Dear Webkinz Customer,

We are happy to introduce the Webkinz Foundation. The Webkinz Foundation is dedicated to improving the welfare, development, health, and safety of children. We feel very fortunate to have the opportunity to help others through our Webkinz Foundation.

To introduce the program we looked for a larger corporate partner who could assist us in raising awareness for the Webkinz Foundation and help us raise a lot of money for worthy causes. During our planning phase we decided that the correct partner and corresponding program would have to meet the following criteria:

• Be sensitive to our core customer base which is largely made up of small gift shops.
  We all want this program to help our core Webkinz business, not hurt it.
• Be able to advertise the program thereby helping draw traffic to the selected program but also to the Webkinz brand in general.
• Be a good community minded company which would represent the Webkinz Foundation well.
• Have a decision making process and corporate policy that is able to accommodate the financial vision we have for the program.

After careful consideration we have chosen to initiate this program with Walgreens. Walgreens’ commitment to community causes, coupled with their ability to promote the program and understand our core customer base, made them a perfect choice for us. We will be beginning the partnership in June with a program called Webkinz Cares™. Walgreens will be getting an extremely limited selection of our classic style Lil’ Kinz™ pets, which they will promote across the United States. These pets carry an additional Webkinz Cares™ hangtag. This hangtag has a special Feature Code, giving members exclusive online surprises in Webkinz World.

We will kick off the Webkinz Cares™ program with one style of Lil’ Kinz pet. All advertising, promotions and most of the actual sales will be surrounding HS011 -- our Lil’ Kinz Cocker Spaniel. There will also be a very limited amount of two other styles of Lil’ Kinz pets, largely for presentation purposes. We will continue a limited monthly rollout of our classic styles in a similar manner as described above. This will effectively distinguish this program from our core customer base which usually carries a wide selection of new and classic Webkinz and Lil’ Kinz styles.

We want to make this a great program for the kids as well as the Webkinz Foundation. The retail price for this Lil’ Kinz pet will be $6.99 with $1.00 going to the Webkinz Foundation. To help kick off the program, Walgreens will have a June 1st one-week only introductory price of $5.99 with $1.00 going to the Webkinz Foundation. Quantities will be limited and will only be available while supplies last.

We are confident our Webkinz Cares™ program will be a huge success, enabling us to fund a number of worthwhile causes through the Webkinz Foundation, while helping promote the Webkinz brand.