Clear Channel Outdoor Holdings (CCO)

Ranking

The payment of the principal of, premium, if any, and interest on the 2017 B Notes by the Issuer will rank pari passu in right of payment to all unsubordinated Indebtedness of the Issuer, including the 2017 A Notes.

The payment of any Guarantee of the 2017 B Notes will rank pari passu in right of payment to all unsubordinated indebtedness of the relevant Guarantor, including, the guarantee by such Guarantor of the 2017 A Notes and, in the case of (i) CCO, payment of the CCU Intercompany Note and (ii) the Company, the Company’s Obligations under the CCOH Mirror Note.

Each Guarantor’s obligations under its Guarantee of the 2017 B Notes will be effectively subordinated to the obligations of the Guarantor under its Secured Indebtedness to the extent of the value of the assets securing such Indebtedness.

At September 30, 2009, on a pro forma basis after giving effect to the Transactions,

(1) the Company and its Subsidiaries would have had $2.6 billion of Pari Passu Indebtedness outstanding (including the 2017 B Notes, the 2017 A Notes, $1.8 billion under the CCU

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Intercompany Note and $30 million borrowed and outstanding under the Senior Credit Facilities, but excluding an additional $120 million capacity under the Senior Credit Facilities (available to the extent CCU has not already borrowed against this facility and reduced the availability thereunder and is in compliance with its covenants under the Senior Credit Facilities; on February 6, 2009, CCU borrowed the remaining $120 million capacity under the Senior Credit Facilities), of which $31 million would have been Secured Indebtedness; and

(2) the Company and the Guarantors would not have had any Subordinated Indebtedness outstanding.

The 2017 B Notes will be effectively subordinated to all of the existing and future Secured Indebtedness of the Issuer and each Guarantor to the extent of the value of the assets securing such Indebtedness.

Although the 2017 B Indenture will limit the incurrence of Indebtedness by the Company and its Restricted Subsidiaries and the issuance of Disqualified Stock and Preferred Stock by the Restricted Subsidiaries, such limitations are subject to a number of significant qualifications and exceptions. Under certain circumstances, the Company and its Subsidiaries may be able to incur substantial amounts of Indebtedness and such Indebtedness may be Secured Indebtedness. See “Certain Covenants in the 2017 B Indenture—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock” and “Certain Covenants in the 2017 B Indenture—Liens.”

Substantially all of the operations of the Issuer are conducted through its Subsidiaries, most of which are Foreign Subsidiaries of the Issuer who will not Guarantee the 2017 B Notes. In addition, substantially all of the operations of the Company are conducted through its Subsidiaries. Unless a Subsidiary is a Guarantor, claims of creditors of such Subsidiary, including trade creditors, and claims of preferred stockholders (if any) of such Subsidiary generally will have priority with respect to the assets and earnings of such Subsidiary over the claims of creditors of the Issuer, including Holders. The 2017 B Notes, therefore, will be effectively subordinated to creditors (including trade creditors) and preferred stockholders (if any) of Subsidiaries of the Company that are not Guarantors. The Company’s Subsidiaries that are not Guarantors had $911 million of total liabilities outstanding as of September 30, 2009, of which $841 million were obligations of Subsidiaries of the Issuer.

See “Risk Factors—Risks Related to the Notes and the Offering.”