Filed by: Paradyne Networks, Inc.
                                       Pursuant to Rule 425 under the Securities
                                        Act of 1933 and deemed filed pursuant to
                           Rule 14a-12 under the Securities Exchange Act of 1934

                                          Subject Company: Elastic Networks Inc.
                                                  Commission File No.: 001-16147

                                                         Date: December 31, 2001

         On December 27, 2001, Paradyne Networks, Inc. ("Paradyne"), a wholly
owned subsidiary of Paradyne ("Merger Sub") and Elastic Networks Inc.
("Elastic") entered into a merger agreement (the "Merger Agreement") pursuant to
which, subject to the terms and conditions of the Merger Agreement, Elastic has
agreed to merge with Merger Sub (the "Merger"). The Merger Agreement and certain
additional related agreements with respect to Paradyne's acquisition of Elastic
were filed by Paradyne under cover of a Form 8-K Current Report today and are
incorporated by reference in their entirety into this filing.

         The material included in this filing contains "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended (as
applicable), particularly those statements regarding the effects of the Elastic
acquisition, and those preceded by, followed by or that otherwise include the
words "believes," "expects," "anticipates," "intends," "estimates," or similar
expressions. For those statements, Paradyne and Elastic claim the protection of
the safe harbor for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995. Forward-looking statements relating to
expectations about future results or events are based upon information available
to Paradyne and Elastic as of today's date, and Paradyne does not assume any
obligation to update any of these statements. The forward-looking statements are
not guarantees of the future performance of Paradyne or the combined company and
actual results may vary materially from the results and expectations discussed.
For instance, while Paradyne and Elastic have entered into a definitive
agreement, there is no assurance that the parties will complete the transaction.
In the event the companies do not receive necessary government or stockholder
approvals or fail to satisfy conditions to closing, the transaction will
terminate. Additional risks and uncertainties related to the Merger include, but
are not limited to, conditions in the financial markets relevant to the proposed
Merger, the successful integration of Elastic into Paradyne's business, and each
company's ability to compete in the highly competitive data communications
equipment industry. The revenues and earnings of Paradyne and the combined
company and their ability to achieve their planned business objectives will be
subject to a number of factors that make estimates of future operating results
uncertain. These factors include: the timing and amount of expense reduction;
the uncertainty of litigation, including putative stockholder class actions; a
reliance on international sales; rapid technological change that could render
Paradyne's or the combined company's products obsolete; the uncertain acceptance
of new telecommunications services based on DSL; substantial dependence




on network service providers who may reduce or discontinue their purchase of
products or services at any time; the timing and amount of, or cancellation or
rescheduling of, orders of Paradyne's or the combined company's products to
existing and new customers; possible inability to sustain revenue growth or
profitability; dependence on only a few customers for a substantial portion of
Paradyne's or the combined company's revenue; highly competitive markets;
reliance on sales of access products to BB Technologies Corporation (a newly
formed subsidiary of SOFTBANK CORP.), Lucent Technologies and Avaya Inc.;
dependence on sole and single-source suppliers and the reliability of the raw
materials supplied by them to manufacture products under customer contracts; a
long and unpredictable sales cycle; the number of DSL lines actually deployed by
BB Technologies Corporation and other DSL customers as compared to forecasts;
Paradyne's or the combined company's ability to manufacture adequate quantities
of products at forecasted costs under customer contracts; Paradyne's or the
combined company's ability to manufacture products in accordance with its
published specifications; and other risks identified from time to time in
Paradyne's and Elastic's SEC reports and public announcements.

         The proposed transaction will be submitted to Paradyne's and Elastic's
stockholders for their consideration, and Paradyne will file with the SEC a
registration statement containing the joint proxy statement-prospectus to be
used by Paradyne and Elastic to solicit their respective stockholders' approval
of the proposed transaction, as well as other relevant documents concerning the
proposed transaction. STOCKHOLDERS OF PARADYNE AND ELASTIC ARE URGED TO READ THE
REGISTRATION STATEMENT AND THE JOINT PROXY STATEMENT-PROSPECTUS REGARDING THE
PROPOSED TRANSACTION WHEN THEY BECOME AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS
FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS,
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. YOU WILL BE ABLE TO OBTAIN A
FREE COPY OF THE JOINT PROXY STATEMENT-PROSPECTUS INCLUDED IN THE REGISTRATION
STATEMENT, AS WELL AS OTHER FILINGS CONTAINING INFORMATION ABOUT PARADYNE AND
ELASTIC, AT THE SEC'S INTERNET SITE (HTTP://WWW.SEC.GOV). COPIES OF THE JOINT
PROXY STATEMENT-PROSPECTUS AND THE SEC FILINGS THAT WILL BE INCORPORATED BY
REFERENCE IN THE JOINT PROXY STATEMENT-PROSPECTUS CAN ALSO BE OBTAINED, WITHOUT
CHARGE, BY DIRECTING A REQUEST TO: PARADYNE, INVESTOR RELATIONS 727-530-8082, OR
TO: ELASTIC, DARRELL BORNE 678-762-3843.

         Paradyne and Elastic and their respective directors and executive
officers may be deemed to be participants in the solicitation of proxies from
the stockholders of Paradyne and Elastic in connection with the Merger.
Information regarding those participants is included in the proxy statements for
the Paradyne and Elastic annual stockholders' meetings for 2001, which are
available at the SEC's website. Additional information regarding the interests
of those participants may be obtained by reading the joint proxy
statement-prospectus regarding the proposed transaction when it becomes
available.


                                       -2-