AGREEMENT AND PLAN OF MERGER

AMONG

EVOLVING SYSTEMS, INC.,

ESI ACQUISITION ONE CORPORATION,

CMS COMMUNICATIONS, INC.

AND

THE SHAREHOLDERS OF CMS COMMUNICATIONS, INC.

November 3, 2003

AGREEMENT AND PLAN OF MERGER

This Agreement and Plan of Merger (this Agreement) is entered into as of November 3, 2003 by and among Evolving Systems, Inc., a Delaware corporation (Parent), ESI Acquisition One Corporation, an Ohio corporation and a wholly-owned subsidiary of Parent (Merger Sub), CMS Communications, Inc., an Ohio corporation (Company), and all of the shareholders of Company (collectively, the Company Shareholders and each individually, a Company Shareholder).

RECITALS

A.                                   The parties intend that, subject to the terms and conditions hereinafter set forth, Merger Sub will merge with and into Company (the Merger), with Company to be the surviving corporation of the Merger, all pursuant to the terms and conditions of this Agreement and the Certificate of Merger substantially in the form attached hereto as Exhibit A (the Certificate of Merger) and the applicable provisions of the laws of the State of Ohio.

B.                                     The Boards of Directors of Parent, Merger Sub and Company have determined that the Merger is in the best interests of their respective companies and shareholders, have approved the Merger and, accordingly, have agreed to effect the Merger provided for herein upon the terms and conditions of this Agreement.

C.                                     To induce Parent and Merger Sub to enter into this Agreement, the Company Shareholders have voted their Company Common Shares (as hereinafter defined) in favor of the Merger.

D.                                    Concurrently with the execution of this Agreement, and as a condition and inducement for the parties willingness to enter into this Agreement:  (i) Parent, Company and each Company Shareholder are executing an Escrow Agreement in the form attached as Exhibit B-1 with respect to the Hold-Back Shares (as defined in Section 1.2(b) (the Hold-Back Share Escrow Agreement) and an Escrow Agreement in the form attached as Exhibit B-2 with respect to the Hold-Back Cash (as defined in Section 1.5) (the Hold-Back Cash Escrow Agreement) and (ii) each Company Shareholder is executing an investment representation letter in the form attached hereto as Exhibit C (collectively, the Investment Representation Letters), and a noncompetition agreement in the form attached hereto as Exhibit D (collectively, the Noncompetition Agreements).

E.                                      At the Effective Time, (i) all of the then issued and outstanding common shares of Company, $0.10 par value per share (the Company Common Shares), will be automatically converted into the right to receive, and shall be exchangeable for, Parent common stock, $0.001 par value per share (Parent Common Stock) and (ii) Merger Sub will be merged with and into Company, in each case, in the manner and on the basis provided in this Agreement.

NOW, THEREFORE, in consideration of the mutual agreements, covenants and other promises set forth herein, the mutual benefits to be gained by the performance thereof, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and accepted, the parties hereto agree as follows:

1.                                      PLAN OF MERGER

1.1                                 The Merger.  The Certificate of Merger will be filed with the Secretary of State of the State of Ohio as soon as practicable after the Closing (as defined in Section 4.1).  The effective time of the Merger (the Effective Time) shall be the time of filing of the Certificate of Merger unless otherwise specified in the Certificate of Merger.  At the Effective Time, subject to the terms and conditions of this Agreement and the applicable provisions of Chapter 1701 of the Ohio Revised Code, Merger Sub will be merged with and into Company, the separate corporate existence of Merger Sub shall cease, and Company shall continue as the surviving corporation and as a wholly-owned subsidiary of Parent.

1.2                                 Conversion and Exchange of Shares.

(a)                                  Conversion of Merger Sub Common Shares.  At the Effective Time and as a result of the Merger, each common share of Merger Sub that is issued and outstanding immediately prior to the Effective Time will be converted into one validly issued, fully paid and nonassessable common share of Surviving Corporation (as defined below in Section 1.4).  Each certificate evidencing ownership of common shares of Merger Sub will evidence ownership of common shares of Surviving Corporation.

(b)                                 Conversion of Company Common Shares.  At the Effective Time, (i) each Company Common Share that is issued and outstanding immediately prior to the Effective Time will, by virtue of the Merger, and without further action on the part of any holder thereof, be automatically converted into the right to receive, and shall be exchangeable for, that number of fully paid and nonassessable shares of Parent Common Stock equal to the Company Exchange Number (as defined in Section 1.2(c)) (the Merger Shares) and (ii) each Company Common Share that is held in the treasury of Company shall be cancelled and retired and no consideration shall be delivered in exchange therefor.  Each holder of a certificate representing Company Common Shares (each a Company Certificate) that have been converted into Parent Common Stock at the Effective Time as a result of the Merger shall thereafter cease to have any rights with respect to such Company Common Shares, except the right to receive shares of Parent Common Stock and cash (without interest) for fractional interests of the shares of Parent Common Stock in accordance with Section 1.2(d) upon the surrender of such Certificate.  Upon the delivery by each Company Shareholder of (i) the Company Certificates representing all Company Common Shares held beneficially and of record by such Company Shareholder and (ii) a letter of transmittal in the form attached hereto as Exhibit E (the Letter of Transmittal), such Company Shareholder shall receive in exchange therefor a certificate representing 90% of the number of Merger Shares which such Company Shareholder has the right to receive pursuant to this Section 1.2(b), with the remaining Merger Shares (the Hold-Back Shares) registered in the name of such Company Shareholder to be placed in escrow pursuant to the terms of the Hold-Back Share Escrow Agreement.

(c)                                  Definitions.  The term Company Exchange Number means 1,146.7496 (which amount equals the quotient of (i) (A) the sum of $10,475,000 divided by (B) the total number of issued and outstanding Company Common Shares divided by (ii) the Parent Average Price Per Share).  The term Parent Average Price Per Share means $14.295, being the average of the closing price per share of Parent Common Stock (in U.S. Dollars) as quoted on

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the Nasdaq Small Cap Market and reported in The Wall Street Journal for the ten (10) consecutive trading days ending Wednesday, October 29, 2003.

(d)                                 Fractional Shares.  No fractional share of Parent Common Stock will be issued in connection with the Merger, but in lieu thereof, the holder of any Company Common Shares who would otherwise be entitled to receive a fraction of a share of Parent Common Stock will receive from Parent an amount of cash equal to the Parent Average Price Per Share multiplied by the fraction of a share of Parent Common Stock to which such holder would otherwise be entitled at the Effective Time.

1.3                                 Directors and Officers.

(a)                                  The directors of Merger Sub immediately prior to the Effective Time shall be the directors of Surviving Corporation immediately after the Effective Time, each to hold the office of a director of Surviving Corporation in accordance with Ohio law and the articles of incorporation and code of regulations of Surviving Corporation until their successors are duly elected and qualified.

(b)                                 The officers of Merger Sub immediately prior to the Effective Time shall be the officers of Surviving Corporation immediately after the Effective Time, each to hold office in accordance with the provisions of the code of regulations of Surviving Corporation.

1.4                                 Effects of the Merger.  At the Effective Time: (a) the separate existence of Merger Sub will cease and Merger Sub will be merged with and into Company and Company will be the surviving corporation in the Merger (the Surviving Corporation); (b) the articles of incorporation and code of regulations of Merger Sub will be the articles of incorporation and code of regulations of Surviving Corporation; (c) each Company Common Share will be converted into the right to receive, and will be exchangeable for, shares of Parent Common Stock as provided in Section 1.2(b); (d) each common share of Merger Sub that is issued and outstanding immediately prior to the Effective Time will be converted into common shares of Surviving Corporation as provided in Section 1.2(a) (and the common shares of Surviving Corporation into which the common shares of Merger Sub are so converted shall be the only common shares of Surviving Corporation that are issued and outstanding immediately after the Effective Time); and (e) the Merger will, at and after the Effective Time, have all of the effects provided by applicable law.

1.5                                 Net Cash.

(a)                                  Disbursement of Net Cash.  Immediately prior to Closing, Company shall disburse $622,341 in cash (the Excess Cash Disbursement) as follows: (i) $560,106.90 in cash to the Company Shareholders and (ii) $62,234.10 (the Hold-Back Cash) to Wells Fargo Bank West, N.A., as escrow agent (the Cash Escrow Agent), to be held pursuant to the terms of the Hold-Back Cash Escrow Agreement.

(b)                                 Estimated Closing Date Balance Sheet; Estimated Net Cash Schedule.  At the Closing, Company shall deliver to Parent (i) an estimated balance sheet of Company as of the date of this Agreement (the Estimated Closing Date Balance Sheet), which shall be prepared in accordance with GAAP applied consistently with those principles, policies and practices used

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in preparing the Financial Statements (as defined is Section 2.7 of this Agreement), and (ii) a schedule derived from the Estimated Closing Date Balance Sheet reflecting the Net Cash (as defined below) of Company as of the date of the Estimated Closing Date Balance Sheet after giving effect to the Excess Cash Disbursement (the Estimated Closing Date Net Cash), each such document in form reasonably satisfactory to Parent; provided, however, that the Estimated Closing Date Balance Sheet must reflect (i) no outstanding indebtedness for money borrowed (other than debt related to trade payables incurred in the ordinary course of business), and (ii) positive or zero Estimated Closing Date Net Cash.  Net Cash as of a given date shall mean the sum of all cash, cash equivalents, prepaid expenses and accounts receivable (minus the allowance for doubtful accounts and warranty reserves) less the sum of all accounts payable, Accrued Liabilities and deferred revenue, all calculated in conformity with GAAP applied consistently with those principles, policies and practices used in preparing the Financial Statements.  Accrued Liabilities shall include all liabilities that would be required to be disclosed on a balance sheet of Company prepared in accordance with GAAP, including, by way of example, all change of control agreement expenses, commission expenses and income tax liabilities.

(c)                                  Final Closing Date Balance Sheet; Closing Net Cash Schedule.  Within seventy-five (75) days following the Closing, Parent shall prepare and deliver to Representative (as defined in Section 5.2(e)(i)): (i) a final audited balance sheet of Company as of the date of this Agreement (Final Closing Date Balance Sheet) which shall be prepared in accordance with GAAP applying the same accounting principles, policies and practices that were used in preparing Companys Financial Statements and (ii) a schedule derived from the Final Closing Date Balance Sheet reflecting Parents calculation of the Net Cash of Company as of the Closing Date after giving effect to the Excess Cash Disbursement (the Final Closing Date Net Cash).

(d)                                 Disbursement of Hold-Back Cash.  Within three (3) business days after the final determination of the  Final Closing Date Net Cash pursuant to Section 1.5(e), Representative or Parent shall deliver written instructions to the Cash Escrow Agent to disburse the Hold-Back Cash as follows:

(i)                                     Zero or Positive Final Closing Date Net Cash.  If the Final Closing Date Net Cash is positive or zero, Representative shall instruct the Cash Escrow Agent to disburse the Hold-Back Cash and any accrued interest thereon to the Company Shareholders.

(ii)                                  Negative Final Closing Date Net Cash.  If the Final Closing Date Net Cash is negative, Parent shall instruct the Cash Escrow Agent to disburse the amount by which the Final Closing Date Net Cash is less than zero and any accrued interest thereon to Parent, and Representative shall instruct the Cash Escrow Agent to disburse any remaining Hold-Back Cash and accrued interest thereon to the Company Shareholders.  If the negative Final Closing Date Net Cash exceeds the amount of Hold-Back Cash, the Company Shareholders shall pay the amount of the deficiency to Parent within three (3) business days following the final determination of the Final Closing Date Net Cash via wire transfer pursuant to instructions provided by Parent to Representative.  If the Company Shareholders fail to pay the deficiency to Parent, Parent may pursue any and all remedies available at law, by contract, or otherwise, including without limitation, the remedies provided in Section 5.2 hereof.  The obligation of the

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Company Shareholders to pay additional amounts to satisfy their obligations hereunder shall be joint and several among the Company Shareholders.

(e)                                  Final Determination of Final Closing Date Net Cash.  If within thirty (30) business days following Representatives receipt of the Final Closing Date Balance Sheet and Parents calculation of the Final Closing Date Net Cash, Representative has not given Parent written notice of its objection to Parents calculation of the Final Closing Date Net Cash (which notice shall state in reasonable detail the amount and basis of Representatives objection), then Parents calculation of the Final Closing Date Net Cash shall be binding and conclusive on the parties.  During the thirty (30) days following Representatives timely delivery of a notice of objection, Representative and Parent shall use their best efforts to reach agreement on the Final Closing Date Net Cash, which agreed upon Final Closing Date Net Cash shall be binding and conclusive on the parties.  If Representative and Parent fail to agree on the Final Closing Date Net Cash during such period, Representative and Parent (1) shall promptly submit the issues remaining in dispute to Ernst & Young, independent public accountants (the Independent Accountants), for resolution in accordance with GAAP applying the same accounting principles, policies and practices that were used in preparing Companys Financial Statements and (2) shall furnish or cause to be furnished to the Independent Accountants such work papers and other documents and information relating to the disputed issues as the Independent Accountants may request and are available to that party or its agents and shall be afforded the opportunity to present to the Independent Accountants any material relating to the disputed issues and to discuss the issues with the Independent Accountants.  The Independent Accountants shall deliver to Representative and Parent, as promptly as practicable and in no event later than sixty (60) days following the submission to the Independent Accountants of the issues remaining in dispute, a report (i) setting forth the Independent Accountants calculation of the disputed issues and a calculation of the Final Closing Date Net Cash, and (ii) allocating the Hold-Back Cash between Parent and Company Shareholders.  Such report and calculation of the Final Closing Date Net Cash shall be final, binding and conclusive on the parties.  The Company Shareholders and Parent will each bear fifty percent (50%) of the fees and costs of the Independent Accountants.

(f)                                    Payments to Company Shareholders.  Any amounts paid to the Company Shareholders pursuant to this Section 1.5 shall be paid to the Company Shareholders pro rata based on their percentage ownership of the Company Common Shares prior to the Effective Time (as set forth in Part 2.3(a) of the Company Disclosure Letter) via wire transfer pursuant to instructions delivered by each Company Shareholder to the Cash Escrow Agent.

1.6                                 Further Assurances.  The Company Shareholders agree that if, at any time after the Effective Time, Parent considers or is advised that any further deeds, assignments or assurances are reasonably necessary or desirable to vest, perfect, confirm or continue in Surviving Corporation or Parent, title to any property or rights of Company, Parent and any of its officers are hereby authorized by the Company Shareholders to execute and deliver all such proper deeds, assignments and assurances and do all other things necessary or desirable to vest, perfect, confirm or continue title to such property or rights in Surviving Corporation or Parent, and otherwise to carry out the purposes of this Agreement, in the name of the Company Shareholders or otherwise. Following the Effective Time, the Company Shareholders shall cooperate fully with Parent and Parents professional advisors in connection with the filing of all

5

Tax Returns (as defined in Section 2.9) related to Company and any audit, litigation or other proceeding with respect to Taxes owed or paid by Company.  Without limiting the generality of the foregoing, the cooperation by the Company Shareholders shall include the provision of records and information reasonably relevant to such audit, litigation or other proceeding.  The Company Shareholders agree to retain all books and records with respect to Tax matters pertinent to Company relating to any taxable period beginning prior to the Effective Time until the expiration of the applicable statutes of limitations of the respective taxable periods.

1.7                                 Securities Law Issues; Registration Rights.  Based in part on the representations of the Company Shareholders made in the Investment Representation Letters, the Parent Common Stock to be issued in the Merger will be issued pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended (the Securities Act) and/or Regulation D promulgated under the Securities Act and exemptions from qualification under applicable state securities laws.  Concurrently with the execution of this Agreement, Parent and the Company Shareholders will enter into a registration rights agreement in the form attached hereto as Exhibit F (the Registration Rights Agreement) with respect to the Merger Shares to be issued to the Company Shareholders.  Subject to compliance by Parent with its obligations under the Registration Rights Agreement, holders of the Merger Shares will be wholly responsible for compliance with all federal and state securities laws regarding the sale, transfer or other disposition of such Merger Shares.

1.8                                 Tax-Free Reorganization.  The parties anticipate that the Merger shall constitute a non-taxable reorganization within the meaning of Section 368(a)(2)(E) of the Internal Revenue Code of 1986, as amended (the Code).  However, Parent makes no representations or warranties to Company, any Company Shareholder or any other holder of Company securities regarding the tax treatment or tax consequences of the Merger or any of the other transactions contemplated by this Agreement, and Company and the Company Shareholders acknowledge that Company and the Company Shareholders are relying solely on their own tax advisors in connection with this Agreement, the Merger and the other transactions contemplated by this Agreement.

1.9                                 Accounting.  The parties intend that the Merger be treated as a purchase for financial accounting purposes.

1.10                           Exchange of Certificates.

(a)                                  At and after the Effective Time, each Company Certificate will represent the right to receive a certificate representing the number of Merger Shares determined pursuant to Section 1.2(b) and, if applicable, cash in lieu of fractional Merger Shares pursuant to Section 1.2(d).  The Parent shall make available to American Stock Transfer and Trust Company (the Exchange Agent) certificates representing the Merger Shares and cash in an amount sufficient to permit the payment of cash in lieu of fractional Merger Shares pursuant to Section 1.2(d).

(b)                                 All certificates covering the number of Merger Shares determined pursuant to Section 1.2(b) and, if applicable, cash in lieu of fractional Merger Shares determined pursuant to Section 1.2(d) to be delivered upon the surrender of a Company Certificates in accordance with the terms hereof will be delivered to the registered holder of such Company

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Certificate.  After the Effective Time, there will be no further registration of transfers of Company Common Shares on the share transfer books of Company.

(c)                                  No dividends or distributions payable to record holders of Parent Common Stock after the Effective Time will be paid to the holder of any unsurrendered Company Certificate unless and until the holder of such unsurrendered Company Certificate surrenders such Company Certificate to Parent or the Exchange Agent as provided above.  Subject to the effect, if any, of applicable escheat and other laws, following surrender of any Company Certificate, Parent shall deliver to the Person entitled thereto, without interest, the amount of any dividends and distributions theretofore paid with respect to the Parent Common Stock so withheld as of any date subsequent to the Effective Time and prior to such date of delivery.

(d)                                 If any certificate for Merger Shares is to be issued in a name other than that in which the Company Certificate surrendered in exchange therefor is registered, it will be a condition of the issuance thereof that the Company Certificate so surrendered will be properly endorsed and otherwise in proper form for transfer and that the Person requesting such exchange will have paid to Parent, or any agent designated by it, any transfer or other Taxes required by reason of the issuance of a certificate for Merger Shares in any name other than that of the registered holder of the Company Certificate surrendered, or established to the satisfaction of Parent, or any agent designated by it, that such Taxes have been paid or are not payable.

(e)                                  Notwithstanding anything to the contrary in this Section 1.10, none of the Exchange Agent, Surviving Corporation nor any party hereto shall be liable to a holder of Company Common Shares for any amount properly paid to a public official pursuant to any applicable abandoned property, escheat or similar law.

1.11                           Shareholders Agreement.  At the Effective Time, the Shareholders Agreement dated as of October 31, 2002 by and among Company and the Company Shareholders shall terminate and be of no further force and effect.

2.                                      REPRESENTATIONS AND WARRANTIES OF COMPANY AND THE COMPANY SHAREHOLDERS

Company and each Company Shareholder jointly and severally represent and warrant to Parent that, except as set forth in the letter addressed to Parent from Company and dated as of the date hereof, including all schedules thereto (which, subject to Section 6.16 hereof, shall specifically reference the Sections of this Agreement to which the specific items of disclosure therein constitute an exception) which has been delivered by Company to Parent concurrently with the parties execution of this Agreement (the Company Disclosure Letter), each of the representations, warranties and statements contained in the following sections of this Section 2 is true and correct as of the date of this Agreement.  For all purposes of this Agreement, the statements contained in the Company Disclosure Letter shall also be deemed to be representations and warranties made and given by Company and each Company Shareholder under Section 2 of this Agreement.

2.1                                 Organization and Good Standing.  Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Ohio and has continuously

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been in good standing under the laws of the State of Ohio at all times since its inception.  Company has the corporate power and authority to own, operate and lease its properties and to carry on its business as now conducted and as proposed to be conducted.  Company is not required to qualify to do business as a foreign corporation in any jurisdiction.  Except as set forth in Part 2.1 of the Company Disclosure Letter, the operations now being conducted by Company are not now, and have never been, conducted by Company under any other name.

2.2                                 Power, Authorization and Validity.

(a)                                  Company has the right, power, legal capacity and authority to enter into and perform its obligations under this Agreement and all agreements and documents that Company is required to execute pursuant to this Agreement (collectively, the Company Ancillary Agreements). The execution and delivery of this Agreement and the Company Ancillary Agreements provided for herein have been duly and validly approved and authorized by all necessary corporate action.  Each Company Shareholder has the right, power, legal capacity and authority to enter into and perform his respective obligations under this Agreement and all agreements and documents that such Company Shareholders is required to execute pursuant to this Agreement (the Shareholders Ancillary Agreements).

(b)                                 Except as set forth in Part 2.2(b) of the Company Disclosure Letter, no filing, authorization, consent or approval, from a Governmental Body (as defined herein) or otherwise, or filing with any Governmental Body is necessary to enable Company or the Company Shareholders to enter into or perform their respective obligations under this Agreement, the Company Ancillary Agreements or the Shareholders Ancillary Agreements, or to complete the Merger, except for the filing of the Certificate of Merger with the Ohio Secretary of State.

(c)                                  This Agreement has been duly executed and delivered by Company and the Company Shareholders.  This Agreement and the Company Ancillary Agreements are valid and binding obligations of Company enforceable against Company in accordance with their respective terms, subject only to the effect, if any, of (i) applicable bankruptcy and other similar laws affecting the rights of creditors generally, (ii) rules of law governing specific performance, injunctive relief and other equitable remedies, and (iii) the enforceability of provisions requiring indemnification in connection with the offering, issuance or sale of securities (the Enforceability Exceptions).  This Agreement is, and the Shareholders Ancillary Agreements when executed by the Company Shareholders will be, valid and binding obligations of the Company Shareholders enforceable against the Company Shareholders in accordance with their respective terms, subject only to the Enforceability Exceptions.

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