EXHIBIT 2.1 DISTRIBUTION AGREEMENT

EXHIBIT 2.1

DISTRIBUTION AGREEMENT

BETWEEN

EON COMMUNICATIONS CORPORATION

AND

CORTELCO SYSTEMS PUERTO RICO, INC.

EFFECTIVE AS OF

JANUARY 30, 2002

Table of Contents

Page
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ARTICLE I DISTRIBUTION...........................................................................................2
SECTION 1.1. DISTRIBUTION DATE................................................................................2
SECTION 1.2. DELIVERY OF SHARES FOR DISTRIBUTION..............................................................2
SECTION 1.3. SHARES RECEIVED..................................................................................2
SECTION 1.4. OBLIGATION TO PROVIDE INFORMATION................................................................3
SECTION 1.5. CONDITIONS TO DISTRIBUTION.......................................................................3
SECTION 1.6. SOLE DISCRETION OF EON...........................................................................3
SECTION 1.7. FRACTIONAL SHARES................................................................................4
ARTICLE II DOCUMENTS AND ITEMS TO BE DELIVERED ON OR BEFORE THE DISTRIBUTION DATE................................4
SECTION 2.1. DOCUMENTS TO BE DELIVERED BY EON.................................................................4
SECTION 2.2. DOCUMENTS TO BE DELIVERED BY CSPR................................................................4
ARTICLE III ACTIONS PENDING THE DISTRIBUTION.....................................................................4
SECTION 3.1. TRANSACTIONS PRIOR TO THE DISTRIBUTION...........................................................4
ARTICLE IV COVENANTS AND OTHER MATTERS...........................................................................5
SECTION 4.1. OTHER AGREEMENTS.................................................................................5
SECTION 4.2. AGREEMENT FOR EXCHANGE OF INFORMATION............................................................5
SECTION 4.3. AUDITORS AND AUDITS; ANNUAL AND QUARTERLY STATEMENTS AND ACCOUNTING..............................7
SECTION 4.4. CONSISTENCY WITH PAST PRACTICES..................................................................9
SECTION 4.5. PAYMENT OF EXPENSES..............................................................................9
SECTION 4.6. DISPUTE RESOLUTION...............................................................................9
SECTION 4.7. GOVERNMENTAL APPROVALS..........................................................................10
SECTION 4.8. REPRESENTATIONS AND WARRANTIES OF EON...........................................................10
SECTION 4.9. REPRESENTATIONS AND WARRANTIES OF CSPR..........................................................10
SECTION 4.10. INSURANCE MATTERS..............................................................................11
ARTICLE V MISCELLANEOUS.........................................................................................11
SECTION 5.1. LIMITATION OF LIABILITY.........................................................................11
SECTION 5.2. ENTIRE AGREEMENT................................................................................11
SECTION 5.3. GOVERNING LAW...................................................................................12
SECTION 5.4. TERMINATION.....................................................................................12
SECTION 5.5. NOTICES.........................................................................................12
SECTION 5.6. COUNTERPARTS....................................................................................12
SECTION 5.7. BINDING EFFECT; ASSIGNMENT......................................................................12
SECTION 5.8. SEVERABILITY....................................................................................13
SECTION 5.9. WAIVER OF BREACH................................................................................13
SECTION 5.10. AMENDMENT AND EXECUTION........................................................................13
SECTION 5.11. DESCRIPTIVE HEADINGS...........................................................................13
EXHIBIT A EMPLOYEE MATTERS AGREEMENT.........................................................................15
EXHIBIT B CONFIDENTIAL DISCLOSURE AGREEMENT..................................................................16

DISTRIBUTION AGREEMENT

This Distribution Agreement (this "AGREEMENT") is entered into as of
January 30, 2002, between eOn Communications Corporation, a Delaware corporation
("EON"), and Cortelco Systems Puerto Rico, a Puerto Rico corporation ("CSPR").
eOn and CSPR are sometimes referred to herein individually as a "party" or
collectively as the "parties."

RECITALS

WHEREAS, eOn currently owns all of the issued and outstanding capital
stock of CSPR;

WHEREAS, the Board of Directors of eOn has determined that it is
appropriate and desirable on the terms and conditions contemplated hereby to
distribute to the holders of its common stock, by means of a pro rata
distribution, approximately 1,200,000 of the shares of CSPR common stock owned
by eOn (the "DISTRIBUTION"); and

WHEREAS, the parties intend in this Agreement, including the Exhibits
and Schedules hereto, to set forth the principal arrangements between them
regarding the Distribution.

NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth below, the parties hereto, intending to be
legally bound, agree as follows:

ARTICLE I

DISTRIBUTION

SECTION 1.1. DISTRIBUTION DATE. Unless otherwise provided in this
Agreement, or in any agreement to be executed in connection with this Agreement,
the effective time and date of agreement in connection with the Distribution
shall be 12:01 a.m., Eastern Time, on the date fixed by the Board of Directors
of eOn (the "DISTRIBUTION DATE").

SECTION 1.2. DELIVERY OF SHARES FOR DISTRIBUTION. Subject to SECTIONS
1.5 and 1.7 hereof, on or prior to the Distribution Date, eOn will deliver to
the distribution agent to be appointed by eOn (the "DISTRIBUTION AGENT") a
single stock certificate, endorsed by eOn in blank, representing that number of
shares equal to the number of shares of eOn common stock outstanding on the
"Record Date" divided by ten (10). The "Record Date" will be a date determined
by the Board of Directors of eOn, in its sole discretion (the "RECORD DATE").

SECTION 1.3. SHARES RECEIVED. Subject to SECTIONS 1.5 and 1.7, eOn
shall cause the transfer agent for the shares of common stock of CSPR to
instruct the Distribution Agent to distribute on the Distribution Date to each
such holder or designated transferee or transferees of such holder one share of
CSPR common stock for every ten (10) shares of eOn common stock so held either
by crediting the holder's brokerage account or by delivering a certificate or
certificates representing such shares.

SECTION 1.4. OBLIGATION TO PROVIDE INFORMATION. CSPR and eOn, as the
case may be, will provide to the Distribution Agent all share certificates and
any information required in order to complete the Distribution on the basis
specified above.

SECTION 1.5. CONDITIONS TO DISTRIBUTION. The parties hereto shall use
their reasonable commercial efforts to effect the Distribution prior to July 31,
2002, or as soon thereafter as practicable. eOn and CSPR shall take all
reasonable steps necessary and appropriate to cause the conditions set forth
this SECTION 1.5 to be satisfied and to effect the Distribution on the
Distribution Date. The obligations of the parties to consummate the Distribution
shall be conditioned on the satisfaction, or written waiver by eOn, of the
following conditions:

(a) Government Approvals. Any material governmental approvals
and consents necessary to consummate the Distribution shall have been obtained
and be in full force and effect;

(b) Registration Statement. The Form 10 Registration Statement
shall have been filed and become effective, and there shall be no stop-order in
effect with respect thereto.

(d) No Legal Restraints. No order, injunction or decree issued
by any court or agency of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the Distribution or any of the other
transactions contemplated by this Agreement shall be in effect.

(e) Other Actions. Such other actions as the parties hereto
may, based upon the advice of counsel, reasonably request to be taken prior to
the Distribution in order to assure the successful completion of the
Distribution shall have been taken.

(f) No Termination. This Agreement shall not have been
terminated.

SECTION 1.6. SOLE DISCRETION OF EON. eOn currently intends to complete
the Distribution by July 31, 2002. eOn shall, in its sole and absolute
discretion, determine the date of the consummation of the Distribution and all
terms of the Distribution, including, without limitation, the form, structure
and terms of any transaction(s) and/or offering(s) to effect the Distribution
and the timing of and conditions to the consummation of the Distribution. In
addition, eOn may at any time and from time to time until the completion of the
Distribution modify or change the terms of the Distribution, including, without
limitation, by accelerating or delaying the timing of the consummation of all or
part of the Distribution. CSPR shall cooperate with eOn in all respects to
accomplish the Distribution and shall, at eOn's direction, promptly take any and
all actions necessary or desirable to effect the Distribution, including,
without limitation, the registration under the Securities Act of the common
stock of CSPR on an appropriate registration form or forms to be designated by
eOn. eOn shall select any investment banker(s) and manager(s) in connection with
the Distribution, as well as any financial printer, solicitation and/or exchange
agent and outside counsel for eOn; provided, however, that nothing

herein shall prohibit CSPR from engaging its own financial, legal, accounting
and other advisors in connection with the Distribution.

SECTION 1.7. FRACTIONAL SHARES. No fractional shares will be issued. As
soon as practicable after the Record Date, eOn shall direct the Distribution
Agent to determine the number of whole shares allocable to each holder of record
or beneficial owner of common stock of eOn as of the Record Date determined by
rounding up fractional shares to the nearest whole share. eOn and the
Distribution Agent shall use their reasonable commercial efforts to aggregate
the shares of common stock of eOn that may be held by any beneficial owner
thereof through more than one account in determining the fractional share
allocable to such beneficial owner.

ARTICLE II

DOCUMENTS AND ITEMS TO BE DELIVERED ON OR BEFORE THE DISTRIBUTION DATE

SECTION 2.1. DOCUMENTS TO BE DELIVERED BY EON. On or before the
Distribution Date, eOn will deliver to CSPR all of the following items and
agreements (collectively, together with all agreements and documents
contemplated by such agreements, the "ANCILLARY AGREEMENTS"):

(a) A duly executed Employee Matters Agreement substantially
in the form attached hereto as EXHIBIT A;

(b) A duly executed Confidential Disclosure Agreement
substantially in the form attached hereto as EXHIBIT B; and

(c) Such other agreements, documents or instruments as the
parties may agree are necessary or desirable in order to achieve the purposes
hereof.

SECTION 2.2. DOCUMENTS TO BE DELIVERED BY CSPR. As of the Distribution
Date, CSPR will deliver to eOn all of the following:

(a) In each case where CSPR is a party to any agreement or
instrument referred to in SECTION 2.1, a duly executed counterpart of such
agreement or instrument; and

(b) Such other agreements, documents or instruments as the
parties may agree are necessary or desirable in order to achieve the purposes
hereof.

ARTICLE III

ACTIONS PENDING THE DISTRIBUTION

SECTION 3.1. TRANSACTIONS PRIOR TO THE DISTRIBUTION. Subject to the
conditions specified in SECTION 1.5 and SECTION 1.6, eOn and CSPR shall use
their reasonable commercial efforts to consummate the Distribution. Such efforts
shall include, but not necessarily be limited to, those specified in this
SECTION 3.1.

(a) Registration Statement. CSPR, with the cooperation and
assistance of eOn, shall register its common stock under Section 12 of the
Securities Exchange Act of 1934 (the "EXCHANGE ACT") by filing a Form 10
Registration Statement, and such amendments or supplements thereto, as may be
necessary in order to cause the same to become and remain effective as required
by law, including, but not limited to, filing such amendments to the Form 10
Registration Statement as may be required by the Securities and Exchange
Commission (the "COMMISSION") or federal, state or foreign securities laws. eOn
and CSPR shall also cooperate in preparing and filing with the Commission any
registration statements or amendments thereof which are required to reflect the
establishment of, or amendments to, any employee benefit and other plans
necessary or appropriate in connection with the Distribution or the other
transactions contemplated by this Agreement.

(b) Information Statement. eOn and CSPR shall prepare and
mail, prior to the Distribution Date, to the holders of common stock of eOn,
such information concerning CSPR and the Distribution and such other matters as
eOn and CSPR shall reasonably determine are necessary and as may be required by
law. eOn and CSPR will prepare, and CSPR will, to the extent required under
applicable law, file with the Commission any such documentation which eOn and
CSPR reasonably determine is necessary or desirable to effectuate the
Distribution, and eOn and CSPR shall each use its reasonable commercial efforts
to obtain all necessary approvals from the Commission with respect thereto as
soon as practicable.

(c) Other Matters. eOn and CSPR shall consult with each other
and their financial advisors regarding the timing, pricing and other material
matters with respect to the Distribution.

(d) Blue Sky. eOn and CSPR shall take all such actions as may
be necessary or appropriate under the securities or blue sky laws of the United
States (and any comparable laws under any foreign jurisdiction) in connection
with the Distribution.

(e) OTC Bulletin Board. CSPR shall use its reasonable
commercial efforts to (i) to make its common stock an OTCBB-eligible security
(pursuant to NASD Rule 6530) and (ii) to assist an eligible market maker in the
submission of any forms or filings required by the NASD in order to permit the
reporting of trades of CSPR's common stock on the OTC Bulletin Board service.

ARTICLE IV

COVENANTS AND OTHER MATTERS

SECTION 4.1. OTHER AGREEMENTS. In addition to the specific agreements,
documents and instruments that are Exhibits to this Agreement, eOn and CSPR
agree to execute or cause to be executed by the appropriate parties and deliver,
as appropriate, such other agreements, instruments and documents as may be
necessary or desirable in order to effect the purposes of this Agreement and the
Ancillary Agreements.

SECTION 4.2. AGREEMENT FOR EXCHANGE OF INFORMATION. Each of eOn and
CSPR agrees to provide, or cause to be provided, to each other, at anytime
before or after the

Distribution Date, as soon as reasonably practicable after written request
therefore, any information in the possession or under the control of such party
that the requesting party reasonably needs (i) to comply with reporting,
disclosure, filing or other requirements imposed on the requesting party
(including under applicable securities laws) by a governmental authority having
jurisdiction over the requesting party, (ii) for use in any other judicial,
regulatory, administrative or other proceeding or in order to satisfy audit,
accounting, claims, regulatory, litigation or other similar requirements, (iii)
to comply with its obligations under this Agreement or any Ancillary Agreement
or (iv) in connection with the ongoing businesses of eOn or CSPR, as the case
may be; provided, however, that in the event that any party determines that any
such provision of information could be commercially detrimental, violate any law
or agreement, or waive any attorney-client privilege, the parties shall take all
reasonable measures to permit the compliance with such obligations in a manner
that avoids any such harm or consequence.

(a) Internal Accounting Controls; Financial Information. Until
the seventh anniversary of the Distribution Date, (i) each party shall maintain
in effect at its own cost and expense adequate systems and controls for its
business to the extent necessary to enable the other party to satisfy its
reporting, accounting, audit and other obligations, and (ii) each party shall
provide, or cause to be provided, to the other party in such form as such
requesting party shall request, at no charge to the requesting party, all
financial and other data and information as the requesting party determines
necessary or advisable in order to prepare its financial statements and reports
or filings with any governmental authority.

(b) Ownership of Information. Any information owned by a party
that is provided to a requesting party pursuant to this SECTION 4.2 shall be
deemed to remain the property of the providing party. Unless specifically set
forth herein, nothing contained in this Agreement shall be construed as granting
or conferring rights of license or otherwise in any such information.

(c) Record Retention. To facilitate the possible exchange of
information pursuant to this SECTION 4.2 and other provisions of this Agreement
after the Distribution Date, each party agrees to use its reasonable commercial
efforts to retain all tax, employee and financial information in their
respective possession or control on the Distribution Date for seven years after
the Distribution Date. No party will destroy any information that exists on the
Distribution Date (other than information that is permitted to be destroyed
under the current record retention policy of such party) without first using its
reasonable commercial efforts to notify the other party of the proposed
destruction and giving the other party the opportunity to take possession of
such information prior to such destruction.

(d) Limitation of Liability. No party shall have any liability
to any other party in the event that any information exchanged or provided
pursuant to this SECTION 4.2 is found to be inaccurate, in the absence of
willful misconduct by the party providing such information. No party shall have
any liability to any other party if any information is destroyed or lost after
reasonable commercial efforts by such party to comply with the provisions of
SECTION 4.2(c).

(e) Other Agreements Providing For Exchange of Information.
The rights and obligations granted under this SECTION 4.2 are subject to any
specific limitations, qualifications

or additional provisions on the sharing, exchange or confidential treatment of
information set forth in this Agreement and any Ancillary Agreement.

(f) Production of Witnesses; Records; Cooperation. After the
Distribution Date, except in the case of a legal or other proceeding by one
party against another party (which shall be governed by such discovery rules as
may be applicable under SECTION 4.6 or otherwise), each party hereto shall use
its reasonable commercial efforts to make available to each other party, upon
written request, the former, current and future directors, officers, employees,
other personnel and agents of such party as witnesses and any books, records or
other documents within its control or which it otherwise has the ability to make
available, to the extent that any such person (giving consideration to business
demands of such directors, officers, employees, other personnel and agents) or
books, records or other documents may reasonably be required in connection with
any legal, administrative or other proceeding in which the requesting party may
from time to time be involved, regardless of whether such legal, administrative
or other proceeding is a matter with respect to which indemnification may be
sought hereunder. The requesting party shall bear all costs and expenses in
connection therewith.

SECTION 4.3. AUDITORS AND AUDITS; ANNUAL AND QUARTERLY STATEMENTS AND
ACCOUNTING. Each party agrees that, for so long as eOn is required by any
governmental entity or regulatory body to include CSPR's results of operations
and financial position in eOn's financial reports, including but not limited to
its audited financial statements:

(a) Selection of Auditors. CSPR shall not select an accounting
firm other than a nationally recognized accounting firm to serve as its
independent certified public accountants ("CSPR'S AUDITORS") for purposes of
providing an opinion on its consolidated financial statements without eOn's
prior written consent (which shall not be unreasonably withheld).

(b) Date of Auditors' Opinion and Quarterly Reviews. CSPR
shall use its reasonable commercial efforts to enable the CSPR Auditors to
complete their audit such that they will date their opinion on CSPR's audited
annual financial statements on the same date that eOn's independent certified
public accountants ("EON'S AUDITORS") date their opinion on eOn's audited annual
financial statements, and to enable eOn to meet its timetable for the printing,
filing and public dissemination of eOn's annual financial statements. CSPR shall
use its reasonable commercial efforts to enable the CSPR Auditors to complete
their quarterly review procedures such that they will provide clearance on
CSPR's quarterly financial statements on the same date that eOn's Auditors
provide clearance on eOn's quarterly financial statements.

(c) Annual and Quarterly Financial Statements. CSPR shall
provide to eOn on a timely basis all information that eOn reasonably requires to
meet its schedule for the preparation, printing, filing, and public
dissemination of eOn's annual and quarterly financial statements. Without
limiting the generality of the foregoing, CSPR will provide all required
financial information with respect to CSPR to CSPR's Auditors in a sufficient
and reasonable time and in sufficient detail to permit CSPR's Auditors to take
all steps and perform all reviews necessary to provide sufficient assistance to
eOn's Auditors with respect to information to be included or contained in eOn's
annual and quarterly financial statements. Similarly, eOn shall

provide to CSPR on a timely basis all information that CSPR reasonably requires
to meet its schedule for the preparation, printing, filing and public
dissemination of CSPR's annual and quarterly financial statements. Without
limiting the generality of the foregoing, eOn will provide all required
financial information with respect to eOn to eOn's Auditors in a sufficient and
reasonable time and in sufficient detail to permit eOn's Auditors to take all
steps and perform all reviews necessary to provide sufficient assistance to
CSPR's Auditors with respect to information to be included or contained in
CSPR's annual and quarterly financial statements.

(d) Identity of Personnel Performing the Annual Audit and
Quarterly Reviews. CSPR shall authorize CSPR's Auditors to make available to
eOn's Auditors both the personnel who performed or are performing the annual
audits and quarterly reviews of CSPR and work papers related to the annual
audits and quarterly reviews of CSPR, in all cases within a reasonable time
prior to CSPR's Auditors' opinion date, so that eOn's Auditors are able to
perform the procedures they consider necessary to take responsibility for the
work of CSPR's Auditors as it relates to eOn's Auditors' report on eOn's
financial statements, all within sufficient time to enable eOn to meet its
timetable for the printing, filing and public dissemination of eOn's annual and
quarterly statements. Similarly, eOn shall authorize eOn's Auditors to make
available to CSPR's Auditors both the personnel who performed or are performing
the annual audits and quarterly reviews of eOn and work papers related to the
annual audits and quarterly reviews of eOn, in all cases within a reasonable
time prior to eOn's Auditors' opinion date, so that CSPR's Auditors are able to
perform the procedures they consider necessary to take responsibility for the
work of eOn's Auditors as it relates to CSPR's Auditors' report on CSPR's
statements, all within sufficient time to enable CSPR to meet its timetable for
the printing, filing and public dissemination of CSPR's annual and quarterly
financial statements.

(e) Access to Books and Records. CSPR shall provide eOn's
internal auditors and their designees access to CSPR's books and records so that
eOn may conduct reasonable audits relating to the financial statements provided
by CSPR pursuant hereto as well as to the internal accounting controls and
operations of CSPR and its Subsidiaries. Similarly, eOn shall provide CSPR's
internal auditors and their designees access to eOn's and its Subsidiaries'
books and records so that CSPR may conduct reasonable audits relating to the
financial statements provided by eOn pursuant hereto as well as to the internal
accounting controls and operations of eOn.

(f) Notice of Change in Accounting Principles. CSPR shall give
eOn as much prior notice as reasonably practical of any proposed determination
of, or any significant changes in, its accounting estimates or accounting
principles from those in effect on the Distribution Date. CSPR will consult with
eOn and, if requested by eOn, CSPR will consult with eOn's independent public
accountants with respect thereto. eOn shall give CSPR as much prior notice as
reasonably practical of any proposed determination of, or any significant
changes in, its accounting estimates or accounting principles from those in
effect on the Distribution Date.

(g) Conflict with Third-Party Agreements. Nothing in SECTIONS
4.2 and 4.3 shall require CSPR to violate any agreement with any third parties
regarding the confidentiality of confidential and proprietary information
relating to that third party or its business.

SECTION 4.4. CONSISTENCY WITH PAST PRACTICES. At all times prior to the
Distribution Date, eOn will cause CSPR to continue to conduct business in the
ordinary course, consistent with past practices.

SECTION 4.5. PAYMENT OF EXPENSES. Except as otherwise provided in this
Agreement, the Ancillary Agreements or any other agreement between the parties
relating to the Distribution, all costs and expenses of the parties hereto in
connection with the Distribution (excluding internal costs and expenses of CSPR)
shall be paid by eOn.

SECTION 4.6. DISPUTE RESOLUTION. Resolution of any and all disputes,
claims and causes of action of any nature whatsoever (collectively, "DISPUTES"),
arising from or in connection with this Agreement, shall be exclusively governed
by and settled in accordance with the provisions of this SECTION 4.6.

(a) Negotiation. The parties shall make a good faith attempt
to resolve any Dispute arising out of or relating to this Agreement through
informal negotiation between appropriate representatives from each of eOn and
CSPR. If at any time either party feels that such negotiations are not leading
to a resolution of the Dispute, such party may send a notice to the other party
describing the Dispute and requesting a meeting of the senior executives from
each party. Within ten (10) business days after such notice is given, each party
shall select appropriate senior executives (e.g., director or V.P. level) of
each party who shall have the authority to resolve the matter and shall meet to
attempt in good faith to negotiate a resolution of the Dispute prior to pursuing
other available remedies. During the course of negotiations under this SECTION
4.6(a), all reasonable requests made by one party to the other for information,
including requests for copies of relevant documents, will be honored. The
specific format for such negotiations will be left to the discretion of the
designated negotiating senior executives but may include the preparation of
agreed upon statements of fact or written statements of position furnished to
the other party. In the event that any Dispute arising out of or related to this
Agreement is not settled by the parties within thirty (30) days after the first
meeting of the negotiating senior executives, either party may commence
litigation with respect to the Dispute. However, except as provided below in
SECTION 4.6(b), neither party shall commence litigation against the other party
to resolve the Dispute (i) until the parties try in good faith to settle the
Dispute by negotiation for at least thirty (30) days after the first meeting of
the negotiating senior executives or (ii) until forty (40) days after notice of
a Dispute is given by either party to the other party, whichever occurs first.

(b) Proceedings. Any Dispute regarding the following is not
required to be negotiated prior to seeking relief from a court of competent
jurisdiction: breach of any obligation of confidentiality; infringement,
misappropriation, or misuse of any intellectual property right; or any other
claim where interim relief from the court is sought to prevent serious and
irreparable injury to a party. However, the parties shall make a good faith
effort to negotiate such Dispute, according to SECTION 4.6(a), while such court
action is pending.

(c) Continuity of Service and Performance. Unless otherwise
agreed in writing, the parties will continue to provide service and honor all
other commitments under this Agreement and each Ancillary Agreement during the
course of dispute resolution pursuant to the

provisions of this SECTION 4.6 with respect to all matters not subject to such
dispute, controversy or claim.

SECTION 4.7. GOVERNMENTAL APPROVALS. To the extent that the
Distribution requires any governmental approvals, the parties will use their
reasonable commercial efforts to obtain any such governmental approvals.

SECTION 4.8. REPRESENTATIONS AND WARRANTIES OF EON. eOn hereby
represents and warrants to CSPR as follows:

(a) Organization, Good Standing and Qualification. eOn is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
carry on its business as currently conducted. eOn is duly qualified to transact
business and is in good standing in each jurisdiction in which the failure to so
qualify would have a material adverse effect on the CSPR's business or
properties.

(b) Corporate Power. eOn has all requisite legal and corporate
power to (i) execute and deliver this Agreement, the Ancillary Agreements and
all applicable exhibits and schedules attached hereto and thereto at such times
as are contemplated by this Agreement and the Ancillary Agreements; and (ii)
perform its obligations hereunder and thereunder.

(c) Due Authorization Execution and Enforceability. The
execution, delivery and performance of this Agreement and the Ancillary
Agreements by eOn have been duly authorized by all necessary corporate or other
actions, eOn has duly and validly executed and delivered this Agreement and the
Ancillary Agreements, and this Agreement and the Ancillary Agreements are the
legal, valid and binding obligations of eOn, enforceable against eOn in
accordance with their respective terms subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and general equity principles.

SECTION 4.9. REPRESENTATIONS AND WARRANTIES OF CSPR. CSPR hereby
represents and warrants to eOn as follows:

(a) Organization, Good Standing and Qualification. CSPR is a
corporation duly organized, validly existing and in good standing under the laws
of the Commonwealth of Puerto Rico and has all requisite corporate power and
authority to carry on its business as currently conducted.

(b) Corporate Power. CSPR has all requisite legal and
corporate power to (i) execute and deliver this Agreement, the Ancillary
Agreements and all applicable exhibits and schedules attached hereto and thereto
at such times as are contemplated by this Agreement and the Ancillary
Agreements; and (ii) perform its obligations hereunder and thereunder.

(c) Due Authorization Execution and Enforceability. The
execution, delivery and performance of this Agreement and the Ancillary
Agreements by CSPR have been duly authorized by all necessary corporate or other
actions, CSPR has duly and validly executed and delivered this Agreement and the
Ancillary Agreements, and this Agreement and the Ancillary

Agreements are the legal, valid and binding obligations of CSPR, enforceable
against CSPR in accordance with their respective terms subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and general equity principles.

SECTION 4.10. INSURANCE MATTERS.

(a) CSPR Insurance Coverage After the Distribution Date. From
and after the Distribution Date, CSPR shall be responsible for obtaining and
maintaining insurance programs for its risk of loss and such insurance
arrangements shall be separate and apart from eOn's insurance programs.
Notwithstanding the foregoing, eOn, upon the request of CSPR, shall use all
reasonable efforts to assist CSPR in the transition to its own separate
insurance programs from and after the Distribution Date, and shall provide CSPR
with any information that is in the possession of eOn and would in anyway
facilitate CSPR's ability to either obtain insurance coverages for CSPR or to
assist CSPR in preventing unintended self-insurance, in whatever form.

(b) Cooperation and Agreement not to Release Carriers. Each of
eOn and CSPR will share such information as is reasonably necessary in order to
permit the other to manage and conduct its insurance matters in an orderly
fashion. Each of eOn and CSPR, at the request of the other, shall cooperate with
and use reasonable efforts to assist the other in recoveries for claims made
under any insurance policy for the benefit of any insured party, and neither eOn
nor CSPR shall take any action which would intentionally jeopardize or otherwise
interfere with either party's ability to collect any proceeds payable pursuant
to any insurance policy. Except as otherwise contemplated by this Distribution
Agreement or any Ancillary Agreement, after the Distribution Date, neither eOn
nor CSPR shall, without the consent of the other, provide any insurance carrier
with a release, or amend, modify or waive any rights under any such policy or
agreement, if such release, amendment, modification or waiver would adversely
affect any rights or potential rights of the other thereunder. However, nothing
in this Section 4.11(b) shall (i) preclude any party from presenting any claim
or from exhausting any policy limit, (ii) require any party to pay any premium
or other amount or to incur any liability, or (iii) require any party to renew,
extend or continue any policy in force.

ARTICLE V

MISCELLANEOUS

SECTION 5.1. LIMITATION OF LIABILITY. IN NO EVENT SHALL EON OR CSPR BE
LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT, INCIDENTAL
OR PUNITIVE DAMAGES OR LOST PROFITS, HOWEVER CAUSED AND UNDER ANY THEORY OF
LIABILITY (INCLUDING NEGLIGENCE) ARISING IN ANY WAY OUT OF THIS AGREEMENT,
WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

SECTION 5.2. ENTIRE AGREEMENT. This Agreement, the other Ancillary
Agreements and the Exhibits and Schedules referenced or attached hereto and
thereto, constitute the entire agreement between the parties with respect to the
subject matter hereof and shall

supersede all prior written and oral and all contemporaneous oral agreements and
understandings with respect to the subject matter hereof.

SECTION 5.3. GOVERNING LAW. This Agreement shall be construed in
accordance with and all Disputes hereunder shall be governed by the laws of the
State of Delaware, excluding its conflict of law rules.

SECTION 5.4. TERMINATION. This Agreement and all Ancillary Agreements
may be terminated and the Distribution abandoned at any time prior to the
Distribution Date by and in the sole discretion of eOn without the approval of
CSPR. In the event of termination pursuant to this SECTION 5.4, no party shall
have any liability of any kind to the other party.

SECTION 5.5. NOTICES. Any notice, demand, offer, request or other
communication required or permitted to be given by either party pursuant to the
terms of this Agreement shall be in writing and shall be deemed effectively
given the earlier of (i) when received, (ii) when delivered personally, (iii)one
(1) business day after being delivered by facsimile (with receipt of appropriate
confirmation), (iv) one (1) business day after being deposited with a nationally
recognized overnight courier service or (v) four (4) days after being deposited
in the U.S. mail, First Class with postage prepaid, and addressed to the
attention of:

If to eOn:

eOn Communications Corporation
0000 Xxxxx Xxxxx XX, Xxxxx 000
Xxxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
Facsimile No.: (000)000-0000

If to CSPR:

Cortelco Systems Puerto Rico, Inc.
0000 Xxxxx xx Xxxx Xxxxxx, Xxxxx 000
Xx Xxxx, Xxxxxx Xxxx 00000
Attention: Chief Executive Officer
Facsimile No.: (000)000-0000

eOn and CSPR may substitute a different address or facsimile number, from time
to time, if such substitute is provided to the intended notice recipient in
writing by notice given in the manner provided in this SECTION 5.5.

SECTION 5.6. COUNTERPARTS. This Agreement, including the Schedules and
Exhibits hereto and the other documents referred to herein, may be executed via
facsimile or otherwise in counterparts, each of which shall be deemed to be an
original but all of which shall constitute one and the same agreement.

SECTION 5.7. BINDING EFFECT; ASSIGNMENT. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective legal
representatives

and successors, and nothing in this Agreement, express or implied, is intended
to confer upon any other person any rights or remedies of any nature whatsoever
under or by reason of this Agreement. Except as herein specifically provided to
the contrary, neither party may assign this Agreement or any rights or
obligations hereunder, without the prior written consent of the other party, and
any such assignment shall be void; provided, however, either party (or its
permitted successive assignees or transferees hereunder) may assign or transfer
this Agreement as a whole without consent to an entity that succeeds to all or
substantially all of the business or assets of such party to which this
Agreement relates.

SECTION 5.8. SEVERABILITY. The parties hereto have negotiated and
prepared the terms of this Agreement in good faith with the intent that each and
everyone of the terms, covenants and conditions herein be binding upon and inure
to the benefit of the respective parties. Accordingly, if any one or more of the
terms, provisions, promises, covenants or conditions of this Agreement or the
application thereof to any person or circumstance shall be adjudged to any
extent invalid, unenforceable, void or voidable for any reason whatsoever by a
court of competent jurisdiction, such provision shall be as narrowly construed
as possible, and each and all of the remaining terms, provisions, promises,
covenants and conditions of this Agreement or their application to other persons
or circumstances shall not be affected thereby and shall be valid and
enforceable to the fullest extent permitted by law. To the extent this Agreement
is in violation of applicable law, then the parties agree to negotiate in good
faith to amend the Agreement, to the extent possible consistent with its
purposes, to conform to law.

SECTION 5.9. WAIVER OF BREACH. The waiver by either party hereto of a
breach or violation of any provision of this Agreement shall not operate as, or
be construed to constitute, a waiver of any subsequent breach of the same or
another provision hereof.

SECTION 5.10. AMENDMENT AND EXECUTION. This Agreement and amendments
hereto shall be in writing and executed in multiple copies via facsimile or
otherwise on behalf of eOn and CSPR by their respective duly authorized officers
and representatives. Each multiple copy shall be deemed an original, but all
multiple copies together shall constitute one and the same instrument.

SECTION 5.11. DESCRIPTIVE HEADINGS. The headings contained in this
Agreement, in any Exhibit or Schedule hereto and in the table of contents to
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. Any capitalized term used in
any Schedule or Exhibit but not otherwise defined therein, shall have the
meaning assigned to such term in this Agreement. When a reference is made in
this Agreement to an Article or a Section, Exhibit or Schedule, such reference
shall be to an Article or Section of, or an Exhibit or Schedule to, this
Agreement unless otherwise indicated.

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WHEREFORE, the parties have signed this Distribution Agreement
effective as of the date first set forth above.

eOn Communications Corporation Cortelco Systems Puerto Rico, Inc.

By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxxxx Xxxxx
------------------------------- -------------------------------
Xxxxx Xxxxxxx Xxxxxx Xxxxx
Chief Financial Officer President

EXHIBIT A

EMPLOYEE MATTERS AGREEMENT

EXHIBIT B

CONFIDENTIAL DISCLOSURE AGREEMENT

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Table of Contents

EXHIBIT 2.1 DISTRIBUTION AGREEMENT

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