WF&G Draft: 8-15-06

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

Filed by the Registrant[ ]

Filed by a Party other than the Registrant[x]

Check the appropriate box:

[x] Preliminary Proxy Statement

[ ] Confidential for use of the Commission Only (as permitted by Rule
14a-6(e)(2))

[ ] Definitive Proxy Statement

[ ] Definitive Additional Materials

[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or
ss. 240.14a-12

CELEBRATE EXPRESS, INC.
-----------------------
(Name of Registrant as Specified In Its Charter)

The Celebrate Express Shareholder Value Committee
Spencer Capital Management, LLC
Spencer Capital Opportunity Fund, LP
Spencer Capital Partners, LLC
Spencer Capital Offshore Opportunity Fund, Ltd.
Spencer Capital Offshore Partners, LLC
Thesis Capital Management, LLC
Thesis Capital, LP
Thesis Capital Master Fund Limited
Kenneth H. Shubin Stein, MD, CFA
Stephen Roseman, CFA

------------------------------------------
(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):

[x] No fee required

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1) Title of each class of securities to which transaction applies:

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2) Aggregate number of securities to which transaction applies:

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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

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4) Proposed maximum aggregate value of transaction:

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[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

1) Amount Previously Paid:

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2) Form, Schedule or Registration Statement No.:

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3) Filing Party:

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4) Date Filed:

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CELEBRATE EXPRESS, INC.

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MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER __, 2006

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PROXY STATEMENT OF

THE CELEBRATE EXPRESS SHAREHOLDER VALUE COMMITTEE, SPENCER
CAPITAL MANAGEMENT, LLC, SPENCER CAPITAL OPPORTUNITY FUND, LP,
SPENCER CAPITAL PARTNERS, LLC, SPENCER CAPITAL OFFSHORE
OPPORTUNITY FUND, LTD., SPENCER CAPITAL OFFSHORE PARTNERS, LLC,
THESIS CAPITAL MANAGEMENT, LLC, THESIS CAPITAL, LP, THESIS
CAPITAL MASTER FUND LIMITED, KENNETH H. SHUBIN STEIN, MD, CFA
AND STEPHEN ROSEMAN, CFA

IN OPPOSITION TO THE BOARD OF DIRECTORS OF CELEBRATE EXPRESS, INC.

August ___, 2006

To Our Fellow Celebrate Express Shareholders:

We are furnishing this Proxy Statement to holders of the common stock, par
value $0.001 per share ("Common Stock"), of Celebrate Express, Inc., a
Washington corporation (the "Company"), in connection with our solicitation of
proxies for use at the 2006 Annual Meeting of Shareholders of the Company and at
any and all adjournments or postponements thereof (the "Annual Meeting"). The
Company has stated that the Annual Meeting will be held at
________________________________, on October __, 2006, at ________ local time,
and the board of directors of the Company (the "Board of Directors" or "Board")
has fixed August __, 2006, as the record date for determining the shareholders
entitled to receive notice of and to vote at the Annual Meeting. This Proxy
Statement is first being sent or given to shareholders on or about August __,
2006.

This solicitation is being conducted by The Celebrate Express Shareholder
Value Committee (the "Shareholder Value Committee") which consists of Spencer
Capital Management, LLC ("SCM"), Spencer Capital Opportunity Fund, LP ("SCF"),
Spencer Capital Partners, LLC ("SCP"), Spencer Capital Offshore Opportunity
Fund, Ltd. ("SCOF"), Spencer Capital Offshore Partners, LLC ("SCOP"), Thesis
Capital Management, LLC ("TCM"), Thesis Capital, LP ("TC"), Thesis Capital
Master Fund Limited ("TCMF") and Kenneth H. Shubin Stein, MD, CFA ("Dr. Shubin
Stein") and Stephen Roseman, CFA ("Mr. Roseman"). The members of the Shareholder
Value Committee collectively beneficially own 1,495,396 shares of Common Stock,
or approximately 19.2% of the outstanding Common Stock based on the number of
shares reported by the Company as outstanding as of March 31, 2006. This 19.2%
of the outstanding Common Stock is owned by the members of the Shareholder Value
Committee as follows: Dr. Shubin Stein and SCM beneficially own 1,200,697
shares, or 15.5%, of which SCF and SCP beneficially own 718,995 shares, or 9.3%,
and SCOF and SCOP beneficially own 481,702 shares, or 6.2%; and Mr. Roseman and
TCM beneficially own 294,699 shares, or 3.8%, of which TC beneficially owns
54,008 shares, or 0.7%, and TCMF beneficially owns 240,691 shares, or 3.1%.

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As more fully discussed below, we are soliciting proxies to be used at the
Annual Meeting for the following actions:

(1) The election of Dr. Shubin Stein, Mr. Roseman and Mr. Matthew C.
Diamond as directors of the Company (collectively, the "Shareholder
Value Committee Nominees"); and

(2) To ratify the appointment of Grant Thornton LLP as the Company's
independent registered public accounting firm for the fiscal year
ending December 31, 2006.

Based on the Company's filings under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), the Shareholder Value Committee believes that
the Board consists of seven directors, with one Board seat vacant. At the Annual
Meeting, the terms of two of the Company's directors will expire. In addition,
because Kevin Green was recently added to the Board to fill one of two Board
vacancies that existed at the time, Mr. Green will be required to stand for
re-election to the Board at the Annual Meeting in accordance with the Washington
Business Corporation Act and the Company's bylaws. If the Company chooses to
fill the remaining vacancy on the Board prior to or at the Annual Meeting, or if
additional directors are otherwise to be elected at the Annual Meeting (whether
by virtue of an expansion of the Board or otherwise), the Filers intend to
nominate a candidate for any such additional director to be elected at the
Annual Meeting. The Shareholder Value Committee may, under the circumstances
described in this Proxy Statement under the caption "REASONS FOR THIS
SOLICITATION" and "MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING," nominate
additional individuals to serve as directors of the Company.

We urge you to elect the Shareholder Value Committee Nominees to the Board
of Directors because we strongly believe that the Board of Directors should
immediately commence consideration of strategic alternatives available to it,
including a possible sale of the Company. In addition, we believe that election
of new members to the Board would be beneficial to the Company and its
shareholders. Among other things, electing the Shareholder Value Committee
Nominees should provide a new voice and fresh perspective on the Board. We
believe that the Board of Directors should include representatives of
significant shareholders who can present shareholders' perspective on management
direction and generally bring focus to the maximization of value for the benefit
of shareholders. Accordingly, we urge you to sign and date the WHITE proxy card
supplied by the Shareholder Value Committee and return it in the enclosed
postage-paid envelope whether or not you attend the meeting in order to vote (A)
"FOR" the election of Kenneth H. Shubin Stein, Stephen Roseman and Matthew C.
Diamond to the Board of Directors, and (B) "FOR" the ratification of Grant
Thornton LLP as the Company's independent registered public accounting firm for
the fiscal year ending December 31, 2006.

If your shares are held in the name of a brokerage firm, bank or nominee,
only that entity can vote such shares and only upon receipt of your specific
instruction. Accordingly, we urge you to contact the person responsible for your
account and instruct that person to execute the WHITE proxy card on your behalf.

YOUR VOTE IS IMPORTANT. If you agree with the reasons for the Shareholder
Value Committee's solicitation set forth in this Proxy Statement and believe
that the election of the Shareholder Value Committee Nominees to the Board of
Directors can make a difference, please vote for the election of the Shareholder
Value Committee Nominees, no matter how many or how few shares you own.

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THE SHAREHOLDER VALUE COMMITTEE URGES YOU NOT TO SIGN ANY PROXY CARD THAT
IS SENT TO YOU BY THE COMPANY, EVEN AS A FORM OF PROTEST. By executing the WHITE
proxy card, you will authorize us to vote FOR the election of the three
Shareholder Value Committee Nominees. If you have already signed a proxy card
sent to you by the Company, you may revoke that proxy at any time prior to the
time a vote is taken by (i) submitting a duly executed proxy bearing a later
date to the Secretary of the Company, (ii) filing with the Secretary of the
Company a later dated written revocation or (iii) attending and voting at the
Annual Meeting in person.

Thank you for your support.

On behalf of the Shareholder Value Committee,

Sincerely,

Kenneth H. Shubin Stein Stephen Roseman

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IF YOU HAVE ANY QUESTIONS, REQUIRE ASSISTANCE IN VOTING THE WHITE PROXY
CARD
OR NEED ADDITIONAL COPIES OF OUR PROXY MATERIALS, PLEASE CALL OUR PROXY
SOLICITOR:

D.F. KING & CO., INC.

48 Wall Street
New York, NY 10005
Toll Free: 1 (800) 735-3591
Banks and Brokers Call Collect: (212) 269-5550

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GENERAL

Based on the Company's filings under the Exchange Act, the Shareholder
Value Committee believes that the Board consists of seven directors, with one
Board seat vacant. At the Annual Meeting, the terms of two of the Company's
directors will expire. In addition, because Kevin Green was recently added to
the Board to fill one of two Board vacancies that existed at the time, Mr. Green
will be required to stand for re-election to the Board at the Annual Meeting in
accordance with the Washington Business Corporation Act and the Company's
bylaws. If the Company chooses to fill the remaining vacancy on the Board prior
to or at the Annual Meeting, or if additional directors are otherwise to be
elected at the Annual Meeting (whether by virtue of an expansion of the Board or
otherwise), the Filers intend to nominate a candidate for any such additional
director to be elected at the Annual Meeting.

We are currently seeking your proxy for the election to the Board of
Directors of three individuals - Dr. Kenneth H. Shubin Stein, Mr. Stephen
Roseman and Mr. Matthew C. Diamond. Under the circumstances described above, we
may seek your proxy for the election of additional individuals to the Board of
Directors in addition to the Shareholder Value Committee Nominees.

For information concerning voting procedures at the Annual Meeting, see
"Voting and Proxy Procedures."

BACKGROUND OF THIS SOLICITATION

On June 22, 2006, Dr. Shubin Stein and SCM publicly disclosed in a Schedule
13D filing with the United States Securities and Exchange Commission (the "SEC")
that they had acquired beneficial ownership of 13.4% of the Common Stock through
purchases of shares on behalf of SCF and SCOF. Subsequently, on June 26, 2006,
Dr. Shubin Stein and Mr. Roseman met with representatives of the Company to
discuss with the Company their respective interests in the Company. At the
meeting, Dr. Shubin Stein requested that SCM be given representation on the
Board of Directors, and following the meeting the Company requested, as an
initial step, that Dr. Shubin Stein provide to the Company, for each of SCM's
nominees, all of the information required of a nominee by the SEC's proxy rules,
together with additional biographical information and a statement as to the
qualifications of each nominee.

On June 29, 2006, Dr. Shubin Stein and Mr. Roseman agreed to jointly
propose Dr. Shubin Stein and Mr. Roseman as nominees for appointment or election
to the Board of Directors. Subsequent to this decision to act together to obtain
representation on the Board, Dr. Shubin Stein and Mr. Roseman had conversations
with members of the Board about the possibility of obtaining Board
representation. The Company promptly rejected the proposal that both Dr. Shubin
Stein and Mr. Roseman be added to the Board but stated that it would consider
providing a single Board seat for Dr. Shubin Stein.

In the interest of obtaining Board representation without resorting to an
election contest, Dr. Shubin Stein and Mr. Roseman pursued the possibility, as
suggested by the Company, that only Dr. Shubin Stein might be added to the Board
of Directors. However, during the course of the ensuing discussions between Dr.
Shubin Stein and the Company, the Board took a number of unilateral steps that
the Shareholder Value Committee believes were directly aimed at limiting
shareholders' rights and therefore are not in the best interests of the
Company's shareholders:

o On July 11, 2006, the Company disclosed that the Board had adopted a
bylaw amendment requiring shareholders wishing to propose Board
nominees at the Annual Meeting to provide to the Company a substantial
body of information no later than Sunday, August 4, 2006. Any failure
to provide all of this information by the Board's

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deadline could result in an inability to propose the nominees at the
Annual Meeting. In addition, the bylaw amendment requires any person
wishing to propose Board nominees at the Annual Meeting to divulge to
the Company the extent of his intended solicitation activities and
prohibits a solicitation that does not conform to that intent, even if
the person soliciting changes his mind in good faith due to changed
circumstances.

o On July 19, 2006, the Board amended the Company's bylaws to make it
harder for shareholders to amend the bylaws by increasing the approval
requirement from a majority to 66-2/3% of the outstanding Common
Stock. The power of the Board to amend the bylaws by majority vote
remained unchanged.

o Also on July 19, 2006, the Board amended the Company's bylaws to
eliminate the right of a director to call a special meeting of the
Board. The effect of this bylaw amendment, adopted while Dr. Shubin
Stein was discussing with the Company the possibility of joining the
Board, would be to deny Dr. Shubin Stein or any other Shareholder
Value Committee Nominee the right to call special Board meetings to
discuss matters of importance to the Company's shareholders.

o On July 25, 2006, the Board implemented a poison pill. Among other
things, the Company's poison pill effectively prevents other
significant shareholders from joining the Shareholder Value Committee
and working in concert with it in connection with the shareholder vote
at the Annual Meeting. As such, the poison pill, implemented in the
face of a possible election contest, works to entrench incumbent
directors by limiting democratic shareholder efforts to unseat
directors at the Annual Meeting.

In late July 2006, with the early-August deadline looming for submitting a
nomination notice under the Board's bylaw amendment that had only been announced
on July 11, 2006, Dr. Shubin Stein was advised by a member of the Board that the
Company's nominating committee would not at that time recommend him for a seat
on the Board, but would continue to consider his possible nomination to the
Board for an unspecified period of time. By this point, based principally on the
Board's handling of his and Mr. Roseman's consideration as possible Board
members and the Board's adoption of measures aimed at limiting shareholder
rights, Dr. Shubin Stein had become convinced that significant shareholders
would require even greater Board representation than he had previously requested
in order to influence the Company's strategic direction in a meaningful way.

On August 1, 2006, Dr. Shubin Stein and Mr. Roseman and their respective
affiliates formed the Shareholder Value Committee, and the Shareholder Value
Committee sent to the Company the extensive nomination notice required under the
bylaw amendment adopted by the Board and publicly disclosed by the Company just
three weeks before.

On August 7, 2006, the Shareholder Value Committee wrote a letter to the
Company's shareholders, which it issued as a press release and mailed. In the
letter, the Shareholder Value Committee wrote the following about its intentions
as to the future of the Company:

If elected, our nominees will push to establish a Board committee to
consider and pursue strategic alternatives for the Company, including a
possible sale of the Company. We believe this is a necessary step toward
maximizing value for all shareholders, and a process that should be
undertaken immediately. However, even if the Board heeds our call for an
immediate process of exploring strategic alternatives, we believe
additional shareholder representatives must be added to the Board. We think
that a strategic alternatives process would benefit greatly both

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from the input of our nominees and from the mandate that the election of
our nominees would represent. We hope you will support us in this endeavor.

Subsequent to the issuance of the Shareholder Value Committee's letter to
Company shareholders, a representative of the Board contacted Dr. Shubin Stein
to engage in discussions that could lead to a possible settlement that would
avoid an election contest. In those discussions, the Board's representative
offered Dr. Shubin Stein two seats on a Board that would consist of seven
directors and reimbursement of Dr. Shubin Stein's expenses in connection with
his efforts to obtain Board representation. Dr. Shubin Stein rejected this
proposal and on August 10, 2006 proposed instead that a settlement would
include: (1) a Board to consist of seven directors, who would be the three
Company directors not up for election at the Annual Meeting, Kevin Green, the
Company's chief executive officer, and the three Shareholder Value Committee
Nominees; (2) establishment of a committee of the Board to explore strategic
alternatives for the Company, including a possible sale of the Company, which
committee would consist of Dr. Shubin Stein (as chairman), Mr. Roseman and Keith
Crandell, one of the continuing directors; (3) elimination of the Company's
newly-adopted poison pill; and (4) reimbursement of expenses in connection with
the efforts by members of the Shareholder Value Committee to obtain Board
representation, up to a cap that was tentatively suggested to be $200,000.

REASONS FOR THIS SOLICITATION

Over the last several months, members of the Shareholder Value Committee
have had numerous discussions with Company management and Board members about
the direction of the Company. In those discussions, members of the Shareholder
Value Committee requested two Board seats in order to provide to the Board, on
an ongoing basis, perspectives that would benefit all shareholders equally.
Despite the fact that members of the Shareholder Value Committee owned almost
one-fifth of the Company's stock, this request was rejected, as was a suggestion
by a current member of the Board that the Shareholder Value Committee be given
just a single Board seat.

The Shareholder Value Committee is now convinced, particularly in light of
the Board's recent actions aimed at limiting shareholder rights, that
shareholders must have even greater Board representation than previously
requested in order to influence the Company's strategic direction in a
meaningful way. The Shareholder Value Committee is therefore soliciting in favor
of three nominees, one for each Board seat that will come up for election at the
Annual Meeting.

If elected, the Shareholder Value Committee Nominees will push to establish
a Board committee to consider and pursue strategic alternatives for the Company,
including a possible sale of the Company. The Shareholder Value Committee
believes this is a necessary step toward maximizing value for all shareholders,
and a process that should be undertaken immediately. However, even if the Board
heeds the call for an immediate process of exploring strategic alternatives, the
Shareholder Value Committee believes additional shareholder representatives must
be added to the Board because it believes that a strategic alternatives process
would benefit greatly both from the input of the Shareholder Value Committee
Nominees and from the mandate that the election of those nominees would
represent.

The Shareholder Value Committee Nominees will not constitute a majority of
the Board if they are elected and, therefore, even if they determine to vote
together on a particular measure, will not be able to adopt that measure without
the support of one or more other members of the Board. Accordingly, the
Shareholder Value Committee Nominees, if elected, will not by themselves be able
to establish a committee to pursue strategic alternatives for the Company.
However, if the Shareholder Value Committee Nominees determine to vote together
on a particular measure, they would

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represent a substantial block and, as three of six directors, could prevent the
other members of the Board from achieving a majority vote.

Under Washington corporate law, the Board of Directors is charged with the
management of the Company, including determining its strategic direction. The
Shareholder Value Committee believes, therefore, that if the Shareholder Value
Committee Nominees are elected, they would be in a position as directors of the
Company to influence the strategic direction of the Company by bringing to the
Board the perspective of a significant shareholder. As members of the Board of
Directors, the Shareholder Value Committee Nominees would be able to present
initiatives to the entire Board of Directors (including proposals relating to
the exploration of strategic alternatives), actively participate in Board
discussions and argue in support of positions that they believe would benefit
the Company's shareholders. If elected, the Shareholder Value Committee Nominees
would have greater access to Company information and management, which would
allow them to be more effective advocates in favor of these positions. The
Shareholder Value Committee Nominees believe that the other directors of the
Company will, in the discharge of their fiduciary duties under Washington law,
consider all reasonable proposals to enhance shareholder value by exploring
these proposals and acting on them if they determine that such proposals are in
the best interests of the Company's shareholders.

Depending on the responsiveness of the Board to any proposals or
initiatives presented by the Shareholder Value Committee Nominees, the
Shareholder Value Committee may seek to nominate additional directors to the
Board of Directors at the 2007 annual meeting if the Shareholder Value Committee
believes that additional representation on the Board would make their efforts
more effective.

The Shareholder Value Committee Nominees do not anticipate that they will
have any conflicts of interest with respect to the Company, if elected, and
recognize their fiduciary duty obligations to all shareholders. None of the
Shareholder Value Committee Nominees has any contract, arrangement or
understanding with the Company, and no other direct financial interest
concerning the Company, other than through the beneficial ownership of stock of
the Company by the Shareholder Value Committee members and the Shareholder Value
Committee Nominees disclosed in this Proxy Statement.

THE SHAREHOLDER VALUE COMMITTEE RECOMMENDS A VOTE FOR THE ELECTION OF THE
SHAREHOLDER VALUE COMMITTEE NOMINEES BECAUSE THEY BELIEVE THAT THE SHAREHOLDER
VALUE COMMITTEE NOMINEES WOULD CONTRIBUTE TO THE CREATION OF SHAREHOLDER VALUE.

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MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING

Proposal 1: Election of Directors

We are seeking your proxy for the election to the Board of Directors of
three individuals - Dr. Kenneth H. Shubin Stein, Stephen Roseman and Matthew C.
Diamond. Each of the Shareholder Value Committee Nominees has consented to being
named as a nominee in this Proxy Statement. The Shareholder Value Committee does
not expect that any of the Shareholder Value Committee Nominees will be unable
to stand for election, but in the event that a vacancy in the slate of
Shareholder Value Committee Nominees should occur unexpectedly, the shares of
Common Stock represented by the WHITE proxy card will be voted for a substitute
candidate selected by the Shareholder Value Committee.

If the Shareholder Value Committee determines to add nominees because the
Company increases the number of directors to be elected at the Annual Meeting
subsequent to the date of this Proxy Statement, the Shareholder Value Committee
will supplement this Proxy Statement. If, however, the Company does not leave
reasonable time before the Annual Meeting to supplement this Proxy Statement,
the Shareholder Value Committee reserves the right to nominate additional
nominees and to use the discretionary authority granted by the proxies it is
soliciting to vote for such additional nominees or to seek judicial relief.
Similarly, if the Company decreases the number of directors to be elected at the
Annual Meeting, the Shareholder Value Committee will (i) supplement this Proxy
Statement if there is a reasonable period of time to do so before the Annual
Meeting, (ii) nominate fewer nominees at the Annual Meeting and vote the WHITE
proxy cards in favor of the remaining Shareholder Value Committee Nominees,
and/or (iii) seek judicial relief.

Biographical Information Regarding the Shareholder Value Committee Nominees

The following information concerning age, principal occupation and business
experience during the last five years, and current directorships has been
furnished to the Shareholder Value Committee by the Shareholder Value Committee
Nominees, each of whom has confirmed his willingness to serve on the Board of
Directors if elected.

Kenneth H. Shubin Stein, MD, CFA, age 37, is the founder of Spencer Capital
Management, LLC, an investment management firm that serves as the investment
adviser of SCF and SCOF. Dr. Shubin Stein also serves as portfolio manager of
Columbia Avenue Capital LLC, a pooled investment vehicle. He was a portfolio
manager at Promethean Investment Group LLC from September 2001 to December 2002,
and an Orthopedic Resident at Mount Sinai Hospital from June 2000 until August
2001. He is a graduate of the Albert Einstein College of Medicine and graduated
from Columbia College with dual concentrations in Premedical Studies and
Political Science. Dr. Shubin Stein is also a holder of the Chartered Financial
Analyst Designation.

Stephen Roseman, CFA, age 36, is the founder of TCM, an investment
management firm that serves as the investment manager of TC, TCMF, Thesis
Capital Domestic, LP and Thesis Capital Offshore Limited. Prior to founding TCM,
Mr. Roseman was a Portfolio Manager at Kern Capital

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Management from 2003 to 2005, where he managed the consumer, retail, and
business services portfolio. Mr. Roseman's previous professional experience
includes OppenheimerFunds, Inc. (1997 to 2003): Senior Equity Analyst with
responsibility for investments in all of the consumer, financials, energy and
industrial sectors for the Discovery Fund; PaineWebber (1996 to 1997): Account
Executive focusing on fixed income cash management tools for corporate clients;
Sperry Van Ness (1996): Associate, Industrial Real Estate Advisory and
Brokerage. Mr. Roseman received an M.B.A. from Fordham University Graduate
School of Business Administration and a B.A. from Arizona State University. He
is also a holder of the Chartered Financial Analyst Designation. In addition to
his financial experience, Mr. Roseman has extensive operating experience in
consumer discretionary verticals including jewelry, apparel, and fine art. He
also serves on the board of the Fordham GBA Alumni Association.

Matthew C. Diamond, age 37, is the Co-founder of Alloy, Inc. ("Alloy"), a
Nasdaq listed company and a pioneer in nontraditional marketing services
targeting the young adult market, of which Mr. Diamond is now the Chairman, CEO
and Treasurer. Mr. Diamond received his MBA from the Harvard Graduate School of
Business in 1996 and his BA in International Studies and Economics from the
University of North Carolina at Chapel Hill in 1991. Prior to founding Alloy,
Mr. Diamond held positions in the Finance and Operations groups at the General
Electric Company, also spending time at the company's Tokyo, Japan offices (from
1992 to 1994). Additionally, since 2001 Mr. Diamond is a board member of
Genesco, Inc., a NYSE listed and Nashville-based specialty retailer, as well as
Chairman of Genesco's Compensation Committee and a member of the Finance
Committee. Mr. Diamond has also agreed to serve as a board member of Do
Something Inc., a New York City based non-profit, beginning in October 2006.

If elected, each Shareholder Value Committee Nominee would receive such
directors' fees as may be payable by the Company in accordance with its practice
at the time. Except as described below, there are no understandings or
arrangements between the Shareholder Value Committee Nominees or any other
person pursuant to which the nominations are to be made by the Shareholder Value
Committee.

Dr. Shubin Stein has contractual rights to indemnification from SCM and
certain related entities, including SCF and SCOF. SCM and certain related
entities, including SCF and SCOF, may reimburse the reasonable expenses of Dr.
Shubin Stein incurred as a Shareholder Value Committee Nominee.

Mr. Roseman has contractual rights to indemnification from TCM and certain
related entities, including TC and TCMF. TCM and certain related entities,
including TC and TCF, may reimburse the reasonable expenses of Mr. Roseman
incurred as a Shareholder Value Committee Nominee.

SCM, SCF, SCP, SCOF, SCOP, TCM, TC and TCMF (together, the "Indemnitors")
will jointly and severally indemnify Mr. Diamond, to the extent he is not
indemnified by the Company, to the fullest extent permitted by law, with respect
to all fees and expenses incurred in connection with claims arising out of or
relating to his running for election to, or serving on, the Company's Board of
Directors and losses or damages resulting from any such claims. The Indemnitors
have agreed to advance all expenses incurred by Mr. Diamond.

Additional information concerning the participants (as such term is defined
in Instruction 3 to Item 4 of Schedule 14A under the Securities Exchange Act) in
this solicitation is set forth in Appendix A to this Proxy Statement.

Proposal 2: Ratification of Appointment of Grant Thornton

[According to the Company Proxy Statement, the Company is soliciting
proxies for the ratification of the appointment of Grant Thornton LLP as the
Company's independent registered public

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accounting firm for the fiscal year ending May 31, 2007. Please refer to the
Company Proxy Statement for a detailed discussion of this proposal, including
various arguments in favor of and against such proposal.] We urge you to vote on
the WHITE proxy card FOR the ratification of the appointment of Grant Thornton
LLP as the Company's independent registered public accounting firm for the
fiscal year ending May 31, 2007. If you do not indicate any voting instruction,
we will vote the WHITE proxy card FOR this proposal.

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INFORMATION ABOUT THE SHAREHOLDER VALUE COMMITTEE

Dr. Shubin Stein is the controlling person of SCM, SCF, SCP, SCOF and SCOP
and a portfolio manager for certain investment funds. SCM, a Delaware limited
liability company ("SCM"), is an investment management firm and is the
investment adviser of SCF and SCOF. SCF, a Delaware limited partnership, is a
Delaware private investment partnership. SCP, a Delaware limited liability
company, serves as the general partner of SCF. SCOF is a Cayman Islands exempted
company which invests in securities. SCOP, a Delaware limited liability company,
serves as the management company of SCOF.

Dr. Shubin Stein's business address is 1995 Broadway, Suite 1801, New York,
New York 10023. The address of SCM, SCF, SCP and SCOP's principal business and
principal office is 1995 Broadway, Suite 1801, New York, New York 10023. The
address of SCOF's principal business and principal office is c/o Walkers SPV
Ltd., P.O. Box 908 GT, Walkers House, Mary Street, George Town, Cayman Islands.

Mr. Roseman is the sole Manager of both TCM and Thesis Capital Advisors,
LLC, a Delaware limited liability company which is the general partner of TC.
TCM is an investment management firm and is the investment manager of TC and
TCMF. TC is a private investment partnership managed by TCM. TCMF is a Cayman
Islands exempted company which invests in securities and is managed by TCM.
TCMF's investors include Thesis Capital Domestic, LP, a Delaware limited
partnership, and Thesis Capital Offshore Limited, a Cayman Islands exempted
company, both managed by TCM.

Mr. Roseman's business address is 60 E. 42nd St., Suite 1245, The Lincoln
Building, New York, NY 10165. The address of TCM and TC's principal business and
principal office is 60 E. 42nd St., Suite 1245, The Lincoln Building, New York,
NY 10165. The address of TCMF's principal business and principal offices is c/o
Goldman Sachs (Cayman) Trust, 2nd Floor, Harbour Centre, P.O. Box 896 GT, Grand
Cayman, Cayman Islands.

In the aggregate, the members of the Shareholder Value Committee
beneficially own 1,495,396 shares of Common Stock, representing approximately
19.2% of the 7,759,821 shares of Common Stock were outstanding as of March 31,
2006, as represented by the Company in its Quarterly Report on Form 10-Q filed
with the SEC on April 13, 2006.

Additional information concerning transactions in securities of the Company
effected during the past two years by the Shareholder Value Committee members
and the Shareholder Value Committee Nominees is set forth in Appendix C to this
Proxy Statement.

SOLICITATION; EXPENSES

Proxies may be solicited by mail, advertisement, telephone, facsimile,
telegraph, email and personal solicitation by the Shareholder Value Committee
and by the Shareholder Value Committee Nominees. No additional compensation will
be paid to the Shareholder Value Committee or to the Shareholder Value Committee
Nominees for the solicitation of proxies. Banks, brokerage houses and other
custodians, nominees and fiduciaries will be requested to forward the
Shareholder Value Committee's solicitation material to their customers for whom
they hold shares, and the Shareholder Value Committee will reimburse them for
their reasonable out-of-pocket expenses.

On behalf of the Shareholder Value Committee, SCM has retained D.F. King &
Co., Inc. ("D.F. King") to assist in the solicitation of proxies and to act as
an advisor and consultant in connection with the solicitation of proxies. The
Shareholder Value Committee will pay D.F. King an estimated fee of up to $75,000
and $5 for each completed telephone contact in connection with the solicitation
and have agreed to reimburse it for its reasonable out-of-pocket expenses.
Approximately 30 to 50 persons will be used by

-11-

D.F. King in its solicitation efforts. Pursuant to the terms of the agreement
with D.F. King, SCM will indemnify D.F. King and its officers, directors and
employees, from any and all losses incurred by D.F. King in connection with the
solicitation of the proxies for the Annual Meeting.

The entire expense of preparing, assembling, printing and mailing this
Proxy Statement and related materials and the cost of soliciting proxies will be
borne by the Shareholder Value Committee. The members of the Shareholder Value
Committee have agreed that these expenses will be borne by the investment funds
that directly hold shares of Common Stock, proportionately in relation to their
respective Common Stock holdings.

The Shareholder Value Committee estimates that the total expenditures
relating to its proxy solicitation incurred by the Shareholder Value Committee
will be approximately $500,000, approximately $125,000 of which has been
incurred to date.

VOTING AND PROXY PROCEDURES

The Shareholder Value Committee believes that it is in the best interest of
the Company's shareholders to elect the Shareholder Value Committee Nominees at
the Annual Meeting. We believe that the Board of Directors should include
representatives of significant shareholders who can present shareholders'
perspective on management direction and bring focus to the maximization of value
for the benefit of shareholders. There can be no assurance that the election of
the Shareholder Value Committee Nominees will maximize shareholder value. THE
SHAREHOLDER VALUE COMMITTEE RECOMMENDS A VOTE FOR THE ELECTION OF THE
SHAREHOLDER VALUE COMMITTEE NOMINEES BECAUSE THE SHAREHOLDER VALUE COMMITTEE
BELIEVES THAT THE SHAREHOLDER VALUE COMMITTEE NOMINEES WOULD CONTRIBUTE TO THE
CREATION OF SHAREHOLDER VALUE.

How do I vote by proxy?

For the proxy solicited hereby to be voted, the WHITE proxy card to be
supplied by the Shareholder Value Committee Nominees must be signed, dated and
returned to the Shareholder Value Committee Nominees, c/o D.F. King in the
enclosed postage-paid envelope in time to be voted at the Annual Meeting. If you
wish to vote for the Shareholder Value Committee Nominees, you must submit the
WHITE proxy card supplied by the Shareholder Value Committee and must NOT submit
the Company's proxy card.

What if I am not the record holder of my shares?

If I plan to attend the Annual Meeting, should I still submit a WHITE proxy?

Whether or not you plan to attend the Annual Meeting, we urge you to submit
a WHITE proxy. Returning the enclosed proxy card will not affect your right to
attend and vote at the Annual Meeting.

What if I want to revoke my proxy?

-12-

Any proxy may be revoked as to all matters covered thereby at any time
prior to the time a vote is taken by (i) submitting a duly executed proxy
bearing a later date to the Secretary of the Company, (ii) filing with the
Secretary of the Company a later dated written revocation or (iii) attending and
voting at the Annual Meeting in person. Attendance at the Annual Meeting will
not in and of itself constitute a revocation.

What should I do if I receive a proxy card solicited by the Company?

If you submit a proxy to us by signing and returning the enclosed WHITE
proxy card, do not sign or return the proxy card solicited by the Company or
follow any voting instructions provided by the Company unless you intend to
change your vote, because only your latest-dated proxy will be counted.

If you have already sent a proxy card to the Company, you may revoke it and
provide your support to the Shareholder Value Committee Nominees by signing,
dating and returning the enclosed WHITE proxy card.

Who can vote?

The Board of Directors has established August __, 2006 as the record date
for the Annual Meeting (the "Record Date"). Only holders of record of Common
Stock on the Record Date will be entitled to vote at the Annual Meeting. If you
are a shareholder of record on the Record Date, you will retain the voting,
rights in connection with the Annual Meeting even if you sell such shares after
the Record Date. Accordingly, it is important that you vote the shares of Common
Stock held by you on the Record Date, or grant a proxy to vote such shares on
the WHITE proxy card, even if you sell such shares after such date.

What is the required quorum?

According to the Company's bylaws, the holders of a majority of shares
of Common Stock entitled to vote at the Annual Meeting, present in person or by
proxy, constitute a quorum.

What vote is required to elect the Shareholder Value Committee Nominees?

Based on the Company Proxy Statement:

o the three nominees receiving the highest number of affirmative votes
at the Annual Meeting will be elected to the Board of Directors; and

o abstentions and broker non-votes will be counted as "present" when
determining whether there is a quorum, but will not be counted toward
a nominee's attainment of a plurality.

How will my shares be voted?

Shares of Common Stock represented by a valid, unrevoked WHITE proxy card
will be voted in accordance with the recommendations made in this Proxy
Statement unless you otherwise indicate on the proxy card. Except as set forth
in this Proxy Statement, the Shareholder Value Committee is not aware of any
other matter to be considered at the Annual Meeting. However, if the Shareholder
Value Committee learns of any other proposals made at a reasonable time before
the Annual Meeting, the Shareholder Value Committee will either supplement this
Proxy Statement and provide an opportunity to shareholders to vote by proxy
directly on such matter or will not exercise discretionary authority with
respect thereto.

-13-

If other proposals are made thereafter, the persons named as proxies on the
WHITE proxy card solicited by the Shareholder Value Committee will vote such
proxies in their discretion.

INFORMATION ABOUT THE COMPANY

Based upon documents publicly filed by the Company, the mailing address of
the principal executive offices of the Company is 11220 120th Ave. NE, Kirkland,
WA 98033.

Appendix B to this Proxy Statement sets forth information obtained from the
Company's public filings related to the beneficial ownership of shares of Common
Stock.

Except as otherwise noted herein, the information in this Proxy Statement
concerning the Company has been taken from or is based upon documents and
records on file with the SEC and other publicly available information. Although
the Shareholder Value Committee does not have any knowledge indicating that any
statement contained herein is untrue, we do not take any responsibility, except
to the extent imposed by law, for the accuracy or completeness of statements
taken from public documents and records that were not prepared by or on behalf
of the Shareholder Value Committee, or for any failure by the Company to
disclose events that may affect the significance or accuracy of such
information.

OTHER MATTERS

Except as set forth in this Proxy Statement, the Shareholder Value
Committee is not aware of any other matter to be considered at the Annual
Meeting. However, if the Shareholder Value Committee learns of any other
proposals made at a reasonable time before the Annual Meeting, the Shareholder
Value Committee will either supplement this Proxy Statement and provide an
opportunity to shareholders to vote by proxy directly on such matter or will not
exercise discretionary authority with respect thereto. If other proposals are
made thereafter, the persons named as proxies on the WHITE proxy card solicited
by the Shareholder Value Committee will vote such proxies in their discretion.

August __, 2006

-14-

Appendix A

INFORMATION CONCERNING PARTICIPANTS IN THE PROXY SOLICITATION

The following sets forth the name, business address, and the number of
shares of Common Stock of the Company beneficially owned (as determined in
accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) as of August __, 2006 by each of (i) the Shareholder Value
Committee members and (ii) the Shareholder Value Committee Nominees:

Class, Number of
Shares of Capital
Stock Beneficially
Owned and Nature of
Name and Address of Beneficial Owner Beneficial Ownership Percent of Class(1)
- ------------------------------------ -------------------- -------------------

The Celebrate Express Shareholder Common Stock
Value Committee 0(2) 0.0%

Kenneth H. Shubin Stein, MD, CFA Common Stock
c/o Spencer Capital Management, LLC 1,200,697(3)(4)(12) 15.5%
1995 Broadway, Suite 1801
New York, New York 10023

Spencer Capital Management, LLC Common Stock
1995 Broadway, Suite 1801 1,200,697(3)(5)(12) 15.5%
New York, New York 10023

Spencer Capital Opportunity Fund, LP Common Stock
1995 Broadway, Suite 1801 718,995(3)(6)(12) 9.3%
New York, New York 10023

Spencer Capital Partners, LLC Common Stock
1995 Broadway, Suite 1801 718,995(3)(6)(12) 9.3%
New York, New York 10023

Spencer Capital Offshore Opportunity Common Stock
Fund, Ltd. 481,702(3)(7)(12) 6.2%
c/o Walkers SPV Ltd.
P.O. Box 908GT
Walkers House
Mary Street
George Town, Cayman Islands

Spencer Capital Offshore Partners, LLC Common Stock
1995 Broadway, Suite 1801 481,702(3)(7)(12) 6.2%

A-1

Matthew C. Diamond Common Stock
151 West 26th St., 11th Floor 0(8) 0.0%
New York, NY 10001

Stephen Roseman Common Stock
c/o Thesis Capital Management, LLC 294,699(9)(10)(12) 3.8%
60 E. 42nd St., Suite 1245
The Lincoln Building
New York, NY 10165

Thesis Capital Management, LLC Common Stock
60 E. 42nd St., Suite 1245 294,699(9)(11)(12) 3.8%
The Lincoln Building
New York, NY 10165

Thesis Capital, LP Common Stock
60 E. 42nd St., Suite 1245 54,008(9)(12) 0.7%
The Lincoln Building
New York, NY 10165

Thesis Capital Master Fund Limited Common Stock
c/o Goldman Sachs (Cayman) Trust, 2nd 240,691(9)(12) 3.1%
Floor,
Harbour Ctr., PO Box 896 GTI
Grand Cayman, Cayman Islands 78384

Notes to Ownership Table:

(1) The percentages of the outstanding Common Stock were calculated on the
basis that 7,759,821 shares of Common Stock were outstanding as of March
31, 2006, as represented by the Company in its Quarterly Report on Form
10-Q filed with the SEC on April 13, 2006.

(2) The Celebrate Express Shareholder Value Committee was formed and has no
business other than in connection with the election of the Nominees at the
2006 Annual Meeting.

(3) Spencer Capital Management, LLC, a Delaware limited liability company
("SCM"), is an investment management firm and is the investment adviser of
Spencer Capital Opportunity Fund ("SCF"), a Delaware limited partnership,
and Spencer Capital Offshore Opportunity Fund, Ltd.,

A-2

a Cayman Islands exempted company ("SCOF"). SCF is a private investment
partnership. Spencer Capital Partners, LLC, a Delaware limited liability
company ("SCP"), serves as the general partner of SCF. SCOF is a Cayman
Islands exempted company which invests in securities. Spencer Capital
Offshore Partners, LLC, a Delaware limited liability company ("SCOP"),
serves as the investment adviser of SCOF. Kenneth H. Shubin Stein, MD, CFA
("Dr. Shubin Stein", and together with SCM, SCF, SCP, SCOF and SCOP,
collectively the "Spencer Capital Members"), is the controlling person of
SCM, SCF, SCP, SCOF and SCOP. As of the date hereof, (i) SCF owns 718,995
shares of Common Stock, and (ii) SCOF owns 481,702 shares of Common Stock.

(4) Dr. Shubin Stein may be deemed to be the beneficial owner of 1,200,697
shares of Common Stock because he is the controlling person of SCM, SCF,
SCP, SCOF and SCOP.

(5) SCM may be deemed to be the beneficial owner of 1,200,697 shares of Common
Stock because it is the investment adviser of SCF and SCOF.

(6) SCP may be deemed to be the beneficial owners of 718,995 shares of Common
Stock. because it is the general partner of SCF.

(7) SCOP may be deemed to be the beneficial owners of 481,702 shares of Common
Stock because it is the management company of SCOF.

(8) Mr. Diamond does not beneficially own any shares of Common Stock.

(9) Thesis Capital Management, LLC, a Delaware limited liability company
("TCM"), is an investment management firm and is the investment manager of
Thesis Capital, LP, a Delaware limited partnership ("TC"), and Thesis
Capital Master Fund Limited, a Cayman Islands exempted company ("TCMF"). TC
is a private investment partnership managed by TCM. TCMF is a Cayman
Islands exempted company which invests in securities. Stephen Roseman, CFA
("Mr. Roseman", and together with TCM, TC and TCMF, collectively the
"Thesis Capital Members"), is the sole Manager of both TCM and Thesis
Capital Advisors, LLC, a Delaware limited liability company which is the
general partner of TC. As of the date hereof, (i) TC owns 54,008 shares of
Common Stock, and (ii) TCMF owns 240,691 shares of Common Stock.

(10) Mr. Roseman may be deemed to be the beneficial owner of 294,699 shares of
Common Stock because he is the controlling person of TCM.

(11) TCM may be deemed to be the beneficial owner of 294,699 shares of Common
Stock because it is the investment manager of TC and TCMF.

(12) As a result of their determination to work together as disclosed in Item 4
of Schedule 13D, as amended, the Spencer Capital Members and Thesis Capital
Members may be deemed a "group" under the Exchange Act and, accordingly,
each may be deemed to beneficially own the shares of the Common Stock
beneficially owned by the others. Each of the Spencer Capital Members
disclaims beneficial ownership of the Common Stock held by the Thesis
Capital Members and any pecuniary interest therein, and each of the Thesis
Members disclaims beneficial ownership of the Common Stock held by each of
the Spencer Capital Members and any pecuniary interest therein.

----------------------------

A-3

Except as set forth in this Proxy Statement, in the Appendices hereto or
filings of the Spencer Capital Members or Thesis Capital Members pursuant to
Section 13 of the Exchange Act, to the best knowledge of the Spencer Capital
Members or Thesis Capital Members, none of the Spencer Capital Members or Thesis
Capital Members, any of the persons participating in this solicitation on behalf
of the Spencer Capital Members or Thesis Capital Members, any of the Shareholder
Value Committee Nominees nor any associate of any of the foregoing persons (i)
owns beneficially, directly or indirectly, or has the right to acquire, any
securities of the Company or any parent or subsidiary of the Company, (ii) owns
any securities of the Company of record but not beneficially, (iii) has
purchased or sold any securities of the Company within the past two years, (iv)
has incurred indebtedness for the purpose of acquiring or holding securities of
the Company, (v) is or has been a party to any contract, arrangement or
understanding with respect to any securities of the Company within the past
year, (vi) has been indebted to the Company or any of its subsidiaries since the
beginning of the Company's last fiscal year, (vii) has any arrangement or
understanding with respect to future employment by the Company or with respect
to any future transactions to which the Company or any of its affiliates will be
or may be a party or (viii) has engaged in or had a direct or indirect interest
in any transaction, or series of similar transactions, since the beginning of
the Company's last fiscal year, or any currently proposed transaction, or series
of similar transactions, to which the Company or any of its subsidiaries was or
is to be a party, in which the amount involved exceeds $60,000. In addition,
except as set forth in this Proxy Statement or in the Appendices hereto, to the
best knowledge of the Spencer Capital Members or Thesis Capital Members, none of
the Spencer Capital Members or Thesis Capital Members, any of the persons
participating in this solicitation on behalf of the Spencer Capital Members or
Thesis Capital Members, any of the Shareholder Value Committee Nominees, nor any
associate of any of the foregoing persons has had or is deemed to have a direct
or indirect material interest in any transaction with the Company since the
beginning of the Company's last fiscal year, or in any proposed transaction, to
which the Company or any of its affiliates was or is a party.

None of the corporations or organizations in which any of the Shareholder
Value Committee Nominees has conducted his principal occupation or employment
was a parent, subsidiary or other affiliate of the Company, and none of the
Shareholder Value Committee Nominees holds any position or office with the
Company, has any family relationship with any executive officer or director of
the Company or each other, or has been involved in any legal proceedings of the
type required to be disclosed by the rules governing this solicitation.

To the knowledge of the Shareholder Value Committee Nominees, there are no
material proceedings to which any Shareholder Value Committee Nominee, or any of
their associates, is a party adverse to the Company or any of its subsidiaries,
or in which either of the Shareholder Value Committee Nominees or any of their
associates has a material interest adverse to the Company or any of its
subsidiaries.

During the past five years and, with respect to (b) below, during the past
ten years:

(a) No petition under the Federal bankruptcy laws or any state insolvency
law has been filed by or against, and no receiver, fiscal agent or similar
officer has been appointed by a court for the business or property of, any
Shareholder Value Committee Nominee, or any partnership in which any Shareholder
Value Committee Nominee was a general partner at or within two years before the
time of such filing, or any corporation or business association of which he was
an executive officer at or within two years before the time of such filing;

(b) No Shareholder Value Committee Nominee has been convicted in a criminal
proceeding or is a named subject of a pending criminal proceeding (excluding
traffic violations and other minor offenses);

A-4

(c) No Shareholder Value Committee Nominee has been the subject of any
order, judgment or decree, not subsequently reversed, suspended or vacated, of
any court of competent jurisdiction, permanently or temporarily enjoining such
person from, or otherwise limiting, the following activities:

(i) Acting as a futures commission merchant, introducing broker,
commodity trading adviser, commodity pool operator, floor broker, leverage
transaction merchant, any other person regulated by the Commodity Futures
Trading Commission, or an associated person of any of the foregoing, or as an
investment adviser, underwriter, broker or dealer in securities, or as an
affiliated person, director or employee of any investment company, bank, savings
and loan association or insurance company, or engaging in or continuing any
conduct or practice in connection with such activity;

(ii) Engaging in any type of business practice; or

(iii) Engaging in any activity in connection with the purchase or sale
of any security or commodity or in connection with any violation of Federal or
State securities laws or Federal commodities laws;

(d) No Shareholder Value Committee Nominee has been the subject of any
order, judgment or decree, not subsequently reversed, suspended or vacated, of
any Federal or State authority barring, suspending or otherwise limiting for
more than 60 days the right of such person to engage in any activity described
in paragraph (c)(i) above, or to be associated with persons engaged in any such
activity;

(e) No Shareholder Value Committee Nominee has been found by a court of
competent jurisdiction in a civil action or by the Commission to have violated
any Federal or State securities law, where the judgment in such civil action or
finding by the Commission has not been subsequently reversed, suspended or
vacated; and

(f) No Shareholder Value Committee Nominee has been found by a court of
competent jurisdiction in a civil action or by the Commodities Futures Trading
Commission to have violated any Federal commodities law, where the judgment in
such civil action or finding by the Commodity Futures Trading Commission has not
been subsequently reversed, suspended or vacated.

Since the beginning of the Company's last fiscal year, none of the
Shareholder Value Committee Nominees currently has or has had any relationship
of the nature described in Item 404(b) of Regulation S-K, promulgated by the
Securities and Exchange Commission under the Exchange Act. Specifically, since
the beginning of the Company's last fiscal year, none of the Shareholder Value
Committee Nominees has been an officer, director, partner or employee of, nor
has either of them owned, directly or indirectly, beneficially or of record,
more than 10% of the equity interest in, any of the following types of
organizations:

(a) Any organization that has made or proposes to make payments to the
Company or any of its subsidiaries for property or services in excess of the
amounts specified in such Item 404(b);

(b) Any organization to which the Company or any of its subsidiaries was
indebted, at the end of the Company's last full fiscal year, in excess of the
amount specified in such Item 404(b);

(c) Any organization to which the Company or any of its subsidiaries has
made or proposes to make payments for property or services in excess of the
amounts specified in such Item 404(b); or

A-5

(d) Any organization that provided or proposes to provide legal services or
investment banking services to the Company or any of its subsidiaries in excess
of the amounts specified in such Item 404(b).

No Shareholder Value Committee Nominee has failed to file reports related
to the Company that are required by Section 16(a) of the Exchange Act.

A-6

Appendix B
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following table sets forth, to the knowledge of the Shareholder Value
Committee based on a review of the Company's proxy statement filed with the SEC
on September 6, 2005, each person (other than directors, whose beneficial
ownership is in the table on the following page, and the Shareholder Value
Committee, whose beneficial ownership is in the table in Appendix A) reported to
own beneficially more than 5% of the outstanding Common Stock:

Name and Address of Number of Shares of Common Percent of Common Stock
Beneficial Owner Stock the Company of the Company(1)
Beneficially Owned
- ----------------------------------------------------------------------------------------------------------------

Five Percent Shareholders:

ARCH Venture Fund IV, L.P.(2) 1,031,196 13.3%
8725 Higgins Road, Suite 290
Chicago, IL 60631
Jan A. Jewell (3) 1,628,855 21.0%
Kern Capital Management, LLC (4) 540,200 7.0%
115 West 47th Street, Suite 1926
New York, NY 10036

Named Executive Officers and Directors:

Michael K. Jewell (5) 1,628,855 21.0%
Keith Crandell (6) 1,049,410 13.5%

1. All percentages are based on the 7,759,821 shares of Common Stock
outstanding as of March 31, 2006, as represented by the Company in its
Quarterly Report on Form 10-Q filed with the SEC on April 13, 2006.

2. Consists of 1,004,754 shares held by ARCH Venture Fund IV, L.P. and 26,442
shares held by ARCH Entrepreneurs Fund, L.P. Excludes 13,797 shares and an
option to purchase shares, 4,417 of which are exercisable within 60 days of
August 15, 2005, held by Keith L. Crandell who is a managing director of
ARCH Venture Partners IV, L.L.C., the general partner of ARCH Venture Fund
IV, L.P. and ARCH Entrepreneurs Fund, L.P.

3. Includes shares held individually by and jointly with Michael K. Jewell,
Ms. Jewell's spouse.

4. Information based solely on Form 13G filing. Robert E. Kern and David G.
Kern are controlling members of Kern Capital Management, LLC and may be
deemed the beneficial owner of the securities.

5. Includes shares held individually by and jointly with Jan A. Jewell, Mr.
Jewell's spouse.

6. Includes shares described above in footnote (3) as well as 13,797 shares
and an option to purchase shares, 4,417 of which are exercisable within 60
days of August 1, 2005, owned by Mr. Crandell. Mr. Crandell is a managing
director in ARCH Venture Partners IV, L.L.C., which is the general partner
of ARCH Venture Fund IV, L.P. and ARCH Entrepreneurs Fund, L.P. Mr.
Crandell disclaims beneficial ownership of these shares except to the
extent of his pecuniary interest therein.

7. Includes 193,765 shares issuable upon exercise of options exercisable
within 60 days of August 15, 2005.

B-1

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth, to the knowledge of the Shareholder Value
Committee based on a review of the Company's proxy statement filed with the SEC
on September 6, 2005, information with respect to the beneficial ownership of
shares of Common Stock by each of the Company's directors and executive officers
and all directors and executive officers as a group:

Number of Percent of Common
Shares Beneficially Stock
-------------------
Name Owned (1) of the Company (2)
- ---- ----- --------------

Michael K. Jewell(3) 1,628,855 21.0%

Travis Roberts(4) 38,840 0.5%

Darin White(5) 30,633 0.4%

Dina Alhadeff(6) 9,531 0.1%

Lori Liddle(7) 106,445 1.4%

Allen McDowell *

Keith Crandell(8) 1,049,410 13.5%

Estelle DeMuesy *

Donald R. Hughes *

Tim McGarvey *

Jean Reynolds *

Ronald A. Weinstein(9) 128,478 1.7%

All executive officers and 3,092,679 39.9%
directors as a group (13
persons)(10)

* Less than 1%

1. Beneficial ownership of shares is determined in accordance with the rules
of the SEC and generally includes any shares over which a person exercises
sole or shared voting or investment power, or of which a person has the
right to acquire ownership within 60 days after August 15, 2005. Except as
otherwise noted, each person or entity has sole voting and investment power
with respect to the shares shown.

2. All percentages are based on the 7,759,821 shares of Common Stock
outstanding as of March 31, 2006, as represented by the Company in its
Quarterly Report on Form 10-Q filed with the SEC on April 13, 2006.

3. Includes shares held individually by and jointly with Jan A. Jewell, Mr.
Jewell's spouse.

4. Includes 20,447 shares subject to options exercisable within 60 days of
August 15, 2005.

5. Includes 15,547 shares subject to options exercisable within 60 days of
August 15, 2005.

6. Includes 9,313 shares subject to options exercisable within 60 days of
August 15, 2005.

7. Includes 104,304 shares subject to options exercisable within 60 days of
August 15, 2005.

8. Includes shares described above in footnote (3) as well as 13,797 shares
and an option to purchase shares, 4,417 of which are exercisable within 60
days of August 1, 2005, owned by Mr. Crandell. Mr. Crandell is a managing
director in ARCH Venture Partners IV, L.L.C., which is the general partner
of ARCH Venture Fund IV, L.P. and ARCH Entrepreneurs Fund, L.P. Mr.Crandell
disclaims beneficial ownership of these shares except to the extent of his
pecuniary interest therein.

B-2

9. Includes 39,737 shares subject to options exercisable within 60 days of
August 15, 2005 and 88,741 shares held by the Weinstein Family Limited
Partnership.

10. Includes 193,765 shares issuable upon exercise of options exercisable
within 60 days of August 15, 2005.

B-3

Appendix C

TRANSACTIONS IN CELEBRATE EXPRESS, INC.

The following tables set forth information with respect to all purchases
and sales of shares of Common Stock by the Spencer Capital Members and the These
Capital Members and their associates, affiliates and the Shareholder Value
Committee Nominees during the past two years (amounts in parentheses indicate a
sale of shares):

Spencer Capital Opportunity Fund, LP

Common Stock Action Date
- ------------ ------ ----

298,200 Purchase 6/12/06
66,797 Purchase 6/13/06
82,317 Purchase 6/14/06
95,600 Purchase 6/15/06
75,197 Purchase 6/21/06
59,650 Purchase 6/23/06
30,264 Purchase 6/28/06
7,520 Purchase 7/05/06
3,450 Purchase 7/06/06

Spencer Capital Offshore Opportunity Fund, Ltd.

Common Stock Action Date
- ------------ ------ ----

201,800 Purchase 6/12/06
45,203 Purchase 6/13/06
55,683 Purchase 6/14/06
67,400 Purchase 6/15/06
50,803 Purchase 6/21/06
40,350 Purchase 6/23/06
20,463 Purchase 6/28/06

C-1

Thesis Capital LP

Common Stock Action Date
- ------------ ------ ----

1,300 Purchase 2/27/06
1,000 Purchase 2/28/06
100 Purchase 3/01/06
700 Purchase 3/08/06
400 Purchase 3/09/06
1,699 Purchase 3/15/06
1,300 Purchase 3/16/06
1,200 Purchase 3/17/06
3,600 Purchase 3/24/06
100 Purchase 3/28/06
100 Purchase 3/29/06
800 Purchase 3/31/06
500 Purchase 4/03/06
500 Purchase 4/04/06
(2,000) Sell 4/13/06
(500) Sell 4/17/06
(700) Sell 4/19/06
100 Purchase 4/28/06
960 Purchase 5/19/06
(100) Sell 5/24/06
200 Purchase 5/24/06
300 Purchase 5/25/05
100 Purchase 5/26/06
(200) Sell 5/30/06
9,040 Purchase 6/09/06
14,949 Purchase 6/12/06
6,986 Purchase 6/13/06
6,638 Purchase 6/14/06
577 Purchase 6/16/06
885 Purchase 6/19/06
(154) Sell 6/27/06
443 Purchase 6/27/06
135 Purchase 6/28/06
2,189 Purchase 8/03/06
603 Purchase 8/07/06
155 Purchase 8/08/06
103 Purchase 8/09/06

Thesis Capital Master Fund Limited

Common Stock Action Date
- ------------ ------ ----

7,100 Purchase 6/05/06
2,840 Purchase 6/06/06
1,200 Purchase 6/07/06
8,900 Purchase 6/08/06
66,760 Purchase 6/09/06
62,751 Purchase 6/12/06
24,514 Purchase 6/13/06
27,862 Purchase 6/14/06
2,423 Purchase 6/16/06
3,715 Purchase 6/19/06
1,857 Purchase 6/27/06
(646) Sell 6/27/06

C-2

565 Purchase 6/28/06
3,900 Purchase 7/25/06
6,500 Purchase 7/26/06
10,511 Purchase 8/03/06
2,200 Purchase 8/04/06
2,897 Purchase 8/07/06
745 Purchase 8/08/06
497 Purchase 8/09/06
1,100 Purchase 8/10/06
2,500 Purchase 8/15/06

C-3

================================================================================
IMPORTANT

Please review this proxy statement and the enclosed materials carefully. YOUR
VOTE IS VERY IMPORTANT, no matter how many or how few shares you own.

1. If your shares are registered in your own name, please sign, date and mail
the enclosed WHITE proxy card to D.F. King & Co., Inc., in the postage-paid
envelope provided today.

2. If you have previously signed and returned a proxy card to Celebrate
Express, you have every right to change your vote. Only your latest dated
proxy card will count. You may revoke any proxy card already sent to
Celebrate Express by signing, dating and mailing the enclosed WHITE proxy
card in the postage-paid envelope provided. Any proxy may be revoked at any
time prior to the 2006 Annual Meeting by delivering a written notice of
revocation or a later dated proxy for the 2006 Annual Meeting to D.F. King
& Co., Inc., or by voting in person at the 2006 Annual Meeting.

3. If your shares are held in the name of a brokerage firm, bank nominee or
other institution, only it can vote your shares and only after receiving
your specific instructions. Accordingly, please sign, date and mail the
enclosed WHITE proxy card in the postage-paid envelope provided, and to
ensure that your shares are voted, you should also contact the person
responsible for your account and give instructions for a WHITE proxy card
to be issued representing your shares.

4. After signing the enclosed WHITE proxy card, do not sign or return
Celebrate Express' proxy card unless you intend to change your vote,
because only your latest dated proxy card will be counted.

If you have any questions concerning this proxy statement, would like to request
additional copies of this proxy statement or need help voting your shares,
please contact our proxy solicitor:

D.F. King & Co., Inc.
48 Wall Street
New York, NY 10005
Call Toll-Free: (800) 735-3591
Banks and Brokerage Firms Call Collect: (212) 269-5550

================================================================================

Preliminary Copies
CELEBRATE EXPRESS, INC.

THIS PROXY IS SOLICITED ON BEHALF OF THE CELEBRATE EXPRESS SHAREHOLDER
VALUE COMMITTEE, SPENCER CAPITAL MANAGEMENT, LLC, SPENCER CAPITAL
OPPORTUNITY FUND, LP, SPENCER CAPITAL PARTNERS, LLC, SPENCER CAPITAL
OFFSHORE OPPORTUNITY FUND, LTD., SPENCER CAPITAL OFFSHORE PARTNERS,
LLC, THESIS CAPITAL MANAGEMENT, LLC, THESIS CAPITAL, LP, THESIS CAPITAL
MASTER FUND LIMITED, KENNETH H. SHUBIN STEIN, MD, CFA AND STEPHEN
ROSEMAN, CFA AND NOT ON BEHALF OF THE BOARD OF DIRECTORS.

This proxy will be voted in accordance with your instructions specified
below. If you do not give any specific instructions, this proxy will be voted
FOR the election of the Shareholder Value Committee Nominees, Kenneth H. Shubin
Stein, Stephen Roseman and Matthew C. Diamond. IN ADDITION, THE PROXIES ARE
AUTHORIZED TO VOTE IN THEIR DISCRETION FOR ANY SUBSTITUTE NOMINEES AS THE
PROXIES MAY SELECT IF ANY NOMINEE NAMED BELOW IS UNABLE TO SERVE AND ON ANY
OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING THAT THE PROXIES
WERE NOT AWARE OF A REASONABLE TIME BEFORE THE ANNUAL MEETING. The undersigned
shareholder hereby acknowledges receipt of the Shareholder Value Committee Proxy
Statement.

The undersigned shareholder may revoke this proxy at any time prior to its
exercise by filing a written notice of revocation with, or by delivering a duly
executed proxy bearing a later date to, the Secretary of the Company or by
attending the Annual Meeting.

PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE.

Please sign exactly as your name(s) appear(s) on the books of the Company.
Joint owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.

Preliminary Copies

Please mark an "X" in the appropriate box below.

We recommend that you vote FOR Proposal 1 below.

1. Election of Directors

For our director nominees [ ] Withhold for all
nominees [ ]

Dr. Kenneth H. Shubin Stein

Stephen Roseman

Matthew C. Diamond

YOU MAY WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL BY WRITING THE NAME OF THE
NOMINEE YOU DO NOT SUPPORT ON THE LINE BELOW.

- -------------------------------

We recommend that you vote FOR Proposal 2 below.
For Against Abstain

2. Ratification of appointment of [ ] [ ] [ ]
Grant Thornton LLP as
independent registered public
accounting firm for the fiscal year
ending May 31, 2007.

[Continued, and to be signed, on other side]

Preliminary Copies
[Continued from other side]

The undersigned hereby appoints Kenneth H. Shubin Stein and Stephen Roseman, or
any combination of them, with full power of substitution, as proxies to vote, as
indicated above, for and in the name of the undersigned all shares of Celebrate
Express, Inc. that the undersigned is entitled to vote at the Annual Meeting
scheduled to be held on October __, 2006 at ___________________________________,
at _________ local time, and at any adjournments or postponements of the
meeting.

This proxy card revokes all previously given by the undersigned.

Please sign exactly as your name appears on this proxy card. All joint
owners should sign. If you are signing in a fiduciary capacity or as a corporate
officer, please also provide your full title.

Dated _____________, 2006

- -------------------------------
Signature of shareholder

- -------------------------------
Signature if held jointly

- -------------------------------
Title, if applicable