidated Financial Data." Please read this table in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the financial statements and notes included in this prospectus.

 
  December 31, 2000
 
  Actual
  Pro Forma
As Adjusted

 
  (in thousands)

Cash and cash equivalents   $ 59,374   $ 59,374
   
 
Current maturities of long-term debt   $ 23,775   $ 14,694
   
 
Long-term debt            
  Credit facility(a)     47,400     261,043
  103/4% Senior Subordinated Notes due 2009(b)     200,000     359,000
  Other     5,161     5,161
   
 
  Total long-term debt     252,561     625,204
   
 
Minority interests     64,035    
   
 
Stockholders' equity:            
  Common stock; $.01 par value per share; 60,000,000 shares authorized; 28,394,423 shares issued and outstanding     284     284
  Capital in excess of par     80,693     80,693
  Retained earnings     22,975     22,975
   
 
  Total stockholders' equity     103,952     103,952
   
 
  Total capitalization   $ 444,323   $ 743,850
   
 

(a)
In connection with the purchases of the minority interests in our Lawrenceburg casino, we amended and restated our credit facility to, among other things, increase borrowing availability to $400 million. On a pro forma as adjusted basis, amounts available for future borrowings under the amended and restated credit facility would have been approximately $139.0 million, subject to certain borrowing conditions. See "Description of Certain Indebtedness."

(b)
Includes unamortized premium of $9.0 million.

20



SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

    Our selected consolidated financial data presented below under the captions "Statements of Operations Data" and "Balance Sheet Data" for and as of the end of each of the five years ended December 31, 2000 are derived from our Consolidated Financial Statements, which have been audited by Ernst & Young LLP, independent auditors. You should read the following information in conjunction with the consolidated financial statements and notes thereto, and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and related notes included elsewhere in this prospectus.

 
  Years Ended December 31,
 
 
  1996
  1997
  1998
  1999
  2000
 
 
  (in thousands, except per share data and ratios)

 
Statements of Operations Data:                                
Revenues:                                
Casino   $ 228,388   $ 319,830   $ 473,505   $ 559,147   $ 658,883  
Admissions     2,759     7,895     16,025     18,893     18,998  
Food, beverage and other     29,212     34,836     51,057     57,998     66,146  
   
 
 
 
 
 
      260,359     362,561     540,587     636,038     744,027  
Less: promotional allowances     (15,542 )   (18,478 )   (33,919 )   (41,484 )   (49,183 )
   
 
 
 
 
 
  Net revenues     244,817     344,083     506,668     594,554     694,844  
Costs and expenses:                                
Casino     121,004     163,935     221,682     250,559     287,770  
Food, beverage and other     23,769     29,962     40,550     41,528     46,575  
Other operating expenses     19,111     28,695     26,639     27,866     30,230  
Selling, general and administrative     52,048     69,725     96,041     117,003     135,819  
Depreciation and amortization     22,416     33,292     33,436     34,058     36,094  
Development and preopening     12,365     594     509     515      
Other(a)     4,855     11,350             6,800  
   
 
 
 
 
 
  Income (loss) from operations     (10,751 )   6,530     87,811     123,025     151,556  
   
 
 
 
 
 
Interest expense, net     (30,607 )   (41,179 )   (53,905 )   (45,724 )   (33,400 )
   
 
 
 
 
 
Income (loss) before minority interests, income taxes and extraordinary item     (41,358 )   (34,649 )   33,906     77,301     118,156  
Minority interests     4,879     (6,916 )   (26,205 )   (34,975 )   (40,466 )
Income tax (expense) benefit     12,530     1,352     (1,140 )   (5,900 )   (31,161 )
Extraordinary loss on extinguishment of debt (net of income tax benefit of $594, $13,500, $0, $0, $800)     (890 )           (24,920 )   (1,154 )
   
 
 
 
 
 
Net income (loss)     (24,839 )   (40,213 )   6,561     11,506     45,375  
Preferred stock dividends and accretion             (820 )   (27 )    
   
 
 
 
 
 
Net income (loss) attributable to common shareholders   $ (24,839 ) $ (40,213 ) $ 5,741   $ 11,479   $ 45,375  
   
 
 
 
 
 
Diluted income (loss) per share   $ (1.02 ) $ (1.65 ) $ 0.23   $ 0.40   $ 1.56  
Shares outstanding     24,333     24,498     25,830     28,325     28,394  
Ratio of earnings to fixed charges(b)(c)             1.5x     2.4x     3.9x  

21


 
  As of December 31,

 
  1996
  1997
  1998
  1999
  2000
 
  (in thousands)

Balance Sheet Data:                              
Cash and cash equivalents   $ 38,284   $ 59,354   $ 89,857   $ 47,090   $ 59,374
Total assets     532,159     559,856     562,752     566,860     537,236
Long-term debt including current maturities     380,208     449,790     424,000     379,373     276,336
Total stockholders' equity     72,701     32,663     40,863     58,245     103,952

(a)
Other includes nonrecurring charges in 1996 related to lease termination costs and referendum expenses, in 1997 related to severance costs and write-down of assets held for sale and in 2000 related to write-down of assets held for sale.

(b)
The ratio of earnings to fixed charges has been computed by dividing earnings available for fixed charges (income before income taxes plus fixed charges less capitalized interest and preferred equity return to Lawrenceburg partner) by fixed charges (interest expenses plus capitalized interest plus preferred equity return to Lawrenceburg partner and one third of rental expense (the portion deemed representative of the interest factor)).

(c)
Our earnings were inadequate to cover fixed charges for the years ended 1996 and 1997 by approximately $45.9 million and $45.3 million, respectively.

22



PRO FORMA CONSOLIDATED FINANCIAL DATA

    Our historical consolidated financial data as of December 31, 2000, and for the year then ended, are derived from our Consolidated Financial Statements, which have been audited by Ernst & Young LLP, independent auditors. The historical financial statements for this period includes the results for the Lawrenceburg partnership on a consolidated basis with a deduction for the 42.5% minority interest in this partnership. The historical balance sheet data at December 31, 2000 have been derived from the audited consolidated financial statements which are also included in this prospectus.

    The pro forma consolidated financial data have been prepared by applying certain pro forma adjustments resulting from our acquisition of the minority interests in the Lawrenceburg partnership, the issuance of $150 million of restricted notes and borrowings of $213.6 million under our amended and restated credit facility. The pro forma data assume that these transactions occurred on January 1, 2000, in the case of the Unaudited Pro Forma Consolidated Statements of Operations for the year ended December 31, 2000 and as of December 31, 2000, in the case of the Unaudited Pro Forma Consolidated Balance Sheet. The pro forma consolidated financial data are presented for informational purposes only and have been derived from, and should be read in conjunction with, our historical consolidated financial statements including the notes thereto. The pro forma adjustments, as described in the notes to the pro forma consolidated financial statements, are based on currently available information and certain adjustments that we believe are reasonable. They are not necessarily indicative of our financial position or results of operations that would have occurred had the transactions described above taken place on the dates indicated, nor are they necessarily indicative of future financial position or results of operations.

    You should read the following information in conjunction with the consolidated financial statements and notes thereto, and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and related notes included elsewhere in this prospectus.

23


Unaudited Pro Forma Consolidated Statements of Operations

 
  Year Ended December 31, 2000

 
 
  Historical

  Pro Forma
Adjustments

  As Adjusted
Pro Forma

 
 
  (in thousands, except per share data)

 
Revenues:                    
Casino   $ 658,883   $   $ 658,883  
Admissions     18,998         18,998  
Food, beverage and other     66,146         66,146  
   
 
 
 
      744,027         744,027  
Less: promotional allowances     (49,183 )       (49,183 )
   
 
 
 
  Net revenues     694,844         694,844  
   
 
 
 
Costs and expenses:                    
Casino     287,770         287,770  
Food, beverage and other     46,575         46,575  
Other operating expenses     30,230         30,230  
Selling, general and administrative     135,819     (6,652) (a)   129,167  
Depreciation and amortization     36,094     7,317 (b)   43,411  
Write-down of assets held for sale     6,800         6,800  
   
 
 
 
      543,288     665     543,953  
   
 
 
 
  Income (loss) from operations     151,556     (665 )   150,891  
   
 
 
 
Interest expense, net     (33,400 )   (34,456) (c)   (67,856 )
   
 
 
 
Income (loss) before minority interests, income taxes and extraordinary item     118,156     (35,121 )   83,035  
Minority interests     (40,466 )   39,789 (d)   (677 )
Income tax expense     (31,161 )   (1,867) (e)   (33,028 )
Extraordinary loss on extinguishment of debt     (1,154 )       (1,154 )
   
 
 
 
Net income   $ 45,375   $ 2,801   $ 48,176  
   
 
 
 
Diluted income per share   $ 1.56   $ 0.09   $ 1.65  
Shares outstanding     28,394         28,394  
Ratio of earnings to fixed charges     3.9x         2.1x  

See Notes to Unaudited Pro Forma Consolidated Financial Statements.

24


Unaudited Pro Forma Consolidated Balance Sheet

 
  December 31, 2000

 
  Historical

  Pro Forma
Adjustments

  As Adjusted
Pro Forma

 
  (in thousands)

Cash and cash equivalents   $ 59,374   $   $ 59,374
Other current assets     12,820     602 (f)   13,422
   
 
 
    Total current assets     72,194     602     72,796
Net property and equipment     397,989         397,989
Other assets:                  
  Deferred finance costs, net     7,767     5,643 (c)   13,410
  Goodwill and other intangible assets, net     56,681     295,257 (b)   351,938
  Other, net     2,605         2,605
   
 
 
    Total other assets     67,053     300,900     367,953
   
 
 
Total assets   $ 537,236   $ 301,502   $ 838,738
   
 
 
Current liabilities:                  
  Accounts payable   $ 15,304   $   $ 15,304
  Other current liabilities     66,611         66,611
  Current maturities of long-term debt     23,775     (9,081) (c)   14,694
   
 
 
    Total current liabilities     105,690     (9,081 )   96,609
Long-term debt     252,561     372,643 (c)   625,204
Deferred income taxes     10,762     1,975 (f)   12,737
Other long-term obligations     236         236
Minority interests in equity of consolidated subsidiaries     64,035     (64,035) (d)  
Stockholders' equity:                  
  Common stock $.01 par; 60,000,000 shares authorized; 28,394,423 issued and outstanding at December 31, 2000     284         284
  Capital in excess of par     80,693         80,693
  Retained earnings     22,975         22,975
   
 
 
    Total stockholders' equity     103,952         103,952
   
 
 
Total liabilities and stockholders' equity   $ 537,236   $ 301,502   $ 838,738
   
 
 

See Notes to Unaudited Pro Forma Consolidated Financial Statements.

25


Notes to Unaudited Pro Forma Consolidated Financial Statements (in thousands)

(a)
Reflects the reduction in financial advisory fee equal to 5.0% of the Lawrenceburg casino's EBITDA paid to Conseco. Following the purchase of Conseco's minority interest, this financial advisory fee will no longer be paid.

(b)
Reflects estimated adjustments to record and amortize goodwill and acquisition costs due to the acquisition of Conseco's 29% and Centaur's 13.5% minority interests in the Lawrenceburg partnership. Goodwill resulting from the acquisition is being amortized over 40 years.

    Because we were the majority owner of the Lawrenceburg partnership prior to our acquisition of the minority interests, our historical financial statements include the assets, liabilities and results of operations for the Lawrenceburg partnership on a fully consolidated basis. We have allocated the entire purchase price on a preliminary basis to goodwill. The final purchase price allocation will be based on the fair market value of the tangible and intangible assets acquired and liabilities assumed as compared to the historical balances of such assets and liabilities on the respective transaction dates.

    The following table sets forth the purchase price of these minority interests as if they were acquired on December 31, 2000:

Purchase Price:

  (in thousands)

 
  Conseco minority interest   $ 260,000  
  Centaur minority interest     105,000  
  Acquisition costs     2,000  
  Deferred income taxes on minority interest     1,373  
  Less Conseco partner loan     (9,081 )
  Less net book value of minority interest     (64,035 )
   
 
    Purchase price allocated to goodwill   $ 295,257  
   
 

    Assuming that we purchased the minority interests in the Lawrenceburg partnership as of January 1, 2000 and using a 40 year amortization period, goodwill amortization would have been $7,317 for the year ended December 31, 2000.

(c)
Following are the estimated sources and uses of funds necessary to acquire the minority interests as if they were acquired on January 1, 2000:

Sources of Funds:

  (in thousands)

 
  Proceeds from the restricted notes, including unamortized premium of $9.0 million   $ 159,000  
  Additional credit facility borrowings     213,643  
   
 
    Total sources of funds   $ 372,643  
   
 
Uses of Funds:        
  Purchase of minority interests   $ (365,000 )
  Acquisition costs     (2,000 )
  Financing costs     (5,643 )
   
 
    Total uses of funds   $ (372,643 )
   
 

26


    The overall estimated change in long-term debt including current maturities at December 31, 2000 is as follows:

 
  (in thousands)

 
Proceeds from the restricted notes, including unamortized premium of $9,000   $ 159,000  
Additional credit facility borrowings     213,643  
Less Lawrenceburg partnership loan to Conseco repaid as a part of the minority interest purchase price     (9,081 )
   
 
Pro forma adjustment to debt as of December 31, 2000   $ 363,562  
   
 

    Pro forma adjustment to interest expense is as follows:

Interest on the restricted notes at 103/4%   $ 16,125  
Less amortization of premium on the restricted notes     (1,081 )
Interest on additional line of credit borrowings     19,432  
Deferred finance cost amortization     835  
Reduction in partner loan interest rate     (1,186 )
Other, net     (749 )
   
 
    $ 34,456  
   
 

    The pro forma interest expense assumes an effective net interest rate of 9.461% on the restricted notes and 9.12% on the additional line of credit borrowings for the year ended December 31, 2000.

(d)
Reflects the elimination of minority interest and minority interest expense attributable to the Lawrenceburg partnership as a result of the acquisition of these minority interests.

(e)
Reflects increase in tax expense to result in an effective tax rate of 40% on the incremental pro forma income before income taxes.

(f)
Reflects estimated deferred income tax benefit and liability from acquisition of minority partnership interests.

27



MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Overview

    Through our subsidiaries or joint ventures, we own and operate five riverboat casinos: the Alton Belle Casino, in Alton, Illinois; the Argosy Casino of Greater Kansas City in Riverside, Missouri; the Argosy Casino — Baton Rouge in Baton Rouge, Louisiana; the Belle of Sioux City in Sioux City, Iowa; and the Argosy Casino Lawrenceburg in Lawrenceburg, Indiana.

    Our results of operations in 2000 reflect increases in both revenues and operating income for all of our casino properties. This improvement is primarily attributable to the successful execution of our operating strategy, which has been developed with the goal to position us as the premier riverboat casino operator. This strategy includes capitalizing on management's significant experience and expertise in gaming industry operations, continued emphasis on database marketing techniques, and prudently investing in gaming and gaming-related assets for our properties. In addition, revenues for 1999 and 2000 were favorably impacted by regulatory changes in three of our markets: dockside gaming in Alton, Illinois, elimination of video poker at many non-casino sites in Baton Rouge, Louisiana and the advent of open boarding in Missouri. In addition, the results of our Baton Rouge casino were favorably impacted by an elimination of an additional head tax of $2.50 per passenger which ceased on July 29, 1999 when we began construction of a $23 million, 300 room convention hotel at our Baton Rouge property. The hotel opened February 5, 2001. We expect the Baton Rouge casino's revenues will benefit from recently enacted legislation in Louisiana that permits dockside gaming, notwithstanding a related increase in tax on casino revenues from 18.5% to 21.5%.

    Although we have recently benefited from favorable regulatory changes, gaming regulations are subject to change at any time and could impose additional operating, financial or other burdens on our business. In addition, gaming taxes and fees represent a significant cost of our operations and are also subject to increase at any time as governmental agencies face additional fiscal pressures. The enactment of any adverse regulatory changes or increases in gaming taxes or fees could adversely affect our operating results.

    During December 1999, we replaced our landing facility at our Alton property. In June 2000, we recorded a $6.8 million pre-tax charge to write down the previous landing facility as it was determined that we had no planned use for the landing facility.

    During 1999, we recorded an extraordinary loss of $24.9 million (net of a $13.5 million tax benefit) related to the early extinguishment of debt. Also, during 1999, we recognized a $10.0 million tax benefit representing prior federal income tax net operating losses that are expected to be utilized in 2000. During the second quarter of 2000, we recorded an extraordinary loss of $1.2 million (net of a $0.8 million tax benefit) related to the redemption of our remaining $22.2 million of outstanding First Mortgage Notes.

28


Results of Operations

    The following table sets forth, for the periods indicated, certain financial information regarding our results of operations:

 
  Years Ended December 31,

 
 
  1998
  1999
  2000
 
 
  (in thousands)

 
Casino Revenues                    
Argosy Casino Lawrenceburg   $ 264,352   $ 308,316   $ 344,013  
Alton Belle Casino     67,798     84,664     112,077  
Argosy Casino of Greater Kansas City     71,955     84,892     97,049  
Argosy Casino — Baton Rouge     46,828     53,262     70,943  
Belle of Sioux City Casino     22,572     28,013     34,801  
   
 
 
 
  Total   $ 473,505   $ 559,147   $ 658,883  
   
 
 
 

Net Revenues

 

 

 

 

 

 

 

 

 

 
Argosy Casino Lawrenceburg   $ 284,721   $ 332,235   $ 367,743  
Alton Belle Casino     72,064     88,079     115,732  
Argosy Casino of Greater Kansas City     76,960     89,813     101,791  
Argosy Casino — Baton Rouge     49,054     55,110     72,995  
Belle of Sioux City Casino     23,526     28,889     35,814  
Other     343     428     769  
   
 
 
 
  Total   $ 506,668   $ 594,554   $ 694,844  
   
 
 
 

Income (loss) from Operations(a)

 

 

 

 

 

 

 

 

 

 
Argosy Casino Lawrenceburg   $ 87,907   $ 103,295   $ 111,991  
Alton Belle Casino     13,850     23,115     32,155  
Argosy Casino of Greater Kansas City     5,369     12,564     17,803  
Argosy Casino — Baton Rouge     (3,381 )   1,129     11,947  
Belle of Sioux City Casino     1,919     4,570     6,708  
Jazz(b)     (6,312 )   (5,118 )   (5,103 )
Corporate     (9,990 )   (15,113 )   (15,516 )
Other     (1,551 )   (1,417 )   (1,629 )
   
 
 
 
  Total(c)   $ 87,811   $ 123,025   $ 158,356  
   
 
 
 

EBITDA(a)(d)

 

 

 

 

 

 

 

 

 

 
Argosy Casino Lawrenceburg   $ 105,674   $ 123,083   $ 133,039  
Alton Belle Casino     17,835     27,388     38,016  
Argosy Casino of Greater Kansas City     11,293     18,252     23,368  
Argosy Casino — Baton Rouge     1,891     6,348     16,384  
Belle of Sioux City Casino     3,016     5,838     8,277  
Jazz(b)     (3,633 )   (2,417 )   (2,385 )
Corporate     (9,436 )   (15,082 )   (15,142 )
Lawrenceburg financial advisory fee(e)     (5,200 )   (6,154 )   (6,652 )
Other     (193 )   (173 )   (455 )
   
 
 
 
  Total(c)   $ 121,247   $ 157,083   $ 194,450  
   
 
 
 

(a)
Income from operations and EBITDA are presented before consideration of any management fees paid to us and, in the case of the Belle of Sioux City (prior to July 2000) and the Argosy Casino Lawrenceburg, before the 30% and 42.5% minority interests, respectively.

(b)
Jazz Enterprises, Inc. is our wholly-owned subsidiary which owns Catfish Town.

29


(c)
Excludes a $6,800 pre-tax charge related to the write-off of the landing facility previously used at our Alton property for the year ended December 31, 2000.

(d)
EBITDA is defined as earnings before interest, taxes, depreciation and amortization and is presented before any management fees paid to Argosy. EBITDA should not be construed as an alternative to operating income or net income (as determined in accordance with generally accepted accounting principles) as an indicator of our operating performance, or as an alternative to cash flows generated by operating, investing and financing activities (as an indicator of cash flow or a measure of liquidity). EBITDA is presented solely as a supplemental disclosure because management believes that it is a widely used measure of operating performance in the gaming industry and for companies with a significant amount of depreciation and amortization. EBITDA may not be comparable to similarly titled measures reported by other companies. We have other significant uses of cash flows, including debt service and capital expenditures, which are not reflected in EBITDA.

(e)
Through February 22, 2001, our Lawrenceburg subsidiary paid a financial advisory fee equal to 5.0% of its EBITDA to a minority partner.

Year ended December 31, 2000 compared to year ended December 31, 1999

    Casino — Casino revenues for the year ended December 31, 2000, increased $99.7 million, or 17.8%, to $658.9 million from $559.1 million for the year ended December 31, 1999. The western properties (Alton, Riverside, Sioux City and Baton Rouge) reported an aggregate 25.6% increase in casino revenues from $250.8 million to $314.9 million. In particular, Alton casino revenues increased from $84.7 million to $112.1 million. Riverside casino revenues increased from $84.9 million to $97.0 million. Sioux City casino revenues increased from $28.0 million to $34.8 million, and Baton Rouge casino revenues increased from $53.3 million to $70.9 million. Lawrenceburg casino revenues increased $35.7 million, or 11.6% to $344.0 million for the year ended December 31, 2000, from $308.3 million for the year ended December 31, 1999. We experienced increases in both passengers and the average win per passenger for the year ended December 31, 2000 versus the year ended December 31, 1999. Additionally, the increase in revenues was partially attributable to favorable regulatory changes in Illinois, Missouri and Louisiana, as well as expanded capacity at Alton.

    Casino expenses increased 14.8% to $287.8 million for the year ended December 31, 2000, from $250.6 million for the year ended December 31, 1999. This increase is primarily due to an increase of $23.1 million in gaming taxes as a result of the overall increase in casino revenues.

    Admissions — Admissions revenues (net of complimentary admissions) were $6.1 million for the year ended December 31, 2000, and $7.2 million for the year ended December 31, 1999. Although the number of admissions increased in Lawrenceburg 1.0% in 2000 over 1999, net admission revenue decreased as more customers were given complimentary admissions.

    Food, Beverage, and Other — Food, beverage and other revenues increased from $58.0 million to $66.1 million for the year ended December 31, 2000. This increase is primarily attributable to the overall increase in casino passengers for the year ended December 31, 2000. Food, beverage and other revenues, as a percent of casino revenues, has remained relatively steady at 10.0% in 2000 and 10.4% in 1999. Food, beverage and other net profit improved $3.0 million to $19.5 million for the year ended December 31, 2000. Increases in revenues and net profit came primarily from Alton and Lawrenceburg. Alton increased food and beverage revenues as it reopened one of its restaurants, which was closed during the entire year ended December 31, 1999. Lawrenceburg's increases were primarily due to a slight increase in admissions.

    During 2000, the Lawrenceburg Hotel generated $4.0 million in net revenues and $1.5 million of operating profit. The hotel occupancy percentage was 87.0% and the average daily room rate, including

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promotional allowances, was $88. In 1999, the Lawrenceburg Hotel generated $4.2 million in net revenues and $1.9 million of operating profit. The hotel occupancy percentage was 83.2% and the average daily room rate, including promotional allowances, was $84 during the months the hotel was open. The decrease in hotel net revenues and operating profit reflects an increase in complimentary rooms to our customers.

    Selling, General and Administrative — Selling, general and administrative expenses increased 15.6% from $117.5 in 1999 to $135.8 million for the year ended December 31, 2000, due primarily to an increase at Lawrenceburg of $2.6 million related to expanded marketing and $5.2 million in additional development payments to the city due to the increased gaming revenues. Marketing expenses increased $8.3 million for the year ended December 31, 2000, remaining relatively flat as a percent of casino revenues at approximately 7.0%.

    Other Operating Expenses — Other operating expenses increased from $27.9 million in 1999 to $30.2 million for the year ended December 31, 2000 due primarily to increased vessel operating costs.

    Depreciation and Amortization — Depreciation and amortization increased slightly to $36.1 million for the year ended December 31, 2000, from $34.1 million in 1999.

    Interest Expense — Net interest expense decreased $12.3 million to $33.4 million for the year ended December 31, 2000. The decrease in interest expense is attributable to the repayments on the credit facility in 2000, the refinancing completed during 1999 and the use of escrowed funds in June 2000 to redeem the untendered Mortgage Notes, both of which reduced our debt levels and a decrease of interest to a minority partner of $2.2 million.

    Minority Interests — Our minority interest expense increased by $5.5 million to $40.5 million for the year ending December 31, 2000. This increase is primarily attributable to improved operating results at Lawrenceburg.

    Income Tax Expense — We recorded income tax expense of $31.2 million for the year ended December 31, 2000 compared to income tax expense of $5.9 million for the year ended December 31, 1999. Prior to 2000, our effective tax rate was impacted favorably due to the utilization of net operating loss carryforwards. For the year ended December 31, 1999, income tax expense was offset by the reversal of a $10.0 million valuation allowance related to prior federal income tax net operating losses.

    Income Before Extraordinary Item — Income before extraordinary items was $46.5 million for the year ended December 31, 2000 compared to net income before extraordinary items of $36.4 million in 1999 due primarily to the factors discussed above.

    Extraordinary Loss — We recorded an extraordinary loss of $1.2 million for the year ended December 31, 2000 related to completion of the final phase of the 1999 refinancing. This extraordinary loss is net of a $0.8 million tax benefit. For the year ended December 31, 1999, we recorded an extraordinary loss of $24.9 million, net of a $13.5 million tax benefit, related to the early extinguishment of debt in conjunction with the refinancing.

    Net Income Attributable to Common Stockholders — Net income attributable to common stockholders was $45.4 million for the year ended December 31, 2000 compared to $11.5 million for the year ended December 31, 1999, due primarily to the factors discussed above.

Year ended December 31, 1999 compared to year ended December 31, 1998

    Casino — Casino revenues for the year ended December 31, 1999, increased by 18.1% to $559.1 million from $473.5 million for the year ended December 31, 1998, due in part to a $44.0 million increase in casino revenues at the Lawrenceburg casino, which generated total casino revenues of $308.3 million for the year ended December 31, 1999. Our other properties reported an aggregate 19.9% increase in casino revenues from $209.2 million to 250.8 million. This improvement is

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primarily attributable to the regulatory changes in Illinois, Louisiana and Missouri and to the continued implementation of our operating and marketing strategies. Specifically, Alton casino revenues increased from $67.8 million to $84.7 million due in part to dockside gaming effective June 1999; Kansas City casino revenues increased from $72.0 million to $84.9 million; Sioux City casino revenues increased from $22.6 million to $28.0 million and Baton Rouge casino revenues increased from $46.8 million to $53.2 million.

    Casino expenses increased 13.0% to $250.6 million for the year ended December 31, 1999, from $221.7 million for the year ended December 31, 1998. This increase is primarily due to an increase of $17.9 million in gaming taxes as a result of the overall increase in casino revenues. Baton Rouge casino expense is net of a $1.6 million decrease in admission taxes due to the elimination of an additional head tax, which commenced when construction began on the Baton Rouge hotel in July 1999.

    Admissions — Admissions revenues (net of complimentary admissions) were $7.2 million for the years ended December 31, 1999 and 1998.

    Food, Beverage, and Other — Food, beverage and other revenues increased from $51.1 million to $58.0 million for the year ended December 31, 1999. This increase is attributable to the restaurants and the hotel at the Lawrenceburg property being open for the entire year in 1999. Food, beverage and other net profit improved $6.0 million to $16.5 million for the year ended December 31, 1999. Alton, Kansas City and Baton Rouge each reported relatively the same food and beverage revenues but decreases in food and beverage expenses. Alton's decrease was due to the closing of one of its restaurants during the entire year ended December 31, 1999 in conjunction with a major renovation. Kansas City's and Baton Rouge's decreases were primarily due to the decreased use of food and beverage as promotional items.

    The Lawrenceburg hotel contributed $4.2 million in net revenues and $1.9 million of operating profit. The hotel occupancy percentage was 83.2% and the average daily room rate, including promotional allowances, was $84. In 1998, the hotel occupancy percentage was 73.5% and the average daily room rate, including promotional allowances, was $79 during the months the hotel was open.

    Other Operating Expenses — Other operating expenses increased from $26.6 million in 1998 to $27.9 million for the year ended December 31, 1999.

    Selling, General and Administrative — Selling, general and administrative expenses increased 21.7% to $117.5 million for the year ended December 31, 1999, due primarily to an increase at Lawrenceburg of $3.9 million related to expanded marketing and $4.5 million in additional development payments to the city due to the increased gaming revenues. Corporate expenses increased due to expenses of $1.8 million related to a severance and settlement arrangement and $3.1 million related to incentive compensation. Marketing expenses increased $4.8 million for the year ended December 31, 1999 but remained relatively flat, at approximately 7%, as a percentage of casino revenues.

    Depreciation and Amortization — Depreciation and amortization increased slightly to $34.1 million for the year ended December 31, 1999, from $33.4 million in 1998.

    Interest Expense — Net interest expense decreased $8.2 million to $45.7 million for the year ended December 31, 1999. The decrease in interest expense is primarily attributable to the refinancing completed during 1999 and a decrease of interest to a minority partner of $3.0 million. This decrease, however, was offset by a decrease in capitalized interest of $1.0 million.

    Income Before Extraordinary Item — Income before extraordinary item of $36.4 million for the year ended December 31, 1999 compared to net income before extraordinary item of $6.6 million in 1998 due primarily to the factors discussed above.

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    Extraordinary Loss — We recorded an extraordinary loss of $24.9 million for the year ended December 31, 1999 related to the early extinguishment of debt in conjunction with a refinancing. This extraordinary loss is net of a $13.5 million tax benefit.

    Income Tax Expense — We recorded income tax expense of $5.9 million for the year ended December 31, 1999 compared to income tax expense of $1.1 million for the year ended December 31, 1998. Our effective tax rate has been impacted favorably in 1999 and 1998 due to the utilization of net operating loss carryforwards. Income tax expense was offset by the reversal of a $10.0 million valuation allowance related to prior federal income tax net operating losses that are expected to be utilized in 2000. We expect our effective tax rate to be approximately 39% in the future.

    Net Income Attributable to Common Stockholders — We reported net income attributable to common stockholders of $11.5 million for the year ended December 31, 1999 compared to $5.7 million for the year ended December 31, 1998, due primarily to the factors discussed above.

Liquidity and Capital Resources

    During 2000, we generated cash flows from operating activities of $157.8 million compared to $126.7 million for 1999. This increase is attributable to the improved operations at each of our five casino locations.

    During 2000, we used cash flows for investing activities of $44.0 million versus $37.1 million for 1999. Capital expenditures in 2000 consisted of $13.6 million in maintenance capital, primarily related to slot machine replacements and $19.6 million for expansion projects, including construction of a 300 room hotel in Baton Rouge. During 2000, $9.2 million in cash flows were used to purchase the minority interest in the Sioux City partnership.

    During 2000, we used $101.5 million in cash flows for financing activities compared to $132.3 million in cash flows for the same period in 1999. During 2000, $56.4 million in cash flows were used to make repayments on the line of credit. Cash flows in both 2000 and 1999 were used to repay loans related to our Lawrenceburg casino, partner equity distributions related to the Lawrenceburg partnership and for payments on installment contracts and other long term debt. In 1999, we received proceeds of $200 million from the issuance of subordinated notes and $161.8 million from a bank credit facility. During 1999, we also repaid long-term debt of $327.7 million, placed $25.2 million in funds in an escrow to retire the First Mortgage Notes, repaid $58.0 million on the credit facility, used $30.6 million to pay premiums to retire existing debt in connection with our refinancing and used $8.7 million to pay fees in connection with the refinancing.

    At December 31, 2000, we had approximately $59.4 million of cash and cash equivalents, including approximately $38.8 million held at the Indiana Partnership. During June 2000, we redeemed the remaining $22.2 million of First Mortgage Notes that were not tendered in the June 1999 refinancing. At December 31, 2000, we had outstanding $200 million of Senior Subordinated Notes, which were issued in June 1999 and are due in June 2009 and $47.4 million on a senior secured revolving credit facility. As of February 13, 2001 availability under the credit facility was approximately $146 million.

    Consistent with gaming industry practice, we conduct our operations with a net working capital deficit. Unlike traditional industrial companies, a gaming company's balance sheet has limited accounts receivable and inventories. In addition, casinos generate significant cash on a daily basis. We generally apply our daily cash flows to pay down indebtedness under our revolving credit facility and pay our current liabilities pursuant to their normal cycles. Given the significant daily cash flows generated by our operations and the financial flexibility provided by our credit facility, the existence of a working capital deficit has no impact on our ability to operate our business or meet our obligations as they become due.

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    We have made a significant investment in property and equipment and plan to make significant additional investments at our existing properties. In 2001, we expect maintenance capital expenditures primarily related to the purchase of new gaming product and facility enhancements to be approximately $19.1 million and final expenditures related to the Baton Rouge hotel to be approximately $7.3 million.

    Both of our partners in the Indiana partnership have exercised their put rights under the terms of the Lawrenceburg partnership agreement. In December 2000, we reached an agreement with Conseco to purchase its 29% limited partner interest for $260 million, including the repayment of Conseco's preferred equity interest and outstanding partner loans and to settle all pending litigation between us and Conseco. In January 2001, we reached an agreement with Centaur to purchase its 13.5% limited partnership interest for $105 million. In the first quarter of 2001, we consummated our acquisition of these minority interests for an aggregate purchase price of $365 million, using the net proceeds from our offering of the restricted notes, together with borrowings under our amended and restated senior credit facility.

    We have also agreed to provide up to $40 million as part of our agreement to develop and operate a proposed casino in Kenosha, Wisconsin. The proposed casino would be owned by the Menominee Indian Tribe of Wisconsin. Of this $40 million commitment, we have advanced $1 million during 2001 and will advance up to an additional $4 million upon the tribe receiving approval from the United States Bureau of Indian Affairs to place the proposed casino property in federal trust. We also have committed to provide a $30 million subordinated note concurrent with, and conditioned upon, the tribe's institutional debt offering that is anticipated to finance the project. In addition, we will provide a $5 million completion guarantee on the construction of the proposed facility. This project and our funding commitment are subject to numerous regulatory approvals.

    To provide funding for our purchase of Conseco's and Centaur's limited partnership interests and our Kenosha casino development commitment, we amended and restated our credit facility to, among other things, increase borrowing availability to $400 million. Cash on hand, operating cash flows, available capacity under our amended and restated credit facility and the net proceeds from our offering of the restricted notes, was sufficient to fund the purchase of Conseco's and Centaur's limited partnership interests, and will be sufficient to fund our commitment to develop the Kenosha casino and our current operating, capital expenditure and debt service obligations for the next 12 months.

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THE EXCHANGE OFFER

General

    We are offering to exchange up to $150,000,000 in aggregate principal amount of registered senior subordinated notes due 2009 for the same aggregate principal amount of restricted senior subordinated notes due 2009, properly tendered before the expiration date and not withdrawn. We are making the exchange offer for all of the restricted notes. Your participation in the exchange offer is voluntary and you should carefully consider whether to accept this offer.

    On the date of this prospectus, $350,000,000 in aggregate principal amount of our senior subordinated notes due 2009 is outstanding, $200,000,000 of which we originally issued and sold in 1999 and $150,000,000 of which we issued and sold on February 8, 2001 in a transaction exempt from the registration requirements of the Securities Act. We are sending this prospectus, together with the letter of transmittal, on approximately      , 2001, to all holders of restricted notes that we are aware of. Our obligations to accept restricted notes subject to transfer restrictions for exchange pursuant to the exchange offer are limited by the conditions listed under "Conditions to the Exchange Offer" below.

    We currently expect that each of the conditions will be satisfied and that no waivers will be necessary.

Purpose of the Exchange Offer

    We issued and sold $150,000,000 in principal amount of our restricted senior notes due 2009 on February 8, 2001 in a transaction exempt from the registration requirements of the Securities Act. Because the transaction was exempt under the Securities Act, you may re-offer, resell, or otherwise transfer the restricted notes only if registered under the Securities Act or if an applicable exemption from the registration and prospectus delivery requirements of the Securities Act is available.

    In connection with the issuance and sale of the restricted notes, we entered into a registration rights agreement, which requires us to consummate this exchange offer by August 7, 2001, which is six months after the date of the closing of the offering of the restricted notes.

    In addition, there are circumstances under which we are required to use our best efforts to file a shelf registration statement with respect to resales of the restricted notes. We have filed a copy of the registration rights agreement as an exhibit to the registration statement that this prospectus forms a part of and that has been filed with the SEC.

    We are making the exchange offer to satisfy our obligations under the registration rights agreement. Otherwise, we are not required to file any registration statement to register any restricted notes. Holders of restricted notes that do not tender their restricted notes or whose restricted notes are tendered but not accepted will have to rely on exemptions to registration requirements under the securities laws, including the Securities Act, if they wish to sell their restricted notes.

Terms of the Exchange

    We are offering to exchange, upon the terms of this prospectus and the letter of transmittal, $1,000 in principal amount of registered senior subordinated notes due 2009 for each $1,000 in principal amount at maturity of the restricted senior subordinated notes due 2009 that are subject to transfer restrictions. The terms of the registered notes are the same in all material respects, including principal amount, interest rate, maturity and ranking, as the terms of the restricted notes for which they may be exchanged pursuant to the exchange offer, except that the registered notes have been registered under the Securities Act and, therefore, will not be subject to restrictions on transfer applicable to the restricted notes and will be entitled to registration rights only under limited circumstances. In addition, the terms of the registered notes are identical in all respects to the terms of the original notes. The

35


registered notes will evidence the same indebtedness as the restricted notes and will be entitled to the benefits of the indenture. Please refer to the section in this prospectus entitled "Description of the Notes."

    The exchange offer is not conditioned upon any minimum aggregate amount of restricted notes being tendered for exchange.

    We have not requested, and do not intend to request, an interpretation by the staff of the SEC as to whether the registered notes issued pursuant to the exchange offer in exchange for the restricted notes may be offered for sale, resold or otherwise transferred by any holder without compliance with the registration and prospectus delivery provisions of the Securities Act. Instead, based on an interpretation by the Staff in a series of no-action letters issued to third parties, we believe that registered notes issued pursuant to the exchange offer in exchange for restricted notes may be offered for sale, resold and otherwise transferred by any holder of registered notes, other than any holder which is:

    an affiliate of ours; or

    a broker-dealer that purchases notes from us to resell pursuant to Rule 144A under the Securities Act or any other available exemption, without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that the registered notes are acquired in the ordinary course of the holder's business and the holder has no arrangement or understanding with any person to participate in the distribution of the registered notes and neither the holder nor any other person is participating in or intends to participate in a distribution of the registered notes.

Since the SEC has not considered our exchange offer in the context of a no-action letter, we cannot assure you that the staff would make a similar determination with respect to the exchange offer. Any holder that is an affiliate of ours or that tenders in the exchange offer for the purpose of participating in a distribution of the registered notes may be deemed to have received restricted securities and will not be allowed to rely on this interpretation by the staff and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction.

    If you participate in the exchange offer, you must acknowledge, among other things, that you are not participating in, and do not intend to participate in, a distribution of registered notes. If you are a broker-dealer that receives registered notes for your own account in exchange for restricted notes, where your restricted notes were acquired by you as a result of your market-making activities or other trading activities, you must acknowledge that you will deliver a prospectus in connection with any resale of the registered notes. Please refer to the section in this prospectus entitled "Plan of Distribution."

    You will not be required to pay brokerage commissions or fees or, if you comply with the instructions in the letter of transmittal, transfer taxes with respect to the exchange of the restricted notes pursuant to the exchange offer.

Expiration Date; Extension; Termination; Amendment

    The exchange offer will expire at 5:00 p.m., New York City time, on            , 2001, unless we have extended the period of time that the exchange offer is open. The expiration date will be at least 20 business days after the beginning of the exchange offer as required by Rule 14e-1(a) under the Exchange Act. We reserve the right to extend the period of time that the exchange offer is open, and delay acceptance for exchange of any restricted notes, by giving oral or written notice to the exchange agent and by timely public announcement no later than 9:00 a.m. New York City time, on the next business day after the previously scheduled expiration date. During any extension, all restricted notes previously tendered will remain subject to the exchange offer unless properly withdrawn.

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    We also reserve the right to:

    end or amend the exchange offer and not to accept for exchange any restricted notes not previously accepted for exchange upon the occurrence of any of the events specified below under "— Conditions to the Exchange Offer" which have not been waived by us; and

    amend the terms of the exchange offer in any manner which, in our good faith judgment, is advantageous to you, whether before or after any tender of the restricted notes.

    If any termination or amendment occurs, we will notify the exchange agent and will either issue a press release or give oral or written notice to you as promptly as practicable.

Procedures for Tendering Restricted Notes

    Your tender to us of your restricted notes and our acceptance of the restricted notes will constitute a binding agreement between you and us on the terms contained in this prospectus and in the letter of transmittal.

    You will tender restricted notes by:

    properly completing and signing the letter of transmittal or a facsimile copy of the letter, and delivering the letter, together with the certificate or certificates representing the restricted notes being tendered and any required signature guarantees and any other documents required by the letter of transmittal, to the exchange agent at its address listed below on or before the expiration date; or

    complying with the procedure for book-entry transfer described below; or

    complying with the guaranteed delivery procedures described below.

    If your restricted notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender the notes, you should contact the registered holder promptly and instruct the registered holder to tender on your behalf. If you wish to tender on your own behalf, you must, before completing and executing the letter of transmittal and delivering the restricted notes, either make appropriate arrangements to register ownership of the restricted notes in your name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take considerable time.

    The method of delivering the restricted notes, letters of transmittal and all of the required documents is at the election and risk of the holder. If delivery is by mail, we recommend that you use registered mail, properly insured, with return receipt requested. In all cases, sufficient time should be allowed to insure timely delivery. No restricted notes or letters of transmittal should be sent to us.

    If tendered restricted notes are registered in the name of the person who signs the letter of transmittal and the registered notes to be issued in exchange for the tendered restricted notes are to be issued in the name of the registered holder, the signature of the signer need not be guaranteed.

    In addition, if any untendered restricted notes are to be reissued in the name of the registered holder, the signature need not be guaranteed. A registered holder shall include any participant in The Depository Trust Company whose name appears on a security listing as an owner of restricted notes.

    In any other case, the tendered restricted notes must be endorsed or accompanied by written instruments of transfer, in form satisfactory to us and duly executed by the registered holder. The signature of the endorsement or instrument of transfer must be guaranteed by an eligible institution. The following are considered eligible institutions:

    a firm which is a member of a registered national securities exchange or a member of the National Association of Securities Dealers, Inc.;

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    a clearing agency;

    an insured credit union;

    a savings association or a commercial bank; or

    a trust company having an office or correspondent in the United States.

    If the registered notes and/or restricted notes not exchanged are to be delivered to an address other than that of the registered holder appearing on the note registrar for the restricted notes, the signature in the letter of transmittal must be guaranteed by an eligible institution.

    We understand that the exchange agent has confirmed with The Depository Trust Company that any financial institution that is a participant in The Depository Trust Company's system may use its Automated Tender Offer Program to tender restricted notes. We further understand that the exchange agent will request, within two business days after the date the exchange offer commences, that The Depository Trust Company establish an account relating to the restricted notes for the purpose of facilitating the exchange offer, and any participant may make book-entry delivery of restricted notes by causing The Depository Trust Company to transfer the restricted notes into the exchange agent's account in accordance with the Automated Tender Offer Program procedures for transfer. However, the exchange of the restricted notes will only be made after timely confirmation of the book-entry transfer and timely receipt by the exchange agent of an agent's message, an appropriate letter of transmittal with any registered signature guarantee, and any other documents required. The term "agent's message" means a message, transmitted by The Depository Trust Company and received by the exchange agent and forming part of a book-entry confirmation, stating that The Depository Trust Company has received an express acknowledgment from a participant tendering restricted notes which are the subject of the book-entry confirmation and that the participant has received and agrees to be bound by the terms of the letter of transmittal and that we may enforce such agreement against the participant.

    If you want to tender restricted notes in the exchange offer and time will not permit a letter of transmittal or restricted notes to reach the exchange agent before the expiration date or you cannot comply with the procedure for book-entry transfer on a timely basis, a tender may be effected if the exchange agent has received at its address listed below before the expiration date, a letter, telegram or facsimile transmission from an eligible institution listing your name and address, the names in which the restricted notes are registered and, if possible, the certificate number of the restricted notes to be tendered, and stating that the tender is being made by the letter, telegram or facsimile transmission and guaranteeing that within three business days after the expiration date, the restricted notes in proper form for transfer, or a confirmation of book-entry transfer of the restricted notes into the exchange agent's account at The Depository Trust Company, will be delivered by the eligible institution, together with a properly completed and duly executed letter of transmittal and any other required documents. Unless restricted notes being tendered by the method described in the preceding sentence are deposited with the exchange agent within the time period described in the preceding sentence and accompanied or preceded by a properly completed letter of transmittal and any other require documents, we may, at our option, reject the tender. You may obtain copies of the notice of guaranteed delivery from the exchange agent.

    Your tender will be deemed to have been received when:

    the exchange agent receives your properly completed and duly signed letter of transmittal accompanied by the restricted notes, or a confirmation of book-entry transfer of such restricted notes into the exchange agent's account at The Depository Trust Company; or

    a notice of guaranteed delivery or letter, telegram or facsimile transmission to similar effect from an eligible institution is received by the exchange agent.

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    We will issue registered notes in exchange for restricted notes tendered pursuant to a notice of guaranteed delivery or letter, telegram or facsimile transmission to similar effect by an eligible institution only when the exchange agent receives (1) the letter of transmittal and any other required documents and (2) the tendered restricted notes.

    We will determine all questions regarding the validity, form, eligibility, time of receipt and acceptance of restricted notes tendered for exchange. You should be aware that:

    We reserve the absolute right to reject any and all tenders of any particular restricted notes not properly tendered or not to accept any particular restricted notes which acceptance might, in our judgment or that of our counsel, be unlawful.

    We reserve the absolute right to waive any defects or irregularities or conditions of the exchange offer as to any particular restricted notes either before or after the expiration date, including the right to waive the ineligibility of any holder that seeks to tender restricted notes in the exchange offer.

    Our interpretation of the terms and conditions of the exchange offer, including the letter of transmittal and the instructions, shall be final and binding on all parties.

    Unless waived, any defects or irregularities in connection with tenders of restricted notes for exchange must be cured within a reasonable period of time as we shall determine.

    Neither we, the exchange agent nor any other person shall have any duty to give notification of any defect or irregularity with respect to any tender of restricted notes for exchange.

    If the letter of transmittal is signed by a person or persons other than the registered holder or holders of restricted notes, the restricted notes must be endorsed or accompanied by appropriate powers of attorney, in either case signed exactly as the name or names of the registered holder or holders appear on the restricted notes.

    If the letter of transmittal or any restricted notes or powers of attorney are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, they should indicate they are acting in that capacity when signing, and, unless waived by us, you should provide evidence of their authority to act in that capacity.

    If you tender, you will be representing to us that:

    the registered notes you acquire pursuant to the exchange offer are being acquired in the ordinary course of business of the person receiving registered notes, whether or not the person is the holder;

    you are not an affiliate of ours;

    you are not participating in, and do not intend to participate in, and have no arrangement or understanding with any person to participate in, a distribution of the restricted notes or the registered notes; and

    if you are a broker or dealer registered under the Exchange Act, you will receive the registered notes for your own account in exchange for restricted notes that were acquired as a result of market-making activities or other trading activities. You must acknowledge that you will deliver a prospectus in connection with any resale of the registered notes. Please refer to the section in this prospectus entitled "Plan of Distribution."

Terms and Conditions of the Letter of Transmittal

    By signing and returning the letter of transmittal you will be agreeing to the following terms and conditions, which are part of the exchange offer.

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    You are exchanging, assigning and transferring the restricted notes to us and irrevocably constitute and appoint the exchange agent as your agent and attorney-in-fact to cause the restricted notes to be assigned, transferred and exchanged.

    You represent and warrant that you have full power and authority to tender, exchange, assign and transfer the restricted notes and acquire registered notes issuable upon the exchange of tendered restricted notes.

    When we accept restricted notes for exchange, we will acquire good and unencumbered title to the tendered restricted notes, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim.

    You will, upon request, execute and deliver any additional documents deemed by the exchange agent or us to be necessary or desirable to complete the exchange, assignment and transfer of tendered restricted notes or transfer ownership of such restricted notes on the account books maintained by The Depository Trust Company.

    Our acceptance of any tendered restricted notes and our issuance of registered notes in exchange for the restricted notes will constitute performance in full by us of our obligations under the registration rights agreement to complete the exchange offer.

    All authority conferred by you will survive your death or incapacity and every obligation of yours will be binding upon your heirs, legal representatives, successors, assigns, executors and administrators. You will also make the representations described above under "Procedures for Tendering Restricted Notes."

Withdrawal Rights

    You may withdraw your tender of restricted notes at any time before 5:00 p.m., New York City time, on the expiration date.

    For a withdrawal to be effective, the exchange agent must receive a written notice of withdrawal, sent by telegram, facsimile transmission, receipt confirmed by telephone, or letter, before the expiration date. Any notice of withdrawal must:

    specify the name of the person that tendered the restricted notes to be withdrawn;

    identify the restricted notes to be withdrawn, including the certificate number or numbers and principal amount of such restricted notes;

    specify the principal amount of restricted notes to be withdrawn;

    include a statement that the holder is withdrawing its election to have the restricted notes exchanged;

    be signed by the holder in the same manner as the original signature on the letter of transmittal by which the restricted notes were tendered or as otherwise described above, including any required signature guarantees, or be accompanied by documents of transfer sufficient to have the trustee under the indenture register the transfer of the restricted notes into the name of the person withdrawing the tender; and

    specify the name in which any of the restricted notes are to be registered, if different from that of the person that tendered the restricted notes.

    The exchange agent will return the properly withdrawn restricted notes promptly following receipt of notice of withdrawal. If restricted notes have been tendered pursuant to the procedure for book-entry transfer, any notice of withdrawal must specify the name and number of the account at The Depository Trust Company to be credited with the withdrawn restricted notes or otherwise comply with The Depository Trust Company's procedures.

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    Any restricted notes withdrawn will not have been validly tendered for exchange for purposes of the exchange offer. Any restricted notes which have been tendered for exchange but which are not exchanged for any reason will be returned to the holder without cost to the holder as soon as practicable after withdrawal, rejection of tender or termination of the exchange offer. In the case of restricted notes tendered by book-entry transfer into the exchange agent's account at The Depository Trust Company pursuant to its book-entry transfer procedures, the restricted notes will be credited to an account with The Depository Trust Company specified by the holder, as soon as practicable after withdrawal, rejection of tender or termination of the exchange offer. Properly withdrawn restricted notes may be retendered by following one of the procedures described under "— Procedures for Tendering Restricted Notes" above at any time on or before the expiration date.

Acceptance of Restricted Notes for Exchange; Delivery of Registered Notes

    Upon satisfaction or waiver of all of the conditions to the exchange offer, we will accept, promptly after the exchange date, all restricted notes properly tendered and will issue the registered notes promptly after the acceptance. Please refer to the section in this prospectus entitled "— Conditions to the Exchange Offer" below. For purposes of the exchange offer, we will be deemed to have accepted properly tendered restricted notes for exchange, when we give notice of acceptance to the exchange agent.

    For each restricted note accepted for exchange, the holder of the restricted note will receive a registered note having a principal amount at maturity equal to that of the surrendered restricted note.

    In all cases, we will issue registered notes for restricted notes that are accepted for exchange pursuant to the exchange offer only after the exchange agent timely receives certificates for the restricted notes or a book-entry confirmation of the restricted notes into the exchange agent's account at The Depository Trust Company, a properly completed and duly executed letter of transmittal and all other required documents.

Conditions to the Exchange Offer

    We will not be required to accept for exchange, or to issue registered notes in exchange for, any restricted notes and may end or amend the exchange offer, by notice to the exchange agent or by a timely press release, if at any time before the acceptance of the restricted notes for exchange or the exchange of the registered notes for the restricted notes, any of the following conditions exist:

    any action or proceeding is instituted or threatened in any court or by or before any governmental agency or regulatory authority or any injunction, order or decree is issued with respect to the exchange offer which, in our sole judgment, might materially impair our ability to proceed with the exchange offer or have a material adverse effect on the contemplated benefits of the exchange offer to us; or

    any change, or any development involving a prospective change, shall have occurred or be threatened in our business, properties, assets, liabilities, financial condition, operations, results of operations or prospects that is or may be adverse to us, or we become aware of facts that have or may have adverse significance with respect to the value of the restricted notes or the registered notes or that may materially impair the contemplated benefits of the exchange offer to us; or

    any law, rule or regulation or applicable interpretation of the staff of the SEC is issued or promulgated which, in our good faith determination, does not permit us to effect the exchange offer; or

    any governmental approval has not been obtained, which we think is necessary for the completion of the exchange offer; or

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    there shall have been proposed, adopted or enacted any law, statute, rule or regulation, or an amendment to any existing law, statute, rule or regulation, which might materially impair our ability to proceed with the exchange offer or have a material adverse effect on the contemplated benefits of the exchange offer to us; or
    there shall occur a change in the current interpretation by the staff of the SEC which permits the registered notes issued pursuant to the exchange offer in exchange for restricted notes to be offered for resale, resold and otherwise transferred by holders, other than any holder that is a broker-dealer or an affiliate of ours within the meaning of Rule 405 under the Securities Act, without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that the registered notes are acquired in the ordinary course of the holders' business and the holders have no arrangement with any person to participate in the distribution of such registered notes.

    We reserve the right to end the exchange offer and reject for exchange any restricted notes upon the occurrence of any of the preceding conditions. In addition, we may amend the exchange offer at any time before the expiration date if any of these conditions exist.

    In addition, we will reject for exchange any restricted notes tendered, and no registered notes will be issued in exchange for any restricted notes, if at the time any stop order is threatened or in effect with respect to the registration statement of which this prospectus constitutes a part or the qualification of the indenture under the Trust Indenture Act of 1939. If any stop order is in effect we will be required to use our best efforts to obtain its withdrawal at the earliest possible time.

    The exchange offer is not conditioned upon any minimum principal amount of restricted notes being tendered for exchange.

Exchange Agent

    We have appointed Bank One Trust Company, NA as the exchange agent for the exchange offer. You should direct all executed letters of transmittal to the exchange agent at the addresses listed below:


By Mail or Overnight Delivery:

 

By Hand Delivery:

Bank One Trust Company, NA

 

Bank One Trust Company, NA
Corporate Trust Operations
1111 Polaris Parkway
Suite N1-OH1-0184
Columbus, Ohio 43240
Attention: Ms. Lora Marsch
  c/o First Chicago Corporate Trust Services
14 Wall Street
8th Floor
New York, New York 10005


Facsimile Transmissions:
(614) 248-9987


Confirm by Telephone:
(800) 346-5153

    You should direct questions and requests for assistance, requests for additional copies of this prospectus or of the letter of transmittal and requests for notices of guaranteed delivery to the exchange agent at the address and telephone number listed above.

    Delivery to an address other than as listed above, or transmissions of instructions by a facsimile number other than as listed above, will not constitute a valid delivery.

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Solicitation of Tenders; Fees and Expenses

    We have not retained any dealer-manager in connection with the exchange offer and will not make any payments to brokers, dealers or others soliciting acceptances of the exchange offer. However, we will pay the exchange agent reasonable and customary fees for its services and will reimburse it for its reasonable out-of-pocket expenses in connection with the exchange offer.

    We will pay the estimated cash expenses to be incurred in connection with the exchange offer. We estimate that those expenses will be, in the aggregate, approximately $500,000, including fees and expenses of the exchange agent and trustee, registration fees, accounting, legal and printing expenses and other related fees and expenses.

    Neither the delivery of this prospectus nor any exchange made under this prospectus shall, under any circumstances, create any implication that there has been no change in our affairs since the respective dates as of which information is given in this prospectus. The exchange offer is not being made to, nor will tenders be accepted from or on behalf of, holders of restricted notes in any jurisdiction in which the making of the exchange offer or the acceptance of the restricted notes would not be in compliance with the laws of the jurisdiction. However, we may, at our discretion, take any action as we may deem necessary to make the exchange offer in any jurisdiction and extend the exchange offer to holders of restricted notes in the jurisdiction concerned.

Transfer Taxes

    We will pay all transfer taxes, if any, applicable to the exchange of restricted notes under the exchange offer. If, however, certificates representing registered notes or restricted notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be issued in the name of any person other than the registered holder of the restricted notes tendered, or if tendered restricted notes are registered in the name of any person other than the person signing the letter of transmittal, or if a transfer tax is imposed for any reason other than the exchange of restricted notes pursuant to the exchange offer, than the amount of the transfer taxes whether imposed on the registered holder or any other person, will be payable by the tendering holder. If satisfactory evidence of payment of the taxes or exemption therefrom is not submitted with the letter of transmittal, the amount of the transfer taxes will be billed directly to the tendering holder.

Accounting Treatment

    The registered notes will be recorded at the carrying value of the restricted notes as reflected in our accounting records on the date the exchange offer is completed. Accordingly, we will not recognize any gain or loss for accounting purposes upon the exchange of registered notes for restricted notes. We will amortize the expenses incurred in connection with the issuance of the registered notes over the term of the registered notes.

Consequences of Failure to Exchange

    If you do not exchange your restricted notes for registered notes pursuant to the exchange offer, you will continue to be subject to the restrictions on transfer of the restricted notes as described in the legend on the notes. In general, the restricted notes may be offered or sold only if registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. We do not currently anticipate that we will register the restricted notes under the Securities Act. However, under limited circumstances we may be required to file with the SEC a shelf registration statement to cover resales of the restricted notes by the holders of notes who satisfy conditions relating to the provision of information in connection with the shelf registration statement. Please refer to the section in this prospectus entitled "Description of the Notes — Registration Rights."

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    Your participation in the exchange offer is voluntary, and you should carefully consider whether to participate. We urge you to consult your financial and tax advisors in making a decision whether or not to tender your restricted notes. Please refer to the section in this prospectus entitled "Certain U.S. Federal Tax Considerations."

    As a result of the making of, and upon acceptance for exchange of all validly tendered restricted notes pursuant to the terms of, this exchange offer, we will have fulfilled a covenant contained in the registration rights agreement. If you do not tender your restricted notes in the exchange offer, you will be entitled to all the rights and limitations applicable to the restricted notes under the indenture, except for any rights under the registration rights agreement that by their terms end or cease to have further effectiveness as a result of the making of this exchange offer. To the extent that restricted notes are tendered and accepted in the exchange offer, the trading market for untendered, or tendered but unaccepted, restricted notes could be adversely affected. Please refer to the section in this prospectus entitled "Risk Factors — If You Do Not Exchange Your Restricted Notes for Registered Notes, Your Notes Will Continue to Have Restrictions on Transfer."

    We may in the future seek to acquire, subject to the terms of the indenture, untendered restricted notes in open market or privately negotiated transactions, through subsequent exchange offers or otherwise. The terms of these purchases or offers may differ from the terms of the exchange offer.

Resale of Registered Notes

    As noted above, we are making the exchange offer in reliance on the position of the staff of the SEC in interpretive letters addressed to third parties in other transactions. However, we have not sought an interpretive letter from the staff and we cannot assure you that the staff would make a similar determination with respect to the exchange offer as it has in past interpretive letters to third parties. Any holder who is an affiliate of ours or who has an arrangement or understanding with respect to the distribution of the registered notes to be acquired pursuant to the exchange offer, or any broker-dealer who purchased restricted notes from us to resell pursuant to Rule 144A or any other available exemption under the Securities Act:

    cannot rely on the applicable interpretations of the staff; and
    must comply with the registration and prospectus delivery requirements of the Securities Act.

    A broker-dealer who holds restricted notes that were acquired for its own account as a result of market-making or other trading activities may be deemed to be an underwriter within the meaning of the Securities Act and must, therefore, deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of registered notes. Each broker-dealer that receives registered notes for its own account in exchange for restricted notes, where the restricted notes were acquired by a broker-dealer as a result of market-making activities or other trading activities must acknowledge in the letter of transmittal that it will deliver a prospectus in connection with any resale of the registered notes. A secondary resale transaction in the United States by a holder using the exchange offer to participate in a distribution of restricted notes must be covered by an effective registration statement containing the selling security holder information required by Item 507 of Regulation S-K. Please refer to the section in this prospectus entitled "Plan of Distribution."

    In addition, to comply with the securities laws of some jurisdictions, the registered notes may be offered or sold only if they have been registered or qualified for sale in the jurisdiction or an exemption from registration or qualification is available and is complied with. We have agreed, pursuant to the registration rights agreement and subject to specified limitations in the registration rights agreement, to register or qualify the registered notes for offer or sale under the securities or blue sky laws of these jurisdictions as any holder of the registered notes reasonably requests. Registration or qualification may require the imposition of restrictions or conditions, including suitability requirements for offerees or purchasers, in connection with the offer or sale of any registered notes.

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THE COMPANY

    We are a leading owner and operator of five riverboat casinos located in emerging gaming markets of the central United States. We pioneered riverboat gaming in St. Louis, Kansas City, Baton Rouge and Sioux City by opening the first casino in each of those markets. Our riverboat casino that serves the Cincinnati market from Lawrenceburg, Indiana is one of the largest revenue producing riverboats in the United States gaming industry. In the first quarter of 2001, we purchased our minority partners' collective 42.5% interest in the Lawrenceburg casino for an aggregate of $365 million. We financed the acquisition with the net proceeds from our offering of the restricted notes and borrowings under our amended and restated senior credit facility.

    We are a Delaware corporation. Our principal executive offices are located at 219 Piasa Street, Alton, Illinois 62002 and our telephone number is (618) 474-7500. You may obtain additional information about us at our website, www.argosycasinos.com.

    The following summarizes our casino properties:

Casino Name

  Principal Metropolitan
Markets Served

  2000 Net
Revenues

  Approximate
Gaming
Positions

 
   
  (in thousands)

   
Argosy Casino Lawrenceburg   Cincinnati-Dayton-Columbus, Ohio   $ 367,743   2,680
Alton Belle Casino   St. Louis, Missouri     115,732   1,100
Argosy Casino of Greater Kansas City   Kansas City, Missouri     101,791   1,310
Argosy Casino — Baton Rouge   Baton Rouge, Louisiana     72,995   1,020
Belle of Sioux City Casino   Sioux City, Iowa     35,814   540

    Over the past several years, we have been implementing a strategic plan that has helped transform us from a company focused on developing casino properties to one recognized for achieving superior operational performance. Our strategy emphasizes increasing revenues and profits through expanding direct marketing programs, investing in state-of-the-art gaming products, such as new slot machines and player tracking systems, and improving cost controls.

    Our initiatives have had the greatest impact at our four western casinos in Alton, Kansas City, Baton Rouge and Sioux City. For the year ended December 31, 2000, net revenues at the western casinos combined increased 25% to $326 million, EBITDA (earnings before interest, taxes, depreciation and amortization) increased 49% to $86 million and income from operations increased 66% to $69 million. At Lawrenceburg, net revenues for the year ended December 31, 2000 grew 11% to $368 million, EBITDA increased 8% to $133 million and income from operations increased 8% to $112 million. Overall, we reported record results for the year ended December 31, 2000 with a 17% increase in net revenues to $695 million, a 24% increase in EBITDA to $194 million and a 294% increase in net income to $45 million.

Business Strategy

    By capitalizing on the extensive gaming industry experience of our management team, we have developed a strategy to maximize the performance of our operating assets and improve financial results. We continue to implement changes at each of our properties to improve our competitive position, increase gaming revenues and enhance profitability. The key elements of our business strategy include: (1) utilizing direct marketing to encourage repeat business and foster customer loyalty; (2) enhancing the gaming product at our casinos by investing in state-of-the-art gaming equipment; (3) renovating our properties to create more exciting gaming environments; and (4) increasing our financial flexibility to enable us to pursue future business opportunities.

    Marketing efforts focused on direct marketing. Our primary marketing focus is through direct and relationship marketing to encourage repeat business and foster customer loyalty. At each of our

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      properties we use sophisticated player tracking systems to identify and reward premium players and our most loyal customers. Based on a player's gaming activity, we create targeted promotions including exclusive direct mail offers and "member's only" concerts, parties, tournaments, sweepstakes and special entertainment events.

    Invest in new gaming equipment. Because slot machines represent 82% of our casino revenues, we regularly and systematically upgrade our gaming product with state-of-the-art slot machines. We believe that regularly replacing slot machines with the most popular products creates a more exciting gaming experience and increases profitability. At our western casinos, the upgraded machines increased the average daily revenue over the older machines they replaced. At Lawrenceburg, additional new slot product helped us take advantage of increased market demand. Going forward we expect to replace an average of 15-20% of our gaming equipment annually.

    Renovate our riverboat and dockside entertainment facilities. To maintain a fresh and exciting gaming experience for our customers, we have developed a prudent capital investment plan to systematically renovate our casino and entertainment facilities. During 1999, we completed a $18 million project at Alton that replaced the existing entertainment pavilion with a newly renovated barge that was originally used as the Lawrenceburg temporary landing facility and an additional new barge. The Alton renovation significantly enhanced the facility's restaurant and entertainment amenities and added an additional 130 slot machines. During 2000, we spent an additional $2 million to improve the Alton casino landing and added an additional 100 slot machines. We plan to spend an additional $2.5 million in 2001 to enhance the Alton riverboat. In June 1999, we completed a $5 million renovation and retheming of our Baton Rouge riverboat. The renovation of the Baton Rouge riverboat's third deck features approximately 200 of the newest and most popular video poker machines and gaming product upgrades to target the video poker market. In July 1999, we began construction of a $23 million, 300 room convention hotel adjacent to the Baton Rouge riverboat casino, which opened on February 5, 2001.

    Increase financial flexibility and pursue strategic opportunities. In June 1999, we completed a refinancing that has allowed us to lower our overall cost of capital, reduce our annual borrowing cost by approximately $13 million and provide the flexibility to take advantage of growth opportunities as they arise. In the future, we will look to invest in growth opportunities that add shareholder value and maintain the proper capital structure. These opportunities include the purchase of the minority interests in our Lawrenceburg casino as well as possible acquisitions of complementary businesses and other strategic opportunities.

Casino Properties

Argosy Casino Lawrenceburg

    Property:  The Lawrenceburg casino is located on the Ohio River in Lawrenceburg, Indiana approximately 15 miles west of Cincinnati and is the closest casino to the Cincinnati metropolitan area. The Lawrenceburg casino is one of the largest riverboats in the United States with 74,300 square feet of gaming space on three levels with 2,100 slot machines and 100 table games. The vessel can accommodate 4,000 passengers; however, to enhance our customers' comfort and enjoyment, we operate at a self-imposed capacity of 3,600 passengers. We typically conduct 9 two-hour cruises seven days a week, with an additional cruise on Friday and Saturday evenings, for a total of 65 cruises per week. Each cruise lasts two hours including a 30 minute boarding time and during peak periods we charge admission fees. Approximately 50% of our weekend cruises are sold out. Indiana gaming law permits dockside gaming only when inclement weather or water conditions prevent a riverboat from cruising. At such times, the Lawrenceburg casino remains dockside and operates on its normal schedule.

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    The complex also includes a 300 room hotel, which was completed in June 1998, a 200,000 square foot land-based entertainment pavilion and support facility featuring a 350 seat buffet restaurant, two specialty restaurants, an entertainment lounge and a 1,800 space parking garage. Employee and overflow parking is provided at a 1,400 space remote lot that is accessed by shuttle bus. We opened the Lawrenceburg casino on December 10, 1996 and, through September 30, 1997, operated from a temporary site utilizing a leased vessel and entertainment and support barge that featured approximately 1,275 gaming positions. Parking for the temporary facility was provided by a 1,400 space remote lot from which we operated a shuttle to and from the casino. On October 1, 1997, the Lawrenceburg casino commenced operations from its permanent riverboat vessel, which it used on a limited capacity basis at the temporary site. On December 9, 1997, the Lawrenceburg casino moved to its permanent site and became fully operational in June 1998 with the completion of its hotel.

    We are the sole general partner of, and hold a 57.5% general partnership interest in, Indiana Gaming Company, L.P., our joint-venture subsidiary that operates the Lawrenceburg casino. Conseco Entertainment L.L.C. ("Conseco"), an indirect subsidiary of Conseco, Inc., holds a 29.0% limited partnership interest and Centaur, Inc. ("Centaur") holds the remaining 13.5% limited partnership interest in the Lawrenceburg partnership. We manage the operations of the Lawrenceburg casino and receive a management fee of 7.5% of EBITDA, while Conseco receives a financial advisory fee of 5.0% of EBITDA.

    In December 2000 and January 2001, we reached agreements with our minority partners in the Lawrenceburg casino to purchase their 42.5% limited partnership interests for $365 million, including the repayment of Conseco's preferred equity interest and outstanding partner loans. In connection with the December agreement, we agreed to settle all pending litigation between Conseco and us upon purchase of their minority interest. The purchases of these minority interests are subject to receipt of all necessary regulatory approvals and satisfaction of customary closing conditions.

    Capital Improvements:  In 2000, we spent approximately $6 million on capital improvements including $3.1 million on slot machines and related systems.

    Gaming Market:  The Lawrenceburg casino draws from a population of approximately 1.6 million residents in the Cincinnati metropolitan area and an additional 5.4 million people who reside within 100 miles of Lawrenceburg, including the major metropolitan markets of Dayton and Columbus, Ohio and, to a lesser extent, Indianapolis, Indiana and Lexington, Kentucky.

    In the Cincinnati market, the Lawrenceburg casino directly competes with two other riverboat casinos. The three riverboat casinos operating in the Cincinnati market generated $511 million of gaming revenues in 2000, a 13% increase from 1999. The Lawrenceburg casino represented 44% of gaming position capacity in the Cincinnati market, and captured 67% of the market's gaming revenues.

    Our closest competitor is located approximately 15 miles further south of Lawrenceburg in Rising Sun, Indiana. The newest competitor, which opened in October 2000, is located 40 miles from Lawrenceburg in Switzerland County, Indiana. Secondarily, we compete with a riverboat casino in Bridgeport, Indiana in the Louisville, Kentucky area approximately 100 miles from Lawrenceburg.

    Regulatory Update:  Indiana gaming law currently limits the number of gaming licenses to be issued in the state to a total of 11, including a maximum of 5 licenses along the Ohio River and a limit of one license per county. Casino gaming is not currently permitted under the laws of either Ohio or Kentucky. Our Indiana gaming license is subject to renewal in 2001 and on an annual basis thereafter. Indiana gaming law does not restrict the size of a licensee's gaming facility or place limits on customer losses or betting levels.

    On January 25, 2001, the Indiana House of Representatives approved a bill that if enacted would, among other things, significantly increase the amount of taxes we pay on gaming revenues generated by our Lawrenceburg casino. The proposed legislation calls for a graduated tax structure on gaming

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revenues with a top bracket tax of 32.5% on gaming revenues above $125 million. In addition to the tax increases, the proposed legislation would eliminate existing restrictions on owning more than one Indiana casino and allow each riverboat county to hold a referendum to allow dockside gaming in that county. After being heard and amended in the Indiana Senate Rules Committee, the amended bill was defeated on March 28, 2001. Nonetheless, provisions of the bill as it passed the Indiana House of Representatives are eligible for inclusion in existing bills during the forthcoming conference committee process. During this process, the bill's provisions, including the level, if any, of any tax increase, may be altered. The Indiana General Assembly's regular session must adjourn by April 29, 2001. If the bill were enacted into law in its current form, it would have a material adverse effect on our future operating results. For example, assuming the legislation was effective January 1, 2000, the Lawrenceburg casino's 2000 EBITDA would have been reduced by approximately $41 million. This estimated impact gives no effect to additional gaming revenues that could be generated through dockside operations. In our experience, early stage bills are subject to numerous changes as they proceed through the legislative process. As a result, we are unable to predict whether the House bill will be enacted into law, if at all, in its current form or with significant modifications.

Alton Belle Casino

    Property:  The Alton Belle Casino is located on the Mississippi River in Alton, Illinois approximately 20 miles northeast of downtown St. Louis. We commenced operations in Alton, Illinois in September 1991 as the first gaming facility in Illinois and the St. Louis metropolitan market. Following the success of our original Alton riverboat casino, we built and opened a larger three-deck contemporary style cruise liner. The cruise liner features 26,500 square feet of gaming space, 950 slot machines and 30 table games. In June 1999, Illinois passed a law permitting casinos to offer continuous dockside gaming. As a result, the Alton Belle Casino remains dockside and offers its customers unlimited ingress and egress during its hours of operation.

    During 1999, we replaced our existing 37,000 square foot entertainment pavilion with a newly-renovated barge that was originally used as the Lawrenceburg temporary landing facility and an additional new barge. The new entertainment pavilion is approximately 60,000 square feet and features a newly designed entrance, 130 additional slot machines, larger and improved food and beverage venues and a new 400 seat main showroom. Parking is available at an adjacent city-owned surface parking facility and at two sites in the city of Alton, to and from which we provide valet parking as well as free shuttle service.

    Capital Improvements:  During 2000, we spent an additional $2 million to improve the Alton landing and added an additional 100 slot machines. We plan to spend an additional $2.5 million to enhance the Alton riverboat in 2001.

    Gaming Market:  The Alton Belle Casino generally draws from a population of approximately 2.5 million within the St. Louis metropolitan area and an additional 1.2 million within a 100-mile radius of the City of St. Louis. The target customers of the Alton Belle Casino are drawn largely from the northern and eastern regions of the greater St. Louis metropolitan area, as well as portions of central and southern Illinois.

    The Alton Belle Casino faces competition from five other riverboat casino companies currently operating in the St. Louis area and expects the level of competition to remain intense in the future. As an Illinois licensee, the Alton Belle Casino is not subject to Missouri's $500 loss limit and therefore has a competitive advantage in attracting high-end customers over competitors operating under Missouri licenses. The riverboat casinos operating in the St. Louis market generated $684 million of gaming revenues in 2000, a 10% increase from 1999. The Alton Belle Casino represented approximately 11% of gaming position capacity in the St. Louis market, and captured approximately 16% of the market's gaming revenues.

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    Regulatory Update:  Illinois gaming law currently limits the number of gaming licenses to be issued in the state to 10. Each license permits the operation of up to two boats as part of a single riverboat gaming operation with a combined maximum of 1,200 gaming positions. Our Illinois gaming license is subject to annual renewal in October 2001.

    In June 1999, Illinois passed an amendment to the Illinois Riverboat Gambling Act to permit casinos to offer continuous dockside gaming with unlimited ingress and egress. In addition to legalizing dockside gaming, the amendment authorized the grant of a gaming license to certain persons to develop and operate a casino in Rosemont, Illinois. A group of plaintiffs filed a lawsuit requesting the court to declare that the 1999 amendment violates the Illinois and U.S. constitutions because the grant of the Rosemont license amounted to "special legislation." If a court invalidates the grant of the Rosemont license, all of the provisions of the 1999 amendment, including the provisions legalizing dockside gaming, would be invalidated. In such event, we would be required to resume cruising and suspend our dockside gaming activities at our Alton casino until such time as the Illinois legislature passed a law reauthorizing dockside gaming. On January 25, 2001, the court dismissed the lawsuit concluding that the plaintiffs lacked standing and on January 30, 2001, the Illinois Gaming Board denied the Rosemont group's applications for an Illinois gaming license. Because we anticipate that both groups will appeal these rulings, we are unable to determine what the ultimate resolution of these matters will be. The loss of dockside gaming at our Alton casino, however would adversely affect our financial results.

Argosy Casino of Greater Kansas City

    Property:  The Argosy Casino of Greater Kansas City is located on the Missouri River in Riverside, Missouri on a 55-acre site approximately five miles from downtown Kansas City. The riverboat features approximately 36,000 square feet of gaming space, 1,110 slot machines and 35 table games. The Kansas City casino began operations in Kansas City, Missouri on June 22, 1994 as the first gaming facility to open in the Kansas City market. During November 1999, Missouri adopted open boarding, allowing customers unlimited ingress and egress, eliminating the two hour mock cruising requirements.

    The Kansas City casino is complemented by an 85,000 square foot land-based entertainment facility featuring specialty and buffet restaurants, a sports/entertainment lounge and 8,000 square feet of banquet/conference facilities. A parking garage and surface parking areas with 2,027 spaces are located adjacent to the pavilion.

    Capital Improvements:  During 2000, we spent $2.1 million on maintenance capital, including $0.7 million on slot machines and related equipment.

    Gaming Market:  The Kansas City casino draws from a population of approximately 1.6 million in the greater Kansas City metropolitan area and an additional 900,000 within a 100-mile radius of Kansas City. The Kansas City casino site offers convenient access from two major highways. The Kansas City casino primarily attracts customers who reside in the northern and western regions of the Kansas City metropolitan area.

    We currently face competition from three other casinos in the Kansas City area. The four riverboat casinos operating in the Kansas City market generated $535 million of gaming revenues in 2000, an 8% increase from 1999. Our Kansas City casino represented 15% of gaming position capacity in the Kansas City market, and captured 18% of the market's gaming revenues.

    Regulatory Update:  Our Missouri gaming license is subject to renewal in June 2002 and again every two years thereafter.

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Argosy Casino — Baton Rouge

    Property:  The Argosy Casino — Baton Rouge is located on the Mississippi River in downtown Baton Rouge, Louisiana. The riverboat features approximately 28,000 square feet of gaming space, 790 slot machines and 40 table games. The Baton Rouge casino began operations in September 1994 as the first riverboat gaming facility in the Baton Rouge market. The Baton Rouge casino is a three-level riverboat casino that typically conducts eight 3-hour cruises seven days a week. Louisiana recently adopted legislation that permits dockside gaming, allowing customers unlimited ingress and egress, and eliminating the three hour cruising requirements. This legislation also increased the tax on riverboat operations from 18.5% to 21.5%.

    The riverboat casino is complemented by our adjacent real estate development known as Catfish Town. Catfish Town is located next to Baton Rouge's convention complex, the Centroplex, which has a 12,000-seat arena and a 30,000-square foot exhibition hall. Catfish Town includes a 50,000 square foot glass-enclosed atrium, entertainment/sports lounge, buffet/coffee shop, conference facilities and approximately 150,000 square feet of retail space that is currently available for lease. On February 5, 2001, we opened our newly constructed, 300 room convention hotel in Catfish Town. The Argosy Casino — Baton Rouge provides parking at a 733-space parking garage and a 271-space surface parking lot.

    Capital Improvements:  During 2000, we spent approximately $1.9 million in capital improvements including approximately $0.9 million in slot machines and related upgrades. We also spent $14.1 million for hotel construction during 2000.

    Gaming Market:  The Baton Rouge casino draws from a population of approximately 540,000 in the Baton Rouge metropolitan area. The Baton Rouge casino faces competition from one casino located in downtown Baton Rouge, a nearby Native American casino and operators of video poker machines in non-casino locations in certain Baton Rouge parishes. The two riverboat casinos operating in the Baton Rouge market generated approximately $164 million of gaming revenues in 2000, an 18% increase from 1999. The Argosy Casino — Baton Rouge represented 47% of gaming position capacity in the Baton Rouge market, and generated 44% of the market's gaming revenues.

    The casino benefited from the elimination of video poker machines in non-casino locations in more heavily populated Baton Rouge parishes as of July 1, 1999. In June 1999, we completed a renovation of the Argosy Casino — Baton Rouge's facilities to aggressively pursue the approximately $80 million portion of the video poker market that was eliminated.

    Regulatory Update:  Our Louisiana license is currently up for renewal. We are currently waiting for the Louisiana Gaming Board to schedule a hearing date for the renewal. After renewal our Louisiana license will be subject to renewal in five years.

    Jazz Enterprises:  Jazz Enterprises, Inc. owns and operates the Catfish Town development adjacent to the riverboat casino. The development of the historic Catfish Town riverfront warehouse district into a retail/entertainment district was an integral element in obtaining a Louisiana gaming license for the Argosy Casino — Baton Rouge. Our original intent was to develop and operate the casino and our joint-venture partner would develop and manage the Catfish Town real estate and hotel. In 1995 our real estate partner experienced financial difficulties, and to preserve our gaming license, we purchased Jazz Enterprises, Inc.

    Pursuant to a development agreement, Jazz Enterprises, Inc. had certain obligations to the City of Baton Rouge, including the obligation to construct a convention size hotel or collect and pay to the City an incremental head tax of $2.50 per passenger, fund a transportation system connecting downtown Baton Rouge and Catfish Town and to develop the Catfish Town facility to accommodate restaurants, retail space and entertainment and restaurant facilities. During July 1999, we began construction of a $23 million 300-room hotel in Baton Rouge to fulfill our obligations under the

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development agreement. The hotel opened on February 5, 2001. Cash flows at Baton Rouge benefited by $3.1 million in 2000 due to the elimination of the incremental head tax.

Belle of Sioux City

    Property:  The Belle of Sioux City is located on the Missouri River in downtown Sioux City, Iowa. The riverboat features 12,500 square feet of gaming space, 430 slot machines and 20 table games. The Belle of Sioux City typically conducts one two-hour cruise each day for 100 days per year. At all other times the Belle of Sioux City remains dockside and operates with unlimited ingress and egress. The casino is complemented by adjacent barge facilities featuring buffet dining facilities, meeting space and administrative support offices.

    We became the manager of the Belle of Sioux City on October 4, 1994 and on December 1, 1994 began operating the Belle of Sioux City through a partnership in which we were a 70% general partner and Sioux City Riverboat Corp., Inc. was a 30% limited partner. As manager of the casino we receive a management fee of 4.5% based upon the facility's adjusted gross gaming revenues (as defined in the management agreement). In July 2000, we purchased the 30% minority interest in the Belle of Sioux City Casino from Sioux City Riverboat Corp., Inc. for $9.2 million.

    Capital Improvements:  In 2000, we spent approximately $0.7 million to enhance our customers' gaming experience at the Belle of Sioux City. Specifically, we spent $0.5 million on slot machines.

    Gaming Market:  The Belle of Sioux City draws from a population of approximately 80,000 in Sioux City and an estimated 100,000 residents within a 40-mile radius of Sioux City. The Belle of Sioux City competes primarily with land-based Native American casinos that are not required to report gaming revenues and other operating statistics, therefore market comparisons cannot be made. We also compete with certain providers and operators of video gaming in the neighboring state of South Dakota. In addition, we compete with slot machines at a pari-mutual race track in Council Bluffs, Iowa and with two riverboat casinos in the Council Bluffs/Omaha, Nebraska market.

    Regulatory Update:  Our Iowa gaming license is subject to annual renewal each March. In addition, Iowa law stipulates that a referendum must be held in 2002 to reaffirm gaming in each county that has gaming and further stipulates that similar referenda be held every eight years thereafter.

Proposed Kenosha, Wisconsin Casino

    Development Agreement:  In December 2000, we entered into an agreement with Nii-Jii Entertainment, LLC ("Nii-Jii") to serve as the developer and operator of a proposed casino in Kenosha, Wisconsin. Nii-Jii separately has entered into an agreement with the Menominee Indian Tribe of Wisconsin to serve as the manager of the casino project proposed at the Dairyland Greyhound Race Track site in Kenosha. The proposed casino project is subject to numerous regulatory approvals, including receiving approval from the United States Bureau of Indian Affairs for placing in federal trust the proposed casino site for the benefit of the tribe. Under our agreement with Nii-Jii, we have committed to provide up to $40 million of financing for the project. Our financing commitment is conditioned upon obtaining the requisite regulatory approvals for all parties and the tribe raising the remaining project costs through an institutional debt offering.

Insurance

    We carry property and casualty insurance on our land-based assets and our vessels, generally in the amount of their replacement costs, with a nominal deductible with respect to our land-based assets and a deductible equal to 2% of the replacement value of the vessels. Our land-based assets are covered by flood insurance. Our general liability insurance with respect to land-based operations has a limit of $1 million per occurrence and $2 million as an annual aggregate with a $50,000 deductible. Our general liability insurance with respect to our marine operations has a $100,000 per occurrence deductible with

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per occurrence coverage up to a $75 million limit. With respect to worker's compensation we have a $250,000 per occurrence deductible with a $1 million per occurrence limit. We carry business interruption insurance at our properties which carry a deductible ranging from 14 to 30 days depending on the location and maximum coverage up to $83 million.

Competition

    The U.S. gaming industry is intensely competitive and features many participants, including riverboat casinos, dockside casinos, land-based casinos, video lottery and poker machines not located in casinos, Native American gaming and other forms of gambling in the United States. Gaming competition is particularly intense in each of the markets where we operate. Historically, we have been an early entrant in each of our markets; however, as competing properties have opened, our operating results in each of these markets have been negatively affected. Many of our competitors have more gaming industry experience, are larger and have significantly greater financial and other resources. In addition, some of our direct competitors in certain markets may have superior facilities and/or operating conditions in terms of:

    amenities offered at the gaming facility and the related support and entertainment facilities;

    convenient parking facilities;

    a location more favorably situated to the population base of a market and ease of accessibility to the casino site; and

    favorable tax or regulatory factors.

    The competitive position of each of our casino properties is discussed in detail in the subsection entitled "Gaming Market" in the "The Company — Casino Properties" section of this prospectus.

    There could be further competition in our markets as a result of the upgrading or expansion of facilities by existing market participants, the entrance of new gaming participants into a market or legislative changes. We expect each market in which we participate, both current and prospective, to be highly competitive.

Marketing

    We have changed our marketing focus from mass marketing to direct and relationship marketing in order to encourage repeat business and foster customer loyalty. We have designed an overall marketing strategy to attain our objective of utilizing direct marketing as our primary means of communicating with our customers. Although the marketing plan for each of our properties is tailored to the specific needs of the site, the overall strategic components are relatively constant:

    further refine and enhance our database marketing efforts;

    create a full-service player development program to service our premium customers;

    aggressively market our gaming product and facility improvements;

    refine, enhance and expand the schedule of parties, events and entertainment; and

    utilize public relations as a tool to increase awareness, and reinforce marketing efforts by publicizing winners.

    A key tactic in implementing our overall strategy is the effective use of the information we obtain regarding our customers' playing activity. At each of our properties, we encourage patrons to join the Argosy Preferred Club. We then track the member's level of play through the use of sophisticated player tracking systems. As of December 31, 2000, we had over 1,200,000 Preferred Club members and we are adding, on average, over 20,000 new members each month. Utilizing the information from our

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database, we create targeted promotions including exclusive direct mail offers and "members only" parties, tournaments, sweepstakes and special entertainment events.

Employees

    As of December 31, 2000, we employed approximately 4,517 full-time and 759 part-time employees. Approximately 2,778 employees, located throughout our properties, are represented by the Seafarers International Union of North America. We have collective bargaining agreements with that union which expire at various times between June 2003 and June 2004. In Alton, 10 of our employees are represented by the International Brotherhood of Electrical Workers and approximately 83 employees are represented by the United Plant Guard Workers of America. In addition, 34 employees located throughout our properties except Alton are represented by American Maritime Officers Union.

    We have not experienced any work stoppages and believe our labor relations are generally satisfactory.

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MANAGEMENT

Directors and Executive Officers

    The following table sets forth the names and ages of our directors and executive officers.

Name

  Age
  Position
William F. Cellini(a)   66   Chairman of the Board of Directors
George L. Bristol(b)   60   Director
Jimmy F. Gallagher(b)   72   Director
F. Lance Callis(c)   65   Director
John B. Pratt(c)   78   Director
Edward F. Brennan(c)   60   Director
James B. Perry(b)   51   Director, President and Chief Executive Officer
Donald J. Malloy   39   Senior Vice President, Secretary and General Counsel
James A Gulbrandsen   60   Senior Vice President — Operations
Dale R. Black   37   Senior Vice President and Chief Financial Officer
Virginia M. McDowell   43   Senior Vice President — Sales and Marketing
R. Ronald Burgess   57   Senior Vice President — Human Resources

(a)
Mr. Cellini comprises a class of directors whose term expires in 2002.

(b)
Messrs. Bristol, Gallagher and Perry comprise a class of directors whose term expires in 2003.

(c)
Messrs. Callis, Pratt and Brennan comprise a class of directors whose term expires in 2001.

    William F. Cellini has been Chairman of Argosy's Board of Directors since February 1993. Mr. Cellini has served as Chief Executive Officer of New Frontier Group, a real estate development, management and construction concern with offices in Chicago and Springfield, Illinois since 1977. Mr. Cellini is a member of the Nominating Committee of the Board of Directors.

    George L. Bristol has been President of GLB, Inc., a consulting firm, since 1977. He has been a member of Argosy's Board of Directors since January 1995 and is a member of its Audit Committee. Mr. Bristol was Argosy's Acting Chief Executive Officer from January 13, 1997 to April 20, 1997.

    Jimmy F. Gallagher has been a director of Argosy since February 1993 and is currently a member of its Nominating Committee and Audit Committee. Mr. Gallagher retired from the gaming industry in March 1991. From March 1990 to March 1991, he was Supervisor of Casino Games for the Park Hotel and Casino in Las Vegas, Nevada.

    F. Lance Callis has been a partner with the law firm of Callis, Papa, Jackstadt & Halloran P.C. (formerly Pratt & Callis, P.C.), with offices in St. Louis, Missouri and Granite City, Illinois, since 1986. Mr. Callis has been a member of Argosy's Board of Directors since February 1993 and is a member of its Compensation Committee and Nominating Committee.

    John B. Pratt, Sr. has practiced law in White Hall, Illinois as a sole practitioner since 1986. He has been a member of Argosy's Board of Directors since February 1993 and is a member of its Compensation Committee, Nominating Committee and Audit Committee.

    Edward F. Brennan has been a partner with the law firm of Brennan, Jones & Brennan P.C. (formerly Brennan, Cates & Constance) in Belleville, Illinois since 1987. He has been a member of Argosy's Board of Directors since January 1995, and also serves on the Audit Committee and Compensation Committee of the Board of Directors.

    James B. Perry has been Argosy's President and Chief Executive Officer since April 21, 1997. Mr. Perry was elected to the Board of Directors during 2000. From August 1996 to April 1997,

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Mr. Perry was President of the Hospitality Group of Keating Building Group. From 1976 to August 1996, Mr. Perry was employed by Aztar Corporation in numerous positions, including President and General Manager of TropWorld Casino and Entertainment Resort in Atlantic City, New Jersey.

    Donald J. Malloy has been Argosy's Senior Vice President and General Counsel since April 6, 1999. From January 1996 until April 1999, Mr. Malloy served as Vice President and Corporate Counsel. On January 8, 1999 Mr. Malloy assumed the additional role of Secretary. From June 1990 to December 1995, Mr. Malloy was an attorney with the law firm of Winston & Strawn in Chicago, Illinois.

    James A. Gulbrandsen has been Argosy's Senior Vice President — Operations since June 1, 1997. From late 1996 to June 1997, Mr. Gulbrandsen was retired. From 1992 to 1996, Mr. Gulbrandsen was an owner/operator of the Womack Casino in Cripple Creek, Colorado.

    Dale R. Black has been Argosy's Senior Vice President and Chief Financial Officer since April 1998. From April 1993 to March 1998, Mr. Black served as Corporate Controller. Prior to joining Argosy, Mr. Black held various financial management positions throughout his career in both industry and with a "Big Five" public accounting firm.

    Virginia M. McDowell has been Senior Vice President — Sales and Marketing since June 1, 1997. From September 1996 to May 1997, Ms. McDowell was General Manager of the Northeast Offices of Creative Data Services, Inc. From 1984 to August 1996, Ms. McDowell held numerous positions with Aztar Corporation, including Vice President of Business Development of TropWorld Casino and Entertainment Resort in Atlantic City, New Jersey.

    R. Ronald Burgess has been Senior Vice President — Human Resources since June 1999. From July 1986 to June of 1999, Mr. Burgess served in several human resources leadership roles with Harrah's Entertainment and the predecessor organization Promus Companies and Holiday Corporation in Memphis.

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DESCRIPTION OF CERTAIN INDEBTEDNESS

    The following is a summary of important terms of our material indebtedness.

Senior Credit Facility

    As part of a 1999 refinancing transaction, we and substantially all of our wholly-owned operating subsidiaries entered into a senior secured revolving bank credit facility with Wells Fargo Bank, National Association and certain other lenders. The credit facility was restated in its entirety earlier this year. The credit facility provides for a revolving credit facility with an aggregate principal amount of up to $400 million and terminates on June 8, 2004. The initial advances under the credit facility were used in connection with the redemption of our 12% convertible subordinated notes. Subsequent advances under the credit facility have been and may continue to be used to finance acquisitions and capital improvements, to provide working capital and for general corporate purposes.

    The credit facility is secured by liens on substantially all of our assets, including the equity interests in certain of our subsidiaries and substantially all of the assets of our subsidiaries party to the credit facility, including the subsidiary that operates the Lawrenceburg casino. The credit facility contains customary representations and warranties and affirmative and negative covenants (including, among others, covenants relating to financial and compliance reporting, capital expenditures, restricted payments, maintenance of certain financial ratios, incurrence of liens, sale or disposition of assets and incurrence of other debt).

    At our option, interest for advances under the credit facility will accrue at either:

    the rate of interest for 1, 2, 3, or 6 month dollar deposits as quoted on the Telerate System Reports in the London interbank eurodollar market ("LIBOR") plus a spread ranging from 1.25% to 2.75%; or

    the higher of (1) the rate most recently announced by Wells Fargo Bank, National Association as its "prime rate" or (2) the Federal Funds Rate plus one-half of one percent per annum (such higher rate, the "Base Rate") plus a spread ranging from 0% to 1.50%.

    The credit facility provides that interest on LIBOR advances will be payable at the end of each applicable interest period or quarterly. Interest on Base Rate advances will be payable quarterly. Upon default, interest will accrue at the Base Rate plus the applicable spread plus 2.00%.

    Under the terms of the credit facility, we have the right to arrange for a $100 million increase to the borrowing availability under the credit facility.

Original Notes

    In June 1999, we issued $200 million principal amount of 103/4% senior subordinated notes due 2009, all of which remain outstanding. The original notes are unconditionally guaranteed by substantially all of our wholly-owned subsidiaries. The terms of the original notes are identical to the terms of the registered notes.

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DESCRIPTION OF NOTES

    As used in this description, the word "Company" refers only to Argosy Gaming Company and not to any of its subsidiaries. Other capitalized terms used in this description are defined later under the heading "— Certain Definitions."

    The restricted notes were, and the registered notes will be, issued under an indenture (as such indenture may be amended or supplemented, the "Indenture") among the Company, as issuer, the Subsidiary Guarantors, as guarantors, and Bank One Trust Company, NA, as trustee (the "Trustee").

    The terms of the registered notes are nearly identical to the terms of the restricted notes in all material respects, including interest rate and maturity, except that the registered notes will not be subject to:

    the restriction on transfer; and

    the registration rights agreements' covenants regarding registration of the notes.

    The following summary of certain provisions of the Indenture does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of the Indenture, including the definitions of certain terms therein and those terms made a part thereof by the Trust Indenture Act of 1939, as amended. We urge you to read the Indenture, because it and not this description, defines your rights as holders of the Notes. You may obtain copies of the Indenture from the Company upon request. Certain defined terms used in this description but not defined below under "— Certain Definitions" have the meanings assigned to them in the Indenture.

General

    The registered notes will be, and the restricted notes are, unsecured senior subordinated obligations of the Company, in an aggregate principal amount of $150 million, and will mature on June 1, 2009. In addition, the Company issued in June 1999 and currently has outstanding an additional $200 million aggregate principal amount of its 103/4% Senior Subordinated Notes due 2009. Subject to the covenants described below under "— Covenants" and applicable law, the Company may issue additional notes under the Indenture. The original notes, the restricted notes, the registered notes and any additional notes subsequently issued under the Indenture would be treated as a single class for all purposes under the Indenture. For purposes of this description, references to the "Notes" include the original notes, the restricted notes, the registered notes and any additional notes subsequently issued under the Indenture.

    Interest on the registered notes will accrue at the rate of 103/4% per annum and will be payable semi-annually in arrears on June 1 and December 1, commencing on December 1, 2001. The Company will make each interest payment to the Holders of record on the immediately preceding May 15 and November 15. Interest on the Notes will accrue from the date of original issuance or, if interest has already been paid, from the date it was most recently paid.

    As of the date of this prospectus, all of our subsidiaries are "Restricted Subsidiaries," except the two wholly-owned subsidiaries formed in connection with our agreement to develop and operate the proposed Kenosha, Wisconsin casino. Our Unrestricted Subsidiaries will not be subject to many of the restrictive covenants in the Indenture and will not guarantee the Notes.

    If, by August 7, 2001, the Company has not consummated a registered exchange offer for the restricted notes or caused a shelf registration statement with respect to resales of the restricted notes to be declared effective, the interest rate on the restricted notes will increase by 0.5% per annum until the consummation of a registered exchange offer or the effectiveness of a shelf registration statement. See "— Registration Rights."

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    In certain circumstances, if the Company sells its partnership interest in Indiana Gaming Company L.P. or if Indiana Gaming L.P. sells substantially all of its assets, the interest rate on the Notes will increase by 0.5% per annum. See "— Covenants — Repurchase of Notes in Connection with Sale of Lawrenceburg Interest."

    If a Holder has given wire transfer instructions to the Company, the Company will pay all principal, interest and premium and Additional Interest, if any, on that Holder's Notes in accordance with those instructions. All other payments on Notes will be made at the office or agency of the Paying Agent and Registrar within the City and State of New York unless the Company elects to make interest payments by check mailed to the Holders at their addresses set forth in the register of Holders.

    The Company will issue registered notes in fully registered form, without coupons, in denominations of $1,000 and integral multiples of $1,000. See "— Book-Entry; Delivery and Form." No service charge will be made for any registration of transfer or exchange of Notes, but the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture.

Paying Agent and Registrar for the Notes

    The Trustee acts as Paying Agent and Registrar. The Company may change the Paying Agent or Registrar without prior notice to the Holders, and the Company or any of its Restricted Subsidiaries may act as Paying Agent or Registrar.

Transfer and Exchange

    A Holder may transfer or exchange Notes in accordance with the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company is not required to transfer or exchange any Note selected for redemption. Also, the Company is not required to transfer or exchange any Note for a period of 15 days before a selection of Notes to be redeemed. See "— Book Entry; Delivery and Form" and "Transfer Restrictions" below.

    The registered Holder of a Note will be treated as the owner of it for all purposes.

Subsidiary Guarantees

    The Subsidiary Guarantors and any future Restricted Subsidiaries of the Company jointly and severally guarantee the Company's obligations under the Notes. Each Subsidiary Guarantee is subordinated to the prior payment in full of all Senior Indebtedness of that Subsidiary Guarantor. The obligations of each Subsidiary Guarantor under its Subsidiary Guarantee are limited as necessary to prevent that Subsidiary Guarantee from constituting a fraudulent conveyance under applicable law. See "Risk Factors — Fraudulent Conveyance Matters."

    Substantially all of the Company's subsidiaries currently guarantee the Notes, except for the Company's wholly-owned subsidiaries formed in connection with the Company's agreement to develop and operate the proposed Kenosha, Wisconsin casino. However, subsidiaries that become guarantors under the Company's senior credit facility are also required to guarantee the Notes. In the event of a bankruptcy, liquidation or reorganization of any of these non-guarantor subsidiaries, these non-guarantor subsidiaries will pay the holders of their debts and their trade creditors before they will be able to distribute any of their assets to us.

    The Subsidiary Guarantors generated 47% of our consolidated net revenues in the year ended December 31, 2000 and held 51% of our consolidated assets as of December 31, 2000. As a result of the Company's acquisition of the outstanding minority interests in the Lawrenceburg Casino, the Company's subsidiaries that operate the Lawrenceburg casino have become Subsidiary Guarantors. In

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addition, the Company's subsidiaries that operate the Belle of Sioux City casino have become Subsidiary Guarantors. As a consequence, the Subsidiary Guarantors virtually hold 100% of the Company's assets and generate substantially all of the Company's revenues. See footnote 14 to our Consolidated Financial Statements included elsewhere in this prospectus for more detail about the division of our consolidated revenues and assets between our Subsidiary Guarantors and non-guarantor subsidiaries.

    A Subsidiary Guarantor may not sell or otherwise dispose of all or substantially all of its assets to, or consolidate with or merge with or into (whether or not such Subsidiary Guarantor is the surviving Person), another Person, other than the Company or another Subsidiary Guarantor, unless:

    immediately after giving effect to such transaction, no Default or Event of Default exists; and

    either: the Person acquiring the property in any such sale or disposition or the Person formed by or surviving any such consolidation or merger assumes all the obligations of that Subsidiary Guarantor under the Indenture and its Subsidiary Guarantee pursuant to a supplemental indenture satisfactory to the Trustee; or the Net Proceeds of such sale or other disposition are applied in accordance with the "Limitations on Asset Sales" covenant described below.

    The Subsidiary Guarantee of a Subsidiary Guarantor will be released:

    in connection with any sale or other disposition of all or substantially all of the assets of that Subsidiary Guarantor (including by way of merger or consolidation) to a Person that is not (either before or after giving effect to such transaction) the Company or a Subsidiary Guarantor, if the Subsidiary Guarantor applies the Net Proceeds of that sale or other disposition in accordance with the "Limitations on Asset Sales" covenant described below;

    in connection with any sale of all of the Capital Stock of a Subsidiary Guarantor to a Person that is not (either before or after giving effect to such transaction) the Company or a Subsidiary Guarantor, if the Company applies the Net Proceeds of that sale in accordance with the "Limitation on Asset Sales" covenant described below; or

    if the Company designates any Subsidiary Guarantor as an Unrestricted Subsidiary in accordance with the Indenture.

    See "— Covenants — Limitation on Asset Sales."

Optional Redemption

    On or after June 1, 2004, the Company may redeem all or a part of the Notes upon not less than 30 nor more than 60 days' notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest and Additional Interest, if any, thereon, to the applicable redemption date (subject to the right of Holders of record on the relevant record date that is on or prior to the redemption date to receive interest due on an interest payment date), if redeemed during the twelve-month period beginning on June 1, of the years indicated below:

Year

  Percentage
 
2004   105.375 %
2005   103.583 %
2006   101.792 %
2007 and thereafter   100.000 %

    In addition, at any time prior to June 1, 2002, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of Notes issued under the Indenture at a redemption price of 110.750% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, to the redemption date (subject to the right of Holders of record on the

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relevant record date that is on or prior to the redemption date to receive interest due on an interest payment date), with the Net Cash Proceeds of one or more Public Equity Offerings; provided that:

    at least 65% of the aggregate principal amount of Notes issued under the Indenture remains outstanding immediately after the occurrence of such redemption (excluding Notes held by the Company and its Subsidiaries); and

    the redemption must occur within 60 days of the date of the closing of Public Equity Offering.

Gaming Redemption

    If any Gaming Authority:

    requests or requires a holder or beneficial owner of Notes to appear before, submit to the jurisdiction of or provide information to, such Gaming Authority and such holder or beneficial owner either refuses to do so or otherwise fails to comply with such request or requirement within a reasonable period of time; or

    determines that any holder or beneficial owner of Notes is not suitable or qualified with respect to beneficial ownership of the Notes,

    then the Company may:

    require that such holder or beneficial owner dispose of its Notes within 30 days (or such earlier date as required by the Gaming Authority) of (1) the termination of the 30-day period described above for the holder or beneficial owner to apply for a license, qualification or finding of suitability or (2) the receipt of the notice from the Gaming Authority that the holder or beneficial owner will not be licensed, qualified or found suitable; or

    redeem the Notes of such holder or beneficial owner at a price equal to the lesser of (1) the price at which such holder or beneficial owner acquired such Notes or (2) the Fair Market Value of such Notes or, if the Notes are listed on a national securities exchange, the last reported sale price on the date the Company notifies such holder or beneficial owner of the redemption.

    Immediately upon a determination that a holder or beneficial owner will not be licensed, qualified or found suitable, the holder or beneficial owner will have no further rights (1) to exercise any right conferred by the Notes, directly or indirectly, through any trustee, nominee or any other Person or entity, or (2) to receive any interest or other distribution or payment with respect to the Notes or any remuneration in any form from the Company for services rendered or otherwise, except the redemption price of the Notes. The holder or beneficial owner applying for a license, qualification or finding of suitability must pay all costs of the licensure or investigation for such qualification or finding of suitability.

Selection and Notice

    If less than all of the Notes are to be redeemed at any time, the Trustee will select Notes for redemption as follows:

    if the Notes are listed, in compliance with the requirements of the principal national securities exchange on which the Notes are listed; or

    if the Notes are not so listed, on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate.

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    No Notes of $1,000 or less shall be redeemed in part. Notices of redemption shall be mailed by first class mail at least 30 but not more than 60 days before the redemption date to each Holder of Notes to be redeemed at its registered address. Notices of redemption may not be conditional. If any Note is to be redeemed in part only, the notice of redemption that relates to that Note shall state the portion of the principal amount thereof to be redeemed. A new Note in principal amount equal to the unredeemed portion of the original Note will be issued in the name of the Holder thereof upon cancellation of the original Note. Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on Notes or portions of them called for redemption.

Sinking Fund

    There will be no sinking fund payments for the Notes.

Registration Rights

    The Company will use its best efforts, at its cost, to file and cause to become effective a registration statement with respect to a registered offer (the "Exchange Offer") to exchange the restricted notes for an issue of registered senior subordinated notes of the Company with terms identical to the restricted notes (except that the registered notes will not bear legends restricting the transfer thereof). Because the restricted notes accrue interest from their February 8, 2001 date of issuance, the required initial interest payment on the restricted notes on June 1, 2001 is less than the required June 1, 2001 interest payment on the original notes. Accordingly, the Company will not consummate the Exchange Offer prior to June 1, 2001 to ensure that the June 1, 2001 interest payment is properly allocated between the original notes and the restricted notes. Upon such registration statement being declared effective, the Company shall offer the registered notes in return for surrender of the restricted notes. Such offer shall remain open for not less than 20 business days after the date notice of the Exchange Offer is mailed to Holders. For each restricted note surrendered to the Company under the Exchange Offer, the Holder will receive a registered note of equal principal amount. Interest on each registered note shall accrue from the last Interest Payment Date on which interest was paid on the restricted notes so surrendered or, if no interest has been paid on such restricted notes, from the Closing Date.

    In the event that applicable interpretations of the staff of the SEC do not permit the Company to effect the Exchange Offer, or under certain other circumstances, the Company shall, at its cost, use its best efforts to cause to become effective a shelf registration statement (the "Shelf Registration Statement") with respect to resales of the restricted notes and to keep such Shelf Registration Statement effective until the expiration of the time period referred to in Rule 144(k) under the Securities Act after the Closing Date, or such shorter period that will terminate when all restricted notes covered by the Shelf Registration Statement have been sold pursuant to the Shelf Registration Statement. The Company will, in the event of such a shelf registration, provide to each Holder copies of the prospectus, notify each Holder when the Shelf Registration Statement for the restricted notes has become effective and take certain other actions as are required to permit resales of the restricted notes. A Holder that sells its restricted notes pursuant to the Shelf Registration Statement generally will be required to be named as a selling security holder in the related prospectus and to deliver a prospectus to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales and will be bound by the provisions of the Registration Rights Agreement that are applicable to such a Holder (including certain indemnification obligations).

    In the event that the Exchange Offer is not consummated and a Shelf Registration Statement, if applicable, is not declared effective on or prior to the date that is six months after the Closing Date, the annual interest rate borne by the restricted notes will be increased by 0.5% per annum until the

61


Exchange Offer is consummated or the Shelf Registration Statement is declared effective ("Additional Interest").

    If the Company effects the Exchange Offer, the Company will be entitled to close the Exchange Offer 20 business days after the commencement thereof, provided that it has accepted all restricted notes theretofore validly surrendered in accordance with the terms of the Exchange Offer. Restricted notes not tendered in the Exchange Offer shall bear interest at the rate set forth on the cover page of this prospectus and be subject to all of the terms and conditions specified in the Indenture, including transfer restrictions.

    This summary of certain provisions of the Registration Rights Agreement does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of the Registration Rights Agreement, a copy of which is available from the Company upon request. We urge you to read the Registration Rights Agreement because it, and not this summary, defines your rights as holders of the restricted notes.

Ranking

    The registered notes will be senior subordinated Indebtedness of the Company and the Subsidiary Guarantees will be senior subordinated Indebtedness of the Subsidiary Guarantors. The payment of the Senior Subordinated Obligations will, to the extent set forth in the Indenture, be subordinated in right of payment to the prior payment in full, in cash or cash equivalents, of all Obligations due in respect of existing and future Senior Indebtedness. The registered notes will be effectively junior to all debt and other liabilities of the Company's subsidiaries that do not guarantee the Notes. As of December 31, 2000, our non-guarantor subsidiaries had approximately $80.5 million of outstanding debt and other liabilities, all of which are obligations of our Lawrenceburg joint-venture subsidiary. Assuming we had amended and restated the credit facility, completed our offering of the restricted notes and purchased the minority interests in our Lawrenceburg casino as of December 31, 2000, the Company and the Subsidiary Guarantors would have had $639.9 million of Indebtedness, $275.1 million of which would have been Senior Indebtedness and our non-guarantor subsidiaries would have had no outstanding debt or other liabilities as to which the registered notes would be effectively junior. Notwithstanding the foregoing, payment from the money or the proceeds of U.S. Government Obligations held in any defeasance trust described under "— Defeasance" below, will not be contractually subordinated in right of payment to any Senior Indebtedness or subject to the restrictions described herein.

    The holders of Senior Indebtedness will be entitled to receive payment in full in cash or cash equivalents of all Obligations due in respect of Senior Indebtedness (including, with respect to Designated Senior Indebtedness, any interest accruing after the commencement of any proceeding described below at the rate specified in the applicable Designated Senior Indebtedness whether or not interest is an allowed claim enforceable against the Company in such proceeding) before the Holders of Notes will be entitled to receive any payment on account of Senior Subordinated Obligations or any payment to acquire any of the Notes for cash, property or securities, or any distribution with respect to the Notes of any cash, property or securities (except that Holders of Notes may receive and retain Permitted Junior Securities and payments made from the trust described under "— Defeasance"), in the event of any distribution to creditors of the Company:

    in a liquidation or dissolution of the Company;

    in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to the Company or its property;

    in an assignment for the benefit of creditors; or

    in any marshaling of the Company's assets and liabilities.

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    In addition, until all Obligations due with respect to Senior Indebtedness are paid in full in cash or cash equivalents, any such distribution to which Holders would be entitled shall be made to the holders of Senior Indebtedness (except that Holders may receive and retain Permitted Junior Securities and payments made from the trust described under "— Defeasance").

    The Company and the Subsidiary Guarantors also may not make any payment in respect of any Senior Subordinated Obligations (except in Permitted Junior Securities or from the trust described under "— Defeasance") if:

    a payment default on Designated Senior Indebtedness occurs and is continuing beyond any applicable grace period; or

    any other default occurs and is continuing on any series of Designated Senior Indebtedness that permits holders of that series of Designated Senior Indebtedness to accelerate its maturity and the Trustee receives a notice of such default (a "Payment Blockage Notice") from the trustee or other representative for the holders of any Designated Senior Debt, or the holders of at least a majority of the outstanding principal amount of such Designated Senior Indebtedness.

    Payments on the Notes and the Subsidiary Guarantees may and shall be resumed:

    in the case of a payment default, upon the date on which such default is cured or waived; and

    in case of a nonpayment default, the earlier of the date on which such nonpayment default is cured or waived or 179 days after the date on which the applicable Payment Blockage Notice is received.

    No new Payment Blockage Notice may be delivered unless and until: (1) 360 days have elapsed since the delivery of the immediately prior Payment Blockage Notice; and (2) all scheduled payments of principal, interest and premium and Additional Interest, if any, on the Notes that have come due have been paid in full in cash.

    No nonpayment default that existed or was continuing on the date of delivery of any Payment Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent Payment Blockage Notice.

    Notwithstanding the foregoing, the Company will be permitted to redeem any Notes to the extent required to do so by any Gaming Authority as described in "— Gaming Redemption."

    The Company must promptly notify holders of Senior Indebtedness if payment of the Notes is accelerated because of an Event of Default.

    Upon the occurrence of a Change in Control, certain Asset Sales, and certain sales of its interest in the Lawrenceburg casino, the Company will be required to offer to repurchase some or all of the Notes. See "— Covenants — Limitation on Asset Sales," "— Repurchase of Notes upon a Change of Control" and "Repurchase of Notes in Connection with Sale of Lawrenceburg Interest." The Credit Facility currently prohibits the Company from purchasing any Notes, and also provides that certain change of control or asset sale events with respect to the Company would constitute a default under the Credit Facility. Any future credit agreements or other agreements relating to Senior Indebtedness to which the Company becomes a party may contain similar restrictions and provisions.

    In the event a Change of Control, Asset Sale or sale of Lawrenceburg interests occurs at a time when the Company is prohibited from purchasing Notes, the Company could seek the consent of its senior lenders to the purchase of Notes or could attempt to refinance the borrowings that contain such prohibition. If the Company does not obtain such a consent or repay such borrowings, the Company will remain prohibited from purchasing Notes. In such case, the Company's failure to purchase tendered Notes would constitute an Event of Default under the Indenture which would, in turn,

63


constitute a default under such Senior Indebtedness. In such circumstances, the subordination provisions in the Indenture would likely restrict payments to the holders of Notes.

    By reason of the subordination provisions described above, in the event of liquidation or insolvency, Holders of Notes may recover less, ratably, than creditors of the Company who are holders of Senior Indebtedness.

Certain Definitions

    Set forth below is a summary of certain of the defined terms used in the covenants and other provisions of the Indenture. Reference is made to the indenture for the full definition of all terms as well as any other capitalized terms used herein for which no definition is provided.

    "Acquired Indebtedness" means Indebtedness of a Person existing at the time such Person becomes a Restricted Subsidiary or assumed in connection with an Asset Acquisition by a Restricted Subsidiary; provided that Indebtedness of such Person which is redeemed, defeased, retired or otherwise repaid at the time of or immediately upon consummation of the transactions by which such Person becomes a Restricted Subsidiary or such Asset Acquisition shall not be Acquired Indebtedness.

    "Adjusted Consolidated Net Income" means, for any period, the aggregate net income (or loss) of the Company and its Restricted Subsidiaries for such period determined in conformity with GAAP; provided that the following items shall be excluded in computing Adjusted Consolidated Net Income (without duplication):

    (1)
    the net income of any Person that is not a Restricted Subsidiary, except to the extent of the amount of dividends or other distributions actually paid to the Company or any of its Restricted Subsidiaries by such Person during such period;

    (2)
    the net income (or loss) of any Person prior to the date it becomes a Restricted Subsidiary or is merged into or consolidated with the Company or any of its Restricted Subsidiaries or all or substantially all of the property and assets of such Person are acquired by the Company or any of its Restricted Subsidiaries;

    (3)
    the net income of any Restricted Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary of such net income is not at the time permitted by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to such Restricted Subsidiary;

    (4)
    any gains or losses (on an after-tax basis) attributable to Asset Sales;

    (5)
    solely for purposes of calculating the amount of Restricted Payments that may be made pursuant to clause (C) of the first paragraph of the "Limitation on Restricted Payments" covenant described below, any amount paid or accrued as dividends on Preferred Stock of the Company owned by Persons other than the Company and any of its Restricted Subsidiaries;

    (6)
    all extraordinary gains and extraordinary losses, including any premium, fees and expenses payable in connection with the offering of the Notes, the repurchase of the First Mortgage Notes, the redemption of the Convertible Subordinated Notes and the initial establishment of the Credit Facility;

    (7)
    any non cash impairment loss determined in accordance with GAAP related to the carrying value of (A) the long-lived assets associated with the Belle of Baton Rouge Casino or (B) other assets owned by the Company or its Restricted Subsidiaries as of the date of the Indenture that are recorded in the ordinary course of business and are being used by the

64


      Company or have been replaced by other comparable assets of the Company or its Restricted Subsidiaries; and

    (8)
    the cumulative effect of a change in accounting principles.

    "Affiliate" means, as applied to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person. For purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by" and "under common control with"), as applied to any Person, 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 the ownership of voting securities, by contract or otherwise.

    "Asset Acquisition" means

    an investment by the Company or any of its Restricted Subsidiaries in any other Person pursuant to which such Person shall become a Restricted Subsidiary or shall be merged into or consolidated with the Company or any of its Restricted Subsidiaries, provided that such Person's primary business is related, ancillary or complementary to the businesses of the Company and its Restricted Subsidiaries on the date of such investment or

    an acquisition by the Company or any of its Restricted Subsidiaries of the property and assets of any Person other than the Company or any of its Restricted Subsidiaries that constitute substantially all of a division or line of business of such Person, provided that the property and assets acquired are related, ancillary or complementary to the businesses of the Company and its Restricted Subsidiaries on the date of such acquisition.

    "Asset Disposition" means the sale or other disposition by the Company or any of its Restricted Subsidiaries (other than to the Company or another Restricted Subsidiary) of

    all or substantially all of the Capital Stock of any Restricted Subsidiary or

    all or substantially all of the assets that constitute a division or line of business of the Company or any of its Restricted Subsidiaries.

    "Asset Sale" means any sale, transfer or other disposition (including by way of merger, consolidation or sale-leaseback transaction) in one transaction or a series of related transactions by the Company or any of its Restricted Subsidiaries to any Person other than the Company or any of its Restricted Subsidiaries of

    all or any of the Capital Stock of any Restricted Subsidiary,

    all or substantially all of the property and assets of an operating unit or business of the Company or any of its Restricted Subsidiaries or

    any other property and assets (other than the Capital Stock of or other Investment in an Unrestricted Subsidiary) that is outside the ordinary course of business of the Company or any of its Restricted Subsidiaries,

in each case, other than a sale of all or substantially all of the assets of the Company in compliance with the "Merger, Consolidation, or Sale of Assets" covenant described below; provided that "Asset Sale" shall not include:

    sales or other dispositions of inventory, receivables and other current assets in the ordinary course of business,

    sales, transfers or other dispositions of assets constituting a Restricted Payment permitted to be made under the "Limitation on Restricted Payments" covenant or Investments permitted pursuant to clause (6) of the definition of Permitted Investments,

65


    sales or other dispositions of assets for consideration at least equal to the fair market value of the assets sold or disposed of, to the extent that the consideration received are invested in accordance with clause (B) of the "Limitation on Asset Sales" covenant,

    the sale or other transfer of any of the Company's or any Restricted Subsidiary's interest in Indiana Gaming Company L.P., which transaction is governed by the "Repurchase of Notes in connection with Sale of Lawrenceburg Interest" covenant described below,

    sales, transfers or other dispositions of assets with a Fair Market Value not in excess of $1.0 million in any transaction or series of related transactions, or

    sales, transfers or other dispositions of furniture, fixtures or equipment that has become worn out, obsolete or damaged or otherwise unsuitable for use in connection with the business of the Company or its Restricted Subsidiaries.

    "Attributable Debt" in respect of a sale and leaseback transaction means, at the time of determination, the present value of the obligation of the lessee for net rental payments during the remaining term of the lease included in such sale and leaseback transaction including any period for which such lease has been extended or may, at the option of the lessor, be extended. Such present value shall be calculated using a discount rate equal to the rate of interest implicit in such transaction, determined in accordance with GAAP.

    "Average Life" means, at any date of determination with respect to any debt security, the quotient obtained by dividing (1) the sum of the products of (A) the number of years from such date of determination to the dates of each successive scheduled principal payment of such debt security and (B) the amount of such principal payment by (2) the sum of all such principal payments.

    "Belle of Baton Rouge Casino" means the Belle of Baton Rouge Casino and the related Catfish Town entertainment facility.

    "Capital Stock" means, with respect to any Person, any and all shares, interests, participations or other equivalents (however designated, whether voting or non-voting) in equity of such Person, whether outstanding on the Closing Date or issued thereafter, including, without limitation, all Common Stock and Preferred Stock.

    "Capitalized Lease" means, as applied to any Person, any lease of any property (whether real personal or mixed) of which the discounted present value of the rental obligations of such Person as lessee, in conformity with GAAP, is required to be capitalized on the balance sheet of such Person.

    "Capitalized Lease Obligations" means the discounted present value of the rental obligations under a Capitalized Lease.

    "Change of Control" means the occurrence of any of the following:

    a "person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) other than a group comprised of one or more Excluded Persons becomes the ultimate "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of more than 40% of the total voting power of the Voting Stock of the Company on a fully diluted basis;

    individuals who on the Closing Date constitute the Board of Directors (together with any new directors whose election by the Board of Directors or whose nomination by the Board of Directors for election by the Company's stockholders was approved by a vote of at least two-thirds of the members of the Board of Directors then in office who either were members of the Board of Directors on the Closing Date or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the members of the Board of Directors then in office;

66


    the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Company and its Subsidiaries taken as a whole to any "person" (as that term is used in Section 13(d)(3) of the Exchange Act); or

    the adoption of a plan relating to the liquidation or dissolution of the Company.

    "Closing Date" means the date on which the Notes are originally issued under the Indenture.

    "Consolidated EBITDA" means, for any period, Adjusted Consolidated Net Income for such period plus, to the extent such amount was deducted in calculating such Adjusted Consolidated Net Income:

    Consolidated Interest Expense,

    income taxes (other than income taxes (either positive or negative) attributable to extraordinary and non-recurring gains or losses or sales of assets),

    depreciation expense,

    amortization expense and

    all other non-cash items reducing Adjusted Consolidated Net Income (other than items that will require cash payments and for which an accrual or reserve is, or is required by GAAP to be, made), less all non-cash items increasing Adjusted Consolidated Net Income (other than normal recurring accruals of revenue in the ordinary course of business), all as determined on a consolidated basis for the Company and its Restricted Subsidiaries in conformity with GAAP,

provided that, if any Restricted Subsidiary is not a Wholly Owned Restricted Subsidiary, Consolidated EBITDA shall be reduced (to the extent not otherwise reduced in accordance with GAAP) by an amount equal to (1) the amount of the Adjusted Consolidated Net Income attributable to such Restricted Subsidiary multiplied by (2) the percentage ownership interest in the income of such Restricted Subsidiary not owned on the last day of such period by the Company or any of its Restricted Subsidiaries.

    "Consolidated Indebtedness" means with respect to any Person at any date of determination (without duplication):

    the total amount of Indebtedness of such Person and its Restricted Subsidiaries, plus

    the total amount of Indebtedness of any other Person, to the extent that such Indebtedness has been Guaranteed by the referrent Person or one or more of its Restricted Subsidiaries, plus

    the aggregate liquidation value of all Disqualified Stock of such Person and all preferred stock of Restricted Subsidiaries of such Person, in each case, determined on a consolidated basis in accordance with GAAP.

    "Consolidated Interest Expense" means, for any period, the aggregate amount of:

    interest in respect of Indebtedness of the Company and its Consolidated Subsidiaries (including, without limitation, amortization of original issue discount on any such Indebtedness, the interest portion of any deferred payment obligation and imputed interest with respect to Attributable Debt, calculated in accordance with the effective interest method of accounting; all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers' acceptance financing; the net costs associated with Interest Rate Agreements); provided, however, that "Consolidated Interest Expense" shall not include interest in respect of

    (A)
    Indebtedness of Indiana Gaming Company L.P. outstanding on the date of the Indenture that is owed to any minority partner of Indiana Gaming Company L.P.,

67


      (B)
      Indebtedness of Indiana Gaming Company L.P. that is incurred after the date of the Indenture if such Indebtedness is owed to any minority partner of Indiana Gaming Company L.P. to the extent that Indiana Gaming Company L.P. concurrently incurs Indebtedness to The Indiana Gaming Company on a pro rata basis, based on The Indiana Gaming Company's percentage interest in Indiana Gaming Company L.P.; and

      (C)
      the Indiana Gaming Company L.P. minority partners' pro rata portion, based on such partners' percentage interest in Indiana Gaming Company L.P., of Indebtedness of Indiana Gaming Company L.P.

    owed to third parties; and

    owed to any minority partner of Indiana Gaming Company L.P. and incurred after the date of the Indenture to the extent that such Indebtedness is not excluded from Consolidated Interest Expense pursuant to clause (B) above;

    all but the principal component of rentals in respect of Capitalized Lease Obligations paid, accrued or scheduled to be paid or to be accrued by the Company and its Restricted Subsidiaries during such period;

    any interest expense on Indebtedness of another Person that is Guaranteed by such Person or one of its Subsidiaries or secured by a Lien on assets of such Person or one of its Subsidiaries, whether or not such Guarantee or Lien is called upon; and

    the product of (1) all dividends, whether paid or accrued and whether or not in cash, on any series of preferred stock of such Person or any of its Restricted Subsidiaries, other than dividends on Capital Stock payable solely in Capital Stock of the Company (other than Disqualified Stock) or to the Company or a Restricted Subsidiary of the Company, times (2) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of such Person, expressed as a decimal, in each case, on a consolidated basis and in accordance with GAAP;

excluding, however,

    any amount of such interest of any Restricted Subsidiary if the net income of such Restricted Subsidiary is excluded in the calculation of Adjusted Consolidated Net Income pursuant to clause (3) of the definition thereof (but only in the same proportion as the net income of such Restricted Subsidiary is excluded from the calculation of Adjusted Consolidated Net Income pursuant to clause (3) of the definition thereof) and

    any premiums, fees and expenses (and any amortization thereof) payable in connection with the offering of the Notes, the repurchase of the First Mortgage Notes, redemption of Convertible Subordinated Notes and the initial establishment of the Credit Facility,

all as determined on a consolidated basis (without taking into account Unrestricted Subsidiaries) in conformity with GAAP.

    "Consolidated Net Worth" means, at any date of determination, stockholders' equity as set forth on the most recently available quarterly or annual consolidated balance sheet of the Company and its Restricted Subsidiaries (which shall be as of a date not more than 135 days prior to the date of such computation, and which shall not take into account Unrestricted Subsidiaries), less any amounts attributable to Disqualified Stock or any equity security convertible into or exchangeable for Indebtedness, the cost of treasury stock and the principal amount of any promissory notes receivable from the sale of the Capital Stock of the Company or any of its Restricted Subsidiaries, each item to be determined in conformity with GAAP (excluding the effects of foreign currency exchange

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adjustments under Financial Accounting Standards Board Statement of Financial Accounting Standards No. 52).

    "Consolidated Subsidiaries" means, for any Person, each Subsidiary of such Person (whether existing on the date of the Indenture or created or acquired thereafter) the financial statements of which are consolidated for financial statement reporting purposes with the financial statements of such Person in accordance with GAAP.

    "Credit Facility" means the Credit Agreement dated the date of the Indenture, among the Company, the Subsidiary Guarantors, and Wells Fargo Bank, N.A., as administrative agent bank and the lenders referred to therein, together with any agreements, instruments and documents executed or delivered pursuant to or in connection with such Credit Facility (including, without limitation, any Guarantees and security documents), in each case as such Credit Facility or such agreements, instruments or documents may be amended, supplemented, extended, renewed, refinanced or otherwise modified from time to time.

    "Currency Agreement" means any foreign exchange contract, currency swap agreement or other similar agreement or arrangement.

    "Debt to EBITDA Ratio" means, on any Transaction Date, the ratio of (1) the aggregate amount of Consolidated Indebtedness of the Company and its Restricted Subsidiaries as of such Transaction Date to (2) the aggregate amount of Consolidated EBITDA of the Company and its Restricted Subsidiaries for the then most recent four fiscal quarters prior to such Transaction Date (the "Four Quarter Period") for which reports have been filed with the SEC or provided to the Trustee. In making the foregoing calculation:

    (A)
    pro forma effect shall be given to Asset Dispositions and Asset Acquisitions (including giving pro forma effect to the application of proceeds of any Asset Disposition) that occur during the period (the "Reference Period") commencing on the first day of the Four Quarter Period and ending on the Transaction Date as if they had occurred and such proceeds had been applied on the first day of such Reference Period; and

    (B)
    pro forma effect shall be given to asset dispositions and asset acquisitions (including giving pro forma effect to the application of proceeds of any asset disposition) that have been made by any Person that has become a Restricted Subsidiary or has been merged with or into the Company or any Restricted Subsidiary during such Reference Period and that would have constituted Asset Dispositions or Asset Acquisitions had such transactions occurred when such Person was a Restricted Subsidiary as if such asset dispositions or asset acquisitions were Asset Dispositions or Asset Acquisitions that occurred on the first day of such Reference Period;

provided that to the extent that clause (A) or (B) of this sentence requires that pro forma effect be given to an Asset Acquisition or Asset Disposition, such pro forma calculation shall be based upon the four full fiscal quarters immediately preceding the Transaction Date of the Person, or division or line of business of the Person, that is acquired or disposed for which financial information is available.

    "Default" means any event that is, or after notice or passage of time or both would be, an Event of Default.

    "Designated Senior Indebtedness" means

    (1)
    any Indebtedness outstanding under the Credit Facility (except that any Indebtedness which represents a partial refinancing of Indebtedness theretofore outstanding pursuant to the Credit Facility, rather than a complete refinancing thereof, shall only constitute Designated Senior Indebtedness if such partial refinancing meets the requirements of clause (2) below) and

69


    (2)
    any other Senior Indebtedness that, at the date of determination, has an aggregate principal amount outstanding of at least $20 million and that had been specifically designated by the Company as "Designated Senior Indebtedness."

    "Disqualified Stock" means any class or series of Capital Stock of any Person that by its terms or otherwise is

    (1)
    required to be redeemed prior to the Stated Maturity of the Notes,

    (2)
    redeemable at the option of the holder of such class or series of Capital Stock at any time prior to the Stated Maturity of the Notes or

    (3)
    convertible into or exchangeable for Capital Stock referred to in clause (1) or (2) above or Indebtedness having a scheduled maturity prior to the Stated Maturity of the Notes;

provided that any Capital Stock that would not contribute Disqualified Stock but for provisions thereof giving holders thereof the right to require such Person to repurchase or redeem such Capital Stock upon the occurrence of an "asset sale" or "change of control" occurring prior to the Stated Maturity of the Notes shall not constitute Disqualified Stock if the "asset sale" or "change of control" provisions applicable to such Capital Stock are no more favorable to the holders of such Capital Stock than the provisions contained in "Limitation on Asset Sales" and "Repurchase of Notes upon a Change of Control" covenants described below and such Capital Stock specifically provides that such Person will not repurchase or redeem any such stock pursuant to such provision prior to the Company's repurchase of such Notes as are required to be repurchased pursuant to the "— Limitation on Asset Sales" and "Repurchase of Notes upon a Change of Control" covenants described below.

    "Excluded Persons" means William F. Cellini, F. Lance Callis, Jimmy F. Gallagher, William J. McEnery, John B. Pratt, Sr., James S. Connors and Stephanie Pratt, each of such person's immediate family or a trust or similar entity existing solely for the benefit of such person or such person's immediate family.

    "Fair Market Value" means the price that would be paid in an arm's-length transaction between an informed and willing seller under no compulsion to sell and an informed and willing buyer under no compulsion to buy, as determined in good faith by the Board of Directors, whose determination shall be conclusive if evidenced by a resolution of the Board of Directors.

    "First Mortgage Notes" means our first mortgage notes due 2004.

    "FF&E Indebtedness" means any Indebtedness of the Company or any of its Restricted Subsidiaries that is Incurred to finance the acquisition or lease after the date of the Indenture of furniture, fixtures or equipment ("FF&E") used directly in the operation of any of the Company's Material Casinos and secured solely by a Lien on such FF&E, which Indebtedness has a principal amount not to exceed 100% of the cost of the FF&E so purchased or leased.

    "GAAP" means generally accepted accounting principles in the United States of America as in effect as of the Closing Date, including, without limitation, those set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as approved by a significant segment of the accounting profession. All ratios and computations contained or referred to in the Indenture shall be computed in conformity with GAAP applied on a consistent basis.

    "Gaming Authority" means any agency, authority, board, bureau, commission, department, office or instrumentality of the United States or foreign government, any state province or any city or other political subdivision, or any officer of official thereof, including the Illinois Gaming Board, the Indiana Gaming Commission, the Iowa Racing and Gaming Commission, the Louisiana Gaming Control Board,

70


the Missouri Gaming Commission and any other agency with authority to regulate any gaming operation (or proposed gaming operation) owned, managed or operated by the Company or any of its Subsidiaries.

    "Gaming License" means every license, franchise or other authorization required to own, lease, operate or otherwise conduct the present and future gaming activities of the Company and its Subsidiaries.

    "Guarantee" means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person:

    to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services (unless such purchase arrangements are on arm's-length terms and are entered into in the ordinary course of business), to take-or-pay, or to maintain financial statement conditions or otherwise) or

    entered into for purposes of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided that the term "Guarantee" shall not include endorsements for collection or deposit in the ordinary course of business;

excluding, however,

    (A)
    Indebtedness of Indiana Gaming Company L.P. outstanding on the date of the Indenture that is owed to any minority partner of Indiana Gaming Company L.P.,

    (B)
    Indebtedness of Indiana Gaming L.P. that is incurred after the date of the Indenture if such Indebtedness is owed to any minority partner of Indiana Gaming Company L.P. to the extent that Indiana Gaming Company L.P. concurrently incurs Indebtedness to the Indiana Gaming Company on a pro rata basis, based on The Indiana Gaming Company's percentage interest in Indiana Gaming Company L.P. and

    (C)
    the Indiana Gaming Company L.P. minority partners' pro rata portion, based on such partners' percentage interest in Indiana Gaming Company L.P., of Indebtedness of Indiana Gaming Company L.P. owed to third parties and owed to any minority partner of Indiana Gaming Company L.P. and incurred after the date of the Indenture to the extent that such Indebtedness is not excluded from Consolidated Interest Expense pursuant to clause (B) above.

The term "Guarantee" used as a verb has a corresponding meaning.

    "Incur" means, with respect to any Indebtedness, to incur, create, issue, assume, Guarantee or otherwise become liable for or with respect to, or become responsible for, the payment of, contingently or otherwise, such Indebtedness, including an "Incurrence" of Acquired Indebtedness; provided that neither the accrual of interest nor the accretion of original issue discount shall be considered an Incurrence of Indebtedness.

    "Indebtedness" means, with respect to any Person at any date of determination (without duplication):

    all indebtedness of such Person for borrowed money;

    all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;

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    all obligations of such Person in respect of letters of credit or other similar instruments (including reimbursement obligations with respect thereto, but excluding obligations with respect to letters of credit (including trade letters of credit) securing obligations (other than obligations described in this definition) entered into in the ordinary course of business of such Person to the extent such letters of credit are not drawn upon or, if drawn upon, to the extent such drawing is reimbursed no later than the third Business Day following receipt by such Person of a demand for reimbursement following payment on the letter of credit);

    all obligations of such Person to pay the deferred and unpaid purchase price of property or services, which purchase price is due more than six months after the date of placing such property in service or taking delivery and title thereto or the completion of such services, except Trade Payables;

    all Capitalized Lease Obligations;

    all Indebtedness of other Persons secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person; provided that the amount of such Indebtedness shall be the lesser of (1) the Fair Market Value of such asset at such date of determination and (2) the amount of such Indebtedness;

    all Indebtedness of other Persons Guaranteed by such Person to the extent such Indebtedness is Guaranteed by such Person; and

    to the extent not otherwise included in this definition, obligations under Currency Agreements and Interest Rate Agreements.

The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above and, with respect to contingent obligations, the maximum liability upon the occurrence of the contingency giving rise to the obligation, provided that

    the amount outstanding at any time of any Indebtedness issued with original issue discount is the face amount of such Indebtedness less the remaining unamortized portion of the original issue discount of such Indebtedness at such time as determined in conformity with GAAP,

    money borrowed and set aside at the time of the Incurrence of any Indebtedness in order to prefund the payment of the interest on such Indebtedness shall not be deemed to be "Indebtedness" so long as such money is held to secure the payment of such interest and

    Indebtedness shall not include any liability for federal, state, local or other taxes.

    "Interest Coverage Ratio" means, on any Transaction Date, the ratio of (1) the aggregate amount of Consolidated EBITDA of the Company and its Restricted Subsidiaries for the then most recent four fiscal quarters prior to such Transaction Date for which reports have been filed with the SEC or provided to the Trustee (the "Four Quarter Period") to (2) the aggregate Consolidated Interest Expense of the Company and its Restricted Subsidiaries during such Four Quarter Period. In making the foregoing calculation:

    (1)
    pro forma effect shall be given to any Indebtedness Incurred or repaid during the period (the "Reference Period") commencing on the first day of the Four Quarter Period and ending on the Transaction Date (other than Indebtedness Incurred or repaid under a revolving credit or similar arrangement to the extent of the commitment thereunder (or under any predecessor revolving credit or similar arrangement) in effect on the last day of such Four Quarter Period unless any portion of such Indebtedness is projected, in the reasonable judgment of the senior management of the Company, to remain outstanding for a period in excess of 12 months from the date of the Incurrence thereof), in each case as if such Indebtedness had been Incurred or repaid on the first day of such Reference Period (and pro forma effect shall be given to

72


      eliminate interest attributable to the Indebtedness represented by the First Mortgage Notes upon the funding on the date of the Indenture of a special purpose account with the trustee for the First Mortgage Notes and any other Indebtedness which has been defeased either pursuant to a "covenant defeasance" or "legal defeasance" in accordance with the instrument under which it was incurred);

    (2)
    Consolidated Interest Expense attributable to interest on any Indebtedness (whether existing or being Incurred) computed on a pro forma basis and bearing a floating interest rate shall be computed as if the rate in effect on the Transaction Date (taking into account any Interest Rate Agreement applicable to such Indebtedness if such Interest Rate Agreement has a remaining term in excess of 12 months or, if shorter, at least equal to the remaining term of such Indebtedness) had been the applicable rate for the entire period;

    (3)
    pro forma effect shall be given to Asset Dispositions and Asset Acquisitions (including giving pro forma effect to the application of proceeds of any Asset Disposition) that occur during such Reference Period as if they had occurred and such proceeds had been applied on the first day of such Reference Period; and

    (4)
    pro forma effect shall be given to asset dispositions and asset acquisitions (including giving pro forma effect to the application of proceeds of any asset disposition) that have been made by any Person that has become a Restricted Subsidiary or has been merged with or into the Company or any Restricted Subsidiary during such Reference Period and that would have constituted Asset Dispositions or Asset Acquisitions had such transactions occurred when such Person was a Restricted Subsidiary as if such asset dispositions or asset acquisitions were Asset Dispositions or Asset Acquisitions that occurred on the first day of such Reference Period;

provided that to the extent that clause (3) or (4) of this sentence requires that pro forma effect be given to an Asset Acquisition or Asset Disposition, such pro forma calculation shall be based upon the four full fiscal quarters immediately preceding the Transaction Date of the Person, or division or line of business of the Person, that is acquired or disposed for which financial information is available.

    "Interest Rate Agreement" means any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement, option or future contract or other similar agreement or arrangement.

    "Investment" in any Person means any direct or indirect advance, loan or other extension of credit (including, without limitation, by way of Guarantee or similar arrangement; but excluding advances to customers, suppliers or contractors in the ordinary course of business that are, in conformity with GAAP, recorded as accounts receivable or prepaid items on the balance sheet of the Company or its Restricted Subsidiaries) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition of Capital Stock, bonds, notes, debentures or other similar instruments issued by, such Person and shall include:

    the designation of a Restricted Subsidiary as an Unrestricted Subsidiary and

    the retention of the Capital Stock (or any other Investment) by the Company or any of its Restricted Subsidiaries, of (or in) any Person that has ceased to be a Restricted Subsidiary, including without limitation, by reason of any transaction permitted by clause (3) of the "Limitation on the Issuance and Sale of Capital Stock of Restricted Subsidiaries" covenant.

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    For purposes of the definition of "Unrestricted Subsidiaries" and the "Limitation on Restricted Payments" covenant described below, the amount of or a reduction in an Investment shall be equal to the fair market value thereof at the time such Investment is made or reduced.

    "Lawrenceburg Casino" means the Company's hotel and casino located in Lawrenceburg, Indiana.

    "Lien" means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (inducing, without limitation, any conditional sale or other title retention agreement or lease in the nature thereof or any agreement to give any security interest).

    "Material Casino" means any gaming establishment possessing at least 400 slot machines and at least 20 table games.

    "Minority Interests" means the partnership interests, including common and preferred equity interests of, and the associated partner loans to, Indiana Gaming Company L.P. of the partners of Indiana Gaming Company L.P. other than the Company and its Restricted Subsidiaries.

    "Moody's" means Moody's Investors Service, Inc. and its successors.

    "Net Cash Proceeds" means:

    with respect to any Asset Sale, the proceeds of such Asset Sale in the form of cash or cash equivalents, including payments in respect of deferred payment obligations (to the extent corresponding to the principal, but not interest, component thereof) when received in the form of cash or cash equivalents and proceeds from the conversion of other property received when converted to cash or cash equivalents, net of

    brokerage commissions and other fees and expenses (including fees and expenses of counsel and investment bankers) related to such Asset Sale,

    provisions for all taxes (whether or not such taxes will actually be paid or are payable) as a result of such Asset Sale without regard to the consolidated results of operations of the Company and its Restricted Subsidiaries, taken as a whole,

    payments made to repay Indebtedness or any other obligation outstanding at the time of such Asset Sale that either (1) is secured by a Lien on the property or assets sold or (2) is required to be paid as a result of such sale and

    appropriate amounts to be provided by the Company or any Restricted Subsidiary as a reserve against any liabilities associated with such Asset Sale, including, without limitation, pension and other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale, all as determined in conformity with GAAP and

    with respect to any issuance or sale of Capital Stock, the proceeds of such issuance or sale in the form of cash or cash equivalents, including payments in respect of deferred payment obligations (to the extent corresponding to the principal, but not interest, component thereof) when received in the form of cash or cash equivalents and proceeds from the conversion of other property received when converted to cash or cash equivalents, net of attorney's fees, accountants' fees, underwriters' or placement agents' fees, discounts or commissions and brokerage, consultant and other fees incurred in connection with such issuance or sale and net of taxes paid or payable as a result thereof.

    "Non-Recourse Indebtedness" means Indebtedness:

    as to which neither the Company nor any of its Restricted Subsidiaries (1) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute

74


      Indebtedness) or (2) is directly or indirectly liable as a guarantor or otherwise (other than the Indiana Gaming Company solely in its capacity as general partner of Indiana Gaming L.P.);

    no default with respect to which (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit upon notice, lapse of time or both any holder of any other Indebtedness of the Company or any of its Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity; and

    as to which the lenders have been notified in writing that they will not have any recourse to the stock or assets of the Company or any of its Restricted Subsidiaries.

    "Obligations" means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.

    "Offer to Purchase" means an offer to purchase Notes by the Company from the Holders commenced by mailing a notice to the Trustee and each Holder stating:

    the covenant pursuant to which the offer is being made and that all Notes validly tendered will be accepted for payment on a pro rata basis;

    the purchase price and the date of purchase (which shall be a Business Day no earlier than 30 days nor later than 60 days from the date such notice is mailed) (the "Payment Date");

    that any Note not tendered will continue to accrue interest pursuant to its terms;

    that, unless the Company defaults in the payment of the purchase price, any Note accepted for payment pursuant to the Offer to Purchase shall cease to accrue interest on and after the Payment Date;

    that Holders electing to have a Note purchased pursuant to the Offer to Purchase will be required to surrender the Note, together with the form entitled "Option of the Holder to Elect Purchase" on the reverse side of the Note completed, to the Paying Agent at the address specified in the notice prior to the close of business on the Business Day immediately preceding the Payment Date;

    that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the third Business Day immediately preceding the Payment Date, a telegram, facsimile transmission or letter setting forth the name of such Holder, the principal amount of Notes delivered for purchase and a statement that such Holder is withdrawing his election to have such Notes purchased; and

    that Holders whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered; provided that each Note purchased and each new Note issued shall be in a principal amount of $1,000 or integral multiples thereof.

On the Payment Date, the Company shall

    accept for payment on a pro rata basis Notes or portions thereof tendered pursuant to an Offer to Purchase;

    deposit with the Paying Agent money sufficient to pay the purchase price of all Notes or portions thereof so accepted; and

    deliver, or cause to be delivered, to the Trustee all Notes or portions thereof so accepted together with an Officers' Certificate specifying the Notes or portions thereof accepted for payment by the Company.

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    The Paying Agent shall promptly mail to the Holders of Notes so accepted payment in an amount equal to the purchase price, and the Trustee shall promptly authenticate and mail to such Holders a new Note equal in principal amount to any unpurchased portion of the Note surrendered, provided that each Note purchased and each new Note issued shall be in a principal amount of $1,000 or integral multiples thereof. The Company will publicly announce the results of an Offer to Purchase as soon as practicable after the Payment Date. The Trustee shall act as the Paying Agent for an Offer to Purchase. The Company will comply with Rule 14e-l under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable, in the event that the Company is required to repurchase Notes pursuant to an Offer to Purchase.

    "Permitted Investment" means:

    (1)
    an Investment in the Company or a Restricted Subsidiary or a Person which will, upon the making of such investment, become a Restricted Subsidiary or be merged or consolidated with or into or transfer or convey all or substantially all its assets to, the Company or a Restricted Subsidiary; provided that such person's primary business is related, ancillary or complementary to the businesses of the Company and its Restricted Subsidiaries on the date of such Investment;

    (2)
    Temporary Cash Investments;

    (3)
    payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses in accordance with GAAP;

    (4)
    stock, obligations or securities received in satisfaction of judgments;

    (5)
    Interest Rate Agreements and Currency Agreements designed solely to protect the Company or its Restricted Subsidiaries against fluctuations in interest rates or foreign currency exchange rates;

    (6)
    Investments in any Person the primary business of which is related, ancillary or complementary to the businesses of the Company and its Restricted Subsidiaries; provided that at the time of such Investment the aggregate amount of such Investments pursuant to this clause (6) does not exceed $15.0 million;

    (7)
    any purchase of less than 100% of the then outstanding Minority Interests in Indiana Gaming Company L.P.; provided, that at the time of such Investment,

    (A)
    no Default or Event of Default shall have occurred and be continuing, and

    (B)
    either (i) the Company could Incur at least $1.00 of Indebtedness under the first paragraph of the "Limitation on Indebtedness and Issuances of Preferred Stock" covenant; or (ii) without regard to whether the Company could incur any amount of Indebtedness, the Company would have been permitted to make a Restricted Payment pursuant to clause (C) of the first paragraph of the "Limitation on Restricted Payments" covenant described below equal to the amount of the proposed expenditure for such purchase of the Minority Interests;

    (8)
    Investments in an Unrestricted Subsidiary which are used to develop a hotel to be used in connection with a Material Casino; provided that at the time of such Investment the aggregate amount of such Investments pursuant to this clause (8) does not exceed $10.0 million; and

    (9)
    early retirement of Indebtedness outstanding on the date of the Indenture owed to former shareholders of Jazz Enterprises Inc.

    "Permitted Junior Securities" means:

    Equity Interests in the Company or any Subsidiary Guarantor; or

76


    debt securities that are subordinated to all Senior Indebtedness and any debt securities issued in exchange for Senior Indebtedness to substantially the same extent as, or to a greater extent than, the Notes and the Subsidiary Guarantees are subordinated to Senior Indebtedness under the Indenture.

    "Permitted Lender" means

    the lenders under the Credit Facility,

    any affiliate of any lender under the Credit Facility,

    any commercial bank, savings bank or loan association having a combined capital and surplus of at least $100.0 million,

    any other financial institution, including a mutual fund or other fund, having total assets of at least $250.0 million and

    any other Person that qualifies as a "qualified institutional buyer" pursuant to Rule 144A under the Securities Act, any purchaser of Indebtedness pursuant to Regulation S under the Securities Act and any purchaser of Indebtedness that is registered under the Securities Act.

    "Permitted Liens" means

    Liens securing obligations under Senior Indebtedness that is permitted to be incurred pursuant to the Indenture including, without limitation, the Credit Facility;

    Liens existing on the Closing Date;

    Liens granted after the Closing Date on any assets or Capital Stock of the Company or its Restricted Subsidiaries created in favor of the Holders;

    Liens for taxes, assessments, governmental charges or claims that are being contested in good faith by appropriate legal proceedings promptly instituted and diligently conducted and for which a reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made;

    statutory and common law Liens of landlords and carriers, warehousemen, mechanics, suppliers, materialmen, repairmen or other similar Liens arising in the ordinary course of business and with respect to amounts not yet delinquent or being contested in good faith by appropriate legal proceedings promptly instituted and diligently conducted and for which a reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made;

    Liens incurred or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social security;

    Liens incurred or deposits made to secure the performance of tenders, bids, leases, statutory or regulatory obligations, bankers' acceptances, surety and appeal bonds, government contracts, performance and return-of-money bonds and other obligations of a similar nature incurred in the ordinary course of business (exclusive of obligations for the payment of borrowed money);

    easements, rights-of-way, municipal and zoning ordinances and similar charges, encumbrances, title defects or other irregularities that do not materially interfere with the ordinary course of business of the Company or any of its Restricted Subsidiaries;

    Liens (including extensions and renewals thereof) upon real or personal property acquired after the Closing Date; provided that

77


    such Lien is created solely for the purpose of securing Indebtedness Incurred, in accordance with the "Limitation on Indebtedness and Issuances of Preferred Stock" covenant described below, to finance the cost (including the cost of improvement or construction) of the item of property or assets subject thereto and such Lien is created prior to, at the time of or within six months after the later of the acquisition, the completion of construction or the commencement of full operation of such property,

    the principal amount of the Indebtedness secured by such Lien does not exceed 100% of such cost and

    any such Lien shall not extend to or cover any property or assets other than such item of property or assets and any improvements on such item;

    leases or subleases granted to others that do not materially interfere with the ordinary course of business of the Company and its Restricted Subsidiaries, taken as a whole;

    Liens encumbering property or assets under construction arising from progress or partial payments by a customer of the Company or its Restricted Subsidiaries relating to such property or assets;

    any interest or title of a lessor in the property subject to any Capitalized Lease or operating lease;

    Liens arising from filing Uniform Commercial Code financing statements regarding leases;

    Liens on property of, or on shares of Capital Stock or Indebtedness of, any Person existing at the time such Person becomes or becomes a part of, any Restricted Subsidiary, provided that such Liens do not extend to or cover any property or assets of the Company or any Restricted Subsidiary other than the property or assets acquired;

    Liens in favor of the Company or any Restricted Subsidiary, other than Liens securing intercompany Indebtedness incurred under clause (3) of the second paragraph of the "Limitation on Indebtedness and Issuances of Preferred Stock" covenant described below;

    Liens arising from the rendering of a final judgment or order against the Company or any Restricted Subsidiary that does not give rise to an Event of Default;

    Liens securing reimbursement obligations with respect to letters of credit that encumber documents and other property relating to such letters of credit and the products and proceeds thereof;

    Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

    Liens encumbering customary initial deposits and margin deposits, and other Liens that are within the general parameters customary in the industry and incurred in the ordinary course of business, in each case, securing Indebtedness under Interest Rate Agreements and Currency Agreements and forward contracts, options, future contracts, futures options or similar agreements or arrangements designed solely to protect the Company or any of its Restricted Subsidiaries from fluctuations in interest rates, currencies or the price of commodities;

    Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business in accordance with the past practices of the Company and its Restricted Subsidiaries prior to the Closing Date;

    Liens on or sales of receivables;

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    Liens securing obligations under Currency Agreements and Interest Rate Agreements entered into in the ordinary course of business; and

    Liens in addition to the foregoing incurred in the ordinary course of business provided that the amount of the obligations secured by such Liens does not exceed in the aggregate $5.0 million at any one time outstanding and that

    are not incurred in connection with the borrowing of money or the obtaining of advances or credit (other than trade credit in the ordinary course of business) and

    do not in the aggregate materially detract from the value of the property or materially impair the use thereof in the operation of the business by the Company or any of its Subsidiaries.

    "Public Equity Offering" means an underwritten primary public offering of Common Stock of the Company pursuant to an effective registration statement under the Securities Act.

    "Restricted Subsidiary" means any Subsidiary of the Company other than an Unrestricted Subsidiary.

    "S&P" means Standard & Poor's Ratings Group, a division of The McGraw-Hill Companies, and its successors.

    "Senior Indebtedness" means the following obligations of the Company or a Subsidiary Guarantor, whether outstanding on the Closing Date or thereafter Incurred:

    (1)
    all Indebtedness and all other monetary obligations (including, without limitation, expenses, fees, principal, interest reimbursement obligations under letters of credit and indemnities payable in connection therewith) of the Company or a Subsidiary Guarantor under (or in respect of) the Credit Facility or any Interest Rate Agreement or Currency Agreement relating to the Indebtedness under the Credit Facility and

    (2)
    all other Indebtedness and all other monetary obligations of the Company or a Subsidiary Guarantor (other than the Notes), including principal and interest on such Indebtedness, unless such Indebtedness, by its terms or by the terms of any agreement or instrument pursuant to which such Indebtedness is issued, is on a parity with, or subordinated in right of payment to, the Notes or any Subsidiary Guarantee;

    Notwithstanding anything to the contrary in clauses (1) and (2) above, Senior Indebtedness shall not include:

    any Indebtedness of the Company that, when Incurred, was without recourse to the Company,

    any Indebtedness of the Company to a Subsidiary of the Company, or to a joint venture in which the Company has an interest,

    any Indebtedness of the Company, to the extent not permitted by the "Limitation on Indebtedness and Issuances of Preferred Stock" covenant or the "Limitation on Senior Subordinated Indebtedness" covenant described below,

    any repurchase, redemption or other obligation in respect of Disqualified Stock,

    any Indebtedness to any employee of the Company or any of its Subsidiaries,

    any liability for taxes owed or owing by the Company or any of its Subsidiaries or

    any Trade Payables.

    "Senior Subordinated Obligations" means any principal of, premium, if any, or interest on the Notes payable pursuant to the terms of the Notes or the Subsidiary Guarantees or upon acceleration,

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including any amounts received upon the exercise of rights of rescission or other rights of action (including claims for damages) or otherwise, to the extent relating to the purchase price of the Notes and the Subsidiary Guarantees or amounts corresponding to such principal, premium, if any, or interest on the Notes.

    "Significant Subsidiary" means, at any date of determination, any Subsidiary that, together with its Subsidiaries:

    for the most recent fiscal year of the Company, accounted for more than 10% of the consolidated revenues of the Company and its Subsidiaries or

    as of the end of such fiscal year, was the owner of more than 10% of the consolidated assets of the Company and its Subsidiaries, all as set forth on the most recently available consolidated financial statements of the Company for such fiscal year.

    "Stated Maturity" means, (1) with respect to any debt security, the date specified in such debt security as the fixed date on which the final installment of principal of such debt security is due and payable and (2) with respect to any scheduled installment of principal of or interest on any debt security, the date specified in such debt security as the fixed date on which such installment is due and payable.

    "Subsidiary" means, with respect to any Person, any corporation, association or other business entity of which more than 50% of the voting power of the outstanding Voting Stock is owned, directly or indirectly, by such Person and one or more other Subsidiaries of such Person.

    "Subsidiary Guarantor" means (1) each Restricted Subsidiary of the Company and (2) any other Subsidiary of the Company that executes a Subsidiary Guarantee pursuant to the "Additional Subsidiary Guarantees" covenant described below.

    "Temporary Cash Investment" means any of the following:

    (1)
    direct obligations of the United States of America or any agency thereof or obligations fully and unconditionally guaranteed by the United States of America or any agency thereof;

    (2)
    demand deposit accounts, time deposit accounts, certificates of deposit and money market deposits maturing within 180 days of the date of acquisition thereof issued by a bank or trust company which is organized under the laws of the United States of America, any state thereof or any foreign country recognized by the United States of America, and which bank or trust company has capital, surplus and undivided profits aggregating in excess of $100 million (or the foreign currency equivalent thereof and has outstanding debt which is rated "A" (or such similar equivalent rating) or higher by at least one nationally recognized statistical rating organization (as defined in Rule 436 under the Securities Act) or any money-market fund sponsored by a registered broker dealer or mutual fund distributor;

    (3)
    repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clause (1) above entered into with a bank or trust company meeting the qualifications described in clause (2) above;

    (4)
    commercial paper, maturing not more than one year after the date of acquisition, issued by a corporation (other than an Affiliate of the Company) organized and in existence under the laws of the United States of America, any state thereof or any foreign country recognized by the United States of America with a rating at the time as of which any investment therein is made of "P-2" (or higher) according to Moody's or "A-2" (or higher) according to S&P;

    (5)
    securities with maturities of one year or less from the date of acquisition issued or fully and conditionally guaranteed by any state, commonwealth or territory of the United States of

80


      America, or by any political subdivision or taxing authority thereof, and rated at least "A" by S&P or Moody's; and

    (6)
    other dollar denominated securities issued by any Person incorporated in the United States rated at least "A" or the equivalent by S&P or at least "A2" or the equivalent by Moody's and in each case either (A) maturing not more than one year after the date of acquisition or (B) which are subject to a repricing arrangement (such as a Dutch auction) not more than one year after the date of acquisition (and reprices at least yearly thereafter) which the Person making the investment believes in good faith will permit such Person to sell such security at par in connection with such repricing mechanism.

    "Trade Payables" means, with respect to any Person, any accounts payable or any other indebtedness or monetary obligation to trade creditors created, assumed or Guaranteed by such Person or any of its Subsidiaries arising in the ordinary course of business in connection with the acquisition of goods or services.

    "Transaction Date" means, with respect to the Incurrence of any Indebtedness by the Company or any of its Restricted Subsidiaries, the date such Indebtedness is to be Incurred and, with respect to any Restricted Payment, the date such Restricted Payment is to be made.

    "Unrestricted Subsidiary" means:

    any Subsidiary of the Company that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors in the manner provided below, and

    any Subsidiary of an Unrestricted Subsidiary;

provided that such Subsidiary:

    has no Indebtedness other than Non-Recourse Debt;

    is not party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary of the Company unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to the Company or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of the Company;

    is a Person with respect to which neither the Company nor any of its Restricted Subsidiaries has any direct or indirect obligation (1) to subscribe for additional Equity Interests or (2) to maintain or preserve such Person's financial condition or to cause such Person to achieve any specified levels of operating results; and

    has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Company or any of its Restricted Subsidiaries.

    If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of the Indenture and any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the Company as of such date and, if such Indebtedness is not permitted to be incurred as of such date under the "Incurrence of Indebtedness and Issuance of Preferred Stock" covenant described below, the Company shall be in default of such covenant.

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    "U.S. Government Obligations" means securities that are

    direct obligations of the United States of America for the payment of which its full faith and credit is pledged or

    obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America,

which, in either case, are not callable or redeemable at the option of the issuer thereof at any time prior to the Stated Maturity of the Notes, and shall also include a depository receipt issued by a bank or trust company as custodian with respect to any such U.S. Government Obligation or a specific payment of interest on or principal of any such U.S. Government Obligation held by such custodian for the account of the holder of a depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of interest on or principal of the U.S. Governmental Obligation evidenced by such depository receipt.

    "Voting Stock" means with respect to any Person, Capital Stock of any class or kind ordinarily having the power to vote for the election of directors, managers or other voting members of the governing body of such Person.

    "Wholly Owned" means, with respect to any Subsidiary of any Person, the ownership of all of the outstanding Capital Stock of such Subsidiary (other than any director's qualifying shares or Investments by foreign nationals mandated by applicable law) by such Person or one or more Wholly Owned Subsidiaries of such Person.

Covenants

Limitation on Indebtedness and Issuances of Preferred Stock

    The Company will not, and will not permit any of its Restricted Subsidiaries to, Incur any Indebtedness (other than the Notes and any guarantees thereof issued on the Closing Date and other Indebtedness existing on the Closing Date) and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided that the Company may Incur Indebtedness or issue Disqualified Stock and the Company's Restricted Subsidiaries may Incur Indebtedness or issue Disqualified Stock or preferred stock if, after giving effect to the Incurrence of such Indebtedness or the issuance of such Disqualified Stock or preferred stock and the receipt and application of the proceeds therefrom, the Interest Coverage Ratio would be greater than 2.0:1.

    Notwithstanding the foregoing, the Company and any Restricted Subsidiary (except as specified below) may Incur each and all of the following:

    (1)
    Subject to the provisions of the third paragraph of the covenant entitled "Repurchase of Notes in Connection with Sale of Lawrenceburg Interest," Indebtedness and letters of credit under the Credit Facility in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed $275.0 million less any amount of such Indebtedness permanently repaid as provided under the "Limitation on Asset Sales" covenant described below;

    (2)
    Subject to the provisions of the third paragraph of the covenant entitled "Repurchase of Notes in Connection with Sale of Lawrenceburg Interest," Indebtedness in an aggregate principal amount at any one time outstanding under this clause (2) not to exceed

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      $150.0 million less any amount of such Indebtedness permanently repaid as provided under the "Limitation on Asset Sales" covenant described below; provided that:

      the initial borrowing under the agreement governing such Indebtedness is used exclusively to purchase at least 29.0% of the then-outstanding interests of Indiana Gaming Company L.P.;

      all of the initial lenders or purchasers of such Indebtedness are Permitted Lenders;

      at the time of the initial borrowing under the agreement governing such Indebtedness, after giving pro forma effect to the issuance of all Indebtedness which is outstanding as of the date of determination pursuant to the Credit Facility and which may otherwise be incurred under such Credit Facility, the Interest Coverage Ratio would be at least 1.5 to 1; and

      such Indebtedness is not issued with any equity or cash flow participations.


    (3)
    Indebtedness owed to the Company evidenced by a promissory note or to any Restricted Subsidiary; provided that:

    if the Company or any Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Senior Subordinated Obligations with respect to the Notes, in the case of the Company, or the subsidiary Guarantee, in the case of a Subsidiary Guarantor and

    any event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of such Indebtedness (other than to the Company or another Restricted Subsidiary) shall be deemed, in each case, to constitute an Incurrence of such Indebtedness not permitted by this clause (3);

    (4)
    Indebtedness issued in exchange for, or the net proceeds of which are used to refinance or refund, then outstanding Indebtedness Incurred under clauses (7), (8), (9) and (10) of this paragraph, and any refinancings thereof in an amount not to exceed the amount so refinanced or refunded (plus premiums, accrued interest, fees and expenses); provided that Indebtedness the proceeds of which are used to refinance or refund the Notes or Indebtedness that is pari passu with, or subordinated in right of payment to, the Notes shall only be permitted under this clause (4) if:

    in case the Notes are refinanced in part or the Indebtedness to be refinanced is pari passu with the Notes, such new Indebtedness, by its terms or by the terms of any agreement or instrument pursuant to which such new Indebtedness is outstanding, is expressly made pari passu with, or subordinate in right of payment to, the remaining Notes,

    in case the Indebtedness to be refinanced is subordinated in right of payment to the Notes, such new Indebtedness, by its terms or by the terms of any agreement or instrument pursuant to which such new Indebtedness is issued or remains outstanding, is expressly made subordinate in right of payment to the Notes at least to the extent that the Indebtedness to be refinanced is subordinated to the Notes and

    such new Indebtedness, determined as of the date of Incurrence of such new Indebtedness, does not mature prior to the Stated Maturity of the Indebtedness to be refinanced or refunded, and the Average Life of such new Indebtedness is at least equal to the remaining Average Life of the Indebtedness to be refinanced or refunded;

      and provided further that in no event may Indebtedness of the Company that is pari passu or subordinated in right of payment to the Notes be refinanced by means of any Indebtedness of any Restricted Subsidiary pursuant to this clause (4);

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    (5)
    Indebtedness (A) in respect of performance, surety or appeal bonds provided in the ordinary course of business, (B) under Currency Agreements and Interest Rate Agreements; provided that such agreements (I) are designed solely to protect the Company or its Restricted Subsidiaries against fluctuations in foreign currency exchange rates or interest rates and (II) do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in foreign currency exchange rates or interest rates or by reason of fees, indemnities and compensation payable thereunder; and (C) arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, or from Guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Company or any of its Restricted Subsidiaries pursuant to such agreements, in any case Incurred in connection with the disposition of any business, assets or Restricted Subsidiary (other than Guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition), in a principal amount not to exceed the gross proceeds actually received by the Company or any Restricted Subsidiary in connection with such disposition;

    (6)
    the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Subsidiary Guarantees to be issued on the date of the Indenture and the Exchange Notes and the related Subsidiary Guarantees to be issued pursuant to the Registration Rights Agreement;

    (7)
    Indebtedness of the Company, to the extent the net proceeds thereof are promptly (A) used to purchase Notes tendered in an Offer to Purchase made as a result of a Change in Control or (B) deposited to defease the Notes as described below under "Defeasance";

    (8)
    Guarantees of Indebtedness of the Company or a Restricted Subsidiary by the Company or any of the Subsidiary Guarantors that was permitted to be incurred by another provision of this covenant;

    (9)
    FF&E Indebtedness, provided that the amount of such Indebtedness in the aggregate outstanding at any time, including all refinancings, replacements and refundings thereof, will not exceed $5.0 million multiplied by the number of Material Casinos then operated by the Company or its Restricted Subsidiaries; and

    (10)
    Indebtedness of the Company (in addition to Indebtedness permitted under clauses (1) through (9) above) in an aggregate principal amount outstanding at any time (together with refinancings thereof) not to exceed $15.0 million.

Notwithstanding any other provision of this "Limitation on Indebtedness and Issuances of Preferred Stock" covenant, the maximum amount of Indebtedness that the Company or a Restricted Subsidiary may Incur pursuant to this "Limitation on Indebtedness and Issuances of Preferred Stock" covenant shall not be deemed to be exceeded, with respect to any outstanding Indebtedness due solely to the result of fluctuations in the exchange rates of currencies. For purposes of determining any particular amount of Indebtedness under this "Limitation on Indebtedness and Issuances of Preferred Stock" covenant,

    (1)
    Indebtedness incurred under the Credit Facility on or prior to the Closing Date shall be treated as Incurred pursuant to clause (1) of the second paragraph of this "Limitation on Indebtedness and Issuances of Preferred Stock" covenant,

    (2)
    Guarantees, Liens or obligations with respect to letters of credit supporting Indebtedness which is included in the determination of such particular amount shall not be included and

    (3)
    any Liens granted pursuant to the equal and ratable provisions referred to in the "Limitation on Liens" covenant described below shall not be treated as Indebtedness.

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For purposes of determining compliance with this "Limitation on Indebtedness and Issuances of Preferred Stock" covenant, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness described in the above clauses (other than Indebtedness referred to in clause (1) of the preceding sentence), the Company, in its sole discretion, shall classify, and from time to time may reclassify, such item of Indebtedness and only be required to include the amount and type of such Indebtedness in one of such clauses.

Limitation on Restricted Payments

    The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly:

    (1)
    declare or pay any dividend or make any distribution on or with respect to the Company's or any Restricted Subsidiary's Capital Stock (other than dividends or distributions payable solely in shares of its Capital Stock (other than Disqualified Stock) or in options, warrants or other rights to acquire shares of such Capital Stock) held by Persons other than the Company or any of its Restricted Subsidiaries,

    (2)
    purchase, redeem, retire or otherwise acquire for value any shares of Capital Stock of the Company or any Subsidiary of the Company (including options, warrants or other rights to acquire such shares of Capital Stock) held by any Person;

    (3)
    make any voluntary or optional principal payment, or voluntary or optional redemption, repurchase, defeasance, or other acquisition or retirement for value, of Indebtedness of the Company or a Subsidiary Guarantor that is subordinated in right of payment to the Notes or any Subsidiary Guarantee, as the case may be; or

    (4)
    make any Investment, other than a Permitted Investment, in any Person (such payments or any other actions described in clauses (1) through (4) above being collectively "Restricted Payments");

if, at the time of, and after giving effect to, the proposed Restricted Payment:

    (A)
    a Default or Event of Default shall have occurred and be continuing,

    (B)
    the Company could not Incur at least $1.00 of Indebtedness under the first paragraph of the "Limitation on Indebtedness and Issuances of Preferred Stock" covenant or

    (C)
    the aggregate amount of all Restricted Payments, together with the amount of any Investment that was made pursuant to clause (7)(B)(ii) of the definition of "Permitted Investments" (the amount of any Restricted Payment with a Fair Market Value in excess of $1.0 million, if other than in cash, to be determined in good faith by the Board of Directors, whose determination shall be conclusive and evidenced by a resolution of the Board of Directors), made after the Closing Date shall exceed the sum of

    50% of the aggregate amount of the Adjusted Consolidated Net Income (or, if the Adjusted Consolidated Net Income is a loss, minus 100% of the amount of such loss) (determined by excluding income resulting from transfers of assets by the Company or a Restricted Subsidiary to an Unrestricted Subsidiary) accrued on a cumulative basis during the period (taken as one accounting period) beginning on the first day of the fiscal quarter immediately following the Closing Date and ending on the last day of the last fiscal quarter preceding the Transaction Date for which reports have been filed with the SEC or provided to the Trustee plus

    the aggregate Net Cash Proceeds received by the Company after the Closing Date from the issuance and sale permitted by the Indenture of its Capital Stock (other than Disqualified Stock) to a Person who is not a Subsidiary of the Company, including an issuance or sale

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        permitted by the Indenture of Indebtedness of the Company for cash subsequent to the Closing Date upon the conversion of such Indebtedness into Capital Stock (other than Disqualified Stock) of the Company, or from the issuance to a Person who is not a Subsidiary of the Company of any options, warrants or other rights to acquire Capital Stock of the Company (in each case, exclusive of any Disqualified Stock or any options, warrants or other rights that are redeemable at the option of the holder, or are required to be redeemed, prior to the Stated Maturity of the Notes) plus

      an amount equal to the net reduction in Investments treated as Restricted Payments in any Person resulting from payments of interest on Indebtedness, dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or any Restricted Subsidiary or from the Net Cash Proceeds from the sale of any such Investment (except, in each case, to the extent any such payment or proceeds are included in the calculation of Adjusted Consolidated Net Income and except, in each case, for any such sale that is not included in the definition of "Asset Sales"), or from redesignations of Unrestricted Subsidiaries as Restricted Subsidiaries (valued in each case as provided in the definition of "Investments"), not to exceed, in each case, the amount of Investments previously made by the Company or any Restricted Subsidiary in such Person or Unrestricted Subsidiary.

    The foregoing provision shall not be violated by reason of:

    (1)
    the payment of any dividend within 60 days after the date of declaration thereof if, at said date of declaration, such payment would comply with the foregoing paragraph;

    (2)
    the redemption, repurchase, defeasance or other acquisition or retirement for value of Indebtedness that is subordinated in right of payment to the Notes including premium, if any, and accrued and unpaid interest, with the proceeds of, or in exchange for, Indebtedness Incurred under clause (4) of the second paragraph of the "Limitation on Indebtedness and Issuances of Preferred Stock" covenant;

    (3)
    the repurchase, redemption or other acquisition of Capital Stock of the Company or an Unrestricted Subsidiary (or options, warrants or other rights to acquire such Capital Stock) in exchange for, or out of the proceeds of a substantially concurrent offering of, shares of Capital Stock (other than Disqualified Stock) of the Company (or options, warrants or other rights to acquire such Capital Stock);

    (4)
    the making of any principal payment or the repurchase, redemption, retirement, defeasance or other acquisition for value of Indebtedness of the Company which is subordinated in right of payment to the Notes in exchange for, or out of the proceeds of, a substantially concurrent offering of, shares of the Capital Stock (other than Disqualified Stock) of the Company (or options, warrants or other rights to acquire such Capital Stock);

    (5)
    payments or distributions, to dissenting stockholders pursuant to applicable law, pursuant to or in connection with a consolidation, merger or transfer of assets that complies with the provisions of the Indenture applicable to mergers, consolidations and transfers of all or substantially all of the property and assets of the Company;

    (6)
    pro rata dividends or distributions on Common Stock of Restricted Subsidiaries held by minority stockholders;

    (7)
    the redemption or repurchase of any debt or equity securities of the Company or any Restricted Subsidiary required by, and in accordance with any order of any Gaming Authority, provided, that the Company has used its reasonable best efforts to effect a disposition of such securities to a third- party and has been unable to do so; or

    (8)
    other Restricted Payments in an aggregate amount not to exceed $15.0 million;

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provided that, except in the case of clauses (1) and (3), no Default or Event of Default shall have occurred and be continuing or occur as a consequence of the actions or payments set forth therein.

    Each Restricted Payment permitted pursuant to the preceding paragraph (other than the Restricted Payment referred to in clause (2) thereof, an exchange of Capital Stock for Capital Stock or Indebtedness referred to in clause (3) or (4) thereof), the Net Cash Proceeds from any issuance of Capital Stock referred to in clauses (3) and (4), and any Investment that is made pursuant to clause 7(B)(ii) of the definition of Permitted Investments shall be included in calculating whether the conditions of clause (C) of the first paragraph of this "Limitation on Restricted Payments" covenant have been met with respect to any subsequent Restricted Payments. In the event the proceeds of an issuance of Capital Stock of the Company are used for the redemption, repurchase or other acquisition of the Notes, or Indebtedness that is pari passu with the Notes, then the Net Cash Proceeds of such issuance shall be included in clause (C) of the first paragraph of this "Limitation on Restricted Payments" covenant only to the extent such proceeds are not used for such redemption, repurchase or other acquisition of Indebtedness.

Limitation on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries

    The Company will not, and will not permit any Restricted Subsidiary to, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction of any kind on the ability of any Restricted Subsidiary to

    (1)
    pay dividends or make any other distributions permitted by applicable law on any Capital Stock of such Restricted Subsidiary owned by the Company or any other Restricted Subsidiary,

    (2)
    pay any Indebtedness owed to the Company or any other Restricted Subsidiary,

    (3)
    make loans or advances to the Company or any other Restricted Subsidiary or

    (4)
    transfer any of its property or assets to the Company or any other Restricted Subsidiary.

    The foregoing provisions shall not restrict any encumbrances or restrictions:

      existing on the Closing Date in the Credit Facility, the Indenture or any other agreements in effect on the Closing Date, and any extensions, refinancings, renewals or replacements of such agreements; provided that the encumbrances and restrictions in any such extensions, refinancings, renewals or replacements are no less favorable in any material respect to the Holders than those encumbrances or restrictions that are then in effect and that are being extended, refinanced, renewed or replaced;

      existing under or by reason of applicable law or by order of any Gaming Authority;

      existing with respect to any Person or the property or assets of such Person acquired by the Company or any Restricted Subsidiary, existing at the time of such acquisition and not incurred in contemplation thereof, which encumbrances or restrictions are not applicable to any Person or the property or assets of any Person other than such Person or the property or assets of such Person so acquired;

      in the case of clause (4) of the first paragraph of this "Limitation on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries" covenant,

      that restrict in a customary manner the subletting, assignment or transfer of any property or asset that is a lease, license, conveyance or contract or similar property or asset,

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        existing by virtue of any transfer of, agreement to transfer, option or right with respect to, or Lien on, any property or assets of the Company or any Restricted Subsidiary not otherwise prohibited by the Indenture or

        arising or agreed to in the ordinary course of business, not relating to any Indebtedness, and that do not, individually or in the aggregate, detract from the value of property or assets of the Company or any Restricted Subsidiary in any manner material to the Company or any Restricted Subsidiary;

      with respect to a Restricted Subsidiary and imposed pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Capital Stock of, or property and assets of, such Restricted Subsidiary; or

      contained in the terms of any Indebtedness or any agreement pursuant to which such Indebtedness was issued if

      the encumbrance or restriction applies only in the event of a payment default or a default with respect to a financial covenant contained in such Indebtedness or agreement,

      the encumbrance or restriction is not materially more disadvantageous to the Holders of the Notes than is customary in comparable financings (as determined by the Company) and

      the Company determines that any such encumbrance or restriction will not materially affect the Company's ability to make principal or interest payments on the Notes).

Nothing contained in this "Limitation on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries" covenant shall prevent the Company or any Restricted Subsidiary from

    creating, incurring, assuming or suffering to exist any Liens otherwise permitted in the "Limitation on Liens" covenant,

    restricting the sale or other disposition of property or assets of the Company or any of its Restricted Subsidiaries that secure Indebtedness of the Company or any of its Restricted Subsidiaries or

    distributing cash flow from Indiana Gaming Company L.P. in accordance with the provisions of its partnership agreement.

Limitation on the Issuance and Sale of Capital Stock of Restricted Subsidiaries

    The Company will not sell, and will not permit any Restricted Subsidiary, directly or indirectly, to issue or sell, any shares of Capital Stock of a Restricted Subsidiary (including options, warrants or other rights to purchase shares of such Capital Stock) except:

    (1)
    to the Company or a Wholly Owned Restricted Subsidiary;

    (2)
    issuances of director's qualifying shares or sales to foreign nationals of shares of Capital Stock of foreign Restricted Subsidiaries, to the extent required by applicable law; or

    (3)
    if, (i) such issuance or sale is of all the Capital Stock of such Restricted Subsidiary and (ii) the Net Cash Proceeds of any such issuance or sale are applied in accordance with clause (A) or (B) of the "Limitation on Asset Sales" covenant described below.

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Additional Subsidiary Guarantees

    If (1) a Restricted Subsidiary acquired or created after the date of the Indenture has at any time a Fair Market Value of more than $250,000 or (2) any Subsidiary of the Company becomes a borrower or a guarantor under the Credit Facility, then that Subsidiary must execute a Subsidiary Guarantee and deliver an opinion of counsel, in accordance with the terms of the Indenture pursuant to which such Subsidiary will become a Subsidiary Guarantor, on a senior subordinated basis (pursuant to subordination provisions substantially similar to those described above under the caption "— Ranking"), of the Company's payment obligations under the Notes and the Indenture; provided that the aggregate Fair Market Value of Restricted Subsidiaries of the Company that are not Subsidiary Guarantors will not at any time exceed $1.0 million.

Designation of Restricted and Unrestricted Subsidiaries

    The Board of Directors may designate any Restricted Subsidiary (including any newly acquired or newly formed Subsidiary of the Company) to be an Unrestricted Subsidiary unless such Subsidiary owns any Capital Stock of, or owns or holds any Lien on any property of, the Company or any Restricted Subsidiary; provided that:

    (1)
    the value of all outstanding Investments owned by the Company and its Restricted Subsidiaries in the Restricted Subsidiary being so designated will be deemed to be an Investment made by the Company or such Restricted Subsidiary as of the time of such designation

    (2)
    the Investment referred to in clause (1) of this proviso would be permitted under the "Limitation on Restricted Payments" covenant described above;

    (3)
    no Subsidiary of the Company with an interest in Indiana Gaming Company L.P., may become an Unrestricted Subsidiary; and

    (4)
    such Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

    Indiana Gaming Company L.P. will initially be designated an Unrestricted Subsidiary.

    The Board of Directors may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that:

    no Default or Event of Default shall have occurred and be continuing at the time of or after giving effect to such designation and

    all Liens and Indebtedness of such Unrestricted Subsidiary outstanding immediately after such designation would, if incurred at such time, have been permitted to be Incurred (and shall be deemed to have been Incurred) for all purposes of the Indenture.

    The Company shall designate Indiana Gaming Company L.P. as a Restricted Subsidiary if the Company or its Subsidiaries acquire all of the then outstanding Minority Interests in Indiana Gaming Company L.P.

    Any such designation by the Board of Directors shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution of the Board of Directors giving effect to such designation and an Officers' Certificate certifying that such designation complied with the foregoing provisions.

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Limitation on Transactions with Shareholders and Affiliates

    The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, enter into, renew or extend any transaction (including, without limitation, the purchase, sale, lease or exchange of property or assets, or the rendering of any service) with any holder (or any Affiliate of such holder) of 10% or more of any class of Capital Stock of the Company or with any Affiliate of the Company or any Restricted Subsidiary, unless:

    such Affiliate Transaction is on fair and reasonable terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained, at the time of such transaction or, if such transaction is pursuant to a written agreement, at the time of execution of the agreement providing therefor, in a comparable transaction by the Company or such Subsidiary with a Person that is not such a holder or an Affiliate; and

    the Company delivers to the Trustee:

    with respect to any transaction or series of related transactions the aggregate amount of which exceeds $2.0 million in value, a resolution of the Board of Directors set forth in an Officers' Certificate certifying that such Affiliate Transaction complies with this covenant and that such Affiliate Transaction has been approved by a majority of the disinterested members of the Board of Directors; and

    with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $10.0 million, an opinion as to the fairness to the Holders of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing

    The foregoing limitation does not limit, and shall not apply to:

    any transaction solely between the Company and any of its Wholly Owned Restricted Subsidiaries or solely between Wholly Owned Restricted Subsidiaries;

    the payment of reasonable and customary regular fees and indemnities to directors of the Company who are not employees of the Company;

    any payments or other transactions pursuant to any tax-sharing agreement between the Company and any other Person with which the Company files a consolidated tax return or with which the Company is part of a consolidated group for tax purposes;

    any sale of shares of Capital Stock (other than Disqualified Stock) of the Company; or

    any Restricted Payments not prohibited by the "Limitation on Restricted Payments" covenant.

Limitation on Liens

    The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any Lien of any kind securing Indebtedness, Attributable Debt or trade payables on any asset now owned or hereafter acquired, except Permitted Liens.

Limitation on Asset Sales

    The Company will not, and will not permit any Restricted Subsidiary to, consummate any Asset Sale, unless (1) the consideration received by the Company or such Restricted Subsidiary is at least equal to the fair market value of the assets sold or disposed of and (2) at least 75% of the consideration received consists of cash or Temporary Cash Investments or the assumption of Indebtedness of the Company or any Restricted Subsidiary (other than Indebtedness to the Company

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or any Restricted Subsidiary), provided that the Company or such Restricted Subsidiary is irrevocably and unconditionally released from all liability under such Indebtedness.

    Within twelve months after the receipt of any Net Cash Proceeds from one or more Asset Sales occurring on or after the Closing Date, the Company shall or shall cause the relevant Restricted Subsidiary to:

    (1)
    (A)  apply an amount equal to such Net Cash Proceeds to permanently repay Senior Indebtedness of the Company or any Subsidiary Guarantor or Indebtedness of any other Restricted Subsidiary, in each case owing to a Person other than the Company or any of its Restricted Subsidiaries; or

    (B)
    invest an equal amount, or the amount not so applied pursuant to clause (A) (or enter into a definitive agreement committing to so invest within 12 months after the date of such agreement), in property or assets (other than current assets) of a nature or type or that are used in a business (or in a company having property and assets of a nature or type, or engaged in a business) similar or related to the nature or type of the property and assets of, or the business of, the Company and its Restricted Subsidiaries existing on the date of such investment and

    (2)
    apply (no later than the end of the 12-month period referred to in clause (1)(B)) such excess Net Cash Proceeds (to the extent not applied pursuant to clause (1)) as provided in the following paragraph of this "Limitation on Asset Sales" covenant.

The amount of such excess Net Cash Proceeds required to be applied (or to be committed to be applied) during such 12-month period as set forth in clause (1) of the preceding sentence and not applied as so required by the end of such period shall constitute "Excess Proceeds."

    If, as of the first day of any calendar month, the aggregate amount of Excess Proceeds not theretofore subject to an Offer to Purchase pursuant to this "Limitation on Asset Sales" covenant totals at least $10.0 million, the Company must commence, not later than the fifteenth Business Day of such month, and consummate an Offer to Purchase from the Holders (and if required by the terms of any Indebtedness that is pari passu with the Notes ("Pari Passu Indebtedness"), from the holders of such Pari Passu Indebtedness) on a pro rata basis an aggregate principal amount of Notes (and Pari Passu Indebtedness) equal to the Excess Proceeds on such date, at a purchase price equal to 100% of the principal amount thereof, plus, in each case, accrued interest and Additional Interest, if any, to the Payment Date. If the aggregate principal amount of Notes and any such Pari Passu Indebtedness tendered by holders thereof exceeds the amount of Excess Proceeds, the Notes and Pari Passu Indebtedness shall be purchased on a pro rata basis. Upon the completion of any such Offers to Purchase, regardless of the amount of Notes validly tendered, the amount of Excess Proceeds shall be reset to zero.

Repurchase of Notes in Connection with Sale of Lawrenceburg Interest

    The Indenture provides that, if (1) Indiana Gaming Company L.P. is an Unrestricted Subsidiary and (2) the amount of Consolidated EBITDA derived from the Lawrenceburg Casino exceeds 50% of Consolidated EBITDA of the Company and its Restricted Subsidiaries:

    the Company and its Subsidiaries will not, and will not permit any of their Subsidiaries to, in one or a series of related transactions, sell or otherwise transfer any of the Company's interest in Indiana Gaming Company L.P., whether directly by a sale of such interest or indirectly by the sale, issuance or transfer of Capital Stock of any Subsidiary of the Company directly or indirectly owning such interest (a "Lawrenceburg Sale") and

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    as long as the Company or Restricted Subsidiary serves as general partner of Indiana Gaming Company L.P., Indiana Gaming Company L.P. will not engage in a sale of all or substantially all its assets, by way of merger, consolidation or otherwise (a "Property Sale"),

    unless:

    no Default or Event of Default shall have occurred and be continuing at the time of, or would occur after giving effect on a pro forma basis to, such Lawrenceburg Sale or Property Sale;

    the Board of Directors of the Company determines in good faith that the Company or such Subsidiary receives fair market value for such Lawrenceburg Sale or Property Sale;

    the Board of Directors of the Company receives a favorable written opinion as to the fairness of the transaction to the Company from a financial point of view issued by an investment banking firm of nationally recognized standing; and

    within 120 business days of the date of such Lawrenceburg Sale or Property Sale, either:

    (1)
    the Company redeems all of the Notes upon not less than 30 days prior written notice mailed by first-class mail to each holder's registered address or

    (2)
    the Company consummates an irrevocable, unconditional cash offer to purchase at least an aggregate principal amount (the "Tender Offer Amount") of Notes that, if the Company purchased all such Notes, would result in the Debt to EBITDA Ratio being no greater than 3.5 to 1,

      in each case, at the purchase price set forth below plus accrued and unpaid interest and Additional Interest, if any, thereon, to the repurchase date, if such Lawrenceburg Sale or Property Sale occurs during the twelve-month period beginning on June 1 of the years indicated below:

Year

  Percentage
 
1999   110.750 %
2000   109.675 %
2001   108.600 %
2002   107.525 %
2003   106.450 %

    and, thereafter at the prices set forth under the caption "Optional Redemption" above.

Upon expiration of the offer described in clause (2) above, the Company will purchase all Notes properly tendered (on a pro rata basis if the principal amount of Notes tendered exceeds the Tender Offer Amount). After the purchase of all Notes properly tendered, any remaining proceeds of the Lawrenceburg Sale or Property Sale will be available for general corporate purposes.

    Upon the consummation of the offer described in clause (2) above, the interest rate on all of the remaining outstanding Notes will increase by 0.50% per annum. If the Company complies with the preceding paragraph of this "Repurchase of Notes in Connection with Sale of Lawrenceburg Interest" covenant with respect to a Lawrenceburg Sale or Property Sale, the provisions of the "Limitation on Asset Sales" and "Repurchase of Notes upon a Change of Control" covenants shall not apply with respect to such Lawrenceburg Sale or Property Sale.

    Following a Lawrenceburg Sale or a Property Sale as described in the first paragraph of this covenant, clauses (1) and (2) of the second paragraph under the "Limitation on Indebtedness and Issuances of Preferred Stock" covenant described above shall be of no further force or effect and none of the Company nor any of its Restricted Subsidiaries shall be permitted to incur any Indebtedness pursuant to such clauses; provided that, any Indebtedness incurred prior to such Lawrenceburg Sale or

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Property Sale under such clauses that remains outstanding after such Lawrenceburg Sale or Property Sale will not be deemed to be a violation of this provision or the "Limitation on Indebtedness and Issuances of Preferred Stock" covenant described above.

    The Indenture also provides that if (1) Indiana Gaming Company L.P. is an Unrestricted Subsidiary and (2) the amount of Consolidated EBITDA derived from the Lawrenceburg casino is less than or equal to 50% of Consolidated EBITDA of the Company and its Restricted Subsidiaries:

    the Company and its Subsidiaries will not, and will not permit any of their Subsidiaries to, consummate a Lawrenceburg Sale unless the Company treats such Lawrenceburg Sale as an "Asset Sale" and complies with the "Limitation on Asset Sales" covenant described above; and

    as long as the Company or a Restricted Subsidiary serves as general partner of Indiana Gaming Company L.P., Indiana Gaming Company L.P. will not engage in a Property Sale unless

    the consideration received by the Company or such Restricted Subsidiary is at least equal to the fair market value of the assets sold or disposed of,

    at least 75% of the consideration received consists of cash or Temporary Cash Investments; and

    the Company's and any Restricted Subsidiaries' pro rata share of the Net Cash Proceeds of such Property Sale are distributed to the Company or any Restricted Subsidiary of the Company and the Company utilizes such Net Cash Proceeds received by it in accordance with the second and third paragraphs of the "Limitation or Asset Sales" covenant described above.

    The Company shall cause distributions from Indiana Gaming Company L.P. to The Indiana Gaming Company to be promptly distributed to the Company.

Limitation on Sale-Leaseback Transactions

    The Company will not, and will not permit any of its Restricted Subsidiaries to, enter into any sale and leaseback transaction; provided that the Company or any Restricted Subsidiary may enter into a sale and leaseback transaction if:

    the Company or such Restricted Subsidiary, as applicable, could have incurred Indebtedness in an amount equal to the Attributable Debt relating to such sale and leaseback transaction under

    the Interest Coverage Ratio test in the first paragraph of the "Limitation on Indebtedness and Issuances of Preferred Stock" covenant or

    clause (9) of the second paragraph of the "Limitation on Indebtedness and Issuances of Preferred Stock" covenant;

    the gross cash proceeds of that sale and leaseback transaction are at least equal to the fair market value, as determined in good faith by the Board of Directors and set forth in an Officers' Certificate delivered to the Trustee, of the property that is the subject of that sale and leaseback transaction; and

    the transfer of assets in that sale and leaseback transaction is permitted by, and the Company applies the proceeds of such transaction in compliance with, the covenant described above under the caption "— Asset Sales."

Limitation on Senior Subordinated Indebtedness

    The Company shall not Incur any Indebtedness that is subordinate in right of payment to any Senior Indebtedness unless such Indebtedness is pari passu with, or subordinated in right of payment

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to, the Notes; provided that the foregoing limitation shall not apply to distinctions between categories of Senior Indebtedness of the Company that exist by reason of any Liens or Guarantees arising or created in respect of some but not all such Senior Indebtedness.

Limitation on Certain Activities of Indiana Gaming Company L.P.

    The Indenture provides that as long as the Company or a Restricted Subsidiary is the general partner of Indiana Gaming Company L.P., the Company will not permit Indiana Gaming Company L.P. to Incur any Indebtedness other than Indebtedness which:

    is Non-Recourse Indebtedness; and

    by its terms, contains no restrictions of the type prohibited by "Limitation on Dividends and Other Payment Restrictions Affecting Subsidiaries."

    The Indenture will provide that as long as the Company or a Restricted Subsidiary is a partner of Indiana Gaming Company L.P., the Company will not permit Indiana Gaming Company L.P. to amend the provisions of its partnership agreement dealing with distributions in a manner which is adverse to the holders of the Notes or the provisions of its partnership agreement with respect to partnership purpose, which is limited to the operation of the Lawrenceburg Casino.

Limitation on Business Activities

    The Company will not, and will not permit any Subsidiary to, engage in any business other than the gaming and hotel businesses and such business activities as are incidental or related or complementary thereto, except to such extent as would not be material to the Company and its Subsidiaries taken as a whole.

Limitation on Status as Investment Company

    The Indenture prohibits the Company and the Subsidiary Guarantors from being required to register as an "investment company" (as that term is defined in the Investment Company Act of 1940, as amended) or from otherwise becoming subject to regulation under the Investment Company Act.

Payments for Consent

    The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any Holder of Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the Indenture or the Notes unless such consideration is offered to be paid and is paid to all Holders of the Notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement.

Repurchase of Notes upon a Change of Control

    The Company must commence, within 30 days of the occurrence of a Change of Control, and consummate an Offer to Purchase for all Notes then outstanding, at a purchase price equal to 101% of the principal amount thereof, plus accrued interest and Additional Interest, if any, to the Payment Date.

    There can be no assurance that the Company will have sufficient funds available at the time of any Change of Control to make any debt payment (including repurchases of Notes) required by the foregoing covenant (as well as may be contained in other securities of the Company which might be outstanding at the time). The above covenant requiring the Company to repurchase the Notes will, unless consents are obtained, require the Company to repay all indebtedness then outstanding which by

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its terms would prohibit such Note repurchase, either prior to or concurrently with such Note repurchase.

SEC Reports and Reports to Holders

    Whether or not the Company is then required to file reports with the SEC, the Company shall file with the SEC all such reports and other information as it would be required to file with the SEC by Sections 13(a) or 15(d) under the Securities Exchange Act of 1934 if it were subject thereto. The Company shall supply the Trustee and each Holder or shall supply to the Trustee for forwarding to each such Holder, without cost to such Holder, copies of such reports and other information.

Events of Default

    The following events are defined as "Events of Default" in the Indenture:

    (1)
    default in the payment of principal of (or premium, if any, on) any Note when the same becomes due and payable at maturity, upon acceleration, redemption or otherwise whether or not such payment is prohibited by the provisions described above under "— Ranking";

    (2)
    default in the payment of interest on any Note when the same becomes due and payable, and such default continues for a period of 30 days whether or not such payment is prohibited by the provisions described above under "— Ranking";

    (3)
    default in the performance or breach of the provisions of the Indenture applicable to mergers, consolidations and transfers of all or substantially all of the assets of the Company or the failure to make or consummate an Offer to Purchase in accordance with the "Limitation on Asset Sales" or "Repurchase of Notes upon a Change of Control" covenant;

    (4)
    the Company defaults in the performance of or breaches any other covenant or agreement of the Company in the Indenture or under the Notes (other than a default specified in clause (1), (2) or (3) above) and such default or breach continues for a period of 30 consecutive days after written notice by the Trustee or the Holders of 25% or more in aggregate principal amount of the Notes;

    (5)
    there occurs with respect to any issue or issues of Indebtedness of the Company or any Significant Subsidiary having an outstanding principal amount of $10.0 million or more in the aggregate for all such issues of all such Persons, whether such Indebtedness now exists or shall hereafter be created, (A) an event of default that has caused the holder thereof to declare such Indebtedness to be due and payable prior to its Stated Maturity and such Indebtedness has not been discharged in full or such acceleration has not been rescinded or annulled within 30 days of such acceleration and/or (B) the failure to make a principal payment at the final (but not any interim) fixed maturity and such defaulted payment shall not have been made, waived or extended within 30 days of such payment default;

    (6)
    any final judgment or order (not covered by insurance) for the payment of money in excess of $10.0 million in the aggregate for all such final judgments or orders against all such Persons (treating any deductibles, self-insurance or retention as not so covered) shall be rendered against the Company or any Significant Subsidiary and shall not be paid or discharged, and there shall be any period of 60 consecutive days following entry of the final judgment or order that causes the aggregate amount for all such final judgments or orders outstanding and not paid or discharged against all such Persons to exceed $10.0 million during which a stay of enforcement of such final judgment or order, by reason of a pending appeal or otherwise, shall not be in effect;

    (7)
    a court having jurisdiction in the premises enters a decree or order for (A) relief in respect of the Company or any Significant Subsidiary in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, (B) appointment of a

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      receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Company or any Significant Subsidiary or for all or substantially all of the property and assets of the Company or any Significant Subsidiary or (C) the winding up or liquidation of the affairs of the Company or any Significant Subsidiary and, in each case, such decree or order shall remain unstayed and in effect for a period of 30 consecutive days;

    (8)
    the Company or any Significant Subsidiary (A) commences a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consents to the entry of an order for relief in an involuntary case under any such law, (B) consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Company or any Significant Subsidiary or for all or substantially all of the property and assets of the Company or any Significant Subsidiary or (C) effects any general assignment for the benefit of creditors;

    (9)
    except as permitted by the Indenture, any Subsidiary Guarantee shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Guarantor, or any Person acting on behalf of any Guarantor, shall deny or disaffirm its obligations under its Subsidiary Guarantee; or

    (10)
    the revocation, termination, suspension or other cessation of effectiveness for a period or more than 90 consecutive days of any Gaming License that results in the cessation or suspension of gaming operations at the Lawrenceburg Casino or any Material Casino; provided that any voluntary relinquishment of or failure to renew after revocation a Gaming License of a Material Casino if such relinquishment or failure to renew is, in the reasonable, good faith judgment of the Board of Directors of the Company, evidenced by a resolution of such Board, both desirable in the conduct of the business of the Company and its Subsidiaries, taken as a whole, and not disadvantageous in any material respect to the holders of the Notes shall not constitute an Event of Default.

    If an Event of Default (other than an Event of Default specified in clause (7) or (8) above that occurs with respect to the Company) occurs and is continuing under the Indenture, the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes, then outstanding, by written notice to the Company (and to the Trustee if such notice is given by the Holders), may, and the Trustee at the request of such Holders shall, declare the principal of, premium, if any, and accrued interest and Additional Interest, if any, on the Notes to be immediately due and payable. Upon a declaration of acceleration, such principal of, premium, if any, and accrued interest and Additional Interest, if any, shall be immediately due and payable. In the event of a declaration of acceleration because an Event of Default set forth in clause (5) above has occurred and is continuing, such declaration of acceleration shall be automatically rescinded and annulled if the event of default triggering such Event of Default pursuant to clause (5) shall be remedied or cured by the Company or the relevant Significant Subsidiary or waived by the holders of the relevant Indebtedness within 60 days after the declaration of acceleration with respect thereto. If an Event of Default specified in clause (7) or (8) above occurs with respect to the Company, the principal of, premium, if any, and accrued interest or Additional Interest, if any, on the Notes then outstanding shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. The Holders of at least a majority in principal amount of the outstanding Notes by written notice to the Company and to the Trustee, may waive all past defaults and rescind and annul a declaration of acceleration and its consequences if (i) all existing Events of Default, other than the nonpayment of the principal of, premium, if any, and accrued interest and Additional Interest, if any, on the Notes that have become due solely by such declaration of acceleration, have been cured or waived and (ii) the rescission would not conflict with any judgment or decree of a court of competent jurisdiction. For information as to the waiver of defaults, see "— Modification and Waiver."

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    The Holders of at least a majority in aggregate principal amount of the outstanding Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or the Indenture, that may involve the Trustee in personal liability, or that the Trustee determines in good faith may be unduly prejudicial to the rights of Holders of Notes not joining in the giving of such direction and may take any other action it deems proper that is not inconsistent with any such direction received from Holders of Notes.

    A Holder may not pursue any remedy with respect to the Indenture or the Notes unless:

    the Holder gives the Trustee written notice of a continuing Event of Default;

    the Holders of at least 25% in aggregate principal amount of outstanding Notes make a written request to the Trustee to pursue the remedy;

    such Holder or Holders offer the Trustee indemnity satisfactory to the Trustee against any costs, liability or expense;

    the Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and

    during such 60-day period, the Holders of a majority in aggregate principal amount of the outstanding Notes do not give the Trustee a direction that is inconsistent with the request.

However, such limitations do not apply to the right of any Holder of a Note to receive payment of the principal of, premium, if any, or accrued interest and Additional Interest, if any, on, such Note or to bring suit for the enforcement of any such payment, on or after the due date expressed in the Notes, which right shall not be impaired or affected without the consent of the Holder.

    The Holders of a majority in aggregate principal amount of the Notes then outstanding, by notice to the Trustee, may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture, except a continuing Default or Event of Default in the payment of the principal of or premium, if any, or interest on the Notes.

    The Indenture requires certain officers of the Company to certify, on or before a date not more than 90 days after the end of each fiscal year, that a review has been conducted of the activities of the Company and its Restricted Subsidiaries and the Company's and its Restricted Subsidiaries' performance under the Indenture and that the Company has fulfilled all obligations thereunder, or, if there has been a default in the fulfillment of any such obligation, specifying each such default and the nature and status thereof. The Company is also obligated to notify the Trustee and the agent under the Credit Facility of any default or defaults in the performance of any covenants or agreements under the Indenture.

Consolidation, Merger and Sale of Assets

    The Company will not consolidate with, merge with or into, or sell, convey, transfer, lease or otherwise dispose of all or substantially all of its property and assets (as an entirety or substantially an entirety in one transaction or a series of related transactions) to any Person or permit any Person to merge with or into the Company unless:

    (1)
    the Company shall be the continuing Person, or the Person (if other than the Company) formed by such consolidation or into which the Company is merged or that acquired or leased such property and assets of the Company shall be a corporation organized and validly existing under the laws of the United States of America or any jurisdiction thereof and shall expressly assume, by a supplemental indenture, executed and delivered to the Trustee, all of the obligations of the Company on all of the Notes and under the Indenture;

    (2)
    immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing;

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    (3)
    immediately after giving effect to such transaction on a pro forma basis, the Company or any Person becoming the successor obligor of the Notes shall have a Consolidated Net Worth equal to or greater than the Consolidated Net Worth of the Company immediately prior to such transaction;

    (4)
    immediately after giving effect to such transaction on a pro forma basis the Company, or any Person becoming the successor obligor of the Notes, as the case may be, could Incur at least $1.00 of Indebtedness under the first paragraph of the "Limitation on Indebtedness and Issuances of Preferred Stock" covenant; provided that this clause (4) shall not apply to a consolidation, merger or sale of all (but not less than all) of the assets of the Company if all Liens and Indebtedness of the Company or any Person becoming the successor obligor on the Notes, as the case may be, and its Restricted Subsidiaries outstanding immediately after such transaction would have been permitted (and all such Liens and Indebtedness, other than Liens and Indebtedness of the Company and its Restricted Subsidiaries outstanding immediately prior to the transaction, shall be deemed to have been Incurred) for all purposes of the Indenture; and

    (5)
    the Company delivers to the Trustee an Officers' Certificate (attaching the arithmetic computations to demonstrate compliance with clauses (3) and (4)) and opinion of counsel, in each case stating that such consolidation, merger or transfer and such supplemental indenture complies with this provision and that all conditions precedent provided for herein relating to such transaction have been compiled with;

provided, however, that:

    clauses (3) and (4) above will not apply if, in the good faith determination of the Board of Directors of the Company, whose determination shall be evidenced by a resolution of the Board of Directors, the principal purpose of such transaction is to change the state of incorporation of the Company and any such transaction shall not have as one of its purposes the evasion of the foregoing limitations; and

    this "Merger, Consolidation or Sale of Assets" covenant will not apply to sales of property and assets with respect to which the Company has complied with the "Repurchase of Notes in Connection with Sale of Lawrenceburg Interest" covenant described above.

    In addition, the Company may not, directly or indirectly, lease all or substantially all of its properties or assets, in one or more related transactions, to any other Person. This "Merger, Consolidation or Sale of Assets" covenant will not apply to a sale, assignment, transfer, conveyance or other disposition of assets between or among the Company and any of the Subsidiary Guarantors.

Defeasance

    The Company may, at its option and at any time, elect to have all of its obligations discharged with respect to the outstanding Notes and all obligations of the Subsidiary Guarantors discharged with respect to their Subsidiary Guarantees ("Legal Defeasance") except for:

    the rights of Holders of outstanding Notes to receive payments in respect of the principal of, or interest or premium and Additional Interest, if any, on such Notes when such payments are due from the trust referred to below;

    the Company's obligations with respect to the Notes concerning issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust;

    the rights, powers, trusts, duties and immunities of the Trustee, and the Company's and the Subsidiary Guarantor's obligations in connection therewith; and

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    the Legal Defeasance provisions of the Indenture.

    In addition, the Company may, at its option and at any time, elect to have the obligations of the Company and the Subsidiary Guarantors released with respect to certain covenants that are described in the Indenture ("Covenant Defeasance") and thereafter any omission to comply with those covenants shall not constitute a Default or Event of Default with respect to the Notes. In the event Covenant Defeasance occurs, certain events (not including non-payment, bankruptcy, receivership, rehabilitation and insolvency events) described under "Events of Default" will no longer constitute an Event of Default with respect to the Notes.

    In order to exercise either Legal Defeasance or Covenant Defeasance:

    the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Notes, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, or interest and premium and Additional Interest, if any, on the outstanding Notes on the stated maturity or on the applicable redemption date, as the case may be, and the Company must specify whether the Notes are being defeased to maturity or to a particular redemption date;

    in the case of Legal Defeasance, the Company shall have delivered to the Trustee an opinion of counsel reasonably acceptable to the Trustee confirming that

    the Company has received from, or there has been published by, the Internal Revenue Service a ruling or

    since the date of the Indenture, there has been a change in the applicable federal income tax law,

      in either case to the effect that, and based thereon such opinion of counsel shall confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

    in the case of Covenant Defeasance, the Company shall have delivered to the Trustee an opinion of counsel reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

    no Default or Event of Default shall have occurred and be continuing either:

    on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit); or

    or insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 91st day after the date of deposit;

    such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under any material agreement or instrument (other than the Indenture) to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound;

    the Company must have delivered to the Trustee an opinion of counsel to the effect that, assuming no intervening bankruptcy of the Company or any Subsidiary Guarantor between the

99


      date of deposit and the 91st day following the deposit and assuming that no Holder is an "insider" of the Company under applicable bankruptcy law, after the 91st day following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally;

    the Company must deliver to the Trustee an Officers' Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders of Notes over the other creditors of the Company with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others; and

    the Company must deliver to the Trustee an Officers' Certificate and an opinion of counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with.

Modification and Waiver

    The Indenture may be amended, without the consent of any Holder, to

    cure any ambiguity, defect or inconsistency in the Indenture; provided that such amendments do not adversely affect the interests of the Holders in any material respect;

    comply with the provisions described under "Consolidation, Merger and Sale of Assets;"

    comply with any requirements of the SEC in connection with the qualification of the Indenture under the Trust Indenture Act;

    evidence and provide for the acceptance of appointment by a successor Trustee; or

    make any change that, in the good faith opinion of the Board of Directors, does not materially and adversely affect the rights of any Holder.

    Modifications and amendments of the Indenture may be made by the Company and the Trustee with the consent of the Holders of not less than a majority in aggregate principal amount of the outstanding Notes; provided, however, that no such modification or amendment may, without the consent of each Holder affected thereby,

    change the Stated Maturity of the principal of, or any installment of interest on, any Note,

    reduce the principal amount of, or premium, if any, or interest on, any Note,

    change the place or currency of payment of principal of, or premium, if any, or interest on, any Note,

    impair the right to institute suit for the enforcement of any payment on or after the Stated Maturity (or, in the case of a redemption, on or after the Redemption Date) of any Note,

    waive a default in the payment of principal of, premium, if any, or interest on the Notes,

    modify the subordination provisions in a manner adverse to the Holders or

    reduce the percentage or aggregate principal amount of outstanding Notes the consent of whose Holders is necessary for waiver of compliance with certain provisions of the Indenture or for waiver of certain defaults.

No Personal Liability of Directors, Officers, Employees, Incorporators or Stockholders

    No director, officer, employee, incorporator or stockholder of the Company or any Subsidiary Guarantor, as such, shall have any liability for any obligations of the Company or the Subsidiary Guarantors under the Notes, the Indenture or the Subsidiary Guarantees or for any claim based on, in

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respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. The waiver may not be effective to waive liabilities under the federal securities laws.

Concerning the Trustee

    If the Trustee becomes a creditor of the Company or any Subsidiary Guarantor, the Indenture limits its right to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The Trustee is permitted to engage in other transactions; however, if it acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the SEC for permission to continue or resign.

    The Holders of a majority in principal amount of the then outstanding Notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee, subject to certain exceptions. The Indenture provides that in case an Event of Default shall occur and be continuing, the Trustee will be required, in the exercise of its power, to use the degree of care of a prudent man in the conduct of his own affairs. Subject to such provisions, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request of any Holder of Notes, unless such Holder shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense.

Book-Entry; Delivery and Form

    The registered notes will be issued in registered, global form in minimum denominations of $1,000 and integral multiples of $1,000 in excess thereof. Registered notes will be issued at the closing of the exchange offer.

    The registered notes initially will be represented by one or more registered notes in registered, global form without interest coupons (the "Global Notes"). The Global Notes will be deposited upon issuance with the Trustee as custodian for The Depository Trust Company ("DTC"), in New York, New York, and registered in the name of DTC or its nominee, in each case for credit to an account of a direct or indirect participant in DTC as described below.

    Except as set forth below, the Global Notes may be transferred, in whole and not in part, only to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the Global Notes may not be exchanged for registered notes in certificated form except in the limited circumstances described below. See "— Exchange of Book-Entry Notes for Certificated Notes." Except in the limited circumstances described below, owners of beneficial interests in the Global Notes will not be entitled to receive physical delivery of registered notes in certificated form. In addition, transfers of beneficial interests in the Global Notes will be subject to the applicable rules and procedures of DTC and its direct or indirect participants, which may change from time to time.

Depository Procedures

    The following description of the operations and procedures of DTC are provided solely as a matter of convenience. These operations and procedures are solely within the control of DTC and are subject to changes by it. The Company takes no responsibility for these operations and procedures and urges investors to contact DTC or its participants directly to discuss these matters.

    DTC has advised the Company that DTC is a limited-purpose trust company created to hold securities for its participating organizations (collectively, the "Participants") and to facilitate the clearance and settlement of transactions in those securities between Participants through electronic book-entry changes in accounts of its Participants. The Participants include securities brokers and

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dealers (including the Placement Agents), banks, trust companies, clearing corporations and certain other organizations. Access to DTC's system is also available to other entities such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly (collectively, the "Indirect Participants"). Persons who are not Participants may beneficially own securities held by or on behalf of DTC only through the Participants or the Indirect Participants. The ownership interests in, and transfers of ownership interests in, each security held by or on behalf of DTC are recorded on the records of the Participants and Indirect Participants.

    DTC has also advised the Company that, pursuant to procedures established by it:

    upon deposit of the Global Notes, DTC will credit the accounts of Participants designated by the Placement Agents with portions of the principal amount of the Global Notes; and

    ownership of these interests in the Global Notes will be shown on, and the transfer of ownership thereof will be effected only through, records maintained by DTC (with respect to the Participants) or by the Participants and the Indirect Participants (with respect to other owners of beneficial interest in the Global Notes).

    The laws of some states require that certain Persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer beneficial interests in a Global Note to such Persons will be limited to that extent. Because DTC can act only on behalf of Participants, which in turn act on behalf of Indirect Participants, the ability of a Person having beneficial interests in a Global Note to pledge such interests to Persons that do not participate in the DTC system, or otherwise take actions in respect of such interests, may be affected by the lack of a physical certificate evidencing such interests.

    Except as described below, owners of interest in the Global Notes will not have registered notes registered in their names, will not receive physical delivery of registered notes in certificated form and will not be considered the registered owners or "Holders" thereof under the Indenture for any purpose.

    Payments in respect of the principal of, and interest and premium, if any, on a Global Note registered in the name of DTC or its nominee will be payable to DTC in its capacity as the registered Holder under the Indenture. Under the terms of the Indenture, the Company and the Trustee will treat the Persons in whose names the registered notes, including the Global Notes, are registered as the owners thereof for the purpose of receiving payments and for all other purposes. Consequently, neither the Company, the Trustee nor any agent of the Company or the Trustee has or will have any responsibility or liability for:

    any aspect of DTC's records or any Participant's or Indirect Participant's records relating to or payments made on account of beneficial ownership interest in the Global Notes or for maintaining, supervising or reviewing any of DTC's records or any Participant's or Indirect Participant's records relating to the beneficial ownership interests in the Global Notes; or

    any other matter relating to the actions and practices of DTC or any of its Participants or Indirect Participants.

    DTC has advised the Company that its current practice, upon receipt of any payment in respect of securities such as the registered notes (including principal and interest), is to credit the accounts of the relevant Participants with the payment on the payment date unless DTC has reason to believe it will not receive payment on such payment date. Each relevant Participant is credited with an amount proportionate to its beneficial ownership of an interest in the principal amount of the relevant security as shown on the records of DTC. Payments by the Participants and the Indirect Participants to the beneficial owners of registered notes will be governed by standing instructions and customary practices and will be the responsibility of the Participants or the Indirect Participants and will not be the responsibility of DTC, the Trustee or the Company. Neither the Company nor the Trustee will be liable

102


for any delay by DTC or any of its Participants in identifying the beneficial owners of the registered notes, and the Company and the Trustee may conclusively rely on and will be protected in relying on instructions from DTC or its nominee for all purposes.

    Transfers between Participants in DTC will be effected in accordance with DTC's procedures, and will be settled in same-day funds.

    DTC has advised the Company that it will take any action permitted to be taken by a Holder of registered notes only at the direction of one or more Participants to whose account DTC has credited the interests in the Global Notes and only in respect of such portion of the aggregate principal amount of the registered notes as to which such Participant or Participants has or have given such direction. However, if there is an Event of Default under the registered notes, DTC reserves the right to exchange the Global Notes for registered notes in certificated form, and to distribute such registered notes to its Participants.

    Although DTC has agreed to the foregoing procedures to facilitate transfers of interests in the Global Notes among participants in DTC, it is under no obligation to perform or to continue to perform such procedures, and may discontinue such procedures at any time. Neither the Company nor the Trustee nor any of their respective agents will have any responsibility for the performance by DTC or its respective participants or indirect participants of their respective obligations under the rules and procedures governing their operations.

Exchange of Global Notes for Certificated Notes

    A Global Note is exchangeable for definitive registered notes in registered certificated form ("Certificated Notes") if:

    DTC (1) notifies the Company that it is unwilling or unable to continue as depositary for the Global Notes and the Company fails to appoint a successor depositary or (2) has ceased to be a clearing agency registered under the Exchange Act;

    the Company, at its option, notifies the Trustee in writing that it elects to cause the issuance of the Certificated Notes; or

    there shall have occurred and be continuing a Default or Event of Default with respect to the Notes.

    In addition, beneficial interests in a Global Note may be exchanged for Certificated Notes upon prior written notice given to the Trustee by or on behalf of DTC in accordance with the Indenture. In all cases, Certificated Notes delivered in exchange for any Global Note or beneficial interests in Global Notes will be registered in the names, and issued in any approved denominations, requested by or on behalf of the depositary (in accordance with its customary procedures).

    Same Day Settlement and Payment

    The Company will make payments in respect of the registered notes represented by the Global Notes (including principal, premium, if any, and interest) by wire transfer of immediately available funds to the accounts specified by the Global Note Holder. The Company will make all payments of principal, interest and premium, if any, with respect to Certificated Notes by wire transfer of immediately available funds to the accounts specified by the Holders thereof or, if no such account is specified, by mailing a check to each such Holder's registered address. The registered notes represented by the Global Notes are expected to be eligible to trade in DTC's Same-Day Funds Settlement System, and any permitted secondary market trading activity in such registered notes will, therefore, be required by DTC to be settled in immediately available funds. The Company expects that secondary trading in any Certificated Notes will also be settled in immediately available funds.

103



CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

    The following general discussion summarizes the material U.S. federal income tax aspects of the exchange offer to holders of the restricted notes. This discussion is a summary for general information purposes only, is limited to the federal income tax consequences of the exchange offer, and does not consider all aspects of the restricted notes and registered notes. This discussion does not consider the impact, if any, of a holder's personal circumstances on the tax consequences of the exchange offer to such holder. This discussion also does not address the U.S. federal income tax consequences to holders subject to special treatment under the U.S. federal income tax laws, such as dealers in securities or foreign currency, tax-exempt entities, banks, thrifts, insurance companies, persons that hold the restricted notes as part of a "straddle," a "hedge" against currency risk, a "conversion transaction," or other risk reduction transaction, or persons that have a "functional currency" other than the U.S. dollar, and investors in pass-through entities. In addition, this discussion does not describe any tax consequences arising out of the tax laws of any state, local or foreign jurisdiction or any federal estate taxes.

    This discussion is based upon the Internal Revenue Code, existing and presupposed regulations thereunder, Internal Revenue Service ("IRS") rulings and pronouncements and judicial decisions now in effect, all of which are subject to change, possibly on a retroactive basis. We have not and will not seek any rulings or opinions from the IRS or counsel with respect to the matters discussed below. We can give no assurance that the IRS will not take positions concerning the tax consequences of the exchange offer which are different from those discussed herein.

    Holders of the restricted notes should consult their own advisors concerning the application of U.S. federal income tax laws, as well as the laws of any state, local or foreign jurisdiction, to the exchange offer in light of their particular situation.

    The exchange of restricted notes for registered notes under the terms of the exchange offer would not constitute a taxable exchange. As a result, (1) a holder would not recognize taxable gain or loss as a result of exchanging restricted notes for registered notes under the terms of the exchange offer, (2) the holding period of the registered notes would include the holding period of the restricted notes exchanged for the registered notes and (3) the adjusted tax basis of the registered notes would be the same as the adjusted tax basis, immediately before the exchange, of the restricted notes exchanged for the registered notes.


PLAN OF DISTRIBUTION

    Based on interpretations by the Staff set forth in no-action letters issued to third parties, we believe that a holder, other than a person that is an affiliate of ours within the meaning of Rule 405 under the Securities Act or a broker dealer registered under the Exchange Act that purchases notes from us to resell pursuant to Rule 144A under the Securities Act or any other exemption, that exchanges restricted notes for registered notes in the ordinary course of business and that is not participating, does not intend to participate, and has no arrangement or understanding with any person to participate, in the distribution of the registered notes will be allowed to resell the registered notes to the public without further registration under the Securities Act and without delivering to the purchasers of the registered notes a prospectus that satisfies the requirements of Section 10 of the Securities Act. However, if any holder acquires registered notes in the exchange offer for the purpose of distributing or participating in a distribution of the registered notes, such holder cannot rely on the position of the Staff enunciated in Exxon Capital Holdings Corporation or similar no-action or interpretive letters and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction, and such secondary resale transaction must be covered by an effective registration statement containing the selling security holder information required by Item 507 or 508, as applicable, of Regulation S-K if the resales are of registered notes obtained by such

104


holder in exchange for restricted notes acquired by such holder directly from us or an affiliate thereof, unless an exemption from registration is otherwise available.

    As contemplated by the above no-action letters and the registration rights agreement, each holder accepting the exchange offer is required to represent to us in the letter of transmittal that they:

    are not an affiliate of ours;

    are not participating in, and do not intend to participate in, and have no arrangement or understanding with any person to participate in, a distribution of the restricted notes or the registered notes;

    are acquiring the registered notes in the ordinary course of business; and

    if they are a broker dealer, they will receive the registered notes for their own account in exchange for the restricted notes that were acquired as a result of market-making activities or other trading activities. Each broker dealer must acknowledge that it will deliver a prospectus in connection with any resale of such registered notes.

    Any broker dealer registered under the Exchange Act who holds restricted notes that were acquired for its own account as a result of market-making activities or other trading activities, other than restricted notes acquired directly from us or any affiliate of ours, may exchange such restricted notes for registered notes pursuant to the exchange offer; however, such broker dealer may be deemed an underwriter within the meaning of the Securities Act and, therefore, must deliver a prospectus meeting the requirements of the Securities Act in connection with any resales of the registered notes received by it in the exchange offer, which prospectus delivery requirement may be satisfied by the delivery by such broker dealer of this prospectus, as it may be amended or supplemented from time to time. We have agreed to use our reasonable best efforts to cause the registration statement, of which this prospectus is a part, to remain continuously effective for a period of 180 days from the exchange date, and to make this prospectus, as amended or supplemented, available to any such broker dealer for use in connection with resales. Each broker-dealer that receives registered notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such registered notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of registered notes received in exchange for outstanding registered notes where such outstanding registered notes were acquired as a result of market-making activities or other trading activities. The letter of transmittal states that, by acknowledging that it will deliver and by delivering a prospectus meeting the requirements of the Securities Act, a broker dealer will not be deemed to admit that it is an underwriter within the meaning of the Securities Act.

    We will not receive any proceeds from any sale of registered notes by a broker dealer. Registered notes received by broker dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the registered notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker dealers and/or the purchasers of any such registered notes. Any broker dealer that resells registered notes that were received by it for its own account pursuant to the exchange offer and any broker dealer that participates in a distribution of such registered notes may be deemed to be an underwriter within the meaning of the Securities Act and any profit on any such resale of registered notes and any commission or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act.

    We have agreed to pay all expenses incident to the exchange offer, other than commissions and concessions of broker dealers, and will indemnify the holders of the restricted notes, including any broker dealers, against certain liabilities, including liabilities under the Securities Act.

105



LEGAL MATTERS

    The validity of the registered notes offered in this prospectus will be passed upon for us by Winston & Strawn, Chicago, Illinois.


EXPERTS

    Ernst and Young LLP, independent auditors, have audited our consolidated financial statements at December 31, 2000 and 1999, and for each of the three years in the period ended December 31, 2000, as set forth in their report. We've included our financial statements in the prospectus and elsewhere in the registration statement in reliance on Ernst and Young LLP's report, given on their authority as experts in accounting and auditing.

106



INDEX TO FINANCIAL STATEMENTS

 
  Page
Report of Independent Auditors   F-2
Consolidated Balance Sheets as of December 31, 2000 and 1999   F-3
Consolidated Statements of Income for each of the fiscal years in the three-year period ended December 31, 2000   F-4
Consolidated Statements of Cash Flows for each of the fiscal years in the three-year period ended December 31, 2000   F-5
Consolidated Statements of Stockholders' Equity for each of the fiscal years in the three-year period ended December 31, 2000   F-6
Notes to Consolidated Financial Statements   F-7

F-1



REPORT OF INDEPENDENT AUDITORS

The Board of Directors
Argosy Gaming Company

    We have audited the accompanying consolidated balance sheets of Argosy Gaming Company as of December 31, 2000 and 1999 and the related consolidated statements of income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2000. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

    We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

    In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Argosy Gaming Company at December 31, 2000 and 1999 and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2000 in conformity with accounting principles generally accepted in the United States.

                        ERNST & YOUNG LLP

Chicago, Illinois
January 30, 2001, except for Note 18
as to which date is March 8, 2001

F-2


ARGOSY GAMING COMPANY

CONSOLIDATED BALANCE SHEETS

(In thousands except share and per share data)

 
  December 31,
 
 
  2000
  1999
 
ASSETS              
Current assets:              
Cash and cash equivalents   $ 59,374   $ 47,090  
Restricted cash in escrow         25,244  
Accounts receivable, net of allowance for doubtful accounts of $1,248 and $1,328, respectively     2,444     3,909  
Income taxes receivable     1,074     653  
Deferred income taxes     4,849     18,681  
Other current assets     4,453     4,840  
   
 
 
  Total current assets     72,194     100,417  
   
 
 
Net property and equipment     397,989     405,205  
   
 
 
Other assets:              
Deferred finance costs, net of accumulated amortization of $2,364 and $1,069, respectively     7,767     8,782  
Goodwill and other intangible assets, net of accumulated amortization of $9,669 and $7,409, respectively     56,681     49,761  
Other     2,605     2,695  
   
 
 
  Total other assets     67,053     61,238  
   
 
 
Total assets   $ 537,236   $ 566,860  
   
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY              
Current liabilities:              
Accounts payable   $ 15,304   $ 17,894  
Accrued payroll and related expenses     11,677     12,174  
Other accrued liabilities     52,275     39,178  
Accrued interest     2,659     3,176  
Current maturities of long-term debt     23,775     32,668  
   
 
 
  Total current liabilities     105,690     105,090  
   
 
 
Long-term debt     252,561     346,705  
Deferred income taxes     10,762     9,945  
Other long-term obligations     236     219  
Minority interests in equity of consolidated subsidiaries     64,035     46,656  
Commitments and contingent liabilities (Note 17)          
Stockholders' equity:              
Common stock, $.01 par; 60,000,000 shares authorized; 28,394,423 and 28,325,106 shares issued and outstanding at December 31, 2000 and 1999, respectively     284     283  
Capital in excess of par     80,693     80,362  
Retained earnings (deficit)     22,975     (22,400 )
   
 
 
  Total stockholders' equity     103,952     58,245  
   
 
 
Total liabilities and stockholders' equity   $ 537,236   $ 566,860  
   
 
 

See accompanying notes to consolidated financial statements.

F-3


ARGOSY GAMING COMPANY

CONSOLIDATED STATEMENTS OF INCOME

(In thousands except share and per share data)

 
  Years Ended December 31,
 
 
  2000
  1999
  1998
 
Revenues:                    
Casino   $ 658,883   $ 559,147   $ 473,505  
Admissions     18,998     18,893     16,025  
Food, beverage and other     66,146     57,998     51,057  
   
 
 
 
      744,027     636,038     540,587  
Less promotional allowances     (49,183 )   (41,484 )   (33,919 )
   
 
 
 
Net revenues     694,844     594,554     506,668  
   
 
 
 
Costs and expenses:                    
Casino     287,770     250,559     221,682  
Selling, general and administrative     135,819     117,518     96,550  
Food, beverage and other     46,575     41,528     40,550  
Other operating expenses     30,230     27,866     26,639  
Depreciation and amortization     36,094     34,058     33,436  
Write-down of assets held for sale     6,800          
   
 
 
 
      543,288     471,529     418,857  
   
 
 
 
Income from operations     151,556     123,025     87,811  
   
 
 
 
Other income (expense):                    
Interest income     1,368     2,870     3,582  
Interest expense     (34,768 )   (48,594 )   (57,487 )
   
 
 
 
      (33,400 )   (45,724 )   (53,905 )
   
 
 
 
Income before minority interests, income taxes and extraordinary items     118,156     77,301     33,906  
Minority interests     (40,466 )   (34,975 )   (26,205 )
Income tax expense     (31,161 )   (5,900 )   (1,140 )
   
 
 
 
Income before extraordinary items     46,529     36,426     6,561  
Extraordinary loss on extinguishment of debt (net of income tax benefit of $770, $13,500 and $0, respectively)     (1,154 )   (24,920 )    
   
 
 
 
Net income     45,375     11,506     6,561  
Preferred stock dividends and accretion         (27 )   (820 )
   
 
 
 
Net income attributable to common stockholders   $ 45,375   $ 11,479   $ 5,741  
   
 
 
 
Basic net income per share   $ 1.60   $ 0.41   $ 0.23  
   
 
 
 
Diluted net income per share   $ 1.56   $ 0.40   $ 0.23  
   
 
 
 

See accompanying notes to consolidated financial statements.

F-4


ARGOSY GAMING COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands except share and per share data)

 
  Years Ended December 31,
 
 
  2000
  1999
  1998
 
Cash flows from operating activities:                    
Net income   $ 45,375   $ 11,506   $ 6,561  
Adjustments to reconcile net income to net cash provided by operating activities:                    
  Extraordinary items     1,154     24,920      
  Depreciation     33,448     31,393     31,011  
  Amortization     3,905     4,288     4,329  
  Deferred income taxes     14,649     4,292     536  
  Compensation expense recognized on issuance of stock     39     113     239  
  Loss on the disposal of equipment     197     902     789  
  Minority interests     40,466     34,975     26,205  
  Write-down of assets held for sale     6,800          
  Changes in operating assets and liabilities:                    
    Accounts receivable     1,465     (1,534 )   (236 )
    Other current assets     149     (607 )   1,184  
    Accounts payable     (2,590 )   7,394     (2,070 )
    Accrued liabilities     12,384     8,917     12,686  
    Other     346     94     429  
   
 
 
 
    Net cash provided by operating activities     157,787     126,653     81,663  
   
 
 
 
Cash flows from investing activities:                    
  Purchases of property and equipment     (33,229 )   (37,162 )   (34,051 )
  Purchase of minority interest in partnership     (9,150 )        
  Restricted cash held by trustees             25,545  
  Long-term obligations             (6,583 )
  Other     (1,619 )   18     908  
   
 
 
 
    Net cash used in investing activities     (43,998 )   (37,144 )   (14,181 )
   
 
 
 
Cash flows from financing activities:                    
  Repayment of credit facility     (56,400 )   (58,000 )    
  Proceeds from credit facility         161,800      
  Payments on long-term debt and installment contracts     (4,734 )   (6,830 )   (7,299 )
  Increase in deferred finance costs     (842 )   (8,736 )    
  Repurchase of First Mortgage Notes     (23,716 )   (241,043 )    
  Redemption of convertible debentures         (117,280 )    
  Proceeds from issuance of long-term debt         200,000      
  Proceeds (net of issuance costs) from sale of Convertible Preferred Stock and Warrants             7,365  
  Cash held in escrow     25,244     (25,244 )    
  Repayment of partner loans     (19,830 )   (16,285 )   (21,939 )
  Partnership distributions     (21,634 )   (20,043 )   (14,496 )
  Other     407     (615 )   (610 )
   
 
 
 
    Net cash used in financing activities     (101,505 )   (132,276 )   (36,979 )
   
 
 
 
Net increase (decrease) in cash and cash equivalents     12,284     (42,767 )   30,503  
Cash and cash equivalents, beginning of year     47,090     89,857     59,354  
   
 
 
 
Cash and cash equivalents, end of year   $ 59,374   $ 47,090   $ 89,857  
   
 
 
 

See accompanying notes to consolidated financial statements.

F-5


ARGOSY GAMING COMPANY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands except share and per share data)

 
  Shares
  Common
Stock

  Capital in
Excess of Par

  Retained
Earnings
(Deficit)

  Total
Stockholders'
Equity

 
Balance, December 31, 1997   24,498,333   $ 245   $ 72,038   $ (39,620 ) $ 32,663  
  Restricted stock compensation expense           239         239  
  Issuance of Convertible Preferred Stock and Warrants           (235 )       (235 )
  Preferred Stock conversion   1,331,980     13     2,442         2,455  
  Net income               6,561     6,561  
  Preferred Stock dividends and accretion               (820 )   (820 )
   
 
 
 
 
 
Balance, December 31, 1998   25,830,313     258     74,484     (33,879 )   40,863  
  Restricted stock compensation expense           113         113  
  Preferred Stock conversion   2,310,011     23     5,344         5,367  
  Warrants converted   172,496     2     355         357  
  Exercise of stock options   11,156         46         46  
  Convertible debentures converted into stock   1,130         20         20  
  Net income               11,506     11,506  
  Preferred Stock dividends and accretion               (27 )   (27 )
   
 
 
 
 
 
Balance, December 31, 1999   28,325,106     283     80,362     (22,400 )   58,245  
  Restricted stock compensation expense           39         39  
  Exercise of stock options   69,317     1     292         293  
  Net income               45,375     45,375  
   
 
 
 
 
 
Balance, December 31, 2000   28,394,423   $ 284   $ 80,693   $ 22,975   $ 103,952  
   
 
 
 
 
 

See accompanying notes to consolidated financial statements.

F-6


ARGOSY GAMING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share data)

1.  Summary of Significant Accounting Policies

    Basis of Presentation — Argosy Gaming Company (collectively with its subsidiaries, "Argosy" or "Company") is engaged in the business of providing casino style gaming and related entertainment to the public and, through its subsidiaries or joint ventures, operates riverboat casinos in Alton, Illinois; Lawrenceburg, Indiana; Riverside, Missouri; Baton Rouge, Louisiana; and Sioux City, Iowa. Indiana Gaming Company, L.P. ("Indiana Partnership"), a limited partnership in which the Company is general partner and holds a 57.5% partnership interest, operates a casino and hotel in Lawrenceburg, Indiana.

    The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The consolidated financial statements include the accounts of Argosy and its controlled subsidiaries and partnerships. All significant intercompany transactions have been eliminated. Under certain conditions, subsidiaries are required to obtain approval from state gaming authorities before making distributions to Argosy.

    Certain 1999 and 1998 amounts have been reclassified to conform to the 2000 presentation.

    Cash and Cash Equivalents — The Company considers cash and all highly liquid investments with an original maturity of three months or less to be cash equivalents.

    Property and Equipment — Property and equipment are recorded at cost. Leasehold improvements are amortized over the life of the respective lease. Depreciation is computed on the straight-line method over the following estimated useful lives:

Buildings and shore improvements   5 to 33 years
Riverboats, docks and improvements   5 to 20 years
Furniture, fixtures and equipment   5 to 10 years

    Impairment of Long-Lived Assets — When events or circumstances indicate that the carrying amount of long-lived assets to be held and used might not be recoverable, the expected future undiscounted cash flows from the assets is estimated and compared with the carrying amount of the assets. If the sum of the estimated undiscounted cash flows is less than the carrying amount of the assets, an impairment loss is recorded. The impairment loss is measured on a location-by-location basis by comparing the fair value of the assets with their carrying amount. Long-lived assets that are held for disposal are reported at the lower of the assets' carrying amount or fair value less costs related to the assets' disposition.

    Deferred Finance Costs — Deferred finance costs are amortized over the life of the respective loans using the effective interest method.

    Goodwill and Other Intangible Assets — Goodwill represents the cost in excess of fair value of net assets acquired, and is amortized over lives up to 40 years. Other intangible assets, primarily payments to cities, are amortized over the lives of the respective leases or development agreements including extensions.

    Revenues and Promotional Allowances — The Company recognizes as casino revenues the net win from gaming activities, which is the difference between gaming wins and losses. Admissions, hotel and other revenue is recognized at the time the related service is performed.

F-7


    The retail value of admissions, hotel rooms, food, beverage and other items which were provided to customers without charge has been included in revenues, and a corresponding amount has been deducted as promotional allowances. The estimated direct cost of providing promotional allowances has been included in costs and expenses as follows:

 
  Years Ended December 31,
 
  2000
  1999
  1998
Admissions   $ 6,377   $ 5,895   $ 4,409
Hotel rooms     1,336     1,059     751
Food, beverage and other     27,858     23,347     22,341

    Advertising Costs — The Company expenses advertising costs as incurred. Advertising expense was $9,857, $10,527 and $9,833 in 2000, 1999 and 1998, respectively.

    Development and Preopening Costs — Development costs incurred in an effort to identify and develop new gaming locations are expensed as incurred. Preopening costs are expensed as occurred.

2.  Property and Equipment

    Property and equipment consists of the following:

 
  December 31,
 
 
  2000
  1999
 
Land   $ 39,252   $ 39,002  
Buildings, leasehold and shore improvements     214,691     217,132  
Riverboats, docks and improvements     152,178     164,419  
Furniture, fixtures and equipment     115,720     109,399  
Construction in progress     19,823     2,642  
   
 
 
      541,664     532,594  
Less accumulated depreciation and amortization     (143,675 )   (127,389 )
   
 
 
Net property and equipment   $ 397,989   $ 405,205  
   
 
 

3.  Write Down of Assets Held for Sale

    During December 1999, the Company replaced the landing facility at our Alton property. In June 2000, the Company recorded a $6,800 pretax charge to write down the previous landing facility as it was determined the Company had no planned use for the landing facility.

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4.  Other Accrued Liabilities

    Other accrued liabilities consist of the following:

 
  December 31,
 
  2000
  1999
Accrued gaming and admissions taxes   $ 23,732   $ 17,532
Slot club liability     4,552     4,195
Accrued insurance expense     9,665     6,232
Other     14,326     11,219
   
 
    $ 52,275   $ 39,178
   
 

5.  Long-Term Debt

    Long-term debt consists of the following:

 
  December 31,
 
  2000
  1999
First mortgage notes due June 1, 2004, interest payable semi-annually at 13.25%   $   $ 22,242
Senior secured line of credit, expires June 2004, interest payable at least quarterly at either LIBOR or prime plus a margin (from 8.3% to 10.0% at December 31, 2000)     47,400     103,800
Senior subordinated notes due June 1, 2009, interest payable semi-annually at 10.75%     200,000     200,000
Notes payable, principal and interest payments due quarterly through September 2015, discounted at 10.5%     5,831     6,487
Notes payable, principal and interest payments due monthly through December 2001, interest payable at prime + 1% (10.5% at December 31, 2000), secured by gaming vessel and certain equipment     14,024     17,933
Loans from partner, principal due in installments, interest payable at prime + 6% (15.5% at December 31, 2000)     9,081     28,911
   
 
      276,336     379,373
Less: current maturities     23,775     32,668
   
 
Long-term debt, less current maturities   $ 252,561   $ 346,705
   
 

    On June 8, 1999, the Company issued $200,000 of Senior Subordinated Notes due 2009 ("Subordinated Notes") and entered into a five year $200,000 Senior Secured revolving bank credit agreement ("Credit Facility"). The Credit Facility is secured by liens on substantially all of the Company's assets, and the Company's subsidiaries are co-borrowers. The Company's joint-venture subsidiary that operates the Argosy Casino & Hotel in Lawrenceburg is not a co-borrower nor are the assets of the subsidiary pledged in either agreement. All of the Company's wholly-owned operating subsidiaries guarantee the Subordinated Notes. The Company's joint-venture subsidiary that operates the Argosy Casino & Hotel in Lawrenceburg is not a guarantor of the Subordinated Notes. The

F-9


Subordinated Notes rank junior to all of the senior indebtedness of the Company, including borrowings under the Credit Facility and the subsidiary guarantees of the Subordinated Notes rank junior to the senior indebtedness of the subsidiary guarantors.

    The Subordinated Notes and the Credit Facility contain certain restrictions on the payment of dividends on the Company's common stock and the occurrence of additional indebtedness, as well as other typical debt covenants. In addition, the Credit Facility requires the Company to maintain certain financial ratios. The Credit Facility provides for, within two years, additional borrowing availability of $75,000 to be used for general corporate purposes and a further $150,000 increase to fund the purchase of all outstanding minority interests in the Lawrenceburg partnership. The increases in the Credit Facility are subject to a number of contingencies including lender approval. The Credit Facility is subject to scheduled reductions of 2.5% to 5.0% per quarter, beginning September 2000, of the total borrowing availability. The Company has a $1,900 letter of credit outstanding at December 31, 2000.

    In 1999, the Company used the net proceeds from the issuance of the Subordinated Notes, $25,000 in borrowings under the Credit Facility and approximately $51,000 of cash on hand to tender for and retire approximately $213,000 of its $235,000 outstanding 131/4% First Mortgage Notes due 2004 ("Mortgage Notes"). Under terms of the Credit Facility, the Company was required to redeem the remaining $22,242 of untendered Mortgage Notes on June 1, 2000 and placed monies in escrow to fund the remaining principal, interest payments and the June 2000 redemption premium. At December 31, 1999, the remaining escrow balance of $25,244 was classified as restricted cash in escrow. During June 2000, the Company used the escrowed funds to redeem the untendered Mortgage Notes and recorded an extraordinary loss of $1,154, net of a tax benefit of $770. On July 7, 1999, the Company redeemed all of its outstanding 12% Convertible Subordinated Notes due 2001 ("Convertible Notes"). During 1999, the Company used borrowings of $105,000 under the Credit Facility and approximately $13,700 of cash to redeem the Convertible Notes. In connection with the early extinguishment of the Mortgage Notes and Convertible Notes during 1999, the Company recorded an extraordinary loss of $24,920 net of a tax benefit of $13,500.

    Interest expense for the years ended December 31, 2000, 1999 and 1998, was $34,768 (net of $717 capitalized), $48,594 (net of $115 capitalized) and $57,487 (net of $1,086 capitalized), respectively.

    Maturities of long-term debt at December 31, 2000 are as follows:

Years ended December 31,
     
2001   $ 23,775
2002     743
2003     825
2004     48,316
2005     1,016
Thereafter     201,661
   
    $ 276,336
   

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6.  Convertible Preferred Stock and Warrants

    On June 16, 1998, the Company issued $8,000 of Series A Convertible Preferred Stock ("Preferred Shares"), together with warrants to purchase an additional 292,612 shares of Common Stock at $3.89 per share. The warrants expire in 2003.

    The Preferred Shares provided for a 4% dividend per annum, payable in cash and/or in kind, at the time of conversion or maturity, at the Company's option. Through December 31, 1998, the Preferred Shares had been converted into 1,331,980 shares of common stock. During the year ended December 31, 1999, the remaining Preferred Shares were converted into 2,310,011 shares of common stock.

    This transaction provided for put and call options which, subject to certain restrictions and limitations, allowed for up to an additional $8,000 of Preferred Shares and Warrants to be issued. In December 1998, the Company amended its agreement with the holders of the Preferred Shares to terminate both the holders' right to purchase, and the Company's right to require such holders to purchase, the additional $8,000 tranche of Preferred Shares and related warrants. The Company paid $625 to amend the agreement, and this amount is included in preferred stock dividends and accretion in the accompanying statement of income for 1998.

    During 1999, 201,172 warrants were converted into 172,496 shares of common stock.

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7.  Earnings Per Share

    The following table sets forth the computation of basic and diluted earnings per share:

 
  Years Ended December 31,
 
 
  2000
  1999
  1998
 
Numerator:                    
Income before extraordinary items   $ 46,529   $ 36,426   $ 6,561  
Preferred stock dividends and accretion         (27 )   (820 )
   
 
 
 
Numerator for basic earnings per share                    
  Income attributable to common stockholders     46,529     36,399     5,741  
Effect of dilutive securities:                    
Preferred stock dividends         27     820  
Numerator for diluted earnings per share — income available to common stockholders after assumed conversions   $ 46,529   $ 36,426   $ 6,561  
   
 
 
 
Denominator:                    
Denominator for basic earnings per share — Weighted-average shares outstanding     28,328,397     27,828,398     24,498,905  
Effect of dilutive securities (computed using the treasury stock method):                    
  Warrants     68,573     163,073      
  Stock options     712,085     569,451      
  Preferred stock         264,806      
  Restricted stock     34,488     94,928     105,580  
   
 
 
 
Denominator for diluted earnings per share — adjusted Weighted-average shares and assumed conversions     29,143,543     28,920,656     24,604,485  
   
 
 
 
Basic earnings per share — before extraordinary items   $ 1.64   $ 1.31   $ 0.23  
Extraordinary items     (0.04 )   (0.90 )    
   
 
 
 
Basic earnings per share — including extraordinary items   $ 1.60   $ 0.41   $ 0.23  
   
 
 
 
Diluted earnings per share — before extraordinary items   $ 1.60   $ 1.26   $ 0.23  
Extraordinary items     (0.04 )   (0.86 )    
   
 
 
 
Diluted earnings per share — including extraordinary items   $ 1.56   $ 0.40   $ 0.23  
   
 
 
 

    At December 31, 2000, employee stock options to purchase 115,353 shares of common stock priced at $18.00 per share were not included in the computation of diluted earnings per share because the options exercise price was greater than the average market price of the common shares and, therefore, the effect would be anti-dilutive.

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8.  Income Taxes

    Income tax (expense) benefit for the years ended December 31, 2000, 1999 and 1998, consists of the following:

 
  2000
  1999
  1998
 
Current:                    
  Federal   $ (12,975 ) $ (13,567 ) $  
  State     (3,537 )   (1,541 )   (604 )
   
 
 
 
      (16,512 )   (15,108 )   (604 )
   
 
 
 
Deferred:                    
  Federal     (14,653 )   9,315      
  State     4     (107 )   (536 )
   
 
 
 
      (14,649 )   9,208     (536 )
   
 
 
 
Income tax expense   $ (31,161 ) $ (5,900 ) $ (1,140 )
   
 
 
 

    The provision for income taxes for the years ended December 31, 2000, 1999 and 1998, differs from that computed at the federal statutory corporate tax rate as follows:

 
  2000
  1999
  1998
 
Federal statutory rate   35.0 % 35.0 % 35.0 %
State income taxes, net of federal benefit   1.9   1.4   2.2  
Valuation allowance     (13.7 ) (7.8 )
Goodwill amortization   0.2   0.3   0.6  
Minority interest in partnership income   (12.0 ) (15.8 ) (27.0 )
Other, net   1.2   0.4   0.4  
   
 
 
 
    26.3 % 7.6 % 3.4 %
   
 
 
 

    The tax effects of significant temporary differences representing deferred tax assets and liabilities at December 31, 2000 and 1999, are as follows:

 
  2000
  1999
 
Depreciation   $ (10,333 ) $ (11,783 )
Preopening     2,357     2,825  
Benefit of net operating loss carryforward     2,496     19,418  
Other, net     1,395     22  
   
 
 
      (4,085 )   10,482  
Valuation allowance     (1,828 )   (1,746 )
   
 
 
Net deferred tax asset (liability)   $ (5,913 ) $ 8,736  
   
 
 

    The valuation allowance relates to state deferred tax assets established under SFAS 109 for Louisiana net operating loss carryforwards of approximately $30,000 and $38,600 at December 31, 2000 and 1999, respectively. These loss carryforwards, which will expire from 2012 through 2019, will be

F-13


carried forward to future years for possible utilization. During 1999, the Company recognized a $10,000 tax benefit representing prior federal income tax net operating losses.

9.  Supplemental Cash Flow Information

    The Company paid $34,145, $48,401 and $58,356 for interest, and $16,165, $1,515 and $784 for income taxes in 2000, 1999 and 1998, respectively.

    The Company issued 69,319, 2,494,793 and 1,331,980 shares of additional common stock resulting from the conversion of Preferred Stock, the exercise of stock options, conversion of debentures and the conversion of warrants during 2000, 1999 and 1998, respectively.

    The Company acquired equipment in the amount of $2,841 in 1998, which was financed through installment contracts.

10.  Leases

    Future minimum lease payments for operating leases with initial terms in excess of one year as of December 31, 2000, are as follows:

Years ending December 31,

   
2001   $ 2,057
2002     566
2003     334
2004     263
2005     236
Thereafter     16,744
   
    $ 20,200
   

    Rent expense for the years ended December 31, 2000, 1999 and 1998, was $8,369, $4,916 and $4,137, respectively.

11.  Stock Option Plans

    The Company adopted the Argosy Gaming Company Stock Option Plan, as amended, ("Stock Option Plan"), which provides for the grant of non-qualified stock options for up to 2,500,000 shares of common stock to key employees of the Company. These options expire 10 years after their respective grant dates and become exercisable over a specified vesting period. At December 31, 2000, options for 706,191 shares are exercisable under the Stock Option Plan at a weighted average price of $3.87. The weighted average contractual life of outstanding options at December 31, 2000 is approximately 7.2 years and the weighted average exercise price of options outstanding is $5.91. The weighted average fair value of options granted was $9.90, $3.07 and $1.40, during 2000, 1999 and 1998, respectively.

    On November 7, 1997 ("Grant Date"), the Company's board of directors approved a plan that allowed certain employees to exchange their existing stock options for an amount of options equal to the number of options to be exchanged multiplied by a fraction: the numerator of which is $4.25

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(closing price on Grant Date) and the denominator of which is the prior option price. This exchange of options was finalized during 1998, and options for 625,373 shares of stock were exchanged for options for 157,524 shares of stock.

    The Company also has adopted the Argosy Gaming Company 1993 Directors Stock Option Plan ("Directors Option Plan"), which provides for a total of 50,000 shares of common stock to be authorized and reserved for issuance. The Directors Option Plan provides for the grant of non-qualified stock options at fair market value to non-employee directors of the Company as of the date such individuals become directors of the Company. These options expire five years after their respective grant dates and become exercisable over a specified vesting period.

    The Company follows Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25"), and related interpretations in accounting for its employee stock options. Under APB 25, the Company does not recognize compensation expense when the exercise price of employee stock options equals or exceeds the market price of the underlying stock on the date of grant.

    The Company has adopted the disclosure only provisions of Statement of Financial Accounting Standards No. 123 ("SFAS 123"), "Accounting for Stock Based Compensation." Accordingly, no compensation expense has been recognized for either stock plan. Had the valuation methods under SFAS 123 been used for the Company's stock option grants, the fiscal 2000 pro forma net income attributable to common stockholders would have been $45,007 and the pro forma diluted income per share would have been $1.54. The fair value of each option was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: dividend yield of zero; expected volatility 57%; risk-free interest rate of 6%; and expected option life of five years. The fiscal 1999 pro forma net income attributable to common stockholders would have been $11,089 and the pro forma diluted income per share would have been $0.38. The fair value of each option was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: dividend yield of zero; expected volatility 56.5%; risk-free interest rate of 6%, and expected option life of three years. The fiscal 1998 pro forma net income attributable to common stockholders would have been $5,579 and the pro forma diluted income per share would have been $0.23. The fair value of each option was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: dividend yield of zero; expected volatility 52.7%; risk-free interest rate of 6% and expected option life of three years. These pro forma amounts may not be representative of future disclosures because the estimated fair value of the options is amortized to expense over the vesting period and additional options may be granted in the future.

F-15


    A summary of stock option activity is as follows:

 
  Stock Option Plan

  Directors Option Plan
 
  Shares
  Weighted Average
Exercise Price
Per Share

  Shares
  Weighted Average
Exercise Price
Per Share

Outstanding, December 31, 1997   2,066,910   $ 13.98   21,000   $ 16.86
Exchange of options:                    
Original Issue   (625,373 )   16.77      
Adjustment   157,524     4.25      
Granted   232,156     3.35      
Forfeited   (239,038 )   17.37   (15,000 )   19.00
   
       
     
Outstanding, December 31, 1998   1,592,179     10.22   6,000     11.50
Granted   275,000     7.14      
Exercised   (11,156 )   4.25      
Forfeited   (658,000 )   16.75      
   
       
     
Outstanding, December 31, 1999   1,198,023     5.98   6,000     11.50
Granted   115,353     18.00      
Exercised   (69,319 )   4.21      
Forfeited   (170,447 )   15.25   (6,000 )   11.50
   
       
     
Outstanding, December 31, 2000   1,073,610     5.91      
   
       
     

12.  Restricted Stock

    The Company issued 165,000 shares of restricted common stock to certain new employees in 1997. The value of these shares at their respective grant dates ranged from $3.13 to $3.63. In 1998, 66,000 shares of the restricted stock vested, and in 2000, 99,000 shares vested.

    Compensation expense was amortized over the period from the date of grant until the respective vesting dates. Compensation expense of $39, $113 and $239 was recognized in 2000, 1999 and 1998, respectively.

13.  Employees Benefit Plan

    The Company established a 401(k) defined-contribution plan, which covers substantially all of its full-time employees. Participants can contribute a portion of their eligible salaries (as defined) subject to maximum limits, as determined by provisions of the Internal Revenue Code. The Company will match a portion of participants' contributions in an amount determined annually by the Company. Expense recognized under the Plan was approximately $1,715, $1,145 and $1,134 in 2000, 1999 and 1998, respectively.

F-16


14.  Subsidiary Guarantors

    The Credit Facility is secured by a first lien on substantially all of the Company's assets and the Company's subsidiaries are co-borrowers. The Company's joint-venture subsidiary that operates the Argosy Casino Lawrenceburg is not a co-borrower nor are the assets of the subsidiary pledged. The Subordinated Notes are fully and unconditionally guaranteed, on a joint and several basis, by the following wholly-owned subsidiaries of the Company: Alton Gaming Company, The Missouri Gaming Company, The St. Louis Gaming Company, Iowa Gaming Company, Argosy of Iowa, Inc., Jazz Enterprises, Inc., Argosy of Louisiana, Inc., Catfish Queen Partnership in Commendam, Centroplex Centre Convention Hotel LLC and The Indiana Gaming Company (the "Guarantors"). The Company's joint-venture subsidiary that operates the Argosy Casino & Hotel in Lawrenceburg is not a guarantor of the Subordinated Notes. The Subordinated Notes rank junior to all of the senior indebtedness of the Company, including borrowings under the Credit Facility.

F-17


    Condensed balance sheets as of December 31, 2000 and 1999, are as follows:

 
  December 31, 2000
 
  Parent
Company

  Guarantors
  Non-Guarantors
  Eliminations
  Consolidated
Current assets:                              
  Cash and cash equivalents   $ 3,476   $ 17,085   $ 38,813   $   $ 59,374
  Other current assets     4,842     6,578     1,400         12,820
   
 
 
 
 
    Total current assets     8,318     23,663     40,213         72,194
   
 
 
 
 
Net property and equipment     2,181     216,397     179,411         397,989
   
 
 
 
 
Other assets:                              
  Goodwill and other intangible assets, net     7,657     30,075     26,716         64,448
  Investment in subsidiaries     343,751             (343,751 )  
  Other, net     271     2,322     12         2,605
   
 
 
 
 
    Total other assets     351,679     32,397     26,728     (343,751 )   67,053
   
 
 
 
 
Total assets   $ 362,178   $ 272,457   $ 246,352   $ (343,751 ) $ 537,236
   
 
 
 
 
Current liabilities:                              
  Accounts payable   $ 1,960   $ 8,234   $ 5,110   $   $ 15,304
  Other current liabilities     7,283     20,867     38,461         66,611
  Current maturities of long-term debt         671     26,464     (3,360 )   23,775
   
 
 
 
 
    Total current liabilities     9,243     29,772     70,035     (3,360 )   105,690
   
 
 
 
 
Long-term debt     247,400     5,161     10,074     (10,074 )   252,561
Intercompany advances and investments, net         88,421     387     (88,808 )  
Deferred income taxes     1,583     9,179             10,762
Other long-term obligations         236             236
Minority interests in equity of consolidated subsidiaries                 64,035     64,035
Stockholders' equity:                              
  Common stock, $.01 par; 60,000,000 shares authorized; 28,394,423 shares issued and outstanding at December 31, 2000     284     1         (1 )   284
  Capital in excess of par     80,693     5,256         (5,256 )   80,693
  Retained earnings (deficit)     22,975     134,431     165,856     (300,287 )   22,975
   
 
 
 
 
    Total stockholders' equity     103,952     139,688     165,856     (305,544 )   103,952
   
 
 
 
 
Total liabilities and stockholders' equity   $ 362,178   $ 272,457   $ 246,352   $ (343,751 ) $ 537,236
   
 
 
 
 

F-18


 
  December 31, 1999
 
 
  Parent
Company

  Guarantors
  Non-Guarantors
  Eliminations
  Consolidated
 
Current assets:                                
  Cash and cash equivalents   $ 531   $ 16,580   $ 29,979   $   $ 47,090  
  Restricted cash in escrow     25,244                 25,244  
  Other current assets     20,948     5,910     1,225         28,083  
   
 
 
 
 
 
    Total current assets     46,723     22,490     31,204         100,417  
   
 
 
 
 
 
Net property and equipment     1,040     217,688     186,477         405,205  
   
 
 
 
 
 
Other assets:                                
  Goodwill and other intangible assets, net     8,524     21,899     28,120         58,543  
  Investment in subsidiaries     338,095             (338,095 )    
  Other, net     376     2,318     1         2,695  
   
 
 
 
 
 
    Total other assets     346,995     24,217     28,121     (338,095 )   61,238  
   
 
 
 
 
 
Total assets   $ 394,758   $ 264,395   $ 245,802   $ (338,095 ) $ 566,860  
   
 
 
 
 
 
Current liabilities:                                
  Accounts payable   $ 962   $ 13,654   $ 3,278   $   $ 17,894  
  Other current liabilities     6,955     15,152     32,421         54,528  
  Current maturities of long-term debt     22,242     603     17,875     (8,052 )   32,668  
   
 
 
 
 
 
    Total current liabilities     30,159     29,409     53,574     (8,052 )   105,090  
   
 
 
 
 
 
Long-term debt     303,800     8,567     69,234     (34,896 )   346,705  
Intercompany advances and investments, net         91,130     161     (91,291 )    
Deferred income taxes     2,554     7,391             9,945  
Other long-term obligations         219             219  
Minority interests in equity of consolidated subsidiaries                 46,656     46,656  
Stockholders' equity:                                
  Common stock, $.01 par; 60,000,000 shares authorized; 28,325,106 shares issued and outstanding at December 31, 1999     283     1         (1 )   283  
  Capital in excess of par     80,362     5,256         (5,256 )   80,362  
  Retained earnings (deficit)     (22,400 )   122,422     122,833     (245,255 )   (22,400 )
   
 
 
 
 
 
    Total stockholders' equity     58,245     127,679     122,833     (250,512 )   58,245  
   
 
 
 
 
 
Total liabilities and stockholders' equity   $ 394,758   $ 264,395   $ 245,802   $ (338,095 ) $ 566,860  
   
 
 
 
 
 

F-19


    Condensed statements of income for the years ended December 31, 2000, 1999 and 1998 are as follows:

 
  Year ended December 31, 2000
 
 
  Parent
Company

  Guarantors
  Non-Guarantors
  Eliminations
  Consolidated
 
Revenues:                                
Casino   $   $ 314,870   $ 344,013   $   $ 658,883  
Admissions             18,998         18,998  
Food, beverage and other     4,511     27,952     37,827     (4,144 )   66,146  
   
 
 
 
 
 
      4,511     342,822     400,838     (4,144 )   744,027  
Less promotional allowances     (9 )   (16,079 )   (33,095 )       (49,183 )
   
 
 
 
 
 
Net revenues     4,502     326,743     367,743     (4,144 )   694,844  
   
 
 
 
 
 
Costs and expenses:                                
Casino         147,874     139,896         287,770  
Selling, general and administrative     15,211     47,960     76,792     (4,144 )   135,819  
Food, beverage and other         21,593     24,982         46,575  
Other operating expenses     288     20,278     9,664         30,230  
Depreciation and amortization     376     21,322     14,396         36,094  
Write down of assets held for sale     6,800                 6,800  
   
 
 
 
 
 
      22,675     259,027     265,730     (4,144 )   543,288  
   
 
 
 
 
 
Income (loss) from operations     (18,173 )   67,716     102,013         151,556  
   
 
 
 
 
 
Other income (expense):                                
Interest income     5,639     4,378     330     (8,979 )   1,368  
Interest expense     (29,368 )   (5,658 )   (8,721 )   8,979     (34,768 )
   
 
 
 
 
 
      (23,729 )   (1,280 )   (8,391 )       (33,400 )
   
 
 
 
 
 
Income (loss) before income taxes, minority interests and equity in net income of consolidated subsidiaries     (41,902 )   66,436     93,622         118,156  
   
 
 
 
 
 
Equity in net income of consolidated subsidiaries     73,171     53,156         (126,327 )    
Minority interests                 (40,466 )   (40,466 )
Income tax (expense) benefit     15,260     (46,421 )           (31,161 )
   
 
 
 
 
 
Income (loss) before extraordinary item     46,529     73,171     93,622     (166,793 )   46,529  
Extraordinary loss on extinguishment of debt     (1,154 )               (1,154 )
   
 
 
 
 
 
Net income (loss)     45,375     73,171     93,622     (166,793 )   45,375  
Preferred stock dividends             (3,592 )   3,592      
   
 
 
 
 
 
Net income (loss) attributable to common stockholders   $ 45,375   $ 73,171   $ 90,030   $ (163,201 ) $ 45,375  
   
 
 
 
 
 

F-20


 
  Year ended December 31, 1999
 
 
  Parent
Company

  Guarantors
  Non-Guarantors
  Eliminations
  Consolidated
 
Revenues:                                
Casino   $   $ 250,831   $ 308,316   $   $ 559,147  
Admissions             18,893         18,893  
Food, beverage and other     3,117     24,478     33,481     (3,078 )   57,998  
   
 
 
 
 
 
      3,117     275,309     360,690     (3,078 )   636,038  
Less promotional allowances     (9 )   (13,020 )   (28,455 )       (41,484 )
   
 
 
 
 
 
Net revenues     3,108     262,289     332,235     (3,078 )   594,554  
   
 
 
 
 
 
Costs and expenses:                                
Casino         123,986     126,573         250,559  
Selling, general and administrative     14,817     38,750     67,029     (3,078 )   117,518  
Food, beverage and other         19,259     22,269         41,528  
Other operating expenses     296     18,904     8,666         27,866  
Depreciation and amortization     31     20,393     13,634         34,058  
   
 
 
 
 
 
      15,144     221,292     238,171     (3,078 )   471,529  
   
 
 
 
 
 
Income (loss) from operations     (12,036 )   40,997     94,064         123,025  
   
 
 
 
 
 
Other income (expense):                                
Interest income     8,350     7,455     284     (13,219 )   2,870  
Interest expense     (40,553 )   (7,056 )   (14,204 )   13,219     (48,594 )
   
 
 
 
 
 
      (32,203 )   399     (13,920 )       (45,724 )
   
 
 
 
 
 
Income (loss) before income taxes, minority interests and equity in net income of consolidated subsidiaries     (44,239 )   41,396     80,144         77,301  
Equity in net income of consolidated subsidiaries     49,383     45,169         (94,552 )    
Minority interests                 (34,975 )   (34,975 )
Income tax (expense) benefit     31,282     (37,182 )           (5,900 )
   
 
 
 
 
 
Income (loss) before extraordinary item     36,426     49,383     80,144     (129,527 )   36,426  
Extraordinary loss on extinguishment of debt     (24,920 )               (24,920 )
   
 
 
 
 
 
Net income (loss)     11,506     49,383     80,144     (129,527 )   11,506  
Preferred stock dividends and accretion     (27 )       (4,864 )   4,864     (27 )
   
 
 
 
 
 
Net income (loss) attributable to common stockholders   $ 11,479   $ 49,383   $ 75,280   $ (124,663 ) $ 11,479  
   
 
 
 
 
 

F-21


 
  Year ended December 31, 1998
 
 
  Parent
Company

  Guarantors
  Non-Guarantors
  Eliminations
  Consolidated
 
Revenues:                                
Casino   $   $ 209,153   $ 264,352   $   $ 473,505  
Admissions             16,025         16,025  
Food, beverage and other     1,996     26,134     24,922     (1,995 )   51,057  
   
 
 
 
 
 
      1,996     235,287     305,299     (1,995 )   540,587  
Less promotional allowances     (7 )   (13,334 )   (20,578 )       (33,919 )
   
 
 
 
 
 
Net revenues     1,989     221,953     284,721     (1,995 )   506,668  
   
 
 
 
 
 
Costs and expenses:                                
Casino     53     111,299     110,330         221,682  
Selling, general and administrative     8,999     34,722     54,824     (1,995 )   96,550  
Food, beverage and other         21,671     18,879         40,550  
Other operating expenses     380     18,037     8,222         26,639  
Depreciation and amortization     553     20,316     12,567         33,436  
   
 
 
 
 
 
      9,985     206,045     204,822     (1,995 )   418,857  
   
 
 
 
 
 
Income (loss) from operations     (7,996 )   15,908     79,899         87,811  
   
 
 
 
 
 
Other income (expense):                                
Interest income     7,887     10,516     1,205     (16,026 )   3,582  
Interest expense     (46,243 )   (7,396 )   (19,874 )   16,026     (57,487 )
   
 
 
 
 
 
      (38,356 )   3,120     (18,669 )       (53,905 )
   
 
 
 
 
 
Income (loss) before income taxes, minority interests and equity in net income of consolidated subsidiaries     (46,352 )   19,028     61,230         33,906  
   
 
 
 
 
 
Equity in net income of consolidated subsidiaries     27,488     35,025         (62,513 )    
Minority interests                 (26,205 )   (26,205 )
Income tax (expense) benefit     25,425     (26,565 )           (1,140 )
   
 
 
 
 
 
Net income (loss)     6,561     27,488     61,230     (88,718 )   6,561  
Preferred stock dividends and accretion     (820 )       (5,554 )   5,554     (820 )
   
 
 
 
 
 
Net income (loss) attributable to common stockholders   $ 5,741   $ 27,488   $ 55,676   $ (83,164 ) $ 5,741  
   
 
 
 
 
 

F-22


    Condensed statements of cash flows for the years ended December 31, 2000, 1999 and 1998 are as follows:

 
  Year ended December 31, 2000
 
 
  Parent
Company

  Guarantors
  Non-Guarantors
  Eliminations
  Consolidated
 
Net cash provided by (used in) operating activities:   $ (1,039 ) $ 42,780   $ 116,046   $   $ 157,787  
   
 
 
 
 
 
Cash flows from investing activities:                                
  Purchases of property
and equipment
    (1,415 )   (25,860 )   (5,954 )       (33,229 )
  Purchase of Minority Interest in Partnership         (9,150 )           (9,150 )
  Investments in and advances (to) from subsidiaries     60,715     (31,673 )   226     (29,268 )    
  Other         (1,619 )           (1,619 )
   
 
 
 
 
 
    Net cash (used in) provided by investing activities     59,300     (68,302 )   (5,728 )   (29,268 )   (43,998 )
   
 
 
 
 
 
Cash flows from financing activities:                                
  Repayment of credit facility     (56,400 )               (56,400 )
  Repurchase of First Mortgage Notes     (23,716 )               (23,716 )
  Cash held in escrow     25,244                 25,244  
  Repayment of partner loans         26,832     (46,662 )       (19,830 )
  Partnership distributions             (50,902 )   29,268     (21,634 )
  Other     (444 )   (805 )   (3,920 )       (5,169 )
   
 
 
 
 
 
    Net cash (used in) provided by financing activities     (55,316 )   26,027     (101,484 )   29,268     (101,505 )
   
 
 
 
 
 
Net increase in cash and cash equivalents     2,945     505     8,834         12,284  
Cash and cash equivalents, beginning of period     531     16,580     29,979         47,090  
   
 
 
 
 
 
Cash and cash equivalents, end of period   $ 3,476   $ 17,085   $ 38,813   $   $ 59,374  
   
 
 
 
 
 

F-23


 
  Year ended December 31, 1999
 
 
  Parent
Company

  Guarantors
  Non-
Guarantors

  Eliminations
  Consolidated
 
Net cash provided by (used in) operating activities:   $ (9,229 ) $ 34,121   $ 101,761   $   $ 126,653  
   
 
 
 
 
 
Cash flows from investing activities:                                
  Purchases of property and equipment     (382 )   (30,855 )   (5,925 )       (37,162 )
  Investments in and advances from (to) subsidiaries     47,816     (20,563 )       (27,253 )    
  Other     503     (485 )           18  
   
 
 
 
 
 
    Net cash (used in) provided by investing activities     47,937     (51,903 )   (5,925 )   (27,253 )   (37,144 )
   
 
 
 
 
 
Cash flows from financing activities:                                
  Repayment of credit facility     (58,000 )               (58,000 )
  Proceeds from credit facility     161,800                 161,800  
  Repurchase of First Mortgage Notes     (241,043 )               (241,043 )
  Redemption of convertible debentures     (117,280 )               (117,280 )
  Proceeds from issuance of long-term debt     200,000                 200,000  
  Cash held in escrow     (25,244 )               (25,244 )
  Repayment of partner loans         22,032     (38,317 )       (16,285 )
  Partnership distributions             (47,296 )   27,253     (20,043 )
  Other     (9,228 )   (1,218 )   (5,735 )       (16,181 )
   
 
 
 
 
 
    Net cash (used in) provided by financing activities     (88,995 )   20,814     (91,348 )   27,253     (132,276 )
   
 
 
 
 
 
Net (decrease) increase in cash and cash equivalents     (50,287 )   3,032     4,488         (42,767 )
Cash and cash equivalents, beginning of period     50,818     13,548     25,491         89,857  
   
 
 
 
 
 
Cash and cash equivalents, end of period   $ 531   $ 16,580   $ 29,979   $   $ 47,090  
   
 
 
 
 
 

F-24


 
  Year ended December 31, 1998
 
 
  Parent
Company

  Guarantors
  Non-Guarantors
  Eliminations
  Consolidated
 
Net cash provided by (used in) operating activities:   $ (19,539 ) $ 20,090   $ 81,112   $   $ 81,663  
   
 
 
 
 
 
Cash flows from investing activities:                                
  Restricted cash held in escrow     12,431         13,114         25,545  
  Purchases of property and equipment     (58 )   (6,317 )   (27,676 )       (34,051 )
  Investments in and advances (to) from subsidiaries     45,457     (25,838 )       (19,619 )    
  Other         908     (6,583 )       (5,675 )
   
 
 
 
 
 
    Net cash (used in) provided by investing activities     57,830     (31,247 )   (21,145 )   (19,619 )   (14,181 )
   
 
 
 
 
 
Cash flows from financing activities:                                
  Repayment of partner loans         14,972     (36,911 )       (21,939 )
  Partnership distributions             (34,115 )   19,619     (14,496 )
  Other     6,740     (2,577 )   (4,707 )       (544 )
   
 
 
 
 
 
    Net cash (used in) provided by financing activities     6,740     12,395     (75,733 )   19,619     (36,979 )
   
 
 
 
 
 
Net increase (decrease) in cash and cash equivalents     45,031     1,238     (15,766 )       30,503  
Cash and cash equivalents, beginning of period     5,787     12,310     41,257         59,354  
   
 
 
 
 
 
Cash and cash equivalents, end of period   $ 50,818   $ 13,548   $ 25,491   $   $ 89,857  
   
 
 
 
 
 

F-25


15.  Fair Value of Financial Instruments

    The estimated fair values of the Company's financial instruments at December 31, 2000 are as follows:

 
  Carrying
Amount

  Fair
Value

Assets:            
Cash and cash equivalents   $ 59,374   $ 59,374
Liabilities:            
Senior Secured Line of Credit     47,400     47,400
Senior Subordinated Notes     200,000     211,000
Other long-term debt     28,936     28,936

    The fair value of the first mortgage notes and the convertible subordinated notes are based on quoted market prices. The Company estimates that the fair value of the remainder of the Company's long-term debt approximates carrying value.

16.  Quarterly Financial Information (unaudited)

 
  First

  Second
  Third
  Fourth
2000:                        
Net revenues   $ 174,817   $ 173,425   $ 181,674   $ 164,928
Income from operations(1)     41,923     31,467     40,705     37,461
Other expense, net     9,625     8,956     7,676     7,143
Income before extraordinary item     13,419     7,751     13,135     12,224
Income per share before extraordinary item                        
Basic     0.47     0.27     0.46     0.43
Diluted     0.46     0.23     0.45     0.42
Net income attributable to common stockholders(2)     13,419     6,597     13,135     12,224
Net income per share(2)                        
Basic     0.47     0.27     0.46     0.43
Diluted     0.46     0.23     0.45     0.42

1999:

 

 

 

 

 

 

 

 

 

 

 

 
Net revenues   $ 137,391   $ 144,602   $ 156,569   $ 155,992
Income from operations     24,591     29,695     34,553     34,186
Other expense, net     13,227     12,857     10,048     9,592
Income before extraordinary item     2,921     7,691     14,318     11,496
Income per share before extraordinary item                        
Basic     0.11     0.27     0.51     0.41
Diluted     0.10     0.27     0.51     0.40
Net income (loss) attributable to common stockholders(3)     2,894     (27,069 )   10,658     24,996
Net income (loss) per share(3)                        
Basic     0.11     (0.47 )   0.38     0.89
Diluted     0.10     (0.47 )   0.37     0.86

(1)
The second quarter of 2000 includes a $6,800 pre-tax charge related to the write-off of the former landing facility at our Alton property.

F-26


(2)
The second quarter of 2000 includes an extraordinary loss of $1,200 related to completion of the final phase of the 1999 refinancing.

(3)
The second and third quarters of 1999 include extraordinary losses related to the refinancing and were $34,800 and $3,600, respectively. The fourth quarter of 1999 extraordinary item represents a $13,500 tax benefit related to the refinancing which was recognized with the reversal of deferred tax valuation reserves and the resulting tax provision.

17.  Commitments and Contingent Liabilities

    The Company has agreed to provide up to $40,000 as part of our agreement to develop and operate a proposed casino in Kenosha, Wisconsin. The proposed casino would be owned by the Menominee Indian Tribe of Wisconsin. Of this $40,000 commitment, we have advanced $1,000 during 2001 and will advance up to an additional $4,000 upon the tribe receiving approval from the United States Bureau of Indian Affairs to place the proposed casino property in federal trust. We also have committed to provide a $30,000 subordinated note concurrent with, and conditioned upon, the tribe's institutional debt offering that is anticipated to finance the project. In addition, we will provide a $5,000 completion guarantee on the construction of the proposed facility. This project and our funding commitment are subject to numerous regulatory approvals.

    The Company is subject, from time to time, to various legal and regulatory proceedings, in the ordinary course of business. The Company believes that current proceedings will not have a material effect on the financial condition of the Company or the results of its operations.

18.  Subsequent Event

    On February 22, 2001, the Company completed its purchase of a 29% limited partnership interest in the Argosy Casino and Hotel in Lawrenceburg, Indiana (the "Lawrenceburg Casino") from Conseco Entertainment, LLC ("Conseco"). The purchase price for the 29% minority interest was $260 million and included the repayment of Conseco's preferred equity interest and outstanding partner loans. The Company and Conseco also settled all pending litigation between the partners.

    On March 8, 2001, the Company completed its purchase of the remaining 13.5% limited partnership interest in the Lawrenceburg Casino from Centaur, Inc. The purchase price for the 13.5% minority interest was $105 million.

    As a result of these acquisitions, the Company now owns 100% of the Lawrenceburg Casino and the subsidiary that operates the Lawrenceburg Casino has become a guarantor under the amended and restated credit facility and of the senior subordinated notes.

    The purchase prices for the minority interests were determined based upon estimates of future cash flows and evaluations of the net worth of the assets acquired. The purchases were funded with $155.3 million of net proceeds received by the Company from its February 8, 2001 private placement of senior subordinated notes and borrowings of approximately $210 million under the Company's $400 million senior credit facility which was amended and restated on March 2, 2001.

F-27



PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS

    Section 145 of the Delaware General Corporation Law (the "DGCL") empowers a corporation, subject to certain limitations, to indemnify its directors and officers against expenses (including attorneys' fees, judgments, fines and certain settlements) actually and reasonably incurred by them in connection with any suit or proceeding to which they are a party so long as they acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to a criminal action or proceeding, so long as they had no reasonable cause to believe their conduct to have been unlawful. The Registrant's Amended and Restated Certificate of Incorporation and Amended and Restated By-laws provide that the Registrant shall indemnify its directors and such of its officers, employees and agents as the Board of Directors may determine from time to time, to the fullest extent permitted by Section 145 of the DGCL.

    Section 102 of the DGCL permits a Delaware corporation to include in its certificate of incorporation a provision eliminating or limiting a director's liability to a corporation or its stockholders for monetary damages for breaches of fiduciary duty. The enabling statute provides, however, that liability for breaches of the duty of loyalty, acts or omissions not in good faith or involving intentional misconduct, or knowing violation of the law, and the unlawful purchase or redemption of stock or payment of unlawful dividends or the receipt of improper personal benefits cannot be eliminated or limited in this manner. The Registrant's Amended and Restated Certificate of Incorporation and Amended and Restated By-laws include a provision which eliminates, to the fullest extent permitted, director liability for monetary damages for breaches of fiduciary duty.

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

    The following documents are filed herewith or incorporated herein by reference.

EXHIBIT
NUMBER

  DESCRIPTION OF EXHIBITS
3.1   Amended and Restated Certification of Incorporation of the Company (previously filed with the Securities and Exchange Commission ("SEC") as an Exhibit to the Company's Registration Statement on Form S-1 (File No. 33-55878) and incorporated herein by reference)

3.2

 

Amended and Restated By-laws of the Company (previously filed with the SEC as an Exhibit to the Company's Registration Statement on Form S-1 (File No. 33-55878) and incorporated herein by reference)

3.3

 

Certificate of Incorporation of Alton Gaming Company (previously filed with the SEC as an Exhibit to the Company's Registration Statement on Form S-4 (File No. 333-83567) and incorporated herein by reference)

3.4

 

By-laws of Alton Gaming Company (previously filed with the SEC as an Exhibit to the Company's Registration Statement on Form S-4 (File No. 333-83567) and incorporated herein by reference)

3.5

 

Certificate of Incorporation of Argosy of Louisiana, Inc. (previously filed with the SEC as an Exhibit to the Company's Registration Statement on From S-4 (File No. 333-83567) and incorporated herein by reference)


 

 

II-1



3.6

 

By-laws of Argosy of Louisiana, Inc. (previously filed with the SEC as an Exhibit to the Company's Registration Statement on Form S-4 (File No. 333-83567) and incorporated herein by reference)

3.7

 

Amended and Restated Articles of Partnership In Commendam of Catfish Queen Partnership In Commendam (previously filed with the SEC as an Exhibit to the Company's Registration Statement on Form S-4 (File No. 333-83567) and incorporated herein by reference)

3.8

 

Certificate of Incorporation of The Indiana Gaming Company (previously filed with the SEC as an Exhibit to the Company's Registration Statement on Form S-4 (File No. 333-83567) and incorporated herein by reference)

3.9

 

By-laws of The Indiana Gaming Company (previously filed with the SEC as an Exhibit to the Company's Registration Statement on Form S-4 (File No. 333-83567) and incorporated herein by reference)

3.10

 

Certificate of Incorporation of Iowa Gaming Company (previously filed with the SEC as an Exhibit to the Company's Registration Statement on Form S-4 (File No. 333-83567) and incorporated herein by reference)

3.11

 

By-laws of Iowa Gaming Company (previously filed with the SEC as an Exhibit to the Company's Registration Statement on Form S-4 (File No. 333-83567) and incorporated herein by reference)

3.12

 

Certificate of Incorporation of Jazz Enterprises, Inc. (previously filed with the SEC as an Exhibit to the Company's Registration Statement on Form S-4 (File No. 333-83567) and incorporated herein by reference)

3.13

 

By-laws of Jazz Enterprises, Inc. (previously filed with the SEC as an Exhibit to the Company's Registration Statement on Form S-4 (File No. 333-83567) and incorporated herein by reference)

3.14

 

Certificate of Incorporation of The Missouri Gaming Company (previously filed with the SEC as an Exhibit to the Company's Registration Statement on Form S-4
(File No. 333-83567) and incorporated herein by reference)

3.15

 

By-laws of The Missouri Gaming Company (previously filed with the SEC as an Exhibit to the Company's Registration Statement on Form S-4 (File No. 333-83567) and incorporated herein by reference)

3.16

 

Certificate of Incorporation of Des Moines Gaming Company/Argosy of Iowa, Inc. (previously filed with the SEC as an Exhibit to the Company's Annual Report on Form 10-K for the year ended December 31, 2000 (File No. 1-11853) and incorporated herein by reference)

3.17

 

By-laws of Des Moines Gaming Company/Argosy of Iowa, Inc. (previously filed with the SEC as an Exhibit to the Company's Annual Report on Form 10-K for the year ended December 31, 2000 (File No. 1-11853) and incorporated herein by reference)

3.18

 

Articles of Organization of Centroplex Centre Convention Hotel, L.L.P. (previously filed with the SEC as an Exhibit to the Company's Annual Report on Form 10-K for the year ended December 31, 2000 (File No. 1-11853) and incorporated herein by reference)

3.19

 

Amended and Restated Agreement of Limited Partnership of Belle of Sioux City, L.P


 

 

II-2



3.20†

 

Third Amended and Restated Agreement of Limited Partnership of Indiana Gaming Company, L.P.

3.21

 

Agreement of Limited Partnership of Indiana Gaming II, L.P.

3.22

 

Certificate of Incorporation of Indiana Gaming Holding Company

3.23

 

By-laws of Indiana Gaming Holding Company

4.1

 

Form of the Company's 103/4% Senior Subordinated Notes due 2009 (included in Exhibit 4.2)

4.2

 

Indenture, dated as of June 8, 1999, by and among the Company, Bank One Trust Company, NA, as Trustee, and the Subsidiary Guarantors named therein, for the Company's 103/4% Senior Subordinated Notes due 2009 (previously filed with the SEC as an Exhibit to the Company's Registration Statement on Form S-4 (File No. 333-83567) and incorporated herein by reference)

4.3

 

First Supplemental Indenture, dated as of February 8, 2001, by and among the Company, Bank One Trust Company, NA, as Trustee, and the Subsidiary Guarantors named therein for the Company's 103/4% Senior Subordinated Notes due 2009 (previously filed with the SEC as an Exhibit to the Company's Annual Report on Form 10-K for the year ended December 31, 2000 (File No. 1-11853) and incorporated herein by reference)

4.4

 

Second Supplemental Indenture, dated as of March 2, 2001, by and among the Company, Bank One Trust Company, NA, as Trustee, and the Subsidiary Guarantors named therein for the Company's 103/4% Senior Subordinated Notes due 2009

4.5

 

Third Supplemental Indenture, dated as of March 12, 2001, by and among the Company, Bank One Trust Company, NA, as Trustee, and the Subsidiary Guarantors named therein for the Company's 103/4% Senior Subordinated Notes due 2009

4.6

 

Registration Rights Agreement, dated as of February 8, 2001, by and among the Company, Morgan Stanley & Co. Incorporated, Banc of America Securities LLC and Wells Fargo Brokerage Services, LLC

5.1

 

Opinion of Winston & Strawn

12.1

 

Computation of Ratios of Earnings to Fixed Charges

23.1

 

Consent of Ernst & Young LLP

23.2

 

Consent of Winston & Strawn (included in Exhibit 5.1)

24.1

 

Powers of Attorney

25.1

 

Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of Bank One Trust Company, NA, relating to the Indenture and the issuance of the Company's 103/4% Senior Subordinated Notes due 2009

99.1

 

Form of Letter of Transmittal

99.2

 

Form of Notice of Guaranteed Delivery

99.3

 

Form of Instruction to Registered Holder and/or Depository Trust Company Participant from Beneficial Owner

To be filed by amendment.

II-3


ITEM 22. UNDERTAKINGS

    (1) The Company hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933 (the "Securities Act"), each filing of the Company's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act")(and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) 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.

    (2) The Company 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 Form S-4, 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.

    (3) The Company 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.

    (4) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

II-4



SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, Argosy Gaming Company certifies that it has reasonable grounds to believe that it meets all of the requirements for filing this Registration Statement on Form S-4 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Alton, State of Illinois, on April 5, 2001.

    ARGOSY GAMING COMPANY

 

 

By:

/s/ 
JAMES B. PERRY   
      Name: James B. Perry
      Title: Director, President and Chief Executive Officer

    Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on the dates indicated:

Signature
  Title
  Date

 

 

 

 

 
*
William F. Cellini
  Chairman of the Board of Directors   April 5, 2001

/s/ 
JAMES B. PERRY   
James B. Perry

 

Director, President and Chief Executive Officer (Principal Executive Officer)

 

April 5, 2001

/s/ 
DALE R. BLACK   
Dale R. Black

 

Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

 

April 5, 2001

*

Edward F. Brennan

 

Director

 

April 5, 2001

*

George L. Bristol

 

Director

 

April 5, 2001

*

F. Lance Callis

 

Director

 

April 5, 2001

*

Jimmy F. Gallagher

 

Director

 

April 5, 2001

*

John B. Pratt

 

Director

 

April 5, 2001
*
Dale R. Black, by signing his name hereto, does sign this document on behalf of the above-named individuals, pursuant to the powers of attorney duly executed by such individuals, which have been filed as an Exhibit to this Registration Statement.


 

 

/s/ 
DALE R. BLACK   

 

 

 

 
   
Dale R. Black
Attorney-In-Fact
       

S-1


SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, Alton Gaming Company certifies that it has reasonable grounds to believe that it meets all of the requirements for filing this Registration Statement on Form S-4 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Alton, State of Illinois, on April 5, 2001.

    ALTON GAMING COMPANY

 

 

By:

/s/ 
JAMES B. PERRY   
      Name: James B. Perry
      Title: President

    Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on the dates indicated:

Signature
  Title
  Date

 

 

 

 

 
/s/ JAMES B. PERRY   
James B. Perry
  President and Sole Director
(Principal Executive Officer)
  April 5, 2001

/s/ 
DALE R. BLACK   
Dale R. Black

 

Treasurer (Principal Financial Officer and Principal Accounting Officer)

 

April 5, 2001

S-2


SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, Argosy of Iowa, Inc. certifies that it has reasonable grounds to believe that it meets all of the requirements for filing this Registration Statement on Form S-4 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Alton, State of Illinois, on April 5, 2001.

    ARGOSY OF IOWA, INC.

 

 

By:

/s/ 
JAMES B. PERRY   
      Name: James B. Perry
      Title: President

    Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on the dates indicated:

Signature
  Title
  Date

 

 

 

 

 
/s/ JAMES B. PERRY   
James B. Perry
  President and Sole Director
(Principal Executive Officer)
  April 5, 2001

/s/ 
DALE R. BLACK   
Dale R. Black

 

Treasurer (Principal Financial Officer and Principal Accounting Officer)

 

April 5, 2001

S-3


SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, Argosy of Louisiana, Inc. certifies that it has reasonable grounds to believe that it meets all of the requirements for filing this Registration Statement on Form S-4 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Alton, State of Illinois, on April 5, 2001.

    ARGOSY OF LOUISIANA, INC.

 

 

By:

/s/ 
JAMES B. PERRY   
      Name: James B. Perry
      Title: President

    Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on the dates indicated:

Signature
  Title
  Date

 

 

 

 

 
/s/ JAMES B. PERRY   
James B. Perry
  President and Sole Director
(Principal Executive Officer)
  April 5, 2001

/s/ 
DALE R. BLACK   
Dale R. Black

 

Treasurer (Principal Financial Officer and Principal Accounting Officer)

 

April 5, 2001

S-4


SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, Catfish Queen Partnership in Commendam certifies that it has reasonable grounds to believe that it meets all of the requirements for filing this Registration Statement on Form S-4 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Alton, State of Illinois, on April 5, 2001.

    CATFISH QUEEN PARTNERSHIP IN COMMENDAM

 

 

By:

 

Argosy of Louisiana, Inc.,
its General Partner

 

 

 

 

By:

 

/s/ 
JAMES B. PERRY   
            Name: James B. Perry
Title: President

    Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on the dates indicated:

Signature
  Title
  Date

 

 

 

 

 
/s/ JAMES B. PERRY   
James B. Perry
  President and Sole Director (Principal Executive Officer) of Argosy of Louisiana, Inc., the general partner of Catfish Queen Partnership in Commendam   April 5, 2001

/s/ 
DALE R. BLACK   
Dale R. Black

 

Treasurer (Principal Financial Officer and Principal Accounting Officer) of Argosy of Louisiana, Inc., the general partner of Catfish Queen Partnership in Commendam

 

April 5, 2001

S-5


SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, Centroplex Centre Convention Hotel, L.L.C. certifies that it has reasonable grounds to believe that it meets all of the requirements for filing this Registration Statement on Form S-4 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Alton, State of Illinois, on April 5, 2001.

    CENTROPLEX CENTRE CONVENTION HOTEL, L.L.C.

 

 

By:

 

Argosy Gaming Company,
its Sole Member

 

 

 

 

By:

 

/s/ 
JAMES B. PERRY   
            Name: James B. Perry
Title: Director, President and Chief
Executive Officer

    Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on the dates indicated:

Signature
  Title
  Date

 

 

 

 

 
/s/ JAMES B. PERRY   
James B. Perry
  Director, President and Chief Executive Officer (Principal Executive Officer) of Argosy Gaming Company, the sole member of Centroplex Centre Convention Hotel, L.L.C.   April 5, 2001

/s/ 
DALE R. BLACK   
Dale R. Black

 

Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) of Argosy Gaming Company, the sole member of Centroplex Centre Convention Hotel, L.L.C.

 

April 5, 2001

S-6


SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, The Indiana Gaming Company certifies that it has reasonable grounds to believe that it meets all of the requirements for filing this Registration Statement on Form S-4 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Alton, State of Illinois, on April 5, 2001.

    THE INDIANA GAMING COMPANY

 

 

By:

 

/s/ 
JAMES B. PERRY   
        Name: James B. Perry
Title: President

    Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on the dates indicated:

Signature
  Title
  Date

 

 

 

 

 
/s/ JAMES B. PERRY   
James B. Perry
  President and Sole Director (Principal Executive Officer)   April 5, 2001

/s/ 
DALE R. BLACK   
Dale R. Black

 

Treasurer (Principal Financial Officer and Principal Accounting Officer)

 

April 5, 2001

S-7


SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, Indiana Gaming Holding Company certifies that it has reasonable grounds to believe that it meets all of the requirements for filing this Registration Statement on Form S-4 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Alton, State of Illinois, on April 5, 2001.

    INDIANA GAMING HOLDING COMPANY

 

 

By:

 

/s/ 
JAMES B. PERRY   
        Name: James B. Perry
Title: President

    Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on the dates indicated:

Signature
  Title
  Date

 

 

 

 

 
/s/ JAMES B. PERRY   
James B. Perry
  President and Sole Director (Principal Executive Officer)   April 5, 2001

/s/ 
DALE R. BLACK   
Dale R. Black

 

Treasurer (Principal Financial Officer and Principal Accounting Officer)

 

April 5, 2001

S-8


SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, Indiana Gaming Company, L.P. certifies that it has reasonable grounds to believe that it meets all of the requirements for filing this Registration Statement on Form S-4 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Alton, State of Illinois, on April 5, 2001.

    INDIANA GAMING COMPANY, L.P.

 

 

By:

 

The Indiana Gaming Company,
its General Partner

 

 

 

 

By:

 

/s/ 
JAMES B. PERRY   
            Name: James B. Perry
Title: President

    Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on the dates indicated:

Signature
  Title
  Date

 

 

 

 

 
/s/ JAMES B. PERRY   
James B. Perry
  President and Sole Director (Principal Executive Officer) of The Indiana Gaming Company, the general partner of Indiana Gaming Company, L.P.   April 5, 2001

/s/ 
DALE R. BLACK   
Dale R. Black

 

Treasurer (Principal Financial Officer and Principal Accounting Officer) of The Indiana Gaming Company, the general partner of Indiana Gaming Company, L.P.

 

April 5, 2001

S-9


SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, Indiana Gaming II, L.P. certifies that it has reasonable grounds to believe that it meets all of the requirements for filing this Registration Statement on Form S-4 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Alton, State of Illinois, on April 5, 2001.

    INDIANA GAMING II, L.P.

 

 

By:

 

Indiana Gaming Holding Company,
its General Partner

 

 

 

 

By:

 

/s/ 
JAMES B. PERRY   
            Name: James B. Perry
Title: President

    Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on the dates indicated:

Signature
  Title
  Date

 

 

 

 

 
/s/ JAMES B. PERRY   
James B. Perry
  President and Sole Director (Principal Executive Officer) of Indiana Gaming Holding Company, the general partner of Indiana Gaming II, L.P.   April 5, 2001

/s/ 
DALE R. BLACK   
Dale R. Black

 

Treasurer (Principal Financial Officer and Principal Accounting Officer) of Indiana Gaming Holding Company, the general partner of Indiana Gaming II, L.P.

 

April 5, 2001

S-10


SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, Iowa Gaming Company certifies that it has reasonable grounds to believe that it meets all of the requirements for filing this Registration Statement on Form S-4 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Alton, State of Illinois, on April 5, 2001.

    IOWA GAMING COMPANY

 

 

By:

 

/s/ 
JAMES B. PERRY   
        Name: James B. Perry
Title: President

    Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on the dates indicated:

Signature
  Title
  Date

 

 

 

 

 
/s/ JAMES B. PERRY   
James B. Perry
  President and Sole Director (Principal Executive Officer)   April 5, 2001

/s/ 
DALE R. BLACK   
Dale R. Black

 

Treasurer (Principal Financial Officer and Principal Accounting Officer)

 

April 5, 2001

S-11


SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, Belle of Sioux City, L.P. certifies that it has reasonable grounds to believe that it meets all of the requirements for filing this Registration Statement on Form S-4 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Alton, State of Illinois, on April 5, 2001.

    BELLE OF SIOUX CITY, L.P.

 

 

By:

 

Iowa Gaming Company,
its General Partner

 

 

 

 

By:

 

/s/ 
JAMES B. PERRY   
            Name: James B. Perry
Title: President

    Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on the dates indicated:

Signature
  Title
  Date

 

 

 

 

 
/s/ JAMES B. PERRY   
James B. Perry
  President and Sole Director (Principal Executive Officer) of Iowa Gaming Company, the general partner of Belle of Sioux City, L.P.   April 5, 2001

/s/ 
DALE R. BLACK   
Dale R. Black

 

Treasurer (Principal Financial Officer and , 2001 Principal Accounting Officer) of Iowa Gaming Company, the general partner of Belle of Sioux City, L.P.

 

April 5, 2001

S-12


SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, Jazz Enterprises, Inc. certifies that it has reasonable grounds to believe that it meets all of the requirements for filing this Registration Statement on Form S-4 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Alton, State of Illinois, on April 5, 2001.

    JAZZ ENTERPRISES, INC.

 

 

By:

 

/s/ 
JAMES B. PERRY   
        Name: James B. Perry
Title: President

    Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on the dates indicated:

Signature
  Title
  Date

 

 

 

 

 
/s/ JAMES B. PERRY   
James B. Perry
  President and Sole Director (Principal Executive Officer)   April 5, 2001

/s/ 
DALE R. BLACK   
Dale R. Black

 

Treasurer (Principal Financial Officer and Principal Accounting Officer)

 

April 5, 2001

S-13


SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, The Missouri Gaming Company certifies that it has reasonable grounds to believe that it meets all of the requirements for filing this Registration Statement on Form S-4 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Alton, State of Illinois, on April 5, 2001.

    THE MISSOURI GAMING COMPANY

 

 

By:

 

/s/ 
JAMES B. PERRY   
        Name: James B. Perry
Title: President

    Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on the dates indicated:

Signature
  Title
  Date

 

 

 

 

 
/s/ JAMES B. PERRY   
James B. Perry
  President and Sole Director (Principal Executive Officer)   April 5, 2001

/s/ 
DAVE R. BLACK   
Dave R. Black

 

Treasurer (Principal Financial Officer and , 2001 Principal Accounting Officer)

 

April 5, 2001

S-14



EXHIBIT INDEX

    The following documents are filed herewith or incorporated herein by reference.

EXHIBIT
NUMBER

  DESCRIPTION OF EXHIBITS

3.1

 

Amended and Restated Certification of Incorporation of the Company (previously filed with the Securities and Exchange Commission ("SEC") as an Exhibit to the Company's Registration Statement on Form S-1 (File No. 33-55878) and incorporated herein by reference)

3.2

 

Amended and Restated By-laws of the Company (previously filed with the SEC as an Exhibit to the Company's Registration Statement on Form S-1 (File No. 33-55878) and incorporated herein by reference)

3.3

 

Certificate of Incorporation of Alton Gaming Company (previously filed with the SEC as an Exhibit to the Company's Registration Statement on Form S-4 (File No. 333-83567) and incorporated herein by reference)

3.4

 

By-laws of Alton Gaming Company (previously filed with the SEC as an Exhibit to the Company's Registration Statement on Form S-4 (File No. 333-83567) and incorporated herein by reference)

3.5

 

Certificate of Incorporation of Argosy of Louisiana, Inc. (previously filed with the SEC as an Exhibit to the Company's Registration Statement on From S-4 (File No. 333-83567) and incorporated herein by reference)

3.6

 

By-laws of Argosy of Louisiana, Inc. (previously filed with the SEC as an Exhibit to the Company's Registration Statement on Form S-4 (File No. 333-83567) and incorporated herein by reference)

3.7

 

Amended and Restated Articles of Partnership In Commendam of Catfish Queen Partnership In Commendam (previously filed with the SEC as an Exhibit to the Company's Registration Statement on Form S-4 (File No. 333-83567) and incorporated herein by reference)

3.8

 

Certificate of Incorporation of The Indiana Gaming Company (previously filed with the SEC as an Exhibit to the Company's Registration Statement on Form S-4 (File No. 333-83567) and incorporated herein by reference)

3.9

 

By-laws of The Indiana Gaming Company (previously filed with the SEC as an Exhibit to the Company's Registration Statement on Form S-4 (File No. 333-83567) and incorporated herein by reference)

3.10

 

Certificate of Incorporation of Iowa Gaming Company (previously filed with the SEC as an Exhibit to the Company's Registration Statement on Form S-4 (File No. 333-83567) and incorporated herein by reference)

3.11

 

By-laws of Iowa Gaming Company (previously filed with the SEC as an Exhibit to the Company's Registration Statement on Form S-4 (File No. 333-83567) and incorporated herein by reference)

3.12

 

Certificate of Incorporation of Jazz Enterprises, Inc. (previously filed with the SEC as an Exhibit to the Company's Registration Statement on Form S-4 (File No. 333-83567) and incorporated herein by reference)


 

 


3.13

 

By-laws of Jazz Enterprises, Inc. (previously filed with the SEC as an Exhibit to the Company's Registration Statement on Form S-4 (File No. 333-83567) and incorporated herein by reference)

3.14

 

Certificate of Incorporation of The Missouri Gaming Company (previously filed with the SEC as an Exhibit to the Company's Registration Statement on Form S-4 (File No. 333-83567) and incorporated herein by reference)

3.15

 

By-laws of The Missouri Gaming Company (previously filed with the SEC as an Exhibit to the Company's Registration Statement on Form S-4 (File No. 333-83567) and incorporated herein by reference)

3.16

 

Certificate of Incorporation of Des Moines Gaming Company/Argosy of Iowa, Inc. (previously filed with the SEC as an Exhibit to the Company's Annual Report on Form 10-K for the year ended December 31, 2000 (File No. 1-11853) and incorporated herein by reference)

3.17

 

By-laws of Des Moines Gaming Company/Argosy of Iowa, Inc. (previously filed with the SEC as an Exhibit to the Company's Annual Report on Form 10-K for the year ended December 31, 2000 (File No. 1-11853) and incorporated herein by reference)

3.18

 

Articles of Organization of Centroplex Centre Convention Hotel, L.L.P. (previously filed with the SEC as an Exhibit to the Company's Annual Report on Form 10-K for the year ended December 31, 2000 (File No. 1-11853) and incorporated herein by reference)

3.19

 

Amended and Restated Agreement of Limited Partnership of Belle of Sioux City, L.P

3.20†

 

Third Amended and Restated Agreement of Limited Partnership of Indiana Gaming Company, L.P.

3.21

 

Agreement of Limited Partnership of Indiana Gaming II, L.P.

3.22

 

Certificate of Incorporation of Indiana Gaming Holding Company

3.23

 

By-laws of Indiana Gaming Holding Company

4.1

 

Form of the Company's 103/4% Senior Subordinated Notes due 2009 (included in Exhibit 4.2)

4.2

 

Indenture, dated as of June 8, 1999, by and among the Company, Bank One Trust Company, NA, as Trustee, and the Subsidiary Guarantors named therein, for the Company's 103/4% Senior Subordinated Notes due 2009 (previously filed with the SEC as an Exhibit to the Company's Registration Statement on Form S-4 (File No. 333-83567) and incorporated herein by reference)

4.3

 

First Supplemental Indenture, dated as of February 8, 2001, by and among the Company, Bank One Trust Company, NA, as Trustee, and the Subsidiary Guarantors named therein for the Company's 103/4% Senior Subordinated Notes due 2009 (previously filed with the SEC as an Exhibit to the Company's Annual Report on Form 10-K for the year ended December 31, 2000 (File No. 1-11853) and incorporated herein by reference)

4.4

 

Second Supplemental Indenture, dated as of March 2, 2001, by and among the Company, Bank One Trust Company, NA, as Trustee, and the Subsidiary Guarantors named therein for the Company's 103/4% Senior Subordinated Notes due 2009

4.5

 

Third Supplemental Indenture, dated as of March 12, 2001, by and among the Company, Bank One Trust Company, NA, as Trustee, and the Subsidiary Guarantors named therein for the Company's 103/4% Senior Subordinated Notes due 2009


 

 


4.6

 

Registration Rights Agreement, dated as of February 8, 2001, by and among the Company, Morgan Stanley & Co. Incorporated, Banc of America Securities LLC and Wells Fargo Brokerage Services, LLC

5.1

 

Opinion of Winston & Strawn

12.1

 

Computation of Ratios of Earnings to Fixed Charges

23.1

 

Consent of Ernst & Young LLP

23.2

 

Consent of Winston & Strawn (included in Exhibit 5.1)

24.1

 

Powers of Attorney

25.1

 

Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of Bank One Trust Company, NA, relating to the Indenture and the issuance of the Company's 103/4% Senior Subordinated Notes due 2009

99.1

 

Form of Letter of Transmittal

99.2

 

Form of Notice of Guaranteed Delivery

99.3

 

Form of Instruction to Registered Holder and/or Depository Trust Company Participant from Beneficial Owner

To be filed by amendment.



QuickLinks

TABLE OF CONTENTS
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
WHERE YOU CAN FIND MORE INFORMATION
INCORPORATION OF DOCUMENTS BY REFERENCE
SUMMARY
THE COMPANY
RECENT DEVELOPMENTS
SUMMARY OF THE EXCHANGE OFFER
SUMMARY OF THE REGISTERED NOTES
SUMMARY CONSOLIDATED FINANCIAL DATA
SUMMARY OPERATING DATA
RISK FACTORS
CAPITALIZATION
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
PRO FORMA CONSOLIDATED FINANCIAL DATA
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THE EXCHANGE OFFER
THE COMPANY
MANAGEMENT
DESCRIPTION OF CERTAIN INDEBTEDNESS
DESCRIPTION OF NOTES
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
PLAN OF DISTRIBUTION
LEGAL MATTERS
EXPERTS
INDEX TO FINANCIAL STATEMENTS
REPORT OF INDEPENDENT AUDITORS
ARGOSY GAMING COMPANY CONSOLIDATED BALANCE SHEETS (In thousands except share and per share data)
ARGOSY GAMING COMPANY CONSOLIDATED STATEMENTS OF INCOME (In thousands except share and per share data)
ARGOSY GAMING COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands except share and per share data)
ARGOSY GAMING COMPANY CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (In thousands except share and per share data)
ARGOSY GAMING COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands except share and per share data)
PART II INFORMATION NOT REQUIRED IN PROSPECTUS
SIGNATURES
EXHIBIT INDEX