Zhone and Paradyne Announce Early Termination of Hart-Scott-Rodino Antitrust Review and Effectiveness of Registration Statement

Zhone Technologies, Inc. (Nasdaq:ZHNE), the first
company dedicated to building total-delivery solutions for voice, data
and content services worldwide, and Paradyne Networks, Inc.
(Nasdaq:PDYN), a leading provider of triple play broadband loop
carriers (BLCs) and Ethernet access equipment, today announced that
they have received notification from the Federal Trade Commission that
the Commission has granted early termination of the waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, with
respect to the acquisition of Paradyne by Zhone. In addition, the
companies announced today that the Securities and Exchange Commission
has declared effective the Form S-4 Registration Statement relating to
the issuance of Zhone common stock in connection with the merger. A
Joint Proxy Statement/Prospectus containing information concerning the
proposed acquisition was first mailed to stockholders of Paradyne and
Zhone on or about August 4, 2005.
   The acquisition is subject to the approval of Paradyne and Zhone
stockholders and certain other conditions that are described in the
Joint Proxy Statement/Prospectus. Paradyne stockholders of record on
July 29, 2005 will vote on the acquisition at a special meeting
scheduled for 10 a.m., local time, on September 1, 2005, at Paradyne's
headquarters in Largo, Florida. Zhone stockholders of record on July
29, 2005 will vote on the acquisition at a special meeting scheduled
for 8 a.m., local time, on September 1, 2005, at Zhone's headquarters
in Oakland, California. If approved by Paradyne and Zhone
stockholders, it is anticipated that the acquisition will close
promptly following the special meetings.

   Additional Information Regarding the Proposed Acquisition

   In connection with Zhone Technologies, Inc.'s proposed acquisition
of Paradyne Networks, Inc., on August 3, 2005 Zhone filed the
definitive joint proxy statement/prospectus with the Securities and
Exchange Commission ("SEC"). In addition, Zhone and Paradyne may file
other information and documents concerning the proposed acquisition
and their respective businesses with the SEC. ZHONE AND PARADYNE URGE
INVESTORS TO REVIEW THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS
AND OTHER INFORMATION TO BE FILED WITH THE SEC BECAUSE THESE DOCUMENTS
CONTAIN IMPORTANT INFORMATION. These documents will be available
without charge on the SEC's web site at www.sec.gov as well as under
the investor relations portions of Zhone's and Paradyne's websites, at
www.zhone.com and www.paradyne.com, respectively. INVESTORS SHOULD
READ THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS CAREFULLY BEFORE
MAKING ANY VOTING OR INVESTMENT DECISIONS.
   The officers and directors of Zhone and Paradyne may have
interests in the proposed acquisition, some of which may differ from,
or may be in addition to, those of the stockholders of Zhone and
Paradyne generally. A description of the interests that the officers
and directors of the companies have in the proposed acquisition is
contained in the joint proxy statement/prospectus.
   In addition, Zhone and Paradyne, their respective officers,
directors and certain other members of their management and employees
may be deemed to be participants in the solicitation of proxies from
the stockholders of Zhone and Paradyne, respectively, in connection
with the proposed acquisition. Information about the officers and
directors of Zhone and their ownership of Zhone securities is set
forth in the proxy statement for Zhone's 2005 Annual Meeting of
Stockholders filed with the SEC on April 1, 2005. Information about
the officers and directors of Paradyne and their ownership of Paradyne
securities is set forth in the proxy statement for Paradyne's 2005
Annual Meeting of Stockholders filed with the SEC on April 11, 2005.
Investors may obtain more detailed information concerning the
participants by reading the definitive joint proxy
statement/prospectus.
   This communication shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities
laws of any such jurisdiction. No offering of securities shall be made
except by means of a prospectus meeting the requirements of Section 10
of the Securities Act of 1933, as amended.

   About Paradyne Networks, Inc.

   Paradyne (Nasdaq: PDYN) provides a broad family of IP-based
broadband access solutions, including BLCs, DSLAMs, Ethernet in the
First Mile bonded solutions, IADs, and CPE. Paradyne's products
support both residential triple play solutions and business class
bonded SHDSL, ADSL2+, and bonded T1/E1 solutions for LAN extension and
cell site data backhaul applications. Paradyne's solutions are
designed to enhance carrier revenue streams with full support for
Multimedia Traffic Management (MTM) and to lower carrier operational
expenses through Operational Intelligence (OpIQ). More information may
be obtained by visiting www.paradyne.com.

   About Zhone Technologies, Inc.

   Zhone (Nasdaq: ZHNE) designs and manufactures network equipment
for network operators worldwide. Zhone's products allow network
operators to deliver a rich array of voice, data, video, and
entertainment services over their existing networks while
simultaneously retooling for converged packet based voice (VoIP) and
video (IPTV) over copper or fiber access lines. Zhone's advanced
networking solutions include the Single Line Multi-Service
architecture (SLMS(TM)), Multi-Access Line Concentrator (MALC(TM)),
Raptor(TM) ATM/IP DSLAMs, Zhone Residential Gateways (ZRG(TM)),
GigaMux(TM) Optical Transport Systems and Zhone Management System
(ZMS(TM)). With deployments at over 300 carriers including among some
of the world's largest networks, Zhone has enabled network operators
to reinvent their businesses. For more information, please visit
www.zhone.com.

   Forward-Looking Statements

   This press release contains forward-looking statements made in
reliance on the safe harbor provisions of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, including forward-looking statements
regarding the anticipated closing date of the merger and the special
meetings of each of Zhone and Paradyne. Actual results could differ
materially from those projected in or contemplated by the
forward-looking statements. Factors that could cause actual results to
differ include the possibility that the acquisition may not close on
the terms described in this release, or at all, the possibility that
the intended benefits of the acquisition may not be fully realized,
the failure of the combined company to retain key employees, and the
failure of the combined company to manage the cost of integrating the
businesses and assets of Zhone and Paradyne. In addition, please refer
to the risk factors contained in Zhone's SEC filings, including,
without limitation, the definitive joint proxy statement/prospectus
filed on August 3, 2005, its Annual Report on Form 10-K filed with the
SEC on March 16, 2005, and in Paradyne's SEC filings, including,
without limitation, its Annual Report on Form 10-K filed with the SEC
on March 16, 2005. Readers are cautioned not to place undue reliance
on any forward-looking statements, which speak only as of the date on
which they are made. The companies undertake no obligation to update
publicly or revise any forward-looking statements.

   Paradyne is a trademark of Paradyne Networks, Inc. Zhone, the
Zhone logo, and all Zhone product names are trademarks of Zhone
Technologies, Inc. Other brand and product names are trademarks of
their respective holders. Copyright (C) 2005 Zhone Technologies, Inc.
and Paradyne Networks, Inc. All rights reserved.