PayPal, Inc. is pleased to announce that we are preparing to open a new regional headquarters, PayPal Private Limited, a PayPal group company incorporated in Singapore. These headquarters will be the service provider for PayPal customers outside the United States and the European Union. Going forward, this development will help us improve services for our customers worldwide.

Please note that no action will be necessary on your part. You will be able to continue using your PayPal account as you do today.

Your Existing Customer Relationship with PayPal

Until August 1, 2006, your customer relationship will continue to be with PayPal, Inc. (a U.S. company) under the PayPal User Agreement, which is governed by California law.

A New Customer Relationship with PayPal

With the opening of our new regional headquarters, your customer relationship will automatically be transferred to PayPal Private Limited. We anticipate that this will occur on August 1, 2006. At that time, we will introduce minor changes to the User Agreement and its incorporated policies, and to the Privacy Policy. The new User Agreement will be similar to the current Agreement, and will contain no adverse amendments from a customer's perspective. It will also no longer contain U.S.-specific references, and it will be modified to comply with Singaporean payment services requirements.

If you do not wish to hold a PayPal Private Limited account and would prefer to retain your relationship with PayPal, Inc., you may only do so if you are a resident of the United States, and if the primary address on your PayPal account as of August 1, 2006 is a legitimate postal address within the United States.

If your primary address is not in the United States, you may close your account at any time, either before or after the transition to PayPal Private Limited, by logging in to your PayPal account and clicking Profile. We value your business and hope you'll transfer with us to PayPal Private Limited, where you'll be able to use PayPal in the same way you do today.

Once the transition from PayPal, Inc. to PayPal Private Limited occurs, we will post updated versions of our User Agreement and its incorporated policies, as well as our Privacy Policy, to our website.

If you have any questions prior to August 1, 2006 about these upcoming changes, please contact Customer Support. You can get contact information by logging in to your PayPal account and clicking Contact Us at the bottom of your Account Overview page.

Yours sincerely,

PayPal, Inc.