Agreement and Plan of Merger

AGREEMENT AND PLAN OF MERGER

BY AND AMONG STAMPS.COM INC., ROCKET ACQUISITION CORP. AND ISHIP.COM, INC.

Dated as of October 22, 1999

TABLE OF CONTENTS

ARTICLE 1 THE MERGER

1.1 The Merger................................................................ A-5

1.2 Effective Time............................................................ A-6

1.3 Effect of the Merger on Constituent Corporations.......................... A-6

1.4 Articles of Incorporation and Bylaws of Surviving Corporation............. A-6

1.5 Directors and Officers of Surviving Corporation........................... A-6

1.6 Maximum Number of Shares of Parent Common Stock to be Issued; Effect on Outstanding Securities of the Company........................................ A-6

1.7 Dissenting Shares........................................................ A-8

1.8 Exchange Procedures...................................................... A-9

1.9 No Further Ownership Rights in Company Capital Stock..................... A-9

1.10 Lost, Stolen or Destroyed Certificates................................. A-10

ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF THE COMPANY

2.1 Organization and Qualification.......................................... A-10

2.2 Authority Relative to this Agreement.................................... A-10

2.3 Capital Stock.......................................................... A-10

2.4 No Subsidiaries........................................................ A-11

2.5 No Conflicts........................................................... A-11

2.6 Books and Records; Organizational Documents............................. A-12

2.7 Company Financial Statements............................................ A-12

2.8 Absence of Changes..................................................... A-12

2.9 No Undisclosed Liabilities.............................................. A-15

ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

3.1 Organization and Qualification.......................................... A-26

3.2 Authority Relative to this Agreement.................................... A-26

3.3 SEC Documents; the Parent Financial Statements.......................... A-26

3.4 No Conflicts........................................................... A-27

Exhibits: Exhibit A—Form of Support Agreements; Exhibit B—Form of Articles of Merger; Exhibit C—Form of Company Affiliate Agreement

AGREEMENT AND PLAN OF MERGER

This Agreement and Plan of Merger is made as of October 22, 1999, by and among Stamps.com Inc. ("Parent"), Rocket Acquisition Corp. ("Merger Sub"), and iShip.com, Inc. ("Company"), and with respect to Section 7.2 only, U.S. Stock Transfer Corporation, as Depositary.

RECITALS

A. The Boards of Directors of each of the Parent, Merger Sub and the Company believe it is in the best interests of the Parent, Merger Sub and the Company that the Parent acquire the Company through the merger of Merger Sub with and into the Company (the "Merger").

B. The Boards of Directors of each of the Parent, Merger Sub and the Company have approved this Agreement, the Merger and the other transactions contemplated hereby.

C. Pursuant to the Merger, all issued and outstanding shares of Company capital stock shall be converted into shares of Parent Common Stock, and all outstanding Company Options and Company Warrants will become exercisable for Parent Common Stock, subject to the terms herein.

ARTICLE 1

THE MERGER

1.1 The Merger. At the Effective Time and subject to and upon the terms and conditions of this Agreement and the applicable provisions of the Washington Code, Merger Sub shall be merged with and into the Company, and the Company shall continue as the surviving corporation.

1.2 Effective Time. The Closing will take place as promptly as practicable, but no later than five Business Days following satisfaction or waiver of the conditions set forth in Article 6, at the offices of Brobeck, Phleger & Harrison LLP, unless another place or time is agreed to. The date upon which the Closing actually occurs is the "Closing Date."

1.3 Effect of the Merger on Constituent Corporations. At the Effective Time, all property, rights, privileges, powers and franchises of Merger Sub and the Company shall vest in the Surviving Corporation.

1.4 Articles of Incorporation and Bylaws of Surviving Corporation.

(a) The articles of incorporation of Merger Sub shall be the articles of incorporation of the Surviving Corporation until amended as provided by law.

(b) The bylaws of Merger Sub shall be the bylaws of the Surviving Corporation until amended as provided by such bylaws.

1.5 Directors and Officers of Surviving Corporation. The directors and officers of Merger Sub immediately prior to the Effective Time shall be the directors and officers of the Surviving Corporation.

1.6 Maximum Number of Shares of Parent Common Stock to be Issued; Effect on Outstanding Securities of the Company.

(a) The maximum number of shares of Parent Common Stock to be issued shall be the Aggregate Merger Share Number.

(b) At the Effective Time, Company Common Stock, Series A Preferred Stock, Series B Preferred Stock, Company Options, Company Warrants, and Merger Sub stock shall be converted or exchanged as provided in the Agreement.

(i) Company Common Stock

(ii) Series A Preferred Stock

(iii) Series B Preferred Stock

(iv) Cancellation of Parent-Owned and Company-Owned Stock

(v) Company Options and Stock Plan

1.7 Dissenting Shares. Shares held by holders who have demanded and perfected dissenters' rights shall not be converted into Parent Common Stock pursuant to Section 1.6.

1.8 Exchange Procedures.

(a) Parent Common Stock. On the Closing Date, the Parent shall issue the aggregate number of shares of Parent Common Stock issuable in exchange for outstanding Company Capital Stock.

(b) Exchange Procedures. Holders of Certificates shall deliver such Certificates to the Parent.

(c) Distributions With Respect to Unexchanged Shares of Company Capital Stock.

(d) Transfers of Ownership.

1.9 No Further Ownership Rights in Company Capital Stock. All shares of Parent Common Stock issued upon surrender for exchange shall be deemed issued in full satisfaction of all rights pertaining to such shares of Company Capital Stock.

1.10 Lost, Stolen or Destroyed Certificates. The Parent shall issue certificates in exchange upon affidavit and, if required, indemnity or bond.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

2.1 Organization and Qualification. The Company is duly organized and validly existing under the laws of the State of Washington and has full corporate power and authority to conduct its business.

2.2 Authority Relative to this Agreement. The Company has full corporate power and authority to execute and deliver this Agreement and consummate the transactions contemplated hereby.

2.3 Capital Stock. The authorized capital stock, issued and outstanding shares, options and warrants are as described in the Agreement.

2.4 No Subsidiaries. The Company has no Subsidiaries.

2.5 No Conflicts. The Agreement does not conflict with the Company's organizational documents, laws, orders, or material contracts.

2.6 Books and Records; Organizational Documents. The books and records are complete and correct in all respects.

2.7 Company Financial Statements. The Company Financials are correct and complete in all material respects and prepared in accordance with GAAP.

2.8 Absence of Changes. Since the date of the Interim Financial Statements, there has not been any material adverse change in the Business or Condition of the Company.

2.9 No Undisclosed Liabilities. Except as reflected or reserved against in the Company Financials, there are no material undisclosed liabilities.

2.10 Taxes. All required tax returns have been filed and taxes paid or accrued as required.

2.11 Legal Proceedings. No pending or threatened legal proceedings, except as disclosed.

2.12 Compliance with Laws and Orders. The Company has not violated applicable laws or orders, except as would not have a material adverse effect.

2.13 Plans; ERISA. Employee benefit plans and ERISA matters are as described in the Agreement.

2.14 Title to Property. The Company has good and marketable title to its properties and assets, subject to stated exceptions.

2.15 Intellectual Property. The Company owns or has rights to its intellectual property, subject to stated exceptions.

2.16 Contracts. The Contracts listed in the Disclosure Letter are in full force and effect.

2.17 Insurance. The Company maintains insurance policies and bonds of customary types and amounts.

2.18 Affiliate Transactions. No undisclosed affiliate transactions exist except as disclosed.

2.19 Employees; Labor Relations. Employment, labor, and worker classification matters are as disclosed.

2.20 Environmental Matters. Environmental permits and compliance matters are as described in the Agreement.

2.21 Substantial Partnerships. UPS, MBE and eBay have not threatened to terminate their relationships as a result of the transaction.

2.22 Accounts Receivable. Accounts and notes receivable arose from bona fide sales transactions in the ordinary course of business.

2.23 Other Negotiations; Brokers; Third Party Expenses. No conflicting agreements or undisclosed liability for transaction-related expenses.

2.24 Foreign Corrupt Practices Act. No unlawful contributions, payments, bribes, or kickbacks have been made.

2.25 Financial Projections. Projections were prepared in good faith and based on reasonable assumptions.

2.26 Approvals. Required governmental and third-party approvals are listed in the Disclosure Letter.

2.27 Takeover Statutes. No takeover statute is applicable and no poison pill arrangement has been adopted.

2.28 Registration Statement; Information Sheet/Prospectus. Company-supplied information will not contain material misstatements or omissions.

2.29 Disclosure. No representation or certificate contains an untrue statement of a material fact or omission.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

3.1 Organization and Qualification. Each of Parent and Merger Sub is duly organized and in good standing.

3.2 Authority Relative to this Agreement. Each has full corporate power and authority to execute and deliver this Agreement and consummate the transactions contemplated hereby.

3.3 SEC Documents; the Parent Financial Statements. SEC documents and financial statements comply with applicable requirements and GAAP.

3.4 No Conflicts. No conflicts or material breaches are expected except as stated.

3.5 Ownership of Merger Sub; No Prior Activities. Merger Sub has not engaged in business activities outside the transaction.

3.6 Investment Advisors. Only disclosed advisors are entitled to fees.

3.7 Absence of Certain Changes or Events. Parent has conducted business in the ordinary course since June 30, 1999.

3.8 Compliance with Laws. Parent and its subsidiaries are in compliance with applicable laws, except as not material.

3.9 Tax Matters. No agreement or circumstance prevents the Merger from qualifying as a reorganization under Section 368(a).

3.10 Intellectual Property Rights. Parent owns or has rights to use necessary intellectual property.

3.11 Year 2000 Preparedness. Parent's systems and products are represented to comply with Year 2000 requirements.

ARTICLE 4

CONDUCT PRIOR TO THE EFFECTIVE TIME

4.1 Conduct of Business of the Company. The Company shall carry on its business in the ordinary course and preserve its business organization, employees, customer relationships, suppliers, and goodwill.

4.2 No Solicitation. The Company shall not solicit, encourage, or negotiate alternative business combination proposals and must notify Parent of any proposal received.

ARTICLE 5

ADDITIONAL AGREEMENTS

5.1 Proxy Statement/Prospectus; Registration Statement. Parent and Company shall prepare and file the Registration Statement and cooperate on related disclosures.

5.2 Shareholder Approval. Each party shall seek approval from its respective stockholders/shareholders.

5.3 Access to Information. Company shall provide Parent access to facilities, books, records, and personnel, subject to limitations in the Agreement.

5.4 Confidentiality. The Confidentiality Agreement remains in effect.

5.5 Expenses; Termination Fee. Each party bears its own expenses, subject to reimbursement and the termination fee provisions.

5.6 Public Disclosure. No public disclosure without approval, except as required by law.

5.7 Approvals. Each party shall use commercially reasonable efforts to obtain required approvals.

5.8 Notification of Certain Matters. Each party must promptly notify the other of certain events or breaches.

5.9 Company Affiliate Agreements. Company shall deliver affiliate agreements from Company Affiliates.

5.10 Additional Documents and Further Assurances. Each party shall execute additional documents and take necessary actions.

5.11 Form S-8. Parent shall file a Form S-8 registration statement if applicable.

5.12 NNM Listing of Additional Shares Application. Parent shall seek quotation authorization for the shares issuable in connection with the Merger.

5.13 Company's Auditors. Company shall cause its management and auditors to assist in preparation of required financial statements and related materials.

5.14 Takeover Statutes. Company Board shall take actions necessary to eliminate the effects of takeover statutes.

5.15 Supplemental Disclosure Letter. Company shall deliver a supplement to the Disclosure Letter on the Closing Date.

5.16 Tax Treatment. The parties shall use best efforts to cause the Merger to qualify as a reorganization under Section 368 of the Code.

5.17 Parent Board Representation. Parent shall use commercially reasonable efforts to cause two persons nominated by the Company to be elected to Parent's board.

ARTICLE 6

CONDITIONS TO THE MERGER

6.1 Conditions to Obligations of Each Party to Effect the Merger. Subject to required approvals, no injunctions, tax opinions, stockholder approvals, and registration statement effectiveness.

6.2 Additional Conditions to Obligations of the Company. Parent's reps and covenants must be true and complied with, Parent must deliver certificates, listing must be authorized, and board nominees elected.

6.3 Additional Conditions to the Obligations of Parent and Merger Sub. Company reps and covenants must be true and complied with, third-party consents obtained, dissent below threshold, no material adverse change, no governmental restraint, 401(k) plan termination if required, affiliate agreements executed, employment agreements effective, consents of UPS/MBE/eBay, lock-up agreements, and appointment of Shareholders' Agent.

ARTICLE 7

SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS; ESCROW PROVISIONS

7.1 Survival of Representations, Warranties, Covenants and Agreements. Representations, warranties, covenants and agreements survive until the first anniversary of the Closing Date.

7.2 Escrow Provisions.

(a) Establishment of the Escrow Fund.

(b) Recourse to the Escrow Fund.

(c) Escrow Period; Distribution of Escrow Fund upon Termination of Escrow Period.

(d) Protection of Escrow Fund.

(e) Claims Upon Escrow Fund.

(f) Objections to Claims.

(g) Resolution of Conflicts; Arbitration.

(h) Shareholders' Agent of the Shareholders; Power of Attorney.

(i) Actions of the Shareholders' Agent.

(j) Third-Party Claims.

(k) Depositary's Duties.

(l) Fees.

ARTICLE 8

TERMINATION, AMENDMENT AND WAIVER

8.1 Termination. The Agreement may be terminated by mutual agreement, by time-out, by injunction or illegality, by breach, by failure to obtain approvals, or upon a Triggering Event.

8.2 Effect of Termination. Upon valid termination, the Agreement becomes void except for specified surviving provisions and liability for willful breaches.

ARTICLE 9

MISCELLANEOUS PROVISIONS

9.1 Notices. Notices must be in writing and delivered by specified methods to the listed addresses.

9.2 Entire Agreement. This Agreement and the Confidentiality Agreement supersede prior discussions and agreements.

9.3 Further Assurances; Post-Closing Cooperation. The parties shall execute and deliver further documents as requested.

9.4 Amendment; Waiver. Amendment or waiver must be in writing signed by the party to be bound.

9.5 Third Party Beneficiaries. No third-party beneficiary rights, except indemnity rights under Article 7.

9.6 No Assignment; Binding Effect. Assignment prohibited without prior written consent.

9.7 Headings. Headings are for convenience only.

9.8 Invalid Provisions. Severability and substitution provisions apply if a provision is invalid or unenforceable.

9.9 Governing Law. California law governs, except mandatory Washington Code provisions.

9.10 Construction. Ambiguities are to be given fair and reasonable construction.

9.11 Counterparts. The Agreement may be executed in counterparts.

9.12 Specific Performance. Specific performance and injunctive relief are available.

ARTICLE 10

DEFINITIONS

10.1 Definitions. The Agreement defines numerous capitalized terms including Actions or Proceedings, Affiliate, Aggregate Company Share Number, Aggregate Merger Share Number, Agreement, Articles of Merger, Approval, Assets and Properties, Associate, Audited Financial Statement Date, Books and Records, Business Combination, Business Day, Business or Condition of the Company, Closing, Closing Date, Closing Price, Code, Common Stock Exchange Ratio, Company, Company Capital Stock, Company Financials, Company Intellectual Property, Company Option(s), Company Preferred Stock, Company Registered Intellectual Property, Company Restricted Stock, Company Warrants, Contract, Depositary, Disclosure Letter, Dissenting Shares, Effective Time, Employment Agreements, Environment, Environmental Law, Equity Equivalents, ERISA, Escrow Amount, Exchange Ratios, Expiration Date, Financial Statement Date, GAAP, Governmental or Regulatory Authority, Hazardous Material, HSR Act, Income Tax, Indebtedness, Intellectual Property, Interim Financial Statements, Investment Assets, IRS, Laws, Liabilities, License, Lien(s), Liquidation Share Number, Losses, Merger, Merger Sub, NASD, NNM, Officer's Certificate, Option, Order, Other Tax, Parent, Parent Common Stock, Parent Financial Statements, PBGC, Permit, Person, Plan, PTO, Registered Intellectual Property, Release, Relevant Group, Restricted Stock Purchase Agreements, SEC, SEC Documents, Securities Act, Series A Exchange Ratio, Series A Liquidation Preference, Series B Exchange Ratio, Series B Liquidation Preference, Shareholders' Agent, Site, Stock Plan, Subsidiary, Support Agreement, Surviving Corporation, Takeover Statute, Tax, Tax Laws, Tax Returns, Taxing Authority, Third Party Claim, Third Party Expenses, and Washington Code.

SIGNATURES

Date:

Company Name:

Parent Name:

Merger Sub Name: