Document:

Voting Agreement - Parrot Acquisition Corp.

 Exhibit 10.2 
  
 VOTING AGREEMENT 
  
 VOTING AGREEMENT, dated July 7, 2005 (this “Agreement”), by and among Zhone Technologies, Inc., a Delaware corporation (“Parent”),
Parrot Acquisition Corp., a Delaware corporation and wholly-owned subsidiary of Parent (“Merger Sub”), and each of the persons listed on Schedule A hereto (each a “Stockholder” and, collectively, the “Stockholders”).

  
 WHEREAS, each of the Stockholders is, as of the date hereof,
the record and beneficial owner of that number of shares of Common Stock, par value $0.001 per share (the “Company Common Stock”), of Paradyne Networks, Inc., a Delaware corporation (the “Company”), set forth opposite such
Stockholder’s name on Schedule A hereto; 
  
 WHEREAS, Parent,
Merger Sub and the Company concurrently with the execution and delivery of this Agreement are entering into an Agreement and Plan of Merger, dated as of the date hereof (as the same may be amended or supplemented, the “Merger Agreement”),
providing for, among other things, the merger (the “Merger”) of Merger Sub with and into the Company upon the terms and subject to the conditions set forth in the Merger Agreement (capitalized terms used and not otherwise defined herein
shall have the meanings attributed thereto in the Merger Agreement); and 
  
 WHEREAS, as a condition to the willingness of Parent and Merger Sub to enter into the Merger Agreement, and in order to induce Parent and Merger Sub to enter into the Merger Agreement, the Stockholders have agreed to
enter into this Agreement. 
  
 NOW, THEREFORE, in consideration of
the execution and delivery by Parent and Merger Sub of the Merger Agreement and the mutual representations, warranties, covenants and agreements contained herein and therein, and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows: 
  
 Section 1. Representations and Warranties of the Stockholders. Each of the Stockholders hereby represents and warrants to Parent and Merger Sub, severally and not jointly, as follows: 
  
 (a) Such Stockholder is the beneficial owner (within the
meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) and unless otherwise indicated, the record owner of the shares of Company Common Stock (as may be adjusted from time to time pursuant to
Section 5 hereof, the “Shares”) set forth opposite such Stockholder’s name on Schedule A to this Agreement and such Shares represent all of the shares of Company Common Stock beneficially owned by such Stockholder as of the
date hereof. For purposes of this Agreement, the term “Shares” shall include any shares of Company Common Stock issuable to such Stockholder upon exercise or conversion of any existing right, contract, option, or warrant to purchase, or
securities convertible into or exchangeable for, Company Common Stock (“Stockholder Rights”) that are currently exercisable or convertible or 

  

 
become exercisable or convertible and any other shares of Company Common Stock such Stockholder may acquire or beneficially own during the term of this
Agreement. 
  
 (b) Such Stockholder has all
requisite power and authority and, if an individual, the legal capacity, to execute and deliver this Agreement and to consummate the transactions contemplated hereby. This Agreement has been validly executed and delivered by such Stockholder and,
assuming that this Agreement constitutes the legal, valid and binding obligation of the other parties hereto, constitutes the legal, valid and binding obligation of such Stockholder, enforceable against such Stockholder in accordance with its terms
(except insofar as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally, or by principles governing the availability of equitable remedies).

  
 (c) The execution and delivery of this
Agreement by such Stockholder does not, and the performance of this Agreement by such Stockholder will not, (i) conflict with the Certificate of Incorporation or By-laws or similar organizational documents of such Stockholder as presently in effect
(in the case of a Stockholder that is a legal entity), (ii) conflict with or violate any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to such Stockholder or by which it is bound or affected, (iii)(A) result in any
breach of or constitute a default (or an event that with notice or lapse of time or both would become a default) under, (B) give to any other person any rights of termination, amendment, acceleration or cancellation of, or (C) result in the creation
of any pledge, claim, lien, charge, encumbrance or security interest of any kind or nature whatsoever upon any of the properties or assets of the Stockholder under, any agreement, contract, indenture, note or instrument to which such Stockholder is
a party or by which it is bound or affected, except for such breaches, defaults or other occurrences that would not prevent or materially delay the performance by such Stockholder of any of such Stockholder’s obligations under this Agreement,
or (iv) except for applicable requirements, if any, of the Exchange Act, the Securities Act of 1933, as amended (the “Securities Act”), or the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”),
require any filing by such Stockholder with, or any permit, authorization, consent or approval of, any governmental or regulatory authority, except where the failure to make such filing or obtain such permit, authorization, consent or approval would
not prevent or materially delay the performance by Stockholder of any of such Stockholder’s obligations under this Agreement. 
  
 (d) The Shares and the certificates representing the Shares owned by such Stockholder are now and at all times during the term hereof will
be held by such Stockholder, or by a nominee or custodian for the benefit of such Stockholder, free and clear of all pledges, liens, charges, claims, security interests, proxies, voting trusts or agreements, understandings or arrangements or any
other encumbrances whatsoever, except for any such encumbrances or proxies arising hereunder or under applicable federal and state securities laws or under the agreements set forth on Schedule B hereto. 
  

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 Such Stockholder owns of record or beneficially no shares of Company Common Stock other than such
Stockholder’s Shares. 
  
 (e) As of the date
hereof, neither such Stockholder, nor any of its respective properties or assets is subject to any order, writ, judgment, injunction, decree, determination or award that would prevent or delay the consummation of the transactions contemplated
hereby. 
  
 (f) Such Stockholder understands and
acknowledges that Parent is entering into, and causing Merger Sub to enter into, the Merger Agreement in reliance upon the Stockholder’s execution and delivery of this Agreement. 
  
 Section 2. Representations and Warranties of Parent and Merger Sub. Parent and Merger Sub hereby jointly and
severally represent and warrant to the Stockholders as follows: 
  
 (a) Each of Parent and Merger Sub is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Each of Parent and Merger Sub has all requisite power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby, and has taken all necessary corporate action to authorize the execution, delivery and performance of this Agreement.
This Agreement has been duly executed and delivered by each of Parent and Merger Sub and, assuming that this Agreement constitutes the legal, valid and binding obligation of the other parties hereto, constitutes the legal, valid and binding
obligation of each of Parent and Merger Sub, enforceable against each of them in accordance with its terms (except insofar as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally, or by principles governing the availability of equitable remedies). 
  
 (b) The execution and delivery of this Agreement by each of Parent and Merger Sub does not, and the performance of this Agreement by each
of Parent and Merger Sub will not, (i) conflict with the Certificate of Incorporation or By-laws or similar organizational documents of each of Parent and Merger Sub as presently in effect, (ii) conflict with or violate any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to Parent or Merger Sub or by which either is bound or affected, (iii) (A) result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a
default) under, (B) give to others any rights of termination, amendment, acceleration or cancellation of, or (C) result in the creation of any pledge, claim, lien, charge, encumbrance or security interest of any kind or nature whatsoever upon any of
the properties or assets of Parent or Merger Sub under, any agreement, contract, indenture, note or instrument to which Parent or Merger Sub is a party or by which it is bound or affected, except for such breaches, defaults or other occurrences that
would not prevent or materially delay the performance by Parent or Merger Sub of their obligations under this Agreement, or (iv) except for applicable 

  

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requirements, if any, of the Exchange Act, the Securities Act or the HSR Act, require any filing by Parent or Merger Sub with, or any permit, authorization,
consent or approval of, any governmental or regulatory authority, except where the failure to make such filing or obtain such permit, authorization, consent or approval would not prevent or materially delay the performance by Parent or Merger Sub of
their obligations under this Agreement. 
  
 Section 3.
Covenants of the Stockholders. Each of the Stockholders, severally and not jointly, agrees as follows: 
  
 (a) Such Stockholder shall not, except as contemplated by the terms of this Agreement, sell, transfer, pledge, assign or otherwise dispose
of, or enter into any contract, option or other arrangement (including any profit-sharing arrangement) or understanding with respect to the sale, transfer, pledge, assignment or other disposition of, the Shares (including any options or warrants to
purchase Company Common Stock) to any person other than Merger Sub or Merger Sub’s designee (any such action, a “Transfer”). For purposes of clarification, the term “Transfer” shall include, without limitation, any short
sale (including any “short sale against the box”), pledge, transfer, and the establishment of any open “put equivalent position” within the meaning of Rule 16a-1(h) under the Exchange Act. Notwithstanding the foregoing, (i)
Transfers of Shares as bona fide gifts, (ii) distributions of Shares to partners, members, stockholders, subsidiaries, affiliates, affiliated partnerships or other affiliated entities of the undersigned, (iii) Transfers of Shares by will or
intestacy, and (iv) Transfers of Shares to (A) the undersigned’s immediate family or (B) a trust, the beneficiaries of which are the undersigned and/or members of the undersigned’s immediate family, shall not be prohibited by this
Agreement; provided that in the case of any such transfer or distribution pursuant to clause (i), (ii), (iii) or (iv), each donee or distributee shall execute and deliver to Parent a valid and binding counterpart to this Agreement. 
  
 (b) Such Stockholder shall not, except as contemplated by
the terms of this Agreement (i) enter into any voting arrangement, whether by proxy, voting agreement, voting trust, power-of-attorney or otherwise, with respect to the Shares or (ii) take any other action that would in any way restrict, limit or
interfere with the performance of his/her obligations hereunder or the transactions contemplated hereby or make any representation or warranty of such Stockholder herein untrue or incorrect in any material respect. 
  
 (c) Until the Merger is consummated or this Agreement is
terminated, except to the extent specifically permitted by the Merger Agreement, such Stockholder shall not, and shall use its reasonable best efforts to cause any investment banker, financial adviser, attorney, accountant or other representative or
agent of such Stockholder not to, directly or indirectly (i) solicit, initiate, knowingly encourage or take any other action designed to, or which could reasonably be expected to, facilitate an Acquisition Proposal or the making, submission or
announcement of, any Acquisition Proposal or (ii) participate or 

  

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engage in any discussions or negotiations regarding, or furnish to any person any nonpublic information with respect to, or take any other action to
facilitate any inquiries or the making of any proposal that constitutes or may reasonably be expected to lead to, any Acquisition Proposal or (iii) engage in any discussions with any person with respect to any Acquisition Proposal, except to notify
such person as to the existence of this Agreement. Such Stockholder shall immediately terminate, and shall use its reasonable best efforts to cause its affiliates to terminate, any existing discussions or negotiations with any persons (other than
Parent) that could be reasonably expected to lead to an Acquisition Proposal. Such Stockholder shall as promptly as practicable (and in any event within 48 hours) advise Parent of any request for information with respect to any Acquisition Proposal
or of any Acquisition Proposal, or any inquiry or proposal, and within 48 hours of the receipt thereof, promptly provide to Parent copies of any written materials received in connection with any of the foregoing, and the identity of the person
making any such Acquisition Proposal or such request, inquiry or proposal and shall keep Parent reasonably informed of the status and material details (including material amendments) with respect to the information previously provided in connection
with the Acquisition Proposal, and shall provide to Parent within 48 hours of receipt thereof all written materials received by it with respect thereto. The Shareholder may satisfy its obligation to provide notice and information to Parent with
respect to an Acquisition Proposal by arranging for the Company to provide that information to Parent. 
  
 (d) At any meeting of Stockholders of the Company called to vote upon the Merger, the Merger Agreement or any other transaction
contemplated by the Merger Agreement or at any adjournment thereof or in any other circumstances upon which a vote, consent or other approval (including by written consent) with respect to such matters is sought, each Stockholder shall vote (or
cause to be voted), or shall consent, execute a consent or cause to be executed a consent in respect of, such Stockholder’s Shares in favor of the Merger, the adoption by the Company of the Merger Agreement and the approval of any other
transactions contemplated by the Merger Agreement. At any meeting of Stockholders of the Company or at any adjournment thereof or in any other circumstances upon which the Stockholder’s vote, consent or other approval is sought, such
Stockholder shall vote (or cause to be voted) such Stockholder’s Shares against (i) any merger agreement or merger (other than the Merger Agreement and the Merger), consolidation, combination, sale of substantial assets, reorganization,
recapitalization, dissolution, liquidation or winding up of or by the Company or any other Acquisition Proposal with respect to the Company (collectively, “Alternative Transactions”) or (ii) any amendment of the Company’s certificate
of incorporation or by-laws or other proposal, action or transaction involving the Company or any of its Subsidiaries, which amendment or other proposal, action or transaction would in any manner impede, frustrate, prevent or nullify the Merger, the
Merger Agreement or any of the other transactions contemplated by the Merger Agreement (collectively, “Frustrating Transactions”). 
  

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 (e) Such Stockholder agrees to permit Parent and Merger Sub to publish and disclose in
the Proxy Statement and related filings under the securities laws such Stockholder’s identity and ownership of Shares and the nature of its commitments, arrangements and understandings under this Agreement and any other information required by
applicable law. 
  
 Section 4. Grant of Irrevocable
Proxy; Appointment of Proxy. 
  
 (a) Each
Stockholder hereby irrevocably grants to, and appoints, Morteza Ejabat, and any other individual who shall hereafter be designated by Parent, such Stockholder’s proxy and attorney-in-fact (with full power of substitution), for and in the name,
place and stead of such Stockholder, to vote such Stockholder’s Shares, or grant a consent or approval in respect of such Shares, at any meeting of Stockholders of the Company or at any adjournment thereof or in any other circumstances upon
which their vote, consent or other approval is sought, in favor of the Merger, the adoption by the Company of the Merger Agreement and the approval of the other transactions contemplated by the Merger Agreement and against any Alternative
Transaction or Frustrating Transaction. 
  
 (b)
Each Stockholder represents that any proxies heretofore given in respect of such Stockholder’s Shares are not irrevocable, and that any such proxies are hereby revoked. 
  
 (c) Each Stockholder hereby affirms that the irrevocable proxy set forth in this Section 4 is given in
connection with the execution of the Merger Agreement, and that such irrevocable proxy is given to secure the performance of the duties of such Stockholder under this Agreement. Such Stockholder hereby further affirms that the irrevocable proxy is
coupled with an interest and may under no circumstances be revoked, subject to Section 7 herein. Such Stockholder hereby ratifies and confirms all that such irrevocable proxy may lawfully do or cause to be done by virtue hereof. Such irrevocable
proxy is executed and intended to be irrevocable in accordance with the provisions of Section 212(e) of the General Corporation Law of the State of Delaware. Such irrevocable proxy shall be valid until the termination of this Agreement pursuant to
Section 7 herein. 
  
 Section 5. Adjustments Upon Share
Issuances, Changes in Capitalization. In the event of any change in Company Common Stock or in the number of outstanding shares of Company Common Stock by reason of a stock dividend, subdivision, reclassification, recapitalization, split,
combination, exchange of shares or other similar event or transaction or any other change in the corporate or capital structure of the Company (including, without limitation, the declaration or payment of an extraordinary dividend of cash,
securities or other property), and consequently the number of Shares changes or is otherwise adjusted, this Agreement and the obligations hereunder shall attach to any additional shares of Company 

  

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Common Stock, Stockholder Rights or other securities or rights of the Company issued to or acquired by each of the Stockholders. 
  
 Section 6. Further Assurances. Each Stockholder will, from time
to time, execute and deliver, or cause to be executed and delivered, such additional or further transfers, assignments, endorsements, consents and other instruments as Parent or Merger Sub may reasonably request for the purpose of effectively
carrying out the transactions contemplated by this Agreement and to vest the power to vote such Stockholder’s Shares as contemplated by Section 3 herein. 
  

Section 7. Termination. This Agreement, and all rights and obligations of the parties hereunder, shall terminate upon the earlier of (a)
the Effective Time and (b) the date upon which the Merger Agreement is terminated pursuant to Section 7.1 thereof. Notwithstanding the foregoing, Sections 7, 8 and 9 shall survive any termination of this Agreement. 
  
 Section 8. Action in Stockholder Capacity Only. No person
executing this Agreement who is or becomes during the term hereof a director or officer of the Company makes any agreement or understanding herein in his or her capacity as such director or officer. Each Stockholder signs solely in his or her
capacity as the record holder and beneficial owner of, or the trustee of a trust whose beneficiaries are the beneficial owners of, such Stockholder’s Shares and nothing herein shall limit or affect any actions taken by a Stockholder in his or
her capacity as an officer or director of the Company to the extent permitted by the Merger Agreement. 
  
 Section 9. Miscellaneous. 
  
 (a) Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the
parties without the prior written consent of the other parties, except that Merger Sub may assign, in its sole discretion, any or all of its rights, interests and obligations hereunder to Parent or to any direct or indirect wholly owned subsidiary
of Parent. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns. Each Stockholder agrees that this Agreement and the obligations
of such Stockholder hereunder shall attach to such Stockholder’s Shares and shall be binding upon any person or entity to which legal or beneficial ownership of such Shares shall pass, whether by operation of law or otherwise, including without
limitation such Stockholder’s heirs, guardians, administrators or successors. 
  
 (b) Expenses. All costs and expenses incurred in connection with this Agreement and the transactions contemplated thereby shall be
paid by the party incurring such expenses. 
  
 (c) Amendments. This Agreement may not be amended except by an instrument in writing signed by each of the parties hereto and in compliance with applicable law. 
  

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 (d) Notice. All notices and other communications hereunder shall be in writing and
shall be deemed duly given if delivered personally, mailed by registered or certified mail (return receipt requested), delivered by Federal Express or other nationally recognized overnight courier service or sent via facsimile to the parties at the
following addresses (or at such other address for a party as shall be specified by like notice): 
  
 (i) if to Parent, addressed to it at: 
  
 Zhone Technologies, Inc. 
 7001 Oakport
Street 
 Oakland, California 94621 
 Attention: Chief Executive Officer 
 Fax: (510) 777-7001 
  
 with a copy to (which shall not constitute notice): 
  
 Latham & Watkins LLP 
 12636 High Bluff Drive, Suite 400 
 San Diego, California 92130 
 Attention: Craig M. Garner, Esq. 
 Fax:
(858) 523-5450 
  
 and 
  
 (ii) if to a Stockholder, to the address set forth under the
name of such Stockholder on Schedule A hereto 
  
 with a
copy to (which shall not constitute notice): 
  
 Hill, Ward
& Henderson 
 101 East Kennedy Boulevard 
 Suite 3700 
 Attention: David S. Felman 
 Fax: (813) 221-2900 
  
 and a copy to (which shall not constitute notice): 
  
 Alston & Bird LLP 
 1201 West Peachtree
Street 
 Atlanta, Georgia 30309-3424 
 Attention: Bryan E. Davis, Esq. 
 Fax: (404) 253-8441 
  

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 (e) Interpretation. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of this Agreement. In this Agreement, unless a contrary intention appears, (i) the words “herein,” “hereof” and “hereunder” and other words of
similar import refer to this Agreement as a whole and not to any particular Section or other subdivision and (ii) reference to any Section means such Section hereof. No provision of this Agreement shall be interpreted or construed against any party
hereto solely because such party or its legal representative drafted such provision. 
  
 (f) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but
all of which shall constitute one and the same agreement. 
  
 (g) Entire Agreement. This Agreement constitutes the entire agreement of the parties and supersedes all prior agreements and undertakings, both written and oral, between the parties, or any of them, with
respect to the subject matter hereof, and except as otherwise expressly provided herein, is not intended to confer upon any other person any rights or remedies hereunder. 
  
 (h) Governing Law; Consent to Jurisdiction; Waiver of Trial by Jury. This Agreement shall be governed
by, and construed in accordance with, the Laws of the State of Delaware, without regard to laws that may be applicable under conflicts of laws principles. Each of the parties hereto irrevocably and unconditionally (i) agrees that any suit, action or
other legal proceeding arising out of or relating to this Agreement or any of the agreements delivered in connection herewith or the transactions contemplated hereby or thereby shall be brought in the state courts of the State of Delaware (or, if
such courts do not have jurisdiction or do not accept jurisdiction, in the United States District Court located in the State of Delaware), (ii) consents to the jurisdiction of any such court in any such suit, action or proceeding, and (iii) waives
any objection that such party may have to the laying of venue of any such suit, action or proceeding in any such court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced
in other jurisdictions by suit on the judgment or in any other manner provided by Law. Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9(d). Nothing in this Agreement will affect
the right of any party to this Agreement to serve process in any other manner permitted by Law. 
  
 EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF 

  

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ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE EITHER OF SUCH WAIVERS, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (C) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 9(h). 
  
 (i) Specific Performance. The parties hereto agree that irreparable damage could occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the parties shall not object to the granting of such relief on the basis that an adequate remedy exists at law and shall not insist upon the posting of any bond as a condition to the granting of such relief, this being
in addition to any other remedy to which they are entitled at law or in equity. 
  
 (j) Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule
of Law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the extent possible. 
  
 [Signature Page Follows] 
  

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 IN WITNESS WHEREOF, each of Parent and Merger Sub has caused this Agreement to be signed by its officer
thereunto duly authorized and each Stockholder has signed this Agreement, all as of the date first written above. 
  

			
	ZHONE TECHNOLOGIES, INC.
		
	By:	 	/s/    KIRK MISAKA        
	 Name:
	 	Kirk Misaka
	 Title:
	 	Chief Financial Officer

  

			
	PARROT ACQUISITION CORP.
		
	By:	 	/s/    KIRK MISAKA        
	 Name:
	 	Kirk Misaka
	 Title:
	 	Chief Financial Officer

  

 VOTING AGREEMENT 
 COUNTERPART SIGNATURE PAGE 
  
 11

 IN WITNESS WHEREOF, each of Parent and Merger Sub has caused this Agreement to be signed by its officer
thereunto duly authorized and each Stockholder has signed this Agreement, all as of the date first written above. 
  

			
	 STOCKHOLDERS:

	
	/s/    SEAN E.
BELANGER        
	 	 	Sean E. Belanger
		
	 Address:  
	 	 c/o Paradyne Networks, Inc.
 8545 126th Avenue North
 Largo, Florida 33773

	
	/s/    PATRICK M.
MURPHY        
	 	 	Patrick M. Murphy
		
	 Address:  
	 	 c/o Paradyne Networks, Inc.
 8545 126th Avenue North
 Largo, Florida 33773

	
	/s/    THOMAS E.
EPLEY        
	 	 	Thomas E. Epley
		
	 Address:  
	 	 c/o Paradyne Networks, Inc.
 8545 126th Avenue North
 Largo, Florida 33773

	
	/s/    SCOTT C.
CHANDLER        
	 	 	Scott C. Chandler
		
	 Address:  
	 	 c/o Paradyne Networks, Inc.
 8545 126th Avenue North
 Largo, Florida 33773

  

 VOTING AGREEMENT 
 COUNTERPART SIGNATURE PAGE 
 12 

 IN WITNESS WHEREOF, each of Parent and Merger Sub has caused this Agreement to be signed by its officer
thereunto duly authorized and each Stockholder has signed this Agreement, all as of the date first written above. 
  

			
	 STOCKHOLDERS:

	
	/s/    KEITH B.
GEESLIN        
	 	 	Keith B. Geeslin
		
	 Address:  
	 	 c/o Paradyne Networks, Inc.
 8545 126th Avenue North
 Largo, Florida 33773

	
	/s/    WILLIAM R.
STENSRUD        
	 	 	William R. Stensrud
		
	 Address:  
	 	 c/o Paradyne Networks, Inc.
 8545 126th Avenue North
 Largo, Florida 33773

	
	/s/    DAVID
WALKER        
	 	 	David Walker
		
	 Address:  
	 	 c/o Paradyne Networks, Inc.
 8545 126th Avenue North
 Largo, Florida 33773

  

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 SCHEDULE A 
  
 OWNERSHIP OF SHARES 
  

			
	 Name and Address of Stockholder

	 	 Number of Shares of Company
 Common Stock

	 Sean E. Belanger
 c/o Paradyne Networks, Inc.
 8545 126th Avenue North
 Largo, Florida 33773
	 	34,7771
		
	 Patrick M. Murphy
 c/o Paradyne Networks, Inc.
 8545 126th Avenue North
 Largo, Florida 33773
	 	02
		
	 Thomas E. Epley
 c/o Paradyne Networks, Inc.
 8545 126th Avenue North
 Largo, Florida 33773
	 	235,9823
		
	 Scott C. Chandler
 c/o Paradyne Networks, Inc.
 8545 126th Avenue North
 Largo, Florida 33773
	 	1,5004
		
	 Keith B. Geeslin
 c/o Paradyne Networks, Inc.
 8545 126th Avenue North
 Largo, Florida 33773
	 	21,7815

	1	Excludes 2,946,534 shares subject to options exercisable within 60 days. 

  

	2	Excludes 1,123,937 shares subject to options within 60 days. 

  

	3	Excludes 30,000 shares subject to options under the 1999 Non-Employee Directors’ Stock Option Plan. Includes 192,485 shares held by the Thomas E. Epley Trust
and 43,497 shares held by the Anderson Epley Family Trust. Mr. Epley is the trustee of each of these trusts. 

  

	4	Excludes 15,000 shares subject to options under the 1999 Non-Employee Directors’ Stock Option Plan. 

  

	5	Includes 21,781 shares held by Mr. Geeslin individually. Excludes 25,000 shares subject to options under the 1999 Non-Employee Directors’ Stock Option Plan and
1,605,952 shares beneficially owned by the Sprout Group. Mr. Geeslin occupies various positions of control of the entities associated with the Sprout Group however Mr. Geeslin disclaims beneficial ownership of these shares, except to the extent of
his pecuniary interest therein. 

  

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	 Name and Address of Stockholder

	 	 Number of Shares of Company
 Common Stock

	 William R. Stensrud
 c/o Paradyne Networks, Inc.
 8545 126th Avenue North
 Largo, Florida 33773
	 	353,9356
		
	 David Walker
 c/o Paradyne Networks, Inc.
 8545 126th Avenue North
 Largo, Florida 33773
	 	07

	6	Includes 353,690 shares held by the Stensrud Family Trust and 245 shares held indirectly by Mr. Stensrud’s son. Excludes 15,000 shares subject to options under
the 1999 Non-Employee Directors’ Stock Option Plan. 

  

	7	Excludes 20,000 shares subject to options under the 1999 Non-Employee Directors’ Stock Option Plan. 

  

 15 

 SCHEDULE B 
  
 LIST OF AGREEMENTS 
  
 None. 
  

 16Consulting Agreement - Sean E. Belanger

 Exhibit 10.3 
  
 CONSULTING AGREEMENT 
  

THIS CONSULTING AGREEMENT (this “Agreement”), dated July 7, 2005 between ZHONE TECHNOLOGIES, INC., a Delaware corporation (the
“Company”), and Sean E. Belanger (the “Consultant”). 
  
 WHEREAS, Consultant and Paradyne Networks, Inc., a Delaware corporation (“Paradyne”), are parties to an employment agreement dated December 8, 2000 (the “Employment Agreement”)
pursuant to which Consultant is employed by Paradyne; 
  
 WHEREAS,
pursuant to an Agreement and Plan of Merger by and among the Company, Parrot Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of the Company (“Merger Sub”), and Paradyne dated as of the date hereof, Merger Sub
will merge with and into Paradyne, and Paradyne will become a wholly owned subsidiary of the Company (the “Merger”); 
  
 WHEREAS, effective as of the effective time of the Merger (the “Effective Date”) Consultant’s employment with Paradyne will
terminate without “Cause” as defined in the Employment Agreement; and 
  
 WHEREAS, due to Consultant’s valuable customer relationships and knowledge of the Paradyne business, the Company desires to retain the Consultant as a consultant to the Company to perform such duties as the
Company may direct for the purpose of retaining Paradyne’s customers following the Merger and to assist with the transition of the manufacturing operations of Paradyne to the Company’s in-house or contract manufacturing model and the
Consultant desires to accept such retention upon the terms and conditions set forth herein. 
  
 NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

  
 1. Termination of Employment.
Effective as of the Effective Date, Consultant’s employment with Paradyne will be terminated without “Cause” (as defined in the Employment Agreement). The Company acknowledges and agrees that as a result of such termination Consultant
shall be entitled to all amounts and benefits due under the terms of the Employment Agreement subject to the conditions set forth therein. 
  
 2. Consulting Relationship. Effective as of the Effective Date, the Company hereby engages the Consultant to perform such duties as
the Company may direct in order to assist the Company in the retention of Paradyne customers following the Merger and to assist with the transition of the manufacturing operations of Paradyne to the Company’s in-house or contract manufacturing
model, and the Consultant agrees to accept such engagement, upon the terms and conditions set forth herein. The Company and Consultant do hereby acknowledge that after the Effective Date the relationship between Company and Consultant shall be
solely that of an independent contractor and that Consultant shall not be treated as an employee for any purpose. 
  

 3. Consulting Period. The term of this Agreement hereunder shall commence on the
Effective Date and continue for a period of two years thereafter, unless earlier terminated as provided herein (the “Consulting Period”). 
  
 4. Other Activities. During the Consulting Period, the Consultant may engage in any other business or professional activities,
either on a full-time or part-time basis, so long as such activities, either singly or in the aggregate, (i) do not interfere with the proper performance of his duties and responsibilities to the Company, (ii) violate Section 13 of the Employment
Agreement, or (iii) violate the terms of the Restrictive Covenant Agreement of even date herewith by and between the Company and Consultant (the “Restrictive Covenant Agreement”). 
  
 5. Compensation and Other Terms of Engagement.

  
 (a) Compensation. In consideration of
the performance of his services for the Company as required hereunder, during the Consulting Period, Consultant shall be entitled to the following as compensation: 
  
 (i) Four Hundred Eighty Thousand and Eighteen Dollars ($480,018) (the “Consulting Fee”)
for each year of the Consulting Period in which Consultant performs services on behalf of the Company, which amount represents the amount Consultant would have earned as base salary and bonus under the terms of the Employment Agreement if Consultant
had remained as an employee of Paradyne. The Consulting Fee shall be payable in substantially equal monthly installments in arrears. 
  
 (ii) Options to purchase Nine Hundred Thirty One Thousand Nine Hundred and Sixty Two (931,962) shares of the Company’s common stock,
representing an amount equal to two times the annual grants on a converted basis that Consultant would have received under the terms of the Employment Agreement if Consultant had remained as an employee of Paradyne. The options shall be granted at
an exercise price equal to the fair market value per share on the date of grant, with terms and conditions applicable to options typically granted by the Company, including that such options will vest and become exercisable ratably over a period of
four years provided Consultant continues to perform services for the full two-year term of the Consulting Period, and thereafter Consultant does not violate the terms of the Restrictive Covenant Agreement. 
  
 (iii) Consultant shall receive no other compensation for
his services hereunder. 
  
 (b) Taxes.
Consultant shall be responsible for all taxes, including self-employment taxes due on payments made under this Agreement. 
  
 (c) Business Expenses. The Company shall reimburse the Consultant for expenses (including, without limitation, travel and
accommodations at the level, class and manner provided to senior executives of the Company), which the 

  

 2 

 
Consultant may from time to time reasonably incur on behalf of, and at the request of the Company in the performance of services under this Agreement;
provided, however, that the Consultant shall be required to account to the Company for such expenses in the manner prescribed by the Company. In determining expenses reasonably incurred in the performance of his duties, the Consultant shall be
reimbursed consistent with the Company’s policy on reimbursement as applied to its senior executives. 
  
 6. Termination of Agreement. Either party may terminate Consultant’s engagement hereunder at any time and for any reason by
providing the other party written notice of such termination. If Consultant terminates his services under this Agreement for any reason other than breach of this Agreement by the Company, or the Company terminates his services for “cause”
(as defined below), then Consultant shall not be entitled to any further payments under this Agreement. If the Company terminates Consultant’s engagement hereunder without cause, then as damages for breach of this Agreement, Consultant shall be
entitled to receive in a lump sum an amount equal to any unpaid Consulting Fee for the remainder of the Consulting Period and all options shall fully vest and become exercisable. For this purpose, “cause” shall mean: (i) Consultant’s
willful and continued failure to perform services reasonably requested by the Company under this Agreement, but only after the Company has provided written notice to Consultant reasonably describing such alleged failure and Consultant fails to cure
such failure after a period of ten (10) days, (ii) Consultant’s engaging in misconduct which is materially injurious to the Company, monetarily or otherwise, (iii) conviction of any felony, or (iv) breach of Section 13 of the Employment
Agreement or the Restrictive Covenant Agreement. 
  
 7. Cooperation. Company agrees to devote such personnel and other resources as Consultant may reasonably request in order for Consultant to adequately perform his services under this Agreement. 
  
 8. Restrictive Covenant Agreement. As a condition to
this Agreement, Consultant agrees to execute and abide by the terms of the Restrictive Covenant Agreement. 
  
 9. Excise Tax Agreement. 
  
 (a) Gross-Up. In the event that it shall be determined (as hereafter provided) that any payment by the Company or Paradyne to or
for the benefit of Consultant, whether paid or payable pursuant to the terms of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any stock option, or the
lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing (collectively, a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code (or any
successor provision thereto) by reason of being considered “contingent on a change in ownership or control” of Paradyne, within the meaning of Section 280G of the Internal Revenue Code (or any successor provision thereto), or to any
similar tax imposed 

  

 3 

 
by state or local law, or any interest or penalties with respect to such tax (such tax or taxes, together with any such interest and penalties, being
hereafter collectively referred to as the “Excise Tax”), then Consultant shall be entitled to receive an additional payment or payments (collectively, a “Gross-Up Payment”). The Gross-Up Payment shall be in an
amount such that, after payment by Consultant of all taxes, including any Excise Tax (and including any interest or penalties imposed with respect to such taxes), imposed upon the Gross-Up Payment, Consultant retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payment. All determinations required to be made under this Section, including whether an Excise Tax is payable by Consultant and the amount of such Excise Tax and whether a Gross-Up Payment is
required to be paid by the Company to Consultant and the amount of such Gross-Up Payment, if any, shall be made in good faith by a nationally recognized accounting or law firm (the “Accounting or Law Firm”) selected by the Company.
For purposes of the computations required by this Section (i) to the extent not otherwise specified here, reasonable assumptions and approximations may be made with respect to applicable taxes and reasonable good faith interpretations of the Code
may be relied upon, and (ii) Consultant shall be deemed to pay federal, state and local income and, if applicable, payroll taxes at the highest marginal rate of taxation. If the Accounting Firm determines that any Excise Tax is payable by
Consultant, the Company shall pay the required Gross-Up Payment to Consultant within five (5) business days after receipt of such determination. If the Accounting or Law Firm determines that no Excise Tax is payable by Consultant, it shall at the
same time as it makes such determination, furnish the Company and Consultant an opinion that Consultant has substantial authority not to report any Excise Tax on his federal, state or local income or other tax return. The Company and Consultant
shall each provide the Accounting or Law Firm access to and copies of any books, records and documents in the possession of the Company or Consultant, as the case may be, reasonably requested by the Accounting or Law Firm, and otherwise cooperate
with the Accounting or Law Firm in connection with the preparation and issuance of the determination and calculations contemplated by this Section 9. 
  
 (b) As a result of the uncertainty of the application of Section 4999 of the Code, it is possible that Gross-Up Payments which will not
have been made by the Company should have been made (“Underpayment”). In that regard, if a claim by the Internal Revenue Service is made that would require the payment by the Company of an amount in addition to the Gross-Up Payment,
then the Company may either increase the Gross-Up Payment by the Underpayment, or may contest such claim. If the Company decides to contest the claim, the Company shall bear and pay directly the costs and expenses (including additional interest and
penalties) incurred in connection with such contest, shall indemnify and hold Consultant harmless on an after-tax basis for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such claim, and
payment of costs and expenses, including advancing any funds necessary to pay the claim while it is being contested up to an amount of five hundred thousand dollars ($500,000). In such case, Consultant agrees to cooperate with and assist the Company
in contesting such claim. In the event that 

  

 4 

 
the Company exhausts its remedies and Consultant is required to make a payment of any Excise Tax, the Company in good faith shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for Consultant’s benefit, if not already paid during the process of contesting the claim. 
  
 10. Miscellaneous Provisions. 
  
 (a) Notices. All notices, offers or other
communications required or permitted to be given pursuant to this Agreement shall be in writing and shall be considered as properly given or made (i) if delivered personally, or (ii) after the expiration of five days from the date upon which such
notice was mailed from within the United States by certified mail, return receipt requested, postage prepaid, (iii) upon receipt by facsimile or other electronic transmission (with written or electronic confirmation of receipt), or (iv) after the
expiration of the second business day following deposit with documented overnight delivery service. All notices given or made pursuant hereto shall be so given or made to the parties at the following addresses: 
  
 If to the Consultant: 
  
 Sean E. Belanger 
 219 Poinciana Lane 
 Largo, FL 33770

  
 If to the Company: 
  
 Zhone Technologies, Inc. 
 7001 Oakport Street 
 Oakland, California
94621 
 Attn: Chief Executive Officer 
  
 With Copy to: 
  
 Latham & Watkins, LLP 
 12636 High Bluff
Drive, Suite 400 
 San Diego, California 92130 
 Attn: Craig Garner, Esq. 
  
 The
address of any party hereto may be changed by a notice in writing given in accordance with the provisions hereof. 
  
 (b) Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, illegal or
unenforceable, such provision shall be severed and enforced to the extent possible or modified in such a way as to make it enforceable, and the invalidity, illegality or unenforceability thereof 

  

 5 

 
shall not affect the validity, legality or enforceability of the remaining provisions of this Agreement. 
  
 (c) Governing Law. The validity, interpretation and
performance of this Agreement shall be governed by, and construed in accordance with, the internal laws of the State of Florida, without giving effect to conflict of law principles. Venue for any actions shall be in Hillsborough County, Florida.

  
 (d) Counterparts. This Agreement may
be executed in counterparts, each of which shall be an original, but all of which shall constitute one and the same instrument. 
  
 (e) Entire Understanding. This Agreement, including all Recitals hereto which are incorporated herein by this reference, together
with the other agreements and documents being executed and delivered concurrently herewith by the Consultant, the Company and certain of its affiliates, constitute the entire understanding among all of the parties hereto and supersedes any prior
understandings and agreements, written or oral, among them respecting the subject matter within. 
  
 (f) Pronouns and Headings. As used herein, all pronouns shall include the masculine, feminine, singular and plural thereof wherever
the context and facts require such construction. The headings, titles and subtitles herein are inserted for convenience of reference only and are to be ignored in any construction of the provisions hereof. 
  
 (g) Amendments. This Agreement shall not be changed
or amended unless in writing and signed by both the Consultant and an authorized officer of the Company. 
  
 IN WITNESS WHEREOF, this Agreement has been executed as of the date and year first above written. 
  

			
	ZHONE TECHNOLOGIES, INC.
		
	By:	 	/s/    KIRK MISAKA        
	 Name:
	 	Kirk Misaka
	 Title:
	 	Chief Financial Officer
	
	CONSULTANT:
	
	/s/    SEAN E.
BELANGER        
	Sean E. Belanger

  

 6

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