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<SEC-DOCUMENT>0000927016-02-001784.txt : 20020415
<SEC-HEADER>0000927016-02-001784.hdr.sgml : 20020415
ACCESSION NUMBER:		0000927016-02-001784
CONFORMED SUBMISSION TYPE:	10-K405
PUBLIC DOCUMENT COUNT:		19
CONFORMED PERIOD OF REPORT:	20011231
FILED AS OF DATE:		20020329

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			TERADYNE INC
		CENTRAL INDEX KEY:			0000097210
		STANDARD INDUSTRIAL CLASSIFICATION:	INSTRUMENTS FOR MEAS & TESTING OF ELECTRICITY & ELEC SIGNALS [3825]
		IRS NUMBER:				042272148
		STATE OF INCORPORATION:			MA
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-K405
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-06462
		FILM NUMBER:		02594882

	BUSINESS ADDRESS:	
		STREET 1:		321 HARRISON AVE
		STREET 2:		MAIL STOP H93
		CITY:			BOSTON
		STATE:			MA
		ZIP:			02118
		BUSINESS PHONE:		6174822700

	MAIL ADDRESS:	
		STREET 1:		321 HARRISON AVENUE
		STREET 2:		H93
		CITY:			BOSTON
		STATE:			MA
		ZIP:			02118
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K405
<SEQUENCE>1
<FILENAME>d10k405.txt
<DESCRIPTION>FORM 10-K405
<TEXT>
<PAGE>

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                               -----------------

                                   FORM 10-K

   (MARK ONE)

[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
          THE SECURITIES EXCHANGE ACT OF 1934

                  For the fiscal year ended December 31, 2001

                                      OR

[_]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
          THE SECURITIES EXCHANGE ACT OF 1934

                         Commission file number 1-6462

                                TERADYNE, INC.
            (Exact name of registrant as specified in its charter)

                    MASSACHUSETTS              04-2272148
                   (State or other
                    jurisdiction of         (I.R.S. Employer
                  incorporation or
                     organization)       Identification Number)

                321 HARRISON AVENUE,
                BOSTON, MASSACHUSETTS             02118
                (Address of principal
                  executive offices)           (Zip Code)

      Registrant's telephone number, including area code: (617) 482-2700

          Securities registered pursuant to Section 12(b) of the Act:

                                        Name of each exchange on
                 Title of each class        which registered
                 -------------------        ----------------
               Common Stock, par value
                   $0.125 per share      New York Stock Exchange
                Common Stock Purchase
                        Rights           New York Stock Exchange

   Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to the
filing requirements for the past 90 days.   Yes  [X]     No   [_]

   Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or in any
amendment to this Form 10-K.   [X]

   The aggregate market value of the voting stock held by nonaffiliates of the
registrant as of February 24, 2002 was $5.4 billion based upon the composite
closing price of the registrant's Common Stock on the New York Stock Exchange
on that date.

   The number of shares outstanding of the registrant's only class of Common
Stock as of February 24, 2002 was 182,358,506 shares.

                      DOCUMENTS INCORPORATED BY REFERENCE

   Portions of the registrant's proxy statement in connection with its 2002
annual meeting of shareholders are incorporated by reference into Part III.

<PAGE>

                                TERADYNE, INC.

                                   FORM 10-K

                                    PART I

Item 1:  Business

   Teradyne, Inc. is the world's largest supplier of automatic test equipment
and is also a leading provider of high performance interconnection systems and
electronic manufacturing services.

   Teradyne's automatic test equipment products include systems that:

    .  test semiconductors ("Semiconductor Test Systems");
    .  test and inspect circuit-boards ("Circuit Board Test and Inspection
       Systems"); and
    .  test high speed voice and data communication ("Broadband Test Systems").

   Teradyne's interconnection systems products and services ("Connection
Systems") include:

    .  high bandwidth backplane assemblies and associated connectors used in
       electronic systems; and
    .  electronic manufacturing services of assemblies that include Teradyne
       backplanes and connectors.

   On October 26, 2001 Teradyne completed its acquisition of GenRad, Inc. of
Westford, MA, a leading manufacturer of automatic test equipment, related
software and diagnostic solutions. GenRad's business has been made part of the
Circuit Board Test and Inspection Systems operating segment. GenRad activity is
reflected in Teradyne's results of operations since the acquisition date. See
"Note F: Acquisitions and Divestitures" and "Note S: Operating Segment and
Geographic Information" in Notes to Consolidated Financial Statements for
further information.

   Broadband Test Systems, Diagnostic Solutions, and, prior to 2001, Software
Test Systems have been combined into "Other Test Systems" for purposes of
reporting Teradyne's operating segments. For financial information concerning
Teradyne's operating segments, see "Note S: Operating Segment and Geographic
Information" in Notes to Consolidated Financial Statements.

   Statements in this Annual Report on Form 10-K which are not historical
facts, so called "forward looking statements," are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
Investors are cautioned that all forward looking statements involve risks and
uncertainties, including those detailed in Teradyne's filings with the
Securities and Exchange Commission. See also "Item 7: Management's Discussion
and Analysis of Financial Condition and Results of Operations--Certain Factors
That May Affect Future Results" and "Note E: Risks and Uncertainties" in Notes
to Consolidated Financial Statements.

Products

Semiconductor Test Solutions

   Semiconductor Test Systems produced by Teradyne are used by electronic
component manufacturers in the design and testing of a wide variety of
semiconductor devices, including logic, memory, mixed signal, and "system on a
chip" integrated circuits. Semiconductor Test Systems are sold to semiconductor
manufacturers, often referred to as "Integrated Device Manufacturers," and
subcontractors to the semiconductor industry who may perform design and/or
manufacturing functions, often referred to as "Fabless/Subcons." Customers use
Teradyne's Semiconductor Test Systems to:

    .  measure product performance;
    .  control and improve product quality;
    .  improve device design;
    .  reduce time to market;
    .  enhance manufacturability;

                                      2

<PAGE>

    .  minimize labor costs; and
    .  increase production yields,

with the overall benefit of comprehensively testing advanced performance
devices while reducing total costs associated with testing.

   The semiconductor test market is comprised of two sub-markets. The first
sub-market is memory device testing, which includes the testing of dynamic
random access memory ("DRAMs") of all types (synchronous, double data rate
("DDR") and Rambus(TM)), static random access memory ("SRAMs") and flash
memory. The second sub-market is non-memory device testing, which includes the
testing of analog, mixed-signal and system-on-a-chip devices, high performance
logic devices and logic devices produced in high volumes.

   Teradyne products within the Semiconductor Test Systems market include:

Memory Test Solutions

   Reducing cost of test is especially crucial in the highly price sensitive
memory device market. Wafer probing, or contacting the silicon die to test it
prior to packaging, has become an increasingly popular means to increase yield
and reduce test costs. Teradyne's Probe-One memory test system delivers one of
the shortest possible test times per wafer and one of the lowest test costs.
The Probe-One's Flex-Die(TM) architecture delivers the ability to test multiple
memory arrays in parallel, further increasing test productivity and reducing
test cost. The Probe-One was introduced in 2001. The testing of packaged memory
devices remains an important market, as well. Teradyne's J996 memory test
system provides high throughput package test solutions for next generation
memory devices. The J996 has the accuracy and waveform fidelity to test 250
MegaHertz devices, and is able to test sixty-four 16 Input/Output devices in
parallel with a minimal amount of floor space. Teradyne's Aires test system is
designed for newest-generation memory devices such as DDR, Direct Rambus(TM)
DRAMs and fast SSRAMs. Accurately delivering the high speed, complex patterns
required for characterization of these emerging devices, Aires' FlexSystem
architecture combines full function memory and logic pattern generators with a
per-pin timing system.

System-on-a-Chip / Mixed Signal / Analog Test Solutions

   Semiconductor devices that employ both analog and digital circuits are
referred to as "mixed-signal devices." Recent mixed-signal devices called
"system on chip," such as those employed in consumer electronics and wireless
communication products, include significantly increased functionality compared
to earlier mixed-signal devices. The introduction of Teradyne's Catalyst test
systems in 1996 began the system-on-a-chip test revolution, providing a single,
integrated test environment for system-on-a-chip testing. Teradyne's Catalyst
Tiger test system, introduced in 2000, extends component and functional test
capability to very high device operating speeds. Catalyst and Catalyst Tiger
test systems reduce time to market and cost to test across the customer
spectrum, from Integrated Device Manufacturers to Fabless/Subcons. With a
market share nearly double its nearest competitor, a majority of people who use
a personal computer, surf the Internet, or watch a DVD, are using a product
whose semiconductor device was tested with the Catalyst test systems. Teradyne
also estimates that 75% of the world's cell phones include devices tested on
Teradyne system-on-a-chip / mixed-signal test systems. As of December 31, 2001,
more than 1,000 Catalyst test systems have been shipped to customers worldwide.
Teradyne's predecessor to the Catalyst test systems, the A5 test systems of
advanced mixed-signal test systems has a worldwide installed base of more than
1,000 systems and covers a wide range of device applications, including
automotive and telecommunications.

High Performance Test Solutions

   High performance devices such as microprocessors require high performance
automatic test equipment for both functional ("Does it function properly?") and
structural ("Is it constructed properly?") testing. Very Large Scale
Integration ("VLSI") test systems offer solutions for the broadest range of
high performance devices used in today's electronics and Internet products,
such as personal computers and video game consoles, Internet routers and
switches, and network servers. Almost every type of high-end microprocessor,
integrated processor,

                                      3

<PAGE>

and graphic device in the world today is tested on a Teradyne high performance
logic test system. Teradyne's J973EP is one of the only VLSI test systems
designed for the wide range of testing capability needed for structural to
functional testing in a single test system. This product's flexible
configuration provides the ability to switch between functional and structural
test in real time, minimizing test cost by matching test performance to device
test requirements only when needed. The J973EP expands the performance curve on
accuracy, precision device power, and differential bus testing.

High Volume Device Test Solutions

   Devices tested in high volume, such as microcontrollers, are at the heart of
almost every consumer electronics product, from small appliances to automotive
engine controllers. Produced in enormous quantities where every penny matters,
delivering the lowest cost of test at very high production throughput rates is
essential. Teradyne's Integra test systems combine compact packaging, high
performance, and ease of use into a system designed to meet the high volume /
low cost requirements of microcontroller production test. Increasing the level
of integration in the system is key to reducing system cost and size. Teradyne
is the first automatic test equipment vendor to combine four channels of
automatic test equipment timing functionality into a single custom
semiconductor device. Teradyne's design team created an innovative technique
that enabled integration of a full 64 channels of test capability onto a single
printed circuit board. This design approach eliminated the mainframe and
interconnection cabling resulting in a complete test system housed in a compact
test head-only configuration. Its "zero footprint" design reduces the total
cost of ownership and allows for more efficient use of production floor space.
Teradyne's Integra test systems include the J750 and J750k. Using the same
compact, low cost architecture Teradyne's IP750 CCD Image Sensor test system
enjoys the world's largest shipment volume and installed base in the image
sensor device test market, driven by the burgeoning popularity of digital
cameras and other imaging products.

Connection Systems Solutions

   Connection Systems is a global supplier of high-performance components and
electronic manufacturing services. Connection System's component technology can
be found in such diverse products as Internet routers, computer servers, mass
data storage and telecom switches. Connection Systems offers a total
interconnect solution with a broad suite of technologically differentiated
capabilities including printed circuit boards, high-speed, high-density
connectors, multi-gigabit backplane assemblies and complete systems integration
and test.

   A backplane plays the crucial roll of locating and supporting printed
circuit boards within a system, enabling them to "talk" to each other and to
the outside world. Connection Systems produces custom, large format backplanes,
up to .400 inches thick and 24 inches x 54 inches in size with up to 64 layers.
Connectors are devices that allow the backplane and other printed circuit
boards (sometimes called daughter cards) to plug together. High bandwidth
capability packed in a small amount of space is an important technological
advantage of Teradyne's connectors. Connection System's VHDM(R) and
VHDM-HSD(TM) connector families have become a standard in the industry for
high-speed, high-density interconnect. The GbX(TM) connector was introduced in
2001 to achieve even higher data rates and greater interconnection density. The
Connection Systems organization also provides electronic manufacturing
services, including backplane assembly, electro-mechanical integration of
sub-assemblies, and complete systems integration and test.

   An essential element of the Connection Systems business is its design and
applications engineering expertise at every step in the process. This expertise
helps customers balance critical cost and performance needs during system
design. In addition, by providing program management services, Connection
Systems becomes an extension of the customer's operation, delivering quick turn
prototypes and high technology production volumes.

Circuit Board Test and Inspection Solutions

   The central element of almost every electronic product is a printed circuit
board. A circuit board includes all the components and their interconnections
that cause the board to perform its intended functions. As more and more
product functionality is packed into smaller packages, such as PDAs, phone
handsets and laptop computers, both the circuit boards and their components are
increasingly complex. The circuit board manufacturing process

                                      4

<PAGE>

is also complex and demands a number of inspection and test steps. Teradyne
circuit board test and inspection equipment is used throughout the
manufacturing process to ensure high production yields, to maintain overall
product quality, to diagnose faults quickly where and when they occur, and to
reduce total manufacturing cost. The Teradyne circuit board and inspection
product range includes the following products:

In-Circuit Test

   In-circuit test systems examine the assembled and soldered circuit board for
proper construction under both power-off and power-on conditions. Faulty
components or solder problems are identified quickly and precisely. Because of
their relatively low cost, high throughput and diagnostic accuracy, in-circuit
testers are used universally in every electronics production line. Teradyne
in-circuit products support a full range of circuit board test applications,
including prototype and ramp up, high-volume production, selective or sample
test and final or system test. Accordingly, Teradyne offers a wide variety of
capabilities and options with its Spectrum 8000-series, Z1800-series and GR
TestStation product lines. Specialized systems such as the GR Pilot and Javelin
"flying probers" round out one of the industry's broadest and most capable
product families.

Imaging Inspection

   As circuit boards become increasingly dense and complex, achieving the
electrical contact required for the traditional in-circuit test method is
becoming more difficult, time-consuming and expensive. "Loss of (electrical)
access" is a primary driver behind the increasing popularity of imaging
inspection systems, which examine the circuit board for physical qualities
including correct component presence and orientation, the absence of electrical
opens and solder quality. Teradyne's imaging inspection systems employ one of
two technologies: automated optical inspection ("AOI"), whereby a visual image
of the board is captured and analyzed; and automated x-ray inspection ("AXI"),
which captures an x-ray image of the board. Each technology has particular
strengths in analyzing various board defect classes. For example, AOI is the
preferred technology for evaluating and diagnosing component-related defects,
while AXI is the preferred technology for analyzing solder-related defects.
Teradyne's Optima 7000-series AOI systems employ advanced and patented
lighting, camera, software, and mechanics, resulting in highly reliable,
repeatable, and accurate optical inspection at high line speeds. The AXI
product line offers fast throughput with high resolution on both its
two-dimensional (2D) and three-dimensional (3D) models, and is the only product
line that includes a combined 2D/3D capability.

Functional Test

   Functional test systems examine the circuit board to determine whether it
will meet its performance specifications and whether it will properly perform
its intended "function." Functional testing is typically employed at the
conclusion of the manufacturing process, as the final check step, to ensure the
product will work as designed. Teradyne's functional test product line
encompasses a full range of functional test applications, including high-volume
production, final or system test, and field or depot diagnosis and repair.
Available products range from VXI and PXI open architecture instruments and
systems, to fully configured platforms for a wide range of manufacturing and
depot test applications. Teradyne functional test systems include focused
solutions for the communications, computer, and automotive markets, addressing
functional test requirements for products such as automotive engine control
units, telecom/datacom infrastructure equipment, wireless handheld devices, and
complex/mission critical military/aerospace products. All Teradyne functional
test solutions are designed specifically for the production test environment,
which helps ensure that the test system has been optimized for throughput,
reliability, and repeatability.

Design to Build Software

   Electronics manufacturers employ a variety of circuit board test and
inspection equipment throughout their production lines. This broad range of
circuit board test and inspection choices requires extensive test planning and
preparation, often referred to as "design to build" or "D2B". Teradyne's
Strategist software tool enables users to model, simulate, optimize and execute
a cost-effective test and inspection strategy, which optimally

                                      5

<PAGE>

divides test and inspection tasks among the imaging inspection, in-circuit and
functional systems used on the manufacturing line. Once the strategy is
determined, the user then employs Teradyne's Alchemist software to generate
test software and documentation for the test and inspection equipment being
used in the manufacturing line.

Broadband Test Solutions

   Broadband Test Systems test the capacity and quality of telephone and cable
television lines connected to homes and businesses. These state-of-the-art
testing capabilities support cable and telephone company service provider's
goals to sell and deploy broadband services sooner and improve the efficiency
of qualification, provisioning, and customer care. Broadband Test Systems
provide voice network maintenance solutions for the communications industry.
Testing more than 120 million access lines worldwide for many of the world's
largest telecommunications companies, including British Telecommunications,
Deutsche Telecom and Verizon, Teradyne's 4TEL access network maintenance
systems reduce operating cost and increase customer satisfaction by reliably
detecting and identifying line faults within a telecommunications access
network. With ten years of Internet protocol testing experience, Teradyne also
provides products to telecommunications companies such as local exchange
carriers for Internet testing, customer care and voice network maintenance.

   Teradyne products within the Broadband Test Systems market include:

4TEL & 4TEL II Voice Test Systems

   Teradyne's 4TEL voice test system precisely identifies and isolates faults
within a telecommunications network, inside or outside customer premises,
without the need for customer isolation equipment. The 4TEL II voice test
system accurately isolates faults to such zones as exchange hardware, exchange
wiring, access cable, inside premises wiring and customer equipment.

   The 4TEL system quickly locates the precise geographic location of a fault,
enabling service providers to dispatch craftspeople to fix a fault, rather than
dispatching them to find the fault. The 4TEL voice test system also reliably
identify when a dispatch is not needed, such as when the problem exists in
customer-owned equipment. Teradyne's 4TEL system currently tests one seventh of
the world's voice lines.

NetFlare(TM) End-to-End Internet Testing

   Cable and telephone company service providers can reduce broadband service
call handling time with Teradyne's NetFlare system. This newly developed
technology allows the consumer or call center representative to emulate the
consumer's network experience and determine the source of a problem. For
example, NetFlare technology automatically measures throughput as the consumer
experiences it, determines whether the broadband service provider commitment is
met, and identifies the network source of the problem. NetFlare significantly
reduces average call handling time and reduces the necessity for further
technical support.

Celerity(TM) Speed Provisioning and Qualification Products

   Service providers need to know which cable lines between the central office
and the end user are qualified for digital subscriber lines ("DSL") and which
are not. Existing cable records are typically insufficient. Teradyne's Celerity
product qualifies millions of lines for DSL capability in hours, and develops a
database immediately showing which lines are qualified, which lines require
conditioning and which lines are disqualified. Celerity performs real time
testing that provides detailed loop qualification information and tests
in-service DSL lines, identifying the presence and dispatch location of faults
that affect data transmission. Celerity customers are able to significantly
reduce costs of deployment and identify new lines and high-speed lines for
increased revenue.

Diagnostic Solutions

   Diagnostic Solutions is a major supplier of automotive manufacturing test
and service bay diagnostic systems supporting vehicle electronics systems
throughout their lifecycle, from design through manufacturing to service.
Diagnostic Solutions products are used by automotive and transportation
original equipment manufacturers, as well as by independent service providers.

                                      6

<PAGE>

Software Test Solutions

   Software Test Systems, which Teradyne divested in December 2000, are used by
a number of industries to test communications networks, computerized
telecommunication systems, and web based applications.

Summary of Net Sales by Operating Segment

   Teradyne's four principal operating segments accounted for the following
percentage of consolidated net sales for each of last three years:

<TABLE>
<CAPTION>
                                                     % of consolidated net sales
                                                     --------------------------
                                                       2001       2000    1999
                                                     ----        ----    ----
   <S>                                               <C>         <C>     <C>
   Semiconductor Test Systems.......................  50%         67%     68%
   Connection Systems...............................  38          24      21
   Circuit Board Test and Inspection Systems........   9           5       6
   Other Test Systems...............................   3           4       5
                                                     ---         ---     ---
   Total............................................ 100%        100%    100%
</TABLE>

Sales and Distribution

   Teradyne's systems are extremely complex and require extensive support both
by the customer and by Teradyne. Prices for Teradyne's systems can reach $3
million or more. In 2001, no single customer accounted for more than 10% of
Teradyne's consolidated net sales. In 2001, Teradyne's three largest customers
accounted for 24% of consolidated net sales.

   Direct sales to United States government agencies accounted for less than 1%
of consolidated net sales in 2001, 2000, and 1999. Approximately 5% of Circuit
Board Test and Inspection Systems sales in 2001 were to the United States
government agencies. Sales were also made within each of Teradyne's segments to
customers who are government contractors. Approximately 3% of Connection
Systems sales and approximately 27% of Circuit Board Test and Inspection
Systems sales fell into that category in 2001. On June 22, 2001, Teradyne sold
its aerospace and defense connector and backplane business to Amphenol
Corporation of Wallingford, Connecticut.

   Teradyne has sales and service offices located throughout North America,
South East Asia, Europe, Taiwan, Japan, and Korea as Teradyne's customers
outside the United States are located primarily in these geographic areas.
Teradyne sells in these areas predominantly through a direct sales force.
Primarily all of Teradyne's manufacturing activities are conducted in the
United States. Sales to customers outside the United States accounted for 49%
of consolidated net sales in 2001, 54% in 2000, and 52% in 1999. Sales to
customers located in Taiwan were 10% in 2001 and 2000. Sales are attributed to
geographic areas based on the location of the customer site.

   Teradyne is subject to the inherent risks involved in international trade,
such as:

    .  political and economic instability and acts of terrorism;
    .  restrictive trade policies;
    .  controls on funds transfer;
    .  currency fluctuations;
    .  difficulties in managing distributors;
    .  potentially adverse tax consequences; and
    .  the possibility of difficulty in accounts receivable collection.

   Teradyne attempts to reduce the effects of currency fluctuations by hedging
those currency exposures associated with certain assets and liabilities
denominated in non-functional currencies and by conducting some of its
international transactions in U.S. dollars or dollar equivalents. See also
"Item 7A. Quantitative and Qualitative Disclosures About Market Risks" and
"Note G: Financial Instruments" in Notes to Consolidated Financial Statements.

                                      7

<PAGE>

Competition

   Teradyne faces substantial competition, throughout the world in each of its
operating segments. Some of these competitors have substantial financial and
other resources to pursue engineering, manufacturing, marketing and
distribution of their products. Teradyne also faces competition from internal
suppliers at several of its customers. Some of Teradyne's competitors have
introduced or announced new products with certain performance characteristics
that may be considered equal or superior to those Teradyne currently offers.
Teradyne expects its competitors to continue to improve the performance of
their current products and to introduce new products or new technologies that
provide improved cost of ownership and performance characteristics. New product
introductions by competitors could cause a decline in sales or loss of market
acceptance of Teradyne's products. Moreover, increased competitive pressure
could lead to intensified price based competition, which could materially
adversely affect Teradyne's business, financial condition and results of
operations.

Backlog

   At December 31, 2001 and 2000, Teradyne's backlog of unfilled orders in each
of its four principal operating segments was as follows:


<TABLE>
<CAPTION>
                                                      (in millions)
                                                     ---------------
                                                      2001    2000
                                                     ------ --------
           <S>                                       <C>    <C>
           Semiconductor Test Systems............... $317.2 $  742.1
           Connection Systems.......................  357.6    534.4
           Circuit Board Test and Inspection Systems   55.5     68.4
           Other Test Systems.......................   32.7     37.2
                                                     ------ --------
                                                     $763.0 $1,382.1
</TABLE>

   Of the backlog at December 31, 2001, approximately 97% of the Semiconductor
Test Systems backlog, 100% of the Connection Systems backlog, 92% of Circuit
Board Test and Inspection Systems backlog, and 59% of the Other Test Systems
backlog is expected to be delivered in 2002. Teradyne's experience indicates
that a portion of orders included in the backlog may be canceled or
rescheduled. During 2001, Teradyne experienced an increase in the rescheduling
of delivery dates by some of its customers, and thus the timing of the delivery
of a significant portion of Teradyne's backlog is uncertain. In 2001, Teradyne
experienced cancellations of $285.5 million. Teradyne may experience additional
cancellations in the future. There are no seasonal factors related to the
backlog.

Raw Materials

   Teradyne's products require a wide variety of electronic and mechanical
components. Teradyne can experience occasional delays in obtaining timely
delivery of certain items. Additionally, Teradyne could experience a temporary
adverse impact if any of its sole source suppliers ceased to deliver products.
Any prolonged inability to obtain adequate supplies, or any other circumstances
that would require Teradyne to seek alternative sources of supply could have a
material adverse effect on its business, financial condition, and results of
operations.

Patents and Licenses

   Teradyne's development of its products, both hardware and software, is
largely based on proprietary information. Teradyne protects its rights in
proprietary information through various methods such as:

    .  copyrights;
    .  trademarks;
    .  patents and patent applications;
    .  software license agreements; and
    .  employee agreements.

   Any invalidation of Teradyne's intellectual property rights could have a
material adverse effect on its business.

                                      8

<PAGE>

Employees

   As of December 31, 2001, Teradyne employed approximately 8,400 people. Since
the inception of Teradyne's business, there have been no work stoppages or
other labor disturbances. Teradyne has no collective bargaining contracts.

Engineering and Development Activities

   The highly technical nature of Teradyne's products requires a large and
continuing engineering and development effort. Engineering and development
expenditures were approximately $288.7 million in 2001, $348.0 million in 2000,
and $261.9 million in 1999. These expenditures amounted to approximately 20% of
consolidated net sales in 2001, 11% in 2000, and 15% in 1999.

Environmental Affairs

   Teradyne's manufacturing facilities are subject to numerous laws and
regulations designed to protect the environment, particularly from
manufacturing plant wastes and emissions. These laws include:

    .  The Comprehensive Environmental Response, Compensation, and Liability
       Act;
    .  The Superfund Amendment and Reauthorization Act of 1986;
    .  The Occupational Safety and Health Act;
    .  The Clean Air Act;
    .  The Clean Water Act;
    .  The Resource Conservation and Recovery Act of 1976; and
    .  The Hazardous and Solid Waste Amendments of 1984.

   In the opinion of management, the costs associated with complying with these
laws and regulations have not had and are currently not expected to have a
material effect upon the financial position or results of operations of
Teradyne.

   In 2001, Teradyne was designated as a "potentially responsible party"
("PRP") at two clean-up sites, one in California and one in Rhode Island.
Teradyne does not believe that it has any liability for the cleanup of the
California site, and has requested the state of California to remove Teradyne's
name from the list of PRPs, however, Teradyne has not yet received a reply. In
the opinion of management, the costs associated with complying with the
clean-up of this site, if required, are not expected to have a material effect
upon the financial position or results of operations of Teradyne. However,
Teradyne cannot predict what its liability, if any, may be for the clean-up of
this site and can give no assurance that it will not materially adversely
affect Teradyne's financial condition or results of operations. With respect to
the second site, in Rhode Island, additional information is currently being
collected to better understand Teradyne's financial obligations, if any, for
its portion of the clean-up of this site.

                                      9

<PAGE>

                       EXECUTIVE OFFICERS OF THE COMPANY

   The following table sets forth the names of all executive officers of
Teradyne and certain other information relating to their positions held with
Teradyne and other business experience. Executive officers of Teradyne do not
have a specific term of office but rather serve at the discretion of the Board
of Directors.

<TABLE>
<CAPTION>
 Executive Officer   Age          Position             Business Experience For The Past 5 Years
 -----------------   ---          --------             ----------------------------------------
<S>                  <C> <C>                        <C>
George W. Chamillard 63  President, Chairman of the Chairman of the Board since 2000; President
                              Board, and Chief      and Chief Executive Officer of Teradyne since
                             Executive Officer      1997; Director of Teradyne since 1996;
                                                    President and Chief Operating Officer of
                                                    Teradyne from 1996 to 1997; Executive Vice
                                                    President of Teradyne from 1994 to 1996.
Gregory R. Beecher.. 44   Vice President and Chief  Vice President and Chief Financial Officer of
                             Financial Officer      Teradyne since 2001; Partner at
                                                    PricewaterhouseCoopers LLP from 1993 to
                                                    2001.
Edward Rogas, Jr.... 61    Senior Vice President    Senior Vice President of Teradyne since 2000;
                                                    Vice President of Teradyne from 1984 to 1999.
David L. Sulman*.... 58    Senior Vice President    Senior Vice President of Teradyne from 2000
                                                    to 2001; Vice President of Teradyne from 1994
                                                    to 1999.
Thomas S. Grilk..... 54  Vice President and General Vice President and General Counsel of
                                  Counsel           Teradyne since 2000; VP of Government
                                                    Affairs and Assistant General Counsel at
                                                    Compaq Computer Corp and Digital
                                                    Equipment Corp from 1994 to 2000.
Michael A. Bradley.. 53         President of        President of Semiconductor Test since 2001;
                             Semiconductor Test     Vice President of Teradyne from 1992 to 2001;
                                                    Chief Financial Officer of Teradyne from 1999
                                                    to 2001.
John M. Casey....... 53  President of Circuit Board President of Circuit Board Test and Inspection
                            Test and Inspection     since 2002; Vice President of Teradyne since
                                                    1990.
Richard E. Schneider 44   President of Connection   President of Connection Systems since 2001;
                                  Systems           Vice President of Teradyne from 1998 to 2001;
                                                    Connections Systems manager from 1998 to
                                                    2001; Connection Systems Business
                                                    Development manager from 1997 to 1998.
G. Richard MacDonald 53          Controller         Controller of Teradyne since 2001; Controller
                                                    of Teradyne's Industrial Consumer Division
                                                    from 1989 to 2001.
Stuart M. Osattin... 56      Vice President and     Vice President and Treasurer of Teradyne
                                 Treasurer          since 1994.
</TABLE>

*Mr. Sulman retired from Teradyne on December 31, 2001.

                                      10

<PAGE>

Item 2:  Properties

   Teradyne's executive offices are in Boston, Massachusetts. Manufacturing and
other operations are carried on in several locations. The following table
provides certain information as to Teradyne's principal general offices and
manufacturing facilities.

<TABLE>
<CAPTION>
                                                                            Approximate
                                                                            Square Feet
                                                                   Property  of Floor
          Location                     Operating Segment           Interest    Space
          --------            ------------------------------------ -------- -----------
<S>                           <C>                                  <C>      <C>
Boston, Massachusetts........ Semiconductor Test & General Offices   Own      492,000
Agoura Hills, California..... Semiconductor Test                     Own      572,000
Nashua, New Hampshire........ Connection Systems                     Own      569,000
North Reading, Massachusetts. Semiconductor Test & Circuit Board
                              Test and Inspection                    Own      273,000
North Reading, Massachusetts. Unoccupied                             Own      425,000*
Westford, Massachusetts...... Circuit Board Test and Inspection     Lease     230,000
Woburn, Massachusetts........ Semiconductor Test                    Lease     205,000
San Diego, California........ Connection Systems                     Own      192,000
Hudson, New Hampshire........ Connection Systems                    Lease     144,000
San Jose, California......... Semiconductor Test                     Own      120,000
Stoughton, Massachusetts..... Unoccupied                             Own      120,000*
Mexicali, Mexico............. Connection Systems                    Lease     112,000
La Verne, California......... Connection Systems                     Own       93,000
Shanghai, China.............. Unoccupied                            Lease      87,000*
Manchester, England.......... Diagnostic Solutions                  Lease      75,000
Kumamoto, Japan.............. Semiconductor Test                     Own       66,000
Deerfield, Illinois.......... Broadband Test                         Own       63,000
Walnut Creek, California..... Circuit Board Test and Inspection     Lease      60,000
Plano, Texas................. Connection Systems                    Lease      50,000
Dublin, Ireland.............. Connection Systems                    Lease      46,000
Fremont, California.......... Connection Systems                    Lease      46,000
</TABLE>

*This space is unoccupied and therefore available for future expansion.

Item 3:  Legal Proceedings

   In connection with the August 2000 acquisition of each of Herco Technology
Corp., a California company, and Perception Laminates, Inc., a California
company, a complaint was filed by the former owners of those companies on or
about September 5, 2001 naming as defendants Teradyne and two of its executive
officers. The case was originally filed in the Superior Court in San Diego
County, California, and was subsequently removed by the defendants to federal
court. On or about November 14, 2001, Teradyne and the two individual
defendants filed a motion to dismiss the amended complaint in its entirety. The
federal court granted in part and denied in part that motion to dismiss. The
claims that were dismissed were dismissed with prejudice. At the federal
court's request, the plaintiffs filed a second amended complaint on March 4,
2002 setting forth their remaining claims. The second amended complaint
alleges, among other things, that the sale of Teradyne's common stock to the
former owners violated certain California securities statutes and common law,
and that Teradyne breached certain contractual obligations in the agreements
relating to the acquisitions. The second amended complaint seeks unspecified
damages, including compensatory, consequential and punitive damages, and
recovery of reasonable attorneys' fees and costs. On March 25, 2002, Teradyne
and the two individual defendants filed their answer to the second amended
complaint.

   Teradyne and two of its executive officers are named as defendants in three
purported class action complaints that were filed in the United States District
Court for the District of Massachusetts, Boston, Massachusetts, on or about
October 16, 2001, October 19, 2001 and November 7, 2001. The complaints allege,
among other things, that the defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, by making, during the period from July 14,
2000 until October 17, 2000, material misrepresentations and omissions to the
investing public regarding Teradyne's business operations and future prospects.
The complaints seek unspecified damages, including compensatory damages and
recovery of reasonable attorneys' fees and costs.

                                      11

<PAGE>

   Teradyne disputes all of the claims above and believes they are without
merit, and intends to defend vigorously against the lawsuits. However, an
adverse resolution of any of the lawsuits could have a material adverse effect
on Teradyne's financial position or results of operations. Teradyne is not
presently able to reasonably estimate potential losses, if any, related to any
of the lawsuits and therefore has not accrued for any potential losses from the
lawsuits.

   In addition, Teradyne is subject to legal proceedings and claims that arise
in the ordinary course of business. Management does not believe these actions
will have a material adverse effect on Teradyne's financial position or results
of operations.

Item 4:  Submission of Matters to a Vote of Security Holders.

   None.

                                    PART II

Item 5:  Market for Registrant's Common Equity and Related Shareholder Matters

   The following table shows the market range for Teradyne's Common Stock based
on reported sale prices on the New York Stock Exchange.

<TABLE>
<CAPTION>
                               Period                             High    Low
                               ------                             ----    ---
<C>  <S>                                                         <C>     <C>
2001 First Quarter.............................................. $ 44.05 $29.05
     Second Quarter.............................................   47.21  26.25
     Third Quarter..............................................   37.45  18.43
     Fourth Quarter.............................................   33.00  18.50
2000 First Quarter.............................................. $ 94.94 $54.88
     Second Quarter.............................................  115.44  65.00
     Third Quarter..............................................   81.00  34.94
     Fourth Quarter.............................................   41.63  23.00
</TABLE>

   The number of record holders of Teradyne's Common Stock at February 22, 2002
was 891.

   Teradyne has never paid cash dividends because it has been Teradyne's policy
to use earnings to finance expansion and growth. Payment of future cash
dividends will rest within the discretion of the Board of Directors and will
depend, among other things, upon Teradyne's earnings, capital requirements, and
financial condition. Teradyne presently expects to retain all of its earnings
for use in the business.

Item 6:  Selected Financial Data

<TABLE>
<CAPTION>
                                                         Years Ended December 31,*
                                          -------------------------------------------------------
                                             2001        2000       1999       1998       1997
                                          ----------  ---------- ---------- ---------- ----------
                                             (Dollars in thousands, except per share amounts)
<S>                                       <C>         <C>        <C>        <C>        <C>
Net sales................................ $1,440,581  $3,043,946 $1,790,912 $1,489,151 $1,266,274
                                          ==========  ========== ========== ========== ==========
(Loss) income before cumulative effect of
  change in accounting principle......... $ (202,215) $  517,754 $  191,694 $  102,117 $  127,608
                                          ==========  ========== ========== ========== ==========
(Loss) income before cumulative effect of
  change in accounting principle per
  common share--basic.................... $    (1.15) $     2.99 $     1.12 $     0.61 $     0.76
                                          ==========  ========== ========== ========== ==========
(Loss) income before cumulative effect of
  change in accounting principle per
  common share--diluted.................. $    (1.15) $     2.86 $     1.07 $     0.59 $     0.74
                                          ==========  ========== ========== ========== ==========
Total assets............................. $2,542,391  $2,355,868 $1,568,213 $1,312,814 $1,251,674
                                          ==========  ========== ========== ========== ==========
Long-term obligations.................... $  451,682  $    8,352 $    8,948 $   13,200 $   13,141
                                          ==========  ========== ========== ========== ==========
</TABLE>

   *Note: Previously published financial data prior to 2000 has not been
restated to give the pro forma effect of the adoption of the provisions of SAB
101. See "Note C: Change in Accounting Principle" in Notes to Consolidated
Financial Statements for further information.

                                      12

<PAGE>

Item 7:  Management's Discussion and Analysis of Financial Condition and
         Results of Operations

   The following discussion should be read in conjunction with the consolidated
financial statements and notes thereto included elsewhere in this Annual Report
on Form 10-K. In addition to the historical information contained in this
document, the discussion in this Annual Report on Form 10-K contains
forward-looking statements, made pursuant to the Private Securities Litigation
Reform Act of 1995, that involve risks and uncertainties, such as statements of
Teradyne's plans, expectations and intentions. The cautionary statements made
in this Annual Report on Form 10-K should be read as being applicable to all
related forward-looking statements whenever they appear in this Annual Report
on Form 10-K. Teradyne's actual results could differ materially from the
results contemplated by these and any other forward-looking statements. Factors
that could contribute to such differences include those discussed below as well
as those cautionary statements and other factors set forth in "Certain Factors
That May Affect Future Results" and elsewhere herein.

Critical Accounting Policies and Estimates

   Teradyne has identified the policies discussed below as critical to
understanding its business and its results of operations. The impact and any
associated risks related to these policies on its business operations is
discussed throughout Management's Discussion and Analysis of Financial
Condition and Results of Operations where such policies affect its reported and
expected financial results.

   The preparation of consolidated financial statements requires Teradyne to
make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent
liabilities. On an on-going basis, Teradyne evaluates its estimates, including
those related to inventories, investments, intangible and other long-lived
assets, bad debts, income taxes, pensions, warranties, contingencies and
litigation. Teradyne bases its estimates on historical experience and on
appropriate and customary assumptions that are believed to be reasonable under
the circumstances, the results of which form the basis for making judgments
about the carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates
under different assumptions or conditions.

   Teradyne recognizes revenue when there is persuasive evidence of an
arrangement, title and risk of loss have passed, delivery has occurred or the
services have been rendered, the sales price is fixed or determinable and
collection of the related receivable is reasonably assured. It is Teradyne's
policy to require an arrangement with its customers, either in the form of a
written or electronic contract or purchase order containing all of the terms
and conditions governing the arrangement, prior to the recognition of revenue.
Title and risk of loss generally passes to the customer at the time of delivery
of the product to a common carrier. At the time of the transaction, Teradyne
assesses whether the sales price is fixed or determinable based upon the
payment terms of the arrangement. If a significant portion of the sales price
is not due with normal payment terms, the sales price may not be deemed fixed
and revenue would be recognized as the amounts become due. Teradyne does not
offer a right of return on its products.

   Teradyne assesses collectibility based on a number of factors, including
past transaction and collection history with a customer and the
credit-worthiness of the customer. Teradyne performs on-going credit
evaluations of its customer's financial condition but generally does not
require collateral from its customers. If Teradyne determines that
collectibility of the sales price is not reasonably assured, revenue is
deferred until such time as collection becomes reasonably assured, which is
generally upon receipt of payment from the customer.

   Revenue is recognized upon delivery provided that customer acceptance
criteria can be demonstrated prior to shipment. Where the criteria cannot be
demonstrated prior to shipment, or in the case of new products, revenue is
deferred until acceptance has been received. For multiple element arrangements,
Teradyne defers the greater of the fair value of any undelivered elements of
the contract or the portion of the sales price which is not payable until the
undelivered elements are delivered. Teradyne also defers the portion of the
sales price that is not due until acceptance, which represents deferred profit.
Fair value is the price charged when the element is sold separately. In order
to recognize revenue the functionality of the undelivered element must not be
essential to the delivered element. Installation is not considered essential to
the functionality of the product as these services do not alter the product
capabilities, do not require specialized skills or tools and can be performed
by the customers or other vendors. In addition to installation, other elements
may include service arrangements and undelivered products. Teradyne's products
are generally subject to warranty and related costs are provided for in cost of
sales when product revenue is recognized.

                                      13

<PAGE>

   Interconnection systems and electronic manufacturing assembly services
revenue is recognized upon shipment or delivery according to the shipping terms
of the arrangement as there is no installation required and there are no
contractual acceptance requirements.

   For certain contracts eligible for contract accounting under Statement of
Accounting Position No. 81-1, "Accounting for Performance of Construction-Type
and Certain Production-Type Contracts," revenue is recognized using the
percentage-of-completion accounting method based upon an efforts-expended
method. The software in these arrangements requires significant production,
modification or customization. In all cases, changes to total estimated costs
and anticipated losses, if any, are recognized in the period in which
determined. To date revenue under contract accounting has not been material.

   Inventories which include materials, labor and manufacturing overhead are
stated at the lower of cost (first-in, first-out basis) or net realizable
value. On a quarterly basis, Teradyne uses consistent methodologies to evaluate
all inventory for net realizable value. Teradyne records a provision for excess
and obsolete inventory when such an impairment is identified through the
quarterly review process. Excess and obsolete inventory, consisting of on-hand
and non-cancelable on-order inventory, in excess of estimated usage over the
next 12 months is written down to its estimated net realizable value, if less
than cost. The excess and obsolescence evaluation is based upon assumptions
about future demand, product mix and possible alternative uses. In 2001,
Teradyne recorded an inventory provision for excess and obsolete inventory of
$139.7 million which includes a writedown for discontinued product lines of
$34.5 million. If actual demand, product mix or possible alternative uses are
less favorable than those projected by management, additional inventory
write-downs may be required.

   On a quarterly basis, Teradyne evaluates the realizability of its deferred
tax assets and assesses the need for a valuation allowance. Realization of
Teradyne's net deferred tax assets is dependent on its ability to generate
approximately $415 million of future taxable income. Teradyne believes that it
is more likely than not that its net deferred tax assets will be realized based
on forecasted income, however, there can be no assurance that Teradyne will be
able to meet its expectations of future income. If Teradyne continues to incur
significant losses for an extended period of time, Teradyne could be required
to establish a valuation allowance against all or a significant portion of its
net deferred tax assets. To the extent Teradyne establishes a valuation
allowance, an expense will be recorded within the provision for income taxes
line in the statement of operations.

   Teradyne assesses the impairment of identifiable intangibles, long-lived
assets and related goodwill whenever events or changes in circumstances
indicate that the carrying value may not be recoverable. Factors Teradyne
considers important which could indicate an impairment include significant
underperformance relative to expected historical or projected future operating
results, significant changes in the manner of Teradyne's use of the acquired
asset or the strategy for Teradyne's overall business and significant negative
industry or economic trends. When Teradyne determines that the carrying value
of intangibles, long-lived assets and related goodwill may not be recoverable
based upon the existence of one or more of the above indicators of impairment,
Teradyne measures any impairment based on a projected discounted cash flow
method using a discount rate determined by its management to be commensurate
with the risk inherent in its current business model. During 2001, Teradyne
recorded charges of $32.3 million related to the impairment of certain excess
facilities and long-lived assets. Intangible assets, long-lived assets, and
goodwill amounted to $1.1 billion as of December 31, 2001.

   The volatility of the industries that Teradyne serves can cause certain of
its customers to experience shortages of cash flows, which can impact their
ability to make required payments. Teradyne maintains allowances for doubtful
accounts for estimated losses resulting from the inability of its customers to
make required payments. At December 31, 2001, this allowance for doubtful
accounts amounted to $6.3 million. Estimated allowances for doubtful accounts
are reviewed periodically taking into account the customer's current payment
history, the customer's current financial statements and other information
regarding the customer's credit worthiness. If the financial condition of
Teradyne's customers were to deteriorate, resulting in an impairment of their
ability to make payments, additional allowances may be required.


                                      14

<PAGE>

                SELECTED RELATIONSHIPS WITHIN THE CONSOLIDATED
                           STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                         YEARS ENDED DECEMBER 31,
                                                                  -------------------------------------
                                                                     2001          2000         1999
                                                                  -----------   ----------   ----------
                                                                          (dollars in thousands)
<S>                                                               <C>           <C>          <C>
Net sales........................................................  $1,440,581   $3,043,946   $1,790,912
                                                                  ===========   ==========   ==========
(Loss) income before cumulative effect of change in accounting
  principle......................................................  $ (202,215)  $  517,754   $  191,694
                                                                  ===========   ==========   ==========
(Decrease) increase in net sales from preceding year:
Amount........................................................... ($1,603,365)  $1,253,034   $  301,761
                                                                  ===========   ==========   ==========
Percentage.......................................................         (53)%         70 %         20%
                                                                  ===========   ==========   ==========
(Decrease) increase in income (loss) from preceding year.........  $ (719,969)  $  326,060   $   89,577
                                                                  ===========   ==========   ==========
Percentage of net sales:
Net sales........................................................       100.0 %      100.0 %      100.0%
Expenses:
Cost of sales....................................................        70.9         52.8         56.1
Cost of sales - inventory provision and other charges............        11.1           --           --
Engineering and development......................................        20.1         11.4         14.6
Selling and administrative.......................................        18.7         12.4         14.9
Restructuring and other charges..................................         3.7           --           --
                                                                  -----------   ----------   ----------
                                                                        124.5         76.6         85.6
Net interest and other income....................................         1.9          0.9          0.9
                                                                  -----------   ----------   ----------
(Loss) income before income taxes and cumulative effect of change
  in accounting principle........................................       (22.6)        24.3         15.3
(Benefit) provision for income taxes.............................        (8.6)         7.3          4.6
                                                                  -----------   ----------   ----------
(Loss) income before cumulative effect of change in
  accounting principle...........................................       (14.0)        17.0         10.7
Cumulative effect of change in accounting principle..............          --         (2.1)          --
                                                                  -----------   ----------   ----------
Net (loss) income................................................       (14.0)%       14.9 %       10.7%
                                                                  ===========   ==========   ==========
</TABLE>

   On October 26, 2001, Teradyne completed its acquisition of GenRad, Inc. of
Westford, MA, a leading manufacturer of electronic automatic test equipment,
related software, and diagnostic solutions. GenRad's business has been made a
part of the Circuit Board Test and Inspection Systems operating segment. GenRad
activity is reflected in Teradyne's results of operations since the acquisition
date. See "Note F: Acquisitions and Divestitures" in Notes to Consolidated
Financial Statements for further information.

Results of Operations:

2001 compared to 2000

Revenue

   Teradyne's four principal operating segments accounted for the following
percentages of consolidated net sales for each of last three years:

<TABLE>
<CAPTION>
                                                      % of consolidated
                                                          net sales
                                                      ----------------
                                                      2001    2000 1999
                                                      ----    ---- ----
            <S>                                       <C>     <C>  <C>
            Semiconductor Test Systems...............  50%     67%  68%
            Connection Systems.......................  38      24   21
            Circuit Board Test and Inspection Systems   9       5    6
            Other Test Systems.......................   3       4    5
                                                      ---     ---  ---
            Total.................................... 100%    100% 100%
</TABLE>


                                      15

<PAGE>

   Sales decreased 53% in 2001 to $1,440.6 million from $3,043.9 million in
2000. Semiconductor Test Systems sales decreased 65%, to $717.7 million in 2001
from $2,044.0 million in 2000, Connection Systems sales to unaffiliated
customers decreased 26%, to $540.8 million in 2001 from $734.6 million in 2000,
and Circuit Board Test and Inspection Systems sales decreased 6%, to $132.4
million in 2001 from $141.2 million in 2000. These decreases reflect the
overall economic and industry market conditions described below. Circuit Board
Test and Inspection Systems sales include the two-month impact of the GenRad
acquisition which contributed sales of $19.0 million. Other Test Systems sales
decreased 60%, to $49.7 million in 2001 from $124.1 million in 2000, which
principally reflects the divestiture of Software Test Systems at the end of
2000 as well as the overall economic and industry market conditions described
below. During the fourth quarter of 2000, Teradyne implemented Staff Accounting
Bulletin No. 101 "Revenue Recognition in Financial Statements" (SAB 101)
retroactive to the beginning of the year. Included in 2001 sales was $98.7
million related to shipments of customer orders in 2000 where title was
retained by Teradyne until customer payment in order to perfect a security
interest. Teradyne no longer retains title until customer payment.

   Teradyne's business has been adversely impacted by the slowdown in economies
worldwide including the effects of the hostilities begun in September 2001.
Teradyne has also been adversely affected by the cyclical nature of the
electronics and semiconductor industries, which experience recurring periods of
oversupply of products and equipment of the type Teradyne sells. These factors
have resulted in a downturn in the demand for Teradyne's products. During 2001,
orders declined significantly across all of Teradyne's product lines when
compared with the orders Teradyne received during 2000. The reduction in net
orders across Teradyne for 2001 compared with 2000 was approximately $2,512.7
million. Teradyne's experience in previous downturns has been that orders
improve as Teradyne's customers' capital expenditures increase. At present,
however, Teradyne cannot say how long the current downturn will last or when
the situation will improve. In the absence of significant improvement, orders
could remain low or decline further, and the amount of Teradyne's inventory,
deferred tax assets, and certain long-lived assets considered realizable could
be significantly reduced.

   In 2001 and 2000, no single customer accounted for more than 10% of
consolidated net sales. In 2001, Teradyne's three largest customers accounted
for 24% of consolidated net sales.

Bookings

   Net orders decreased 76% to $808.2 million in 2001 from $3,320.9 million in
2000. Net orders decreased in all operating segments and were led by a 85%
decrease in Semiconductor Test Systems net orders. Connection Systems net
orders, Circuit Board Test and Inspection Systems net orders, and Other Test
Systems net orders decreased 64%, 33%, and 78%, respectively. Teradyne
experienced cancellations of $285.5 million during 2001. Teradyne's net orders
for its four principal operating segments for 2001 and 2000 were as follows:

<TABLE>
<CAPTION>
                                                      (in millions)
                                                      2001    2000
                                                     ------ --------
           <S>                                       <C>    <C>
           Semiconductor Test Systems............... $294.0 $1,960.5
           Connection Systems.......................  385.0  1,082.0
           Circuit Board Test and Inspection Systems  101.4    151.6
           Other Test Systems.......................   27.8    126.8
                                                     ------ --------
                                                     $808.2 $3,320.9
</TABLE>

   Teradyne's backlog decreased 45% to $763.0 million in 2001 from $1,382.1
million in 2000. At December 31, 2001 and 2000, Teradyne's backlog of unfilled
orders for its four principal operating segments was as follows:

<TABLE>
<CAPTION>
                                                      (in millions)
                                                      2001    2000
                                                     ------ --------
           <S>                                       <C>    <C>
           Semiconductor Test Systems............... $317.2 $  742.1
           Connection Systems.......................  357.6    534.4
           Circuit Board Test and Inspection Systems   55.5     68.4
           Other Test Systems.......................   32.7     37.2
                                                     ------ --------
                                                     $763.0 $1,382.1
</TABLE>

                                      16

<PAGE>

   Customers may delay delivery of products or cancel orders suddenly and
without significant notice, subject to possible cancellation penalties. Due to
possible customer changes in delivery schedules and cancellation of orders,
Teradyne's backlog at any particular date is not necessarily indicative of the
actual sales for any succeeding period. Delays in delivery schedules and/or
cancellations of backlog during any particular period could have a material
adverse effect on Teradyne's business and results of operations.

Gross Margin

   Certain costs in 2001 and 2000 have been reclassified from cost of sales
into engineering and development and selling and administrative. These
reclassified costs consist of new product development costs incurred in
manufacturing engineering, test technology and applications engineering costs
supporting sales. The costs reclassified from cost of sales to engineering and
development represent work performed to develop and implement manufacturing and
test processes focused on the introduction of new product platforms. The costs
reclassified from cost of sales to selling and administrative represent the
development of applications programming used to demonstrate new product
capabilities. The impact of the reclassifications is detailed below:

<TABLE>
<CAPTION>
                                          Year Ended   Year Ended
                                         December 31, December 31,
             Increase / (Decrease)           2001         2000
             ---------------------       ------------ ------------
             (in thousands)
             <S>                         <C>          <C>
             Cost of sales..............   ($57,046)    ($62,325)
             Engineering and development     39,750       47,104
             Selling and administrative.     17,296       15,221
</TABLE>

   Cost of sales, excluding the charges described below, increased to 71% of
sales in 2001 from 53% of sales in 2000. The percentage increase in 2001 was
attributable to the decreased utilization of Teradyne's manufacturing capacity,
as sales volume decreased while certain components of costs of sales remained
fixed. The increase in the percentage of cost of sales was also impacted to a
lesser extent by increased competitive price pressure as current semiconductor
products mature and the mix of Teradyne's business changes as Connection
Systems and Circuit Board Test and Inspection System sales, which have lower
gross margins, become a larger percentage of Teradyne's business.

   Teradyne introduced a number of new products in 2001. Generally, Teradyne's
new products begin their product life with lower gross margins and margins
improve as volume purchases increase and cost reduction activities are
implemented. There can be no assurance that significant improvements in gross
margins will be achieved on current or new Teradyne products through either
volume purchases or cost reduction activities.

   Cost of sales related to inventory provisions and other charges for asset
impairments and vacated leases was $159.8 million in 2001. Inventory provision
for excess and obsolete inventory was $105.2 million in 2001, which excludes
the inventory writedowns for product line discontinuance, compared to $27.5
million in 2000, included in cost of sales, representing a 5% increase. The
increase in the inventory provision was caused by the worldwide economic
slowdown during 2001. Between 2000 and 2001, orders declined by approximately
$2,512.7 million, a 76% decrease. This drop in orders combined with lead time
requirements for inventory procurement and Teradyne's new product introduction
plans necessitated additional charges for excess and obsolete inventory. During
2001, Teradyne recorded an inventory writedown in Semiconductor Test Systems
due to the discontinuance of the Flash 750 product line of $32.3 million and
related asset impairments of $4.6 million. In the third and fourth quarters of
2001, Teradyne recorded a charge of $15.4 million for certain impaired
manufacturing assets and vacated space under operating leases at Connection
Systems.

Engineering and Development

   Engineering and development expenses, as a percentage of sales, increased to
20% in 2001 from 11% in 2000, with spending decreasing by $59.4 million. This
spending decrease was primarily due to lower material costs and the impact of
workforce reductions, salary cuts, and furloughs in Semiconductor Test Systems
and Circuit Board Test and Inspection Systems, excluding the impact of the
GenRad acquisition. Connection Systems engineering and development spending
increased 5% from 2000 to 2001.


                                      17

<PAGE>

Selling and Administrative

   Selling and administrative expenses increased to 19% of sales in 2001 from
12% of sales in 2000, with spending decreasing by $107.7 million. The decrease
in spending was principally due to certain cost containment programs such as
workforce reductions, salary cuts, and furloughs.

Restructuring and Other Charges

   Restructuring and other charges include a workforce reduction and early
retirement provision of $37.3 million, a charge for a Connection Systems
impaired facility of $12.0 million, a charge for impaired assets of $1.9
million relating to the discontinuance of the Flash 750 product line in
Semiconductor Test Systems, and a charge for vacated space under certain
operating leases of $1.7 million in Circuit Board Test and Inspection Systems.
There were approximately 2,900 employees terminated in 2001 across all
functional groups. These terminations will result in future cost savings in
2002 of approximately $132.0 million. Teradyne has paid $23.8 million in
severance benefits during 2001. All remaining severance benefits for employees
terminated in 2001 will be paid by the fourth quarter of 2002.

   Below is a table summarizing activity relating to restructuring and other
charges:

<TABLE>
<CAPTION>
                                         Lease
                                        Payments
                             Severance     on
                                and     Vacated    Impaired  Impaired
                             Benefits  Facilities Facilities  Assets   Total
                             --------- ---------- ---------- -------- --------
                                               (in thousands)
<S>                          <C>       <C>        <C>        <C>      <C>
2001 provision.............. $ 37,278    $1,676    $ 12,000  $ 1,923  $ 52,877
Cash payments...............  (23,755)       --          --       --   (23,755)
Non-cash charges............       --        --     (12,000)  (1,923)  (13,923)
                             --------    ------    --------  -------  --------
Balance at December 31, 2001 $ 13,523    $1,676    $     --  $    --  $ 15,199
                             ========    ======    ========  =======  ========
</TABLE>

   The accrual for severance and benefits is reflected in accrued employees'
compensation and withholdings and the accrual for lease payments on vacated
facilities is reflected in other accrued liabilities.

Interest income and expense

   Interest income decreased by $2.4 million to $22.7 million in 2001 compared
to $25.1 million in 2000. The decrease in 2001 was attributable to decreases in
the average invested balances and lower interest rates. Interest expense
increased by $2.3 million as a result of interest expense for two months
associated with Teradyne's convertible notes.

Other income and expense

   Included in other income in 2001 is a gain from the sale of Connections
Systems aerospace and defense business of $14.8 million. Included in other
expense for 2001 is Teradyne's proportionate share of a loss related to an
equity method investment of $7.0 million.

Income before taxes

   (Loss) income before income taxes and cumulative effect of change in
accounting principle was a loss of $326.2 million in 2001 compared to income of
$739.6 million in 2000. Semiconductor Test Systems, Connection Systems, Circuit
Board Test and Inspection Systems, and Other Test Systems income before income
taxes decreased $907.2 million, $167.5 million, $40.3 million, and $3.3
million, respectively in 2001 due to decreased sales in each group and the
market conditions described above.

                                      18

<PAGE>

Income taxes

   Teradyne's effective tax rate benefit was 38% in 2001. The effective tax
rate provision for the year ended 2000 was 30%. The change in the tax rate is a
result of a loss in 2001. In 2000, Teradyne was able to reduce its effective
tax rate with tax benefits from its foreign sales corporation and Ireland
manufacturing operations.

   On a quarterly basis, Teradyne evaluates the realizability of its deferred
tax assets and assesses the need for a valuation allowance. Realization of
Teradyne's net deferred tax assets is dependent on its ability to generate
approximately $415 million of future taxable income. Teradyne believes that it
is more likely than not that its net deferred tax assets will be realized based
on forecasted income. However, if Teradyne continues to incur significant
losses for an extended period of time, it could be required to establish a
valuation allowance against all or a significant portion of its net deferred
tax assets. To the extent Teradyne establishes a valuation allowance, an
expense will be recorded within the provision for income taxes line in the
statement of operations.

   In response to an adverse World Trade Organization (WTO) finding that the
U.S. Foreign Sales Credit (FSC) tax provisions were a prohibited export
subsidy, the U.S. repealed FSC and enacted replacement legislation
(Extraterritorial Income Exclusion Act of 2000). The European Union filed a WTO
challenge to the new law and the WTO has upheld the European Union's challenge.
The U.S. has decided to appeal and the appellate process and final resolution
of this matter could extend beyond 2002. The U.S. government and industry
groups are evaluating options. It is not possible to predict what impact, if
any, this issue will have on future earnings pending final resolution of the
challenge. During the years ended December 31, 2001, 2000, and 1999, the FSC
benefited Teradyne's effective tax rate as follows:

<TABLE>
<CAPTION>
                                          2001   2000   1999
                                          ----   ----   ----
                 <S>                      <C>    <C>    <C>
                 Export sales corporation (0.7%) (4.8%) (4.7%)
</TABLE>

2000 compared to 1999

Revenue

   Sales increased 70% in 2000 to a record $3,043.9 million from $1,790.9
million in 1999. Semiconductor Test Systems shipments increased by 69% due to
increased sales to semiconductor manufacturers and subcontractors as these
customers increased capacity to meet their customer's requirements. Sales of
Connection Systems to unaffiliated customers grew 97% as a result of
significant growth in demand from networking, data storage, and other high
technology customers. Circuit Board Test and Inspection Systems sales increased
by 19% from 1999. Other Test Systems sales increased 40% from 1999 with
increases in Broadband Test Systems of 10% and Software Test Systems of 64%.
Due to the sale of a majority interest in the software test business in
December 2000, Software Test Systems revenue will not be reflected on an
on-going basis.

Bookings

   Incoming net orders increased 52% from $2,190.6 million in 1999 to a record
$3,320.9 million in 2000. Net orders increased in all operating segments and
were led by a 159% increase in Connection Systems net orders. Semiconductor
Test Systems net orders increased 24%. Broadband Test Systems net orders
increased 77% and Circuit Board Test and Inspection Systems and Software Test
Systems increased 26% and 70%, respectively. Teradyne's backlog increased 41%
to a record $1,382.1 million.

Gross Margin

   Certain costs in 2000 and 1999 have been reclassified from cost of sales
into engineering and development and selling and administrative. These
reclassified costs consist of new product development costs incurred in
manufacturing engineering, test technology and applications engineering costs
supporting sales. The costs

                                      19

<PAGE>

reclassified from cost of sales to engineering and development represent work
performed to develop and implement manufacturing and test processes focused on
the introduction of new product platforms. The costs reclassified from cost of
sales to selling and administrative represent the development of applications
programming used to demonstrate new product capabilities. The impact of the
reclassifications is detailed below:

<TABLE>
<CAPTION>
                                          Year Ended   Year Ended
                                         December 31, December 31,
             Increase / (Decrease)           2000         1999
             ---------------------       ------------ ------------
             (in thousands)
             <S>                         <C>          <C>
             Cost of sales..............   $(62,325)    $(43,536)
             Engineering and development     47,104       33,291
             Selling and administrative.     15,221       10,245
</TABLE>

   Costs of sales as a percentage of sales decreased from 56% of sales in 1999
to 53% of sales in 2000. The decrease in cost of sales was primarily due to the
increased utilization of Teradyne's manufacturing overhead as sales volume
increased while certain components of cost of sales remained fixed.

Engineering and Development

   Engineering and development expenses decreased from 15% of sales in 1999 to
11% of sales in 2000, even though spending increased $86.2 million. The
increase in spending was primarily due to new product development expenses in
Semiconductor Test Systems, and, to a lesser extent, increased expenses related
to product development in Connection Systems, Circuit Board Test and Inspection
Systems, and Software Test Systems.

Selling and Administrative

   Selling and administrative expenses as a percentage of sales decreased from
15% in 1999 to 12% in 2000. Spending increased by $111.1 million year over year
in support of increased Semiconductor Test Systems, Connection Systems, and
Software Test Systems sales.

Interest income and expense

   Interest income increased $7.8 million to $25.1 million in 2000 compared to
$17.3 million in 1999. Interest income increased due to an increase in
Teradyne's average invested balances and higher interest rates.

Other income and expense

   Included in other income in 2000 is an immaterial gain relating to the
divestiture of the software test business.

Income before taxes

   Income before income taxes and cumulative effect of change in accounting
principle increased $465.8 million from $273.8 million in 1999 to $739.6
million in 2000. Semiconductor Test Systems, Connection Systems, Circuit Board
Test and Inspection Systems, and Other Test Systems income before income taxes
increased $387.4 million, $91.8 million, $7.0 million, and $9.5 million,
respectively in 2000 due to increased sales in each group.

Income taxes

   Teradyne's effective tax rate was 30% in 2000 and 1999. Teradyne continued
to utilize export sales corporation benefits and other tax benefits to operate
below the U.S. statutory rate of 35%.

                                      20

<PAGE>

Liquidity and Capital Resources

   Teradyne's cash, cash equivalents and marketable securities balance
increased $121.8 million in 2001, to $586.2 million. Teradyne used cash from
operating activities of $79.0 million in 2001 and generated cash from operating
activities in 2000 and 1999 of $470.9 million and $367.5 million, respectively.
Net income (loss), adjusted to exclude the effects of non-cash items, used cash
of $77.1 million in 2001, and provided cash of $501.6 million and $279.7
million in 2000 and 1999, respectively. Changes in operating assets and
liabilities net of businesses sold and acquired used cash of $1.9 million in
2001 as accounts payable and accruals balances decreased as purchases slowed.
The decrease in accounts payable and accruals was partially offset by reduced
accounts receivable and inventory balances. Changes in operating assets and
liabilities used cash of $30.7 million in 2000 and generated cash of $87.7
million in 1999.

   Teradyne used $247.3 million of cash for investing activities in 2001,
$312.3 million in 2000, and $244.8 million in 1999. Investing activities
consist of purchases, sales, and maturities of marketable securities, proceeds
from the sale of businesses, cash acquired in business acquisitions, and
purchases of capital assets to support long-term growth. Capital expenditures
decreased by $56.8 million in 2001 compared with 2000, primarily in the
Semiconductor Test Systems segment. This was due to the actions taken by
Teradyne in 2001 to reduce planned capital expenditures due to current market
conditions. Capital expenditures were $241.4 million in 2001, $298.2 million in
2000, and $151.2 million in 1999.

   Teradyne generated $401.5 million of cash from financing activities in 2001,
used $97.5 million in 2000, and used $126.8 million in 1999. Financing
activities include the issuance of convertible notes, mortgage borrowings,
sales and repurchases of Teradyne's common stock, as well as repayments of
debt. In 2001, Teradyne assumed debt of $89.7 million from the GenRad
acquisition which Teradyne repaid on October 26, 2001. During 2001, 2000, and
1999 issuances of common stock under stock option and stock purchase plans
generated $58.5 million, $55.3 million, and $82.3 million, respectively.
Teradyne used cash for the acquisition of treasury stock of $147.5 million and
$207.8 million in 2000 and 1999, respectively. Since 1996, Teradyne has used
$540.8 million of cash to repurchase 20.0 million shares of its common stock on
the open market though no cash was used in 2001 to repurchase shares of common
stock.

   On October 24, 2001, Teradyne sold $400 million principal amount of 3.75%
Convertible Senior Notes due 2006 (the "Notes") in a private placement and
received net proceeds of $389 million. The Notes are convertible at the option
of the holders at a rate which is equivalent to a conversion price of
approximately $26.00 per share, which is equal to a conversion rate of
approximately 38.4615 shares of common stock per $1,000 principal amount of
Notes. The Notes are redeemable by Teradyne at any time after October 18, 2004
at specified prices. Teradyne will begin making annual interest payments of up
to $15 million, paid semi-annually, on the Notes commencing on April 15, 2002.
The Notes are senior unsecured obligations of Teradyne that rank equally with
Teradyne's existing and future unsecured and unsubordinated indebtedness. In
the event of a change in control by which Teradyne merges with or sells
substantially all of its assets to a third party, the holders of the Notes may
be able to require Teradyne to redeem some or all of the Notes either in
discounted Teradyne common stock or in cash. On February 8, 2002, the
Securities and Exchange Commission declared effective a Registration Statement
on Form S-3 covering both the Notes and the shares of common stock into which
they can be converted.

   On December 19, 2001, Teradyne obtained a loan of approximately $45 million
in the form of a 7.5% mortgage loan maturing on January 1, 2007, (the
"Mortgage"). Principal payments are made according to a twenty-year
amortization schedule through December 2006, with the remaining principal due
on January 1, 2007. Teradyne began making monthly principal and interest
payments of $0.4 million on February 1, 2002.

   On October 26, 2001, Teradyne completed its acquisition of GenRad, Inc. of
Westford, MA, a leading manufacturer of electronic automatic test equipment,
related software and diagnostic solutions. GenRad's business has been made part
of the Circuit Board Test and Inspection Systems operating segment. Under the
terms of the acquisition, each outstanding share of GenRad common stock was
converted into 0.1733 shares of Teradyne common stock. The total number of
Teradyne shares exchanged for the shares of GenRad, based on the shares of
GenRad outstanding as of the closing, was approximately 5.0 million.

                                      21

<PAGE>

   The following table reflects Teradyne's current contractual obligations:

<TABLE>
<CAPTION>
                  Non-cancelable Convertible Mortgage
                      Lease        Senior     Notes    Notes  Other
                   Commitments      Notes    Payable  Payable Debt    Total
                  -------------- ----------- -------- ------- ------ --------
   (in thousands)
   <S>            <C>            <C>         <C>      <C>     <C>    <C>
    2002.........    $ 24,019                $ 1,009  $6,557  $  254 $ 31,839
    2003.........      20,417                  1,088             254   21,759
    2004.........      17,532                  1,172             254   18,958
    2005.........      14,754                  1,263             254   16,271
    2006.........      10,490     $400,000     1,244             254  411,988
    Beyond 2006..      34,442                 44,264           1,635   80,341
                     --------     --------   -------  ------  ------ --------
    Total........    $121,654     $400,000   $50,040  $6,557  $2,905 $581,156
</TABLE>

   Teradyne believes its cash, cash equivalents, and marketable securities
balance of $586.2 million, together with a tax refund of $85.2 million received
in March 2002, will be sufficient to meet working capital and expenditure needs
for the foreseeable future. Depending on market conditions and funding
requirements, Teradyne may seek additional external financing.

   Inflation has not had a significant long-term impact on earnings.

Recently Issued Accounting Pronouncements

   In July 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 141 ("SFAS 141"), "Business
Combinations." SFAS 141 requires the purchase method of accounting for business
combinations initiated after June 30, 2001 and eliminates the
pooling-of-interest method.

   In July 2001, FASB issued SFAS 142, "Goodwill and Other Intangible Assets",
which is effective for Teradyne on January 1, 2002. SFAS 142 requires, among
other things, the discontinuance of goodwill amortization and includes
provisions for the reclassification of certain existing recognized intangibles
as goodwill, reassessment of the useful lives of existing recognized
intangibles, and reclassification of certain intangibles out of previously
reported goodwill. In 2001, Teradyne recorded goodwill amortization of
approximately $3.9 million. At December 31, 2001 Teradyne had $190.3 million of
goodwill which will not be amortized. In 2002, Teradyne will record
amortization of approximately $7.4 million relating to other intangibles
primarily in connection with the GenRad acquisition. SFAS 142 also requires
Teradyne to complete a transitional goodwill impairment test six months from
the date of adoption. Teradyne has completed a preliminary evaluation of the
impact of SFAS 142 and currently does not expect to record a goodwill
impairment.

   In August 2001, FASB issued SFAS 143, "Accounting for Obligations Associated
with the Retirement of Long-Lived Assets." SFAS 143 provides the accounting
requirements for retirement obligations associated with tangible long-lived
assets. SFAS 143 is effective for financial statements for fiscal years
beginning after June 15, 2002. Teradyne has determined that SFAS 143 will not
have an impact on its financial position and results of operations.

   In October 2001, FASB issued SFAS 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets." SFAS 144 requires one method of accounting for
long lived assets disposed of by sale. SFAS 144 is effective for financial
statements issued for fiscal years beginning after December 15, 2001. Teradyne
has adopted SFAS 144 effective January 1, 2002. SFAS 144 did not have an impact
on Teradyne's financial position or results of operations.

                                      22

<PAGE>

Certain Factors That May Affect Future Results

   From time to time, information provided by Teradyne, statements made by its
employees or information included in its filings with the Securities and
Exchange Commission (including this Form 10-K and Teradyne's Annual Report to
Shareholders) contain statements which are not purely historical facts, but are
forward looking statements, made under the Safe Harbor provisions of the
Private Securities Litigation Reform Act of 1995, which involve risks and
uncertainties. In particular, forward looking statements are contained in "Item
1: Business", and in "Item 7: Management's Discussion and Analysis of Financial
Condition and Results of Operations" relating to projections, plans, and
objectives for Teradyne's business, financial condition, operating results,
future economic performance or statements relating to the sufficiency of
capital to meet working capital, planned capital expenditures, and expectations
as to customer orders. Teradyne's actual future results may differ
significantly from those stated in any forward looking statements. Factors that
may cause such differences include, but are not limited to, the factors
discussed below. Each of these factors, and others, are discussed from time to
time in Teradyne's filings with the Securities and Exchange Commission.

Teradyne's Business Is Impacted by the Slowdown in Economies Worldwide.

   Teradyne's business has been negatively impacted by the slowdown in the
economies of the United States, Asia and elsewhere that began in the second
half of 2000. The uncertainty regarding the growth rate of the worldwide
economies has caused companies to reduce capital investment and may cause
further reduction of such investments. These reductions have been particularly
severe in the electronics and semiconductor industry which Teradyne serves and
have contributed to Teradyne incurring losses in recent periods. Teradyne
cannot predict if or when the growth rate of worldwide economies will rebound,
whether the growth rate of its business will rebound when the worldwide
economies begin to grow, or if or when Teradyne will return to profitability.
While Teradyne's diverse business may allow it to perform better than some
companies in periods of economic decline, the effects of the economic decline
are being felt across all of Teradyne's business segments and have
significantly slowed customer orders.

Teradyne's Business is Dependent on the Current and Anticipated Market for
Electronics.

   Teradyne's business and results of operations depend in significant part
upon capital expenditures of manufacturers of semiconductors and other
electronics, which in turn depend upon the current and anticipated market
demand for those products. The current and anticipated market demand for
electronics has been impacted by the economic slowdown that began in the latter
portions of 2000 and the effects of the hostilities begun in September 2001.
Historically, the electronic and semiconductor industry has been highly
cyclical with recurring periods of over-supply, which often have had a severe
negative effect on demand for test equipment, including systems manufactured
and marketed by Teradyne. Teradyne believes that the markets for newer
generations of electronic products such as those that Teradyne manufactures and
markets will also be subject to similar fluctuations. Teradyne is dependent on
the timing of customer orders and the deferral or cancellation of previous
customer orders could have an adverse effect on its results of operations.
Teradyne cannot assure you that the downward trend in new orders will turn
around in the future or that any increase in sales or new orders for a calendar
quarter will be sustained in subsequent quarters. In addition, any factor
adversely affecting the electronics industry or particular segments within the
electronics industry may adversely affect Teradyne's business, financial
condition and operating results.

Teradyne Has Taken and Expects to Continue to Take Measures to Address the
Current Slowdown in the Market for Its Products Which Could Have Long-term
Negative Effects on Teradyne's Business.

   Teradyne has taken and expects to take additional measures to address the
current slowdown in the market for its products. In particular, Teradyne has
reduced its workforce, frozen hiring, delayed salary increases, reduced the pay
of substantially all employees, implemented furloughs, discontinued its Flash
750 memory product line, recorded asset impairment charges and reduced its
planned capital expenditures and expense

                                      23

<PAGE>

budgets. These measures have reduced expenses in the face of decreased revenues
due to decreased or cancelled customer orders. However, each measure Teradyne
has taken and any additional measures taken in the future to contain
expenditures could have long-term negative effects on Teradyne's business by
reducing its pool of technical talent, decreasing or slowing improvements in
its products, and making it more difficult for Teradyne to respond to customers
or competitors.

Teradyne's Business May Be Adversely Impacted by Acquisitions Which May Affect
Its Ability to Manage and Maintain Its Business.

   Since Teradyne's inception, it has acquired a number of businesses. In the
future, Teradyne may undertake additional acquisitions of businesses that
complement its existing operations. Such past or future acquisitions could
involve a number of risks, including:

    .  the possibility that one or more such acquisitions may not close due to
       closing conditions in the acquisition agreements, the inability to
       obtain regulatory approval, or the inability to meet conditions imposed
       for government or court approvals for the transaction;
    .  the diversion of the attention of management and other key personnel;
    .  the inability to effectively integrate an acquired business into
       Teradyne's culture, product and service delivery methodology and other
       standards, controls, procedures and policies;
    .  the inability to retain the management, key personnel and other
       employees of an acquired business;
    .  the inability to retain the customers of an acquired business;
    .  the possibility that Teradyne's reputation will be adversely affected by
       customer satisfaction problems of an acquired business;
    .  potential known or unknown liabilities associated with an acquired
       business, including but not limited to regulatory, environmental and tax
       liabilities;
    .  the amortization of acquired identifiable intangibles, which may
       adversely affect Teradyne's reported results of operations; and
    .  litigation which has or which may arise in the future in connection with
       such acquisitions.

   For example, in connection with the August 2000 acquisition of each of Herco
Technology Corp., a California company, and Perception Laminates, Inc., a
California company, a complaint was filed by the former owners of those
companies on or about September 5, 2001 naming as defendants Teradyne and two
of its executive officers. This case is further described in "Item 3: Legal
Proceedings" on this Form 10-K. Teradyne cannot predict the outcome of the
lawsuit at this time, and can give no assurance that it will not materially
adversely affect Teradyne's financial position or results of operations.

   In addition to the foregoing, any acquired business could significantly
underperform relative to Teradyne's expectations.

Teradyne Currently Faces, and in the Future May Be the Subject of, Securities
Class Action Litigation Due to Past or Future Stock Price Volatility.

   When the market price of a stock has been volatile, holders of that stock
sometimes institute securities class action litigation against the company that
issued the stock. Currently, Teradyne and two if its executive officers are
named as defendants in three purported class action complaints that were filed
in the United States District Court for the District of Massachusetts, Boston,
Massachusetts, on or about October 16, 2001, October 19, 2001 and November 7,
2001. The complaints allege, among other things, that the defendants violated
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, by making,
during the period from July 14, 2000 until October 17, 2000, material
misrepresentations and omissions to the investing public regarding Teradyne's
business operations and future prospects. The complaints seek unspecified
damages, including compensatory damages and recovery of reasonable attorneys'
fees and costs. Teradyne strongly believes that the purported class action
complaints lack merit and it intends to defend against the claims vigorously.
However, Teradyne could

                                      24

<PAGE>

incur substantial costs defending the lawsuits. The lawsuits could also divert
the time and attention of Teradyne's management. Teradyne cannot predict the
outcome of the lawsuits at this time, and can give no assurance that they will
not materially adversely affect Teradyne's financial position or results of
operations.

Teradyne's Business May be Adversely Impacted by Divestitures of Lines of
Business Which May Affect Its Ability to Manage and Maintain Its Business.

   Since Teradyne's inception, it has divested itself of certain lines of
business. In the future, Teradyne may undertake additional such divestitures.
Such past or future divestitures could involve a number of risks, including:

    .  the diversion of the attention of management and other key personnel;
    .  disruptions and other effects caused by the divestiture of a line of
       business on Teradyne's culture, product and service delivery methodology
       and other standards, controls, procedures and policies;
    .  customer satisfaction problems caused by the loss of a divested line of
       business; and
    .  the decreased diversification of Teradyne's product lines caused by the
       divestiture of a line of business which may make Teradyne's operating
       results subject to increased market fluctuations.

If Teradyne Is Unable to Protect Its Intellectual Property, Teradyne May Lose a
Valuable Asset or May Incur Costly Litigation to Protect Its Rights.

   Teradyne's products incorporate technology that it protects in several ways,
including patents, copyrights and trade secrets. While Teradyne believes that
its patents, copyrights and trade secrets have value in general, no single one
is in itself essential. At times, Teradyne has been notified that it may be in
violation of patents held by others. An assertion of patent infringement
against Teradyne, if successful, could have a material adverse effect on its
ability to sell its products, or could require a lengthy and expensive defense
which could adversely affect its operating results.

If Teradyne Fails to Develop New Technologies to Adapt to Its Customers' Needs
and if Its Customers Fail to Accept Its New Products, Teradyne's Revenues Will
Be Adversely Affected.

   Teradyne believes that its technological position depends primarily on the
technical competence and creative ability of its engineers. Teradyne's
development of new technologies, commercialization of those technologies into
products, and market acceptance and customer demand for those products is
critical to Teradyne's success. Successful product development and introduction
depends upon a number of factors, including:

    .  new product selection;
    .  development of competitive products by competitors;
    .  timely and efficient completion of product design;
    .  timely and efficient implementation of manufacturing; and
    .  assembly processes and product performance at customer locations.

Intense Competition in Teradyne's Industry May Affect Its Revenues.

   Teradyne faces substantial competition throughout the world in each of its
operating segments. Some of Teradyne's competitors have substantial financial
and other resources to pursue engineering, manufacturing, marketing and
distribution of their products. Teradyne also faces competition from internal
suppliers at several of its customers. Some of Teradyne's competitors have
introduced or announced new products with certain performance characteristics
which may be considered equal or superior to those Teradyne currently offers.
Teradyne expects its competitors to continue to improve the performance of
their current products and to introduce new products or new technologies that
provide improved cost of ownership and performance characteristics. New

                                      25

<PAGE>

product introductions by competitors could cause a decline in sales or loss of
market acceptance of Teradyne's products. Moreover, increased competitive
pressure could lead to intensified price based competition, which could
materially adversely affect Teradyne's business, financial condition and
results of operations.

Teradyne Is Subject to Risks of Operating Internationally.

   Teradyne derives a significant portion of its total revenue from customers
outside the United States. Teradyne's international sales are subject to
significant risks and difficulties, including:

    .  unexpected changes in legal and regulatory requirements and in policy
       changes affecting international markets;
    .  changes in tariffs and exchange rates;
    .  political and economic instability and acts of terrorism;
    .  difficulties in accounts receivable collection;
    .  difficulties in staffing and managing international operations; and
    .  potentially adverse tax consequences, such as the World Trade
       Organization's dispute against the U.S. Foreign Sales Credit.

Teradyne May Incur Significant Liabilities if It Fails to Comply With
Environmental Regulations.

   Teradyne is subject to environmental regulations relating to the use,
storage, discharge, site cleanup, and disposal of hazardous chemicals used in
its manufacturing processes. If Teradyne fails to comply with present and
future regulations, or is required to perform site remediation, Teradyne could
be subject to future liabilities or the suspension of production. Present and
future regulations may also:

    .  restrict Teradyne's ability to expand its facilities;
    .  require Teradyne to acquire costly equipment; or
    .  require Teradyne to incur other significant costs and expenses.

Teradyne Has Substantially Increased Its Indebtedness.

   On October 24, 2001, Teradyne completed a private placement of $400 million
principal amount of 3.75% Convertible Senior Notes (the "Notes") due 2006 and
received net proceeds of $389 million. On December 19, 2001, Teradyne obtained
a loan of approximately $45 million in the form of a 7.5% mortgage loan
maturing on January 1, 2007 (the "Mortgage"). As a result, Teradyne has
incurred approximately $445 million principal amount of additional
indebtedness, substantially increasing its ratio of debt to total
capitalization. Teradyne may incur substantial additional indebtedness in the
future. The level of Teradyne's indebtedness, among other things, could:

    .  make it difficult for Teradyne to make payments on its debt and other
       obligations;
    .  make it difficult for Teradyne to obtain any necessary future financing
       for working capital, capital expenditures, debt service requirements or
       other purposes;
    .  require the dedication of a substantial portion of any cash flow from
       operations to service for indebtedness, thereby reducing the amount of
       cash flow available for other purposes, including capital expenditures;
    .  limit Teradyne's flexibility in planning for, or reacting to changes in,
       its business and the industries in which Teradyne competes;
    .  place Teradyne at a possible competitive disadvantage with respect to
       less leveraged competitors and competitors that have better access to
       capital resources; and
    .  make Teradyne more vulnerable in the event of a further downturn in its
       business.
   There can be no assurance that Teradyne will be able to meet its debt
service obligations, including its obligations under the Notes and the Mortgage.

                                      26

<PAGE>

Teradyne May Not Be Able to Satisfy a Change in Control Offer.

   The indenture governing the Notes contains provisions that apply to a change
in control of Teradyne. If someone triggers a change in control as defined in
the indenture, Teradyne may be required to offer to purchase the Notes with
cash. If Teradyne has to make that offer, Teradyne cannot be sure that it will
have enough funds to pay for all the Notes that the holders could tender.

   In the event of a change in control of Teradyne, the mortgage lender may
elect to declare all amounts due under the Mortgage to be immediately due and
payable, and may elect to take possession of or sell the property subject to
the Mortgage.

Teradyne May Not Be Able to Pay Its Debt and Other Obligations.

   If Teradyne's cash flow is inadequate to meet its obligations, Teradyne
could face substantial liquidity problems. If Teradyne is unable to generate
sufficient cash flow or otherwise obtain funds necessary to make required
payments on the Notes, the Mortgage, or certain of its other obligations,
Teradyne would be in default under the terms thereof, which would permit the
holders of those obligations to accelerate their maturity and also could cause
defaults under future indebtedness Teradyne may incur. Any such default could
have a material adverse effect on Teradyne's business, prospects, financial
position and operating results. In addition, Teradyne cannot assure that it
would be able to repay amounts due in respect of the Notes or the Mortgage if
payment of those obligations were to be accelerated following the occurrence of
any other event of default as defined in the instruments creating those
obligations. Moreover, Teradyne cannot assure that it will have sufficient
funds or will be able to arrange for financing to pay the principal amount due
on the Notes or the Mortgage at their respective maturities.

Teradyne May Need Additional Financing, Which Could Be Difficult to Obtain.

   Teradyne expects that its existing cash and marketable securities, cash
generated from operations, the proceeds of the Notes offering in October 2001
and the proceeds from the Mortgage financing in December 2001, will be
sufficient to meet Teradyne's cash requirements to fund operations and expected
capital expenditures for the foreseeable future. In the event Teradyne may need
to raise additional funds, Teradyne cannot be certain that it will be able to
obtain such additional financing on favorable terms, if at all. Further, if
Teradyne issues additional equity securities, stockholders may experience
additional dilution or the new equity securities may have rights, preferences
or privileges senior to those of existing holders of common stock. Future
financings may place restrictions on how Teradyne operates its business. If
Teradyne cannot raise funds on acceptable terms, if and when needed, Teradyne
may not be able to develop or enhance its products and services, take advantage
of future opportunities, grow its business or respond to competitive pressures,
which could seriously harm Teradyne's business.

Provisions of Teradyne's Charter and By-Laws and Massachusetts Law Make a
Takeover of Teradyne More Difficult.

   Teradyne's basic corporate documents, its stockholder rights plan, and
Massachusetts law contain provisions that could discourage, delay or prevent a
change in the control of Teradyne, even if a change of control might be
regarded as beneficial to some or all of Teradyne's stockholders.

Teradyne's Operating Results Are Likely to Fluctuate Significantly.

   Teradyne's quarterly and annual operating results are affected by a wide
variety of factors that could materially adversely affect revenues and
profitability, including:

    .  competitive pressures on selling prices;
    .  the timing of customer orders and the deferral or cancellation of orders
       previously received;
    .  provisions for excess and obsolete inventory;
    .  changes in product mix;
    .  Teradyne's ability to introduce new products and technologies on a
       timely basis;
    .  the introduction of products and technologies by Teradyne's competitors;

                                      27

<PAGE>

    .  market acceptance of Teradyne's and its competitors' products;
    .  fulfilling backlog on a timely basis;
    .  reliance on sole source suppliers;
    .  potential retrofit costs;
    .  the level of orders received which can be shipped in a quarter; and
    .  the timing of investments in engineering and development.

   In particular, due to Teradyne's introduction of a number of new, complex
test systems in 2001 and the planned introduction of other such systems in
2002, there can be no assurance that Teradyne will not experience delays in
shipment of its products or that its products will achieve customer acceptance.

   As a result of the foregoing and other factors, Teradyne has and may
continue to experience material fluctuations in future operating results on a
quarterly or annual basis which could materially and adversely affect its
business, financial condition, operating results and stock price.

Item 7a:  Quantitative and Qualitative Disclosures About Market Risks

Concentration of Credit Risk

   Financial instruments which potentially subject Teradyne to concentrations
of credit risk consist principally of cash investments, forward currency
contracts, and accounts receivable. Teradyne maintains cash investments
primarily in U.S. Treasury and government agency securities and corporate debt
securities, rated AA or higher, which have minimal credit risk. Teradyne places
forward currency contracts with high credit-quality financial institutions in
order to minimize credit risk exposure. Concentrations of credit risk with
respect to accounts receivable are limited due to the large number of
geographically dispersed customers. Teradyne performs ongoing credit
evaluations of its customers' financial condition and does not require
collateral to secure accounts receivable.

Exchange Rate Risk Management

   Teradyne regularly enters into forward contracts in European and Japanese
currencies to hedge its overseas net monetary position and has in the past
entered into forward contracts to hedge non-U.S. currency forecasted
transactions. Forward currency contracts generally have maturities of less than
one year. These contracts are used to reduce Teradyne's risk associated with
exchange rate movements, as gains and losses on these contracts are intended to
offset exchange losses and gains on underlying exposures. Teradyne does not
engage in currency speculation.

   At December 31, 2001, the face amount of outstanding forward currency
contracts to buy U.S. dollars to hedge those currency exposures associated with
certain assets and liabilities denominated in non-functional currencies was
$11.0 million. A 10% fluctuation in exchange rates for these currencies would
change the fair value by approximately $1.3 million. However, since these
contracts hedge non-U.S. currency assets and liabilities, any change in the
fair value of the contracts would be offset by opposite changes in the
underlying value of these assets and liabilities being hedged. The hypothetical
movement was estimated by calculating the fair value of the forward currency
contracts at December 31, 2001 and comparing that with those calculated using
hypothetical forward currency exchange rates.

Interest Rate Risk Management

   At December 31, 2001, the fair value of outstanding short and long-term
marketable securities was approximately $270.0 million. A hypothetical 10%
increase in interest rates for securities contained in the investment portfolio
would change the fair value by approximately $2.3 million. Market risk was
estimated as the potential decrease in the fair value resulting from a
hypothetical increase in interest rates for issues contained in the investment
portfolio.

                                      28

<PAGE>

                             REPORT OF MANAGEMENT

   Management is responsible for the preparation and integrity of the
consolidated financial statements appearing in this Annual Report on Form 10-K.
The financial statements were prepared in conformity with accounting principles
generally accepted in the United States of America appropriate in the
circumstances and, accordingly, include some amounts based on management's best
judgments and estimates. Financial information in this Annual Report on Form
10-K is consistent with that in the financial statements.

   Management is responsible for maintaining a system of internal business
controls and procedures to provide reasonable assurance, at an appropriate
cost/benefit relationship, that assets are safeguarded and that transactions
are authorized, recorded and reported properly. The internal control system is
augmented by appropriate reviews by management, written policies and
guidelines, careful selection and training of qualified personnel and a written
code of business ethics applicable to all employees of Teradyne and its
subsidiaries. Management believes that Teradyne's internal controls provide
reasonable assurance that assets are safeguarded against material loss from
unauthorized use or disposition and that the financial records are reliable for
preparing financial statements and other data and maintaining accountability
for assets.

   The Audit Committee of the Board of Directors, composed solely of Directors
who are not employees or officers of Teradyne, meets periodically with the
independent accountants, internal auditors and management to discuss internal
business controls, auditing and financial reporting matters. The Audit
Committee reviews with the independent accountants the scope and results of the
audit. The Audit Committee also meets with the independent accountants without
management present to ensure that the independent accountants have free access
to the Audit Committee.

   The independent accountants, PricewaterhouseCoopers LLP, are engaged to
audit the consolidated financial statements of Teradyne and to conduct such
tests and related procedures as they deem necessary in accordance with auditing
standards generally accepted in the United States of America. The opinion of
the independent accountants, based upon their audits of the consolidated
financial statements, is contained in this Annual Report on Form 10-K.

/S/ GEORGE W. CHAMILLARD
- ------------------------------------------
George W. Chamillard
Chairman, President and Chief Executive Officer

/S/ GREGORY R. BEECHER
- ------------------------------------------
Gregory R. Beecher
Vice President and Chief Financial Officer
March 29, 2002

                                      29

<PAGE>

Item 8:  Financial Statements and Supplementary Data

                       REPORT OF INDEPENDENT ACCOUNTANTS

   To the Directors and Shareholders of Teradyne, Inc.:

   In our opinion, the consolidated financial statements listed in the index
appearing under Item 14(a)(1) present fairly, in all material respects, the
financial position of Teradyne, Inc. and its subsidiaries at December 31, 2001
and 2000, and the results of their operations and their cash flows for each of
the three years in the period ended December 31, 2001 in conformity with
accounting principles generally accepted in the United States of America. In
addition, in our opinion, the financial statement schedule listed in the index
appearing under Item 14(a)(2) presents fairly, in all material respects, the
information set forth therein when read in conjunction with the related
consolidated financial statements. These financial statements and financial
statement schedule are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements and
financial statement schedule based on our audits. We conducted our audits of
these statements in accordance with auditing standards generally accepted in
the United States of America, which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.

   As discussed in Note C to the consolidated financial statements, during the
year ended December 31, 2000 the Company changed its method of recognizing
revenue.

                                             PricewaterhouseCoopers LLP

Boston, Massachusetts
January 15, 2002

                                      30

<PAGE>

                                TERADYNE, INC.
                          CONSOLIDATED BALANCE SHEETS
                          DECEMBER 31, 2001 AND 2000

<TABLE>
<CAPTION>
                                                                                                 2001        2000
                                                                                              ----------  ----------
                                                                                                  (in thousands)
<S>                                                                                           <C>         <C>
                                           ASSETS
Current assets:
  Cash and cash equivalents.................................................................. $  317,591  $  242,421
  Marketable securities......................................................................     50,096      60,154
  Accounts receivable, less allowance for doubtful accounts of $6,294 and $5,176 in 2001 and
   2000, respectively........................................................................    169,630     420,040
  Income tax receivable and prepaid amounts..................................................     97,000      11,206
  Inventories................................................................................
    Parts....................................................................................    262,520     318,790
    Assemblies in process....................................................................    132,097     159,123
    Finished goods...........................................................................     12,372      34,650
                                                                                              ----------  ----------
                                                                                                 406,989     512,563
  Deferred tax assets........................................................................    141,013      93,958
  Prepayments and other current assets.......................................................     24,703      37,492
                                                                                              ----------  ----------
     Total current assets....................................................................  1,207,022   1,377,834
Property, plant, and equipment:..............................................................
  Land.......................................................................................     73,141      54,774
  Buildings and improvements.................................................................    348,710     293,124
  Machinery and equipment....................................................................    918,163     831,539
  Construction in progress...................................................................    104,515      75,520
                                                                                              ----------  ----------
     Total...................................................................................  1,444,529   1,254,957
                                                                                              ----------  ----------
  Less: Accumulated depreciation.............................................................   (608,963)   (521,171)
                                                                                              ----------  ----------
     Net property, plant, and equipment......................................................    835,566     733,786
Marketable securities........................................................................    218,544     161,848
Deferred tax assets--long-term...............................................................      4,313          --
Goodwill.....................................................................................    190,276      52,673
Intangible and other assets..................................................................     86,670      29,727
                                                                                              ----------  ----------
     Total assets............................................................................ $2,542,391  $2,355,868
                                                                                              ==========  ==========
                                        LIABILITIES
Current liabilities:
  Notes payable--banks....................................................................... $    6,557  $    7,389
  Current portion of long-term debt..........................................................      1,263         169
  Accounts payable...........................................................................     59,761     153,897
  Accrued employees' compensation and withholdings...........................................     98,519     149,845
  Deferred revenue and customer advances.....................................................     52,220     183,465
  Other accrued liabilities..................................................................     76,519      86,637
  Accrued income taxes.......................................................................      1,292      28,914
                                                                                              ----------  ----------
     Total current liabilities...............................................................    296,131     610,316
Long-term other accrued liabilities..........................................................     30,194       8,972
Deferred tax liabilities.....................................................................         --      21,257
Long-term debt...............................................................................    451,682       8,352
Commitments and contingencies (Note J).......................................................
                                                                                              ----------  ----------
Total liabilities............................................................................    778,007     648,897
                                                                                              ----------  ----------
                                    SHAREHOLDERS' EQUITY
Common stock, $0.125 par value, 1,000,000 shares authorized, 181,119 and 172,559 net shares
 issued and outstanding in 2001 and 2000, respectively.......................................     22,640      21,570
Additional paid-in capital...................................................................    600,541     334,241
Accumulated other comprehensive loss.........................................................     (7,742)         --
Retained earnings............................................................................  1,148,945   1,351,160
                                                                                              ----------  ----------
     Total shareholders' equity..............................................................  1,764,384   1,706,971
                                                                                              ----------  ----------
     Total liabilities and shareholders' equity.............................................. $2,542,391  $2,355,868
                                                                                              ==========  ==========
</TABLE>

   The accompanying notes are an integral part of the consolidated financial
                                  statements.

                                      31

<PAGE>

                                TERADYNE, INC.

                     CONSOLIDATED STATEMENTS OF OPERATIONS



<TABLE>
<CAPTION>
                                                                       YEARS ENDED DECEMBER 31,
                                                               ---------------------------------------
                                                                   2001           2000        1999
                                                                ----------     ----------  ----------
                                                               (in thousands, except per share amounts
<S>                                                            <C>            <C>          <C>
Net sales..................................................... $1,440,581     $3,043,946   $1,790,912
Expenses:
Cost of sales.................................................  1,022,049      1,607,374    1,004,216
Cost of sales - inventory provision and other charges.........    159,759             --           --
Engineering and development...................................    288,657        348,024      261,861
Selling and administrative....................................    270,084        377,783      266,637
Restructuring and other charges...............................     52,877             --           --
                                                                ----------     ----------  ----------
                                                                1,793,426      2,333,181    1,532,714
                                                                ----------     ----------  ----------
(Loss) income from operations.................................   (352,845)       710,765      258,198
Interest income...............................................     22,743         25,106       17,307
Interest expense..............................................     (4,091)        (1,841)      (1,656)
Other income and expense, net.................................      8,040          5,618           --
                                                                ----------     ----------  ----------
(Loss) income before income taxes and cumulative effect of
  change in accounting principle..............................   (326,153)       739,648      273,849
(Benefit) provision for income taxes..........................   (123,938)       221,894       82,155
                                                                ----------     ----------  ----------
(Loss) income before cumulative effect of change in accounting
  principle...................................................   (202,215)       517,754      191,694
Cumulative effect of change in accounting principle, net of
  applicable tax of $27,488 (Note C)..........................         --        (64,138)          --
                                                                ----------     ----------  ----------
Net (loss) income............................................. $ (202,215)    $  453,616   $  191,694
                                                                ==========     ==========  ==========
(Loss) income per common share before cumulative effect of
  change in accounting principle -- basic..................... $    (1.15)    $     2.99   $     1.12
                                                                ==========     ==========  ==========
Cumulative effect of change in accounting principle -- basic.. $        -     $    (0.37)  $        -
                                                                ==========     ==========  ==========
Net (loss) income per common share -- basic................... $    (1.15)    $     2.62   $     1.12
                                                                ==========     ==========  ==========
(Loss) income per common share before cumulative effect of
  change in accounting principle -- diluted................... $    (1.15)    $     2.86   $     1.07
                                                                ==========     ==========  ==========
Cumulative effect of change in accounting principle -- diluted $        -     $    (0.35)  $        -
                                                                ==========     ==========  ==========
Net (loss) income per common share -- diluted................. $    (1.15)    $     2.51   $     1.07
                                                                ==========     ==========  ==========
Shares used in net income per common share -- basic...........    175,828        173,312      170,519
                                                                ==========     ==========  ==========
Shares used in net income per common share -- diluted.........    175,828        181,011      178,550
                                                                ==========     ==========  ==========
</TABLE>

   The accompanying notes are an integral part of the consolidated financial
                                  statements.

                                      32

<PAGE>

                                TERADYNE, INC.

                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                 YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999

<TABLE>
<CAPTION>
                                                                                 Common               Accumulated
                                                                    Shares       Stock    Additional     Other
                                                              ------------------  Par      Paid-in   Comprehensive  Retained
                                                              Issued  Reacquired Value     Capital       Loss       Earnings
                                                              ------- ---------- -------  ---------- ------------- ----------
<S>                                                           <C>     <C>        <C>      <C>        <C>           <C>
(in thousands)
Balance, December 31, 1998...................................  92,411    8,667   $10,468  $ 310,052    $      0    $  705,850
Issuance of stock to employees under benefit plans...........   3,205                401     60,730
Repurchase of stock..........................................            1,366      (171)   (86,980)
Two-for-one stock split effected in the form of a 100% stock
 dividend....................................................  95,616   10,033    10,698    (10,698)
Issuance of stock to employees under benefit plans after two-
 for-one stock split.........................................   1,973                246     20,947
Tax benefit from stock options...............................                                60,462
Repurchase of stock after two-for-one stock split............            2,820      (352)  (120,315)
Comprehensive income:
Net income...................................................                                                         191,694

  Total comprehensive income.................................
                                                              -------   ------   -------  ---------    --------    ----------
Balance, December 31, 1999................................... 193,205   22,886   $21,290  $ 234,198    $      0    $  897,544
Issuance of stock to employees under benefit plans...........   4,168                521     54,742
Tax benefit from stock options...............................                                88,046
Shares issued to effect acquisition..........................   1,841                230    104,256
Repurchase of stock..........................................            3,769      (471)  (147,001)
Comprehensive income:
Net income...................................................                                                         453,616

  Total comprehensive income.................................
                                                              -------   ------   -------  ---------    --------    ----------
Balance, December 31, 2000................................... 199,214   26,655   $21,570  $ 334,241    $      0    $1,351,160
Issuance of stock to employees under benefit plans...........   3,609                451     58,092
Tax benefit from stock options...............................                                23,319
Shares issued to effect acquisition..........................   4,951                619    184,889
Comprehensive income:
Net loss.....................................................                                                        (202,215)
Unrealized gains on investments, net of tax of $2,168........                                             3,546
Additional minimum pension liability, net of tax of $6,918...                                           (11,288)

  Total comprehensive loss...................................
                                                              -------   ------   -------  ---------    --------    ----------
Balance, December 31, 2001................................... 207,774   26,655   $22,640  $ 600,541    $ (7,742)   $1,148,945
                                                              =======   ======   =======  =========    ========    ==========
</TABLE>
<TABLE>
<CAPTION>

                                                                  Total
                                                              Shareholders' Comprehensive
                                                                 Equity     Income (Loss)
                                                              ------------- -------------
<S>                                                           <C>           <C>
(in thousands)
Balance, December 31, 1998...................................  $1,026,370
Issuance of stock to employees under benefit plans...........      61,131
Repurchase of stock..........................................     (87,151)
Two-for-one stock split effected in the form of a 100% stock
 dividend....................................................           0
Issuance of stock to employees under benefit plans after two-
 for-one stock split.........................................      21,193
Tax benefit from stock options...............................      60,462
Repurchase of stock after two-for-one stock split............    (120,667)
Comprehensive income:
Net income...................................................     191,694     $ 191,694
                                                                              ---------
  Total comprehensive income.................................                 $ 191,694
                                                               ----------     =========
Balance, December 31, 1999...................................  $1,153,032
Issuance of stock to employees under benefit plans...........      55,263
Tax benefit from stock options...............................      88,046
Shares issued to effect acquisition..........................     104,486
Repurchase of stock..........................................    (147,472)
Comprehensive income:
Net income...................................................     453,616     $ 453,616
                                                                              ---------
  Total comprehensive income.................................                 $ 453,616
                                                               ----------     =========
Balance, December 31, 2000...................................  $1,706,971
Issuance of stock to employees under benefit plans...........      58,543
Tax benefit from stock options...............................      23,319
Shares issued to effect acquisition..........................     185,508
Comprehensive income:
Net loss.....................................................    (202,215)    $(202,215)
Unrealized gains on investments, net of tax of $2,168........       3,546         3,546
Additional minimum pension liability, net of tax of $6,918...     (11,288)      (11,288)
                                                                              ---------
  Total comprehensive loss...................................                 $(209,957)
                                                               ----------     =========
Balance, December 31, 2001...................................  $1,764,384
                                                               ==========
</TABLE>

   The accompanying notes are an integral part of the consolidated financial
                                  statements.

                                      33

<PAGE>

                                TERADYNE, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                             YEARS ENDED DECEMBER 31,
                                                                                         -------------------------------
                                                                                           2001       2000       1999
                                                                                         ---------  ---------  ---------
                                                                                                  (in thousands)
<S>                                                                                      <C>        <C>        <C>
Cash flows from operating activities:
  Net (loss) income..................................................................... $(202,215) $ 453,616  $ 191,694
  Adjustments to reconcile net (loss) income to net cash (used for) provided by
   operating activities:
    Depreciation........................................................................   130,949     99,929     85,279
    Amortization........................................................................     7,719      1,933      1,107
    Gain on sale of business............................................................   (14,779)        --         --
    Impairment of fixed assets..........................................................    32,261         --         --
    Provision for doubtful accounts.....................................................     1,192      1,337      1,407
    Deferred income tax provision (credit)..............................................   (47,091)   (44,242)    (4,101)
    Other non-cash items, net...........................................................    14,869    (10,997)     4,354
    Changes in operating assets and liabilities, net of businesses sold and acquired:
     Accounts receivable................................................................   285,232   (115,267)   (78,263)
     Inventories........................................................................   158,669   (235,319)    (2,346)
     Other assets.......................................................................   (74,688)     7,589    (24,576)
     Accounts payable and accruals......................................................  (364,491)   226,798    115,750
     Accrued income taxes...............................................................    (6,599)    85,482     77,171
                                                                                         ---------  ---------  ---------
Net cash (used for) provided by operating activities....................................   (78,972)   470,859    367,476
                                                                                         ---------  ---------  ---------
Cash flows from investing activities:
    Additions to property, plant, and equipment.........................................  (198,180)  (235,189)  (119,780)
    Increase in equipment manufactured by the Company...................................   (43,269)   (63,053)   (31,376)
    Proceeds from sale of business, net of expenses.....................................    26,250         --         --
    Purchases of held-to-maturity marketable securities.................................  (230,255)  (409,180)  (177,650)
    Maturities of held-to-maturity marketable securities................................   156,984    394,006    118,990
    Purchases of available-for-sale marketable securities...............................    (1,876)  (177,864)  (204,824)
    Proceeds from sales and maturities of available-for-sale marketable securities......    31,415    177,104    169,824
    Cash acquired in acquisition........................................................    11,593      1,885         --
                                                                                         ---------  ---------  ---------
Net cash used by investing activities...................................................  (247,338)  (312,291)  (244,816)
                                                                                         ---------  ---------  ---------
Cash flows from financing activities:
    Proceeds from convertible notes, net................................................   389,000         --         --
    Proceeds from mortgage notes payable................................................    45,000         --         --
    Payments of long-term debt..........................................................   (91,063)    (5,283)    (1,333)
    Issuance of common stock under stock option and stock purchase plans................    58,543     55,263     82,323
    Acquisition of treasury stock.......................................................        --   (147,472)  (207,819)
                                                                                         ---------  ---------  ---------
Net cash provided by (used for) financing activities....................................   401,480    (97,492)  (126,829)
                                                                                         ---------  ---------  ---------
Increase (decrease) in cash and cash equivalents........................................    75,170     61,076     (4,169)
Cash and cash equivalents at beginning of year..........................................   242,421    181,345    185,514
                                                                                         ---------  ---------  ---------
Cash and cash equivalents at end of year................................................ $ 317,591  $ 242,421  $ 181,345
                                                                                         =========  =========  =========
Supplementary disclosure of cash flow information:
    Cash paid (received) during the year for:
     Interest........................................................................... $   1,275  $   1,728  $   1,615
     Income taxes (received) paid....................................................... $ (16,119) $ 130,416  $  22,747
    Businesses acquired:
     Fair value of assets acquired...................................................... $ 357,733  $ 119,887
     Liabilities assumed................................................................ $ 166,257  $  15,401
     Common stock issued................................................................ $ 185,508  $ 104,486
</TABLE>

   The accompanying notes are an integral part of the consolidated financial
                                  statements.

                                      34

<PAGE>

                                TERADYNE, INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A.   THE COMPANY

   Teradyne, Inc. is the world's largest supplier of automatic test equipment
and is also a leading provider of high performance interconnection systems and
electronic manufacturing services.

   Teradyne's automatic test equipment products include systems that:

    .  test semiconductors ("Semiconductor Test Systems");
    .  test and inspect circuit-boards ("Circuit Board Test and Inspection
       Systems"); and
    .  test high speed voice and data communication ("Broadband Test Systems").

   Teradyne's interconnection systems products and services ("Connection
Systems") include:

    .  high bandwidth backplane assemblies and associated connectors used in
       electronic systems; and
    .  electronic manufacturing services of assemblies that include Teradyne
       backplanes and connectors.

   Broadband Test Systems, Diagnostic Solutions, and, prior to 2001, Software
Test Systems have been combined into "Other Test Systems" for purposes of
disclosing Teradyne's reportable segments.

B.   ACCOUNTING POLICIES

Basis of Presentation

   The consolidated financial statements include the accounts of Teradyne and
its subsidiaries. All significant intercompany balances and transactions are
eliminated. Certain prior years' amounts were reclassified to conform to the
current year presentation.

   Certain costs in 2001, 2000, and 1999 have been reclassified from cost of
sales into engineering and development and selling and administrative. These
reclassified costs consist of new product development costs incurred in
manufacturing engineering, test technology and applications engineering costs
supporting sales. The costs reclassified from cost of sales to engineering and
development represent work performed to develop and implement manufacturing and
test processes focused on the introduction of new product platforms. The costs
reclassified from cost of sales to selling and administrative represent the
development of applications programming used to demonstrate new product
capabilities.

   On October 26, 2001 Teradyne completed its acquisition of GenRad, Inc. of
Westford, MA, a leading manufacturer of electronic automatic test equipment,
related software and diagnostic solutions. The GenRad business has been made
part of the Circuit Board Test and Inspection Systems operating segment. GenRad
activity is reflected in Teradyne's results of operations since the acquisition
date.

Preparation of Financial Statements and Use of Estimates

   The preparation of consolidated financial statements requires Teradyne to
make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent
liabilities. On an on-going basis, Teradyne evaluates its estimates, including
those related to inventories, investments, intangible and other long-lived
assets, bad debts, income taxes, pensions, warranties, contingencies and
litigation. Teradyne bases its estimates on historical experience and on
appropriate and customary assumptions that are believed to be reasonable under
the circumstances, the results of which form the basis for making judgments
about the carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates
under different assumptions or conditions.

                                      35

<PAGE>

                                TERADYNE, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


B.  ACCOUNTING POLICIES--(Continued)

Revenue Recognition

   In accordance with the guidance provided by the Securities and Exchange
Commission's Staff Accounting Bulletin No. 101, "Revenue Recognition in
Financial Statements", Teradyne recognizes revenue when there is persuasive
evidence of an arrangement, title and risk of loss have passed, delivery has
occurred or the services have been rendered, the sales price is fixed or
determinable and collection of the related receivable is reasonably assured.

   For equipment where there is hardware and software that is incidental to the
product, revenue is recognized upon shipment provided that customer acceptance
criteria can be demonstrated prior to shipment. Where the criteria cannot be
demonstrated prior to shipment, or in the case of new products, revenue is
deferred until acceptance has been received. For multiple element arrangements,
Teradyne defers the greater of the fair value of any undelivered elements of
the contract or the portion of the sales price which is not payable until the
undelivered elements are delivered. Teradyne also defers the portion of the
sales price that is not due until acceptance, which represents deferred profit.
Fair value is the price charged when the element is sold separately. In order
to recognize revenue the functionality of the undelivered element must not be
essential to the delivered element. Installation is not considered essential to
the functionality of the product as these services do not alter the product
capabilities, do not require specialized skills or tools and can be performed
by the customers or other vendors. In addition to installation, other elements
may include service arrangements and undelivered products. Teradyne's products
are generally subject to warranty and related costs are provided for in cost of
sales when product revenue is recognized.

   Interconnection systems and electronic manufacturing assembly services
revenue is recognized upon shipment or delivery according to the shipping terms
of the arrangement as there is no installation required and there are no
contractual acceptance requirements.

   For transactions involving the sale of software which is not incidental to
the product, revenue is recognized in accordance with American Institute of
Certified Public Accountants ("AICPA") Statement of Position No. 97-2 (SOP No.
97-2), "Software Revenue Recognition", as amended by SOP No. 98-9 "Modification
of SOP 97-2, Software Revenue Recognition, With Respect to Certain
Transactions." Teradyne recognizes revenue when there is persuasive evidence of
an arrangement, delivery has occurred, the sales price is fixed or determinable
and collectibility is probable. Revenue is deferred in instances when vendor
specific objective evidence of fair value of undelivered elements is not
determinable. Vendor specific evidence of fair value is the price charged when
the element is sold separately. Revenue for the separate elements is only
recognized where the functionality of the undelivered element is not essential
to the delivered element.

   For certain contracts eligible for contract accounting under SOP No. 81-1
"Accounting for Performance of Construction-type and Certain Production-Type
Contracts", revenue is recognized using the percentage-of-completion accounting
method based upon an efforts-expended method. The software in these
arrangements requires significant production, modification or customization. In
all cases, changes to total estimated costs and anticipated losses, if any, are
recognized in the period in which determined.

Inventories

   Inventories which include materials, labor and manufacturing overhead are
stated at the lower of cost (first-in, first-out basis) or net realizable
value. On a quarterly basis, Teradyne uses consistent methodologies to evaluate
all inventory for net realizable value. Teradyne records a provision for excess
and obsolete inventory when such an impairment is identified through the
quarterly review process. Excess and obsolete inventory, consisting of on-hand
and non-cancelable on-order inventory, in excess of estimated usage over the
next 12 months is written down to its estimated net realizable value, if less
than cost. The excess and obsolescence evaluation is based upon assumptions
about future demand, product mix and possible alternative uses.

                                      36

<PAGE>

                                TERADYNE, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

B.  ACCOUNTING POLICIES--(Continued)

Property, Plant, and Equipment

   Property, plant, and equipment are stated at cost and depreciated over the
estimated useful lives of the assets. Leasehold improvements and major renewals
are capitalized and included in property, plant, and equipment accounts while
expenditures for maintenance and repairs and minor renewals are charged to
expense. When assets are retired, the assets and related allowances for
depreciation and amortization are removed from the accounts and any resulting
gain or loss is reflected in operations.

   Teradyne provides for depreciation of its assets principally on the
straight-line method with the cost of the assets being charged to expense over
their useful lives as follows:

<TABLE>
<CAPTION>
               Buildings........................... 40 years
               <S>                                  <C>
               Buildings improvements.............. 5 to 10 years
               Leasehold improvements.............. 5 to 10 years
               Furniture and fixtures.............. 10 years
               Test systems manufactured internally 6 years
               Machinery and equipment............. 3 to 5 years
               Software............................ 3 to 5 years
               Test technology..................... 2 years
</TABLE>

Goodwill and Intangible and Other Assets

   Goodwill and intangible assets are amortized over their estimated useful
economic life using the straight line method and are carried at cost less
accumulated amortization. Goodwill resulting from the GenRad acquisition which
was completed after June 30, 2001 is not being amortized in accordance with the
requirements of SFAS No. 142, "Goodwill and Other Intangible Assets". Beginning
January 1, 2002 all other goodwill amortization will cease in accordance with
SFAS No. 142.

   In accordance with Statement of Financial Accounting Standards No. 121
("SFAS 121") "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of", Teradyne reviews long-lived assets for
impairment whenever events or changes in business circumstances indicate that
the carrying amount of the assets may not be fully recoverable or that the
useful lives of these assets are no longer appropriate. Each impairment test is
based on a comparison of the estimated undiscounted cash flows to the recorded
value of the asset. If an impairment is indicated, the asset is written down to
its estimated fair value based on a discounted cash flow analysis. The cash
flow estimates used to determine the impairment, if any, contain management's
best estimates using appropriate assumptions and projections at that time.

Engineering and Development Costs

   Teradyne's products are highly technical in nature and require a large and
continuing engineering and development effort. Software development costs
incurred prior to the establishment of technological feasibility are charged to
expense. Software development costs incurred subsequent to the establishment of
technological feasibility are capitalized until the product is available for
release to customers. To date, the period between achieving technological
feasibility and general availability of the product has been short and software
development costs eligible for capitalization have not been material.
Engineering and development costs are expensed as incurred.

                                      37

<PAGE>

                                TERADYNE, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

B.  ACCOUNTING POLICIES--(Continued)

Advertising Costs

   Teradyne expenses all advertising costs as incurred. Advertising costs were
$10.3 million, $16.8 million, and $9.0 million in 2001, 2000, and 1999,
respectively.

Investments in Other Companies

   Teradyne holds minority interests in public and private companies having
operations or technology in areas within its strategic focus. These investments
are included in other long-term assets and include investments accounted for at
cost and under the equity method of accounting. Under the equity method of
accounting, which generally applies to investments that represent a 20 to 50
percent ownership of the equity securities of the investees, Teradyne's
proportionate share of the earnings or losses of the investees is included in
other income and expense. Teradyne records an impairment charge when it
believes an investment has experienced a decline in value that is
other-than-temporary. At December 31, 2001, these investments were $14.4
million.

Income Taxes

   Deferred tax assets and liabilites are determined based on differences
between financial reporting and tax bases of assets and liabilities and are
measured using the enacted tax rates and laws that will be in effect when the
differences are expected to reverse. The measurement of deferred tax assets is
reduced by a valuation allowance if, based upon weighted available evidence, it
is more likely than not that some or all of the deferred tax assets will not be
realized.

   U.S. Federal taxes are provided for on the retained earnings of non-U.S.
sales and service subsidiaries whose earnings are expected to be remitted to
the United States. U.S. Federal taxes are not provided for on the earnings of a
non-U.S. manufacturing subsidiary which are expected to be reinvested
indefinitely in operations outside the U.S.

Translation of Non U.S. Currencies

   Assets and liabilities of non U.S. subsidiaries, which are denominated in
currencies other than the U.S. dollar, are remeasured into U.S. dollars at
rates of exchange in effect at the end of the fiscal year except nonmonetary
assets and liabilities which are remeasured using historical exchange rates.
Revenue and expense amounts are remeasured using an average of exchange rates
in effect during the year, except those amounts related to nonmonetary assets
and liabilities, which are remeasured at historical exchange rates. Net
realized gains and losses resulting from currency remeasurement are included in
operations.

Net Income (Loss) per Common Share

   Basic net income (loss) per common share is calculated by dividing net
income (loss) by the weighted average number of common shares outstanding
during the period. Diluted net income (loss) per common share is calculated by
dividing net income (loss) by the sum of the weighted average number of common
shares plus

                                      38

<PAGE>

                                TERADYNE, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

B.  ACCOUNTING POLICES--(Continued)

additional common shares that would have been outstanding if potential dilutive
common shares had been issued for granted stock option and stock purchase
rights.

Other Comprehensive Income (Loss)

   Teradyne reports comprehensive income (loss) in accordance with Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income" (SFAS
130). Comprehensive income (loss) includes net income (loss), minimum pension
liability adjustments, and unrealized gains and losses on certain investments
in debt and equity securities.

C.  CHANGE IN ACCOUNTING PRINCIPLE

   In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" (SAB
101). SAB 101 summarizes certain areas of the Staff's views in applying
generally accepted accounting principles to revenue recognition in financial
statements. During the fourth quarter of 2000, Teradyne implemented the SEC's
SAB 101 guidelines, retroactive to the beginning of the year. This was reported
as a cumulative effect of a change in accounting principle as of January 1,
2000. The cumulative effect of the change in accounting principle on prior
years resulted in a charge to income of $64.1 million (net of income taxes of
$27.5 million) or $0.35 per diluted share which has been included in income for
the fiscal year ending December 31, 2000. For the fiscal year ending December
31, 2000, Teradyne recognized $126.1 million in revenue that is included in the
cumulative effect adjustment as of January 1, 2000. The results for the first
three quarters of fiscal year ending December 31, 2000 have been restated in
accordance with SAB 101. Included in 2001 sales was $98.7 million which
resulted in $48.8 million of income (net of tax of $20.9 million) related to
shipments in 2000 where title was retained until payment. Title is no longer
retained until payment as a normal business practice. Prior years do not
reflect the change in accounting principle as the effect could not be
reasonably determined.

D.  RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

   In July 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 141 ("SFAS 141"), "Business
Combinations." SFAS 141 requires the purchase method of accounting for business
combinations initiated after June 30, 2001 and eliminates the
pooling-of-interest method.

   In July 2001, FASB issued SFAS 142, "Goodwill and Other Intangible Assets",
which is effective for Teradyne on January 1, 2002. SFAS 142 requires, among
other things, the discontinuance of goodwill amortization and includes
provisions for the reclassification of certain existing recognized intangibles
as goodwill, reassessment of the useful lives of existing recognized
intangibles, and reclassification of certain intangibles out of previously
reported goodwill. In 2001, Teradyne recorded goodwill amortization of
approximately $3.9 million. At December 31, 2001 Teradyne had goodwill of
$190.3 million which will not be amortized. In 2002, Teradyne will record
amortization of approximately $7.4 million relating to other intangibles
primarily in connection with the GenRad acquisition. SFAS 142 also requires
Teradyne to complete a transitional goodwill impairment test six months from
the date of adoption. Teradyne has completed a preliminary evaluation of the
impact of SFAS 142 and currently does not expect to record a goodwill
impairment.

   In August 2001, FASB issued SFAS 143, "Accounting for Obligations Associated
with the Retirement of Long-Lived Assets." SFAS 143 provides the accounting
requirements for retirement obligations associated with tangible long-lived
assets. SFAS 143 is effective for financial statements for fiscal years
beginning after June 15, 2002. Teradyne has determined that SFAS 143 will not
have an impact on its financial position and results of operations.

                                      39

<PAGE>

                                TERADYNE, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


D.  RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS--(Continued)

   In October 2001, FASB issued SFAS 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets." SFAS 144 requires one method of accounting for
long lived assets disposed of by sale. SFAS 144 is effective for financial
statements issued for fiscal years beginning after December 15, 2001. Teradyne
has adopted SFAS 144 effective January 1, 2002. SFAS 144 did not have an impact
on Teradyne's financial position or results of operations.

E.  RISKS AND UNCERTAINTIES

   Teradyne's future results of operations involve a number of risks and
uncertainties. These factors include, but are not limited to, the slowdown in
economies worldwide, the effects of the hostilities begun in September 2001,
the current and anticipated market for electronics, risks associated with any
measures Teradyne takes to address the current slowdown in the market,
enforcement of Teradyne's intellectual property rights, failure to develop new
technologies, risks associated with acquisitions and divestitures, securities
class action litigation due to past or future stock activity, competition,
risks of operating internationally, risks associated with obligations and
potential liabilities under environmental regulations, Teradyne's debt service
obligations with respect to its recent sale of convertible senior notes and a
mortgage financing with respect to certain of its owned real estate assets, the
difficulty in obtaining future financing if needed, provisions of Teradyne's
charter and by-laws and Massachusetts law that make a takeover of Teradyne more
difficult, competitive pricing pressures, changes in product mix, timing of
customer orders or any deferral or cancellation of orders previously received,
market acceptance of Teradyne's products, new product introductions from
Teradyne's competitors, reliance on sole source suppliers, potential retrofit
costs, and the timing of investments in engineering and development. At
present, Teradyne cannot say how long the current business downturn will last
or when the situation will improve. In the absence of significant improvement,
orders could remain low or decline further, and the amount of Teradyne's
inventory, deferred tax assets, and certain long-lived assets considered
realizable could be significantly reduced.

F.  ACQUISITIONS AND DIVESTITURES

   On October 26, 2001 Teradyne completed its acquisition of GenRad, Inc. of
Westford, MA, a leading manufacturer of electronic automatic test equipment,
related software, and diagnostic solutions. GenRad's business has been made
part of the Circuit Board Test and Inspection Systems operating segment. Under
the terms of the acquisition, each outstanding share of GenRad common stock was
converted into 0.1733 shares of Teradyne common stock. Under the terms of the
acquisition, Teradyne assumed approximately $89.7 million of debt which
Teradyne repaid on October 26, 2001. The results of GenRad have been included
since the acquisition date.

   The primary reasons for Teradyne's acquisition of GenRad, and the factors
that contributed to a purchase price that resulted in recognition of goodwill,
are:

    .  the combination of Teradyne's circuit board test systems with GenRad
       will strengthen Teradyne's product offerings;
    .  Teradyne's global presence in Europe and Asia among large electronics
       manufacturing services companies and original equipment manufacturers in
       the circuit board test and inspection markets will be strengthened as a
       result of the acquisition; and
    .  to enable Teradyne to compete more effectively in the circuit board test
       and inspection markets.

   Based on the exchange ratio of 0.1733 shares of Teradyne common stock for
each GenRad share, Teradyne issued approximately 5.0 million common shares and
1.2 million vested employee stock options in the exchange, which increased
common stockholders' equity by approximately $185.5 million. The common stock
was valued at $34.90 per share, which was Teradyne's average common stock price
over a five-day trading period, which

                                      40

<PAGE>

                                TERADYNE, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

F.  ACQUISITIONS AND DIVESTITURES--(Continued)

included the public announcement date of August 2, 2001 and two days before and
after the public announcement date. The employee stock options were valued
using the Black-Scholes option pricing model, based on following assumptions
prevalent at the August 2001 announcement date:

<TABLE>
<CAPTION>
                          Expected life (years).   6.0
                          <S>                    <C>
                              Interest rate.....  4.1%
                              Volatility........ 63.2%
                              Dividend yield....  0.0%
</TABLE>

   This transaction was accounted for using the purchase method of accounting
as required by SFAS 141, "Business Combinations," which was issued in the
second quarter of 2001.

   The purchase price allocation is preliminary and subject to future
adjustment based on the completion of facility exit and restructuring plans.
Based on the purchase price allocation, the following table summarizes the fair
values of the assets acquired and liabilities assumed on October 26, 2001:

<TABLE>
<CAPTION>
                            (in thousands)
             <S>                                          <C>
             Consideration:
              Common stock issued........................ $172,761
              Employee stock options.....................   12,747
              Transaction costs..........................    5,968
                                                          --------
                Total consideration...................... $191,476
                                                          ========
             Assets and liabilities acquired:
              Cash and cash equivalents.................. $ 11,593
              Accounts receivable........................   40,124
              Inventories................................   57,863
              Other current assets.......................    7,847
              Property, plant, & equipment...............   28,445
              Long-term net deferred tax asset...........   25,534
              Intangible assets..........................   44,700
                                                          --------
                Total identifiable assets acquired.......  216,106
                                                          --------
             Accounts payable............................   23,956
             Accrued employees' compensation and benefits   28,032
             Other accrued liabilities...................   13,919
             Deferred revenue............................   10,700
             Long-term debt..............................   89,650
                                                          --------
                Total liabilities acquired...............  166,257
                                                          --------
                Total net identifiable assets acquired...   49,849
                                                          --------
             Goodwill....................................  141,627
                                                          --------
                Total net assets acquired................ $191,476
                                                          ========
</TABLE>

   The $44.7 million of intangible assets consists of $35.6 million of
completed technology, $5.3 million of service and software maintenance
contracts and customer relationships, and $3.8 million of tradenames and
trademarks. The intangible assets are subject to amortization with a weighted
average amortization period of 7 years.

                                      41

<PAGE>

                                TERADYNE, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


F.  ACQUISITIONS AND DIVESTITURES--(Continued)

   Goodwill related to the GenRad acquisition is reported as part of the
Circuit Board Test and Inspection Systems segment.

   The following unaudited pro forma data presents information as if GenRad had
been acquired at the beginning of each period presented. The pro forma amounts
include an adjustment for amortization of intangibles of $5.1 million in 2001
and $6.2 million in 2000. The pro forma amounts do not reflect any benefits
from economies which might be achieved from combining the operations. The pro
forma information does not necessarily reflect the actual results that would
have occurred had the companies been combined during the periods presented, nor
is it necessarily indicative of the future results of operations of the
combined companies:

<TABLE>
<CAPTION>
                                                                                          Year Ended
                                                                                    ----------------------
                                                                                       2001        2000
(in thousands except per share amounts)                                             ----------  ----------
<S>                                                                                 <C>         <C>
Revenue............................................................................ $1,609,374  $3,385,601
(Loss) income before cumulative effect of change in accounting principle...........   (361,811)    535,079
Net (loss) income..................................................................   (361,811)    470,941
(Loss) income before cumulative effect of change in accounting principle--per share
  of common stock..................................................................
   Basic........................................................................... $    (2.01) $     3.00
   Diluted......................................................................... $    (2.01) $     2.88
(Loss) income--per share of common stock...........................................
   Basic........................................................................... $    (2.01) $     2.64
   Diluted......................................................................... $    (2.01) $     2.53
</TABLE>

   On June 22, 2001, Teradyne sold its aerospace and defense connector and
backplane business to Amphenol Corporation of Wallingford, Connecticut for cash
proceeds of $26.3 million. This transaction resulted in a pre-tax gain of $14.8
million which has been recorded in other income and expense.

   On August 15, 2000, Teradyne acquired two California-based companies, both
in the printed circuit board (PCB) industry: Herco Technology Corp. of San
Diego, California, a fabricator of printed circuit boards, and Perception
Laminates, Inc. of La Verne, California, which supplies PCB laminates and is a
major supplier to Herco. The acquisitions are part of the Connection Systems
operating segment. The cost of the acquired companies was $104.5 million with
approximately 1.8 million shares of common stock issued. The acquisitions were
accounted for using the purchase method of accounting and accordingly, the
results have been included in our consolidated results of operations from the
date of acquisition. Goodwill resulting from the acquisitions will no longer be
amortized beginning in 2002.

   The components of the purchase price allocation are as follows:

<TABLE>
<CAPTION>
                                                (in thousands)
                                                --------------
                  <S>                           <C>
                  Current assets...............    $ 20,140
                  Property, plant and equipment      41,650
                  Acquired intangibles.........       4,736
                  Goodwill.....................      53,361
                  Less: Liabilities assumed....      15,401
                                                   --------
                     Total.....................    $104,486
</TABLE>

   On December 29, 2000, Teradyne sold a controlling interest in its software
test business to an investor group led by Matrix Partners of Waltham,
Massachusetts for approximately $28.7 million. The gain from the sale was
immaterial. Teradyne has retained an ownership position of approximately 21% in
the new company called Empirix. Teradyne has accounted for its investment in
Empirix under the equity method of accounting. At December 31, 2001, the
carrying value of Teradyne's investment in Empirix was zero.

                                      42

<PAGE>

                                TERADYNE, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


G.  FINANCIAL INSTRUMENTS

Cash Equivalents

   Teradyne considers all highly liquid investments with original maturities of
three months or less at the date of acquisition to be cash equivalents.

Marketable Securities

   Teradyne classifies investments in marketable securities as trading,
available-for-sale or held-to-maturity at the time of purchase and periodically
re-evaluates such classification. There were no securities classified as
trading at December 31, 2001 or 2000. Securities are classified as
held-to-maturity when Teradyne has the positive intent and ability to hold the
securities to maturity. Held-to-maturity securities are stated at cost with
corresponding premiums or discounts amortized over the life of the investment
to interest income. Securities classified as available-for-sale are reported at
fair value. Realized gains and losses and declines in value judged to be
other-than-temporary on available-for-sale securities are included in interest
income. Unrealized gains and losses are included in accumulated other
comprehensive income. The cost of securities sold is based on the specific
identification method.

   The short-term marketable securities mature in less than one year. Long-term
marketable securities have maturities of one to five years. At December 31,
2001 and 2000 these investments are reported as follows (in thousands):

<TABLE>
<CAPTION>
                                                          2001                          2000
                                               --------------------------- ------------------------------
                                                                  Held-to-                       Held-
                                               Available-For-sale Maturity Available-For-sale to-Maturity
                                               ------------------ -------- ------------------ -----------
<S>                                            <C>                <C>      <C>                <C>
Short-term marketable securities:
U.S. Treasury and government agency securities      $  7,282      $30,000       $ 13,918        $29,539
Corporate debt securities.....................        12,814                      16,697
                                                    --------      -------       --------        -------
                                                    $ 20,096      $30,000       $ 30,615        $29,539
                                                    ========      =======       ========        =======
Long-term marketable securities:
U.S. Treasury and government agency securities      $133,958                    $ 55,778        $30,000
Corporate debt securities.....................        84,586                      76,070
                                                    --------                    --------        -------
                                                    $218,544                    $131,848        $30,000
                                                    ========                    ========        =======
</TABLE>

Other

   As of December 31, 2001, the estimated fair value of Teradyne's convertible
notes was approximately $547 million compared to the carrying value of $400
million. The estimated fair value of the convertible notes is based on the
quoted market price of the convertible notes on December 31, 2001. The quoted
market price for the convertible notes primarily reflects the conversion value
of the notes into Teradyne's common stock.

   Fair values for Teradyne's non-convertible debt were determined based on
interest rates that are currently available to Teradyne for the issuance of
debt with similar terms and remaining maturities for debt issues and
approximate carrying values.

                                      43

<PAGE>

                                TERADYNE, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


G.  FINANCIAL INSTRUMENTS--(Continued)

   For all other balance sheet financial instruments, the carrying amount
approximates fair value.

Derivatives

   Teradyne adopted SFAS 133, "Accounting for Derivative Instruments and
Hedging Activities," as amended by SFAS 137 and SFAS 138 in the first quarter
of 2001. SFAS 133 requires Teradyne to recognize all derivatives on the balance
sheet at fair value. Adoption of SFAS 133 did not have a material impact on
Teradyne's financial position or results of operations.

   Teradyne conducts business in a number of foreign countries, with certain
transactions denominated in local currencies. The purpose of Teradyne's foreign
currency management is to minimize the effect of exchange rate fluctuations on
certain foreign denominated net monetary assets and anticipated cash flows. The
terms of currency instruments used for hedging purposes are consistent with the
timing of the transactions being hedged. Teradyne does not use derivative
financial instruments for trading or speculative purposes.

   Teradyne enters into foreign currency forward contracts to hedge currency
exposures associated with monetary assets and liabilities denominated in
non-functional currencies. These contracts are used to reduce Teradyne's risk
associated with exchange rate movements, as gains and losses on these contracts
are intended to offset exchange losses and gains on underlying exposures.
Changes in the fair value of these derivatives are recorded immediately in
earnings which are used to offset the changes in the underlying net monetary
position being hedged.

   Teradyne periodically hedges certain forecasted foreign currency denominated
sales, over a maximum period of twelve months. The derivatives are designated
as cash-flow hedges, and changes in their fair value are carried in accumulated
other comprehensive income until the underlying transaction occurs. Once the
underlying forecasted transaction occurs, the appropriate gain or loss from the
derivative designated as a hedge of the transaction is reclassified from
accumulated other comprehensive income to net sales. During 2001 the amount of
net realized gains from cash-flow hedges was immaterial. As of December 31,
2001, there were no outstanding cash-flow hedges and therefore there is no
amount to be reclassified from accumulated other comprehensive income.

   At December 31, 2001, Teradyne had the following forward currency contracts
to buy U.S. dollars for non U.S. currencies with the following notional amounts
totaling $11.0 million; $2.4 million Japanese Yen, $3.6 million Euro, $4.4
million British pound sterling, and $0.6 million Swedish Krona. At December 31,
2000, the face amount of outstanding forward currency contracts to buy U.S.
dollars for non U.S. currencies was $73.0 million. The fair value of the
outstanding contracts at December 31, 2001 was $0.2 million. Realized gains
related to forward contracts hedging net monetary position were $4.1 million,
$7.0 million, and $0.1 million for 2001, 2000, and 1999, respectively. Both the
contract gains and losses and the gains and losses on the items being hedged
are included in selling and administrative expenses.

   Teradyne holds warrants to purchase 0.3 million shares of common stock of
LogicVision, a public technology company, at an exercise price of $4.86 per
share. In accordance with SFAS 133, Teradyne recorded a gain of $2.0 million in
other income for the fair value of the warrants for the year ended December 31,
2001. The fair value of the warrant is included in other assets.

Concentration of Credit Risk

   Financial instruments which potentially subject Teradyne to concentrations
of credit risk consist principally of marketable securities, forward currency
contracts, and accounts receivable. Teradyne maintains cash investments
primarily in U.S. Treasury and government agency securities and corporate debt
securities, rated

                                      44

<PAGE>

                                TERADYNE, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

G.  FINANCIAL INSTRUMENTS--(Continued)

AA or higher, which have minimal credit risk. Teradyne places forward currency
contracts with high credit-quality financial institutions in order to minimize
credit risk exposure. Concentrations of credit risk with respect to accounts
receivable are limited due to the large number of geographically dispersed
customers. Teradyne performs ongoing credit evaluations of its customers'
financial condition but does not require collateral to secure accounts
receivable.


H.  DEBT
   Long-term debt at December 31, 2001 and 2000 consisted of the following (in
thousands):

<TABLE>
<CAPTION>
                                               2001    2000
                                             -------- ------
                    <S>                      <C>      <C>
                    Convertible senior notes $400,000     --
                    Mortgage notes payable..   50,040 $5,040
                    Other long-term debt....    2,905  3,481
                                             -------- ------
                    Total...................  452,945  8,521
                    Less current maturities.    1,263    169
                                             -------- ------
                                             $451,682 $8,352
                                             ======== ======
</TABLE>

   The total maturities of long-term debt for the succeeding five years and
thereafter are: 2002 -- $1.3 million; 2003 -- $1.3 million; 2004 -- $1.4
million; 2005 -- $1.5 million; 2006 -- $401.5 million; and $45.9 million
thereafter.

Convertible Senior Notes

   In 2001, Teradyne sold $400 million principal amount of 3.75% Convertible
Senior Notes due 2006 (the "Notes") in a private placement and received net
proceeds of $389 million. The Notes are convertible at the option of the
holders at a rate which is equivalent to a conversion price of approximately
$26.00 per share, which is equal to a conversion rate of approximately 38.4615
shares of common stock per $1,000 principal amount of Notes. On or after
October 18, 2004, Teradyne may redeem the Notes in whole or in part at the
prices set forth below. The redemption price, expressed as a percentage of
principal amount, is as follows for the following periods:

<TABLE>
<CAPTION>
                                                                 Redemption
    Period                                                         Price
    ------                                                       ----------
    <S>                                                          <C>
    Beginning on October 18, 2004 and ending on October 14, 2005   101.50%
    Beginning on October 15, 2005 and ending on October 14, 2006   100.75%
</TABLE>

and thereafter equal to 100% of the principal amount.

   Teradyne will begin making annual interest payments of up to $15 million,
paid semi-annually, on the Notes commencing on April 15, 2002. The Notes are
senior unsecured obligations of Teradyne that rank equally with Teradyne's
existing and future unsecured and unsubordinated indebtedness. In the event of
a change in control by which Teradyne merges with or sells substantially all of
its assets to a third party, the holders of the Notes may be able to require
Teradyne to redeem some or all of the Notes either in discounted Teradyne
common stock or in cash.

Mortgage Notes Payable

   On December 19, 2001, Teradyne obtained a loan of approximately $45 million
in the form of a 7.5% mortgage loan maturing on January 1, 2007. This loan is
collateralized by certain Teradyne California real estate properties. Principal
payments are made according to a twenty-year amortization schedule through
December 2006, with the remaining principal due on January 1, 2007. Teradyne
began making monthly principal and interest payments of $0.4 million on
February 1, 2002.

                                      45

<PAGE>

                                TERADYNE, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

H.  DEBT--(Continued)

   In 1983, Teradyne obtained a loan of $4.5 million from the Boston
Redevelopment Authority in the form of a 3% mortgage loan maturing March 31,
2013. This loan is collateralized by Teradyne's property at 321 Harrison
Avenue, which may, at Teradyne's option, become subordinated to another
mortgage up to a maximum of $5.0 million. Interest for the first 4 1/2 years of
the loan was capitalized up to a principal amount of $5.0 million. Since
September 30, 1987, Teradyne has been making semi-annual interest payments.

Short-term Borrowings

   The weighted average interest rates on short-term borrowings outstanding as
of December 31, 2001 and 2000 was 1.2% for both years.

I.  GOODWILL AND INTANGIBLE AND OTHER ASSETS

   At December 31, 2001 and 2000, the goodwill and intangible and other assets
were:

<TABLE>
<CAPTION>
                                                                        2001     2000
                                                                      --------  -------
<S>                                                                   <C>       <C>
(In thousands)
Goodwill............................................................. $197,036  $55,409
Less accumulated amortization........................................   (6,760)  (2,736)
                                                                      --------  -------
Net goodwill......................................................... $190,276  $52,673
                                                                      ========  =======
Intangibles and other assets:
Completed technology................................................. $ 35,600       --
Service and software maintenance contracts and customer relationships    8,993  $ 3,693
Tradenames and trademarks............................................    3,800       --
Other intangibles assets.............................................    1,535    1,044
                                                                      --------  -------
Total intangibles....................................................   49,928    4,737
Less accumulated amortization........................................   (3,602)    (645)
                                                                      --------  -------
Total net intangible assets..........................................   46,326    4,092
Other assets.........................................................   40,344   25,635
                                                                      --------  -------
Net intangible and other assets...................................... $ 86,670  $29,727
                                                                      ========  =======
</TABLE>

J.  COMMITMENTS AND CONTINGENCIES

   Rental expense for the years ended December 31, 2001, 2000, and 1999 was
$26.0 million, $21.3 million, and $18.8 million, respectively.

   The following table reflects Teradyne's current non-cancelable operating
lease commitments:

<TABLE>
<CAPTION>
                                        Non-cancelable
                                            Lease
                                         Commitments
                                        --------------
                         <S>            <C>
                         (in thousands)
                         2002..........    $ 24,019
                         2003..........      20,417
                         2004..........      17,532
                         2005..........      14,754
                         2006..........      10,490
                         Beyond 2006...      34,442
                                           --------
                         Total.........    $121,654
</TABLE>

                                      46

<PAGE>

                                TERADYNE, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


J.  COMMITMENTS AND CONTINGENCIES--(Continued)

   In connection with the August 2000 acquisition of each of Herco Technology
Corp., a California company, and Perception Laminates, Inc., a California
company, a complaint was filed by the former owners of those companies on or
about September 5, 2001 naming as defendants Teradyne and two of its executive
officers. The case was originally filed in the Superior Court in San Diego
County, California, and was subsequently removed by the defendants to federal
court. An amended complaint was filed in the federal court on October 12, 2001.
On or about November 14, 2001, Teradyne and the two individual defendants filed
a motion to dismiss the amended complaint in its entirety. The federal court
granted in part and denied in part that motion to dismiss. The claims that were
dismissed were dismissed with prejudice. At the federal court's request, the
plaintiffs filed a second amended complaint on March 4, 2002 setting forth
their remaining claims. The second amended complaint alleges, among other
things, that the sale of Teradyne's common stock to the former owners violated
certain California securities statutes and common law, and that Teradyne
breached certain contractual obligations in the agreements relating to the
acquisitions. The amended complaint seeks unspecified damages, including
compensatory, consequential and punitive damages, and recovery of reasonable
attorneys' fees and costs. On March 25, 2002, Teradyne and the two individual
defendants filed their answer to the second amended complaint.

   Teradyne and two of its executive officers are named as defendants in three
purported class action complaints that were filed in the United States District
Court for the District of Massachusetts, Boston, Massachusetts, on or about
October 16, 2001, October 19, 2001 and November 7, 2001. The complaints allege,
among other things, that the defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, by making, during the period from July 14,
2000 and October 17, 2000, material misrepresentations and omissions to the
investing public regarding Teradyne's business operations and future prospects.
The complaints seek unspecified damages, including compensatory damages and
recovery of reasonable attorneys' fees and costs.

   Teradyne disputes all of the claims above and believes they are without
merit, and intends to defend vigorously against the lawsuits. However, an
adverse resolution of any of the lawsuits could have a material adverse effect
on Teradyne's financial position or results of operations. Teradyne is not
presently able to reasonably estimate potential losses, if any, related to any
of the lawsuits and therefore has not accrued for any potential losses from the
lawsuits.

   In addition, Teradyne is subject to legal proceedings and claims that arise
in the ordinary course of business. Management does not believe these actions
will have a material adverse effect on Teradyne's financial position or results
of operations.

   In 2001, Teradyne was designated as a "potentially responsible party"
("PRP") at two clean-up sites, one in California and one in Rhode Island.
Teradyne does not believe that it has any liability for the cleanup of the
California site and has requested the state of California to remove Teradyne's
name from the list of PRPs, however, Teradyne has not as yet received a reply.
In the opinion of management, the costs associated with complying with the
clean-up of this site, if required, are not expected to have a material effect
upon the financial position or results of operations of Teradyne. With respect
to the second site, in Rhode Island, additional information is currently being
collected to better understand Teradyne's financial obligations, if any, for
its portion of the clean-up of this site.

K.  NET INCOME (LOSS) PER COMMON SHARE

   The following table sets forth the computation of basic and diluted net
income (loss) per common share (in thousands, except per share amounts):

                                      47

<PAGE>

                                TERADYNE, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


K.  NET INCOME (LOSS) PER COMMON SHARE--(Continued)

<TABLE>
<CAPTION>
                                                                 2001       2000      1999
                                                               ---------  --------  --------
<S>                                                            <C>        <C>       <C>
(Loss) income before cumulative effect of change in accounting
  principle................................................... $(202,215) $517,754  $191,694
Cumulative effect of change in accounting principle...........        --   (64,138)       --
                                                               ---------  --------  --------
Net (loss) income............................................. $(202,215) $453,616  $191,694
                                                               =========  ========  ========
Shares used in (loss) income per common share--basic..........   175,828   173,312   170,519
Effect of dilutive securities:
Employee and director stock options...........................        --     7,293     7,540
Employee stock purchase rights................................        --       406       491
                                                               ---------  --------  --------
Dilutive potential common shares..............................        --     7,699     8,031
                                                               ---------  --------  --------
Shares used in (loss) income per common share--diluted........   175,828   181,011   178,550
                                                               =========  ========  ========
(Loss) income before cumulative effect of change in accounting
  principle per common share--basic........................... $   (1.15) $   2.99  $   1.12
Cumulative effect of change in accounting principle--basic.... $      --  $  (0.37) $     --
                                                               ---------  --------  --------
Net (loss) income per common share--basic..................... $   (1.15) $   2.62  $   1.12
                                                               =========  ========  ========
(Loss) income before cumulative effect of change in accounting
  principle per common share--diluted......................... $   (1.15) $   2.86  $   1.07
Cumulative effect of change in accounting principle--diluted.. $      --  $  (0.35) $     --
                                                               ---------  --------  --------
Net (loss) income per common share--diluted................... $   (1.15) $   2.51  $   1.07
                                                               =========  ========  ========
</TABLE>

   All options and equivalent shares related to the convertible notes
outstanding in 2001 were excluded from the calculation of diluted net loss per
share because the effect would have been antidilutive. As of December 31, 2001,
there were 16.4 million options outstanding. As of December 31, 2001, there
were 15.4 million equivalent shares related to the convertible notes shares
outstanding. For purposes of computing diluted earnings per share, weighted
average common share equivalents do not include stock options with an exercise
price that exceed the average fair market value of Teradyne's common stock.
Accordingly, options to purchase 1.5 million shares of common stock in 2000 and
0.1 million shares of common stock in 1999 were not included in the calculation
of diluted net income per share.

L.  INVENTORY PROVISIONS AND SPECIAL CHARGES

   The charges described below have been recorded as follows in the Statement
of Operations during 2001:

<TABLE>
<CAPTION>
                                                         Excess
                                                           and
                                              Workforce Obsolete    Asset    Vacated
                                              Reduction Inventory Impairment Leases   Total
                                              --------- --------- ---------- ------- --------
<S>                                           <C>       <C>       <C>        <C>     <C>
(In thousands)
Cost of sales - inventory provision and other
  charges....................................           $139,683   $16,999   $3,077  $159,759
Engineering and development..................                        1,339              1,339
Restructuring and other charges..............  $37,278              13,923    1,676    52,877
                                               -------  --------   -------   ------  --------
Total........................................  $37,278  $139,683   $32,261   $4,753  $213,975
                                               =======  ========   =======   ======  ========
</TABLE>


                                      48

<PAGE>

                                TERADYNE, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


L.  INVENTORY PROVISIONS AND SPECIAL CHARGES--(Continued)

   During 2001, Teradyne recorded charges of $37.3 million in connection with
workforce reductions and an early retirement program. The provision for
severance and early retirement benefits was recorded in restructuring charges
and related asset impairments. There were approximately 2,900 employees
terminated in 2001 across all functional groups. Teradyne has paid $23.8
million in severance benefits during 2001. All remaining severance benefits for
the terminations in 2001 will be paid by the fourth quarter of 2002.

   During 2001, Teradyne recorded a provision of $139.7 million for excess and
obsolete inventory and for discontinued product lines. The total inventory
provision for excess and obsolete inventory, excluding the discontinued product
lines, was $105.2 million in 2001 and was principally due to the sharp decline
in incoming Semiconductor Test Systems and Connection Systems orders. During
the third quarter of 2001, Teradyne recorded a charge of $40.2 million related
to the discontinuance of its Flash 750 memory product. The Flash 750 memory
product charge included an inventory writedown of $32.3 million and the
impairment of long-lived assets directly related to the support of the Flash
memory product line of $7.9 million. During the fourth quarter of 2001,
Teradyne recorded a charge of $2.3 million for obsolete inventory due to
overlapping product lines as a result of the consummation of the GenRad
acquisition.

   During the third and fourth quarters of 2001, management concluded that
certain Connection Systems long-lived assets held for disposal were impaired as
the estimated fair value was less than the carrying value of these assets. The
impaired assets charge included a $12.0 million writedown related to a
partially completed manufacturing facility held for sale and a writedown of
$12.4 million for certain manufacturing assets that were taken out of
operations and are held for disposal. Fair value of the impaired facility was
determined by a market appraisal.

   During the fourth quarter of 2001, Teradyne recorded charges for vacated
office space under operating leases at Connection Systems and Circuit Board
Test and Inspection Systems of $3.1 million and $1.7 million, respectively.

   The table below summarizes activity relating to restructuring and other
charges:

<TABLE>
<CAPTION>
                                         Lease
                                        Payments
                             Severance     on
                                and     Vacated    Impaired  Impaired
                             Benefits  Facilities Facilities  Assets   Total
                             --------- ---------- ---------- -------- --------
<S>                          <C>       <C>        <C>        <C>      <C>
                                               (in thousands)
2001 provision.............. $ 37,278    $1,676    $ 12,000  $ 1,923  $ 52,877
Cash payments...............  (23,755)       --          --       --   (23,755)
Non-cash charges............       --        --     (12,000)  (1,923)  (13,923)
                             --------    ------    --------  -------  --------
Balance at December 31, 2001 $ 13,523    $1,676    $     --  $    --  $ 15,199
                             ========    ======    ========  =======  ========
</TABLE>

   The accrual for severance and benefits is reflected in accrued employees'
compensation and withholdings and the accrual for lease payments on vacated
facilities is reflected in other accrued liabilities.

M.  RETIREMENT PLANS

   Teradyne has defined benefit pension plans covering a majority of domestic
employees and employees of certain non U.S. subsidiaries. Benefits under these
plans are based on employees' years of service and compensation. Teradyne's
funding policy is to make contributions to the plans in accordance with local
laws and to the extent that such contributions are tax deductible. The assets
of these plans consist primarily of equity and fixed income securities. In
addition, Teradyne has an unfunded supplemental executive defined benefit plan
in the United States to provide retirement benefits in excess of levels allowed
by the Employment Retirement Income Security Act (ERISA) and the Internal
Revenue Code (the "IRC").

                                      49

<PAGE>

                                TERADYNE, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


M.  RETIREMENT PLANS--(Continued)

   During the fourth quarter of 1999, Teradyne offered all eligible domestic
employees participating in the U.S. plan a choice: to continue to have benefits
accumulate in the U.S. plan and continue to be eligible for the then current
Savings Plan match described in "Note P: Savings Plans" or to stop accumulating
benefits in the U.S plan and be eligible for an increased match in the Savings
Plan. The accrued benefit of those employees who selected the enhanced Savings
Plan match was frozen on January 1, 2000 resulting in an insignificant
curtailment gain.

   The expense of these defined benefit pension plans and the December 31
balances of plan assets and obligations are shown below (in thousands):

<TABLE>
<CAPTION>
                                                     2001     2000     1999
                                                   --------  -------  -------
 <S>                                               <C>       <C>      <C>
 EXPENSE
 Service cost..................................... $  6,369  $ 6,365  $ 7,874
 Interest cost....................................   10,210    8,972    8,247
 Expected return on plan assets...................  (10,029)  (8,589)  (7,394)
 Amortization of unrecognized:
   Net transition obligation......................       74       89      102
   Prior service cost.............................      766      843      612
   Net loss.......................................      264      206    1,592
 Curtailment loss (gain) / employee contributions.    2,402      (89)     (87)
                                                   --------  -------  -------
 Total expense.................................... $ 10,056  $ 7,797  $10,946
                                                   ========  =======  =======

                                                     2001     2000     1999
                                                   --------  -------  -------
 WEIGHTED AVERAGE ASSUMPTIONS
 Discount rate....................................      7.0%     7.5%     8.0%
 Expected return on plan assets...................      9.0      9.0      9.0
 Salary progression rate..........................      5.0      5.0      5.0
</TABLE>
<TABLE>
<CAPTION>

                                                    2001      2000
                  ASSETS AND OBLIGATIONS          --------  --------
          <S>                                     <C>       <C>
          Projected benefit obligation:
            Beginning of year.................... $139,472  $124,546
            Service cost.........................    6,369     6,365
            Interest cost........................   10,210     8,972
            Actuarial (gain) loss................   15,329     3,859
            Benefits paid........................   (4,171)   (3,372)
            Plan amendment.......................      212       623
            Curtailment..........................     (947)       --
            GenRad acquisition...................   15,695        --
            Non U.S. currency movement...........   (1,120)   (1,521)
                                                  --------  --------
            End of year..........................  181,049   139,472
          Fair value of plan assets:
            Beginning of year....................  114,512   111,535
            Company contributions ...............    6,050     9,445
            Plan participants' contributions.....       71        79
            Actual return........................  (10,964)   (2,285)
            Benefits paid........................   (4,171)   (3,372)
            GenRad acquisition...................   10,365        --
            Non U.S. currency movement...........     (646)     (890)
                                                  --------  --------
          End of year............................  115,217   114,512
                                                  --------  --------

          Funded status..........................  (65,832)  (24,960)
          Unrecognized prior service cost........    5,315     7,110
          Unrecognized net transition obligation.      306       470
          Unrecognized net actuarial (gain) loss.   43,261     8,597
                                                  --------  --------
          Net amount recognized.................. $(16,950) $ (8,783)
                                                  ========  ========
</TABLE>

                                      50

<PAGE>

                                TERADYNE, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


M.  RETIREMENT PLANS--(Continued)

   The impact of the GenRad acquisition and an early retirement program
increased the projected benefit obligation by $15.9 million. GenRad had its own
retirement plan for its employees which was merged into Teradyne's plan during
2001. In the third quarter of 2001, Teradyne provided certain employees the
option to retire early.

   The following table provides amounts recognized in the statement of
financial position as of December 31, (in thousands):

<TABLE>
<CAPTION>
                                                   2001      2000
                                                 --------  --------
            <S>                                  <C>       <C>
            Prepaid pension cost................ $    926  $  3,162
            Accrued benefit liability...........  (17,876)  (11,945)
            Additional minumum pension liability  (22,228)       --
            Intangible asset....................    4,022        --
            Accumulated other comprehensive loss   18,206        --
                                                 --------  --------
            Net amount recognized............... $(16,950) $ (8,783)
                                                 ========  ========
</TABLE>

   The projected benefit obligation, accumulated benefit obligation, and fair
value of plan assets for pension plans with accumulated benefit obligations in
excess of plan assets for 2001 and 2000 were as follows:

<TABLE>
<CAPTION>
                                                                                     2001   2000
                                                                                    ------  -----
<S>                                                                                 <C>     <C>
                                                                                    (In millions)
Projected benefit obligation....................................................... $181.0  $22.2
Accumulated benefit obligation.....................................................  154.8   14.3
Fair value of plan assets for pension plans with accumulated benefit obligations in
  excess of plan assets............................................................ $115.2  $ 3.7
</TABLE>

   An additional minimum pension liability adjustment of $22 million was
required during 2001 as the accumulated benefit obligation of $155 million
exceeded the $115 million of pension plan assets at year end. The $40 million
difference was reduced by an accrued benefit liability of $18 million resulting
in an additional minimum pension liability of $22 million.

N.  COMMON STOCK REPURCHASE PROGRAM

   Teradyne's Board of Directors has authorized the repurchase of 30.0 million
shares of Teradyne's stock on the open market. During 1999, Teradyne
repurchased 5.6 million shares at a cost of $207.8 million. During 2000,
Teradyne repurchased 3.8 million shares at a cost of $147.5 million, increasing
the cumulative shares purchased under this program through 2000 to 20.0 million
shares at an aggregate cost of $540.8 million. During 2001, Teradyne did not
repurchase any stock. Teradyne records treasury stock at its acquisition cost.

O.  STOCK BASED COMPENSATION

   Teradyne has both employee and non-employee stock option plans and an
employee stock purchase plan. Teradyne previously adopted the disclosure
requirements of SFAS No. 123, "Accounting for Stock-Based Compensation"
(SFAS 123), and as permitted by this standard, will continue to apply
Accounting Principles Board (APB) Opinion 25 and related interpretations in
accounting for its plans. Teradyne is required to disclose the pro forma net
income and net income per common share amounts as if compensation costs for
Teradyne's

                                      51

<PAGE>

                                TERADYNE, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

O.  STOCK BASED COMPENSATION--(Continued)

stock based compensation plans had been determined based on the fair value at
the grant dates for awards under those plans. Had compensation expense for the
stock based compensation plans been accounted for at fair value according to
SFAS 123, amounts reported in the Statement of Operations for 2001, 2000, and
1999, respectively would have been:

<TABLE>
<CAPTION>
                                                                           2001     2000   1999
                                                                          -------  ------ ------
<S>                                                                       <C>      <C>    <C>
(Loss) income before cumulative effect of change in accounting principle. ($275.7) $458.0 $153.6
(Loss) income before cumulative effect of change in accounting principle
  per common share--basic................................................ ($ 1.57) $ 2.64 $ 0.90
(Loss) income before cumulative effect of change in accounting principle
  per common share--diluted.............................................. ($ 1.57) $ 2.53 $ 0.86
</TABLE>

Stock Option Plans

   Under its stock option plans, all of which are fixed accounting plans,
Teradyne granted options to directors, officers, certain employees, and other
individuals entitling them to purchase common stock at 100% of the fair market
value on the date of grant. Options granted to employees prior to 2001 vest in
equal installments over four years and have a maximum term of five years.
Beginning in September 2001 options granted to employees also vest in equal
installments over four years but have a maximum term of seven years. In 2001,
Teradyne had a one-time option grant for all employees that vests over two
years and has a term of seven years.

   Stock option plan activity for the years 2001, 2000, and 1999 follows (in
thousands):

<TABLE>
<CAPTION>
                                                2001    2000    1999
                                               ------  ------  ------
         <S>                                   <C>     <C>     <C>
         Outstanding at January 1............. 22,745  19,225  21,548
             Options granted.................. 10,289   7,905   5,631
             Options exercised................ (2,766) (3,217) (7,272)
             Options canceled.................   (518) (1,168)   (682)
                                               ------  ------  ------
         Outstanding at December 31........... 29,750  22,745  19,225
                                               ======  ======  ======
         Exercisable at December 31........... 13,545   8,758   6,355
                                               ======  ======  ======
         Available for grant at December 31... 29,841   7,130  13,867
                                               ======  ======  ======
</TABLE>

   Weighted average option exercise price information for the years 2001, 2000
and 1999 follows:

<TABLE>
<CAPTION>
                                              2001   2000   1999
                                             ------ ------ ------
               <S>                           <C>    <C>    <C>
               Outstanding at January 1..... $22.79 $16.44 $ 9.73
                   Options granted.......... $23.33 $34.73 $32.13
                   Options exercised........ $10.89 $11.49 $ 9.03
                   Options canceled......... $32.15 $30.62 $12.68
               Outstanding at December 31... $25.28 $22.79 $16.44
               Exercisable at December 31... $24.94 $16.71 $12.59
</TABLE>

                                      52

<PAGE>

                                TERADYNE, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


O.  STOCK BASED COMPENSATION--(Continued)

   Significant option groups outstanding at December 31, 2001 and related
weighted average price and remaining contractual life information follows
(options in thousands):

<TABLE>
<CAPTION>
                                 Options Outstanding            Options Exercisable
                         ------------------------------------ -----------------------
                           Weighted
                           Average
                          Remaining
                         Contractual         Weighted-Average        Weighted-Average
Range Of Exercise Prices Life (Years) Shares  Exercise Price  Shares  Exercise Price
- ------------------------ ------------ ------ ---------------- ------ ----------------
<S>                      <C>          <C>    <C>              <C>    <C>
   $ 3.82 - $20.94......     1.62      7,756      $11.29       5,632      $11.24
   $21.65...............     6.67      8,177      $21.65       1,722      $21.65
   $23.09 - $32.13......     3.77     11,280      $29.33       4,692      $29.84
   $32.78 - $173.11.....     5.11      2,537      $61.74       1,499      $64.86
                                      ------                  ------
   Total................     4.12     29,750      $25.28      13,545      $24.94
                                      ======                  ======
</TABLE>

   The weighted average grant date fair value for options granted during 2001,
2000 and 1999 was $11.90, $15.34 and $16.21 per option, respectively. The fair
value of options at date of grant was estimated using the Black-Scholes option
pricing model with the following weighted average assumptions:

<TABLE>
<CAPTION>
                                           2001  2000  1999
                                           ----  ----  ----
                    <S>                    <C>   <C>   <C>
                    Expected life (years).  4.3   4.2   4.1
                    Interest rate.........  3.7%  5.7%  6.1%
                    Volatility............ 67.0% 63.7% 56.7%
                    Dividend yield........  0.0%  0.0%  0.0%
</TABLE>

Employee Stock Purchase Plan

   Under the Teradyne Employee Stock Purchase Plan, eligible employees may
purchase shares of common stock through regular payroll deductions of up to 10%
of their compensation. The price paid for the common stock is equal to 85% of
the lower of the fair market value of Teradyne's common stock on the first
business day in January (July for new hires) or the last business day of
December. In January 2002, Teradyne issued 0.9 million shares of common stock
to employees who participated in the plan during 2001 at a weighted-average
price of $25.60 per share. Currently, there are 0.4 million shares reserved for
issuance.

   The weighted-average fair value of employee stock purchase rights granted in
2001, 2000 and 1999 was $12.56, $17.98 and $8.18, respectively. The fair value
of the employees' purchase rights was estimated using the Black-Scholes option
pricing model with the following assumptions for 2001, 2000 and 1999,
respectively:

<TABLE>
<CAPTION>
                                           2001  2000  1999
                                           ----  ----  ----
                    <S>                    <C>   <C>   <C>
                    Expected life (years).  1.0   1.0   1.0
                    Interest rate.........  2.2%  6.0%  4.5%
                    Volatility............ 67.0% 81.5% 58.4%
                    Dividend yield........  0.0%  0.0%  0.0%
</TABLE>

                                      53

<PAGE>

                                TERADYNE, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


P.  SAVINGS PLANS

   Teradyne sponsors an employee retirement Savings Plan covering substantially
all U.S. employees. Under Teradyne's savings plan, employees may contribute up
to 15% of their compensation (subject to Internal Revenue Service limitations).
For employees that elected in 1999 to continue to accrue benefits under
Teradyne's defined benefit plan, as described in "Note M: Retirement Plans,"
Teradyne annually matches employee contributions up to 6% of such compensation
at rates ranging from 50% to 100%. Employees that elected in 1999 to stop
accruing benefits under Teradyne's defined benefit plan, as described in "Note
M: Retirement Plans," are eligible for an increased Teradyne match of 100% to
150% on employee contributions up to 5% of compensation. Teradyne's
contributions vest after two years, although contributions for those employees
with five years of service vest immediately. Teradyne has also established an
unfunded Supplemental Savings Plan to provide savings benefits in excess of
those allowed by ERISA and the IRC. The provisions of this plan are the same as
the Savings Plan. Under Teradyne's savings plans, amounts charged to operations
were $14.6 million in 2001, $16.6 million in 2000, and $9.8 million in 1999.

Q.  STOCKHOLDER RIGHTS PLAN

   Teradyne's Board of Directors adopted a Stockholder Rights Plan on November
16, 2000, under which a dividend of one Common Stock Purchase Right (each a
"Right") was distributed for each outstanding share of Common Stock. The plan
entitles Right holders to purchase shares of Teradyne's common stock for $540
per share subject to adjustment (the "Purchase Price") in certain events, such
as a tender offer to acquire 20% or more of Teradyne's outstanding shares.
Under some circumstances, such as a determination by continuing Directors that
an acquiring party's interests are adverse to those of Teradyne, the Plan
entitles such holders (other than an acquiring party or adverse party) to
purchase Common Stock (or other securities or consideration owned by Teradyne)
having a value equal to two times the Purchase Price of the Right for the
Purchase Price. The Rights expire on November 27, 2010.

R.  INCOME TAXES

   The components of (loss) income before income taxes and the (benefit)
provision for income taxes as shown in the consolidated statements of income
are as follows (in thousands)

<TABLE>
<CAPTION>
                                                                       2001       2000      1999
                                                                     ---------  --------  --------
<S>                                                                  <C>        <C>       <C>
(Loss) income before income taxes and cumulative effect of change in
  accounting principle:
   United States.................................................... $(324,800) $655,103  $239,453
   Non U.S..........................................................    (1,353)   84,545    34,396
                                                                     ---------  --------  --------
                                                                     $(326,153) $739,648  $273,849
                                                                     =========  ========  ========
Provision (credit) for income taxes:
 Current:
   U.S. Federal..................................................... $ (90,149) $182,202  $ 65,104
   Non U.S..........................................................    (3,093)   29,393    14,296
   State............................................................       751    19,703     6,856
                                                                     ---------  --------  --------
                                                                       (92,491)  231,298    86,256
                                                                     ---------  --------  --------
 Deferred:
   U.S. Federal.....................................................   (24,739)   (4,529)     (184)
   Non U.S..........................................................        43    (3,172)   (3,461)
   State............................................................    (6,751)   (1,703)     (456)
                                                                     ---------  --------  --------
                                                                       (31,447)   (9,404)   (4,101)
                                                                     ---------  --------  --------
                                                                     $(123,938) $221,894  $ 82,155
                                                                     =========  ========  ========
</TABLE>

                                      54

<PAGE>

                                TERADYNE, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


R.  INCOME TAXES--(Continued)

   Significant components of Teradyne's deferred tax assets (liabilities) as of
December 31, 2001 and 2000 are as follows (in thousands):

<TABLE>
<CAPTION>
                                                     2001      2000
                                                   --------  --------
          <S>                                      <C>       <C>
          Deferred tax assets:
             Net operating loss carryforwards..... $ 45,728  $    592
             Tax credits..........................   33,922     9,686
             Inventory valuations.................   31,669    13,494
             Accruals.............................   24,565    23,495
             Research and development.............   19,821     2,898
             Vacation.............................    6,141     9,211
             Deferred revenue.....................    5,391    32,088
             Other................................   14,955     2,494
                                                   --------  --------
          Total deferred tax assets...............  182,192    93,958
                                                   --------  --------
          Deferred tax liabilities:
             Excess of tax over book depreciation.  (17,012)  (16,509)
             Amortization.........................  (16,218)     (916)
             Pension..............................   (1,102)   (3,572)
             Other................................   (2,534)     (260)
                                                   --------  --------
          Total deferred tax liabilities..........  (36,866)  (21,257)
                                                   --------  --------
          Net deferred asset...................... $145,326  $ 72,701
                                                   ========  ========
</TABLE>

   At December 31, 2001 Teradyne had U.S. Federal operating loss carryforwards
of approximately $113.5 million primarily due to the operating loss
carryforwards related to the GenRad acquisition that expire in the years 2003
through 2020, state operating loss carryforwards of $88.5 million that expire
in the years 2006 through 2021, and foreign operating loss carryforwards of
$9.6 million. These losses are limited in their use by "change in ownership"
rules as defined in the Internal Revenue Code of 1986.

   Teradyne believes that it is more likely than not that its net deferred tax
assets will be realized.

   Teradyne has approximately $33.9 million of tax credit carryforwards that
expire in years 2003 through 2019. Business tax credits of approximately $24.1
million expire in the years 2003 through 2019. Foreign tax credits of
approximately $7.7 million expire in the years 2005 through 2006. Alternative
minimum tax credits of $2.1 million do not expire.

   A reconciliation of the effective tax rate for the years 2001, 2000, and
1999 follows:

<TABLE>
<CAPTION>
                                                      2001    2000  1999
                                                      -----   ----  ----
       <S>                                            <C>     <C>   <C>
       U.S. statutory federal tax rate............... (35.0)% 35.0% 35.0%
       State income taxes, net of federal tax benefit  (1.8)   1.6   1.5
       Tax credits...................................    --   (0.8) (1.3)
       Export sales corporation......................  (0.7)  (4.8) (4.7)
       Other, net....................................  (0.5)  (1.0) (0.5)
                                                      -----   ----  ----
                                                      (38.0)% 30.0% 30.0%
                                                      =====   ====  ====
</TABLE>

   U.S. federal taxes have not been provided for approximately $63.1 million,
$59.0 million, and $30.0 million of cumulative undistributed earnings of a
non-U.S. manufacturing subsidiary in 2001, 2000, and 1999, respectively.
Teradyne intends to reinvest these earnings indefinitely in operations outside
the US.

                                      55

<PAGE>

                                TERADYNE, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


S.  OPERATING SEGMENT AND GEOGRAPHIC INFORMATION

   Teradyne has four principal operating segments which are the design,
manufacturing and marketing of Semiconductor Test Systems, Connection Systems,
Circuit Board Test and Inspection Systems, and Other Test Systems. These
operating segments were determined based upon the nature of the products and
services offered. The Other Test Systems segment in 2001 is comprised of
Broadband Test Systems and Diagnostic Solutions. In 2000 and 1999, the Other
Test Systems segment is comprised of Broadband Test Systems and Software Test
Systems.

   Teradyne evaluates performance based on several factors, of which the
primary financial measure is business segment income before taxes. The
accounting policies of the business segments are the same as those described in
"Note B: Accounting Policies." Intersegment sales are accounted for at fair
value as if sales were to third parties. During 2001 and 2000 no individual
customer accounted for more than 10% of consolidated net sales. During 1999,
principally all of Teradyne's operating segments reported sales to one customer
accounting for a total of 11% of consolidated net sales.

<TABLE>
<CAPTION>
                                            Circuit
                                             Board
                                             Test &
                  Semiconductor Connection Inspection Other Test  Corporate     SAB 101
                  Test Systems   Systems    Systems    Systems       And      Adjustments
                     Segment     Segment    Segment    Segment   Eliminations     (4)     Consolidated
                  ------------- ---------- ---------- ---------- ------------ ----------- ------------
<S>               <C>           <C>        <C>        <C>        <C>          <C>         <C>
2001
 Sales to
   unaffiliated
   customers.....  $  717,655    $540,755   $132,448   $ 49,723          --         --     $1,440,581
 Intersegment
   sales.........          --       4,119         --         --     ($4,119)        --             --
                   ----------    --------   --------   --------   ---------     ------     ----------
 Net sales.......     717,655     544,874    132,448     49,723      (4,119)        --      1,440,581
 Income (loss)
   before taxes
   (1)...........    (231,869)    (12,477)   (38,505)    (2,880)    (40,422)        --       (326,153)
 Total assets (2)     643,412     417,296    353,605     56,455   1,071,623         --      2,542,391
 Property
   additions (3).      82,307     103,416      2,605      1,760      51,361         --        241,449
 Depreciation and
   amortization
   expense (3)...      56,014      55,588      6,881      2,314      17,871         --        138,668
2000
 Sales to
   unaffiliated
   customers.....  $2,044,330    $734,642   $141,208   $124,133          --      ($367)    $3,043,946
 Intersegment
   sales.........          --      29,294         --         --    ($29,294)        --             --
                   ----------    --------   --------   --------   ---------     ------     ----------
 Net sales.......   2,044,330     763,936    141,208    124,133     (29,294)      (367)     3,043,946
 Income (loss)
   before taxes
   (1)...........     675,315     155,040      1,761        415     (92,729)      (154)       739,648
 Total assets (2)     920,629     511,083     86,161     19,174     780,926     37,895      2,355,868
 Property
   additions (3).     119,705      92,403      4,878      4,394      76,862         --        298,242
 Depreciation and
   amortization
   expense (3)...      47,497      33,118      3,357      2,906      14,984         --        101,862
</TABLE>

                                      56

<PAGE>

                                 TERADYNE, INC

            NOTES TO FINANCIAL CONSOLIDATED STATEMENT--(Continued)



S.   OPERATING SEGMENT AND GEOGRAPHIC INFORMATION--(Continued)
<TABLE>
<CAPTION>
                                                 Circuit
                                                  Board
                                                  Test &    Other
                       Semiconductor Connection Inspection  Test     Corporate     SAB 101
                       Test Systems   Systems    Systems   Systems      And      Adjustments
                          Segment     Segment    Segment   Segment  Eliminations     (4)     Consolidated
                       ------------- ---------- ---------- -------  ------------ ----------- ------------
<S>                    <C>           <C>        <C>        <C>      <C>          <C>         <C>
1999
 Sales to unaffiliated
   customers..........  $1,210,543    $373,051   $118,599  $88,719          --         --     $1,790,912
 Intersegment
   sales..............          --      15,069         --       --    ($15,069)        --             --
                        ----------    --------   --------  -------    --------     ------     ----------
 Net sales............   1,210,543     388,120    118,599   88,719     (15,069)        --      1,790,912
 Income (loss) before
   taxes (1)..........     287,960      63,249     (5,205)  (9,093)    (63,062)        --        273,849
 Total assets (2).....     564,536     219,763     56,481   37,615     686,656         --      1,565,051
 Property
   additions (3)......      47,054      38,500      5,608    2,885      57,109         --        151,156
 Depreciation
   and amortization
   expense (3)........      32,086      18,567      5,139    3,218      27,376         --         86,386
</TABLE>

(1) Income before taxes of the principal businesses exclude the effects of
    employee profit sharing, management incentive compensation, other
    unallocated expenses, and net interest and other income.

(2) Total business assets are directly attributable to each business. Corporate
    assets consist of cash and cash equivalents, marketable securities,
    unallocated fixed assets of support divisions and common facilities and
    certain other assets.

(3) Corporate property additions and depreciation and amortization expense
    include items attributable to the unallocated fixed assets of support
    divisions and common facilities.

(4) Corporate adjustment reflects the impact of SAB 101 on sales, income before
    taxes, and total assets in 2000. During the fourth quarter of 2000 Teradyne
    implemented SAB 101. Segments reflect their results before the change in
    accounting principle.

   Information as to Teradyne's sales in different geographical areas is as
follows (in thousands):

<TABLE>
<CAPTION>
                                             2001       2000       1999
                                          ---------- ---------- ----------
     <S>                                  <C>        <C>        <C>
     Sales to unaffiliated customers (1):
        United States. .................. $  735,264 $1,407,110 $  859,638
        Europe...........................    261,675    425,694    268,637
        South East Asia. ................    169,539    626,060    359,430
        Taiwan...........................    150,277    306,611    147,876
        Japan............................     60,353    119,883     89,546
        Korea. ..........................     14,012     88,833     12,058
        Other............................     49,461     69,755     53,727
                                          ---------- ---------- ----------
                                          $1,440,581 $3,043,946 $1,790,912
                                          ========== ========== ==========
</TABLE>
- --------

(1) Sales are attributable to geographic areas based on location of customer
    site.

   Because a substantial portion of Teradyne's sales are derived from the sales
of product manufactured in the United States, long-lived assets located outside
the United States are less than 10% of total assets.

                                      57

<PAGE>

                           SUPPLEMENTARY INFORMATION
                                  (Unaudited)

   The following sets forth certain unaudited consolidated quarterly statements
of operations data for each of Teradyne's last eight quarters. In management's
opinion, this quarterly information reflects all adjustments, consisting only
of normal recurring adjustments, necessary for a fair statement for the periods
presented. Such quarterly results are not necessarily indicative of future
results of operations and should be read in conjunction with the audited
consolidated financial statements of Teradyne and the notes thereto included
elsewhere herein.

<TABLE>
<CAPTION>
                                                                            2001
                                                          ----------------------------------------
                                                            1st       2nd        3rd        4th
                                                          Quarter   Quarter    Quarter    Quarter
                                                          --------  --------  ---------  ---------
<S>                                                       <C>       <C>       <C>        <C>
Net sales................................................ $605,189  $365,823  $ 249,355  $ 220,214
Expenses:
  Cost of sales..........................................  355,298   259,477    205,292    201,982
  Cost of sales - inventory provision and other charges..   13,716    37,945     53,528     54,570
  Engineering and development............................   83,570    71,029     66,006     68,052
  Selling and administrative.............................   73,286    65,908     59,928     70,962
  Restructuring and other charges........................    5,705     3,356     34,475      9,341
                                                          --------  --------  ---------  ---------
                                                           531,575   437,715    419,229    404,907
                                                          --------  --------  ---------  ---------
Income (loss) from operations............................   73,614   (71,892)  (169,874)  (184,693)
Interest income..........................................    6,194     5,149      4,553      6,847
Interest expense.........................................     (244)     (296)      (286)    (3,265)
Other income and expense, net............................   (2,480)   12,918     (1,914)      (484)
                                                          --------  --------  ---------  ---------
Income (loss) before income taxes........................   77,084   (54,121)  (167,521)  (181,595)
Provision (benefit) for income taxes.....................   23,125   (13,940)   (64,117)   (69,006)
                                                          --------  --------  ---------  ---------
Net income (loss)........................................ $ 53,959  $(40,181) $(103,404) $(112,589)
                                                          ========  ========  =========  =========
Net income (loss) per common share -- basic.............. $   0.31  $  (0.23) $   (0.59) $   (0.63)
                                                          ========  ========  =========  =========
Net income (loss) per common share -- diluted............ $   0.30  $  (0.23) $   (0.59) $   (0.63)
                                                          ========  ========  =========  =========
</TABLE>

                                      58

<PAGE>

                    SUPPLEMENTARY INFORMATION--(Continued)
                                  (Unaudited)


<TABLE>
<CAPTION>
                                                                                2000
                                                               --------------------------------------
                                                                 1st       2nd       3rd       4th
                                                               Quarter   Quarter   Quarter   Quarter
                                                               --------  --------  --------  --------
<S>                                                            <C>       <C>       <C>       <C>
Net sales..................................................... $615,358  $747,458  $859,478  $821,652
Expenses:
  Cost of sales...............................................  324,896   388,254   441,855   452,369
  Engineering and development.................................   79,510    85,165    91,126    92,223
  Selling and administrative..................................   82,059    95,729    99,107   100,888
                                                               --------  --------  --------  --------
                                                                486,465   569,148   632,088   645,480
                                                               --------  --------  --------  --------
Income from operations........................................  128,893   178,310   227,390   176,172
Interest income...............................................    4,962     6,235     6,641     7,268
Interest expense..............................................     (425)     (412)     (570)     (434)
Other income and expense, net.................................       --        --        --     5,618
                                                               --------  --------  --------  --------
Income before income taxes and cumulative effect of change in
  accounting principle........................................  133,430   184,133   233,461   188,624
Provision for income taxes....................................   40,029    55,240    70,038    56,587
                                                               --------  --------  --------  --------
Income before cumulative effect of change in accounting
  principle...................................................   93,401   128,893   163,423   132,037
Cumulative effect of change in accounting principle...........  (64,138)       --        --        --
                                                               --------  --------  --------  --------
Net income.................................................... $ 29,263  $128,893  $163,423  $132,037
                                                               ========  ========  ========  ========
Income before cumulative effect of change in accounting
  principle per common share -- basic......................... $   0.54  $   0.74  $   0.94  $   0.76
                                                               ========  ========  ========  ========
Cumulative effect of change in accounting principle per common
  share -- basic.............................................. $  (0.37) $     --  $     --  $     --
                                                               ========  ========  ========  ========
Net income per common share -- basic.......................... $   0.17  $   0.74  $   0.94  $   0.76
                                                               ========  ========  ========  ========
Income before cumulative effect of change in accounting
  principle per common share -- diluted....................... $   0.52  $   0.71  $   0.90  $   0.74
                                                               ========  ========  ========  ========
Cumulative effect of change in accounting principle per common
  share -- diluted............................................ $  (0.35) $     --  $     --  $     --
                                                               ========  ========  ========  ========
Net income per common share -- diluted........................ $   0.16  $   0.71  $   0.90  $   0.74
                                                               ========  ========  ========  ========
</TABLE>

Item 9:  Changes and disagreements with accountants on accounting and financial
disclosure

   None.

                                      59

<PAGE>

                                   PART III

Item 10:  Directors and executive officers of the registrant.

   Certain information relating to directors and executive officers of
Teradyne, executive compensation, security ownership of certain beneficial
owners and management, and certain relationships and related transactions is
incorporated by reference herein from Teradyne's definitive proxy statement in
connection with its Annual Meeting of Shareholders to be held on May 23, 2002,
which proxy statement will be filed with the Securities and Exchange Commission
not later than 120 days after the close of the fiscal year. For this purpose,
the Management Compensation and Development Committee Report and Performance
Graph included in such proxy statement are specifically not incorporated
herein. (Also see "Item 1 -- Executive Officers of the Company" elsewhere in
this report.)

Item 11:  Executive compensation.

   Certain information relating to directors and executive officers of
Teradyne, executive compensation, security ownership of certain beneficial
owners and management, and certain relationships and related transactions is
incorporated by reference herein from Teradyne's definitive proxy statement in
connection with its Annual Meeting of Shareholders to be held on May 23, 2002,
which proxy statement will be filed with the Securities and Exchange Commission
not later than 120 days after the close of the fiscal year. For this purpose,
the Management Compensation and Development Committee Report and Performance
Graph included in such proxy statement are specifically not incorporated herein.

Item 12:  Security ownership of certain beneficial owners and management.

   Certain information relating to directors and executive officers of
Teradyne, executive compensation, security ownership of certain beneficial
owners and management, and certain relationships and related transactions is
incorporated by reference herein from Teradyne's definitive proxy statement in
connection with its Annual Meeting of Shareholders to be held on May 23, 2002,
which proxy statement will be filed with the Securities and Exchange Commission
not later than 120 days after the close of the fiscal year. For this purpose,
the Management Compensation and Development Committee Report and Performance
Graph included in such proxy statement are specifically not incorporated herein.

Item 13:  Certain relationships and related transactions.

   Certain information relating to directors and executive officers of
Teradyne, executive compensation, security ownership of certain beneficial
owners and management, and certain relationships and related transactions is
incorporated by reference herein from Teradyne's definitive proxy statement in
connection with its Annual Meeting of Shareholders to be held on May 23, 2002,
which proxy statement will be filed with the Securities and Exchange Commission
not later than 120 days after the close of the fiscal year. For this purpose,
the Management Compensation and Development Committee Report and Performance
Graph included in such proxy statement are specifically not incorporated herein.

                                      60

<PAGE>

                                    PART IV

Item 14:  Exhibits, Financial Statement Schedules And Reports On Form 8-K.

(a) 1.  Financial Statements

   The following consolidated financial statements are included in Item 8:

       Report of Independent Accountants Balance Sheets as of December 31, 2001
       and 2000 Statements of Operations for the years ended December 31, 2001,
       2000, and 1999
      Statements of Shareholders' Equity for the years ended December 31, 2001,
   2000, and 1999
      Statements of Cash Flows for the years ended December 31, 2001, 2000, and
   1999

(a) 2.  Financial Statement Schedules

   The following consolidated financial statement schedule is included in Item
14(d):

      Schedule II -- Valuation and Qualifying Accounts

      Schedules other than those listed above have been omitted since they are
   either not required or information is otherwise included.

(a) 3.  Listing Of Exhibits

   The Exhibits which are filed with this report or which are incorporated by
reference herein are set forth in the Exhibit Index.

(b) Reports On Form 8-K

   A Current Report on Form 8-K dated October 18, 2001, was filed with the
Securities and Exchange Commission on October 18, 2001 relating to (i)
Teradyne's third quarter financial results and its interim financial statements
and (ii) two legal complaints filed against Teradyne.

   A Current Report on Form 8-K dated October 19, 2001, was filed with the
Securities and Exchange Commission on October 19, 2001 relating to (i)
Teradyne's intent to offer Convertible Senior Notes due 2006 in a private
placement and (ii) the pricing terms of the offering.

   A Current Report on Form 8-K dated October 24, 2001, was filed with the
Securities and Exchange Commission on October 24, 2001 relating to Teradyne's
completion of its offering of Convertible Senior Notes due 2006 in a private
placement.

                                      61

<PAGE>

Item 14(d)  Financial Statement Schedules

                                TERADYNE, INC.

               SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>
                     Column A                         Column B        Column C         Column D  Column E
                     --------                         --------  ---------------------  --------  --------
                                                                      Additions
                                                                ---------------------
                                                     Balance at Charged to Charged to             Balance
                                                     Beginning   Cost and    Other               at End of
                    Description                      of Period   Expenses   Accounts  Deductions  Period
                    -----------                      ---------- ---------- ---------- ---------- ---------
                                                                    (thousands of dollars)
<S>                                                  <C>        <C>        <C>        <C>        <C>
Valuation reserve deducted in the balance sheet from
  the asset to which it applies:
Accounts receivable:
 2001 Allowance for doubtful accounts...............   $5,176     $1,192      $ --       $ 74     $6,294
                                                       ======     ======      ====       ====     ======
 2000 Allowance for doubtful accounts...............   $4,410     $1,337      $ --       $571     $5,176
                                                       ======     ======      ====       ====     ======
 1999 Allowance for doubtful accounts...............   $2,395     $1,407      $804       $196     $4,410
                                                       ======     ======      ====       ====     ======
</TABLE>

                                      62

<PAGE>

                                 EXHIBIT INDEX

   The following designated exhibits are, as indicated below, either filed
herewith or have heretofore been filed with the Securities and Exchange
Commission and are referred to and incorporated by reference to such filings.

<TABLE>
<CAPTION>
Exhibit
  No.                    Description                                SEC Document Reference
  ---                    -----------                                ----------------------
<C>     <S>                                            <C>
  3.1   Restated Articles of Organization of the       Exhibit 3.01 to the Company's Quarterly Report on
          Company, as amended                            Form 10-Q for the quarter ended July 2, 2000.
  3.2   Amended and Restated Bylaws of the Company     Exhibit 3.3 to the Company's Annual Report on
                                                         Form 10-K for the fiscal year ended
                                                         December 31, 1996.
  4.1   Rights Agreement between the Company and       Exhibit 4.1 to the Company's Form 8-K filed
          Fleet National Bank dated as of November 17,   November 20, 2000.
          2000
  4.2   Indenture by and between the Company and State Exhibit 4.4 to the Company's Registration
          Street Bank and Trust Company as Trustee       Statement on Form S-3 (Registration
          dated as of October 24, 2001, including the    Statement No. 333-75632).
          form of Note
  4.3   Form of Note                                   Included in Exhibit 4.4 to the Company's
                                                         Registration Statement on Form S-3
                                                         (Registration Statement No. 333-75632).
  4.4   Registration Rights Agreement by and between   Exhibit 4.6 to the Company's Registration
          the Company and Goldman, Sachs & Co. and       Statement on Form S-3 (Registration
          Banc of America Securities LLC dated as of     Statement No. 333-75632).
          October 24, 2001
 10.1   Teradyne, Inc. Supplemental Executive          Exhibit 10.4 to the Company's Annual Report on
          Retirement Plan*                               Form10-K for the fiscal year ended
                                                         December 31, 1997.
 10.2   1991 Employee Stock Option Plan, as amended*   Exhibit 4.2 to the Company's Registration
                                                         Statement on Form S-8 (Registration
                                                         Statement No. 333-07177).
 10.3   Amendment to 1991 Stock Plan dated             Exhibit 10.3 to the Company's Annual Report on
         March 9, 2001*                                  Form 10-K for the fiscal year ended
                                                         December 31, 2000.
 10.4   Megatest Corporation 1990 Stock Option Plan*   Exhibit 4.1 to the Company's Registration
                                                         Statement on Form S-8 (Registration
                                                         Statement No. 333-64683).
 10.5   Megatest Corporation Director Stock Option     Exhibit 4.2 to the Company's Registration
          Plan*                                          Statement on Form S-8 (Registration
                                                         Statement No. 333-64683).
 10.6   1996 Employee Stock Purchase Plan, as          Filed herewith.
          amended*
 10.7   Master Lease Agreement between Megatest and    Exhibit 10.10 to the Company's Annual Report
          General Electric Capital Corporation dated     on Form 10-K for the fiscal year ended
          August 10, 1995                                December 31, 1995.
 10.8   Loan and Security Agreement between Megatest   Exhibit 10.11 to the Company's Annual Report
          and the CIT Group/Equipment Financing, Inc.    on Form 10-K for the fiscal year ended
          dated August 14, 1995                          December 31, 1995.
</TABLE>

                                      63

<PAGE>

<TABLE>
<CAPTION>
Exhibit
  No.                      Description                                   SEC Document Reference
  ---                      -----------                                   ----------------------
<C>     <S>                                                <C>
 10.9   Deed of Trust, Financing Statement, Security       Exhibit 10.12 to the Company's Annual Report on
          Agreement and Fixture Filing between Megatest      Form 10-K for the fiscal year ended
          and the Sun Life Assurance Company of Canada       December 31, 1995.
          (U.S.) dated August 25, 1995
 10.10. 1997 Employee Stock Option Plan, as amended*       Exhibit 10.01 to the Company's Quarterly Report
                                                             on Form 10-Q for the quarter ended July 1, 2001.
 10.11. 1996 Non-Employee Director Stock Option Plan, as   Filed herewith.
          amended*
 10.12. GenRad, Inc. 1991 Equity Incentive Plan*           Exhibit 4.4 to the Company's Registration
                                                             Statement on Form S-8 (Registration Statement
                                                             No. 333-73700).
 10.13. GenRad, Inc. 1991 Directors' Stock Option Plan*    Exhibit 4.5 to the Company's Registration
                                                             Statement on Form S-8 (Registration Statement
                                                             No. 333-73700).
 10.14. GenRad, Inc. 1997 Non-Qualified Employee Stock     Exhibit 4.6 to the Company's Registration
          Option Plan*                                       Statement on Form S-8 (Registration Statement
                                                             No. 333-73700).
 10.15. GenRad, Inc. Non-Statutory Stock Option            Exhibit 4.7 to the Company's Registration
          Agreement by and between Robert M.                 Statement on Form S-8 (Registration Statement
          Dutkowsky and GenRad, Inc.*                        No. 333-73700).
 10.16. Change in Control Agreement dated October 19, 2001 Filed herewith.
          between the Company and Executive Officer*
 10.17. Change in Control Agreement dated October 19, 2001 Filed herewith.
          between the Company and Executive Officer*
 10.18. Change in Control Agreement dated October 19, 2001 Filed herewith.
          between the Company and Executive Officer*
 10.19. Change in Control Agreement dated March 19, 2002   Filed herewith.
          between the Company and Executive Officer*
 10.20. Change in Control Agreement dated October 19, 2001 Filed herewith.
          between the Company and Executive Officer*
 10.21. Change in Control Agreement dated October 2, 2001  Filed herewith.
          between the Company and Executive Officer*
 10.22. Change in Control Agreement dated October 19, 2001 Filed herewith.
          between the Company and Executive Officer*
 10.23. Change in Control Agreement dated October 19, 2001 Filed herewith.
          between the Company and Executive Officer*
 10.24. Change in Control Agreement dated October 19, 2001 Filed herewith.
          between the Company and Executive Officer*
 10.25. Promisory Note dated December 19, 2001 between the Filed herewith.
          Company, as borrower, and General Electric
          Capital Business Asset Funding Corporation, as
          lender
 10.26. Form of Commercial Deed of Trust, Security         Filed herewith.
          Agreement, Assignment of Leases and Rents, and
          Fixture Filing Agreement dated December 19,
          2001 between the Company, as borrower, and
          General Electric Capital Business Asset Funding
          Corporation, as lender

 10.27  Form of Assignment of Rents and Leases             Filed herewith.
          Agreement dated December 19, 2001 between
          the Company, as borrower, and General
          Electric Capital Business Asset Funding
          Corporation, as lender
</TABLE>

                                      64

<PAGE>

<TABLE>
<CAPTION>
Exhibit
  No.                     Description                                SEC Document Reference
  ---                     -----------                                ----------------------
<C>     <S>                                             <C>

 10.28  Form of Certificate and Indemnity Agreement     Filed herewith.
          regarding Hazardous Substances dated
          December 19, 2001 between the Company, as
          borrower, and General Electric Capital
          Business Asset Funding Corporation, as lender

 10.29  Lease Agreements dated July 26, 1996 between    Exhibit 10 to GenRad, Inc.'s Quarterly Report on
          GenRad, Inc. and Michelson Farm-Westford      Form 10-Q for the quarter ended June 29, 1996
          Technology Park Trust                         (Commission File No. 1-8045).

  12.1  Statement regarding Computation of Ratio of
          Earnings to Fixed Charges                     Filed herewith.

  21.1  Subsidiaries of the Company                     Filed herewith.

  23.1  Consent of PricewaterhouseCoopers LLP           Filed herewith.
</TABLE>

   * Indicates management contracts or compensatory plans

                                      65

<PAGE>

                                  SIGNATURES

   Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized this 29th day of
March, 2002.

                                            TERADYNE, INC.

                                            By:    /s/  GREGORY R. BEECHER
                                                -----------------------------
                                                     Gregory R. Beecher,
                                                    Vice President and Chief
                                                       Financial Officer

   Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

          Signature                       Title                   Date
          ---------                       -----                   ----

  /s/  GEORGE W. CHAMILLARD   Chairman of the Board,         March 29, 2002
- -----------------------------   President,
    George W. Chamillard        and Chief Executive Officer
                                (Principal Executive
                                 Officer)

   /s/  GREGORY R. BEECHER    Vice President and             March 29, 2002
- -----------------------------   Chief Financial Officer
     Gregory R. Beecher         (Principal Financial
                                 Officer)

  /s/  G. RICHARD MACDONALD   Controller, Principal          March 29, 2002
- -----------------------------   Accounting Officer
    G. Richard MacDonald

    /s/  JAMES W. BAGLEY      Director                       March 29, 2002
- -----------------------------
       James W. Bagley

    /s/  ALBERT CARNESALE     Director                       March 29, 2002
- -----------------------------
      Albert Carnesale

    /s/  DANIEL S. GEGORY     Director                       March 25, 2002
- -----------------------------
      Daniel S. Gegory

   /s/  DWIGHT H. HIBBARD     Director                       March 28, 2002
- -----------------------------
      Dwight H. Hibbard

    /s/  JOHN P. MULRONEY     Director                       March 26, 2002
- -----------------------------
      John P. Mulroney

  /s/  VINCENT M. O'REILLY    Director                       March 27, 2002
- -----------------------------
     Vincent M. O'Reilly

    /s/  RICHARD J. TESTA     Director                       March 29, 2002
- -----------------------------
      Richard J. Testa

     /s/  ROY A. VALLEE       Director                       March 29, 2002
- -----------------------------
        Roy A. Vallee

  /s/  PATRICIA S. WOLPERT    Director                       March 25, 2002
- -----------------------------
     Patricia S. Wolpert

                                      66

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.6
<SEQUENCE>3
<FILENAME>dex106.txt
<DESCRIPTION>1996 EMPLOYEE STOCK OPTION PLAN
<TEXT>
<PAGE>
                                                                    Exhibit 10.6
                                 TERADYNE, INC.

                        1996 EMPLOYEE STOCK PURCHASE PLAN

Article 1 - Purpose.

         This 1996 Employee Stock Purchase Plan (the "Plan") is intended to
encourage stock ownership by all eligible employees of Teradyne, Inc. (the
"Company"), a Massachusetts corporation, and its participating subsidiaries (as
defined in Article 17) so that they may share in the growth of the Company by
acquiring or increasing their proprietary interest in the Company. The Plan is
designed to encourage eligible employees to remain in the employ of the Company
and its participating subsidiaries. The Plan is intended to constitute an
"employee stock purchase plan" within the meaning of Section 423(b) of the
Internal Revenue Code of 1986, as amended (the "Code").

Article 2 - Administration of the Plan.

         The Plan may be administered by a committee appointed by the Board of
Directors of the Company (the "Committee"). The Committee shall consist of not
less than two members of the Company's Board of Directors. The Board of
Directors may from time to time remove members from, or add members to, the
Committee. Vacancies on the Committee, howsoever caused, shall be filled by the
Board of Directors. The Committee may select one of its members as Chairman, and
shall hold meetings at such times and places as it may determine. Acts by a
majority of the Committee, or acts reduced to or approved in writing by a
majority of the members of the Committee, shall be the valid acts of the
Committee.

         The interpretation and construction by the Committee of any provisions
of the Plan or of any option granted under it shall be final, unless otherwise
determined by the Board of Directors. The Committee may from time to time adopt
such rules and regulations for carrying out the Plan as it may deem best,
provided that any such rules and regulations shall be applied on a uniform basis
to all employees under the Plan. No member of the Board of Directors or the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any option granted under it.

         In the event the Board of Directors fails to appoint or refrains from
appointing a Committee, the Board of Directors shall have all power and
authority to administer the Plan. In such event, the word "Committee" wherever
used herein shall be deemed to mean the Board of Directors.

Article 3 - Eligible Employees.

         No option may be granted to any person serving as a member of the
Committee at the time of grant. Subject to the foregoing limitation, all
employees of the Company or any of its participating subsidiaries on United
States payroll who are employees of the

<PAGE>
Company or any of its participating subsidiaries (i) on or before the first day
of any Payment Period (as defined in Article 5) or (ii) for employees first
employed after the first day of a particular Payment Period, on or before the
first day of the next succeeding July in any such Payment Period, and whose
customary employment is not less than twenty hours per week and more than five
months in any calendar year shall be eligible to receive options under the Plan
to purchase common stock of the Company, par value $.125 per share ("Common
Stock"). An employee eligible under this Plan solely by virtue of clause (ii) of
the preceding sentence shall be referred to herein as a "July Employee." All
eligible employees shall have the same rights and privileges hereunder. Persons
who elect to enter the Plan in accordance with Article 7 and who are eligible
employees on the first business day of any Payment Period (as defined in Article
5) (or on the first business day of July with respect to July Employees) shall
receive their options as of such day. Persons who elect to enter the Plan in
accordance with Article 7 and who become eligible employees after any date on
which options are granted under the Plan shall be granted options on the first
business day of the next succeeding Payment Period or the first business day of
July (whichever is applicable) on which options are granted to eligible
employees under the Plan. In no event, however, may an employee be granted an
option if such employee, immediately after the option was granted, would be
treated as owning stock possessing five percent or more of the total combined
voting power or value of all classes of stock of the Company or of any parent
corporation or subsidiary corporation, as the terms "parent corporation" and
"subsidiary corporation" are defined in Section 424(e) and (f) of the Code. For
purposes of determining stock ownership under this paragraph, the rules of
Section 424(d) of the Code shall apply, and stock which the employee may
purchase under outstanding options shall be treated as stock owned by the
employee.

Article 4 - Stock Subject to the Plan.

         The stock subject to the options under the Plan shall be authorized but
unissued Common Stock, or shares of Common Stock reacquired by the Company,
including shares purchased in the open market. The aggregate number of shares
which may be issued pursuant to the Plan is 5,400,000, subject to adjustment as
provided in Article 12. If any option granted under the Plan shall expire or
terminate for any reason without having been exercised in full or shall cease
for any reason to be exercisable in whole or in part, the unpurchased shares
subject thereto shall again be available under the Plan.

Article 5 - Payment Period and Stock Options.

         For the duration of the Plan, the Payment Period shall be defined as
the twelve-month period commencing on the first day of January and ending
annually on the last day of December of each calendar year. Notwithstanding the
foregoing, the first Payment Period during which payroll deductions will be
accumulated under the Plan shall commence on July 1, 1996 and shall end on
December 31, 1996.

         On the first business day of each Payment Period (or on the first
business day of July of such Payment Period in the case of a July Employee), the
Company will grant to

<PAGE>
each eligible employee who is then a participant in the Plan an option to
purchase on the last day of such Payment Period, at the Option Price hereinafter
provided for, a maximum of 6,000 shares, on condition that such employee remains
eligible to participate in the Plan throughout the remainder of such Payment
Period. The participant shall be entitled to exercise the option so granted only
to the extent of the participant's accumulated payroll deductions on the last
day of such Payment Period. If the participant's accumulated payroll deductions
on the last day of the Payment Period would enable the participant to purchase
more than 6,000 shares except for the 6,000 share limitation, the excess of the
amount of the accumulated payroll deductions over the aggregate purchase price
of the 6,000 shares shall be promptly refunded to the participant by the
Company, without interest. The Option Price per share for each Payment Period
shall be the lesser of (i) 85% of the fair market value of the Common Stock on
the first business day of the Payment Period (or, in the case of a July
Employee, on the first business day of July of such Payment Period) and (ii) 85%
of the fair market value of the Common Stock on the last business day of the
Payment Period, in either event rounded up to the nearest cent. The foregoing
limitation on the number of shares subject to option and the Option Price shall
be subject to adjustment as provided in Article 12.

         For purposes of the Plan, the term "fair market value" on any date
means (i) the average (on that date) of the high and low prices of the Common
Stock on the principal national securities exchange on which the Common Stock is
traded, if the Common Stock is then traded on a national securities exchange; or
(ii) the last reported sale price (on that date) of the Common Stock on The
Nasdaq Stock Market, if the Common Stock is not then traded on a national
securities exchange; or (iii) the average of the closing bid and asked prices
last quoted (on that date) by an established quotation service for
over-the-counter securities, if the Common Stock is not reported on The Nasdaq
Stock Market; or (iv) if the Common Stock is not publicly traded, the fair
market value of the Common Stock as determined by the Committee after taking
into consideration all factors which it deems appropriate, including, without
limitation, recent sale and offer prices of the Common Stock in private
transactions negotiated at arm's length.

         For purposes of the Plan, the term "business day" means a day on which
there is trading on The Nasdaq Stock Market or the aforementioned national
securities exchange, whichever is applicable pursuant to the preceding
paragraph; and if neither is applicable, a day that is not a Saturday, Sunday or
legal holiday in Massachusetts.

         Notwithstanding any other provision herein, no employee shall be
granted an option which permits the employee's right to purchase stock under the
Plan, and under all other Section 423(b) employee stock purchase plans of the
Company and any parent or subsidiary corporations, to accrue at a rate which
exceeds $25,000 of fair market value of such stock (determined on the date or
dates that options on such stock were granted) for each calendar year in which
such option is outstanding at any time. The purpose of the limitation in the
preceding sentence is to comply with Section 423(b)(8) of the Code. If the
participant's accumulated payroll deductions on the last day of the Payment
Period would otherwise enable the participant to purchase Common Stock in excess
of the Section 423(b)(8) $25,000 limitation described in this paragraph, the
excess of the

<PAGE>
amount of the accumulated payroll deductions over the aggregate purchase price
of the shares actually purchased shall be promptly refunded to the participant
by the Company, without interest.

Article 6 - Exercise of Option.

         Each eligible employee who continues to be a participant in the Plan on
the last day of a Payment Period shall be deemed to have exercised his or her
option on such date and shall be deemed to have purchased from the Company such
number of full shares of Common Stock reserved for the purpose of the Plan as
the participant's accumulated payroll deductions on such date will pay for at
the Option Price, subject to the 6,000 share limit of the option and the Section
423(b)(8) $25,000 limitation described in Article 5. If the individual is not a
participant on the last day of a Payment Period, then he or she shall not be
entitled to exercise his or her option. Only full shares of Common Stock may be
purchased under the Plan. Unused payroll deductions remaining in a participant's
account at the end of a Payment Period solely by reason of the inability to
purchase a fractional share (and for no other reason) shall be refunded.

Article 7 - Authorization for Entering the Plan.

         An employee may elect to enter the Plan by filling out, signing and
delivering to the Company an authorization:

         A. Stating the percentage to be deducted from the employee's pay;

         B. Authorizing the purchase of stock for the employee in each Payment
      Period in accordance with the terms of the Plan; and

         C. Specifying the exact name or names in which stock purchased for the
      employee is to be issued as provided under Article 11 hereof.

         Such authorization must be received by the Company on or before the
first day of the next succeeding Payment Period or on or prior to the first day
of July of such Payment Period in the case of a July Employee.

         Unless a participant files a new authorization or withdraws from the
Plan, the deductions and purchases under the authorization the participant has
on file under the Plan will continue from one Payment Period to succeeding
Payment Periods as long as the Plan remains in effect.

         The Company will accumulate and hold for each participant's account the
amounts deducted from his or her pay. No interest will be paid on these amounts.

<PAGE>
Article 8 - Maximum Amount of Payroll Deductions.

         An employee may authorize payroll deductions in an amount (expressed as
a whole percentage) not less than two percent (2%) but not more than ten percent
(10%) of the employee's cash compensation.

Article 9 - Change in Payroll Deductions.

         Deductions may not be increased during a Payment Period. Deductions may
be decreased during a Payment Period, provided that an employee may not decrease
his deduction more often than twice during any Payment Period (and with respect
to July Employees once during any Payment Period).

Article 10 - Withdrawal from the Plan.

         A participant may withdraw from the Plan (in whole but not in part) at
any time prior to the last day of a Payment Period by delivering a withdrawal
notice to the Company.

         To re-enter the Plan, an employee who has previously withdrawn must
file a new authorization on or before the first day of the next Payment Period
in which he or she wishes to participate. The employee's re-entry into the Plan
becomes effective at the beginning of such Payment Period, provided that he or
she is an eligible employee on the first business day of the Payment Period.

Article 11 - Issuance of Stock.

         Certificates for stock issued to participants shall be delivered as
soon as practicable after each Payment Period by the Company's transfer agent.

         Stock purchased under the Plan shall be issued only in the name of the
participant, or if the participant's authorization so specifies, in the name of
the participant and another person of legal age as joint tenants with rights of
survivorship.

Article 12 - Adjustments.

         Upon the happening of any of the following described events, a
participant's rights under options granted under the Plan shall be adjusted as
hereinafter provided:

         A. In the event that the shares of Common Stock shall be subdivided or
      combined into a greater or smaller number of shares or if, upon a
      reorganization, split-up, liquidation, recapitalization or the like of the
      Company, the shares of Common Stock shall be exchanged for other
      securities of the Company, each participant shall be entitled, subject to
      the conditions herein stated, to purchase such number of shares of Common
      Stock or amount of other securities of the Company as were exchangeable
      for the number of shares of Common Stock that such participant would have
      been entitled to purchase except for such action, and appropriate

<PAGE>
      adjustments shall be made in the purchase price per share to reflect such
      subdivision, combination or exchange; and

         B. In the event the Company shall issue any of its shares as a stock
      dividend upon or with respect to the shares of stock of the class which
      shall at the time be subject to options hereunder, each participant upon
      exercising such an option shall be entitled to receive (for the purchase
      price paid upon such exercise) the shares as to which the participant is
      exercising his or her option and, in addition thereto (at no additional
      cost), such number of shares of the class or classes in which such stock
      dividend or dividends were declared or paid, and such amount of cash in
      lieu of fractional shares, as is equal to the number of shares thereof and
      the amount of cash in lieu of fractional shares, respectively, which the
      participant would have received if the participant had been the holder of
      the shares as to which the participant is exercising his or her option at
      all times between the date of the granting of such option and the date of
      its exercise.

         Upon the happening of any of the foregoing events, the class and
aggregate number of shares set forth in Article 4 hereof which are subject to
options which have been or may be granted under the Plan and the limitations set
forth in the second paragraph of Article 5 shall also be appropriately adjusted
to reflect the events specified in paragraphs A and B above. Notwithstanding the
foregoing, any adjustments made pursuant to paragraphs A or B shall be made only
after the Committee, based on advice of counsel for the Company, determines
whether such adjustments would constitute a "modification" (as that term is
defined in Section 424 of the Code). If the Committee determines that such
adjustments would constitute a modification, it may refrain from making such
adjustments.

         If the Company is to be consolidated with or acquired by another entity
in a merger, a sale of all or substantially all of the Company's assets or
otherwise (an "Acquisition"), the Committee or the board of directors of any
entity assuming the obligations of the Company hereunder (the "Successor Board")
shall, with respect to options then outstanding under the Plan, either (i) make
appropriate provision for the continuation of such options by arranging for the
substitution on an equitable basis for the shares then subject to such options
either (a) the consideration payable with respect to the outstanding shares of
the Common Stock in connection with the Acquisition, (b) shares of stock of the
successor corporation, or a parent or subsidiary of such corporation, or (c)
such other securities as the Successor Board deems appropriate, the fair market
value of which shall not exceed the fair market value of the shares of Common
Stock subject to such options immediately preceding the Acquisition; or (ii)
terminate each participant's options in exchange for a cash payment equal to the
excess of the fair market value on the date of the Acquisition of the number of
shares of Common Stock that the participant's accumulated payroll deductions as
of the date of the Acquisition could purchase, at an option price determined
with reference only to the first business day of the applicable Payment Period
(or the first business day of July of such Payment Period in the case of a July
Employee) and subject to the 6,000 share limit, Code Section 423(b)(8) and

<PAGE>
fractional-share limitations on the amount of stock a participant would be
entitled to purchase over the aggregate option price to such participant
thereof.

         The Committee or Successor Board shall determine the adjustments to be
made under this Article 12, and its determination shall be conclusive.

Article 13 - No Transfer or Assignment of Employee's Rights.

         An option granted under the Plan may not be transferred or assigned,
otherwise than by will or by the laws of descent and distribution. Any option
granted under the Plan may be exercised, during the participant's lifetime, only
by the participant.

Article 14 - Termination of Employee's Rights.

         Whenever a participant ceases to be an eligible employee because of
retirement, voluntary or involuntary termination, resignation, layoff,
discharge, death or for any other reason, his or her rights under the Plan shall
immediately terminate, and the Company shall promptly refund, without interest,
the entire balance of his or her payroll deduction account under the Plan;
provided, however, that if an employee is laid off during the last three months
of any Payment Period, he shall nevertheless be deemed to be a participant in
the Plan on the last day of the Payment Period. Notwithstanding the foregoing,
eligible employment shall be treated as continuing intact while a participant is
on military leave, sick leave or other bona fide leave of absence, for up to 90
days, or, if such leave is longer than 90 days, for so long as the participant's
right to re-employment is guaranteed either by statute or by written contract.
Notwithstanding any other provision herein, if a participant's employment is
terminated by reason of retirement, and the date of such termination occurs
after the date that is 3 months prior to the last day of the Payment Period,
such participant's rights under the Plan are not immediately terminated, and if
the participant has not withdrawn from the Plan, such participant's options
shall be deemed to have been exercised on the last day of the Payment Period in
accordance with the terms of the Plan.

Article 15 - Termination and Amendments to Plan.

         The Plan may be terminated at any time by the Company's Board of
Directors but such termination shall not affect options then outstanding under
the Plan. If at any time shares of stock reserved for the purpose of the Plan
remain available for purchase but not in sufficient number to satisfy all then
unfilled purchase requirements, the available shares shall be apportioned among
participants in proportion to the amount of payroll deductions accumulated on
behalf of each participant that would otherwise be used to purchase stock, and
the Plan shall terminate. Upon such termination or any other termination of the
Plan, all payroll deductions not used to purchase stock will be refunded,
without interest.

         The Committee or the Board of Directors may from time to time adopt
amendments to the Plan provided that, without the approval of the shareholders
of the

<PAGE>
Company, no amendment may (i) increase the number of shares that may be issued
under the Plan; (ii) change the class of employees eligible to receive options
under the Plan, if such action would be treated as the adoption of a new plan
for purposes of Code Section 423(b) and the regulations thereunder; or (iii)
cause Rule 16b-3 under the Securities Exchange Act of 1934 to become
inapplicable to the Plan.

Article 16 - Limits on Sale of Stock Purchased under the Plan.

         The Plan is intended to provide shares of Common Stock for investment
and not for resale. The Company does not, however, intend to restrict or
influence any employee in the conduct of his or her own affairs. An employee
may, therefore, sell stock purchased under the Plan at any time the employee
chooses, subject to compliance with any applicable federal or state securities
laws and subject to any restrictions imposed under Article 21 to ensure that tax
withholding obligations are satisfied. THE EMPLOYEE ASSUMES THE RISK OF ANY
MARKET FLUCTUATIONS IN THE PRICE OF THE STOCK.

Article 17 - Participating Subsidiaries.

         The term "participating subsidiary" shall mean any present or future
subsidiary of the Company, as that term is defined in Section 424(f) of the
Code, that is designated from time to time by the Board of Directors to
participate in the Plan. The Board of Directors shall have the power to make
such designation before or after the Plan is approved by the shareholders.

Article 18 - Optionees Not Shareholders.

         Neither the granting of an option to an employee nor the deductions
from his or her pay shall constitute such employee a stockholder of the shares
covered by an option until such shares have been actually purchased by the
employee.

Article 19 - Application of Funds.

         The proceeds received by the Company from the sale of Common Stock
pursuant to options granted under the Plan will be used for general corporate
purposes.

Article 20 - Notice to Company of Disqualifying Disposition.

         By electing to participate in the Plan, each participant agrees to
notify the Company in writing immediately after the participant transfers Common
Stock acquired under the Plan, if such transfer occurs within two years after
the first business day of the Payment Period in which such Common Stock was
acquired. Each participant further agrees to provide any information about such
a transfer as may be requested by the Company or any subsidiary corporation in
order to assist it in complying with the tax laws. Such dispositions generally
are treated as "disqualifying dispositions" under

<PAGE>
Sections 421 and 424 of the Code, which have certain tax consequences to
participants and to the Company and its participating subsidiaries.

Article 21 - Withholding of Additional Income Taxes.

         By electing to participate in the Plan, each participant acknowledges
that the Company and its participating subsidiaries are required to withhold
taxes with respect to the amounts deducted from the participant's compensation
and accumulated for the benefit of the participant under the Plan, and each
participant agrees that the Company and its participating subsidiaries may
deduct additional amounts from the participant's compensation, when amounts are
added to the participant's account, used to purchase Common Stock or refunded,
in order to satisfy such withholding obligations. Each participant further
acknowledges that when Common Stock is purchased under the Plan the Company and
its participating subsidiaries may be required to withhold taxes with respect to
all or a portion of the difference between the fair market value of the Common
Stock purchased and its purchase price, and each participant agrees that such
taxes may be withheld from compensation otherwise payable to such participant.
It is intended that tax withholding will be accomplished in such a manner that
the full amount of payroll deductions elected by the participant under Article 7
will be used to purchase Common Stock. However, if amounts sufficient to satisfy
applicable tax withholding obligations have not been withheld from compensation
otherwise payable to any participant, then, notwithstanding any other provision
of the Plan, the Company may withhold such taxes from the participant's
accumulated payroll deductions and apply the net amount to the purchase of
Common Stock, unless the participant pays to the Company, prior to the exercise
date, an amount sufficient to satisfy such withholding obligations. Each
participant further acknowledges that the Company and its participating
subsidiaries may be required to withhold taxes in connection with the
disposition of stock acquired under the Plan and agrees that the Company or any
participating subsidiary may take whatever action it considers appropriate to
satisfy such withholding requirements, including deducting from compensation
otherwise payable to such participant an amount sufficient to satisfy such
withholding requirements or conditioning any disposition of Common Stock by the
participant upon the payment to the Company or such subsidiary of an amount
sufficient to satisfy such withholding requirements.

Article 22 - Governmental Regulations.

         The Company's obligation to sell and deliver shares of Common Stock
under the Plan is subject to the approval of any governmental authority required
in connection with the authorization, issuance or sale of such shares.

         Government regulations may impose reporting or other obligations on the
Company with respect to the Plan. For example, the Company may be required to
identify shares of Common Stock issued under the Plan on its stock ownership
records and send tax information statements to employees and former employees
who transfer title to such shares.

<PAGE>
Article 23 - Governing Law.

         The validity and construction of the Plan shall be governed by the laws
of Massachusetts, without giving effect to the principles of conflicts of law
thereof.

Article 24 - Approval of Board of Directors and Stockholders of the Company.

         The Plan was adopted by the Board of Directors on March 19, 1996 and on
such date the Board of Directors resolved that the Plan was to be submitted to
the shareholders of the Company for approval at the next meeting of
shareholders. If the Plan does not receive such approval, all payroll deductions
shall be returned without interest and the Plan shall be terminated.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.11
<SEQUENCE>4
<FILENAME>dex1011.txt
<DESCRIPTION>1996 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
<TEXT>
<PAGE>
                                                                   Exhibit 10.11


           TERADYNE, INC. 1996 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

         1. Purpose. This Non-Qualified Stock Option Plan, to be known as the
1996 Non-Employee Director Stock Option Plan (hereinafter, this "Plan") is
intended to promote the interests of Teradyne, Inc. (hereinafter, the "Company")
by providing an inducement to obtain and retain the services of qualified
persons who are not employees or officers of the Company to serve as members of
its Board of Directors (the "Board").

         2. Available Shares. The total number of shares of Common Stock, par
value $.125 per share, of the Company (the "Common Stock") for which options may
be granted under this Plan shall not exceed 1,600,000 shares, subject to
adjustment in accordance with paragraph 10 of this Plan. Shares subject to this
Plan are authorized but unissued shares or shares that were once issued and
subsequently reacquired by the Company. If any options granted under this Plan
are surrendered before exercise or lapse without exercise, in whole or in part,
the shares reserved therefor shall continue to be available under this Plan.

         3. Administration. This Plan shall be administered by the Board or by a
committee appointed by the Board (the "Committee"). In the event the Board fails
to appoint or refrains from appointing a Committee, the Board shall have all
power and authority to administer this Plan. In such event, the word "Committee"
wherever used herein shall be deemed to mean the Board. The Committee shall,
subject to the provisions of the Plan, have the power to construe this Plan, to
determine all questions hereunder, and to adopt and amend such rules and
regulations for the administration of this Plan as it may deem desirable. No
member of the Board or the Committee shall be liable for any action or
determination made in good faith with respect to this Plan or any option granted
under it.

         4. Automatic Grant of Options. Subject to the availability of shares
under this Plan, (a) each person who becomes a member of the Board on or after
August 26, 1999 and who is not an employee or officer of the Company (each, a
"Non-Employee Director") shall be automatically granted on the date such person
is first elected to the Board, without further action by the Board, an option to
purchase 22,500 shares of the Common Stock, (b) each person who was a
Non-Employee Director on February 7, 2000 shall be granted on February 5, 2001
an option to purchase 6,750 shares of the Common Stock, (c) each Non-Employee
Director who became a new member of the Board during February 2000 shall be
granted on February 5, 2001 an option to purchase 15,750 shares of the Common
Stock, and (d) beginning on February 5, 2001 and throughout the term of this
Plan, each person who is a Non-Employee Director on the first Monday in February
in each year shall be automatically granted on each such date an option to
purchase 11,250 shares of the Common Stock. The options to be granted under this
paragraph 4 shall be the only options ever to be granted at any time to each
such member under this Plan. The number of shares covered by options granted
under this paragraph 4 shall be subject to adjustment in accordance with the
provisions of paragraph 10 of this Plan.

         5. Option Price. The purchase price of the stock covered by an option
granted pursuant to this Plan shall be 100% of the fair market value of such
shares on the day the option is granted. The option price will be subject to
adjustment in accordance with the provisions of


<PAGE>
                                     - 2 -

paragraph 10 of this Plan. For purposes of this Plan, if, at the time an option
is granted under the Plan, the Company's Common Stock is publicly traded, "fair
market value" shall be determined as of the last business day for which the
prices or quotes discussed in this sentence are available prior to the date such
option is granted and shall mean (i) the average (on that date) of the high and
low prices of the Common Stock on the principal national securities exchange on
which the Common Stock is traded, if the Common Stock is then traded on a
national securities exchange; or (ii) the last reported sale price (on that
date) of the Common Stock on the Nasdaq National Market, if the Common Stock is
not then traded on a national securities exchange; or (iii) the closing bid
price (or average of bid prices) last quoted (on that date) by an established
quotation service for over-the-counter securities, if the Common Stock is not
reported on the Nasdaq National Market List.

         6. Period of Option. Unless sooner terminated in accordance with the
provisions of paragraph 8 of this Plan, an option granted hereunder shall expire
on the date which is seven (7) years after the date of grant of the option.

         7. (a) Vesting of Shares and Non-Transferability of Options. Options
granted under this Plan shall not be exercisable until they become vested.
Options granted under this Plan prior to February 5, 2001 shall vest in the
optionee and thus become exercisable, in accordance with the following schedule,
provided that the optionee has continuously served as a member of the Board
through such vesting date:

Percentage of Option
Shares for which
Option Will be Exercisable    Date of Vesting

         0%                   Less than one year from the date of grant
         25%                  One year from the date of grant
         50%                  Two years from the date of grant
         75%                  Three years from the date of grant
         100%                 Four years from the date of grant

         Options granted on or after February 5, 2001 shall not be subject to
vesting and shall be immediately exercisable in their entirety on the date of
grant.

         The number of shares as to which options may be exercised shall be
cumulative, so that once the option shall become exercisable as to any shares it
shall continue to be exercisable as to said shares, until expiration or
termination of the option as provided in this Plan.

                  (b) Non-transferability. Any option granted pursuant to this
Plan shall not be assignable or transferable other than by will or the laws of
descent and distribution or pursuant to a domestic relations order and shall be
exercisable during the optionee's lifetime only by him or her.




<PAGE>
                                     - 3 -

         8. Termination of Option Rights.

                  (a) If an optionee ceases to be a director of the Company
other than by reason of death, no further installments of his options will
become exercisable, and his options shall terminate after the passage of three
months from the date of termination of his directorship (but not later than on
their specified expiration dates). Notwithstanding the foregoing, in the event a
director of the Company (A) resigns from the Board of Directors to enter
government service or (B) retires from the Board of Directors (i) at any time on
or after age 55 but prior to age 65 provided that such director has been a
director of the Company continuously for at least ten years or (ii) at any time
on or after age 65 provided that such director has been a director of the
Company continuously for at least five years, such director may exercise any
option then held by him or her, within the original term of the option, as to
all or any of the shares covered thereby, at the time or times such exercise is
permitted under the terms of the option. Notwithstanding the foregoing, if a
director retires from the Company at any time and becomes a director of a
competitor of the company, such director's options shall terminate after the
passage of three months from the date that such director becomes a director of a
competitor. Nothing in the Plan shall be deemed to give any optionee the right
to be nominated as a director by the Company for any period of time.

                  (b) If an optionee dies, any option of his may be exercised,
to the extent of the number of shares with respect to which he could have
exercised it on the date of his death, by his estate, personal representative or
beneficiary who acquires the option by will or by the laws of descent and
distribution, at any time prior to the earlier of the option's specified
expiration date or six months from the date of the optionee's death. The option
shall terminate on the earlier of such dates.

         9. Exercise of Option. Subject to the terms and conditions of this Plan
and the option agreements, an option granted hereunder shall, to the extent then
exercisable, be exercisable in whole or in part by giving written notice to the
Company by mail or in person, at its principal executive offices, stating the
number of shares with respect to which the option is being exercised,
accompanied by payment in full for such shares. Payment may be (a) in United
States dollars in cash or by check, (b) in whole or in part in shares of the
Common Stock of the Company already owned by the person or persons exercising
the option or shares subject to the option being exercised (subject to such
restrictions and guidelines as the Board may adopt from time to time), valued at
fair market value determined in accordance with the provisions of paragraph 5 or
(c) consistent with applicable law, through the delivery of an assignment to the
Company of a sufficient amount of the proceeds from the sale of the Common Stock
acquired upon exercise of the option and an authorization to the broker or
selling agent to pay that amount to the Company, which sale shall be at the
participant's direction at the time of exercise. There shall be no such exercise
at any one time as to fewer than one hundred (100) shares or all of the
remaining shares then purchasable by the person or persons exercising the
option, if fewer than one hundred (100) shares. The Company's transfer agent
shall, on behalf of the Company, prepare a certificate or certificates
representing such shares acquired pursuant to exercise of the option, shall
register the optionee as the owner of such shares on the books of the Company
and shall cause the fully executed certificate(s) representing such shares to be
delivered to the optionee as soon as practicable after payment of the option
price in full. The holder of an option


<PAGE>
                                     - 4 -

shall not have any rights of a stockholder with respect to the shares covered by
the option, except to the extent that one or more certificates for such shares
shall be delivered to him or her upon the due exercise of the option.

      10. Adjustments Upon Changes in Capitalization and Other Events. Upon the
occurrence of any of the following events, an optionee's rights with respect to
options granted to him or her hereunder shall be adjusted as hereinafter
provided:

         (a) Stock Dividends and Stock Splits. If the shares of Common Stock
      shall be subdivided or combined into a greater or smaller number of shares
      or if the Company shall issue any shares of Common Stock as a stock
      dividend on its outstanding Common Stock, the number of shares of Common
      Stock deliverable upon the exercise of options shall be appropriately
      increased or decreased proportionately, and appropriate adjustments shall
      be made in the purchase price per share to reflect such subdivision,
      combination or stock dividend.

         (b) Recapitalization Adjustments. In the event of a reorganization,
      recapitalization, merger, consolidation, or any other change in the
      corporate structure or shares of the Company, to the extent permitted by
      Rule 16b-3 under the Securities Exchange Act of 1934, adjustments in the
      number and kind of shares authorized by this Plan and in the number and
      kind of shares covered by, and in the option price of outstanding options
      under this Plan shall be made if, and in the same manner as, such
      adjustments are made to options issued under the Company's other stock
      option plans. Notwithstanding the foregoing, no such adjustment shall be
      made which would, within the meaning of any applicable provisions of the
      Internal Revenue Code of 1986, as amended, constitute a modification,
      extension or renewal of any Option or a grant of additional benefits to
      the holder of an Option.

         (c) Issuances of Securities. Except as expressly provided herein, no
      issuance by the Company of shares of stock of any class, or securities
      convertible into shares of stock of any class, shall affect, and no
      adjustment by reason thereof shall be made with respect to, the number or
      price of shares subject to options. No adjustments shall be made for
      dividends paid in cash or in property other than securities of the
      Company.

         (d) Adjustments. Upon the happening of any of the foregoing events, the
      class and aggregate number of shares set forth in paragraphs 2 and 4 of
      this Plan that are subject to options which previously have been or
      subsequently may be granted under this Plan shall also be appropriately
      adjusted to reflect such events. The Board shall determine the specific
      adjustments to be made under this paragraph 10 and its determination shall
      be conclusive.

      11. Restrictions on Issuance of Shares. Notwithstanding the provisions of
paragraphs 4 and 9 of this Plan, the Company shall have no obligation to deliver
any certificate or certificates upon exercise of an option until one of the
following conditions shall be satisfied:

         (i) The issuance of shares with respect to which the option has been
      exercised is at the time of the issue of such shares effectively
      registered under applicable Federal and state securities laws as now in
      force or hereafter amended; or


<PAGE>
                                     - 5 -

         (ii) Counsel for the Company shall have given an opinion that the
      issuance of such shares is exempt from registration under Federal and
      state securities laws as now in force or hereafter amended; and the
      Company has complied with all applicable laws and regulations with respect
      thereto, including without limitation all regulations required by any
      stock exchange upon which the Company's outstanding Common Stock is then
      listed.

      12. Legend on Certificates. The certificates representing shares issued
pursuant to the exercise of an option granted hereunder shall carry such
appropriate legend, and such written instructions shall be given to the
Company's transfer agent, as may be deemed necessary or advisable by counsel to
the Company in order to comply with the requirements of the Securities Act of
1933 or any state securities laws.

      13. Representation of Optionee. If requested by the Company, the
optionee shall deliver to the Company written representations and warranties
upon exercise of the option that are necessary to show compliance with Federal
and state securities laws, including representations and warranties to the
effect that a purchase of shares under the option is made for investment and not
with a view to their distribution (as that term is used in the Securities Act of
1933).

      14. Option Agreement. Each option granted under the provisions of this
Plan shall be evidenced by an option agreement, which agreement shall be duly
executed and delivered on behalf of the Company and by the optionee to whom such
option is granted. The option agreement shall contain such terms, provisions and
conditions not inconsistent with this Plan as may be determined by the officer
executing it.

      15. Termination and Amendment of Plan. Options may no longer be granted
under this Plan after November 13, 2006, and this Plan shall terminate when all
options granted or to be granted hereunder are no longer outstanding. The Board
may at any time terminate this Plan or make such modification or amendment
thereof as it deems advisable; provided, however, that the Board may not modify
or amend this Plan, without approval of the stockholders, if such approval is
required by the Federal securities laws or applicable regulatory authorities (at
the time of any such modification or amendment). Termination or any modification
or amendment of this Plan shall not, without consent of a participant, affect
his or her rights under an option previously granted to him or her.

      16. Withholding of Income Taxes. Upon the exercise of an option, the
Company, in accordance with Section 3402(a) of the Internal Revenue Code, may
require the optionee to pay withholding taxes in respect of amounts considered
to be compensation includible in the optionee's gross income.


<PAGE>
                                     - 6 -

      17. Compliance with Regulations. It is the Company's intent that the
Plan comply in all respects with Rule 16b-3 under the Securities Exchange Act of
1934 (or any successor or amended provision thereof) and any applicable
Securities and Exchange Commission interpretations thereof. If any provision of
this Plan is deemed not to be in compliance with Rule 16b-3, the provision shall
be null and void.

      18. Governing Law. The validity and construction of this Plan and the
instruments evidencing options shall be governed by the laws of the Commonwealth
of Massachusetts, without giving effect to the principles of conflicts of law
thereof.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.16
<SEQUENCE>5
<FILENAME>dex1016.txt
<DESCRIPTION>CHANGE IN CONTROL AGREEMENT
<TEXT>
<PAGE>

                                                                   Exhibit 10.16


                  EXECUTIVE OFFICER CHANGE IN CONTROL AGREEMENT


         EXECUTIVE OFFICER CHANGE IN CONTROL AGREEMENT entered into this 19th
day of October, 2001, by and between Teradyne, Inc., a Massachusetts
corporation ("Teradyne"), and the undersigned executive officer of Teradyne
              --------
("Employee").
  --------

                                   WITNESSETH:

         WHEREAS, Teradyne and Employee desire to set forth certain terms and
conditions relating to benefits to be afforded to Employee upon the occurrence
of a Change in Control (as hereinafter defined) of Teradyne;

         NOW THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, the parties hereto hereby agree
as follows:

         1.       Option Acceleration. (a) during the Term (as hereinafter
                  -------------------
defined), if within twenty-four (24) months following a Change in Control there
is a Termination Event (as hereinafter defined), all of Employee's unvested
Options granted prior to, on, or after the date hereof (but only (I) such
Options as have been granted to Employee by Teradyne as of the date of the
Change in Control or (II) such Options as have been assumed by an acquiring
company at the time of a Change in Control or such new options that have been
substituted by an acquiring company for Options existing at the time of a Change
in Control, each pursuant to the terms of any Teradyne option plan) shall
automatically become fully vested as of the date of such Termination Event. The
parties hereto acknowledge that the terms of this Agreement are intended to
modify the terms of Employee's existing Option agreements and to be a supplement
to future Option agreements.

                  (b) For purposes of this Agreement, the following terms shall
have the following meanings:

                  "Cause" shall mean conduct involving one or more of the
                   -----
following: (i) the substantial and continuing failure of Employee, after notice
thereof, to render services to Teradyne in accordance with the terms or
requirements of his or her employment; (ii) Employee's disloyalty, gross
negligence, willful misconduct, dishonesty, fraud or breach of fiduciary duty to
Teradyne; (iii) Employee's deliberate disregard of the rules or policies of, or
breach of an agreement with, Teradyne which results in direct or indirect loss,
damage or injury to Teradyne; (iv) the unauthorized disclosure by Employee of
any trade secret or confidential information of Teradyne; or (v) the commission
by Employee of an act which constitutes unfair competition with Teradyne.

                  A "Change in Control" shall be deemed to have occurred upon
                     -----------------
the occurrence of any of the following events: (i) any consolidation, cash
tender offer, reorganization, recapitalization, merger or plan of share exchange
following which the shareholders of Teradyne immediately prior to such
transaction own less than a majority of the combined voting power of

<PAGE>

                                       -2-


the then-outstanding securities of the combined corporation or person
immediately after such transaction; (ii) any sale, lease, exchange or other
transfer of all or substantially all of Teradyne's assets; (iii) the adoption by
the Board of Directors of Teradyne of any plan or proposal for the liquidation
or dissolution of Teradyne; (iv) a change in the majority of the Board of
Directors of Teradyne through one or more contested elections; or (v) any person
(as that term is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange
Act of 1934, as amended) becomes beneficial owner of 30% or more of the combined
voting power of Teradyne's outstanding voting securities.

                  "Good Reason" shall mean any one or more of the following: (i)
                   -----------
any material reduction of Employee's responsibilities (other than for Cause or
as a result of death or disability); (ii) any material reduction in Employee's
model compensation as in effect on the date of the consummation of the Change in
Control, or as the same may be increased from time to time, or any failure by
Teradyne to pay to Employee any bonus accrued, but not yet paid, upon written
notice by Employee to Teradyne, within 45 days; (iii) a material reduction in
the value of Employee's benefit package from the value of Employee's benefit
package on the date of the consummation of the Change in Control; or (iv) any
permanent assignment of Employee to a job location situated more than 50 miles
away from his current job location.

                  "Option" shall mean an option to purchase shares of Teradyne
                   ------
Common Stock.

                  "Termination Event" shall mean (i) any termination of Employee
                   -----------------
by Teradyne without Cause or (ii) any voluntary termination by Employee for Good
Reason.

         2.       (a) Parachute Payment Gross-Up. If any Payments (as
                      --------------------------
hereinafter defined) to Employee are subject to the Excise Tax (as hereinafter
defined), Teradyne shall pay to Employee a Gross-Up Payment (as hereinafter
defined). The Gross-Up Payment with respect to any Payment shall be paid no
later than 15 days prior to the date that the Excise Tax is due with respect to
such Payment.

                  (b)      Definitions. For purposes of this Section 2, the
                           -----------
following terms shall have the following meanings:

                           (i)      "Code" shall mean the Internal Revenue Code
                                     ----
                                    of 1986, as amended.

                           (ii)     "Excise Tax" shall mean the tax imposed by
                                     ----------
                                    Section 4999 of the Code. The amount of the
                                    Excise Tax (if any) imposed on any non-cash
                                    benefits or any deferred payment or benefit
                                    shall be reasonably determined by Teradyne,
                                    after consultation with its legal and tax
                                    advisors.

                           (iii)    "Gross-Up Payment" shall mean, with respect
                                     ----------------
                                    to Payments to the Employee, the amount
                                    necessary so that the amount retained by
                                    Employee, after reduction for (1) any Excise
                                    Tax on the Gross-Up

<PAGE>

                                       -3-


                                    Payment and (2) any federal, state, or local
                                    income and employment taxes imposed on the
                                    Gross-Up Payment, is an amount equal to the
                                    Excise Tax on the Payments to Employee,
                                    other than the Gross-Up Payment. The amount
                                    of the Gross-Up Payment shall be reasonably
                                    determined by Teradyne after consultation
                                    with its legal and tax advisors.

                                    (1)  For purposes of determining the amount
                                         of the Gross-Up Payment, Employee shall
                                         be deemed to pay federal income taxes
                                         at the highest marginal rate of
                                         federal, state and local income tax in
                                         the calendar year in which the Gross-Up
                                         Payment is made (determined by
                                         reference to Employee's residence for
                                         such calendar year), net of the maximum
                                         reduction in federal income taxes which
                                         could be obtained from deduction of
                                         such state and local taxes.

                                    (2)  In the event that the Excise Tax with
                                         respect to the Payments is determined
                                         to exceed the amount taken into account
                                         hereunder, Teradyne shall make an
                                         additional Gross-Up Payment in respect
                                         of such excess. For purposes of
                                         calculating such Gross-Up Payment, any
                                         interest or penalties imposed in
                                         connection with such excess Excise Tax
                                         shall be treated as an Excise Tax.

                                    (3)  In the event that the Excise Tax with
                                         respect to the Payments is subsequently
                                         determined to be less than the amount
                                         taken into account for purposes of
                                         calculating the Gross-Up Payment,
                                         Employee shall promptly repay to
                                         Teradyne the after-tax portion of the
                                         Gross-Up Payment that exceeds the
                                         Gross-Up Payment that otherwise would
                                         have been payable in connection with
                                         the actual Excise Tax imposed on the
                                         Payments.

                           (iv)     "Payment" shall mean, with respect to the
                                     -------
                                    Employee, any payment in the nature of
                                    compensation to (or for the benefit of) such
                                    individual, if such payment is contingent on
                                    a change (i) in the ownership or effective
                                    control of Teradyne or (ii) in the ownership
                                    of a substantial portion of the assets of
                                    Teradyne (in each case, as reasonably
                                    determined by Teradyne in accordance with
                                    Section 280G(b)(2) of the Code and the
                                    regulations promulgated thereunder).
                                    Notwithstanding the foregoing, any amount
                                    payable to (or for the benefit of) the
                                    Employee shall be a Payment if an Excise Tax
                                    is imposed on the Employee with respect to
                                    such payment or benefit, and such payment or
                                    benefit is contingent on a change (i) in the
                                    ownership or effective control of Teradyne
                                    or (ii)

<PAGE>

                                       -4-

                                    in the ownership of a substantial portion of
                                    the assets of Teradyne (in each case,
                                    determined in accordance with Section
                                    280G(b)(2) of the Code and the regulations
                                    promulgated thereunder).

         3.       No Obligation of Employment. Employee understands that the
                  ---------------------------
employment relationship between Employee and Teradyne will be "at will" and
Employee understands that, prior to any Change in Control, Teradyne may
terminate Employee with or without "Cause" at any time. Following any Change in
Control, Teradyne may also terminate Employee with or without "cause" at any
time subject to Employee's rights and Teradyne's obligations specified in this
Agreement.

         4.       Governing Law. This Agreement shall be governed by and
                  -------------
construed in accordance with the internal laws of the Commonwealth of
Massachusetts and this Agreement shall be deemed to be performable in
Massachusetts.

         5.       Severability. In case any one or more of the provisions
                  ------------
contained in this Agreement for any reason shall be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement and this Agreement shall
be construed to the maximum extent permitted by law.

         6.       Waivers and Modifications. This Agreement may be modified, and
                  -------------------------
the rights, remedies and obligations contained in any provision hereof may be
waived, only in accordance with this Section 6. No waiver by either party of any
breach by the other or any provision hereof shall be deemed to be a waiver of
any later or other breach thereof or as a waiver of any other provision of this
Agreement. This Agreement may not be waived, changed, discharged or terminated
orally or by any course of dealing between the parties, but only by an
instrument in writing signed by the party against whom any waiver, change,
discharge or termination is sought.

         7.       Assignment. Employee may not assign any of his rights or
                  ----------
delegate any of his duties or obligations under this Agreement. The rights and
obligations of Teradyne under this Agreement shall inure to the benefit of, and
shall be binding upon, the successors and assigns of Teradyne. For purposes of
this Agreement, "Teradyne" shall be deemed to include all successors and assigns
of Teradyne.

         8.       Entire Agreement. This Agreement constitutes the entire
                  ----------------
understanding of the parties relating to the subject matter hereof and
supersedes and cancels all agreements, written or oral, made prior to the date
hereof between Employee and Teradyne relating to the subject matter hereof;
provided, however, that Employee's existing option agreements, as modified
hereby, shall remain in effect.

<PAGE>

                                       -5-


         9.       Notices. All notices hereunder shall be in writing and shall
                  -------
be delivered in person or mailed by certified or registered mail, return receipt
requested, addressed as follows:

         If to Teradyne, to:        Teradyne, Inc.
                                    321 Harrison Avenue
                                    Boston, MA 02118
                                    Attention: Tom Grilk

         If to Employee, at Employee's address set forth on the signature page
hereto.

         10.      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
together shall constitute one and the same instrument.

         11.      Section Headings. The descriptive section headings herein have
                  ----------------
been inserted for convenience only and shall not be deemed to define, limit, or
otherwise affect the construction of any provision hereof.

         12.      Term. The term of this Agreement (the "Term") shall commence
                  ----
upon the date hereof and terminate upon the earlier of (i) twenty-four (24)
months following any Change in Control of Teradyne, (ii) the date prior to any
Change in Control of Teradyne that employee for any reason ceases to be an
employee of Teradyne and (iii) the date following any Change in Control of
Teradyne that Employee is terminated for Cause or voluntary terminates his
employment (other than for Good Reason).


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.

                                       TERADYNE, INC.


                                       By: /s/ George W. Chamillard
                                           -------------------------------------
                                           Name:  George W. Chamillard
                                           Title: Chairman, Chief Executive
                                                  Officer and President of
                                                  Teradyne, Inc.



                                       EMPLOYEE


                                       /s/ Edward Rogas, Jr.
                                       -----------------------------------------
                                       Name: Edward Rogas, Jr.
                                       Address: 909 Westbend Road
                                                Westlake Village, CA 91362

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.17
<SEQUENCE>6
<FILENAME>dex1017.txt
<DESCRIPTION>CHANGE IN CONTROL AGREEMENT
<TEXT>
<PAGE>

                                                                   Exhibit 10.17


                  EXECUTIVE OFFICER CHANGE IN CONTROL AGREEMENT


         EXECUTIVE OFFICER CHANGE IN CONTROL AGREEMENT entered into this 19th
day of October, 2001, by and between Teradyne, Inc., a Massachusetts
corporation ("Teradyne"), and the undersigned executive officer of Teradyne
              --------
("Employee").
  --------

                                   WITNESSETH:

         WHEREAS, Teradyne and Employee desire to set forth certain terms and
conditions relating to benefits to be afforded to Employee upon the occurrence
of a Change in Control (as hereinafter defined) of Teradyne;

         NOW THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, the parties hereto hereby agree
as follows:

         1.       Option Acceleration. (a) during the Term (as hereinafter
                  -------------------
defined), if within twenty-four (24) months following a Change in Control there
is a Termination Event (as hereinafter defined), all of Employee's unvested
Options granted prior to, on, or after the date hereof (but only (I) such
Options as have been granted to Employee by Teradyne as of the date of the
Change in Control or (II) such Options as have been assumed by an acquiring
company at the time of a Change in Control or such new options that have been
substituted by an acquiring company for Options existing at the time of a Change
in Control, each pursuant to the terms of any Teradyne option plan) shall
automatically become fully vested as of the date of such Termination Event. The
parties hereto acknowledge that the terms of this Agreement are intended to
modify the terms of Employee's existing Option agreements and to be a supplement
to future Option agreements.

                  (b) For purposes of this Agreement, the following terms shall
have the following meanings:

                  "Cause" shall mean conduct involving one or more of the
                   -----
following: (i) the substantial and continuing failure of Employee, after notice
thereof, to render services to Teradyne in accordance with the terms or
requirements of his or her employment; (ii) Employee's disloyalty, gross
negligence, willful misconduct, dishonesty, fraud or breach of fiduciary duty to
Teradyne; (iii) Employee's deliberate disregard of the rules or policies of, or
breach of an agreement with, Teradyne which results in direct or indirect loss,
damage or injury to Teradyne; (iv) the unauthorized disclosure by Employee of
any trade secret or confidential information of Teradyne; or (v) the commission
by Employee of an act which constitutes unfair competition with Teradyne.

                  A "Change in Control" shall be deemed to have occurred upon
                     -----------------
the occurrence of any of the following events: (i) any consolidation, cash
tender offer, reorganization, recapitalization, merger or plan of share exchange
following which the shareholders of Teradyne immediately prior to such
transaction own less than a majority of the combined voting power of

<PAGE>

                                       -2-


the then-outstanding securities of the combined corporation or person
immediately after such transaction; (ii) any sale, lease, exchange or other
transfer of all or substantially all of Teradyne's assets; (iii) the adoption by
the Board of Directors of Teradyne of any plan or proposal for the liquidation
or dissolution of Teradyne; (iv) a change in the majority of the Board of
Directors of Teradyne through one or more contested elections; or (v) any person
(as that term is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange
Act of 1934, as amended) becomes beneficial owner of 30% or more of the combined
voting power of Teradyne's outstanding voting securities.

                  "Good Reason" shall mean any one or more of the following: (i)
                   -----------
any material reduction of Employee's responsibilities (other than for Cause or
as a result of death or disability); (ii) any material reduction in Employee's
model compensation as in effect on the date of the consummation of the Change in
Control, or as the same may be increased from time to time, or any failure by
Teradyne to pay to Employee any bonus accrued, but not yet paid, upon written
notice by Employee to Teradyne, within 45 days; (iii) a material reduction in
the value of Employee's benefit package from the value of Employee's benefit
package on the date of the consummation of the Change in Control; or (iv) any
permanent assignment of Employee to a job location situated more than 50 miles
away from his current job location.

                  "Option" shall mean an option to purchase shares of Teradyne
                   ------
Common Stock.

                  "Termination Event" shall mean (i) any termination of Employee
                   -----------------
by Teradyne without Cause or (ii) any voluntary termination by Employee for Good
Reason.

         2.       (a) Parachute Payment Gross-Up. If any Payments (as
                      --------------------------
hereinafter defined) to Employee are subject to the Excise Tax (as hereinafter
defined), Teradyne shall pay to Employee a Gross-Up Payment (as hereinafter
defined). The Gross-Up Payment with respect to any Payment shall be paid no
later than 15 days prior to the date that the Excise Tax is due with respect to
such Payment.

                  (b)      Definitions. For purposes of this Section 2, the
                           -----------
following terms shall have the following meanings:

                           (i)      "Code" shall mean the Internal Revenue Code
                                     ----
                                    of 1986, as amended.

                           (ii)     "Excise Tax" shall mean the tax imposed by
                                     ----------
                                    Section 4999 of the Code. The amount of the
                                    Excise Tax (if any) imposed on any non-cash
                                    benefits or any deferred payment or benefit
                                    shall be reasonably determined by Teradyne,
                                    after consultation with its legal and tax
                                    advisors.

                           (iii)    "Gross-Up Payment" shall mean, with respect
                                     ----------------
                                    to Payments to the Employee, the amount
                                    necessary so that the amount retained by
                                    Employee, after reduction for (1) any Excise
                                    Tax on the Gross-Up

<PAGE>

                                       -3-


                                    Payment and (2) any federal, state, or local
                                    income and employment taxes imposed on the
                                    Gross-Up Payment, is an amount equal to the
                                    Excise Tax on the Payments to Employee,
                                    other than the Gross-Up Payment. The amount
                                    of the Gross-Up Payment shall be reasonably
                                    determined by Teradyne after consultation
                                    with its legal and tax advisors.

                                    (1)      For purposes of determining the
                                             amount of the Gross-Up Payment,
                                             Employee shall be deemed to pay
                                             federal income taxes at the highest
                                             marginal rate of federal, state and
                                             local income tax in the calendar
                                             year in which the Gross-Up Payment
                                             is made (determined by reference to
                                             Employee's residence for such
                                             calendar year), net of the maximum
                                             reduction in federal income taxes
                                             which could be obtained from
                                             deduction of such state and local
                                             taxes.

                                    (2)      In the event that the Excise Tax
                                             with respect to the Payments is
                                             determined to exceed the amount
                                             taken into account hereunder,
                                             Teradyne shall make an additional
                                             Gross-Up Payment in respect of such
                                             excess. For purposes of calculating
                                             such Gross-Up Payment, any interest
                                             or penalties imposed in connection
                                             with such excess Excise Tax shall
                                             be treated as an Excise Tax.

                                    (3)      In the event that the Excise Tax
                                             with respect to the Payments is
                                             subsequently determined to be less
                                             than the amount taken into account
                                             for purposes of calculating the
                                             Gross-Up Payment, Employee shall
                                             promptly repay to Teradyne the
                                             after-tax portion of the Gross-Up
                                             Payment that exceeds the Gross-Up
                                             Payment that otherwise would have
                                             been payable in connection with the
                                             actual Excise Tax imposed on the
                                             Payments.

                           (iv)     "Payment" shall mean, with respect to the
                                     -------
                                    Employee, any payment in the nature of
                                    compensation to (or for the benefit of) such
                                    individual, if such payment is contingent on
                                    a change (i) in the ownership or effective
                                    control of Teradyne or (ii) in the ownership
                                    of a substantial portion of the assets of
                                    Teradyne (in each case, as reasonably
                                    determined by Teradyne in accordance with
                                    Section 280G(b)(2) of the Code and the
                                    regulations promulgated thereunder).
                                    Notwithstanding the foregoing, any amount
                                    payable to (or for the benefit of) the
                                    Employee shall be a Payment if an Excise Tax
                                    is imposed on the Employee with respect to
                                    such payment or benefit, and such payment or
                                    benefit is contingent on a change (i) in the
                                    ownership or effective control of Teradyne
                                    or (ii)

<PAGE>

                                       -4-


                                    in the ownership of a substantial portion of
                                    the assets of Teradyne (in each case,
                                    determined in accordance with Section
                                    280G(b)(2) of the Code and the regulations
                                    promulgated thereunder).

         3.       No Obligation of Employment. Employee understands that the
                  ---------------------------
employment relationship between Employee and Teradyne will be "at will" and
Employee understands that, prior to any Change in Control, Teradyne may
terminate Employee with or without "Cause" at any time. Following any Change in
Control, Teradyne may also terminate Employee with or without "cause" at any
time subject to Employee's rights and Teradyne's obligations specified in this
Agreement.

         4.       Governing Law. This Agreement shall be governed by and
                  -------------
construed in accordance with the internal laws of the Commonwealth of
Massachusetts and this Agreement shall be deemed to be performable in
Massachusetts.

         5.       Severability. In case any one or more of the provisions
                  ------------
contained in this Agreement for any reason shall be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement and this Agreement shall
be construed to the maximum extent permitted by law.

         6.       Waivers and Modifications. This Agreement may be modified, and
                  -------------------------
the rights, remedies and obligations contained in any provision hereof may be
waived, only in accordance with this Section 6. No waiver by either party of any
breach by the other or any provision hereof shall be deemed to be a waiver of
any later or other breach thereof or as a waiver of any other provision of this
Agreement. This Agreement may not be waived, changed, discharged or terminated
orally or by any course of dealing between the parties, but only by an
instrument in writing signed by the party against whom any waiver, change,
discharge or termination is sought.

         7.       Assignment. Employee may not assign any of his rights or
                  ----------
delegate any of his duties or obligations under this Agreement. The rights and
obligations of Teradyne under this Agreement shall inure to the benefit of, and
shall be binding upon, the successors and assigns of Teradyne. For purposes of
this Agreement, "Teradyne" shall be deemed to include all successors and assigns
of Teradyne.

         8.       Entire Agreement. This Agreement constitutes the entire
                  ----------------
understanding of the parties relating to the subject matter hereof and
supersedes and cancels all agreements, written or oral, made prior to the date
hereof between Employee and Teradyne relating to the subject matter hereof;
provided, however, that Employee's existing option agreements, as modified
hereby, shall remain in effect.

<PAGE>

                                       -5-


         9.       Notices. All notices hereunder shall be in writing and shall
                  -------
be delivered in person or mailed by certified or registered mail, return receipt
requested, addressed as follows:

         If to Teradyne, to:        Teradyne, Inc.
                                    321 Harrison Avenue
                                    Boston, MA 02118
                                    Attention: Tom Grilk

         If to Employee, at Employee's address set forth on the signature page
hereto.

         10.      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
together shall constitute one and the same instrument.

         11.      Section Headings. The descriptive section headings herein have
                  ----------------
been inserted for convenience only and shall not be deemed to define, limit, or
otherwise affect the construction of any provision hereof.

         12.      Term. The term of this Agreement (the "Term") shall commence
                  ----
upon the date hereof and terminate upon the earlier of (i) twenty-four (24)
months following any Change in Control of Teradyne, (ii) the date prior to any
Change in Control of Teradyne that employee for any reason ceases to be an
employee of Teradyne and (iii) the date following any Change in Control of
Teradyne that Employee is terminated for Cause or voluntary terminates his
employment (other than for Good Reason).


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.

                                       TERADYNE, INC.


                                       By: /s/ George W. Chamillard
                                           -------------------------------------
                                           Name:  George W. Chamillard
                                           Title: Chairman, Chief Executive
                                                  Officer and President of
                                                  Teradyne, Inc.



                                       EMPLOYEE


                                       /s/ Gregory R. Beecher
                                       -----------------------------------------
                                       Name: Gregory R. Beecher
                                       Address: 23 Yale Street
                                                Winchester, MA 01890

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.18
<SEQUENCE>7
<FILENAME>dex1018.txt
<DESCRIPTION>CHANGE IN CONTROL AGREEMENT
<TEXT>
<PAGE>

                                                                   Exhibit 10.18


                  EXECUTIVE OFFICER CHANGE IN CONTROL AGREEMENT


         EXECUTIVE OFFICER CHANGE IN CONTROL AGREEMENT entered into this 19th
day of October, 2001, by and between Teradyne, Inc., a Massachusetts
corporation ("Teradyne"), and the undersigned executive officer of Teradyne
              --------
("Employee").
  --------

                                   WITNESSETH:

         WHEREAS, Teradyne and Employee desire to set forth certain terms and
conditions relating to benefits to be afforded to Employee upon the occurrence
of a Change in Control (as hereinafter defined) of Teradyne;

         NOW THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, the parties hereto hereby agree
as follows:

         1.       Option Acceleration. (a) during the Term (as hereinafter
                  -------------------
defined), if within twenty-four (24) months following a Change in Control there
is a Termination Event (as hereinafter defined), all of Employee's unvested
Options granted prior to, on, or after the date hereof (but only (I) such
Options as have been granted to Employee by Teradyne as of the date of the
Change in Control or (II) such Options as have been assumed by an acquiring
company at the time of a Change in Control or such new options that have been
substituted by an acquiring company for Options existing at the time of a Change
in Control, each pursuant to the terms of any Teradyne option plan) shall
automatically become fully vested as of the date of such Termination Event. The
parties hereto acknowledge that the terms of this Agreement are intended to
modify the terms of Employee's existing Option agreements and to be a supplement
to future Option agreements.

                  (b) For purposes of this Agreement, the following terms shall
have the following meanings:

                  "Cause" shall mean conduct involving one or more of the
                   -----
following: (i) the substantial and continuing failure of Employee, after notice
thereof, to render services to Teradyne in accordance with the terms or
requirements of his or her employment; (ii) Employee's disloyalty, gross
negligence, willful misconduct, dishonesty, fraud or breach of fiduciary duty to
Teradyne; (iii) Employee's deliberate disregard of the rules or policies of, or
breach of an agreement with, Teradyne which results in direct or indirect loss,
damage or injury to Teradyne; (iv) the unauthorized disclosure by Employee of
any trade secret or confidential information of Teradyne; or (v) the commission
by Employee of an act which constitutes unfair competition with Teradyne.

                  A "Change in Control" shall be deemed to have occurred upon
                     -----------------
the occurrence of any of the following events: (i) any consolidation, cash
tender offer, reorganization, recapitalization, merger or plan of share exchange
following which the shareholders of Teradyne immediately prior to such
transaction own less than a majority of the combined voting power of

<PAGE>

                                       -2-


the then-outstanding securities of the combined corporation or person
immediately after such transaction; (ii) any sale, lease, exchange or other
transfer of all or substantially all of Teradyne's assets; (iii) the adoption by
the Board of Directors of Teradyne of any plan or proposal for the liquidation
or dissolution of Teradyne; (iv) a change in the majority of the Board of
Directors of Teradyne through one or more contested elections; or (v) any person
(as that term is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange
Act of 1934, as amended) becomes beneficial owner of 30% or more of the combined
voting power of Teradyne's outstanding voting securities.

                  "Good Reason" shall mean any one or more of the following: (i)
                   -----------
any material reduction of Employee's responsibilities (other than for Cause or
as a result of death or disability); (ii) any material reduction in Employee's
model compensation as in effect on the date of the consummation of the Change in
Control, or as the same may be increased from time to time, or any failure by
Teradyne to pay to Employee any bonus accrued, but not yet paid, upon written
notice by Employee to Teradyne, within 45 days; (iii) a material reduction in
the value of Employee's benefit package from the value of Employee's benefit
package on the date of the consummation of the Change in Control; or (iv) any
permanent assignment of Employee to a job location situated more than 50 miles
away from his current job location.

                  "Option" shall mean an option to purchase shares of Teradyne
                   ------
Common Stock.

                  "Termination Event" shall mean (i) any termination of Employee
                   -----------------
by Teradyne without Cause or (ii) any voluntary termination by Employee for Good
Reason.

         2.       (a) Parachute Payment Gross-Up. If any Payments (as
                      --------------------------
hereinafter defined) to Employee are subject to the Excise Tax (as hereinafter
defined), Teradyne shall pay to Employee a Gross-Up Payment (as hereinafter
defined). The Gross-Up Payment with respect to any Payment shall be paid no
later than 15 days prior to the date that the Excise Tax is due with respect to
such Payment.

                  (b)      Definitions. For purposes of this Section 2, the
                           -----------
following terms shall have the following meanings:

                           (i)      "Code" shall mean the Internal Revenue Code
                                     ----
                                    of 1986, as amended.

                           (ii)     "Excise Tax" shall mean the tax imposed by
                                     ----------
                                    Section 4999 of the Code. The amount of the
                                    Excise Tax (if any) imposed on any non-cash
                                    benefits or any deferred payment or benefit
                                    shall be reasonably determined by Teradyne,
                                    after consultation with its legal and tax
                                    advisors.

                           (iii)    "Gross-Up Payment" shall mean, with respect
                                     ----------------
                                    to Payments to the Employee, the amount
                                    necessary so that the amount retained by
                                    Employee, after reduction for (1) any Excise
                                    Tax on the Gross-Up

<PAGE>

                                       -3-


                                    Payment and (2) any federal, state, or local
                                    income and employment taxes imposed on the
                                    Gross-Up Payment, is an amount equal to the
                                    Excise Tax on the Payments to Employee,
                                    other than the Gross-Up Payment. The amount
                                    of the Gross-Up Payment shall be reasonably
                                    determined by Teradyne after consultation
                                    with its legal and tax advisors.

                                    (1)      For purposes of determining the
                                             amount of the Gross-Up Payment,
                                             Employee shall be deemed to pay
                                             federal income taxes at the highest
                                             marginal rate of federal, state and
                                             local income tax in the calendar
                                             year in which the Gross-Up Payment
                                             is made (determined by reference to
                                             Employee's residence for such
                                             calendar year), net of the maximum
                                             reduction in federal income taxes
                                             which could be obtained from
                                             deduction of such state and local
                                             taxes.

                                    (2)      In the event that the Excise Tax
                                             with respect to the Payments is
                                             determined to exceed the amount
                                             taken into account hereunder,
                                             Teradyne shall make an additional
                                             Gross-Up Payment in respect of such
                                             excess. For purposes of calculating
                                             such Gross-Up Payment, any interest
                                             or penalties imposed in connection
                                             with such excess Excise Tax shall
                                             be treated as an Excise Tax.

                                    (3)      In the event that the Excise Tax
                                             with respect to the Payments is
                                             subsequently determined to be less
                                             than the amount taken into account
                                             for purposes of calculating the
                                             Gross-Up Payment, Employee shall
                                             promptly repay to Teradyne the
                                             after-tax portion of the Gross-Up
                                             Payment that exceeds the Gross-Up
                                             Payment that otherwise would have
                                             been payable in connection with the
                                             actual Excise Tax imposed on the
                                             Payments.

                           (iv)     "Payment" shall mean, with respect to the
                                     -------
                                    Employee, any payment in the nature of
                                    compensation to (or for the benefit of) such
                                    individual, if such payment is contingent on
                                    a change (i) in the ownership or effective
                                    control of Teradyne or (ii) in the ownership
                                    of a substantial portion of the assets of
                                    Teradyne (in each case, as reasonably
                                    determined by Teradyne in accordance with
                                    Section 280G(b)(2) of the Code and the
                                    regulations promulgated thereunder).
                                    Notwithstanding the foregoing, any amount
                                    payable to (or for the benefit of) the
                                    Employee shall be a Payment if an Excise Tax
                                    is imposed on the Employee with respect to
                                    such payment or benefit, and such payment or
                                    benefit is contingent on a change (i) in the
                                    ownership or effective control of Teradyne
                                    or (ii)

<PAGE>

                                       -4-


                                    in the ownership of a substantial portion of
                                    the assets of Teradyne (in each case,
                                    determined in accordance with Section
                                    280G(b)(2) of the Code and the regulations
                                    promulgated thereunder).

         3.       No Obligation of Employment. Employee understands that the
                  ---------------------------
employment relationship between Employee and Teradyne will be "at will" and
Employee understands that, prior to any Change in Control, Teradyne may
terminate Employee with or without "Cause" at any time. Following any Change in
Control, Teradyne may also terminate Employee with or without "cause" at any
time subject to Employee's rights and Teradyne's obligations specified in this
Agreement.

         4.       Governing Law. This Agreement shall be governed by and
                  -------------
construed in accordance with the internal laws of the Commonwealth of
Massachusetts and this Agreement shall be deemed to be performable in
Massachusetts.

         5.       Severability. In case any one or more of the provisions
                  ------------
contained in this Agreement for any reason shall be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement and this Agreement shall
be construed to the maximum extent permitted by law.

         6.       Waivers and Modifications. This Agreement may be modified, and
                  -------------------------
the rights, remedies and obligations contained in any provision hereof may be
waived, only in accordance with this Section 6. No waiver by either party of any
breach by the other or any provision hereof shall be deemed to be a waiver of
any later or other breach thereof or as a waiver of any other provision of this
Agreement. This Agreement may not be waived, changed, discharged or terminated
orally or by any course of dealing between the parties, but only by an
instrument in writing signed by the party against whom any waiver, change,
discharge or termination is sought.

         7.       Assignment. Employee may not assign any of his rights or
                  ----------
delegate any of his duties or obligations under this Agreement. The rights and
obligations of Teradyne under this Agreement shall inure to the benefit of, and
shall be binding upon, the successors and assigns of Teradyne. For purposes of
this Agreement, "Teradyne" shall be deemed to include all successors and assigns
of Teradyne.

         8.       Entire Agreement. This Agreement constitutes the entire
                  ----------------
understanding of the parties relating to the subject matter hereof and
supersedes and cancels all agreements, written or oral, made prior to the date
hereof between Employee and Teradyne relating to the subject matter hereof;
provided, however, that Employee's existing option agreements, as modified
hereby, shall remain in effect.

<PAGE>

                                       -5-


         9.       Notices. All notices hereunder shall be in writing and shall
                  -------
be delivered in person or mailed by certified or registered mail, return receipt
requested, addressed as follows:

         If to Teradyne, to:        Teradyne, Inc.
                                    321 Harrison Avenue
                                    Boston, MA 02118
                                    Attention: Tom Grilk

         If to Employee, at Employee's address set forth on the signature page
hereto.

         10.      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
together shall constitute one and the same instrument.

         11.      Section Headings. The descriptive section headings herein have
                  ----------------
been inserted for convenience only and shall not be deemed to define, limit, or
otherwise affect the construction of any provision hereof.

         12.      Term. The term of this Agreement (the "Term") shall commence
                  ----
upon the date hereof and terminate upon the earlier of (i) twenty-four (24)
months following any Change in Control of Teradyne, (ii) the date prior to any
Change in Control of Teradyne that employee for any reason ceases to be an
employee of Teradyne and (iii) the date following any Change in Control of
Teradyne that Employee is terminated for Cause or voluntary terminates his
employment (other than for Good Reason).


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.

                                       TERADYNE, INC.


                                       By: /s/ Gregory R. Beecher
                                           -------------------------------------
                                           Name:  Gregory R. Beecher
                                           Title: Vice President and Chief
                                                  Financial Officer of Teradyne,
                                                  Inc.



                                       EMPLOYEE


                                       /s/ George W. Chamillard
                                       -----------------------------------------
                                       Name: George W. Chamillard
                                       Address: 378 Jerusalem Road
                                                Cohasset, MA 02025

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.19
<SEQUENCE>8
<FILENAME>dex1019.txt
<DESCRIPTION>CHANGE IN CONTROL AGREEMENT
<TEXT>
<PAGE>

                                                                   Exhibit 10.19


                  EXECUTIVE OFFICER CHANGE IN CONTROL AGREEMENT


         EXECUTIVE OFFICER CHANGE IN CONTROL AGREEMENT entered into this 19th
day of March, 2002, by and between Teradyne, Inc., a Massachusetts corporation
("Teradyne"), and the undersigned executive officer of Teradyne ("Employee").
  --------                                                        --------

                                   WITNESSETH:

         WHEREAS, Teradyne and Employee desire to set forth certain terms and
conditions relating to benefits to be afforded to Employee upon the occurrence
of a Change in Control (as hereinafter defined) of Teradyne;

         NOW THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, the parties hereto hereby agree
as follows:

         1.       Option Acceleration. (a) during the Term (as hereinafter
                  -------------------
defined), if within twenty-four (24) months following a Change in Control there
is a Termination Event (as hereinafter defined), all of Employee's unvested
Options granted prior to, on, or after the date hereof (but only (I) such
Options as have been granted to Employee by Teradyne as of the date of the
Change in Control or (II) such Options as have been assumed by an acquiring
company at the time of a Change in Control or such new options that have been
substituted by an acquiring company for Options existing at the time of a Change
in Control, each pursuant to the terms of any Teradyne option plan) shall
automatically become fully vested as of the date of such Termination Event. The
parties hereto acknowledge that the terms of this Agreement are intended to
modify the terms of Employee's existing Option agreements and to be a supplement
to future Option agreements.

                  (b) For purposes of this Agreement, the following terms shall
have the following meanings:

                  "Cause" shall mean conduct involving one or more of the
                   -----
following: (i) the substantial and continuing failure of Employee, after notice
thereof, to render services to Teradyne in accordance with the terms or
requirements of his or her employment; (ii) Employee's disloyalty, gross
negligence, willful misconduct, dishonesty, fraud or breach of fiduciary duty to
Teradyne; (iii) Employee's deliberate disregard of the rules or policies of, or
breach of an agreement with, Teradyne which results in direct or indirect loss,
damage or injury to Teradyne; (iv) the unauthorized disclosure by Employee of
any trade secret or confidential information of Teradyne; or (v) the commission
by Employee of an act which constitutes unfair competition with Teradyne.

                  A "Change in Control" shall be deemed to have occurred upon
                     -----------------
the occurrence of any of the following events: (i) any consolidation, cash
tender offer, reorganization, recapitalization, merger or plan of share exchange
following which the shareholders of Teradyne immediately prior to such
transaction own less than a majority of the combined voting power of

<PAGE>

                                       -2-


the then-outstanding securities of the combined corporation or person
immediately after such transaction; (ii) any sale, lease, exchange or other
transfer of all or substantially all of Teradyne's assets; (iii) the adoption by
the Board of Directors of Teradyne of any plan or proposal for the liquidation
or dissolution of Teradyne; (iv) a change in the majority of the Board of
Directors of Teradyne through one or more contested elections; or (v) any person
(as that term is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange
Act of 1934, as amended) becomes beneficial owner of 30% or more of the combined
voting power of Teradyne's outstanding voting securities.

                  "Good Reason" shall mean any one or more of the following: (i)
                   -----------
any material reduction of Employee's responsibilities (other than for Cause or
as a result of death or disability); (ii) any material reduction in Employee's
model compensation as in effect on the date of the consummation of the Change in
Control, or as the same may be increased from time to time, or any failure by
Teradyne to pay to Employee any bonus accrued, but not yet paid, upon written
notice by Employee to Teradyne, within 45 days; (iii) a material reduction in
the value of Employee's benefit package from the value of Employee's benefit
package on the date of the consummation of the Change in Control; or (iv) any
permanent assignment of Employee to a job location situated more than 50 miles
away from his current job location.

                  "Option" shall mean an option to purchase shares of Teradyne
                   ------
Common Stock.

                  "Termination Event" shall mean (i) any termination of Employee
                   -----------------
by Teradyne without Cause or (ii) any voluntary termination by Employee for Good
Reason.

         2.       (a) Parachute Payment Gross-Up. If any Payments (as
                      --------------------------
hereinafter defined) to Employee are subject to the Excise Tax (as hereinafter
defined), Teradyne shall pay to Employee a Gross-Up Payment (as hereinafter
defined). The Gross-Up Payment with respect to any Payment shall be paid no
later than 15 days prior to the date that the Excise Tax is due with respect to
such Payment.

                  (b)      Definitions. For purposes of this Section 2, the
                           -----------
following terms shall have the following meanings:

                           (i)      "Code" shall mean the Internal Revenue Code
                                     ----
                                    of 1986, as amended.

                           (ii)     "Excise Tax" shall mean the tax imposed by
                                     ----------
                                    Section 4999 of the Code. The amount of the
                                    Excise Tax (if any) imposed on any non-cash
                                    benefits or any deferred payment or benefit
                                    shall be reasonably determined by Teradyne,
                                    after consultation with its legal and tax
                                    advisors.

                           (iii)    "Gross-Up Payment" shall mean, with respect
                                     ----------------
                                    to Payments to the Employee, the amount
                                    necessary so that the amount retained by
                                    Employee, after reduction for (1) any Excise
                                    Tax on the Gross-Up

<PAGE>

                                       -3-


                                    Payment and (2) any federal, state, or local
                                    income and employment taxes imposed on the
                                    Gross-Up Payment, is an amount equal to the
                                    Excise Tax on the Payments to Employee,
                                    other than the Gross-Up Payment. The amount
                                    of the Gross-Up Payment shall be reasonably
                                    determined by Teradyne after consultation
                                    with its legal and tax advisors.

                                    (1)      For purposes of determining the
                                             amount of the Gross-Up Payment,
                                             Employee shall be deemed to pay
                                             federal income taxes at the highest
                                             marginal rate of federal, state and
                                             local income tax in the calendar
                                             year in which the Gross-Up Payment
                                             is made (determined by reference to
                                             Employee's residence for such
                                             calendar year), net of the maximum
                                             reduction in federal income taxes
                                             which could be obtained from
                                             deduction of such state and local
                                             taxes.

                                    (2)      In the event that the Excise Tax
                                             with respect to the Payments is
                                             determined to exceed the amount
                                             taken into account hereunder,
                                             Teradyne shall make an additional
                                             Gross-Up Payment in respect of such
                                             excess. For purposes of calculating
                                             such Gross-Up Payment, any interest
                                             or penalties imposed in connection
                                             with such excess Excise Tax shall
                                             be treated as an Excise Tax.

                                    (3)      In the event that the Excise Tax
                                             with respect to the Payments is
                                             subsequently determined to be less
                                             than the amount taken into account
                                             for purposes of calculating the
                                             Gross-Up Payment, Employee shall
                                             promptly repay to Teradyne the
                                             after-tax portion of the Gross-Up
                                             Payment that exceeds the Gross-Up
                                             Payment that otherwise would have
                                             been payable in connection with the
                                             actual Excise Tax imposed on the
                                             Payments.

                           (iv)     "Payment" shall mean, with respect to the
                                     -------
                                    Employee, any payment in the nature of
                                    compensation to (or for the benefit of) such
                                    individual, if such payment is contingent on
                                    a change (i) in the ownership or effective
                                    control of Teradyne or (ii) in the ownership
                                    of a substantial portion of the assets of
                                    Teradyne (in each case, as reasonably
                                    determined by Teradyne in accordance with
                                    Section 280G(b)(2) of the Code and the
                                    regulations promulgated thereunder).
                                    Notwithstanding the foregoing, any amount
                                    payable to (or for the benefit of) the
                                    Employee shall be a Payment if an Excise Tax
                                    is imposed on the Employee with respect to
                                    such payment or benefit, and such payment or
                                    benefit is contingent on a change (i) in the
                                    ownership or effective control of Teradyne
                                    or (ii)

<PAGE>

                                       -4-


                                    in the ownership of a substantial portion of
                                    the assets of Teradyne (in each case,
                                    determined in accordance with Section
                                    280G(b)(2) of the Code and the regulations
                                    promulgated thereunder).

         3.       No Obligation of Employment. Employee understands that the
                  ---------------------------
employment relationship between Employee and Teradyne will be "at will" and
Employee understands that, prior to any Change in Control, Teradyne may
terminate Employee with or without "Cause" at any time. Following any Change in
Control, Teradyne may also terminate Employee with or without "cause" at any
time subject to Employee's rights and Teradyne's obligations specified in this
Agreement.

         4.       Governing Law. This Agreement shall be governed by and
                  -------------
construed in accordance with the internal laws of the Commonwealth of
Massachusetts and this Agreement shall be deemed to be performable in
Massachusetts.

         5.       Severability. In case any one or more of the provisions
                  ------------
contained in this Agreement for any reason shall be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement and this Agreement shall
be construed to the maximum extent permitted by law.

         6.       Waivers and Modifications. This Agreement may be modified, and
                  -------------------------
the rights, remedies and obligations contained in any provision hereof may be
waived, only in accordance with this Section 6. No waiver by either party of any
breach by the other or any provision hereof shall be deemed to be a waiver of
any later or other breach thereof or as a waiver of any other provision of this
Agreement. This Agreement may not be waived, changed, discharged or terminated
orally or by any course of dealing between the parties, but only by an
instrument in writing signed by the party against whom any waiver, change,
discharge or termination is sought.

         7.       Assignment. Employee may not assign any of his rights or
                  ----------
delegate any of his duties or obligations under this Agreement. The rights and
obligations of Teradyne under this Agreement shall inure to the benefit of, and
shall be binding upon, the successors and assigns of Teradyne. For purposes of
this Agreement, "Teradyne" shall be deemed to include all successors and assigns
of Teradyne.

         8.       Entire Agreement. This Agreement constitutes the entire
                  ----------------
understanding of the parties relating to the subject matter hereof and
supersedes and cancels all agreements, written or oral, made prior to the date
hereof between Employee and Teradyne relating to the subject matter hereof;
provided, however, that Employee's existing option agreements, as modified
hereby, shall remain in effect.

<PAGE>

                                       -5-


         9.       Notices. All notices hereunder shall be in writing and shall
                  -------
be delivered in person or mailed by certified or registered mail, return receipt
requested, addressed as follows:

         If to Teradyne, to:        Teradyne, Inc.
                                    321 Harrison Avenue
                                    Boston, MA 02118
                                    Attention: Tom Grilk

         If to Employee, at Employee's address set forth on the signature page
hereto.

         10.      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
together shall constitute one and the same instrument.

         11.      Section Headings. The descriptive section headings herein have
                  ----------------
been inserted for convenience only and shall not be deemed to define, limit, or
otherwise affect the construction of any provision hereof.

         12.      Term. The term of this Agreement (the "Term") shall commence
                  ----
upon the date hereof and terminate upon the earlier of (i) twenty-four (24)
months following any Change in Control of Teradyne, (ii) the date prior to any
Change in Control of Teradyne that employee for any reason ceases to be an
employee of Teradyne and (iii) the date following any Change in Control of
Teradyne that Employee is terminated for Cause or voluntary terminates his
employment (other than for Good Reason).


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.

                                       TERADYNE, INC.


                                       By: /s/ George W. Chamillard
                                           -------------------------------------
                                           Name:  George W. Chamillard
                                           Title: Chairman, Chief Executive
                                                  Officer and President of
                                                  Teradyne, Inc.



                                       EMPLOYEE


                                       /s/ John M. Casey
                                       -----------------------------------------
                                       Name: John M. Casey
                                       Address: 34 Deverell Drive
                                                North Barrington, IL 60010

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.20
<SEQUENCE>9
<FILENAME>dex1020.txt
<DESCRIPTION>CHANGE IN CONTROL AGREEMENT
<TEXT>
<PAGE>

                                                                   Exhibit 10.20


                  EXECUTIVE OFFICER CHANGE IN CONTROL AGREEMENT


         EXECUTIVE OFFICER CHANGE IN CONTROL AGREEMENT entered into this 19th
day of October, 2001, by and between Teradyne, Inc., a Massachusetts corporation
("Teradyne"), and the undersigned executive officer of Teradyne ("Employee").
  --------                                                        --------

                                   WITNESSETH:

         WHEREAS, Teradyne and Employee desire to set forth certain terms and
conditions relating to benefits to be afforded to Employee upon the occurrence
of a Change in Control (as hereinafter defined) of Teradyne;

         NOW THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, the parties hereto hereby agree
as follows:

         1.       Option Acceleration. (a) during the Term (as hereinafter
                  -------------------
defined), if within twenty-four (24) months following a Change in Control there
is a Termination Event (as hereinafter defined), all of Employee's unvested
Options granted prior to, on, or after the date hereof (but only (I) such
Options as have been granted to Employee by Teradyne as of the date of the
Change in Control or (II) such Options as have been assumed by an acquiring
company at the time of a Change in Control or such new options that have been
substituted by an acquiring company for Options existing at the time of a Change
in Control, each pursuant to the terms of any Teradyne option plan) shall
automatically become fully vested as of the date of such Termination Event. The
parties hereto acknowledge that the terms of this Agreement are intended to
modify the terms of Employee's existing Option agreements and to be a supplement
to future Option agreements.

                  (b) For purposes of this Agreement, the following terms shall
have the following meanings:

                  "Cause" shall mean conduct involving one or more of the
                   -----
following: (i) the substantial and continuing failure of Employee, after notice
thereof, to render services to Teradyne in accordance with the terms or
requirements of his or her employment; (ii) Employee's disloyalty, gross
negligence, willful misconduct, dishonesty, fraud or breach of fiduciary duty to
Teradyne; (iii) Employee's deliberate disregard of the rules or policies of, or
breach of an agreement with, Teradyne which results in direct or indirect loss,
damage or injury to Teradyne; (iv) the unauthorized disclosure by Employee of
any trade secret or confidential information of Teradyne; or (v) the commission
by Employee of an act which constitutes unfair competition with Teradyne.

                  A "Change in Control" shall be deemed to have occurred upon
                     -----------------
the occurrence of any of the following events: (i) any consolidation, cash
tender offer, reorganization, recapitalization, merger or plan of share exchange
following which the shareholders of Teradyne immediately prior to such
transaction own less than a majority of the combined voting power of

<PAGE>

                                       -2-


the then-outstanding securities of the combined corporation or person
immediately after such transaction; (ii) any sale, lease, exchange or other
transfer of all or substantially all of Teradyne's assets; (iii) the adoption by
the Board of Directors of Teradyne of any plan or proposal for the liquidation
or dissolution of Teradyne; (iv) a change in the majority of the Board of
Directors of Teradyne through one or more contested elections; or (v) any person
(as that term is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange
Act of 1934, as amended) becomes beneficial owner of 30% or more of the combined
voting power of Teradyne's outstanding voting securities.

                  "Good Reason" shall mean any one or more of the following: (i)
                   -----------
any material reduction of Employee's responsibilities (other than for Cause or
as a result of death or disability); (ii) any material reduction in Employee's
model compensation as in effect on the date of the consummation of the Change in
Control, or as the same may be increased from time to time, or any failure by
Teradyne to pay to Employee any bonus accrued, but not yet paid, upon written
notice by Employee to Teradyne, within 45 days; (iii) a material reduction in
the value of Employee's benefit package from the value of Employee's benefit
package on the date of the consummation of the Change in Control; or (iv) any
permanent assignment of Employee to a job location situated more than 50 miles
away from his current job location.

                  "Option" shall mean an option to purchase shares of Teradyne
                   ------
Common Stock.

                  "Termination Event" shall mean (i) any termination of Employee
                   -----------------
by Teradyne without Cause or (ii) any voluntary termination by Employee for Good
Reason.

         2.       (a) Parachute Payment Gross-Up. If any Payments (as
                      --------------------------
hereinafter defined) to Employee are subject to the Excise Tax (as hereinafter
defined), Teradyne shall pay to Employee a Gross-Up Payment (as hereinafter
defined). The Gross-Up Payment with respect to any Payment shall be paid no
later than 15 days prior to the date that the Excise Tax is due with respect to
such Payment.

                  (b)      Definitions. For purposes of this Section 2, the
                           -----------
following terms shall have the following meanings:

                           (i)      "Code" shall mean the Internal Revenue Code
                                     ----
                                    of 1986, as amended.

                           (ii)     "Excise Tax" shall mean the tax imposed by
                                     ----------
                                    Section 4999 of the Code. The amount of the
                                    Excise Tax (if any) imposed on any non-cash
                                    benefits or any deferred payment or benefit
                                    shall be reasonably determined by Teradyne,
                                    after consultation with its legal and tax
                                    advisors.

                           (iii)    "Gross-Up Payment" shall mean, with respect
                                     ----------------
                                    to Payments to the Employee, the amount
                                    necessary so that the amount retained by
                                    Employee, after reduction for (1) any Excise
                                    Tax on the Gross-Up

<PAGE>

                                       -3-


                                    Payment and (2) any federal, state, or local
                                    income and employment taxes imposed on the
                                    Gross-Up Payment, is an amount equal to the
                                    Excise Tax on the Payments to Employee,
                                    other than the Gross-Up Payment. The amount
                                    of the Gross-Up Payment shall be reasonably
                                    determined by Teradyne after consultation
                                    with its legal and tax advisors.

                                    (1)      For purposes of determining the
                                             amount of the Gross-Up Payment,
                                             Employee shall be deemed to pay
                                             federal income taxes at the highest
                                             marginal rate of federal, state and
                                             local income tax in the calendar
                                             year in which the Gross-Up Payment
                                             is made (determined by reference to
                                             Employee's residence for such
                                             calendar year), net of the maximum
                                             reduction in federal income taxes
                                             which could be obtained from
                                             deduction of such state and local
                                             taxes.

                                    (2)      In the event that the Excise Tax
                                             with respect to the Payments is
                                             determined to exceed the amount
                                             taken into account hereunder,
                                             Teradyne shall make an additional
                                             Gross-Up Payment in respect of such
                                             excess. For purposes of calculating
                                             such Gross-Up Payment, any interest
                                             or penalties imposed in connection
                                             with such excess Excise Tax shall
                                             be treated as an Excise Tax.

                                    (3)      In the event that the Excise Tax
                                             with respect to the Payments is
                                             subsequently determined to be less
                                             than the amount taken into account
                                             for purposes of calculating the
                                             Gross-Up Payment, Employee shall
                                             promptly repay to Teradyne the
                                             after-tax portion of the Gross-Up
                                             Payment that exceeds the Gross-Up
                                             Payment that otherwise would have
                                             been payable in connection with the
                                             actual Excise Tax imposed on the
                                             Payments.

                           (iv)     "Payment" shall mean, with respect to the
                                     -------
                                    Employee, any payment in the nature of
                                    compensation to (or for the benefit of) such
                                    individual, if such payment is contingent on
                                    a change (i) in the ownership or effective
                                    control of Teradyne or (ii) in the ownership
                                    of a substantial portion of the assets of
                                    Teradyne (in each case, as reasonably
                                    determined by Teradyne in accordance with
                                    Section 280G(b)(2) of the Code and the
                                    regulations promulgated thereunder).
                                    Notwithstanding the foregoing, any amount
                                    payable to (or for the benefit of) the
                                    Employee shall be a Payment if an Excise Tax
                                    is imposed on the Employee with respect to
                                    such payment or benefit, and such payment or
                                    benefit is contingent on a change (i) in the
                                    ownership or effective control of Teradyne
                                    or (ii)

<PAGE>

                                       -4-


                                    in the ownership of a substantial portion of
                                    the assets of Teradyne (in each case,
                                    determined in accordance with Section
                                    280G(b)(2) of the Code and the regulations
                                    promulgated thereunder).

         3.       No Obligation of Employment. Employee understands that the
                  ---------------------------
employment relationship between Employee and Teradyne will be "at will" and
Employee understands that, prior to any Change in Control, Teradyne may
terminate Employee with or without "Cause" at any time. Following any Change in
Control, Teradyne may also terminate Employee with or without "cause" at any
time subject to Employee's rights and Teradyne's obligations specified in this
Agreement.

         4.       Governing Law. This Agreement shall be governed by and
                  -------------
construed in accordance with the internal laws of the Commonwealth of
Massachusetts and this Agreement shall be deemed to be performable in
Massachusetts.

         5.       Severability. In case any one or more of the provisions
                  ------------
contained in this Agreement for any reason shall be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement and this Agreement shall
be construed to the maximum extent permitted by law.

         6.       Waivers and Modifications. This Agreement may be modified, and
                  -------------------------
the rights, remedies and obligations contained in any provision hereof may be
waived, only in accordance with this Section 6. No waiver by either party of any
breach by the other or any provision hereof shall be deemed to be a waiver of
any later or other breach thereof or as a waiver of any other provision of this
Agreement. This Agreement may not be waived, changed, discharged or terminated
orally or by any course of dealing between the parties, but only by an
instrument in writing signed by the party against whom any waiver, change,
discharge or termination is sought.

         7.       Assignment. Employee may not assign any of his rights or
                  ----------
delegate any of his duties or obligations under this Agreement. The rights and
obligations of Teradyne under this Agreement shall inure to the benefit of, and
shall be binding upon, the successors and assigns of Teradyne. For purposes of
this Agreement, "Teradyne" shall be deemed to include all successors and assigns
of Teradyne.

         8.       Entire Agreement. This Agreement constitutes the entire
                  ----------------
understanding of the parties relating to the subject matter hereof and
supersedes and cancels all agreements, written or oral, made prior to the date
hereof between Employee and Teradyne relating to the subject matter hereof;
provided, however, that Employee's existing option agreements, as modified
hereby, shall remain in effect.

<PAGE>

                                       -5-


         9.       Notices. All notices hereunder shall be in writing and shall
                  -------
be delivered in person or mailed by certified or registered mail, return receipt
requested, addressed as follows:

         If to Teradyne, to:        Teradyne, Inc.
                                    321 Harrison Avenue
                                    Boston, MA 02118
                                    Attention: Tom Grilk

         If to Employee, at Employee's address set forth on the signature page
hereto.

         10.      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
together shall constitute one and the same instrument.

         11.      Section Headings. The descriptive section headings herein have
                  ----------------
been inserted for convenience only and shall not be deemed to define, limit, or
otherwise affect the construction of any provision hereof.

         12.      Term. The term of this Agreement (the "Term") shall commence
                  ----
upon the date hereof and terminate upon the earlier of (i) twenty-four (24)
months following any Change in Control of Teradyne, (ii) the date prior to any
Change in Control of Teradyne that employee for any reason ceases to be an
employee of Teradyne and (iii) the date following any Change in Control of
Teradyne that Employee is terminated for Cause or voluntary terminates his
employment (other than for Good Reason).


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.

                                       TERADYNE, INC.


                                       By: /s/ George W. Chamillard
                                           -------------------------------------
                                           Name:  George W. Chamillard
                                           Title: Chairman, Chief Executive
                                                  Officer and President of
                                                  Teradyne, Inc.



                                       EMPLOYEE


                                       /s/ Michael A. Bradley
                                       -----------------------------------------
                                       Name: Michael A. Bradley
                                       Address: 750 Commonwealth Avenue
                                                Newton, MA 02459-1134

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.21
<SEQUENCE>10
<FILENAME>dex1021.txt
<DESCRIPTION>CHANGE IN CONTROL AGREEMENT
<TEXT>
<PAGE>

                                                                   Exhibit 10.21


                  EXECUTIVE OFFICER CHANGE IN CONTROL AGREEMENT


         EXECUTIVE OFFICER CHANGE IN CONTROL AGREEMENT entered into this second
day of October, 2001, by and between Teradyne, Inc., a Massachusetts corporation
("Teradyne"), and the undersigned executive officer of Teradyne ("Employee").
  --------                                                        --------

                                   WITNESSETH:

         WHEREAS, Teradyne and Employee desire to set forth certain terms and
conditions relating to benefits to be afforded to Employee upon the occurrence
of a Change in Control (as hereinafter defined) of Teradyne;

         NOW THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, the parties hereto hereby agree
as follows:

         1.       Option Acceleration. (a) during the Term (as hereinafter
                  -------------------
defined), if within twenty-four (24) months following a Change in Control there
is a Termination Event (as hereinafter defined), all of Employee's unvested
Options granted prior to, on, or after the date hereof (but only (I) such
Options as have been granted to Employee by Teradyne as of the date of the
Change in Control or (II) such Options as have been assumed by an acquiring
company at the time of a Change in Control or such new options that have been
substituted by an acquiring company for Options existing at the time of a Change
in Control, each pursuant to the terms of any Teradyne option plan) shall
automatically become fully vested as of the date of such Termination Event. The
parties hereto acknowledge that the terms of this Agreement are intended to
modify the terms of Employee's existing Option agreements and to be a supplement
to future Option agreements.

                  (b) For purposes of this Agreement, the following terms shall
have the following meanings:

                  "Cause" shall mean conduct involving one or more of the
                   -----
following: (i) the substantial and continuing failure of Employee, after notice
thereof, to render services to Teradyne in accordance with the terms or
requirements of his or her employment; (ii) Employee's disloyalty, gross
negligence, willful misconduct, dishonesty, fraud or breach of fiduciary duty to
Teradyne; (iii) Employee's deliberate disregard of the rules or policies of, or
breach of an agreement with, Teradyne which results in direct or indirect loss,
damage or injury to Teradyne; (iv) the unauthorized disclosure by Employee of
any trade secret or confidential information of Teradyne; or (v) the commission
by Employee of an act which constitutes unfair competition with Teradyne.

                  A "Change in Control" shall be deemed to have occurred upon
                     -----------------
the occurrence of any of the following events: (i) any consolidation, cash
tender offer, reorganization, recapitalization, merger or plan of share exchange
following which the shareholders of Teradyne immediately prior to such
transaction own less than a majority of the combined voting power of

<PAGE>


                                       -2-


the then-outstanding securities of the combined corporation or person
immediately after such transaction; (ii) any sale, lease, exchange or other
transfer of all or substantially all of Teradyne's assets; (iii) the adoption by
the Board of Directors of Teradyne of any plan or proposal for the liquidation
or dissolution of Teradyne; (iv) a change in the majority of the Board of
Directors of Teradyne through one or more contested elections; or (v) any person
(as that term is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange
Act of 1934, as amended) becomes beneficial owner of 30% or more of the combined
voting power of Teradyne's outstanding voting securities.

                  "Good Reason" shall mean any one or more of the following: (i)
                   -----------
any material reduction of Employee's responsibilities (other than for Cause or
as a result of death or disability); (ii) any material reduction in Employee's
model compensation as in effect on the date of the consummation of the Change in
Control, or as the same may be increased from time to time, or any failure by
Teradyne to pay to Employee any bonus accrued, but not yet paid, upon written
notice by Employee to Teradyne, within 45 days; (iii) a material reduction in
the value of Employee's benefit package from the value of Employee's benefit
package on the date of the consummation of the Change in Control; or (iv) any
permanent assignment of Employee to a job location situated more than 50 miles
away from his current job location.

                  "Option" shall mean an option to purchase shares of Teradyne
                   ------
Common Stock.

                  "Termination Event" shall mean (i) any termination of Employee
                   -----------------
by Teradyne without Cause or (ii) any voluntary termination by Employee for Good
Reason.

         2.       (a) Parachute Payment Gross-Up. If any Payments (as
                      --------------------------
hereinafter defined) to Employee are subject to the Excise Tax (as hereinafter
defined), Teradyne shall pay to Employee a Gross-Up Payment (as hereinafter
defined). The Gross-Up Payment with respect to any Payment shall be paid no
later than 15 days prior to the date that the Excise Tax is due with respect to
such Payment.

                  (b)      Definitions. For purposes of this Section 2, the
                           -----------
following terms shall have the following meanings:

                           (i)      "Code" shall mean the Internal Revenue Code
                                     ----
                                    of 1986, as amended.

                           (ii)     "Excise Tax" shall mean the tax imposed by
                                     ----------
                                    Section 4999 of the Code. The amount of the
                                    Excise Tax (if any) imposed on any non-cash
                                    benefits or any deferred payment or benefit
                                    shall be reasonably determined by Teradyne,
                                    after consultation with its legal and tax
                                    advisors.

                           (iii)    "Gross-Up Payment" shall mean, with respect
                                     ----------------
                                    to Payments to the Employee, the amount
                                    necessary so that the amount retained by
                                    Employee, after reduction for (1) any Excise
                                    Tax on the Gross-Up

<PAGE>

                                       -3-


                                    Payment and (2) any federal, state, or local
                                    income and employment taxes imposed on the
                                    Gross-Up Payment, is an amount equal to the
                                    Excise Tax on the Payments to Employee,
                                    other than the Gross-Up Payment. The amount
                                    of the Gross-Up Payment shall be reasonably
                                    determined by Teradyne after consultation
                                    with its legal and tax advisors.

                                    (1)      For purposes of determining the
                                             amount of the Gross-Up Payment,
                                             Employee shall be deemed to pay
                                             federal income taxes at the highest
                                             marginal rate of federal, state and
                                             local income tax in the calendar
                                             year in which the Gross-Up Payment
                                             is made (determined by reference to
                                             Employee's residence for such
                                             calendar year), net of the maximum
                                             reduction in federal income taxes
                                             which could be obtained from
                                             deduction of such state and local
                                             taxes.

                                    (2)      In the event that the Excise Tax
                                             with respect to the Payments is
                                             determined to exceed the amount
                                             taken into account hereunder,
                                             Teradyne shall make an additional
                                             Gross-Up Payment in respect of such
                                             excess. For purposes of calculating
                                             such Gross-Up Payment, any interest
                                             or penalties imposed in connection
                                             with such excess Excise Tax shall
                                             be treated as an Excise Tax.

                                    (3)      In the event that the Excise Tax
                                             with respect to the Payments is
                                             subsequently determined to be less
                                             than the amount taken into account
                                             for purposes of calculating the
                                             Gross-Up Payment, Employee shall
                                             promptly repay to Teradyne the
                                             after-tax portion of the Gross-Up
                                             Payment that exceeds the Gross-Up
                                             Payment that otherwise would have
                                             been payable in connection with the
                                             actual Excise Tax imposed on the
                                             Payments.

                           (iv)     "Payment" shall mean, with respect to the
                                     -------
                                    Employee, any payment in the nature of
                                    compensation to (or for the benefit of) such
                                    individual, if such payment is contingent on
                                    a change (i) in the ownership or effective
                                    control of Teradyne or (ii) in the ownership
                                    of a substantial portion of the assets of
                                    Teradyne (in each case, as reasonably
                                    determined by Teradyne in accordance with
                                    Section 280G(b)(2) of the Code and the
                                    regulations promulgated thereunder).
                                    Notwithstanding the foregoing, any amount
                                    payable to (or for the benefit of) the
                                    Employee shall be a Payment if an Excise Tax
                                    is imposed on the Employee with respect to
                                    such payment or benefit, and such payment or
                                    benefit is contingent on a change (i) in the
                                    ownership or effective control of Teradyne
                                    or (ii)

<PAGE>

                                       -4-


                                    in the ownership of a substantial portion of
                                    the assets of Teradyne (in each case,
                                    determined in accordance with Section
                                    280G(b)(2) of the Code and the regulations
                                    promulgated thereunder).

         3.       No Obligation of Employment. Employee understands that the
                  ---------------------------
employment relationship between Employee and Teradyne will be "at will" and
Employee understands that, prior to any Change in Control, Teradyne may
terminate Employee with or without "Cause" at any time. Following any Change in
Control, Teradyne may also terminate Employee with or without "cause" at any
time subject to Employee's rights and Teradyne's obligations specified in this
Agreement.

         4.       Governing Law. This Agreement shall be governed by and
                  -------------
construed in accordance with the internal laws of the Commonwealth of
Massachusetts and this Agreement shall be deemed to be performable in
Massachusetts.

         5.       Severability. In case any one or more of the provisions
                  ------------
contained in this Agreement for any reason shall be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement and this Agreement shall
be construed to the maximum extent permitted by law.

         6.       Waivers and Modifications. This Agreement may be modified, and
                  -------------------------
the rights, remedies and obligations contained in any provision hereof may be
waived, only in accordance with this Section 6. No waiver by either party of any
breach by the other or any provision hereof shall be deemed to be a waiver of
any later or other breach thereof or as a waiver of any other provision of this
Agreement. This Agreement may not be waived, changed, discharged or terminated
orally or by any course of dealing between the parties, but only by an
instrument in writing signed by the party against whom any waiver, change,
discharge or termination is sought.

         7.       Assignment. Employee may not assign any of his rights or
                  ----------
delegate any of his duties or obligations under this Agreement. The rights and
obligations of Teradyne under this Agreement shall inure to the benefit of, and
shall be binding upon, the successors and assigns of Teradyne. For purposes of
this Agreement, "Teradyne" shall be deemed to include all successors and assigns
of Teradyne.

         8.       Entire Agreement. This Agreement constitutes the entire
                  ----------------
understanding of the parties relating to the subject matter hereof and
supersedes and cancels all agreements, written or oral, made prior to the date
hereof between Employee and Teradyne relating to the subject matter hereof;
provided, however, that Employee's existing option agreements, as modified
hereby, shall remain in effect.

<PAGE>

                                       -5-


         9.       Notices. All notices hereunder shall be in writing and shall
                  -------
be delivered in person or mailed by certified or registered mail, return receipt
requested, addressed as follows:

         If to Teradyne, to:        Teradyne, Inc.
                                    321 Harrison Avenue
                                    Boston, MA 02118
                                    Attention: Tom Grilk

         If to Employee, at Employee's address set forth on the signature page
hereto.

         10.      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
together shall constitute one and the same instrument.

         11.      Section Headings. The descriptive section headings herein have
                  ----------------
been inserted for convenience only and shall not be deemed to define, limit, or
otherwise affect the construction of any provision hereof.

         12.      Term. The term of this Agreement (the "Term") shall commence
                  ----
upon the date hereof and terminate upon the earlier of (i) twenty-four (24)
months following any Change in Control of Teradyne, (ii) the date prior to any
Change in Control of Teradyne that employee for any reason ceases to be an
employee of Teradyne and (iii) the date following any Change in Control of
Teradyne that Employee is terminated for Cause or voluntary terminates his
employment (other than for Good Reason).


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.

                                       TERADYNE, INC.


                                       By: /s/ George W. Chamillard
                                           -------------------------------------
                                           Name:  George W. Chamillard
                                           Title: Chairman, Chief Executive
                                                  Officer and President of
                                                  Teradyne, Inc.



                                       EMPLOYEE


                                       /s/ Richard E. Schneider
                                       -----------------------------------------
                                       Name: Richard E. Schneider
                                       Address: 30 Hannah Drive
                                                Hollis, NH 03049

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.22
<SEQUENCE>11
<FILENAME>dex1022.txt
<DESCRIPTION>CHANGE IN CONTROL AGREEMENT
<TEXT>
<PAGE>

                                                                   Exhibit 10.22


                  EXECUTIVE OFFICER CHANGE IN CONTROL AGREEMENT


         EXECUTIVE OFFICER CHANGE IN CONTROL AGREEMENT entered into this 19th
day of October, 2001, by and between Teradyne, Inc., a Massachusetts
corporation ("Teradyne"), and the undersigned executive officer of Teradyne
              --------
("Employee").
  --------

                                   WITNESSETH:

         WHEREAS, Teradyne and Employee desire to set forth certain terms and
conditions relating to benefits to be afforded to Employee upon the occurrence
of a Change in Control (as hereinafter defined) of Teradyne;

         NOW THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, the parties hereto hereby agree
as follows:

         1.       Option Acceleration. (a) during the Term (as hereinafter
                  -------------------
defined), if within twenty-four (24) months following a Change in Control there
is a Termination Event (as hereinafter defined), all of Employee's unvested
Options granted prior to, on, or after the date hereof (but only (I) such
Options as have been granted to Employee by Teradyne as of the date of the
Change in Control or (II) such Options as have been assumed by an acquiring
company at the time of a Change in Control or such new options that have been
substituted by an acquiring company for Options existing at the time of a Change
in Control, each pursuant to the terms of any Teradyne option plan) shall
automatically become fully vested as of the date of such Termination Event. The
parties hereto acknowledge that the terms of this Agreement are intended to
modify the terms of Employee's existing Option agreements and to be a supplement
to future Option agreements.

                  (b) For purposes of this Agreement, the following terms shall
have the following meanings:

                  "Cause" shall mean conduct involving one or more of the
                   -----
following: (i) the substantial and continuing failure of Employee, after notice
thereof, to render services to Teradyne in accordance with the terms or
requirements of his or her employment; (ii) Employee's disloyalty, gross
negligence, willful misconduct, dishonesty, fraud or breach of fiduciary duty to
Teradyne; (iii) Employee's deliberate disregard of the rules or policies of, or
breach of an agreement with, Teradyne which results in direct or indirect loss,
damage or injury to Teradyne; (iv) the unauthorized disclosure by Employee of
any trade secret or confidential information of Teradyne; or (v) the commission
by Employee of an act which constitutes unfair competition with Teradyne.

                  A "Change in Control" shall be deemed to have occurred upon
                     -----------------
the occurrence of any of the following events: (i) any consolidation, cash
tender offer, reorganization, recapitalization, merger or plan of share exchange
following which the shareholders of Teradyne immediately prior to such
transaction own less than a majority of the combined voting power of the
then-outstanding securities of the combined corporation or person immediately
after such

<PAGE>


                                       -2-


transaction; (ii) any sale, lease, exchange or other transfer of all or
substantially all of Teradyne's assets; (iii) the adoption by the Board of
Directors of Teradyne of any plan or proposal for the liquidation or dissolution
of Teradyne; (iv) a change in the majority of the Board of Directors of Teradyne
through one or more contested elections; or (v) any person (as that term is used
in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act of 1934, as amended)
becomes beneficial owner of 30% or more of the combined voting power of
Teradyne's outstanding voting securities.

                  "Good Reason" shall mean any one or more of the following: (i)
                   -----------
any material reduction of Employee's responsibilities (other than for Cause or
as a result of death or disability); (ii) any material reduction in Employee's
model compensation as in effect on the date of the consummation of the Change in
Control, or as the same may be increased from time to time, or any failure by
Teradyne to pay to Employee any bonus accrued, but not yet paid, upon written
notice by Employee to Teradyne, within 45 days; (iii) a material reduction in
the value of Employee's benefit package from the value of Employee's benefit
package on the date of the consummation of the Change in Control; or (iv) any
permanent assignment of Employee to a job location situated more than 50 miles
away from his current job location.

                  "Option" shall mean an option to purchase shares of Teradyne
                   ------
Common Stock.

                  "Termination Event" shall mean (i) any termination of Employee
                   -----------------
by Teradyne without Cause or (ii) any voluntary termination by Employee for Good
Reason.

         2.       (a) Parachute Payment Gross-Up. If any Payments (as
                      --------------------------
hereinafter defined) to Employee are subject to the Excise Tax (as hereinafter
defined), Teradyne shall pay to Employee a Gross-Up Payment (as hereinafter
defined). The Gross-Up Payment with respect to any Payment shall be paid no
later than 15 days prior to the date that the Excise Tax is due with respect to
such Payment.

                  (b)      Definitions. For purposes of this Section 2, the
                           -----------
following terms shall have the following meanings:

                           (i)      "Code" shall mean the Internal Revenue Code
                                     ----
                                    of 1986, as amended.

                           (ii)     "Excise Tax" shall mean the tax imposed by
                                     ----------
                                    Section 4999 of the Code. The amount of the
                                    Excise Tax (if any) imposed on any non-cash
                                    benefits or any deferred payment or benefit
                                    shall be reasonably determined by Teradyne,
                                    after consultation with its legal and tax
                                    advisors.

                           (iii)    "Gross-Up Payment" shall mean, with respect
                                     ----------------
                                    to Payments to the Employee, the amount
                                    necessary so that the amount retained by
                                    Employee, after reduction for (1) any Excise
                                    Tax on the Gross-Up Payment and (2) any
                                    federal, state, or local income and
                                    employment taxes imposed on the Gross-Up
                                    Payment, is an

<PAGE>

                                       -3-


                                    amount equal to the Excise Tax on the
                                    Payments to Employee, other than the
                                    Gross-Up Payment. The amount of the Gross-Up
                                    Payment shall be reasonably determined by
                                    Teradyne after consultation with its legal
                                    and tax advisors.

                                    (1)      For purposes of determining the
                                             amount of the Gross-Up Payment,
                                             Employee shall be deemed to pay
                                             federal income taxes at the highest
                                             marginal rate of federal, state and
                                             local income tax in the calendar
                                             year in which the Gross-Up Payment
                                             is made (determined by reference to
                                             Employee's residence for such
                                             calendar year), net of the maximum
                                             reduction in federal income taxes
                                             which could be obtained from
                                             deduction of such state and local
                                             taxes.

                                    (2)      In the event that the Excise Tax
                                             with respect to the Payments is
                                             determined to exceed the amount
                                             taken into account hereunder,
                                             Teradyne shall make an additional
                                             Gross-Up Payment in respect of such
                                             excess. For purposes of calculating
                                             such Gross-Up Payment, any interest
                                             or penalties imposed in connection
                                             with such excess Excise Tax shall
                                             be treated as an Excise Tax.

                                    (3)      In the event that the Excise Tax
                                             with respect to the Payments is
                                             subsequently determined to be less
                                             than the amount taken into account
                                             for purposes of calculating the
                                             Gross-Up Payment, Employee shall
                                             promptly repay to Teradyne the
                                             after-tax portion of the Gross-Up
                                             Payment that exceeds the Gross-Up
                                             Payment that otherwise would have
                                             been payable in connection with the
                                             actual Excise Tax imposed on the
                                             Payments.

                           (iv)     "Payment" shall mean, with respect to the
                                     -------
                                    Employee, any payment in the nature of
                                    compensation to (or for the benefit of) such
                                    individual, if such payment is contingent on
                                    a change (i) in the ownership or effective
                                    control of Teradyne or (ii) in the ownership
                                    of a substantial portion of the assets of
                                    Teradyne (in each case, as reasonably
                                    determined by Teradyne in accordance with
                                    Section 280G(b)(2) of the Code and the
                                    regulations promulgated thereunder).
                                    Notwithstanding the foregoing, any amount
                                    payable to (or for the benefit of) the
                                    Employee shall be a Payment if an Excise Tax
                                    is imposed on the Employee with respect to
                                    such payment or benefit, and such payment or
                                    benefit is contingent on a change (i) in the
                                    ownership or effective control of Teradyne
                                    or (ii) in the ownership of a substantial
                                    portion of the assets of Teradyne

<PAGE>

                                       -4-


                                    (in each case, determined in accordance with
                                    Section 280G(b)(2) of the Code and the
                                    regulations promulgated thereunder).

         3.       No Obligation of Employment. Employee understands that the
                  ---------------------------
employment relationship between Employee and Teradyne will be "at will" and
Employee understands that, prior to any Change in Control, Teradyne may
terminate Employee with or without "Cause" at any time. Following any Change in
Control, Teradyne may also terminate Employee with or without "cause" at any
time subject to Employee's rights and Teradyne's obligations specified in this
Agreement.

         4.       Governing Law. This Agreement shall be governed by and
                  -------------
construed in accordance with the internal laws of the Commonwealth of
Massachusetts and this Agreement shall be deemed to be performable in
Massachusetts.

         5.       Severability. In case any one or more of the provisions
                  ------------
contained in this Agreement for any reason shall be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement and this Agreement shall
be construed to the maximum extent permitted by law.

         6.       Waivers and Modifications. This Agreement may be modified, and
                  -------------------------
the rights, remedies and obligations contained in any provision hereof may be
waived, only in accordance with this Section 6. No waiver by either party of any
breach by the other or any provision hereof shall be deemed to be a waiver of
any later or other breach thereof or as a waiver of any other provision of this
Agreement. This Agreement may not be waived, changed, discharged or terminated
orally or by any course of dealing between the parties, but only by an
instrument in writing signed by the party against whom any waiver, change,
discharge or termination is sought.

         7.       Assignment. Employee may not assign any of his rights or
                  ----------
delegate any of his duties or obligations under this Agreement. The rights and
obligations of Teradyne under this Agreement shall inure to the benefit of, and
shall be binding upon, the successors and assigns of Teradyne. For purposes of
this Agreement, "Teradyne" shall be deemed to include all successors and assigns
of Teradyne.

         8.       Entire Agreement. This Agreement constitutes the entire
                  ----------------
understanding of the parties relating to the subject matter hereof and
supersedes and cancels all agreements, written or oral, made prior to the date
hereof between Employee and Teradyne relating to the subject matter hereof;
provided, however, that Employee's existing option agreements, as modified
hereby, shall remain in effect.

<PAGE>

                                       -5-


         9.       Notices. All notices hereunder shall be in writing and shall
                  -------
be delivered in person or mailed by certified or registered mail, return receipt
requested, addressed as follows:

         If to Teradyne, to:        Teradyne, Inc.
                                    321 Harrison Avenue
                                    Boston, MA 02118
                                    Attention: Tom Grilk

         If to Employee, at Employee's address set forth on the signature page
hereto.

         10.      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
together shall constitute one and the same instrument.

         11.      Section Headings. The descriptive section headings herein have
                  ----------------
been inserted for convenience only and shall not be deemed to define, limit, or
otherwise affect the construction of any provision hereof.

         12.      Term. The term of this Agreement (the "Term") shall commence
                  ----                                   ----
upon the date hereof and terminate upon the earlier of (i) twenty-four (24)
months following any Change in Control of Teradyne, (ii) the date prior to any
Change in Control of Teradyne that employee for any reason ceases to be an
employee of Teradyne and (iii) the date following any Change in Control of
Teradyne that Employee is terminated for Cause or voluntary terminates his
employment (other than for Good Reason).


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.

                                       TERADYNE, INC.


                                       By: /s/ George W. Chamillard
                                           -------------------------------------
                                           Name:  George W. Chamillard
                                           Title: Chairman, Chief Executive
                                                  Officer and President of
                                                  Teradyne, Inc.



                                       EMPLOYEE


                                       /s/ Richard MacDonald
                                       -----------------------------------------
                                       Name: Richard G. MacDonald
                                       Address: 283 Marsh Street
                                                Belmont, MA 02478

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.23
<SEQUENCE>12
<FILENAME>dex1023.txt
<DESCRIPTION>CHANGE IN CONTROL AGREEMENT
<TEXT>
<PAGE>

                                                                   Exhibit 10.23


                  EXECUTIVE OFFICER CHANGE IN CONTROL AGREEMENT


         EXECUTIVE OFFICER CHANGE IN CONTROL AGREEMENT entered into this 19th
day of October, 2001, by and between Teradyne, Inc., a Massachusetts
corporation ("Teradyne"), and the undersigned executive officer of Teradyne
              --------
("Employee").
  --------

                                   WITNESSETH:

         WHEREAS, Teradyne and Employee desire to set forth certain terms and
conditions relating to benefits to be afforded to Employee upon the occurrence
of a Change in Control (as hereinafter defined) of Teradyne;

         NOW THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, the parties hereto hereby agree
as follows:

         1.       Option Acceleration. (a) during the Term (as hereinafter
                  -------------------
defined), if within twenty-four (24) months following a Change in Control there
is a Termination Event (as hereinafter defined), all of Employee's unvested
Options granted prior to, on, or after the date hereof (but only (I) such
Options as have been granted to Employee by Teradyne as of the date of the
Change in Control or (II) such Options as have been assumed by an acquiring
company at the time of a Change in Control or such new options that have been
substituted by an acquiring company for Options existing at the time of a Change
in Control, each pursuant to the terms of any Teradyne option plan) shall
automatically become fully vested as of the date of such Termination Event. The
parties hereto acknowledge that the terms of this Agreement are intended to
modify the terms of Employee's existing Option agreements and to be a supplement
to future Option agreements.

                  (b) For purposes of this Agreement, the following terms shall
have the following meanings:

                  "Cause" shall mean conduct involving one or more of the
                   -----
following: (i) the substantial and continuing failure of Employee, after notice
thereof, to render services to Teradyne in accordance with the terms or
requirements of his or her employment; (ii) Employee's disloyalty, gross
negligence, willful misconduct, dishonesty, fraud or breach of fiduciary duty to
Teradyne; (iii) Employee's deliberate disregard of the rules or policies of, or
breach of an agreement with, Teradyne which results in direct or indirect loss,
damage or injury to Teradyne; (iv) the unauthorized disclosure by Employee of
any trade secret or confidential information of Teradyne; or (v) the commission
by Employee of an act which constitutes unfair competition with Teradyne.

                  A "Change in Control" shall be deemed to have occurred upon
                     -----------------
the occurrence of any of the following events: (i) any consolidation, cash
tender offer, reorganization, recapitalization, merger or plan of share exchange
following which the shareholders of Teradyne immediately prior to such
transaction own less than a majority of the combined voting power of

<PAGE>


                                      -2-


the then-outstanding securities of the combined corporation or person
immediately after such transaction; (ii) any sale, lease, exchange or other
transfer of all or substantially all of Teradyne's assets; (iii) the adoption by
the Board of Directors of Teradyne of any plan or proposal for the liquidation
or dissolution of Teradyne; (iv) a change in the majority of the Board of
Directors of Teradyne through one or more contested elections; or (v) any person
(as that term is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange
Act of 1934, as amended) becomes beneficial owner of 30% or more of the combined
voting power of Teradyne's outstanding voting securities.

                  "Good Reason" shall mean any one or more of the following: (i)
                   -----------
any material reduction of Employee's responsibilities (other than for Cause or
as a result of death or disability); (ii) any material reduction in Employee's
model compensation as in effect on the date of the consummation of the Change in
Control, or as the same may be increased from time to time, or any failure by
Teradyne to pay to Employee any bonus accrued, but not yet paid, upon written
notice by Employee to Teradyne, within 45 days; (iii) a material reduction in
the value of Employee's benefit package from the value of Employee's benefit
package on the date of the consummation of the Change in Control; or (iv) any
permanent assignment of Employee to a job location situated more than 50 miles
away from his current job location.

                  "Option" shall mean an option to purchase shares of Teradyne
                   ------
Common Stock.

                  "Termination Event" shall mean (i) any termination of Employee
                   -----------------
by Teradyne without Cause or (ii) any voluntary termination by Employee for Good
Reason.

         2.       (a) Parachute Payment Gross-Up. If any Payments (as
                      --------------------------
hereinafter defined) to Employee are subject to the Excise Tax (as hereinafter
defined), Teradyne shall pay to Employee a Gross-Up Payment (as hereinafter
defined). The Gross-Up Payment with respect to any Payment shall be paid no
later than 15 days prior to the date that the Excise Tax is due with respect to
such Payment.

                  (b)      Definitions. For purposes of this Section 2, the
                           -----------
following terms shall have the following meanings:

                           (i)      "Code" shall mean the Internal Revenue Code
                                     ----
                                    of 1986, as amended.

                           (ii)     "Excise Tax" shall mean the tax imposed by
                                     ----------
                                    Section 4999 of the Code. The amount of the
                                    Excise Tax (if any) imposed on any non-cash
                                    benefits or any deferred payment or benefit
                                    shall be reasonably determined by Teradyne,
                                    after consultation with its legal and tax
                                    advisors.

                           (iii)    "Gross-Up Payment" shall mean, with respect
                                     ----------------
                                    to Payments to the Employee, the amount
                                    necessary so that the amount retained by
                                    Employee, after reduction for (1) any Excise
                                    Tax on the Gross-Up

<PAGE>

                                       -3-


                                    Payment and (2) any federal, state, or local
                                    income and employment taxes imposed on the
                                    Gross-Up Payment, is an amount equal to the
                                    Excise Tax on the Payments to Employee,
                                    other than the Gross-Up Payment. The amount
                                    of the Gross-Up Payment shall be reasonably
                                    determined by Teradyne after consultation
                                    with its legal and tax advisors.

                                    (1)      For purposes of determining the
                                             amount of the Gross-Up Payment,
                                             Employee shall be deemed to pay
                                             federal income taxes at the highest
                                             marginal rate of federal, state and
                                             local income tax in the calendar
                                             year in which the Gross-Up Payment
                                             is made (determined by reference to
                                             Employee's residence for such
                                             calendar year), net of the maximum
                                             reduction in federal income taxes
                                             which could be obtained from
                                             deduction of such state and local
                                             taxes.

                                    (2)      In the event that the Excise Tax
                                             with respect to the Payments is
                                             determined to exceed the amount
                                             taken into account hereunder,
                                             Teradyne shall make an additional
                                             Gross-Up Payment in respect of such
                                             excess. For purposes of calculating
                                             such Gross-Up Payment, any interest
                                             or penalties imposed in connection
                                             with such excess Excise Tax shall
                                             be treated as an Excise Tax.

                                    (3)      In the event that the Excise Tax
                                             with respect to the Payments is
                                             subsequently determined to be less
                                             than the amount taken into account
                                             for purposes of calculating the
                                             Gross-Up Payment, Employee shall
                                             promptly repay to Teradyne the
                                             after-tax portion of the Gross-Up
                                             Payment that exceeds the Gross-Up
                                             Payment that otherwise would have
                                             been payable in connection with the
                                             actual Excise Tax imposed on the
                                             Payments.

                           (iv)     "Payment" shall mean, with respect to the
                                     -------
                                    Employee, any payment in the nature of
                                    compensation to (or for the benefit of) such
                                    individual, if such payment is contingent on
                                    a change (i) in the ownership or effective
                                    control of Teradyne or (ii) in the ownership
                                    of a substantial portion of the assets of
                                    Teradyne (in each case, as reasonably
                                    determined by Teradyne in accordance with
                                    Section 280G(b)(2) of the Code and the
                                    regulations promulgated thereunder).
                                    Notwithstanding the foregoing, any amount
                                    payable to (or for the benefit of) the
                                    Employee shall be a Payment if an Excise Tax
                                    is imposed on the Employee with respect to
                                    such payment or benefit, and such payment or
                                    benefit is contingent on a change (i) in the
                                    ownership or effective control of Teradyne
                                    or (ii)

<PAGE>

                                       -4-


                                    in the ownership of a substantial portion of
                                    the assets of Teradyne (in each case,
                                    determined in accordance with Section
                                    280G(b)(2) of the Code and the regulations
                                    promulgated thereunder).

         3.       No Obligation of Employment. Employee understands that the
                  ---------------------------
employment relationship between Employee and Teradyne will be "at will" and
Employee understands that, prior to any Change in Control, Teradyne may
terminate Employee with or without "Cause" at any time. Following any Change in
Control, Teradyne may also terminate Employee with or without "cause" at any
time subject to Employee's rights and Teradyne's obligations specified in this
Agreement.

         4.       Governing Law. This Agreement shall be governed by and
                  -------------
construed in accordance with the internal laws of the Commonwealth of
Massachusetts and this Agreement shall be deemed to be performable in
Massachusetts.

         5.       Severability. In case any one or more of the provisions
                  ------------
contained in this Agreement for any reason shall be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement and this Agreement shall
be construed to the maximum extent permitted by law.

         6.       Waivers and Modifications. This Agreement may be modified, and
                  -------------------------
the rights, remedies and obligations contained in any provision hereof may be
waived, only in accordance with this Section 6. No waiver by either party of any
breach by the other or any provision hereof shall be deemed to be a waiver of
any later or other breach thereof or as a waiver of any other provision of this
Agreement. This Agreement may not be waived, changed, discharged or terminated
orally or by any course of dealing between the parties, but only by an
instrument in writing signed by the party against whom any waiver, change,
discharge or termination is sought.

         7.       Assignment. Employee may not assign any of his rights or
                  ----------
delegate any of his duties or obligations under this Agreement. The rights and
obligations of Teradyne under this Agreement shall inure to the benefit of, and
shall be binding upon, the successors and assigns of Teradyne. For purposes of
this Agreement, "Teradyne" shall be deemed to include all successors and assigns
of Teradyne.

         8.       Entire Agreement. This Agreement constitutes the entire
                  ----------------
understanding of the parties relating to the subject matter hereof and
supersedes and cancels all agreements, written or oral, made prior to the date
hereof between Employee and Teradyne relating to the subject matter hereof;
provided, however, that Employee's existing option agreements, as modified
hereby, shall remain in effect.

<PAGE>

                                       -5-


         9.       Notices. All notices hereunder shall be in writing and shall
                  -------
be delivered in person or mailed by certified or registered mail, return receipt
requested, addressed as follows:

         If to Teradyne, to:        Teradyne, Inc.
                                    321 Harrison Avenue
                                    Boston, MA 02118
                                    Attention: Tom Grilk

         If to Employee, at Employee's address set forth on the signature page
hereto.

         10.      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
together shall constitute one and the same instrument.

         11.      Section Headings. The descriptive section headings herein have
                  ----------------
been inserted for convenience only and shall not be deemed to define, limit, or
otherwise affect the construction of any provision hereof.

         12.      Term. The term of this Agreement (the "Term") shall commence
                  ----
upon the date hereof and terminate upon the earlier of (i) twenty-four (24)
months following any Change in Control of Teradyne, (ii) the date prior to any
Change in Control of Teradyne that employee for any reason ceases to be an
employee of Teradyne and (iii) the date following any Change in Control of
Teradyne that Employee is terminated for Cause or voluntary terminates his
employment (other than for Good Reason).


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.

                                       TERADYNE, INC.


                                       By: /s/ George W. Chamillard
                                           -------------------------------------
                                           Name:  George W. Chamillard
                                           Title: Chairman, Chief Executive
                                                  Officer and President of
                                                  Teradyne, Inc.



                                       EMPLOYEE


                                       /s/ Stuart M. Osattin
                                       -----------------------------------------
                                       Name: Stuart M. Osattin
                                       Address: 44 Pinecliff Drive
                                                Marblehead, MA 01945

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.24
<SEQUENCE>13
<FILENAME>dex1024.txt
<DESCRIPTION>CHANGE IN CONTROL AGREEMENT
<TEXT>
<PAGE>

                                                                   Exhibit 10.24


                  EXECUTIVE OFFICER CHANGE IN CONTROL AGREEMENT


         EXECUTIVE OFFICER CHANGE IN CONTROL AGREEMENT entered into this 19th
day of October, 2001, by and between Teradyne, Inc., a Massachusetts
corporation ("Teradyne"), and the undersigned executive officer of Teradyne
              --------
("Employee").
  --------

                                   WITNESSETH:

         WHEREAS, Teradyne and Employee desire to set forth certain terms and
conditions relating to benefits to be afforded to Employee upon the occurrence
of a Change in Control (as hereinafter defined) of Teradyne;

         NOW THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, the parties hereto hereby agree
as follows:

         1.       Option Acceleration. (a) during the Term (as hereinafter
                  -------------------
defined), if within twenty-four (24) months following a Change in Control there
is a Termination Event (as hereinafter defined), all of Employee's unvested
Options granted prior to, on, or after the date hereof (but only (I) such
Options as have been granted to Employee by Teradyne as of the date of the
Change in Control or (II) such Options as have been assumed by an acquiring
company at the time of a Change in Control or such new options that have been
substituted by an acquiring company for Options existing at the time of a Change
in Control, each pursuant to the terms of any Teradyne option plan) shall
automatically become fully vested as of the date of such Termination Event. The
parties hereto acknowledge that the terms of this Agreement are intended to
modify the terms of Employee's existing Option agreements and to be a supplement
to future Option agreements.

                  (b) For purposes of this Agreement, the following terms shall
have the following meanings:

                  "Cause" shall mean conduct involving one or more of the
                   -----
following: (i) the substantial and continuing failure of Employee, after notice
thereof, to render services to Teradyne in accordance with the terms or
requirements of his or her employment; (ii) Employee's disloyalty, gross
negligence, willful misconduct, dishonesty, fraud or breach of fiduciary duty to
Teradyne; (iii) Employee's deliberate disregard of the rules or policies of, or
breach of an agreement with, Teradyne which results in direct or indirect loss,
damage or injury to Teradyne; (iv) the unauthorized disclosure by Employee of
any trade secret or confidential information of Teradyne; or (v) the commission
by Employee of an act which constitutes unfair competition with Teradyne.

                  A "Change in Control" shall be deemed to have occurred upon
                     -----------------
the occurrence of any of the following events: (i) any consolidation, cash
tender offer, reorganization, recapitalization, merger or plan of share exchange
following which the shareholders of Teradyne immediately prior to such
transaction own less than a majority of the combined voting power of

<PAGE>


                                       -2-


the then-outstanding securities of the combined corporation or person
immediately after such transaction; (ii) any sale, lease, exchange or other
transfer of all or substantially all of Teradyne's assets; (iii) the adoption by
the Board of Directors of Teradyne of any plan or proposal for the liquidation
or dissolution of Teradyne; (iv) a change in the majority of the Board of
Directors of Teradyne through one or more contested elections; or (v) any person
(as that term is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange
Act of 1934, as amended) becomes beneficial owner of 30% or more of the combined
voting power of Teradyne's outstanding voting securities.

                  "Good Reason" shall mean any one or more of the following: (i)
                   -----------
any material reduction of Employee's responsibilities (other than for Cause or
as a result of death or disability); (ii) any material reduction in Employee's
model compensation as in effect on the date of the consummation of the Change in
Control, or as the same may be increased from time to time, or any failure by
Teradyne to pay to Employee any bonus accrued, but not yet paid, upon written
notice by Employee to Teradyne, within 45 days; (iii) a material reduction in
the value of Employee's benefit package from the value of Employee's benefit
package on the date of the consummation of the Change in Control; or (iv) any
permanent assignment of Employee to a job location situated more than 50 miles
away from his current job location.

                  "Option" shall mean an option to purchase shares of Teradyne
                   ------
Common Stock.

                  "Termination Event" shall mean (i) any termination of Employee
                   -----------------
by Teradyne without Cause or (ii) any voluntary termination by Employee for Good
Reason.

         2.       (a) Parachute Payment Gross-Up. If any Payments (as
                      --------------------------
hereinafter defined) to Employee are subject to the Excise Tax (as hereinafter
defined), Teradyne shall pay to Employee a Gross-Up Payment (as hereinafter
defined). The Gross-Up Payment with respect to any Payment shall be paid no
later than 15 days prior to the date that the Excise Tax is due with respect to
such Payment.

                  (b)      Definitions. For purposes of this Section 2, the
                           -----------
following terms shall have the following meanings:

                           (i)      "Code" shall mean the Internal Revenue Code
                                     ----
                                    of 1986, as amended.

                           (ii)     "Excise Tax" shall mean the tax imposed by
                                     ----------
                                    Section 4999 of the Code. The amount of the
                                    Excise Tax (if any) imposed on any non-cash
                                    benefits or any deferred payment or benefit
                                    shall be reasonably determined by Teradyne,
                                    after consultation with its legal and tax
                                    advisors.

                           (iii)    "Gross-Up Payment" shall mean, with respect
                                     ----------------
                                    to Payments to the Employee, the amount
                                    necessary so that the amount retained by
                                    Employee, after reduction for (1) any Excise
                                    Tax on the Gross-Up

<PAGE>

                                       -3-


                                    Payment and (2) any federal, state, or local
                                    income and employment taxes imposed on the
                                    Gross-Up Payment, is an amount equal to the
                                    Excise Tax on the Payments to Employee,
                                    other than the Gross-Up Payment. The amount
                                    of the Gross-Up Payment shall be reasonably
                                    determined by Teradyne after consultation
                                    with its legal and tax advisors.

                                    (1)      For purposes of determining the
                                             amount of the Gross-Up Payment,
                                             Employee shall be deemed to pay
                                             federal income taxes at the highest
                                             marginal rate of federal, state and
                                             local income tax in the calendar
                                             year in which the Gross-Up Payment
                                             is made (determined by reference to
                                             Employee's residence for such
                                             calendar year), net of the maximum
                                             reduction in federal income taxes
                                             which could be obtained from
                                             deduction of such state and local
                                             taxes.

                                    (2)      In the event that the Excise Tax
                                             with respect to the Payments is
                                             determined to exceed the amount
                                             taken into account hereunder,
                                             Teradyne shall make an additional
                                             Gross-Up Payment in respect of such
                                             excess. For purposes of calculating
                                             such Gross-Up Payment, any interest
                                             or penalties imposed in connection
                                             with such excess Excise Tax shall
                                             be treated as an Excise Tax.

                                    (3)      In the event that the Excise Tax
                                             with respect to the Payments is
                                             subsequently determined to be less
                                             than the amount taken into account
                                             for purposes of calculating the
                                             Gross-Up Payment, Employee shall
                                             promptly repay to Teradyne the
                                             after-tax portion of the Gross-Up
                                             Payment that exceeds the Gross-Up
                                             Payment that otherwise would have
                                             been payable in connection with the
                                             actual Excise Tax imposed on the
                                             Payments.

                           (iv)     "Payment" shall mean, with respect to the
                                     -------
                                    Employee, any payment in the nature of
                                    compensation to (or for the benefit of) such
                                    individual, if such payment is contingent on
                                    a change (i) in the ownership or effective
                                    control of Teradyne or (ii) in the ownership
                                    of a substantial portion of the assets of
                                    Teradyne (in each case, as reasonably
                                    determined by Teradyne in accordance with
                                    Section 280G(b)(2) of the Code and the
                                    regulations promulgated thereunder).
                                    Notwithstanding the foregoing, any amount
                                    payable to (or for the benefit of) the
                                    Employee shall be a Payment if an Excise Tax
                                    is imposed on the Employee with respect to
                                    such payment or benefit, and such payment or
                                    benefit is contingent on a change (i) in the
                                    ownership or effective control of Teradyne
                                    or (ii)

<PAGE>

                                       -4-


                                    in the ownership of a substantial portion of
                                    the assets of Teradyne (in each case,
                                    determined in accordance with Section
                                    280G(b)(2) of the Code and the regulations
                                    promulgated thereunder).

         3.       No Obligation of Employment. Employee understands that the
                  ---------------------------
employment relationship between Employee and Teradyne will be "at will" and
Employee understands that, prior to any Change in Control, Teradyne may
terminate Employee with or without "Cause" at any time. Following any Change in
Control, Teradyne may also terminate Employee with or without "cause" at any
time subject to Employee's rights and Teradyne's obligations specified in this
Agreement.

         4.       Governing Law. This Agreement shall be governed by and
                  -------------
construed in accordance with the internal laws of the Commonwealth of
Massachusetts and this Agreement shall be deemed to be performable in
Massachusetts.

         5.       Severability. In case any one or more of the provisions
                  ------------
contained in this Agreement for any reason shall be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement and this Agreement shall
be construed to the maximum extent permitted by law.

         6.       Waivers and Modifications. This Agreement may be modified, and
                  -------------------------
the rights, remedies and obligations contained in any provision hereof may be
waived, only in accordance with this Section 6. No waiver by either party of any
breach by the other or any provision hereof shall be deemed to be a waiver of
any later or other breach thereof or as a waiver of any other provision of this
Agreement. This Agreement may not be waived, changed, discharged or terminated
orally or by any course of dealing between the parties, but only by an
instrument in writing signed by the party against whom any waiver, change,
discharge or termination is sought.

         7.       Assignment. Employee may not assign any of his rights or
                  ----------
delegate any of his duties or obligations under this Agreement. The rights and
obligations of Teradyne under this Agreement shall inure to the benefit of, and
shall be binding upon, the successors and assigns of Teradyne. For purposes of
this Agreement, "Teradyne" shall be deemed to include all successors and assigns
of Teradyne.

         8.       Entire Agreement. This Agreement constitutes the entire
                  ----------------
understanding of the parties relating to the subject matter hereof and
supersedes and cancels all agreements, written or oral, made prior to the date
hereof between Employee and Teradyne relating to the subject matter hereof;
provided, however, that Employee's existing option agreements, as modified
hereby, shall remain in effect.

<PAGE>

                                       -5-


         9.       Notices. All notices hereunder shall be in writing and shall
                  -------
be delivered in person or mailed by certified or registered mail, return receipt
requested, addressed as follows:

         If to Teradyne, to:        Teradyne, Inc.
                                    321 Harrison Avenue
                                    Boston, MA 02118
                                    Attention: Tom Grilk

         If to Employee, at Employee's address set forth on the signature page
hereto.

         10.      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
together shall constitute one and the same instrument.

         11.      Section Headings. The descriptive section headings herein have
                  ----------------
been inserted for convenience only and shall not be deemed to define, limit, or
otherwise affect the construction of any provision hereof.

         12.      Term. The term of this Agreement (the "Term") shall commence
                  ----
upon the date hereof and terminate upon the earlier of (i) twenty-four (24)
months following any Change in Control of Teradyne, (ii) the date prior to any
Change in Control of Teradyne that employee for any reason ceases to be an
employee of Teradyne and (iii) the date following any Change in Control of
Teradyne that Employee is terminated for Cause or voluntary terminates his
employment (other than for Good Reason).


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.

                                       TERADYNE, INC.


                                       By: /s/ George W. Chamillard
                                           -------------------------------------
                                           Name:  George W. Chamillard
                                           Title: Chairman, Chief Executive
                                                  Officer and President of
                                                  Teradyne, Inc.



                                       EMPLOYEE


                                       /s/ Thomas S. Grilk
                                       -----------------------------------------
                                       Name: Thomas S. Grilk
                                       Address: 10 Underhill Road
                                                Lynnfield, MA 01940

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.25
<SEQUENCE>14
<FILENAME>dex1025.txt
<DESCRIPTION>REAL ESTATE MORTGAGE FINANCING DOCUMENTS
<TEXT>
<PAGE>

                                                                   Exhibit 10.25


                                                           Loan No. 050-8563-001

                                 PROMISSORY NOTE
                                 ---------------

$45,000,000.00                                                 December 19, 2001


         FOR VALUE RECEIVED, TERADYNE, INC., a Massachusetts corporation
("BORROWER"), promises to pay to the order of GENERAL ELECTRIC CAPITAL BUSINESS
ASSET FUNDING CORPORATION ("GE CAPITAL") at GE CAPITAL's office at 10900 NE 4th
Street, Suite 500, Bellevue, Washington 98004, Attention: Middle Market
Risk/Operations, or at such other address as the holder hereof may from time to
time designate in writing, the principal sum of FORTY-FIVE MILLION AND NO/100
DOLLARS ($45,000,000.00) together with interest from the date the proceeds of
the loan (the "Loan") evidenced by this Promissory Note (this "Note") are
initially disbursed until maturity on the principal balance from time to time
remaining unpaid hereon at the rate of 7.5% per annum (computed on the basis of
a 360-day year of twelve (12) consecutive thirty (30)-day months) in
installments as follows: (i) interest only in advance at the rate of $9,375.00
per day shall be due and payable on the date the proceeds of the Loan are
initially disbursed to or for the benefit of BORROWER (including, without
limitation, disbursement into an escrow for the benefit of BORROWER) for the
period beginning on the date of such disbursement and ending on December 31,
2001; (ii) fifty-nine (59) installments of principal and interest in the amount
of $362,516.94 each shall be payable commencing on February 1, 2002, and
continuing on the first day of each and every succeeding month until and
including December 1, 2006, and (iii) on January 1, 2007 (the "Maturity Date"),
all then unpaid principal and interest hereon shall be due and payable.

         If any payment shall not be paid when due (excluding the payment due on
the Maturity Date or upon acceleration) and shall remain unpaid for ten (10)
days, BORROWER shall pay an additional charge equal to five percent (5.00%) of
the delinquent payment or the highest additional charge permitted by law,
whichever is less.

         BORROWER recognizes that its default in making the payments as provided
for in this Note, or in the Deed of Trust securing this Note or in any of the
other documents executed or delivered in connection with the Loan, when due, or
by otherwise causing an event of default to occur under this Note, under the
Deed of Trust or under any document executed or delivered in connection with the
Loan, will require GE CAPITAL to incur additional expense in servicing the Loan,
in loss to GE CAPITAL of the use of the money due and in frustration to GE
CAPITAL in meeting its other financial and loan commitments and that damages
caused thereby would be extremely difficult and impractical to ascertain.
BORROWER agrees that an amount equal to such additional charge is a reasonable
estimate of the damage to GE CAPITAL in the event of late payment or any such
default regardless of whether or not there has been an acceleration of the Loan.
If for any reason any court of competent jurisdiction should determine that the
additional charge provided for above is unenforceable, such additional charge
shall be in an amount equal to the highest additional charge allowed by such
court pursuant to law.

         Upon not less than thirty (30) days advance written notice to GE
CAPITAL and upon payment of the Prepayment Premium, BORROWER shall have the
right to prepay all, but not

                                        1

<PAGE>

less than all, of the outstanding balance of this Note on any regularly
scheduled principal and interest payment date. The Prepayment Premium shall be
the sum of the Base Premium and the Variable Premium. The "Base Premium" shall
be determined by multiplying the principal amount to be repaid by the applicable
Base Premium Factor set forth below. The "Variable Premium" determined by (i)
calculating the decrease (expressed in basis points) in the current weekly
average yield of Five (5)-year Treasury Constant Maturities (as published in
Federal Reserve Statistical Release H.15 [519]) (the "Index") from Friday,
November 16, 2001, to the Friday immediately preceding the week in which the
prepayment is made, (ii) dividing the decrease by 100, (iii) multiplying the
result by the following described applicable premium factor (the "Premium
Factor"), and (iv) multiplying the product by the principal balance to be
prepaid. If the Index is unchanged or has increased from Friday, November 16,
2001, to the Friday immediately preceding the prepayment date, no Variable
Premium shall be due. The Premium Factor shall be the amount shown on the
following chart for the month in which prepayment occurs:

  Number of Months                          Base                Variable
  ----------------                          ----                --------
     Remaining            Years        Premium Factor        Premium Factor
     ---------            -----        --------------        --------------
      60 - 49              (5)              .05                   .044
      48 - 37              (4)              .04                   .037
      36 - 25              (3)              .03                   .030
      24 - 13              (2)              .02                   .022
      12 - 1               (1)              .01                   .014

         If the Federal Reserve Board ceases to publish the Index, then the
decrease in the weekly average yield of five (5)-year U.S. Treasury Constant
Maturities will be determined from another comparable source designated by GE
CAPITAL.

         If GE CAPITAL at any time accelerates this Note after an Event of
Default (defined below), then BORROWER shall be obligated to pay the Prepayment
Premium in accordance with the foregoing schedule. The Prepayment Premium shall
not be payable with respect to condemnation awards or insurance proceeds from
fire or other casualty which GE CAPITAL applies to prepayment, nor with respect
to BORROWER's prepayment of the Note in full during the last three (3) months of
the term of this Note unless an Event of Default has occurred and remains
uncured. BORROWER expressly acknowledges that (A) the Prepayment Premium is not
a penalty but is intended solely to compensate GE CAPITAL for the loss of its
bargain and the reimbursement of internal expenses and administrative fees and
expenses incurred by GE CAPITAL, (B) such Prepayment Premium, as such Prepayment
Premium may be imposed pursuant to the terms of this Note and of the Deed of
Trust, is reasonable in amount, (C) the Prepayment Premium, as such Prepayment
Premium may be imposed pursuant to the terms of this Note and of the Deed of
Trust, shall be paid without prejudice to the right of GE CAPITAL to collect any
other amounts provided to be paid under this Note or under the Deed of Trust or
any other document executed or delivered in connection with the Loan, (D) any
tender of payment prior to the payment date therefor as set forth in this Note
for any reason whatsoever of all or any part of the indebtedness evidenced by
this Note shall include such Prepayment Premium, (E) GE CAPITAL shall be
entitled to bid all or a portion of such Prepayment Premium at any foreclosure
sale under the Deed of Trust, (F) if BORROWER defaults under this Note, under
the Deed of Trust or under any of the documents executed or delivered in
connection with the Loan, GE CAPITAL shall be entitled to actual damages for the
detriment caused thereby, but

                                        2

<PAGE>

that it is extremely difficult and impractical to ascertain the extent of such
damages and that such Prepayment Premium is a reasonable estimate of such
damages, and (G) nothing contained in this Note, in the Deed of Trust, or in any
of the other documents executed or delivered in connection with the Loan, shall
be deemed to mean that BORROWER has any right to pay all or any part of the
indebtedness evidenced by this Note prior to the payment date thereof as set
forth in this Note except for the privilege expressly reserved to so prepay as
set forth in this Note.

         BORROWER HEREBY ACKNOWLEDGES AND AGREES THAT GE CAPITAL WOULD NOT LEND
TO BORROWER THE LOAN WITHOUT BORROWER'S AGREEMENT, AS SET FORTH ABOVE, TO PAY GE
CAPITAL THE PREPAYMENT PREMIUM, INCLUDING WITHOUT LIMITATION UPON A DEFAULT
ARISING FROM THE CONVEYANCE OF ANY RIGHT, TITLE OR INTEREST IN THE PROPERTY
ENCUMBERED BY THE DEED OF TRUST, AND BORROWER HAS CAUSED THOSE PERSONS SIGNING
THIS NOTE ON BORROWER'S BEHALF TO SEPARATELY SIGN THE AGREEMENT CONTAINED IN THE
TWO PRECEDING PARAGRAPHS AND THIS PARAGRAPH, IN COMPLIANCE WITH SECTION 2954.10
OF THE CALIFORNIA CIVIL CODE, BY PLACING THEIR SIGNATURES BELOW:

                  BORROWER:

                  TERADYNE, INC.,
                  a Massachusetts corporation

                  By:    /s/ Stuart M. Osattin
                         -----------------------------------
                  Print: Stuart M. Osattin
                         -----------------------------------
                  Its:   V.P. and Treasurer
                         -----------------------------------

         The Loan is secured, in part, by five (5) certain Commercial Deeds of
Trust, Security Agreements, Assignments of Leases and Rents and Fixture Filings
(collectively, the "Deed of Trust") covering the real property and other assets
(the "Property") described therein, and by certain other documents executed and
delivered in connection with the Loan (the Deed of Trust and such other
documents are collectively called the "Loan Documents").

         Each of the following shall constitute an Event of Default ("Event of
Default") hereunder and under the Deed of Trust:

                  a.       Failure of BORROWER to make any payment of principal,
interest, or any Prepayment Premium due under this Note when due, and such
failure shall continue for a period of ten (10) days after written notice is
given to BORROWER by GE CAPITAL specifying such failure (provided that no notice
shall be given of any failure by BORROWER to pay all amounts which become due
hereunder on the Maturity Date); or

                  b.       Failure of BORROWER within the time required by the
Deed of Trust to make any payment for taxes, insurance or for reserves for such
payments, or any other payment necessary to prevent the filing of any lien, and
such failure shall continue for a period of ten (10) days after written notice
is given to BORROWER by GE CAPITAL specifying such failure; or

                                        3

<PAGE>

                  c.       Failure of BORROWER to observe or perform any
obligations of BORROWER to GE CAPITAL on or with respect to any transactions,
debts, undertakings or agreements other than the transaction evidenced by this
Note; or

                  d.       The Property or any part or interest in the Property
is transferred in any manner whatsoever without the prior written consent of GE
CAPITAL; or

                  e.       If any lease agreement covering any portion of the
Property is executed by Borrower without GE CAPITAL's prior written consent; or

                  f.       Filing by BORROWER of a voluntary petition in
bankruptcy or filing by BORROWER of any petition or answer seeking or
acquiescing in any reorganization, arrangement, composition, readjustment,
liquidation, or similar relief for itself under any present or future federal,
state or other statute, law or regulation relating to bankruptcy, insolvency or
other relief for debtors, or the seeking or consenting to by BORROWER of the
appointment of any trustee, receiver, custodian, conservator or liquidator for
BORROWER, any part of the Property, or any of the income or rents of the
Property, or the making by BORROWER of any general assignment for the benefit of
creditors, or the inability of or failure of BORROWER to pay its debts generally
as they become due, or the insolvency on a balance sheet basis of BORROWER, or
the imposition of a lien upon the Property which is not discharged in the manner
permitted by the Deed of Trust, or the giving of notice by BORROWER to any
governmental body of insolvency or suspension of operations; or

                  g.       Filing of a petition against BORROWER seeking any
reorganization, arrangement, composition, readjustment, liquidation, or similar
relief under any present or future federal, state or other law or regulation
relating to bankruptcy, insolvency or other relief for debts, or the appointment
of any trustee, receiver, custodian, conservator or liquidator of BORROWER, of
any part of the Property or of any of the income or rents of the Property,
unless such petition shall be dismissed within ninety (90) days after such
filing, but in any event prior to the entry of an order, judgment or decree
approving such petition; or

                  h.       The commencement of any proceeding for the
dissolution or termination of BORROWER voluntarily, involuntarily, or by
operation of law, if the same is not dismissed within ninety (90) days after the
date on which it is commenced; or

                  i.       Failure of BORROWER to observe or perform any other
obligation under the Deed of Trust or any of the Loan Documents when such
observance or performance is due, and such failure shall continue beyond the
applicable cure period set forth in the Deed of Trust or the Loan Documents, or
if the default cannot be cured within such applicable cure period, if BORROWER
fails within such time to commence and pursue curative action with reasonable
diligence or fails at any time after expiration of such applicable cure period
to continue with reasonable diligence all necessary curative actions. No notice
of default and no opportunity to cure shall be required if during the prior
twelve (12) months GE CAPITAL has already sent a notice to BORROWER concerning
default in performance of the same obligation.

         Upon the occurrence of any Event of Default, GE CAPITAL shall have the
option to declare the entire amount of principal and interest due under this
Note immediately due and payable without additional notice or demand, and GE
CAPITAL may exercise any of its rights

                                        4

<PAGE>

under this Note, under the Deed of Trust and under the Loan Documents. If the
entire unpaid principal balance of this Note is not paid on the Maturity Date,
whether the Maturity Date occurs by acceleration as described in the immediately
preceding sentence or otherwise, the outstanding principal balance of this Note
shall thereafter bear interest at the rate of five percent (5.00%) per annum
above the prime interest rate in effect from time to time as published by the
Wall Street Journal (or any successor thereto), or fifteen percent (15.00%) per
annum, whichever is higher, provided that such interest rate shall not exceed
the maximum interest rate permitted by law.

         All payments of the principal and interest on this Note shall be made
in coin or currency of the United States of America which at the time shall be
the legal tender for the payment of public and private debts.

         If this Note is placed in the hands of an attorney for collection,
BORROWER agrees to pay reasonable attorneys' fees and costs incurred by GE
CAPITAL in connection therewith, and in the event suit or action is instituted
to enforce or interpret this Note (including without limitation efforts to
modify or vacate any automatic stay or injunction), the prevailing party shall
be entitled to recover all expenses reasonably incurred at, before or after
trial and on appeal, whether or not taxable as costs, or in any bankruptcy
proceeding, or in connection with post-judgment collection efforts, including,
without limitation, attorneys' fees, witness fees (expert and otherwise),
deposition costs, copying charges and other expenses.

         This Note shall be governed and construed in accordance with the laws
of the State of California applicable to contracts made and to be performed
therein (excluding choice-of-law principles). BORROWER hereby irrevocably
submits to the jurisdiction of any state or federal court sitting in California
in any action or proceeding brought to enforce or otherwise arising out of or
relating to this Note, and hereby waives any objection to venue in any such
court and any claim that such forum is an inconvenient forum.

         This Note is given in a commercial transaction for business purposes.

         This Note may be declared due prior to the Maturity Date, all in the
events, on the terms, and in the manner provided for in the Deed of Trust.

         BORROWER and all sureties, endorsers, guarantors and other parties now
or hereafter liable for the payment of this Note, in whole or in part, hereby
severally (i) waive demand, notice of demand, presentment for payment, notice of
nonpayment, notice of default, protest, notice of protest, notice of intent to
accelerate, notice of acceleration and all other notices, and further waive
diligence in collecting this Note or in enforcing any of the security for this
Note; (ii) agree to any substitution, subordination, exchange or release of any
security for this Note or the release of any party primarily or secondarily
liable for the payment of this Note; (iii) agree that GE CAPITAL shall not be
required to first institute suit or exhaust its remedies hereon against BORROWER
or others liable or to become liable for the payment of this Note or to enforce
its rights against any security for the payment of this Note; and (iv) consent
to any extension of time for the payment of this Note, or any installment
hereof, made by agreement by GE CAPITAL with any person now or hereafter liable
for the payment of this Note, even if BORROWER is not a party to such agreement.

                                        5

<PAGE>

         All agreements between BORROWER and GE CAPITAL, whether now existing or
hereafter arising and whether written or oral, are hereby limited so that in no
contingency, whether by reason of demand or acceleration of the Maturity Date of
this Note or otherwise, shall the interest contracted for, charged, received,
paid or agreed to be paid to GE CAPITAL exceed the maximum amount permissible
under the applicable law. If, from any circumstance whatsoever, interest would
otherwise be payable to GE CAPITAL in excess of the maximum amount permissible
under applicable law, the interest payable to GE CAPITAL shall be reduced to the
maximum amount permissible under applicable law; and if from any circumstance GE
CAPITAL shall ever receive anything of value deemed interest by applicable law
in excess of the maximum amount permissible under applicable law, an amount
equal to the excessive interest shall be applied to the reduction of the
principal of this Note and not to the payment of interest, or if such excessive
amount of interest exceeds the unpaid balance of principal of this Note, such
excess shall be refunded to BORROWER. All interest paid or agreed to be paid to
GE CAPITAL shall, to the extent permitted by applicable law, be amortized,
prorated, allocated, and spread throughout the full period (including any
renewal or extension) until payment in full of the principal so that the
interest accruing under this Note for such full period shall not exceed the
maximum amount permissible under applicable law. GE CAPITAL expressly disavows
any intent to contract for, charge or receive interest in an amount which
exceeds the maximum amount permissible under applicable law. This paragraph
shall control all agreements between BORROWER and GE CAPITAL.

                            [SIGNATURE PAGE FOLLOWS]

                                       6

<PAGE>

             IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS NOTE
              SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN
            WRITING ARE ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES
           NOT CONTAINED IN THIS NOTE MAY BE LEGALLY ENFORCED. YOU MAY
              CHANGE THE TERMS OF THIS NOTE ONLY BY ANOTHER WRITTEN
                                   AGREEMENT.

                                       BORROWER:

                                       TERADYNE, INC.,
                                       a Massachusetts corporation


                                       By:    /s/ Stuart M. Osattin
                                           -------------------------------------
                                       Print: Stuart M. Osattin
                                              ----------------------------------
                                       Its:   V.P. and Treasurer
                                            ------------------------------------

                                        7

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.26
<SEQUENCE>15
<FILENAME>dex1026.txt
<DESCRIPTION>REAL ESTATE MORTGAGE FINANCING DOCUMENTS
<TEXT>
<PAGE>

                                                                   Exhibit 10.26


- --------------------------------------------------------------------------------
AFTER RECORDING, RETURN TO:
- ---------------------------

General Electric Capital Business
Asset Funding Corporation
Middle Market Risk/Operations Department
10900 NE 4th Street, Suite 500
Bellevue, Washington  98004
Attn: Ms. Deehan Gay
Loan No. 050-8563-001

THIS INSTRUMENT PREPARED BY:
- ----------------------------

Jenkens & Gilchrist,
a professional corporation
George C. Dunlap, Esq.
1445 Ross Avenue, Suite 3200
Dallas, Texas 75202
================================================================================
                                         [space above for recorder's use only]


                            COMMERCIAL DEED OF TRUST,
                               SECURITY AGREEMENT,
                         ASSIGNMENT OF LEASES AND RENTS,
                               AND FIXTURE FILING

Borrower: Teradyne, Inc.
Borrower's Entity: a Massachusetts corporation
State of Organization of Borrower: Massachusetts
Organizational I.D. of Borrower: 04-2272148


         THIS DEED OF TRUST (herein this "Instrument") is made effective as of
December 19, 2001, by the Trustor, TERADYNE INC., a Massachusetts corporation,
whose address is 321 Harrison Avenue, Boston, Massachusetts 02118-2238 (herein
"Borrower"), in favor of FIRST AMERICAN TITLE INSURANCE COMPANY, a California
corporation, whose address is One First American Way, Santa Ana, California
92701 (herein "Trustee"), for the benefit of the Beneficiary, GENERAL ELECTRIC
CAPITAL BUSINESS ASSET FUNDING CORPORATION, a Delaware corporation, whose
address is Middle Market Risk/Operations Department, 10900 NE 4th Street, Suite
500, Bellevue, Washington 98004 (herein "GE CAPITAL").

         Borrower, in consideration of the indebtedness herein recited and the
trust herein created, irrevocably grants, conveys and assigns to Trustee, IN
TRUST, WITH POWER OF SALE, all of Borrower's estate, right, title and interest,
now owned or hereafter acquired, including any reversion or remainder interest,
in the real property located in Los Angeles County, California, more
particularly described on Exhibit A attached hereto and incorporated herein,
                          ---------
including all heretofore or hereafter vacated alleys and streets abutting the
property, and all easements, rights, appurtenances, tenements, hereditaments,
rents, royalties, mineral, oil and gas rights and profits, water, water rights,
and water stock appurtenant to the property (collectively, the "Premises");

                                        1

<PAGE>

         TOGETHER with all of Borrower's estate, right, title and interest, now
owned or hereafter acquired, in:

                  a.       all buildings, structures, improvements, parking
areas, landscaping, and fixtures now or hereafter erected on, attached to, or
used or adapted for use in the operation of the Premises; including but without
being limited to the following property: all heating, air conditioning and
incinerating apparatus and equipment; all boilers, piping and plumbing fixtures,
water heaters, cooling, ventilating, sprinkling and vacuum cleaning systems,
fire extinguishing apparatus, gas and electric fixtures, carpeting, floor
coverings, underpadding, elevators, escalators, partitions, mantels, built-in
mirrors, window shades, blinds, draperies, screens, storm sash, awnings, signs,
and shrubbery and plants, and including also all interest of any owner of the
Premises in any of such items hereafter at any time acquired under conditional
sale contract, chattel mortgage or other title retaining or security instrument,
all of which property mentioned in this clause (a) shall be deemed part of the
realty covered by this Instrument and not severable wholly or in part without
material injury to the freehold of the Premises (all of the foregoing together
with replacements and additions thereto are referred to herein as
"Improvements"); and

                  b.       all compensation, awards, damages, rights of action
and proceeds, including interest thereon and/or the proceeds of any policies of
insurance therefor, arising out of or relating to a (i) taking or damaging of
the Premises or the Improvements thereon by reason of any public or private
improvement, condemnation proceeding (including change of grade), sale or
transfer in lieu of condemnation, or fire, earthquake or other casualty, or (ii)
any injury to or decrease in the value of the Premises or the Improvements for
any reason whatsoever; and

                  c.       return premiums or other payments upon any insurance
any time provided for the benefit of or naming GE CAPITAL, and refunds or
rebates of taxes or assessments on the Premises; and

                  d.       all the right, title and interest of Borrower in, to
and under all written and oral leases and rental agreements (including
extensions, renewals and subleases; all of the foregoing shall be referred to
collectively herein as the "Leases") now or hereafter affecting the Premises
including, without limitation, all rents, issues, profits and other revenues and
income therefrom and from the renting, leasing or bailment of the Improvements
and equipment, all guaranties of tenants' performance under the Leases, and all
rights and claims of any kind that Borrower may have against any tenant under
the Leases or in connection with the termination or rejection of the Leases in a
bankruptcy or insolvency proceeding; and the leasehold estate in the event this
Instrument is on a leasehold; and

                  e.       plans, specifications, contracts and agreements
relating to the design or construction of the Improvements; Borrower's rights
under any payment, performance, or other bond in connection with the design or
construction of the Improvements; and contracts, agreements, and purchase orders
with contractors, subcontractors, suppliers, and materialmen incidental to the
design or construction of the Improvements; and

                  f.       all contracts, accounts, rights, claims or causes of
action pertaining to or affecting the Premises or the Improvements, including,
without limitation, all options or contracts to acquire other property for use
in connection with operation or development of the Premises or the Improvements,
management contracts, service or supply contracts, permits,

                                        2

<PAGE>

licenses, franchises and certificates relating to the Property, all utility and
similar deposits relating to the use and occupancy of the Premises, and all
general intangibles relating to the Premises (the term "general intangibles" as
used in this paragraph shall have the meaning given such term in the Uniform
Commercial Code-Secured Transactions of the state where the Premises is
located); and

                  g.       all books, records, surveys, reports and other
documents related to the Premises, the Improvements, the Leases, or other items
of collateral described herein; and

                  h.       all additions, accessions, replacements,
substitutions, proceeds and products of the real and personal property, tangible
and intangible, described herein.

         All of the foregoing described collateral is exclusive of any
furniture, furnishings or trade fixtures owned and supplied by tenants, if any,
of the Premises. The Premises, the Improvements, the Leases and all of the rest
of the foregoing property are herein referred to as the "Property."

         TO SECURE TO GE CAPITAL (a) the repayment of the indebtedness evidenced
by Borrower's note dated of even date herewith in the principal sum of
FORTY-FIVE MILLION AND NO/100 DOLLARS ($45,000,000.00), with interest thereon as
set forth in the note, and all renewals, extensions and modifications thereof
(herein the "Note"), and with a final maturity date of January 1, 2007 (the
"Maturity Date"); (b) the repayment of any future advances, with interest
thereon, made by GE CAPITAL to Borrower pursuant to Section 30 hereof (herein
                                                    ----------
"Future Advances"); (c) the payment of all other sums, with interest thereon,
advanced in accordance herewith to protect the security of this Instrument or to
fulfill any of Borrower's obligations hereunder or under the other Loan
Documents (as defined below); (d) the performance of the covenants and
agreements of Borrower contained herein or in the other Loan Documents; (e) the
repayment of all sums now or hereafter owing to GE CAPITAL by Borrower pursuant
to any instrument which recites that it is secured hereby; and (f) the repayment
of all other sums now or hereafter owing to GE CAPITAL by Borrower or any entity
related to Borrower (the indebtedness described in clause (f) is collectively
called "Other Loans"). The indebtedness and obligations described in clauses
(a)-(f) above are collectively referred to herein as the "Indebtedness." The
Note, this Instrument, the Commercial Deeds of Trust, Security Agreements,
Assignments of Leases and Rents and Fixture Filings (the "Other Deeds of Trust")
dated of even date herewith, executed by Borrower for the benefit of GE CAPITAL,
and all other documents evidencing, securing or guarantying the Indebtedness
(except any Certificate and Indemnity Agreement Regarding Hazardous Substances),
as the same may be modified or amended from time to time, are referred to herein
as the "Loan Documents." The terms of the Note secured hereby may provide that
the interest rate or payment terms or balance due may be indexed, adjusted,
renewed, or renegotiated from time to time, and this Instrument shall continue
to secure the Note notwithstanding any such indexing, adjustment, renewal or
renegotiation.

         Borrower represents and warrants that Borrower has good, marketable and
insurable title to, and has the right to grant, convey and assign an
indefeasible fee simple estate in, the Premises, Improvements, rents and leases
(or, if this Instrument is on a leasehold, good, marketable and insurable title
to, and the right to convey the leasehold estate and that the ground lease is in
full force and effect without modification except as noted above and without
default on the part of either lessor or lessee thereunder), and the right to
convey the other Property, that

                                        3

<PAGE>

the Property is unencumbered except for the matters set forth on Exhibit B
                                                                 ---------
attached to and made a part of this Instrument, and that Borrower will warrant
and forever defend unto Trustee and GE CAPITAL the title to the Property against
all claims and demands, subject only to the permitted exceptions set forth in
Exhibit B attached hereto.
- ---------

         Borrower represents, warrants, covenants and agrees for the benefit of
GE CAPITAL as follows:

                  a.       PAYMENT OF PRINCIPAL AND INTEREST. Borrower shall
                           ---------------------------------
promptly pay when due the principal of and interest on the Indebtedness, any
prepayment and other charges provided in the Loan Documents and all other sums
secured by this Instrument.

                  b.       FUNDS FOR TAXES, INSURANCE AND OTHER CHARGES. Upon
                           --------------------------------------------
the occurrence of an Event of Default (hereinafter defined), and at GE CAPITAL's
sole option at any time thereafter, Borrower shall pay on or before the first
day of each month, in addition to each monthly payment on the Note, one-twelfth
(1/12) of the annual real estate taxes, insurance premiums, assessments, water
and sewer rates, ground rents and other charges (herein "Impositions") payable
with respect to the Property (as estimated by GE CAPITAL in its sole
discretion), to be held by GE CAPITAL without interest to Borrower, for the
payment of any Impositions.

         If the amount of such additional payments held by GE CAPITAL ("Funds")
at the time of the annual accounting thereof shall exceed the amount deemed
necessary by GE CAPITAL to provide for the payment of Impositions as they fall
due, such excess shall be at Borrower's option, either repaid to Borrower or
credited to Borrower on the next monthly installment or installments of Funds
due. If at any time the amount of the Funds held by GE CAPITAL shall be less
than the amount deemed necessary by GE CAPITAL to pay Impositions as they fall
due, Borrower shall pay to GE CAPITAL any amount necessary to make up the
deficiency within thirty (30) days after notice from GE CAPITAL to Borrower
requesting payment thereof.

         Upon the occurrence of an Event of Default, GE CAPITAL may apply, in
any amount and in any order as GE CAPITAL shall determine in GE CAPITAL's sole
discretion, any Funds held by GE CAPITAL at the time of application (a) to pay
Impositions which are now or will hereafter become due, or (b) as a credit
against sums secured by this Instrument. Upon payment in full of all sums
secured by this Instrument, GE CAPITAL shall refund to Borrower any Funds held
by GE CAPITAL.

                  c.       APPLICATION OF PAYMENTS. Unless applicable law
                           -----------------------
provides otherwise, each complete installment payment received by GE CAPITAL
from Borrower under the Note or this Instrument shall be applied by GE CAPITAL
first in payment of amounts payable to GE CAPITAL by Borrower under Section 2
                                                                    ---------
hereof, then to interest payable on the Note, then to principal of the Note, and
then to interest and principal on any Future Advances in such order as GE
CAPITAL, at GE CAPITAL's sole discretion, shall determine. Upon Borrower's
breach of any covenant or agreement of Borrower in this Instrument, GE CAPITAL
may apply, in any amount and in any order as GE CAPITAL shall determine in GE
CAPITAL's sole discretion, any payments received by GE CAPITAL under the Note or
this Instrument. Any partial payment received by GE CAPITAL shall, at GE
CAPITAL's option, be held in a non-

                                        4

<PAGE>

interest bearing account until GE CAPITAL receives funds sufficient to equal a
complete installment payment.

                  d.       CHARGES, LIENS. Subject to Section 40 below, Borrower
                           --------------             ----------
shall pay all Impositions attributable to the Property when the same are due and
in the manner provided under Section 2 hereof or, if not paid in such manner, by
                             ---------
Borrower making payment, when due, directly to the payee thereof, or in such
other manner as GE CAPITAL may designate in writing. If requested by GE CAPITAL,
Borrower shall promptly furnish to GE CAPITAL all notices of Impositions which
become due, and in the event Borrower shall make payment directly, Borrower
shall promptly furnish to GE CAPITAL receipts evidencing such payments. Borrower
shall promptly discharge any lien which has, or may have, priority over or
equality with, the lien of this Instrument, and Borrower shall pay, when due,
the claims of all persons supplying labor or materials to or in connection with
the Property. Without GE CAPITAL's prior written permission, Borrower shall not
allow any lien inferior to this Instrument to be perfected against the Property.
If any lien is filed against the Property without GE CAPITAL's prior written
permission and without the consent of Borrower, Borrower shall, within thirty
(30) days after receiving notice of the filing of such lien, either (a) cause
such lien to be released of record and deliver evidence of such release to GE
CAPITAL or (b) obtain and deliver to GE CAPITAL a surety bond in form, in an
amount and issued by a surety approved by GE CAPITAL, which surety bond operates
to release the Property from the claim evidenced by such lien.

                  e.       INSURANCE. Borrower shall obtain and maintain the
                           ---------
following types of insurance upon and relating to the Property:

         a.       "All Risk" property and fire insurance (with extended coverage
                  endorsement including malicious mischief and vandalism) in an
                  amount not less than the full replacement value of the
                  Property (with a deductible not to exceed $1,000,000.00),
                  naming GE CAPITAL under a lender's loss payee endorsement
                  (form 438BFU or equivalent) and including agreed amount,
                  inflation guard, replacement cost and waiver of subrogation
                  endorsements;

         b.       Comprehensive general liability insurance in an amount not
                  less than $2,000,000.00 insuring against personal injury,
                  death and property damage and naming GE CAPITAL as additional
                  insured;

         c.       Business interruption insurance covering loss of income for up
                  to ninety (90) days; and

         d.       Such other types of insurance or endorsements to existing
                  insurance as may reasonably be required from time to time by
                  GE CAPITAL.

                           Upon each request of GE CAPITAL, Borrower shall
                  increase the coverages under any of the insurance policies
                  required to be maintained hereunder or otherwise modify such
                  policies in accordance with GE CAPITAL's request provided such
                  request is made on a reasonable basis. All of the insurance
                  policies required hereunder shall be issued by corporate
                  insurers licensed to do business in the state in which the
                  Property is located and rated A:X or better by A.M. Best
                  Company, and shall be in form acceptable to GE CAPITAL. If and
                  to the extent

                                        5

<PAGE>

                  that the Property is located within an area that has been or
                  is hereafter designated or identified as an area having
                  special flood hazards by the Department of Housing and Urban
                  Development or such other official as shall from time to time
                  be authorized by federal or state law to make such designation
                  pursuant to any national or state program of flood insurance,
                  Borrower shall carry flood insurance with respect to the
                  Property in amounts not less than the maximum limit of
                  coverage then available with respect to the Property or the
                  amount of the Indebtedness, whichever is less. Certificates of
                  all insurance required to be maintained hereunder shall be
                  delivered to GE CAPITAL, along with evidence of payment in
                  full of all premiums required thereunder, contemporaneously
                  with Borrower's execution of this Instrument. All such
                  certificates shall be in form acceptable to GE CAPITAL and
                  shall require the insurance company to give to GE CAPITAL at
                  least thirty (30) days' prior written notice before canceling
                  the policy for any reason or materially amending it, except
                  with respect to the insurance policy for the Property which
                  expires in December of 2001. Certificates evidencing all
                  renewal and substitute policies of insurance shall be
                  delivered to GE CAPITAL, along with evidence of the payment in
                  full of all premiums required thereunder, at least thirty (30)
                  days before termination of the policies being renewed or
                  substituted, except with respect to the insurance policy for
                  the Property which expires in December of 2001. If any loss
                  shall occur at any time when Borrower shall be in default
                  hereunder, GE CAPITAL shall be entitled to the benefit of all
                  insurance policies held or maintained by Borrower, to the same
                  extent as if same had been made payable to GE CAPITAL, and
                  upon foreclosure hereunder, GE CAPITAL shall become the owner
                  thereof. GE CAPITAL shall have the right, but not the
                  obligation, to make premium payments, at Borrower's expense,
                  to prevent any cancellation, endorsement, alteration or
                  reissuance of any policy of insurance maintained by Borrower,
                  and such payments shall be accepted by the insurer to prevent
                  same.

                           If any act or occurrence of any kind or nature
                  (including any casualty for which insurance was not obtained
                  or obtainable) shall result in damage to or destruction of the
                  Property (such event being called a "Loss"), Borrower will
                  give prompt written notice thereof to GE CAPITAL. All
                  insurance proceeds paid or payable in connection with any Loss
                  shall be paid to GE CAPITAL. If (i) no Event of Default has
                  occurred and is continuing hereunder, (ii) Borrower provides
                  evidence satisfactory to GE CAPITAL of its ability to pay all
                  amounts becoming due under the Note during the pendency of any
                  restoration or repairs to or replacement of the Property,
                  (iii) the available insurance proceeds, together with any
                  funds deposited with GE CAPITAL by Borrower are, in GE
                  CAPITAL's judgment, sufficient to fully and completely
                  restore, repair or replace the Property, and (iv) Borrower
                  provides evidence satisfactory to GE CAPITAL that none of the
                  tenants of the Property will terminate their lease agreements
                  as a result of either the Loss or the repairs to or
                  replacement of the Property, Borrower shall have the right to
                  apply all insurance proceeds received in connection with such
                  Loss either (a) to restore, repair, replace and rebuild the
                  Property as nearly as possible to its value, condition and
                  character immediately prior to such Loss, or (b) to the
                  payment of the Indebtedness in such order as GE CAPITAL may
                  elect. If an Event of Default has occurred and is continuing
                  hereunder at the time of

                                        6

<PAGE>

                  such Loss, if GE CAPITAL determines that Borrower will be
                  unable to pay all amounts becoming due under the Note during
                  the pendency of any restoration or repairs to or replacement
                  of the Property, if the available insurance proceeds together
                  with any funds deposited with GE CAPITAL by Borrower are
                  insufficient, in GE CAPITAL's judgment, to fully and
                  completely restore, repair or replace the Property, or if GE
                  CAPITAL believes that one or more tenants of the Property will
                  terminate their lease agreements as a result of either the
                  Loss or the repairs to or replacement of the Property, then
                  all of the insurance proceeds payable with respect to such
                  Loss will be applied to the payment of the Indebtedness, or if
                  so instructed by GE CAPITAL, Borrower will promptly, at
                  Borrower's sole cost and expense and regardless of whether
                  sufficient insurance proceeds shall be available, commence to
                  restore, repair, replace and rebuild the Property as nearly as
                  possible to its value, condition, character immediately prior
                  to such Loss, provided GE CAPITAL releases such proceeds to
                  Borrower for repairs or replacements to the Property. Borrower
                  shall diligently prosecute any restoration, repairs or
                  replacement of the Property undertaken by or on behalf of
                  Borrower pursuant to this Section 5. All such work shall be
                                            ---------
                  conducted pursuant to written contracts approved by GE CAPITAL
                  in writing. Notwithstanding anything contained herein to the
                  contrary, in the event the insurance proceeds received by GE
                  CAPITAL following any Loss are insufficient in GE CAPITAL's
                  judgment to fully and completely restore, repair or replace
                  the Property, and if Borrower has complied with all of the
                  other conditions described in this Section 5, Borrower may
                                                     ---------
                  elect to restore, repair or replace the Property if it first
                  deposits with GE CAPITAL such additional sums as GE CAPITAL
                  determines are necessary in order to fully and completely
                  restore, repair or replace the Property. In the event any
                  insurance proceeds remain following the restoration, repair or
                  replacement of the Property, such proceeds shall be applied to
                  the Indebtedness in such order as GE CAPITAL may elect.

                                    f.       PRESERVATION AND MAINTENANCE OF THE
                                             -----------------------------------
                  PROPERTY; LEASEHOLDS. Borrower (a) shall not commit waste or
                  --------------------
                  permit impairment or deterioration of the Property, (b) shall
                  not abandon the Property, (c) shall restore or repair promptly
                  and in a good and workmanlike manner all or any part of the
                  Property to the equivalent of its original condition, or such
                  other condition as GE CAPITAL may approve in writing, in the
                  event of any damage, injury or loss thereto, whether or not
                  insurance proceeds are available to cover, in whole or in
                  part, the costs of such restoration or repair (but GE CAPITAL
                  shall make the net insurance proceeds received by GE CAPITAL
                  available to Borrower for the restoration or repair of the
                  Property as a condition to the enforcement by GE CAPITAL of
                  the covenant set forth in this subpart (c)), (d) shall keep
                  the Property, including all improvements, fixtures, equipment,
                  machinery and appliances thereon, in good repair and shall
                  replace fixtures, equipment, machinery and appliances on the
                  Property when necessary to keep such items in good repair,
                  normal wear and tear excepted (e) shall comply with all laws,
                  ordinances, regulations and requirements of any governmental
                  body applicable to the Property, (f) if all or part of the
                  Property is for rent or lease, then GE CAPITAL, at its option
                  after the occurrence of an Event of Default, may require
                  Borrower to provide for professional management of the
                  Property by a property

                                        7

<PAGE>

                  manager satisfactory to GE CAPITAL pursuant to a contract
                  approved by GE CAPITAL in writing, unless such requirement
                  shall be waived by GE CAPITAL in writing, (g) shall comply
                  with the terms of any restrictive covenants or other similar
                  documents applicable to the Property and generally operate and
                  maintain the Property in a manner to ensure maximum rentals,
                  and (h) shall give notice in writing to GE CAPITAL of and,
                  unless otherwise directed in writing by GE CAPITAL, appear in
                  and defend any action or proceeding purporting to affect the
                  Property, the security of this Instrument or the rights or
                  powers of GE CAPITAL hereunder. Except as provided in the
                  following sentence, neither Borrower nor any tenant or other
                  person, without the written approval of GE CAPITAL, shall
                  remove, demolish or alter any Improvement now existing or
                  hereafter erected on the Property or any fixture, equipment,
                  machinery or appliance in or on the Property except when
                  incident to the replacement of fixtures, equipment, machinery
                  and appliances with items of like kind. Borrower shall have
                  the right to make nonstructural alterations and improvements
                  to the interior of the Property without the prior written
                  approval of GE CAPITAL.

                           Borrower represents, warrants and covenants that to
                  the best of Borrower's knowledge, the Property is and shall
                  remain in compliance with the Americans with Disabilities Act
                  of 1990 and all of the regulations promulgated thereunder, as
                  the same may be amended from time to time.

                                    g.       USE OF PROPERTY. Unless required by
                                             ---------------
                  applicable law or unless GE CAPITAL has otherwise agreed in
                  writing, Borrower shall not allow changes in the use for which
                  all or any part of the Property was intended at the time this
                  Instrument was executed. Borrower shall not, without GE
                  CAPITAL's prior written consent, (a) initiate or acquiesce in
                  a change in the zoning classification (including any variance
                  under any existing zoning ordinance applicable to the
                  Property), (b) permit the use of the Property to become a
                  non-conforming use under applicable zoning ordinances, unless
                  grandfathered by applicable law and only if following any
                  damage to the Property, the rebuilding of the Property for its
                  use as of the date of this Instrument and to its same size as
                  of the date of this Instrument would be permitted under such
                  applicable law, (c) file any subdivision or parcel map
                  affecting the Property, or (d) amend, modify or consent to any
                  easement or covenants, conditions or restrictions pertaining
                  to the Property.

                                    h.       PROTECTION OF GE CAPITAL'S
                                             --------------------------
                  SECURITY. If Borrower fails to perform any of the covenants
                  --------
                  and agreements contained in this Instrument, or if any action
                  or proceeding is commenced which affects the Property or title
                  thereto or the interest of GE CAPITAL therein, including, but
                  not limited to, eminent domain, insolvency, code enforcement,
                  or arrangements or proceedings involving a bankrupt or
                  decedent, then GE CAPITAL, at GE CAPITAL's, option may make
                  such appearances, disburse such sums and take such action as
                  GE CAPITAL deems necessary, in its sole discretion, to protect
                  GE CAPITAL's interest, including, but not limited to, (a)
                  disbursement of attorneys' fees, (b) entry upon the Property
                  to make repairs, and/or (c) procurement of satisfactory
                  insurance as provided in Section 5 hereof.
                                           ---------

                                        8

<PAGE>

                           Any amounts disbursed by GE CAPITAL pursuant to this
                  Section 8, with interest thereon, shall become additional
                  ---------
                  Indebtedness of Borrower secured by this Instrument. Unless
                  Borrower and GE CAPITAL agree to other terms of payment, such
                  amounts shall be immediately due and payable and shall bear
                  interest from the date of disbursement at the post maturity
                  rate stated in the Note. Borrower hereby covenants and agrees
                  that GE CAPITAL shall be subrogated to the lien of any
                  mortgage or other lien discharged, in whole or in part, by the
                  Indebtedness. Nothing contained in this Section 8 shall
                                                          ---------
                  require GE CAPITAL to incur any expense or take any action
                  hereunder.

                                    i.       INSPECTION. Upon reasonable advance
                                             ----------
                  notice, GE CAPITAL may make or cause to be made reasonable
                  entries upon the Property to inspect the interior and exterior
                  thereof.

                                    j.       FINANCIAL DATA. Borrower will
                                             --------------
                  furnish to GE CAPITAL, and will cause each guarantor of the
                  Indebtedness to furnish to GE CAPITAL upon request, within
                  ninety (90) days after the close of each calendar year, (i)
                  balance sheet and profit and loss statements for the
                  immediately preceding calendar year prepared in accordance
                  with generally accepted accounting principles and practices
                  consistently applied and, if GE CAPITAL so requires,
                  accompanied by the annual audit report of an independent
                  certified public accountant reasonably acceptable to GE
                  CAPITAL, all as submitted by Borrower to the Securities and
                  Exchange Commission (the "SEC"), and (ii) if Borrower is no
                  longer required to submit financial reports to the SEC, all
                  other financial information and reports that GE CAPITAL may,
                  from time to time, reasonably request, including, if GE
                  CAPITAL so requires, income tax returns of Borrower and any
                  guarantor of the Indebtedness, and financial statements of any
                  tenant of the Property designated by GE CAPITAL.

                                    k.       CONDEMNATION. If the Property, or
                                             ------------
                  any part thereof, shall be condemned for any reason,
                  including, without limitation, fire or earthquake damage, or
                  otherwise taken for public or quasi-public use under the power
                  of eminent domain, or be transferred in lieu thereof, all
                  damages or other amounts awarded for the taking of, or injury
                  to, the Property shall be paid to GE CAPITAL, and GE CAPITAL
                  shall have the right, in its sole and absolute discretion, to
                  apply the amounts so received against (a) the costs and
                  expenses of GE CAPITAL or Trustee, including reasonable
                  attorneys' fees incurred in connection with collection of such
                  amounts, and (b) the balance against the Indebtedness;
                  provided, however, that if (i) no Event of Default shall have
                  occurred and be continuing hereunder, (ii) Borrower provides
                  evidence satisfactory to GE CAPITAL of its ability to pay all
                  amounts becoming due under the Note during the pendency of any
                  restoration or repairs to or replacement of the Property,
                  (iii) GE CAPITAL determines, in its sole discretion, that the
                  proceeds of such award are sufficient to restore, repair,
                  replace and rebuild the Property as nearly as possible to its
                  value, condition and character immediately prior to such
                  taking (or, if the proceeds of such award are insufficient for
                  such purpose, if Borrower provides additional sums to GE
                  CAPITAL's satisfaction so that the

                                        9

<PAGE>

                  aggregate of such sums and the proceeds of such award will be
                  sufficient for such purpose), and (iv) Borrower provides
                  evidence satisfactory to GE CAPITAL that, as a result of
                  either the condemnation or taking or the repairs to or
                  replacement of the Property, none of the tenants of the
                  Property will terminate their lease agreements, then the
                  proceeds of such award, together with additional sums provided
                  by Borrower, shall be placed in a separate account for the
                  benefit of GE CAPITAL and Borrower to be used to restore,
                  repair, replace and rebuild the Property as nearly as possible
                  to its value, condition and character immediately prior to
                  such taking. All work to be performed in connection therewith
                  shall be pursuant to a written contract therefor, which
                  contract shall be subject to the prior reasonable approval of
                  GE CAPITAL. To the extent that any funds remain after the
                  Property has been so restored and repaired, the same shall be
                  applied against the Indebtedness in such order as GE CAPITAL
                  may elect. To enforce its rights hereunder, GE CAPITAL shall
                  be entitled to participate in and control (after the
                  occurrence of an Event of Default), any condemnation
                  proceedings and to be represented therein by counsel of its
                  own choice, and Borrower will deliver, or cause to be
                  delivered to GE CAPITAL such instruments as may be requested
                  by GE CAPITAL from time to time to permit such participation.
                  In the event GE CAPITAL, as a result of any such judgment,
                  decree or award, reasonably believes that the payment or
                  performance of any of the Indebtedness is or shall be
                  impaired, GE CAPITAL may declare all of the Indebtedness
                  immediately due and payable, in which event no prepayment
                  premium shall be due.

                                    l.       BORROWER AND LIEN NOT RELEASED.
                                             ------------------------------
                  From time to time, GE CAPITAL may, at GE CAPITAL's option,
                  without giving notice to or obtaining the consent of Borrower,
                  Borrower's successors or assigns or of any junior lienholder
                  or guarantors, without liability on GE CAPITAL's part and
                  notwithstanding Borrower's breach of any covenant or agreement
                  of Borrower in this Instrument, extend the time for payment of
                  the Indebtedness or any part thereof, reduce the payments
                  thereon, release anyone liable on any of the Indebtedness,
                  accept an extension or modification or renewal note or notes
                  therefor, release from the lien of this Instrument any part of
                  the Property, take or release other or additional security,
                  reconvey any part of the Property, consent to any map or plan
                  of the Property, consent to the granting of any easement, join
                  in any extension or subordination agreement, and agree in
                  writing with Borrower to modify the rate of interest or period
                  of amortization of the Note or decrease the amount of the
                  monthly installments payable thereunder. Any actions taken by
                  GE CAPITAL pursuant to the terms of this Section 12 shall not
                                                           ----------
                  affect the obligation of Borrower or Borrower's successors or
                  assigns to pay the sums secured by this Instrument and to
                  observe the covenants of Borrower contained herein, shall not
                  affect the guaranty of any person, corporation, partnership or
                  other entity for payment of the Indebtedness, and shall not
                  affect the lien or priority of the lien hereof on the
                  Property. Borrower shall pay GE CAPITAL a reasonable service
                  charge, together with such title insurance premiums and
                  attorneys' fees as may be incurred at GE CAPITAL's option, for
                  any such action if taken at Borrower's request.

                                       10

<PAGE>

                                    m.       FORBEARANCE BY GE CAPITAL NOT A
                                             -------------------------------
                  WAIVER. Any forbearance by GE CAPITAL in exercising any right
                  ------
                  or remedy hereunder, or otherwise afforded by applicable law,
                  shall not be a waiver of or preclude the exercise of any other
                  right or remedy. The acceptance by GE CAPITAL of payment of
                  any sum secured by this Instrument after the due date of such
                  payment shall not be a waiver of GE CAPITAL's right to either
                  require prompt payment when due of all other sums so secured
                  or to declare a default for failure to make prompt payment.
                  The procurement of insurance or the payment of taxes or other
                  liens or charges by GE CAPITAL shall not be a waiver of GE
                  CAPITAL's right to accelerate the maturity of the Indebtedness
                  secured by this Instrument, nor shall GE CAPITAL's receipt of
                  any awards, proceeds or damages under Sections 5 or 11 hereof
                                                        ----------------
                  operate to cure or waive Borrower's default in payment of sums
                  secured by this Instrument.

                                    n.       UNIFORM COMMERCIAL CODE SECURITY
                                             --------------------------------
                  AGREEMENT. This Instrument is intended to be a security and a
                  ---------
                  fixture filing agreement pursuant to the Uniform Commercial
                  Code for any and all of the items specified above as part of
                  the Property which, under applicable law, may be subject to a
                  security interest pursuant to the Uniform Commercial Code, and
                  Borrower hereby grants and conveys to GE CAPITAL a first and
                  prior security interest in all of the Property that
                  constitutes personalty, whether now owned or hereafter
                  acquired. Borrower is the debtor and GE CAPITAL is the secured
                  party. The respective addresses of Borrower and of GE CAPITAL
                  are as provided on page 1 of this Instrument. Borrower hereby
                  authorizes GE CAPITAL to file this Instrument, or a
                  reproduction thereof, and any other financing statements
                  describing the Property which are deemed necessary by GE
                  CAPITAL, in the real estate records and other appropriate
                  indexes as determined by GE CAPITAL, as a financing statement
                  for any of the items specified above as part of the Property.
                  Any reproduction of this Instrument or of any other security
                  agreement or financing statement shall be sufficient as a
                  financing statement. In addition, Borrower agrees to execute
                  and deliver to GE CAPITAL, upon GE CAPITAL's request, any
                  additional financing statements, as well as extensions,
                  renewals and amendments thereof, and reproductions of this
                  Instrument in such form as GE CAPITAL may require to perfect a
                  security interest with respect to the foregoing items.
                  Borrower shall pay all costs of filing such financing
                  statements and any extensions, renewals, amendments and
                  releases thereof, and shall pay all costs and expenses of any
                  record searches for financing statements GE CAPITAL may
                  require. Without the prior written consent of GE CAPITAL,
                  Borrower shall not create or suffer to be created pursuant to
                  the Code any other security interest in said items, including
                  replacements and additions thereto. Upon Borrower's breach of
                  any covenant or agreement of Borrower contained in this
                  Instrument, including the covenants to pay when due all sums
                  secured by this Instrument, GE CAPITAL shall have the remedies
                  of a secured party under the Code, and GE CAPITAL also may
                  invoke the remedies provided in Section 26 of this Instrument
                                                  ----------
                  as to such items. In exercising any of said remedies, GE
                  CAPITAL may proceed against the items of real property and any
                  items of personal property specified above, separately or
                  together, and in any order whatsoever, without in any way
                  affecting the availability of GE CAPITAL's

                                       11

<PAGE>

                  remedies under the Code or of the remedies provided in Section
                                                                         -------
                  26 of this Instrument. Within ten (10) days following any
                  --
                  request therefor by GE CAPITAL, Borrower shall prepare and
                  deliver to GE CAPITAL a written inventory specifically listing
                  all of the personal property covered by the security interest
                  herein granted, which inventory shall be certified by Borrower
                  as being true, correct and complete.

                                    o.       LEASES OF THE PROPERTY. As used in
                                             ----------------------
                  this Section 15, the word "Lease" shall include subleases if
                       ----------
                  this Instrument is on a leasehold. Borrower shall comply with
                  and observe Borrower's obligations as landlord under all
                  Leases, if any, of the Property or any part thereof. All
                  Leases now or hereafter entered into will be in form and
                  substance subject to the reasonable approval of GE CAPITAL.
                  All Leases of the Property shall specifically provide that
                  such Leases are subordinate to this Instrument; that the
                  tenant attorns to GE CAPITAL, such attornment to be effective
                  upon GE CAPITAL's acquisition of title to the Property; that
                  the tenant agrees to execute such further evidences of
                  attornment as GE CAPITAL may, from time to time, request; that
                  the attornment of the tenant shall not be terminated by
                  foreclosure; and that GE CAPITAL may, at GE CAPITAL's option,
                  accept or reject such attornments. Borrower shall not, without
                  GE CAPITAL's written consent, request or consent to the
                  subordination of any Lease of all or any part of the Property
                  to any lien subordinate to this Instrument. If Borrower
                  becomes aware that any tenant proposes to do, or is doing, any
                  act or thing which may give rise to any right of set-off
                  against rent, Borrower shall (a) take such steps as shall be
                  reasonably calculated to prevent the accrual of any right to a
                  set-off against rent, (b) immediately notify GE CAPITAL
                  thereof in writing and of the amount of said set-offs, and (c)
                  within ten (10) days after such accrual, reimburse the tenant
                  who shall have acquired such right to set-off or take such
                  other steps as shall effectively discharge such setoff and as
                  shall assure that rents thereafter due shall continue to be
                  payable without set-off or deduction. Upon GE CAPITAL's
                  receipt of notice of the occurrence of any default or
                  violation by Borrower of any of its obligations under the
                  Leases, GE CAPITAL shall have the immediate right, but not the
                  duty or obligation, without prior written notice to Borrower
                  or to any third party, to enter upon the Property and to take
                  such actions as GE CAPITAL may deem necessary to cure any
                  default or violation by Borrower under the Leases. The costs
                  incurred by GE CAPITAL in taking any such actions pursuant to
                  this Section 15 shall become part of the Indebtedness, shall
                       ----------
                  bear interest at the rate provided in the Note, and shall be
                  payable by Borrower to GE CAPITAL on demand. GE CAPITAL shall
                  have no liability to Borrower or to any third party for any
                  actions taken by GE CAPITAL or not taken pursuant to this
                  Section 15.
                  ----------

                                    p.       REMEDIES CUMULATIVE. Each remedy
                                             -------------------
                  provided in this Instrument is distinct and cumulative to all
                  other rights or remedies under this Instrument or afforded by
                  law or equity, and may be exercised concurrently,
                  independently or successively, in any order whatsoever.

                                    q.       TRANSFERS OF THE PROPERTY OR
                                             ----------------------------
                  BENEFICIAL INTERESTS IN BORROWER; ASSUMPTION. GE CAPITAL may,
                  --------------------------------------------
                  at its

                                       12

<PAGE>

                  option, declare all sums secured by this Instrument to be
                  immediately due and payable, and GE CAPITAL may invoke any
                  remedies permitted by Section 26 of this Instrument, if (a)
                                        ----------
                  title to the Property is changed without the prior written
                  consent of GE CAPITAL, (b) if all or any portion of the
                  Property is leased to any third party without the prior
                  written consent of GE CAPITAL, (c) if any deed of trust,
                  security agreement or other similar document or encumbrance is
                  executed or granted by Borrower with respect to all or any
                  portion of the Property, or (d) if a controlling interest in
                  Borrower's voting stock is sold or transferred to any person
                  or entity in either a single transaction or in one (1) or more
                  related transactions. GE CAPITAL's consent to any transaction
                  described in the immediately preceding sentence may be given
                  or withheld in GE CAPITAL's sole discretion. GE CAPITAL shall
                  have the right to condition its consent to any proposed sale
                  or transfer of the Property which is described in subpart (a)
                  above upon, among other things, GE CAPITAL's approval of the
                  transferee's creditworthiness and management ability, and the
                  transferee's execution, prior to the sale or transfer, of a
                  written assumption agreement containing such terms as GE
                  CAPITAL may require, including, if required by GE CAPITAL, the
                  imposition of a transfer fee of one percent (1%) of the then
                  outstanding balance of the Indebtedness. Consent by GE CAPITAL
                  to one transfer of the Property shall not constitute consent
                  to subsequent transfers or waiver of the provisions of this
                  Section 17. No transfer by Borrower shall relieve Borrower of
                  ----------
                  liability for payment of the Indebtedness.

                                    r.       NOTICE. Except for any notice
                                             ------
                  required under applicable law to be given in another manner,
                  any and all notices, elections, demands, or requests permitted
                  or required to be made under this Instrument or under the Note
                  shall be in writing, signed by the party giving such notice,
                  election, demand or request, and shall be delivered
                  personally, or sent by registered, certified, or Express
                  United States mail, postage prepaid, or by Federal Express or
                  similar service requiring a receipt, to the other party at the
                  address stated above, or to such other party and at such other
                  address within the United States of America as any party may
                  designate in writing as provided herein. The date of receipt
                  of such notice, election, demand or request shall be the
                  earliest of (a) the date of actual receipt, (b) three (3) days
                  after the date of mailing by registered or certified mail, (c)
                  one (1) day after the date of mailing by Express Mail or the
                  delivery (for redelivery) to Federal Express or another
                  similar service requiring a receipt, or (d) the date of
                  personal delivery (or refusal upon presentation for delivery).
                  GE CAPITAL shall endeavor to deliver a copy of any written
                  notice given to Borrower pursuant to the Loan Documents to
                  Borrower's counsel, Brown, Rudnick, Freed & Gesmer, One
                  Financial Center, Boston, Massachusetts 02111, Attn: Joel M.
                  Reck, but any failure by GE CAPITAL to deliver any such notice
                  to Borrower's counsel shall neither invalidate any notice
                  given to Borrower nor impose any liability on GE CAPITAL.

                                    s.       SUCCESSORS AND ASSIGNS BOUND; JOINT
                                             -----------------------------------
                  AND SEVERAL LIABILITY; AGENTS; CAPTIONS. The covenants and
                  ---------------------------------------
                  agreements herein contained shall bind, and the rights
                  hereunder shall inure to, the respective heirs, successors and
                  assigns of GE CAPITAL and Borrower, subject to the provisions
                  of Section 17 hereof. In exercising any rights hereunder or
                     ----------
                  taking any

                                       13

<PAGE>

                  actions provided for herein, GE CAPITAL may act through its
                  employees, agents or independent contractors as authorized by
                  GE CAPITAL. The captions and headings of the sections of this
                  Instrument are for convenience only and are not to be used to
                  interpret or define the provisions hereof.

                                    t.       WAIVER OF STATUTE OF LIMITATIONS.
                                             --------------------------------
                  Borrower hereby waives the right to assert any statute of
                  limitations as a bar to the enforcement of the lien of this
                  Instrument or to any action brought to enforce the Note or any
                  other obligation secured by this Instrument.

                                    u.       WAIVER OF MARSHALLING.
                                             ---------------------
                  Notwithstanding the existence of any other security interests
                  in the Property held by GE CAPITAL or by any other party, GE
                  CAPITAL shall have the right to determine the order in which
                  any or all of the Property shall be subjected to the remedies
                  provided herein. GE CAPITAL shall have the right to determine
                  the order in which any or all portions of the Indebtedness
                  secured hereby are satisfied from the proceeds realized upon
                  the exercise of the remedies provided herein. Borrower, any
                  party who consents to this Instrument and any party who now or
                  hereafter acquires a security interest in the Property and who
                  has actual or constructive notice hereof hereby waives any and
                  all right to require the marshalling of assets in connection
                  with the exercise of any of the remedies permitted by
                  applicable law or provided herein.

                                    v.       HAZARDOUS WASTE. Borrower has
                                             ---------------
                  furnished to GE CAPITAL a Phase I Environmental Site
                  Assessment dated November, 2001, prepared by CDM Dresser &
                  McKee and an Environmental Questionnaire executed by Borrower
                  and dated November 29, 2001 (collectively, the "Report").
                  Except as disclosed to GE CAPITAL in the Report, Borrower has
                  received no notification of any kind suggesting that the
                  Property or any adjacent property is or may be contaminated
                  with any hazardous waste or materials or is or may be required
                  to be cleaned up in accordance with any applicable law or
                  regulation; and Borrower further represents and warrants that,
                  except as previously disclosed to GE CAPITAL in writing, to
                  the best of its knowledge as of the date hereof, after due and
                  diligent inquiry, there are no hazardous waste or materials
                  located in, on or under the Property or any adjacent property,
                  or incorporated in any Improvements, nor has the Property or
                  any adjacent property ever been used as a landfill or a waste
                  disposal site, or a manufacturing, handling, storage,
                  distribution or disposal facility for hazardous waste or
                  materials. As used herein, the term "hazardous waste or
                  materials" includes any substance or material defined in or
                  designated as hazardous or toxic wastes, hazardous or toxic
                  material, a hazardous, toxic or radioactive substance, or
                  other similar term, by any federal, state or local statute,
                  regulation or ordinance now or hereafter in effect. Borrower
                  shall promptly comply with all statutes, regulations and
                  ordinances, and with all orders, decrees or judgments of
                  governmental authorities or courts having jurisdiction,
                  relating to the use, collection, treatment, disposal, storage,
                  control, removal or cleanup of hazardous waste or materials
                  in, on or under the Property or any adjacent property, or
                  incorporated in any Improvements, at Borrower's expense. In
                  the event that GE CAPITAL at any time has a reasonable belief
                  that the

                                       14

<PAGE>

                  Property is not free of all hazardous waste or materials or
                  that Borrower has violated any applicable environmental law
                  with respect to the Property, then within thirty (30) days
                  after GE CAPITAL delivers written notice to Borrower thereof,
                  Borrower shall obtain and furnish to GE CAPITAL, at Borrower's
                  sole cost and expense, an environmental audit and inspection
                  of the Property from an expert satisfactory to GE CAPITAL. In
                  the event that Borrower fails to immediately obtain such audit
                  or inspection, GE CAPITAL or its agents may perform or obtain
                  such audit or inspection at Borrower's sole cost and expense.
                  GE CAPITAL may, but is not obligated to, enter upon the
                  Property and take such actions and incur such costs and
                  expenses to effect such compliance (if Borrower fails to
                  comply with the obligations provided in this Section 22) as it
                                                               ----------
                  deems advisable to protect its interest in the Property; and
                  whether or not Borrower has actual knowledge of the existence
                  of hazardous waste or materials on the Property or any
                  adjacent property as of the date hereof, Borrower shall
                  reimburse GE CAPITAL as provided in Section 23 below for the
                                                      ----------
                  full amount of all costs and expenses incurred by GE CAPITAL
                  prior to GE CAPITAL acquiring title to the Property through
                  foreclosure or acceptance of a deed in lieu of foreclosure, in
                  connection with such compliance activities. Neither this
                  provision nor any of the other Loan Documents shall operate to
                  put GE CAPITAL in the position of an owner of the Property
                  prior to any acquisition of the Property by GE CAPITAL. The
                  rights granted to GE CAPITAL herein and in the other Loan
                  Documents are granted solely for the protection of GE
                  CAPITAL's lien and security interest covering the Property and
                  do not grant to GE CAPITAL the right to control Borrower's
                  actions, decisions or policies regarding hazardous waste or
                  materials.

                                    w.       ADVANCES, COSTS AND EXPENSES.
                                             ----------------------------
                  Borrower shall pay, within ten (10) days after written demand
                  from GE CAPITAL, all sums advanced by GE CAPITAL and all costs
                  and expenses incurred by GE CAPITAL in taking any actions
                  pursuant to the Loan Documents, including reasonable
                  attorneys' fees and disbursements, accountants' fees,
                  appraisal and inspection fees, and the costs for title reports
                  and guaranties, together with interest thereon at the rate
                  applicable under the Note after an Event of Default from the
                  date Borrower receives written notice from GE CAPITAL of such
                  expenses incurred by GE CAPITAL. All such costs and expenses
                  incurred by GE CAPITAL and advances made shall constitute
                  advances under this Instrument to protect the Property and
                  shall be secured by and have the same priority as the lien of
                  this Instrument. If Borrower fails to pay any such advances,
                  costs and/or expenses and interest thereon, GE CAPITAL may
                  apply any undisbursed loan proceeds to pay the same and,
                  without foreclosing the lien of this Instrument, may, at its
                  option, commence an independent action against Borrower for
                  the recovery of the costs, expenses and/or advances, with
                  interest, together with costs of suit, costs of title reports
                  and guaranty of title, disbursements of counsel and reasonable
                  attorneys' fees incurred therein or in any appeal therefrom.

                                    x.       ASSIGNMENT OF LEASES AND RENTS.
                                             ------------------------------
                  Borrower, for good and valuable consideration, the receipt and
                  sufficiency of which is hereby acknowledged, to secure the
                  Indebtedness, does hereby absolutely and unconditionally
                  grant, bargain, sell, transfer, assign, convey, set over and
                  deliver

                                       15

<PAGE>

                  unto GE CAPITAL all right, title and interest of Borrower in,
                  to and under the Leases, if any, of the Property, whether now
                  in existence or hereafter entered into, and all guaranties,
                  amendments, extensions and renewals of said Leases and any of
                  them, and all rents, income and profits which may now or
                  hereafter be or become due or owing under the Leases, and any
                  of them, or on account of the use of the Property.

                           Borrower represents, warrants, covenants and agrees
                  with GE CAPITAL as follows:

         a.       The sole ownership of the entire lessor's interest in the
                  Leases is vested in Borrower, and Borrower has not, and shall
                  not, perform any acts or execute any other instruments which
                  might prevent GE CAPITAL from fully exercising its rights with
                  respect to the Leases under any of the terms, covenants and/or
                  conditions of this Instrument.

         b.       The Leases are and shall be valid and enforceable in
                  accordance with their terms and have not been and shall not be
                  altered, modified, amended, terminated, canceled, renewed or
                  surrendered, except as approved in writing by GE CAPITAL. The
                  terms and conditions of the Leases have not been and shall not
                  be waived in any manner whatsoever, except as approved in
                  writing by GE CAPITAL.

         c.       Borrower shall not alter the term or the amount of rent
                  payable under any Lease without prior written notice to GE
                  CAPITAL and GE CAPITAL's prior written consent.

         d.       To the best of Borrower's knowledge, there are no defaults now
                  existing under any of the Leases and there exists no state of
                  facts which, with the giving of notice or lapse of time or
                  both, would constitute a default under any of the Leases.

         e.       Borrower shall give prompt written notice to GE CAPITAL of any
                  notice received by Borrower claiming that a default has
                  occurred under any of the Leases on the part of Borrower,
                  together with a complete copy of any such notice.

         f.       Each of the Leases shall remain in full force and effect
                  irrespective of any merger of the interest of lessor and any
                  lessee under any of the Leases.

         g.       Borrower will not permit any Lease to become subordinate to
                  any lien other than the lien of this Instrument.

         h.       Borrower shall not permit or consent to the assignment by any
                  tenant of its rights under its Lease without the prior written
                  consent of GE CAPITAL. Without limitation of the foregoing,
                  Borrower shall not permit or consent to the filing of any
                  encumbrance against the tenant's interest under any Lease
                  including, without limitation, any leasehold mortgage.

                                       16

<PAGE>

                           This assignment is absolute, is effective
                  immediately, and is irrevocable by Borrower so long as the
                  Indebtedness remains outstanding. Notwithstanding the
                  foregoing, until a Notice is sent to Borrower in writing that
                  an Event of Default has occurred (which notice is hereafter
                  called a "Notice"), Borrower may receive, collect and enjoy
                  the rents, income and profits accruing from the Property.

                           Upon the occurrence of an Event of Default hereunder,
                  GE CAPITAL may, at its option, after service of a Notice,
                  receive and collect all such rents, income and profits from
                  the Property as they become due. GE CAPITAL shall thereafter
                  continue to receive and collect all such rents, income and
                  profits, as long as such default or defaults shall exist, and
                  during the pendency of any foreclosure proceedings.

                           Borrower hereby irrevocably appoints GE CAPITAL its
                  true and lawful attorney with power of substitution and with
                  full power for GE CAPITAL in its own name and capacity or in
                  the name and capacity of Borrower, from and after service of a
                  Notice, to demand, collect, receive and give complete
                  acquittances for any and all rents, income and profits
                  accruing from the Property, either in its own name or in the
                  name of Borrower or otherwise, which GE CAPITAL may deem
                  necessary or desirable in order to collect and enforce the
                  payment of the rents, income and profits of and from the
                  Property. Lessees of the Property are hereby expressly
                  authorized and directed, following receipt of a Notice from GE
                  CAPITAL, to pay any and all amounts due Borrower pursuant to
                  the Leases to GE CAPITAL or such nominee as GE CAPITAL may
                  designate in a writing delivered to and received by such
                  lessees, and the lessees of the Property are expressly
                  relieved of any and all duty, liability or obligation to
                  Borrower in respect of all payments so made.

                           Upon the occurrence of any Event of Default, from and
                  after service of a Notice, GE CAPITAL is hereby vested with
                  full power to use all measures, legal and equitable, deemed by
                  it to be necessary or proper to enforce this Section 24 and to
                                                               ----------
                  collect the rents, income and profits assigned hereunder,
                  including the right of GE CAPITAL or its designee, to enter
                  upon the Property, or any part thereof, and take possession of
                  all or any part of the Property together with all personal
                  property, fixtures, documents, books, records, papers and
                  accounts of Borrower relating thereto, and GE CAPITAL may
                  exclude Borrower, its agents and servants, wholly therefrom.
                  Borrower hereby grants full power and authority to GE CAPITAL
                  to exercise all rights, privileges and powers herein granted
                  at any and all times after service of a Notice, with full
                  power to use and apply all of the rents and other income
                  herein assigned to the payment of the costs of managing and
                  operating the Property and of any indebtedness or liability of
                  Borrower to GE CAPITAL, including, but not limited, to the
                  payment of taxes, special assessments, insurance premiums,
                  damage claims, the reasonable costs of maintaining, repairing,
                  rebuilding and restoring the Improvements on the Property or
                  of making the same rentable, reasonable attorneys' fees
                  incurred in connection with the enforcement of this
                  Instrument, and of principal and interest payments due from
                  Borrower to GE CAPITAL on the Note and this Instrument, all in
                  such

                                       17

<PAGE>

                  order as GE CAPITAL may determine. GE CAPITAL shall be under
                  no obligation to exercise or prosecute any of the rights or
                  claims assigned to it hereunder or to perform or carry out any
                  of the obligations of the lessor under any of the Leases and
                  does not assume any of the liabilities in connection with or
                  arising or growing out of the covenants and agreements of
                  Borrower in the Leases. It is further understood that the
                  assignment set forth in this Section 24 shall not operate to
                                               ----------
                  place responsibility for the control, care, management or
                  repair of the Property, or parts thereof, upon GE CAPITAL, nor
                  shall it operate to make GE CAPITAL liable for the performance
                  of any of the terms and conditions of any of the Leases, or
                  for any waste of the Property by any lessee under any of the
                  Leases, or any other person, or for any dangerous or defective
                  condition of the Property or for any negligence in the
                  management, upkeep, repair or control of the Property
                  resulting in loss or injury or death to any lessee, licensee,
                  employee or stranger.

                                    y.       DEFAULT. The following shall each
                                             -------
                  constitute an event of default ("Event of Default"):

                                             a.       Failure of Borrower to
                  make any payment of principal, interest, or any Prepayment
                  Premium due under this Note when due, and such failure shall
                  continue for a period of ten (10) days after written notice is
                  given to Borrower by GE CAPITAL specifying such failure
                  (provided that no notice shall be given of any failure by
                  Borrower to pay all amounts which become due hereunder on the
                  Maturity Date); or

                                             b.       Failure of Borrower within
                  the time required by this Instrument to make any payment for
                  taxes, insurance or for reserves for such payments, or any
                  other payment necessary to prevent filing of or discharge of
                  any lien (subject to Section 4 hereof), and such failure shall
                                       ---------
                  continue for a period of ten (10) days after written notice is
                  given to Borrower by GE CAPITAL specifying such failure; or

                                             c.       The Property or any part
                  of or interest in the Property is transferred in any manner
                  whatsoever without the prior written consent of GE CAPITAL; or

                                             d.       If any lease agreement
                  covering all or any portion of the Property is executed by
                  Borrower without GE CAPITAL's prior written consent; or

                                             e.       Filing by Borrower of a
                  voluntary petition in bankruptcy or filing by Borrower of any
                  petition or answer seeking or acquiescing in any
                  reorganization, arrangement, composition, readjustment,
                  liquidation, or similar relief for itself under any present or
                  future federal, state or other statute, law or regulation
                  relating to bankruptcy, insolvency or other relief for
                  debtors, or the seeking or consenting to by Borrower of the
                  appointment of any trustee, receiver, custodian, conservator
                  or liquidator for Borrower, any part of the Property, or any
                  of the income or rents of the Property, or the making by

                                       18

<PAGE>

                  Borrower of any general assignment for the benefit of
                  creditors, or the inability of or failure by Borrower to pay
                  its debts generally as they become due, or the insolvency on a
                  balance sheet basis or business failure of Borrower, or the
                  imposition of a lien upon any of the Property which is not
                  discharged in the manner permitted by Section 4 of this
                                                        ---------
                  Instrument, or the giving of notice by Borrower to any
                  governmental body of insolvency or suspension of operations;
                  or

                                             f.       Filing of a petition
                  against Borrower seeking any reorganization, arrangement,
                  composition, readjustment, liquidation, or similar relief
                  under any present or future federal, state or other law or
                  regulation relating to bankruptcy, insolvency or other relief
                  for debts, or the appointment of any trustee, receiver,
                  custodian, conservator or liquidator of Borrower, of any part
                  of the Property or of any of the income or rents of the
                  Property, unless such petition shall be dismissed within
                  ninety (90) days after such filing, but in any event prior to
                  the entry of an order, judgment or decree approving such
                  petition; or

                                             g.       The commencement of any
                  proceeding for the dissolution or termination of Borrower
                  voluntarily, involuntarily, or by operation of law, if the
                  same is not dismissed within ninety (90) days after the date
                  on which it is commenced; or

                                             h.       Any warranty,
                  representation or statement furnished to GE CAPITAL by or on
                  behalf of Borrower under the Note, this Instrument, any of the
                  other Loan Documents or the Certificate and Indemnity
                  Agreement Regarding Hazardous Substances, shall prove to have
                  been false or misleading in any material respect; or

                                             i.       Failure of Borrower to
                  observe or perform any other obligation under this Instrument,
                  any other Loan Document or the Certificate and Indemnity
                  Regarding Hazardous Substances when such observance or
                  performance is due, and such failure shall continue beyond the
                  applicable cure period set forth in such Loan Document, or if
                  the default cannot be cured within such applicable notice and
                  cure period, Borrower fails within such time to commence and
                  pursue curative action with reasonable diligence or fails at
                  any time after expiration of such applicable cure period to
                  continue with reasonable diligence all necessary curative
                  actions. No notice of default and no opportunity to cure shall
                  be required if during the prior twelve (12) months GE CAPITAL
                  has already sent a notice to Borrower concerning default in
                  performance of the same obligation.

                           GE CAPITAL shall deliver written notice to Borrower
                  of the occurrence of any Event of Default pursuant to Section
                                                                        -------
                  25(h) above.
                  -----

                                    z.       RIGHTS AND REMEDIES ON DEFAULT.
                                             -------------------------------

                           Upon the occurrence of any Event of Default and at
                  any time thereafter, Trustee or GE CAPITAL may exercise any
                  one or more of the following rights and remedies:

                                       19

<PAGE>

                                             a.       GE CAPITAL may declare the
                  entire Indebtedness, including the then unpaid principal
                  balance on the Note, the accrued but unpaid interest thereon,
                  court costs and attorneys' fees hereunder immediately due and
                  payable, without notice, presentment, protest, demand or
                  action of any nature whatsoever (each of which hereby is
                  expressly waived by Borrower), whereupon the same shall become
                  immediately due and payable. Additionally, GE CAPITAL shall
                  not be required to make any further advances on the Note or
                  other Loan Documents upon the occurrence of an Event of
                  Default or an event which, with the giving of notice or
                  passing of time or both, would constitute an Event of Default.

                                             b.       GE CAPITAL may enter upon
                  the Property and take exclusive possession thereof and of all
                  books, records and accounts relating thereto without notice
                  and without being guilty of trespass, and hold, lease, manage,
                  operate or otherwise use or permit the use of the Property,
                  either itself or by other persons, firms or entities, in such
                  manner, for such time and upon such other terms as GE CAPITAL
                  may deem to be prudent and reasonable under the circumstances
                  (making such repairs, alterations, additions and improvements
                  thereto and taking any and all other action with reference
                  thereto, from time to time, as GE CAPITAL shall deem necessary
                  or desirable), and apply all rents and other amounts collected
                  by GE CAPITAL in connection therewith in accordance with the
                  provisions of subsection (h) of this Section 26. Borrower
                                                       ----------
                  hereby irrevocably appoints GE CAPITAL as the agent and
                  attorney-in-fact of Borrower, with full power of substitution,
                  and in the name of Borrower, if GE CAPITAL elects to do so, to
                  (i) endorse the name of Borrower on any checks or drafts
                  representing proceeds of the insurance policies, or other
                  checks or instruments payable to Borrower with respect to the
                  Property, (ii) prosecute or defend any action or proceeding
                  incident to the Property, and (iii) take any action with
                  respect to the Property that GE CAPITAL may at any time and
                  from time to time deem necessary or appropriate. GE CAPITAL
                  shall have no obligation to undertake any of the foregoing
                  actions, and if GE CAPITAL should do so, it shall have no
                  liability to Borrower for the sufficiency or adequacy of any
                  such actions taken by GE CAPITAL.

                                             c.       (i)      GE CAPITAL may,
                  by and through Trustee, or otherwise, sell or offer for sale
                  the Property in such portions, order and parcels as GE CAPITAL
                  may determine, with or without having first taken possession
                  of same, in accordance with the laws of the State of
                  California.

                                             (ii)     GE CAPITAL, may, at its
                  option, accomplish all or any of the aforesaid in such manner
                  as permitted or required by the laws of the State of
                  California relating to the sale of real estate or by Chapter 9
                  of the Code relating to the sale of collateral after default
                  by a debtor (as said section and chapter now exist or may be
                  hereafter amended or succeeded), or by any other present or
                  subsequent articles or enactments relating to same. Nothing
                  contained in this paragraph shall be construed to limit in any
                  way Trustee's right to sell the Property by private sale, if,
                  and to the extent that such private sale is permitted

                                       20

<PAGE>

                  under the laws of the state where the Property (or that
                  portion thereof to be sold) is located or by public or private
                  sale after entry of a judgment by any court of competent
                  jurisdiction ordering same. At any such sale:

         a.                         whether made under the power of sale herein
         contained, the laws of the State of California, the Code, any other
         legal requirement or by virtue of any judicial proceedings or any other
         legal right, remedy or recourse, it shall not be necessary for Trustee
         to have physically present, or to have constructive possession of, the
         Property (Borrower shall deliver to Trustee any portion of the Property
         not actually or constructively possessed by Trustee immediately upon
         demand by Trustee), and the title to and right of possession of any
         such property shall pass to the purchaser thereof as completely as if
         the same had been actually present and delivered to purchaser at such
         sale;

         b.                         each instrument of conveyance executed by
         Trustee shall contain a general warranty of title, binding upon
         Borrower;

         c.                         each and every recital contained in any
         instrument of conveyance made by Trustee shall conclusively establish
         the truth and accuracy of the matters recited therein, including,
         without limitation, nonpayment of the Indebtedness, advertisement and
         conduct of such sale in the manner provided herein and otherwise by law
         and appointment of any successor Trustee hereunder;

         d.                         any and all prerequisites to the validity
         thereof shall be conclusively presumed to have been performed;

         e.                         the receipt by Trustee or of such other
         party or officer making the sale of the full amount of the purchase
         money shall be sufficient to discharge the purchaser or purchasers from
         any further obligation for the payment thereof, and no such purchaser
         or purchasers, or his or their assigns or personal representatives,
         shall thereafter be obligated to see to the application of such
         purchase money or be in any way answerable for any loss, misapplication
         or nonapplication thereof;

         f.                         to the fullest extent permitted by law,
         Borrower shall be completely and irrevocably divested of all of its
         right, title, interest, claim and demand whatsoever, either at law or
         in equity, in and to the property sold, and such sale shall be a
         perpetual bar, both at law and in equity, against Borrower and against
         all other persons claiming or to claim the property sold or any part
         thereof by, through or under Borrower; and

         g.                         to the extent and under such circumstances
         as are permitted by law, GE CAPITAL may be a purchaser at any such
         sale.

                                    d.       After sale of the Property, or any
         portion thereof, Borrower will be divested of any and all interest and
         claim thereto, including any interest or claim to all insurance
         policies, bonds, loan commitments and other intangible property covered
         hereby. Additionally, Borrower will be considered a tenant at
         sufferance of the purchaser of the Property, and said purchaser shall
         be entitled to immediate possession thereof, and

                                       21

<PAGE>

         if Borrower shall fail to vacate the Property immediately, the
         purchaser may and shall have the right, without further notice to
         Borrower, to go into any justice court in any precinct or county in
         which the Property is located and file an action in forcible entry and
         detainer, which action shall lie against Borrower or its assigns or
         legal representatives, as a tenant at sufferance. This remedy is
         cumulative of any and all remedies the purchaser may have hereunder or
         otherwise.

                                    e.       (i)      Upon, or at any time
         after, commencement of foreclosure of the lien and security interest
         provided for herein or any legal proceedings hereunder, GE CAPITAL may
         make application to a court of competent jurisdiction, as a matter of
         strict right and without notice to Borrower or regard to the adequacy
         of the Property, for the repayment of the Indebtedness, for appointment
         of a receiver of the Property, and Borrower does hereby irrevocably
         consent to such appointment. Any such receiver shall have all the usual
         powers and duties of receivers in similar cases, including the full
         power to rent, maintain and otherwise operate the Property upon such
         terms as may be approved by the court, and shall apply such rents in
         accordance with the provisions of subsection (h) of this Section 26.
                                                                  ----------

                                    (ii)     GE CAPITAL may exercise any and all
         other rights, remedies and recourses granted under the Loan Documents
         or now or hereafter existing in equity, at law, by virtue of statute or
         otherwise.

                                    f.       Trustee and GE CAPITAL shall have
         all rights, remedies and recourses granted in the Loan Documents and
         available at law or equity (including specifically those granted by the
         Code in effect and applicable to the Property or any portion thereof)
         and the same (i) shall be cumulative and concurrent; (ii) may be
         pursued separately, successively or concurrently against Borrower, any
         guarantor of the Indebtedness or others obligated under the Note, or
         against the Property, or against any one or more of them at the sole
         discretion of GE CAPITAL; (iii) may be exercised as often as occasion
         therefor shall arise, it being agreed by Borrower that the exercise or
         failure to exercise any of the same shall in no event be construed as a
         waiver or release thereof or of any other right, remedy or recourse;
         and (iv) are intended to be, and shall be, nonexclusive.

                                    g.       To the fullest extent permitted by
         law, Borrower hereby irrevocably and unconditionally waives and
         releases (i) all benefits that might accrue to Borrower by any present
         or future laws exempting the Property from attachment, levy or sale on
         execution or providing for any appraisement, valuation, stay of
         execution, exemption from civil process, redemption or extension of
         time for payment; (ii) all notices of any Event of Default (except as
         may be specifically provided for under the terms hereof), presentment,
         demand, notice of intent to accelerate, notice of acceleration and any
         other notice of GE CAPITAL's or Trustee's election to exercise or the
         actual exercise of any right, remedy or recourse provided for under the
         Loan Documents; (iii) any right to appraisal or marshalling of assets
         or a sale in inverse order of alienation; (iv) the exemption of
         homestead; and (v) the administration of estates of decedents, or other
         matter to defeat, reduce or affect the right of GE CAPITAL under

                                       22

<PAGE>

         the terms of this Instrument to sell the Property for the collection of
         the Indebtedness secured hereby (without any prior or different resort
         for collection) or the right of GE CAPITAL, under the terms of this
         Instrument, to receive the payment of the Indebtedness out of the
         proceeds of sale of the Property in preference to every other person
         and claimant whatever (only reasonable expenses of such sale being
         first deducted). Borrower expressly waives and relinquishes any right
         or remedy which it may have or be able to assert by reason of any
         statute pertaining to the rights and remedies of sureties.

                                    h.       The proceeds of any sale of, and
         the rents, profits and other income generated by the holding, leasing,
         operating or other use of the Property, shall be applied by GE CAPITAL
         (or the receiver, if one is appointed) to the extent that funds are so
         available therefrom in the following orders of priority: (i) first, to
         the payment of the costs and expenses of taking possession of the
         Property and of holding, using, leasing, maintaining, repairing,
         improving and selling the same, including, without limitation, (A)
         receiver's fees; (B) costs of advertisement; (C) attorneys' and
         accountants' fees; and (D) court costs, if any; (ii) second, to the
         payment of all amounts, other than the principal amount and accrued but
         unpaid interest on the Note which may be due to GE CAPITAL under the
         Loan Documents, including all Indebtedness, together with interest
         thereon as provided therein, in such order and manner as GE CAPITAL may
         determine; (iii) third, to the payment of the principal amount
         outstanding on the Note in such order and manner as GE CAPITAL may
         determine and all other Indebtedness; (iv) fourth, to the payment of
         all accrued but unpaid interest due on the Note in such order and
         manner as GE CAPITAL may determine; and (v) fifth, to Borrower.
         Borrower, any guarantor of the Indebtedness and any other party liable
         on the Indebtedness shall be liable for any deficiency remaining in the
         Indebtedness subsequent to any sale referenced in this subsection (h).

                                    i.       GE CAPITAL shall have the right to
         become the purchaser at any sale of the Property hereunder and shall
         have the right to be credited on the amount of its bid therefor all of
         the Indebtedness due and owing as of the date of such sale.

                                    j.       If GE CAPITAL shall accelerate the
         Indebtedness following the occurrence of an Event of Default, any
         payments received by GE CAPITAL following such acceleration, whether as
         the result of voluntary payments made by Borrower or as a result of the
         sale of the Property by Trustee, shall be deemed voluntary prepayments
         of the Note and accordingly, the prepayment fee required under the Note
         shall also be payable, subject to the terms of the Note.

                                    k.       The purchaser at any trustee's or
         foreclosure sale hereunder may disaffirm any easement granted, or
         rental, lease or other contract made in violation of any provisions of
         this Instrument and may take immediate possession of the Property free
         from, and despite the terms of, any such grant of easement, rental,
         lease or other contract.

                                    l.       Any forbearance by GE CAPITAL in
         exercising any right or remedy hereunder, or otherwise afforded by
         applicable law, shall not be a waiver of or preclude the exercise of
         any other right or remedy. The acceptance by GE CAPITAL of payment of
         any sum secured by this Instrument after the due date of such payment
         shall not be a waiver of GE CAPITAL's right to either require prompt
         payment when due of all other sums so secured or to declare a default
         for failure to make prompt payment. The

                                       23

<PAGE>

         procurement of insurance or the payment of taxes or other liens or
         charges by GE CAPITAL shall not be a waiver of GE CAPITAL's right to
         accelerate the maturity of the Indebtedness secured by this Instrument,
         nor shall GE CAPITAL's receipt of any awards, proceeds or damages under
         Sections 5 and 11 hereof operate to cure or waive Borrower's default in
         -----------------
         payment of sums secured by this Instrument.

                                    m.       Each remedy provided in this
         Instrument is distinct and cumulative of all other rights or remedies
         under this Instrument or provided by law or equity, and may be
         exercised concurrently, independently, or successively, in any order
         whatsoever.

                                    n.       Notwithstanding the existence of
         any other security interests in the Property held by GE CAPITAL or by
         any other party, GE CAPITAL shall have the right to determine the order
         in which any or all of the Property shall be subjected to the remedies
         provided herein. GE CAPITAL shall have the right to determine the order
         in which any or all portions of the Indebtedness secured hereby are
         satisfied from the proceeds realized upon the exercise of the remedies
         provided herein. Borrower, any party who consents to this Instrument
         and any party who now or hereafter acquires a security interest in the
         Property and who has actual or constructive notice hereof hereby waives
         any and all right to require the marshalling of assets in connection
         with the exercise of any of the remedies permitted by applicable law or
         provided herein.

                           aa.      RECONVEYANCE. Upon payment of all sums
                                    ------------
         secured by this Instrument, GE CAPITAL shall request Trustee to
         reconvey the Property and shall surrender this Instrument and all notes
         evidencing the Indebtedness secured by this Instrument to Trustee.
         Trustee shall reconvey the Property without warranty to the person or
         persons legally entitled thereto. Such person or persons shall pay
         Trustee's reasonable costs incurred in so reconveying the Property. All
         charges and expenses relating to such reconveyance shall be paid by
         Borrower at Borrower's sole cost and expense.

                           bb.      SUBSTITUTE TRUSTEE. Trustee shall not be
                                    ------------------
         liable for any error of judgment or act done by Trustee, or be
         otherwise responsible or accountable under any circumstances
         whatsoever. Trustee shall not be personally liable in case of entry by
         it or anyone acting by virtue of the powers herein granted it upon the
         Property for debts contracted or liability or damages incurred in the
         management or operation of the Property. All monies received by Trustee
         shall, until used or applied as herein provided, be held in trust for
         the purposes for which they were received, but need not be segregated
         in any manner from any other monies (except to the extent required by
         law) and Trustee shall be under no liability for interest on any monies
         received by it hereunder.

                  Trustee may resign by giving of notice of such resignation in
         writing to GE CAPITAL. If Trustee shall die, resign or become
         disqualified from acting, or shall fail or refuse to exercise its
         powers hereunder when requested by GE CAPITAL so to do, or if for any
         reason and without cause GE CAPITAL shall prefer to appoint a
         substitute trustee to act instead of the original Trustee named herein,
         or any prior successor or substitute trustee, GE CAPITAL shall have
         full power to appoint a substitute trustee and, if

                                       24

<PAGE>

         preferred, several substitute trustees in succession who shall succeed
         to all the estate, rights, powers and duties of the aforenamed Trustee.
         Upon appointment by GE CAPITAL, any new Trustee appointed pursuant to
         any of the provisions hereof shall, without any further act, deed or
         conveyance, become vested with all the estates, properties, rights,
         powers and trusts of its predecessor in the rights hereunder with the
         same effect as if originally named as Trustee herein.

                           cc.      USE OF PROPERTY. The Property is not
                                    ---------------
         currently used for agricultural, farming, timber or grazing purposes.
         Borrower warrants that this Instrument is and will at all times
         constitute a commercial trust deed, as defined under appropriate state
         law.

                           dd.      FUTURE ADVANCES. Upon request of Borrower,
                                    ---------------
         GE CAPITAL, at GE CAPITAL's option so long as this Instrument secures
         Indebtedness held by GE CAPITAL, may make Future Advances to Borrower.
         Such Future Advances, with interest thereon, shall be secured by this
         Instrument when evidenced by promissory notes stating that said notes
         are secured hereby.

                           ee.      IMPOSITION OF TAX BY STATE.
                                    ---------------------------

                                    a.       State Taxes Covered. The following
                                             -------------------
         constitute state taxes to which this Section 31 applies:
                                              ----------

                                             a.       A specific tax upon trust
         deeds or upon all or any part of the indebtedness secured by a trust
         deed.

                                             b.       A specific tax on a
         grantor which the taxpayer is authorized or required to deduct from
         payments on the indebtedness secured by a trust deed.

                                             c.       A tax on a trust deed
         chargeable against the beneficiary or the holder of the note secured.

                                             d.       A specific tax on all or
         any portion of the indebtedness or on payments of principal and
         interest made by a grantor.

                                    b.       Remedies. If any state tax to which
                                             --------
         this Section 31 applies is enacted subsequent to the date of this
              ----------
         Instrument, this shall have the same effect as an Event of Default, and
         GE CAPITAL may exercise any or all of the remedies available to it
         unless the following conditions are satisfied:

                                             a.       Borrower may lawfully pay
         the tax or charge imposed by state tax, and

                                             b.       Borrower pays the tax or
         charge within thirty (30) days after notice from GE CAPITAL that the
         tax law has been enacted.

                                       25

<PAGE>

                  In the event Borrower prepays the Indebtedness as a result of
         the imposition of any state tax pursuant to this Section 31, the
                                                          ----------
         prepayment premium provided under the Note shall not be payable in
         connection with such prepayment.

                           ff.      ATTORNEYS' FEES. In the event suit or action
                                    ---------------
         is instituted to enforce or interpret any of the terms of this
         Instrument (including, without limitation, efforts to modify or vacate
         any automatic stay or injunction), the prevailing party shall be
         entitled to recover all expenses reasonably incurred at, before and
         after trial and on appeal whether or not taxable as costs, or in any
         bankruptcy proceeding including, without limitation, attorneys' fees,
         witness fees (expert and otherwise), deposition costs, copying charges
         and other expenses. Whether or not any court action is involved, all
         reasonable expenses, including but not limited to the costs of
         searching records, obtaining title reports, surveyor reports, title
         insurance, trustee fees, and other attorneys' fees, incurred by GE
         CAPITAL that are necessary at any time in GE CAPITAL's opinion for the
         protection of its interest or enforcement of its rights shall become a
         part of the Indebtedness payable on demand and shall bear interest from
         the date of written notice by GE CAPITAL to Borrower of such
         expenditure until repaid at the interest rate as provided in the Note.
         The term "attorneys' fees" as used in the Loan Documents shall be
         deemed to mean such fees as are reasonable and are actually incurred.

                           gg.      GOVERNING LAW; SEVERABILITY. THIS INSTRUMENT
                                    ---------------------------
         SHALL BE GOVERNED BY THE LAW OF THE STATE OF CALIFORNIA APPLICABLE TO
         CONTRACTS MADE AND TO BE PERFORMED THEREIN (EXCLUDING CHOICE-OF-LAW
         PRINCIPLES). In the event that any provision or clause of this
         Instrument or the Note conflicts with applicable law, such conflict
         shall not affect other provisions of this Instrument or the Note which
         can be given effect without the conflicting provision, and to this end
         the provisions of this Instrument and the Note are declared to be
         severable.

                           hh.      WAIVER OF JURY TRIAL. BORROWER HEREBY
                                    --------------------
         KNOWINGLY AND VOLUNTARILY WAIVES ANY AND ALL RIGHTS THAT BORROWER MAY
         NOW OR HEREAFTER HAVE UNDER THE LAWS OF THE UNITED STATES OF AMERICA OR
         THE LAWS OF THE STATE OF CALIFORNIA TO A TRIAL BY JURY OF ANY AND ALL
         ISSUES ARISING DIRECTLY OR INDIRECTLY IN ANY ACTION OR PROCEEDING
         RELATING TO THIS INSTRUMENT, THE LOAN DOCUMENTS OR ANY TRANSACTIONS
         CONTEMPLATED THEREBY OR RELATED THERETO INCLUDING SPECIFICALLY, WITHOUT
         LIMITATION, INCLUDING ANY RIGHT TO A JURY TRIAL WITH RESPECT TO ANY AND
         ALL DEFENSES, RIGHTS, CLAIMS AND/OR COUNTERCLAIMS IN ANY SUCH ACTION OR
         PROCEEDING.

                           ii.      TIME OF ESSENCE. Time is of the essence to
                                    ---------------
         this Instrument.

                           jj.      CHANGES IN WRITING. This Instrument and any
                                    ------------------
         of its terms may only be changed, waived, discharged or terminated by
         an instrument in writing signed by the party against which enforcement
         of the change, waiver, discharge or termination is sought. Any
         agreement subsequently made by Borrower or GE CAPITAL

                                       26

<PAGE>

         relating to this Instrument shall be superior to the rights of the
         holder of any intervening lien or encumbrance.

                           kk.      NO OFFSET. Borrower's obligation to make
                                    ---------
         payments and perform all obligations, covenants and warranties under
         this Instrument and under the Note shall be absolute and unconditional
         and shall not be affected by any circumstance, including without
         limitation any setoff, counterclaim, abatement, suspension, recoupment,
         deduction, defense or other right that Borrower or any guarantor may
         have or claim against GE CAPITAL or any entity participating in making
         the loan secured hereby. The foregoing provisions of this Section 37,
                                                                   ----------
         however, do not constitute a waiver of any claim or demand which
         Borrower or any guarantor may have in damages or otherwise against GE
         CAPITAL or any other person, or preclude Borrower from maintaining a
         separate action thereon; provided, however, that Borrower waives any
         right it may have at law or in equity to consolidate such separate
         action with any action or proceeding brought by GE CAPITAL.

                           ll.      USURY. All agreements in this Deed of Trust,
                                    -----
         the Note and in the other documents executed or delivered in connection
         herewith are expressly limited so that in no contingency or event
         whatsoever, whether by reason of advancement or acceleration of
         maturity of the Indebtedness, or otherwise, shall the amount paid or
         agreed to be paid hereunder for the use, forbearance or detention of
         money exceed the highest lawful rate permitted under applicable usury
         laws, if any. If, from any circumstance whatsoever, fulfillment of any
         provision of this Deed of Trust, the Note or any of the other documents
         executed or delivered in connection herewith, at the time performance
         of such provision shall be due, shall be prohibited by law, the
         obligation to be fulfilled shall be reduced to the maximum not so
         prohibited and if, from any circumstance whatsoever, GE CAPITAL shall
         ever receive as interest under the Note, this Deed of Trust or any of
         the documents executed or delivered in connection herewith an amount
         which would exceed the highest lawful rate, the receipt of such excess
         shall be deemed a mistake and shall be credited against the principal
         amount of the Indebtedness to which the same may lawfully be credited,
         and any portion of such excess not capable of being so credited shall
         be rebated to Borrower.

                           mm.      SUBSTITUTION OF COLLATERAL. Borrower shall
                                    --------------------------
         have the one-time right, subject to GE CAPITAL's prior written
         approval, which approval shall not be unreasonably withheld, to obtain
         a release of the lien of this Deed of Trust from either (a) the
         Property and one(1) of the properties encumbered by the Other Deeds of
         Trust or (b)one (1) or more of such tracts which together comprise
         twenty-five percent (25%) of the then-current fair market value of all
         of the real property which is encumbered by this Deed of Trust and the
         Other Deeds of Trust, provided that concurrently with such release,
         Borrower must grant to GE CAPITAL first and prior liens covering other
         real property owned by Borrower and which is acceptable to GE CAPITAL
         in its sole but reasonable discretion (such other real property being
         called the "Substitute Assets"). The Substitute Assets must be
         acceptable to GE CAPITAL in its sole but reasonable discretion, and in
         the event of a substitution as described in subpart (b) of the
         immediately preceding sentence, GE CAPITAL must receive an appraisal
         covering the Substitute Assets acceptable to GE CAPITAL in it's sole,
         but reasonable discretion. Borrower shall deliver to GE CAPITAL all due
         diligence materials with

                                       27

<PAGE>

         respect to the Substitute Assets which Borrower delivered to GE CAPITAL
         in connection with the Property including, without limitation,
         environmental site assessments covering each of the Substitute Assets.
         Borrower shall execute any and all documents required by GE CAPITAL to
         evidence the transaction described herein and shall pay all costs and
         expenses of GE CAPITAL in connection therewith including, without
         limitation, reasonable attorneys' fees, title charges, survey costs and
         recording fees.

                           nn.      TAX CONTEST. Borrower shall have the right
                                    -----------
         to contest at its sole cost and expense, after prior written notice to
         GE CAPITAL, by appropriate legal proceedings conducted in good faith
         and with diligence, the amount or validity of any ad valorem taxes
         assessed against the Property, so long as such proceedings operate to
         prevent to collection or other realization of such taxes from the sale
         or forfeiture of the Property or any part thereof. In addition, at any
         time GE CAPITAL determines that the payment of any such taxes being
         contested by Borrower shall become necessary to prevent either the sale
         or forfeiture of the Property or any part thereof to satisfy such
         taxes, then Borrower shall immediately pay the amount of the taxes to
         the applicable governmental authority.

                           oo.      FURTHER ASSURANCES. Borrower hereby agrees
                                    ------------------
         from time to time upon the request of GE CAPITAL to execute and deliver
         such additional documents and/or modifications to this Instrument as GE
         CAPITAL may request in connection with any sale or assignment by GE
         CAPITAL of interests in the Loan; provided, however, that no such
         additional or modified documents shall (a) change any of the economic
         terms of the Loan Documents or (b) require Borrower to pledge any
         additional collateral as security for the replacement of the
         Indebtedness.

                           IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS
                  AGREEMENT SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN
                  WRITING ARE ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT
                  CONTAINED IN THIS INSTRUMENT MAY BE LEGALLY ENFORCED. YOU MAY
                  CHANGE THE TERMS OF THIS INSTRUMENT ONLY BY ANOTHER WRITTEN
                  AGREEMENT.

                                       28

<PAGE>

                  IN WITNESS WHEREOF, Borrower has executed this Instrument or
         has caused the same to be executed by its representatives thereunto
         duly authorized.

                                       BORROWER:

                                       TERADYNE, INC.,
                                       a Massachusetts corporation



                                       By:    /s/ Stuart M. Osattin
                                          --------------------------------------
                                       Print: Stuart M. Osattin
                                             -----------------------------------
                                       Its:   Vice President and Treasurer
                                           -------------------------------------

                                       29

<PAGE>

                          COMMONWEALTH OF MASSACHUSETTS

Suffolk County                                                 December 14, 2001


         Then, before me personally appeared Stuart M. Osattin, to me personally
known, who, being duly sworn, did depose and say that he is the Vice President
and Treasurer of Teradyne, Inc., and acknowledged the foregoing instrument to be
his free act and deed and the free act and deed of Teradyne, Inc.


                                       /s/ Unknown
                                       -----------------------------------------
                                       Notary Public
                                       My Commission expires: 10/20/06

                                       30

<PAGE>

                                    EXHIBIT A
                                    ---------

                             DESCRIPTION OF PROPERTY
                             -----------------------


                              See Attached Schedule

                                       31

<PAGE>

                                    EXHIBIT B
                                    ---------

                              PERMITTED EXCEPTIONS
                              --------------------


                              See Attached Schedule

                                       32

<PAGE>

        Schedule Pursuant to Instruction 2 to Rule 601 of Regulation S-K
    under the Securities Act of 1933 and the Securities Exchange Act of 1934


         Teradyne, Inc. entered into five of the foregoing Commercial Deed of
Trust, Security Agreement, Assignment of Leases and Rents, and Fixture Filing
agreements. The agreements are substantially identical but for the Exhibits A
and B attached thereto. Such Exhibits A and B are attached to and follow this
schedule.

<PAGE>

                                   EXHIBIT "A"
                                   -----------

                                Legal Description


THE LAND REFERRED TO IN THIS COMMITMENT IS IN THE STATE OF CALIFORNIA, COUNTY OF
LOS ANGELES, AND IS DESCRIBED AS FOLLOWS:

LOT 3, OF TRACT NO. 43597, IN THE CITY OF AGOURA HILLS, AS PER MAP RECORDED IN
BOOK 1078 PAGES 72 TO 80 INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER
OF SAID COUNTY.

EXCEPT FROM A PORTION THEREOF AN UNDIVIDED ONE-HALF OF ALL OIL, GAS, PETROLEUM
AND OTHER MINERAL OR HYDROCARBON SUBSTANCES IN AND TO THAT PORTION OF SAID LAND
LYING BELOW THE DEPTH OF 500 FEET FROM THE SURFACE, WITHOUT THE RIGHT OF SURFACE
ENTRY, AS RESERVED IN THE DEED FROM MAX H. GOLDSMITH AND SHIRLEY H. GOLDSMITH,
HUSBAND AND WIFE AS JOINT TENANTS, IN DEED RECORDED AS INSTRUMENT NO. 1450 ON
DECEMBER 29, 1960 IN BOOK D1076 PAGE 565 OF OFFICIAL RECORDS.

ALSO EXCEPTING TO THE COUNTY OF LOS ANGELES ALL OIL, GAS HYDROCARBONS, OR OTHER
MINERALS IN AND UNDER THE ABOVE DESCRIBED PARCEL OF LAND WITHOUT THE RIGHT OF
SURFACE ENTRY FOR DEVELOPMENT THEREOF.

<PAGE>

                                   EXHIBIT "B"
                                   -----------

                              Permitted Exceptions


1.       AN EASEMENT FOR PURPOSES HEREIN STATED, AND RIGHTS INCIDENTAL THERETO
         AS PROVIDED IN A DOCUMENT
         FOR:              CONDUITS, PIPE LINES, VAULTS, MANHOLES, LATERALS AND
                           METERS.
         AFFECTS:          A 4 FOOT STRIP OF LAND IN THE NORTHERLY PORTION OF
                           SAID LAND.
         RECORDED:         DECEMBER 20, 1963 AS INSTRUMENT NO. 4348, IN BOOK
                           D2297, PAGE 290 AND DECEMBER 20, 1963 AS INSTRUMENT
                           NO. 4349, IN BOOK D2297, PAGE 293, BOTH OF OFFICIAL
                           RECORDS.

2.       THE FACT THAT THE OWNERSHIP OF SAID LAND DOES NOT INCLUDE ANY RIGHT OF
         INGRESS AND EGRESS TO OR FROM THE FREEWAY ADJACENT SAID LAND, SAID
         RIGHTS HAVING BEEN RELINQUISHED BY DEED FROM EDWARD TORRES, A SINGLE
         MAN, CARL COHEN AND FRANCES RAE COHEN, HUSBAND AND WIFE, GEORGE
         ROSENBERG AND META ROSENBERG, HUSBAND AND WIFE TO THE STATE OF
         CALIFORNIA, RECORDED SEPTEMBER 18, 1964 AS INSTRUMENT NO. 1531 AND BY
         DEED FROM FIRST WESTERN BANK AND TRUST COMPANY, A CALIFORNIA
         CORPORATION TRUSTEE UNDER TRUST NO. 6495-85268, RECORDED MARCH 12, 1974
         AS INSTRUMENT NO. 2348.

3.       EASEMENTS AND RIGHTS AS SET FORTH IN SECTION 959.1 OF THE STREETS AND
         HIGHWAYS CODE OF THE STATE OF CALIFORNIA, AS RESERVED AND EXCEPTED BY
         THE COUNTY OF LOS ANGELES PURSUANT TO VACATION ROADSIDE DRIVE NO.
         R-53090-68-7, RECORDED SEPTEMBER 20, 1974 AS INSTRUMENT NO. 4431.

4.       AN EASEMENT FOR PURPOSES HEREIN STATED, AND RIGHTS INCIDENTAL THERETO
         AS PROVIDED IN A DOCUMENT
         FOR:              PUBLIC UTILITY PURPOSES.
         AFFECTS:          A 4 FOOT STRIP OF LAND SHOWN AND DELINEATED ON SAID
                           MAP.
         RECORDED:         JANUARY 27, 1964 IN BOOK D 2337 PAGE 304, OF OFFICIAL
                           RECORDS, AS INSTRUMENT NO. 4665.

5.       PROVISIONS OF THE DEDICATION STATEMENT ON THE MAP OF
         TRACT:            43597.
         WHICH RECITE:     WHILE ALL OF AGOURA ROAD AND REYES ADOBE ROAD WITHIN
                           OR ADJACENT TO THIS SUBDIVISION REMAINS A PUBLIC
                           STREET, WE HEREBY ABANDON ALL RIGHTS, EXCEPT FOR 9
                           DRIVEWAY OPENINGS FOR LOTS

<PAGE>

                           1 THROUGH 7, DIRECT VEHICULAR INGRESS AND EGRESS TO
                           SAID STREETS.

6.       AN EASEMENT FOR PURPOSES HEREIN STATED, AS SHOWN ON OR DEDICATED BY THE
         MAP AND AS SHOWN ON SURVEY, JOB NO. 21-223, PREPARED BY DAVID T.
         ROSELL, RPLS NO. 6281 OF ROSELL SURVEYING & MAPPING DATED NOVEMBER 16,
         2001.
         OF:               TRACT 43597.
         FOR:              DRIVEWAY AND FIRE LANE.
         AFFECTS:          A 30 FOOT STRIP ON THE LOT LINE BETWEEN LOTS 3 AND 4,
                           AND A 50 FOOT STRIP BETWEEN LOTS 3 AND 2

         FOR:              STORM DRAIN
         AFFECTS:          A 10 FOOT STRIP OF LAND IN LOT 3, AND A 10 FOOT STRIP
                           OF LAND AND A 16 FOOT STRIP OF LAND

         FOR:              SANITARY SEWER
         AFFECTS:          A 10 FOOT STRIP OF LAND WITHIN LOT 3.

7.       THE TERMS AND PROVISIONS SET OUT IN THAT CERTAIN DOCUMENT ENTITLED
         "AGREEMENT", RECORDED MAY 29,1986 AS INSTRUMENT NO. 86-666139 AND AS
         SHOWN ON SURVEY, JOB NO. 21-223, PREPARED BY DAVID T. ROSELL, RPLS NO.
         6281 OF ROSELL SURVEYING & MAPPING DATED NOVEMBER 16, 2001.

8.       THE TERMS AND PROVISIONS SET OUT IN THAT CERTAIN DOCUMENT ENTITLED
         "AGREEMENT", RECORDED AUGUST 13,1986 AS INSTRUMENT NO. 86-1042685.

         THIS AGREEMENT SHALL RUN WITH THE LAND AND SHALL BE BINDING UPON THE
         UNDERSIGNED AND ITS HEIRS, SUCCESSORS AND ASSIGNS.

         THIS AGREEMENT SHALL NOT BE AMENDED OR TERMINATED EXCEPT UPON THE
         EXPRESS WRITTEN AGREEMENT OF THE UNDERSIGNED AND THE CITY OF AGOURA
         HILLS.

9.       THE TERMS AND PROVISIONS SET OUT IN THAT CERTAIN DOCUMENT ENTITLED
         "AGREEMENT", RECORDED AUGUST 13,1986 AS INSTRUMENT NO. 86-1042686.

         THIS AGREEMENT SHALL RUN WITH THE LAND AND SHALL BE BINDING UPON THE
         UNDERSIGNED AND ITS HEIRS, SUCCESSORS AND ASSIGNS.

         THIS AGREEMENT SHALL NOT BE AMENDED OR TERMINATED EXCEPT UPON THE
         EXPRESS WRITTEN AGREEMENT OF THE UNDERSIGNED AND THE CITY OF AGOURA
         HILLS.

<PAGE>

10.      THE TERMS AND PROVISIONS SET OUT IN THAT CERTAIN DOCUMENT ENTITLED
         "AGREEMENT", RECORDED OCTOBER 9, 1986 AS INSTRUMENT NO. 86-1364924.

11.      COVENANTS, CONDITIONS AND RESTRICTIONS BUT DELETING ANY COVENANT,
         CONDITION, OR RESTRICTION INDICATING A PREFERENCE, LIMITATION OR
         DISCRIMINATION BASED ON RACE, COLOR, RELIGION, SEX, MARITAL STATUS,
         ANCESTRY, DISABILITY, HANDICAP, FAMILIAL STATUS, OR NATIONAL ORIGIN, TO
         THE EXTENT SUCH COVENANTS, CONDITIONS OR RESTRICTIONS VIOLATE 42 U.S.C.
         ss. 3604(c) OR CALIFORNIA GOVERNMENT CODE ss. 12955. LAWFUL
         RESTRICTIONS UNDER STATE AND FEDERAL LAW ON THE AGE OF OCCUPANTS IN
         SENIOR HOUSING OR HOUSING FOR OLDER PERSONS SHALL NOT BE CONSTRUED AS
         RESTRICTIONS BASED ON FAMILIAL STATUS AS PROVIDED IN A DOCUMENT,
         RECORDED:         NOVEMBER 26, 1986 AS INSTRUMENT NO. 86-1642957.

         SAID COVENANTS, CONDITIONS AND RESTRICTIONS WERE MODIFIED BY A
         DOCUMENT,
         RECORDED:         FEBRUARY 12, 1987 AS INSTRUMENT NO. 87-210391.

         AMONG OTHER THINGS, SAID DOCUMENT PROVIDES:
         EASEMENTS.

12.      AN EASEMENT FOR PURPOSES HEREIN STATED, AND RIGHTS INCIDENTAL THERETO
         AS PROVIDED IN A DOCUMENT AND AS SHOWN ON SURVEY, JOB NO. 21-223,
         PREPARED BY DAVID T. ROSELL, RPLS NO. 6281 OF ROSELL SURVEYING &
         MAPPING DATED NOVEMBER 16, 2001.
         FOR:              WATERLINES.
         AFFECTS:          REFERENCE IS MADE TO SAID DOCUMENT FOR FULL
                           PARTICULARS.
         RECORDED:         DECEMBER 5, 1986 AS INSTRUMENT NO. 86-1686664.

13.      AN EASEMENT FOR PURPOSES HEREIN STATED, AND RIGHTS INCIDENTAL THERETO
         AS PROVIDED IN A DOCUMENT AND AS SHOWN ON SURVEY, JOB NO. 21-223,
         PREPARED BY DAVID T. ROSELL, RPLS NO. 6281 OF ROSELL SURVEYING &
         MAPPING DATED NOVEMBER 16, 2001.
         FOR:              PUBLIC UTILITIES.
         AFFECTS:          AS DESCRIBED IN SAID DOCUMENT
         RECORDED:         MARCH 12, 1987 AS INSTRUMENT NO. 87-372455.

14.      THE TERMS AND PROVISIONS SET OUT IN THAT CERTAIN DOCUMENT ENTITLED
         "DEDICATION OF PROPERTY TO LAS VIRGENES MUNICIPAL WATER DISTRICT FOR
         PUBLIC USE", RECORDED APRIL 2, 1987 AS INSTRUMENT NO. 87-507897.

15.      AN EASEMENT FOR PURPOSES HEREIN STATED, AND RIGHTS INCIDENTAL THERETO
         AS PROVIDED IN A DOCUMENT

<PAGE>

         FOR:              PUBLIC USE.
         AFFECTS:          SAID TRACT.
         RECORDED:         APRIL 2, 1987 AS INSTRUMENT NO. 87-507897.

16.      AN EASEMENT FOR PURPOSES HEREIN STATED, AND RIGHTS INCIDENTAL THERETO
         AS PROVIDED IN A DOCUMENT AS SHOWN ON SURVEY, JOB NO. 21-223, PREPARED
         BY DAVID T. ROSELL, RPLS NO. 6281 OF ROSELL SURVEYING & MAPPING DATED
         NOVEMBER 16, 2001.
         FOR:              VEHICULAR AND PEDESTRIAN ACCESS.
         AFFECTS:          LOTS 3 AND 4
         RECORDED:         MAY 22, 1987 AS INSTRUMENT NO. 87-813532.

17.      COVENANTS, CONDITIONS AND RESTRICTIONS AS SET FORTH IN THE DOCUMENT
         ABOVE MENTIONED BUT DELETING ANY COVENANT, CONDITION, OR RESTRICTION
         INDICATING A PREFERENCE, LIMITATION OR DISCRIMINATION BASED ON RACE,
         COLOR, RELIGION, SEX, MARITAL STATUS, ANCESTRY, DISABILITY, HANDICAP,
         FAMILIAL STATUS, OR NATIONAL ORIGIN, TO THE EXTENT SUCH COVENANTS,
         CONDITIONS OR RESTRICTIONS VIOLATE 42 U.S.C. ss. 3604(c) OR CALIFORNIA
         GOVERNMENT CODE ss. 12955. LAWFUL RESTRICTIONS UNDER STATE AND FEDERAL
         LAW ON THE AGE OF OCCUPANTS IN SENIOR HOUSING OR HOUSING FOR OLDER
         PERSONS SHALL NOT BE CONSTRUED AS RESTRICTIONS BASED ON FAMILIAL
         STATUS.

<PAGE>

                                   EXHIBIT "A"
                                   -----------

                                Legal Description


THE LAND REFERRED TO IN THIS COMMITMENT IS IN THE STATE OF CALIFORNIA, COUNTY OF
LOS ANGELES, AND IS DESCRIBED AS FOLLOWS:

LOT 2, OF TRACT NO. 43597, IN THE CITY OF AGOURA HILLS, AS PER MAP RECORDED IN
BOOK 1078 PAGES 72 TO 80 INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER
OF SAID COUNTY.

EXCEPT FROM A PORTION THEREOF AN UNDIVIDED ONE-HALF OF ALL OIL, GAS, PETROLEUM
AND OTHER MINERAL OR HYDROCARBON SUBSTANCES IN AND TO THAT PORTION OF SAID LAND
LYING BELOW THE DEPTH OF 500 FEET FROM THE SURFACE, WITHOUT THE RIGHT OF SURFACE
ENTRY, AS RESERVED IN THE DEED FROM MAX H. GOLDSMITH AND SHIRLEY H. GOLDSMITH,
HUSBAND AND WIFE AS JOINT TENANTS, IN DEED RECORDED AS INSTRUMENT NO. 1450 ON
DECEMBER 29,1960 IN BOOK D1076 PAGE 565 OF OFFICIAL RECORDS.

ALSO EXCEPTING TO THE COUNTY OF LOS ANGELES ALL OIL, GAS, HYDROCARBONS, OR OTHER
MINERALS IN AND UNDER THE ABOVE DESCRIBED PARCEL OF LAND WITHOUT THE RIGHT OF
SURFACE ENTRY FOR DEVELOPMENT THEREOF.

<PAGE>

                                   EXHIBIT "B"
                                   -----------

                              Permitted Exceptions


1.       A WAIVER OF ANY CLAIMS FOR ANY AND ALL DAMAGES TO SAID LAND BY REASON
         OF LOCATION, CONSTRUCTION, LANDSCAPING OR MAINTENANCE OF THE FREEWAY
         LYING NORTHERLY OF SAID LAND, AS PROVIDED IN THE DEED TO STATE OF
         CALIFORNIA, RECORDED JULY 27, 1950, AS INSTRUMENT NO. 2809, IN BOOK
         33808, PAGE 268, OF OFFICIAL RECORDS.

2.       AN EASEMENT FOR PURPOSES HEREIN STATED, AND RIGHTS INCIDENTAL THERETO
         AS PROVIDED IN A DOCUMENT
         FOR:              CONDUITS, PIPE LINES, VAULTS, MANHOLES, LATERALS AND
                           METERS.
         AFFECTS:          A 4 FOOT STRIP OF LAND IN THE NORTHERLY PORTION OF
                           SAID LAND.
         RECORDED:         DECEMBER 20, 1963 AS INSTRUMENT NO. 4348, IN BOOK
                           D2297, PAGE 290 AND DECEMBER 20, 1963 AS INSTRUMENT
                           NO. 4349, IN BOOK D2297, PAGE 293, BOTH OF OFFICIAL
                           RECORDS.

3.       AN EASEMENT FOR PURPOSES HEREIN STATED, AND RIGHTS INCIDENTAL THERETO
         AS PROVIDED IN A DOCUMENT AND SHOWN ON THE SURVEY, JOB NO. 21-222,
         PREPARED DAVID T. ROSELL, RPLS NO. 6281 OF ROSELL SURVEYING & MAPPING
         DATED NOVEMBER 16, 2001.
         FOR:              STORM DRAINS.
         AFFECTS:          A 20 FOOT BY 15 FOOT STRIP WITHIN LOT 2 AS THEREIN
                           DESCRIBED.
         RECORDED:         JANUARY 16, 1973 AS INSTRUMENT NO. 3474.

4.       AN EASEMENT FOR PURPOSES HEREIN STATED, AND RIGHTS INCIDENTAL THERETO
         AS PROVIDED IN A DOCUMENT
         FOR:              STORM DRAIN.
         AFFECTS:          A 20 FOOT BY 25 FOOT STRIP OF LAND WITHIN LOT 2 AS
                           THEREIN DESCRIBED.
         RECORDED:         JANUARY 16, 1973 AS INSTRUMENT NO. 3475 AND 3476.

5.       THE FACT THAT THE OWNERSHIP OF SAID LAND DOES NOT INCLUDE ANY RIGHTS OF
         ACCESS, SAID RIGHTS HAVING BEEN RELINQUISHED, CONDEMNED OR RESERVED IN
         A DOCUMENT
         RECORDED:         SEPTEMBER 18, 1964 AS INSTRUMENT NO. 1531 AND MARCH
                           12, 1974 AS INSTRUMENT NO. 2348.
         FROM:             EDWARD TORRES, A SINGLE MAN, CARL COHEN AND FRANCES
                           RAE COHEN, HUSBAND AND WIFE, GEORGE ROSENBERG AND
                           META ROSENBERG, HUSBAND AND WIFE AND FROM FIRST
                           WESTERN BANK AND TRUST

<PAGE>

                           COMPANY, A CALIFORNIA CORPORATION TRUSTEE UNDER TRUST
                           NO. 6495-85268.

6.       AN EASEMENT FOR PURPOSES HEREIN STATED, AND RIGHTS INCIDENTAL THERETO
         AS PROVIDED IN A DOCUMENT AND SHOWN ON THE SURVEY, JOB NO. 21-222,
         PREPARED DAVID T. ROSELL, RPLS NO. 6281 OF ROSELL SURVEYING & MAPPING
         DATED NOVEMBER 16, 2001.
         FOR:              PUBLIC UTILITIES.
         AFFECTS:          A PORTION OF LOT 2 AS THEREIN DESCRIBED.
         RECORDED:         OCTOBER 11, 1979 AS INSTRUMENT NO. 79-1137891.

7.       A MEMORANDUM OF AGREEMENT AND GRANT OF EASEMENT, DATED DECEMBER 17,
         1980, EXECUTED BY AND BETWEEN CURREY-RIACH COMPANY, AND TIFFANY
         DEVELOPMENT COMPANY, A CALIFORNIA CORPORATION, AND RECORDED JANUARY 16,
         1981 AS INSTRUMENT NO. 81-54573 AND SHOWN ON THE SURVEY, JOB NO.
         21-222, PREPARED DAVID T. ROSELL, RPLS NO. 6281 OF ROSELL SURVEYING &
         MAPPING DATED NOVEMBER 16, 2001.
         FOR:              SEWER LINES
         AFFECTS:          A 10 FOOT STRIP OF LAND AS SHOWN AND DELINEATED ON
                           SAID MAP

8.       EASEMENTS AND RIGHTS AS SET FORTH IN SECTION 959.1 OF THE STREETS AND
         HIGHWAYS CODE OF THE STATE OF CALIFORNIA, AS RESERVED AND EXCEPTED BY
         THE COUNTY OF LOS ANGELES PURSUANT TO VACATION ROADSIDE DRIVE NO.
         R-53090-68-7, RECORDED SEPTEMBER 20, 1974 AS INSTRUMENT NO. 4431.

9.       AN EASEMENT FOR PURPOSES HEREIN STATED, AND RIGHTS INCIDENTAL THERETO
         AS PROVIDED IN A DOCUMENT
         FOR:              PUBLIC UTILITY PURPOSES.
         AFFECTS:          A 4 FOOT STRIP OF LAND SHOWN AND DELINEATED ON SAID
                           MAP.
         RECORDED:         JANUARY 27, 1964 IN BOOK D-2337 PAGE 304, OF OFFICIAL
                           RECORDS, AS INSTRUMENT NO. 4665.

10.      AN EASEMENT FOR PURPOSES HEREIN STATED, AND RIGHTS INCIDENTAL THERETO
         AS PROVIDED IN A DOCUMENT AND SHOWN ON THE SURVEY, JOB NO. 21-222,
         PREPARED DAVID T. ROSELL, RPLS NO. 6281 OF ROSELL SURVEYING & MAPPING
         DATED NOVEMBER 16, 2001.
         FOR:              UNDERGROUND CONDUITS AND WIRES.
         AFFECTS:          A 20 FOOT STRIP OF LAND AS SHOWN AND DELINEATED ON
                           THE MAP OF SAID TRACT.
         RECORDED:         FEBRUARY 20, 1986 AS INSTRUMENT NO. 86-223618, AND
                           RE-RECORDED MARCH 21, 1986 AS INSTRUMENT NO.
                           86-355248.

11.      PROVISIONS OF THE DEDICATION STATEMENT ON THE MAP OF

<PAGE>

         TRACT:            43597.
         WHICH RECITE:     WHILE ALL OF AGOURA ROAD AND REYES ADOVE ROAD WITHIN
                           OR ADJACENT TO THIS SUBDIVISION REMAINS A PUBLIC
                           STREET, WE HEREBY ABANDON ALL RIGHTS, EXCEPT FOR 9
                           DRIVEWAY OPENINGS FOR LOTS 1 THROUGH 7, DIRECT
                           VEHICULAR INGRESS AND EGRESS TO SAID STREETS.

12.      AN EASEMENT FOR PURPOSES HEREIN STATED, AS SHOWN ON OR DEDICATED BY THE
         MAP AND SHOWN ON THE SURVEY, JOB NO. 21-222, PREPARED DAVID T. ROSELL,
         RPLS NO. 6281 OF ROSELL SURVEYING & MAPPING DATED NOVEMBER 16, 2001.
         OF:               TRACT 43597.
         FOR:              DRIVEWAY AND FIRE LANE.
         AFFECTS:          A 50 FOOT STRIP OF LAND IN LOT 2.

         FOR:              A VARIABLE WIDTH EASEMENT FOR STORM DRAIN TO THE CITY
                           OF AGOURA HILLS
         AFFECTS:          ALONG THE NORTHERLY LINE OF LOT 2

         FOR:              STORM DRAIN
         AFFECTS:          A 10 FOOT STRIP OF LAND AND A 14 FOOT STRIP OF LAND
                           IN LOT 1

         FOR:              SANITARY SEWER
         AFFECTS:          A 10 FOOT STRIP OF LAND WITHIN LOT 2

13.      AN AGREEMENT DATED DECEMBER 12, 1985 BY AND BETWEEN KATELL/AHMANSON
         PARTNERSHIP, A CALIFORNIA LIMITED PARTNERSHIP AND PACIFIC BELL, A
         CALIFORNIA CORPORATION, SUBJECT TO THE TERMS, COVENANTS, CONDITIONS AND
         PROVISIONS CONTAINING THEREIN RECORDED MAY 29, 1986 AS INSTRUMENT NO.
         86-666139 AND SHOWN ON THE SURVEY, JOB NO. 21-222, PREPARED DAVID T.
         ROSELL, RPLS NO. 6281 OF ROSELL SURVEYING & MAPPING DATED NOVEMBER 16,
         2001.

14.      AN ASSESSMENT DISTRICT PARTICIPATION AGREEMENT DATED AUGUST 6, 1986,
         EXECUTED BY KATELL/AHMANSON PARTNERSHIP, RECORDED AUGUST 13, 1986 AS
         INSTRUMENT NO. 86-1042685, SAID AGREEMENT IS IN FAVOR OF THE CITY OF
         AGOURA HILLS AND PERTAINS TO THE RELOCATION OF ELECTRIC OR
         COMMUNICATIONS FACILITIES, SAID AGREEMENT ALSO STATES IN PART:

         THIS AGREEMENT SHALL RUN WITH THE LAND AND SHALL BE BINDING UPON THE
         UNDERSIGNED AND ITS HEIRS, SUCCESSORS AND ASSIGNS.

<PAGE>

         THIS AGREEMENT SHALL NOT BE AMENDED OR TERMINATED EXCEPT UPON THE
         EXPRESS WRITTEN AGREEMENT OF THE UNDERSIGNED AND THE CITY OF AGOURA
         HILLS.

15.      AN ASSESSMENT-DISTRICT PARTICIPATION AGREEMENT DATED AUGUST 6, 1986,
         EXECUTED BY KATELL/AHMANSON PARTNERSHIP, RECORDED AUGUST 13, 1986 AS
         INSTRUMENT NO. 86-1042686. SAID AGREEMENT IS IN FAVOR OF THE CITY OF
         AGOURA HILLS AND PERTAINS TO THE INSTALLATION AND CONSTRUCTION OF
         IMPROVEMENTS AND APPURTENANT WORK RELATED TO THE VENTURA FREEWAY REYES
         ADOBE ROAD INTERCHANGE.

         SAID AGREEMENT ALSO STATES IN PART:

         THIS AGREEMENT SHALL RUN WITH THE LAND AND SHALL BE BINDING UPON THE
         UNDERSIGNED AND ITS HEIRS, SUCCESSORS AND ASSIGNS.

         THIS AGREEMENT SHALL NOT BE AMENDED OR TERMINATED EXCEPT UPON THE
         EXPRESS WRITTEN AGREEMENT OF THE UNDERSIGNED AND THE CITY OF AGOURA
         HILLS.

16.      AN UNRECORDED EXCHANGE AGREEMENT DATED OCTOBER 2, 1986 EXECUTED BY
         TERADYNE, INC., A MASSACHUSETTS CORPORATION AND KATELL/AHMANSON
         PARTNERSHIP, A CALIFORNIA LIMITED PARTNERSHIP DISCLOSED BY A MEMORANDUM
         OF EXCHANGE AGREEMENT RECORDED OCTOBER 9, 1986 AS INSTRUMENT NO.
         86-1364924, SUBJECT TO THE TERMS, COVENANTS AND PROVISIONS CONTAINED IN
         SAID AGREEMENT AND SAID MEMORANDUM.

17.      COVENANTS, CONDITIONS AND RESTRICTIONS BUT DELETING ANY COVENANT,
         CONDITION, OR RESTRICTION INDICATING A PREFERENCE, LIMITATION OR
         DISCRIMINATION BASED ON RACE, COLOR, RELIGION, SEX, MARITAL STATUS,
         ANCESTRY, DISABILITY, HANDICAP, FAMILIAL STATUS, OR NATIONAL ORIGIN, TO
         THE EXTENT SUCH COVENANTS, CONDITIONS OR RESTRICTIONS VIOLATE 42 U.S.C.
         ss. 3604(c) OR CALIFORNIA GOVERNMENT CODE ss. 12955. LAWFUL
         RESTRICTIONS UNDER STATE AND FEDERAL LAW ON THE AGE OF OCCUPANTS IN
         SENIOR HOUSING OR HOUSING FOR OLDER PERSONS SHALL NOT BE CONSTRUED AS
         RESTRICTIONS BASED ON FAMILIAL STATUS AS PROVIDED IN A DOCUMENT,
         RECORDED:         NOVEMBER 26, 1986 AS INSTRUMENT NO. 86-1642957.

         SAID COVENANTS, CONDITIONS AND RESTRICTIONS PROVIDE THAT A VIOLATION
         THEREOF SHALL NOT DEFEAT NOR RENDER INVALID THE LIEN OF ANY MORTGAGE OR
         DEED OF TRUST MADE IN GOOD FAITH AND FOR VALUE.

         AMONG OTHER THINGS, SAID DOCUMENT PROVIDES:

<PAGE>

         EASEMENTS.

         SAID COVENANTS, CONDITIONS AND RESTRICTIONS WERE MODIFIED BY A
         DOCUMENT,
         RECORDED:         FEBRUARY 12, 1987 AS INSTRUMENT NO. 210391.

18.      AN EASEMENT FOR PURPOSES HEREIN STATED, AND RIGHTS INCIDENTAL THERETO
         AS PROVIDED IN A DOCUMENT
         FOR:              WATER LINES.
         AFFECTS:          REFERENCE IS MADE TO SAID DOCUMENT FOR FULL
                           PARTICULARS.
         RECORDED:         DECEMBER 5, 1986 AS INSTRUMENT NO. 86-1686664.

19.      AN EASEMENT FOR PURPOSES HEREIN STATED, AND RIGHTS INCIDENTAL THERETO
         AS PROVIDED IN A DOCUMENT
         FOR:              PUBLIC UTILITIES.
         AFFECTS:          EIGHT (8) STRIPS OF LAND LYING WITHIN LOTS 1, 2, 3,
                           AND 4 OF TRACT NO. 43597, AS PER MAP RECORDED IN BOOK
                           1078, PAGES 72 THROUGH 80 INCLUSIVE OF MISCELLANEOUS
                           RECORDS (MAPS) IN THE OFFICE OF THE COUNTY RECORDER
                           OF SAID COUNTY OF LOS ANGELES, STATE OF CALIFORNIA,
                           DESCRIBED THEREIN.
         RECORDED:         MARCH 12, 1987 AS INSTRUMENT NO. 87-372455.

<PAGE>

                                   EXHIBIT "A"
                                   -----------

                                Legal Description


THE LAND REFERRED TO IN THIS COMMITMENT IS IN THE STATE OF CALIFORNIA, COUNTY OF
LOS ANGELES, AND IS DESCRIBED AS FOLLOWS:

LOT 1 OF TRACT 43597, IN THE CITY OF AGOURA HILLS, AS PER MAP RECORDED IN BOOK
1078 PAGE 72 TO 80 INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF
SAID COUNTY.

EXCEPT FROM A PORTION THEREOF AN UNDIVIDED ONE-HALF OF ALL OIL, GAS, PETROLEUM
AND OTHER MINERAL OR HYDROCARBON SUBSTANCES IN AND TO THAT PORTION OF SAID LAND
LYING BELOW THE DEPTH OF 500 FEET FROM THE SURFACE, WITHOUT THE RIGHT OF SURFACE
ENTRY, AS RESERVED IN THE DEED FROM MAX H. GOLDSMITH AND SHIRLEY H. GOLDSMITH,
HUSBAND AND WIFE AS JOINT TENANTS, IN DEED RECORDED AS INSTRUMENT NO. 1450 ON
DECEMBER 29,1960 IN BOOK D1076 PAGE 565 OF OFFICIAL RECORDS.

ALSO EXCEPT TO THE COUNTY OF LOS ANGELES ALL OIL, GAS, HYDROCARBONS, OR OTHER
MINERALS IN AND UNDER THE ABOVE DESCRIBED PARCEL OF LAND WITHOUT THE RIGHT OF
SURFACE ENTRY FOR DEVELOPMENT THEREOF.

<PAGE>

                                   EXHIBIT "B"
                                   -----------

                              Permitted Exceptions


1.       A WAIVER OF ANY CLAIMS FOR ANY AND ALL DAMAGES TO SAID LAND BY REASON
         OF LOCATION, CONSTRUCTION, LANDSCAPING OR MAINTENANCE OF THE FREEWAY
         LYING NORTHERLY OF SAID LAND, AS PROVIDED IN THE DEED TO STATE OF
         CALIFORNIA, RECORDED JULY 27,1950 AS INSTRUMENT NO. 2809, IN BOOK
         33808, PAGE 268, OFFICIAL RECORDS.

2.       AN EASEMENT FOR PURPOSES HEREIN STATED, AND RIGHTS INCIDENTAL THERETO
         AS PROVIDED IN A DOCUMENT
         FOR:              CONDUITS, PIPE LINES, VAULTS, MANHOLES, LATERALS AND
                           METERS.
         AFFECTS:          A 4 FOOT STRIP OF LAND IN THE NORTHERLY PORTION OF
                           SAID LAND.
         RECORDED:         DECEMBER 20,1963 AS INSTRUMENT NO. 4348, IN BOOK
                           D2297 PAGE 290 AND DECEMBER 20, 1963 AS INSTRUMENT
                           NO. 4349, IN BOOK D2297 PAGE 293, BOTH OF OFFICIAL
                           RECORDS.

3.       AN EASEMENT FOR PURPOSES HEREIN STATED, AND RIGHTS INCIDENTAL THERETO
         AS PROVIDED IN A DOCUMENT AND SHOWN ON THE SURVEY, JOB NO. 21-221,
         PREPARED DAVID T. ROSELL, RPLS NO. 6281 OF ROSELL SURVEYING & MAPPING
         DATED NOVEMBER 16, 2001.
         FOR:              STORM DRAINS.

         AFFECTS:          A 10 FOOT BY 25 FOOT STRIP OF LAND.
         RECORDED:         JANUARY 16, 1973 AS INSTRUMENT NO. 3474.

4.       AN EASEMENT FOR PURPOSES HEREIN STATED, AND RIGHTS PROVIDED IN A
         DOCUMENT AND SHOWN ON THE SURVEY, JOB NO. 21-221, PREPARED DAVID T.
         ROSELL, RPLS NO. 6281 OF ROSELL SURVEYING & MAPPING DATED NOVEMBER 16,
         2001.
         FOR:              PUBLIC UTILITIES.
         AFFECTS:          A 10 FOOT STRIP OF LAND.
         RECORDED:         OCTOBER 11, 1979 AS INSTRUMENT NO. 79-1137891

5.       A MEMORANDUM OF AGREEMENT AND GRANT OF EASEMENT, DECEMBER 17, 1980,
         EXECUTED BY AND BETWEEN CURREY-RIACH COMPANY, AND TIFFANY DEVELOPMENT
         COMPANY, A CALIFORNIA CORPORATION, AND RECORDED JANUARY 16, 1981 AS
         INSTRUMENT NO. 81-54573 AND SHOWN ON THE SURVEY, JOB NO. 21-221,
         PREPARED DAVID T. ROSELL, RPLS NO. 6281 OF ROSELL SURVEYING & MAPPING
         DATED NOVEMBER 16, 2001.
         PURPOSE:          SEWER LINES
         AFFECTS:          A 10 FOOT STRIP OF LAND AS SHOWN AND DELINEATED ON
                           SAID MAP.

<PAGE>

6.       AN EASEMENT FOR PUBLIC STREET, ROAD OR HIGHWAY PURPOSES AS PROVIDED IN
         A DOCUMENT,
         AFFECTS:          SAID LAND.
         RECORDED:         SEPTEMBER 20, 1974 AS INSTRUMENT NO. 4431.

7.       AN EASEMENT FOR PURPOSES HEREIN STATED, AND RIGHTS INCIDENTAL THERETO
         AS PROVIDED IN A DOCUMENT AND SHOWN ON THE SURVEY, JOB NO. 21-221,
         PREPARED DAVID T. ROSELL, RPLS NO. 6281 OF ROSELL SURVEYING & MAPPING
         DATED NOVEMBER 16, 2001.
         FOR:              UNDERGROUND CONDUITS AND WIRES.
         AFFECTS:          A 20 FOOT STRIP OF LAND AS SHOWN AND DELINEATED ON
                           THE MAP OF SAID TRACT
         RECORDED:         FEBRUARY 20, 1986 AS INSTRUMENT NO. 86-223618 AND
                           RE-RECORDED MARCH 21, 1986 AS INSTRUMENT NO.
                           86-355248.

8.       PROVISIONS OF THE DEDICATION STATEMENT ON THE MAP OF
         TRACT:            43597.
         WHICH RECITE:     WHILE ALL OF AGOURA ROAD AND REYES ADOBE ROAD WITHIN
                           OR ADJACENT TO THIS SUBDIVISIONS REMAINS A PUBLIC
                           STREET, WE HEREBY ABANDON ALL RIGHTS, EXCEPT FOR 9
                           DRIVEWAY OPENING FOR LOTS 1 THROUGH 7, DIRECT
                           VEHICULAR INGRESS AND EGRESS TO SAID STREETS.

9.       AN EASEMENT FOR PURPOSES HEREIN STATED, AND RIGHTS INCIDENTAL THERETO
         AS PROVIDED IN A DOCUMENT AND SHOWN ON THE SURVEY, JOB NO. 21-221,
         PREPARED DAVID T. ROSELL, RPLS NO. 6281 OF ROSELL SURVEYING & MAPPING
         DATED NOVEMBER 16, 2001.
         FOR:              DRIVEWAY AND FIRELANE.
         AFFECTS:          A 60 FOOT STRIP OF LAND.
         RECORDED:         IN BOOK 1078 PAGES 72 TO 80 OF MAPS.

         FOR:              A VARIABLE WIDTH EASEMENT FOR STORM DRAIN TO THE CITY
                           OF AGOURA HILLS
         AFFECTS:          ALONG THE NORTHERLY LINE OF SAID LOT 1.

         FOR:              STORM DRAIN
         AFFECTS:          A 10 FOOT STRIP OF LAND AND A 14 FOOT STRIP OF LAND

         FOR:              SANITARY SEWER
         AFFECTS:          A 10 FOOT STRIP OF LAND

10.      THE TERMS AND PROVISIONS SET OUT IN THAT CERTAIN DOCUMENT ENTITLED
         "AGREEMENT", RECORDED MAY 29,1986 AS INSTRUMENT NO. 86-666139 AND SHOWN
         ON THE SURVEY, JOB NO. 21-221, PREPARED DAVID T.

<PAGE>

         ROSELL, RPLS NO. 6281 OF ROSELL SURVEYING & MAPPING DATED NOVEMBER 16,
         2001.

11.      THE TERMS AND PROVISIONS SET OUT IN THAT CERTAIN DOCUMENT ENTITLED
         "ASSESSMENT DISTRICT PARTICIPATION AGREEMENT", RECORDED AUGUST 13, 1986
         AS INSTRUMENT NO. 86-1042685.

         THIS AGREEMENT SHALL RUN WITH THE LAND AND SHALL BE BINDING UPON THE
         UNDERSIGNED AND ITS HEIRS, SUCCESSORS AND ASSIGNS.

         THIS AGREEMENT SHALL NOT BE AMENDED OR TERMINATED EXCEPT UPON THE
         EXPRESS WRITTEN AGREEMENT OF THE UNDERSIGNED AND THE CITY OF AGOURA
         HILLS.

12.      THE TERMS AND PROVISIONS SET OUT IN THAT CERTAIN DOCUMENT ENTITLED
         "ASSESSMENT-DISTRICT PARTICIPATION AGREEMENT", RECORDED AUGUST 13, 1986
         AS INSTRUMENT NO. 86-1042686.

         SAID AGREEMENT ALSO STATES IN PART:

         THIS AGREEMENT SHALL RUN WITH THE LAND AND SHALL BE BINDING UPON THE
         UNDERSIGNED AND ITS HEIRS, SUCCESSORS AND ASSIGNS.

         THIS AGREEMENT SHALL NOT BE AMENDED OR TERMINATED EXCEPT UPON THE
         EXPRESS WRITTEN AGREEMENT OF THE UNDERSIGNED AND THE CITY OF AGOURA
         HILLS.

13.      THE TERMS AND PROVISIONS SET OUT IN THAT CERTAIN DOCUMENT ENTITLED
         "DISCLOSED BY A MEMORANDUM OF EXCHANGE AGREEMENT", RECORDED OCTOBER 9,
         1986 AS INSTRUMENT NO. 86-1364924.

14.      COVENANTS, CONDITIONS AND RESTRICTIONS BUT DELETING ANY COVENANT,
         CONDITION, OR RESTRICTION INDICATING A PREFERENCE, LIMITATION OR
         DISCRIMINATION BASED ON RACE, COLOR, RELIGION, SEX, MARITAL STATUS,
         ANCESTRY, DISABILITY, HANDICAP, FAMILIAL STATUS, OR NATIONAL ORIGIN, TO
         THE EXTENT SUCH COVENANTS, CONDITIONS OR RESTRICTIONS VIOLATE 42 U.S.C.
         ss. 3604(c) OR CALIFORNIA GOVERNMENT CODE ss. 12955. LAWFUL
         RESTRICTIONS UNDER STATE AND FEDERAL LAW ON THE AGE OF OCCUPANTS IN
         SENIOR HOUSING OR HOUSING FOR OLDER PERSONS SHALL NOT BE CONSTRUED AS
         RESTRICTIONS BASED ON FAMILIAL STATUS AS PROVIDED IN A DOCUMENT,
         RECORDED:         NOVEMBER 26,1986 AS INSTRUMENT NO. 86-1642957.

         AMONG OTHER THINGS, SAID DOCUMENT PROVIDES:

         EASEMENTS

<PAGE>

         SAID COVENANTS, CONDITIONS AND RESTRICTIONS WERE MODIFIED BY A
         DOCUMENT,
         RECORDED:         FEBRUARY 12,1987 AS INSTRUMENT NO. 87-210391.

15.      AN EASEMENT FOR PURPOSES HEREIN STATED, AND RIGHTS INCIDENTAL THERETO
         AS PROVIDED IN A DOCUMENT AND SHOWN ON THE SURVEY, JOB NO. 21-221,
         PREPARED DAVID T. ROSELL, RPLS NO. 6281 OF ROSELL SURVEYING & MAPPING
         DATED NOVEMBER 16, 2001.
         FOR:              WATERLINES.
         AFFECTS:          REFERENCE IS MADE TO SAID DOCUMENT FOR FULL
                           PARTICULARS.
         RECORDED:         DECEMBER 5, 1986 AS INSTRUMENT NO. 86-1686664.

<PAGE>

                                   EXHIBIT "A"
                                   -----------

                                Legal Description


REAL PROPERTY in the City of San Jose, County of Santa Clara, State of
California, described as follows:

LOT 2, so designated and delineated on the Map of Tract No. 7422 recorded April
25, 1983 in Book 511 of Maps, pages 20, 21, 22 and 23, Santa Clara County
Records.

TOGETHER WITH an appurtenant easement for the purposes of mutual ingress and
egress, as granted by Cad N. Swenson, Co., Inc. and CA. Swenson, Inc. to Fox
Lane Investment Company recorded June 1, 1983 in Book H597, page 745, Official
Records.

TOGETHER WITH mutual access easement established by Map of Tract No. 7422
recorded April 25, 1983 in Book 511 of Maps, pages 20, 21, 22 and 23, Santa
Clara County Records.

<PAGE>

                                   EXHIBIT "B"
                                   -----------

                              Permitted Exceptions

1.       Matters set forth in a document entitled "Declaration of Covenants,
         Conditions and Restrictions for Swenson Business Park", executed by
         Carl N. Swenson Co., Inc., recorded April 16, 1982 in Book G728, page
         394, Official Records, including but not limited to covenants,
         conditions, restrictions, easements, assessments, liens and charges.

         First Amendment thereto was recorded November 24, 1982 in Book H164,
         page 591, Official Records.

         Second Amendment thereto was recorded November 24,1982 in Book H164,
         page 582, Official Records.

         Third Amendment thereto was recorded January 20, 1984 in Book 1243,
         page 489, Official Records.

         Fourth Amendment thereto was recorded February 25, 1988 in Book K454,
         page 1077, Official Records.

2.       The effect, if any, of the fact that the Map of Tract No. 7422 recorded
         April 25, 1983 in Book 511 of Maps, pages 20, 21, 22 and 23, Santa
         Clara County Records, indicates that "We hereby establish a
         non-revocable ingress-egress easement over portions of Lots 1 and 2 for
         their mutual benefit, over portions of Lots 1 and 3 for their mutual
         benefit . . ." and as shown on the survey dated November 9, 2001,
         prepared Mitchell Duryea, Licensed Land Surveyor No. 5660 of Duryea &
         Associates.

         Reference is hereby made to the record for further particulars.

3.       An easement for mutual ingress and egress, reserved as appurtenant to
         and for the benefit of Lot 3 of said Tract No. 7422, and incidental
         purposes, recorded June 1, 1983 in Book H597, page 745 of Official
         Records and as shown on the survey dated November 9, 2001, prepared
         Mitchell Duryea, Licensed Land Surveyor No. 5660 of Duryea &
         Associates.

         Reference is hereby made to the record for further particulars.

4.       An easement for underground electrical facilities and incidental
         purposes, recorded March 1, 1984 in Book 1344, page 506, Official
         Records and as shown on the survey dated November 9, 2001, prepared
         Mitchell Duryea, Licensed Land Surveyor No. 5660 of Duryea &
         Associates.

         In Favor of  :    Pacific Gas and Electric Company and The Pacific
                           Telephone and Telegraph Company

         Reference is hereby made to the record for further particulars.

<PAGE>

5.       An easement for underground electrical facilities and incidental
         purposes, recorded March 1, 1984 in Book 1344, page 510, Official
         Records and as shown on the survey dated November 9, 2001, prepared
         Mitchell Duryea, Licensed Land Surveyor No. 5660 of Duryea &
         Associates.

         In Favor of  :    Pacific Gas and Electric Company and The Pacific
                           Telephone and Telegraph Company

         Reference is hereby made to the record for further particulars.

6.       An easement for underground electrical facilities and incidental
         purposes, recorded May 14, 1984 in Book 1540, page 111, Official
         Records and as shown on the survey dated November 9, 2001, prepared
         Mitchell Duryea, Licensed Land Surveyor No. 5660 of Duryea &
         Associates.

         In Favor of  :    Pacific Gas and Electric Company, a California
                           corporation

         Said matter affects Strips of land of the uniform width of 10 feet, the
         center lines of which are delineated by the heavy dashed line shown
         upon the print of second party's Drawing No. SJB 1732.

7.       Terms and conditions of that certain Site Development Permit

         File No.     :    HA93-01-061
         Disclosed By :    Certificate
         Recorded     :    January 21, 1994 in Book N263, page 0261, Official
                           Records

         Reference is hereby made to the record for particulars.

8.       Terms and conditions of that certain Site Development Permit

         File No.     :    H93-09-061
         Disclosed By :    Certificate
         Recorded     :    January 21, 1994 in Book N263, page 0263, Official
                           Records

         Reference is hereby made to the record for particulars.

<PAGE>

                                   EXHIBIT "A"
                                   -----------

                                Legal Description


REAL PROPERTY in the City of San Jose, County of Santa Clara, State of
California, described as follows:

LOT 1, so designated and delineated on the Map of Tract No. 7422 recorded April
25, 1983 in Book 511 of Maps, pages 20, 21, 22 and 23, Santa Clara County
Records.

TOGETHER WITH an appurtenant easement for the purposes of mutual ingress and
egress, as granted by Cad N. Swenson, Co., Inc. and CA. Swenson, Inc. to Fox
Lane Investment Company recorded June 1, 1983 in Book H597, page 745, Official
Records.

TOGETHER WITH mutual access easement established by Map of Tract No. 7422
recorded April 25, 1983 in Book 511 of Maps, pages 20, 21, 22 and 23, Santa
Clara County Records.

<PAGE>

                                   EXHIBIT "B"
                                   -----------

                              Permitted Exceptions

1.       Matters set forth in a document entitled "Declaration of Covenants,
         Conditions and Restrictions for Swenson Business Park", executed by
         Carl N. Swenson Co., Inc., recorded April 16, 1982 in Book G728, page
         394, Official Records, including but not limited to covenants,
         conditions, restrictions, easements, assessments, liens and charges.

         First Amendment thereto was recorded November 24, 1982 in Book H164,
         page 591, Official Records.

         Second Amendment thereto was recorded November 24,1982 in Book H164,
         page 582, Official Records.

         Third Amendment thereto was recorded January 20, 1984 in Book 1243,
         page 489, Official Records.

         Fourth Amendment thereto was recorded February 25, 1988 in Book K454,
         page 1077, Official Records.

2.       The effect, if any, of the fact that the Map of Tract No. 7422 recorded
         April 25, 1983 in Book 511 of Maps, pages 20, 21, 22 and 23, Santa
         Clara County Records, indicates that "We hereby establish a
         non-revocable ingress-egress easement over portions of Lots 1 and 2 for
         their mutual benefit, over portions of Lots 1 and 3 for their mutual
         benefit . . ." and as shown on the survey dated November 9, 2001,
         prepared Mitchell Duryea, Licensed Land Surveyor No. 5660 of Duryea &
         Associates.

         Reference is hereby made to the record for further particulars.

3.       An easement for mutual ingress and egress, reserved as appurtenant to
         and for the benefit of Lot 3 of said Tract No. 7422, and incidental
         purposes, recorded June 1, 1983 in Book H597, page 745 of Official
         Records and as shown on the survey dated November 9, 2001, prepared
         Mitchell Duryea, Licensed Land Surveyor No. 5660 of Duryea &
         Associates.

         Reference is hereby made to the record for further particulars.

4.       An easement for underground electrical facilities and incidental
         purposes, recorded March 1, 1984 in Book 1344, page 506, Official
         Records and as shown on the survey dated November 9, 2001, prepared
         Mitchell Duryea, Licensed Land Surveyor No. 5660 of Duryea &
         Associates.

         In Favor of  :    Pacific Gas and Electric Company and The Pacific
                           Telephone and Telegraph Company

         Reference is hereby made to the record for further particulars.

<PAGE>

5.       An easement for underground electrical facilities and incidental
         purposes, recorded March 1, 1984 in Book 1344, page 510, Official
         Records and as shown on the survey dated November 9, 2001, prepared
         Mitchell Duryea, Licensed Land Surveyor No. 5660 of Duryea &
         Associates.

         In Favor of  :    Pacific Gas and Electric Company and The Pacific
                           Telephone and Telegraph Company

         Reference is hereby made to the record for further particulars.

6.       An easement for underground electrical facilities and incidental
         purposes, recorded May 14, 1984 in Book 1540, page 111, Official
         Records and as shown on the survey dated November 9, 2001, prepared
         Mitchell Duryea, Licensed Land Surveyor No. 5660 of Duryea &
         Associates.

         In Favor of  :    Pacific Gas and Electric Company, a California
                           corporation

         Said matter affects Strips of land of the uniform width of 10 feet, the
         center lines of which are delineated by the heavy dashed line shown
         upon the print of second party's Drawing No. SJB 1732.

7.       Terms and conditions of that certain Site Development Permit

         File No.     :    HA93-01-061
         Disclosed By :    Certificate
         Recorded     :    January 21, 1994 in Book N263, page 0261, Official
                           Records

         Reference is hereby made to the record for particulars.

8.       Terms and conditions of that certain Site Development Permit

         File No.     :    H93-09-061
         Disclosed By :    Certificate
         Recorded     :    January 21, 1994 in Book N263, page 0263, Official
                           Records

         Reference is hereby made to the record for particulars.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.27
<SEQUENCE>16
<FILENAME>dex1027.txt
<DESCRIPTION>REAL ESTATE MORTGAGE FINANCING DOCUMENTS
<TEXT>
<PAGE>

                                                                   Exhibit 10.27


- --------------------------------------------------------------------------------
AFTER RECORDING, RETURN TO:
- --------------------------
General Electric Capital Business
Asset Funding Corporation
Middle Market Risk/Operations Department
10900 NE 4th Street, Suite 500
Bellevue, Washington  98004
Attn: Ms. Deehan Gay
Loan No. 050-8563-001

THIS INSTRUMENT PREPARED BY:
- ---------------------------
Jenkens & Gilchrist,
a professional corporation
George C. Dunlap, Esq.
1445 Ross Avenue, Suite 3200
Dallas, Texas 75202

                                  [Space above reserved for recorder's use only]
================================================================================

                         ASSIGNMENT OF RENTS AND LEASES
                         ------------------------------

         THIS ASSIGNMENT is made effective as of December 19, 2001, by TERADYNE
INC., a Massachusetts corporation, with a mailing address of 321 Harrison
Avenue, Boston, Massachusetts 02118-2238 (hereinafter called "Assignor"), in
favor of GENERAL ELECTRIC CAPITAL BUSINESS ASSET FUNDING CORPORATION, a Delaware
corporation, with a mailing address of 10900 NE 4th Street, Suite 500, Bellevue,
Washington 98004, Attention: Middle Market Risk/Operations Department
(hereinafter called "GE CAPITAL").

                                   WITNESSETH
                                   ----------

         Assignor, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, does hereby absolutely, irrevocably
and unconditionally grant, bargain, sell, transfer, assign, convey, set over and
deliver unto GE CAPITAL all right, title and interest of Assignor in, to and
under all written and oral leases and rental agreements of the real estate
described in Exhibit A attached hereto and incorporated herein (the "Property"),
whether now in existence or hereafter entered into, and all guaranties,
amendments, extensions, renewals and subleases of said leases and any of them,
all of which are hereinafter called the "Leases," all rents, income and profits
which may now or hereafter be or become due or owing under the Leases, and any
of them, or on account of the use of the Property, any award hereafter made in
any bankruptcy, insolvency or reorganization proceeding in any state or federal
court involving any of the tenants of the Leases, and any and all payments made
by such tenants in lieu of rent.

         This Assignment is made for the purpose of securing:

         A.       The payment of the indebtedness (including any extensions or
                  renewals thereof) evidenced by a certain Promissory Note (the
                  "Note") of Assignor dated of even date herewith in the
                  principal sum of $45,000,000.00 and secured by five (5)
                  certain Commercial Deeds of Trust, Security Agreements,
                  Assignments of Leases and Rents and Fixture Filings
                  (collectively, the "Deed of Trust") of even date herewith
                  encumbering the Property;

                                        1

<PAGE>

         B.       The payment of all other sums with interest thereon becoming
                  due and payable to GE CAPITAL under the provisions of the Deed
                  of Trust and any other instrument constituting security for
                  the Note; and

         C.       The performance and discharge of each and every term, covenant
                  and condition contained in the Note, Deed of Trust and any
                  other instrument constituting security for the Note.

                  Assignor represents, warrants, covenants and agrees with GE
                  CAPITAL as follows:

         A.       The sole ownership of the entire lessor's interest in the
                  Leases is or shall be vested in Assignor, and Assignor has
                  not, and shall not, perform any acts or execute any other
                  instruments which might prevent GE CAPITAL from fully
                  exercising its rights under any of the terms, covenants and
                  conditions of this Assignment.

         B.       The Leases are and shall be valid and enforceable in
                  accordance with their terms, have not been altered, modified,
                  amended, terminated, canceled, renewed or surrendered nor have
                  any of the terms and conditions thereof been waived in any
                  manner whatsoever except as approved in writing by GE CAPITAL.

         C.       Assignor shall not alter the term of any Lease or the amount
                  of rent payable under any Lease without GE CAPITAL's prior
                  written consent. In addition, Assignor shall not materially
                  alter any of the other terms of the Leases without GE
                  CAPITAL'S prior written consent, which consent shall not be
                  unreasonably withheld.

         D.       To the best of Assignor's knowledge, there are no defaults now
                  existing under any of the Leases, and there exists no state of
                  facts which, with the giving of notice or passing of time or
                  both, would constitute a default under any of the Leases.

         E.       Assignor shall give prompt notice to GE CAPITAL of any notice
                  received by Assignor claiming that a default has occurred
                  under any of the Leases on the part of Assignor, together with
                  a complete copy of any such notice.

         F.       Each of the Leases shall remain in full force and effect
                  irrespective of any merger of the interest of lessor and any
                  lessee under any of the Leases.

         G.       Assignor will not permit any Lease to become subordinate to
                  any lien other than the lien of the Deed of Trust.

         H.       Assignor shall not permit or consent to the assignment by any
                  tenant of its rights under its Lease without the prior written
                  consent of GE CAPITAL. Without limitation of the foregoing,
                  Assignor shall not permit or consent to the filing of any
                  encumbrance against the tenant's interest under any Lease
                  including, without limitation, any leasehold mortgage.

                                        2

<PAGE>

         I.       All existing Leases are described on Exhibit B attached hereto
                                                       ---------
                  and incorporated herein. Assignor has delivered to Assignee
                  true, correct and complete copies of all existing Leases and
                  all amendments and modifications thereto.

                           The parties further agree as follows:

                           This Assignment is an absolute, present assignment
                  from Assignor to GE CAPITAL, effective immediately, and shall
                  be irrevocable by Assignor so long as Assignor remains
                  indebted to GE CAPITAL. Possession of the Property by GE
                  CAPITAL shall not be a prerequisite to GE CAPITAL'S right to
                  collect the rents, income and profits of and from the
                  Property. Notwithstanding the foregoing, until written notice
                  is sent to Assignor that an Event of Default (as defined in
                  the Note and/or in the Deed of Trust) has occurred (which
                  notice is hereafter called a "Notice"), Assignor shall be
                  entitled to receive, collect and enjoy the rents, income and
                  profits accruing from the Property. All rents, income and
                  profits collected or received by Assignor with respect to
                  periods falling after Assignor's receipt of a Notice shall be
                  held by Assignor in trust for Assignee and shall be paid by
                                   --------
                  Assignor to Assignee on demand.

                           GE CAPITAL may, at its option, after delivery of a
                  Notice to Assignor, receive and collect all such rents, income
                  and profits, from the Property. GE CAPITAL shall thereafter
                  continue to receive and collect all such rents, income and
                  profits as they become due as long as such Event of Default
                  shall exist and during the pendency of any foreclosure
                  proceedings, and if there is a deficiency, during any
                  redemption period. All sums received by Assignor after service
                  of a Notice shall be deemed received in trust and shall be
                  turned over to GE CAPITAL within one (1) business day after
                  Assignor's receipt thereof.

                           Assignor hereby irrevocably appoints GE CAPITAL its
                  true and lawful attorney with power of substitution and with
                  full power for GE CAPITAL in its own name and capacity or in
                  the name and capacity of Assignor, from and after delivery of
                  a Notice, to demand, collect, receive and give complete
                  acquittances for any and all rents, income and profits
                  accruing from the Property, either in its own name or in the
                  name of Assignor or otherwise, which GE CAPITAL may deem
                  necessary or desirable in order to collect and enforce the
                  payment of the rents, income and profits. Such appointment is
                  coupled with an interest and is irrevocable. Assignor also
                  hereby irrevocably appoints GE CAPITAL as its true and lawful
                  attorney, from and after delivery of a Notice, to appear in
                  any state or federal bankruptcy, insolvency, or reorganization
                  proceeding in any state or federal court involving any of the
                  tenants of the Leases. Tenants of the Property are hereby
                  expressly authorized and directed to pay any and all amounts
                  due Assignor pursuant to the Leases to GE CAPITAL or such
                  nominee as GE CAPITAL may designate in writing delivered to
                  and received by such tenants, each of whom are expressly
                  relieved of any and all duty, liability or obligation to
                  Assignor in respect of all payments so made.

                           From and after delivery of a Notice, GE CAPITAL is
                  hereby vested with full power to use all measures, legal and
                  equitable, deemed by it to be necessary

                                        3

<PAGE>

                  or proper to enforce this Assignment and to collect the rents,
                  income and profits assigned hereunder, including the right of
                  GE CAPITAL or its designee to enter upon the Property, or any
                  part thereof, and take possession of all or any part of the
                  Property together with all personal property, fixtures,
                  documents, books, records, papers and accounts of Assignor
                  relating thereto, and GE CAPITAL may exclude Assignor, its
                  agents and employees, wholly therefrom. Assignor hereby grants
                  full power and authority to GE CAPITAL to exercise all rights,
                  privileges and powers herein granted at any and all times
                  after delivery of a Notice, with full power to use and apply
                  all of the rents and other income and profits herein assigned
                  to the payment of the costs of managing and operating the
                  Property and to any indebtedness or liabilities of Assignor to
                  GE CAPITAL, including, but not limited to, the payment of
                  taxes, special assessments, insurance premiums, damage claims,
                  the reasonable costs of maintaining, repairing, rebuilding and
                  restoring the improvements on the Property or of making the
                  same rentable, reasonable attorneys' fees incurred in
                  connection with the enforcement of this Assignment, and to the
                  payment of principal and interest due from Assignor to GE
                  CAPITAL on the Note and the Deed of Trust, all in such order
                  as GE CAPITAL may determine. GE CAPITAL shall be under no
                  obligation to exercise or prosecute any of the rights or
                  claims assigned to it hereunder or to perform or carry out any
                  of the obligations of the lessor under any of the Leases and
                  does not assume any of the liabilities in connection with or
                  arising or growing out of the covenants and agreements of
                  Assignor in the Leases. It is further understood that this
                  Assignment shall not operate to place responsibility for the
                  control, care, management or repair of the Property, or parts
                  thereof, upon GE CAPITAL, nor shall it operate to make GE
                  CAPITAL liable for the performance of any of the terms and
                  conditions of any of the Leases, or for any waste of the
                  Property, or for any dangerous or defective condition of the
                  Property or for any negligence in the management, upkeep,
                  repair or control of the Property resulting in loss or injury
                  or death to any lessee, licensee, employee or stranger.

                           Waiver of or acquiescence by GE CAPITAL in any
                  default by Assignor, or failure of GE CAPITAL to insist upon
                  strict performance by Assignor of any covenants, conditions or
                  agreements in this Assignment, shall not constitute a waiver
                  of any subsequent or other default or failure, whether similar
                  or dissimilar.

                           The rights and remedies of GE CAPITAL under this
                  Assignment are cumulative and are not in lieu of, but are in
                  addition to any other rights or remedies which GE CAPITAL
                  shall have under the Deed of Trust or any other instrument
                  constituting security for the Note, or at law or in equity.

                           If any term of this Assignment, or the application
                  thereof to any person or circumstances, shall, to any extent,
                  be invalid or unenforceable, the remainder of this Assignment,
                  or the application of such term to persons or circumstances
                  other than those as to which it is invalid or unenforceable,
                  shall not be affected thereby, and each term of this
                  Assignment shall be valid and enforceable to the fullest
                  extent permitted by law.

                                        4

<PAGE>

                           Any and all notices, elections, demands, or requests
                  permitted or required to be made under this Assignment,
                  including without limitation a Notice, shall be in writing and
                  shall be given in accordance with Section 18 of the Deed of
                                                    ----------
                  Trust.

                           Assignor hereby authorizes GE CAPITAL to give written
                  notice of this Assignment, which may include a copy hereof, at
                  any time to any tenant under any of the Leases.

                           The terms "Assignor" and "GE CAPITAL" shall be
                  construed to include the legal representatives, heirs
                  successors and assigns thereof. The gender and number used in
                  this Assignment are used as a reference term only and shall
                  apply with the same effect whether the parties are of the
                  masculine or feminine gender, corporate or other form, and the
                  singular shall likewise include the plural.

                           This Assignment may not be amended, modified or
                  changed nor shall any waiver of any provision hereof be
                  effective, except and only by an instrument in writing and
                  signed by the party against whom enforcement of any waiver,
                  amendment, change, modification or discharge is sought.

                           Notwithstanding anything contained herein to the
                  contrary, in no event shall this Assignment be deemed to
                  reduce the indebtedness evidenced by the Note by an amount in
                  excess of the actual amount of cash received by GE CAPITAL
                  under the Leases, whether before, during or after the
                  occurrence of an Event of Default, and Assignor acknowledges
                  that in no event shall the indebtedness secured hereby be
                  reduced by the value from time to time of the rents, income
                  and profits of or from the Property, unless rents and income
                  are actually received by GE CAPITAL and applied against the
                  indebtedness secured hereby. In addition, GE CAPITAL reserves
                  the right, at any time, whether before or after the occurrence
                  of an Event of Default, to recharacterize this Assignment as
                  merely constituting security for the indebtedness of Assignor
                  to GE CAPITAL, which recharacterization shall be made by
                  written notice delivered to Assignor. GE CAPITAL's receipt of
                  any rents, issues and profits pursuant to this Assignment
                  after the institution of foreclosure proceedings, either by
                  court action or by the private power of sale contained in any
                  deed of trust now or hereafter securing the Note, shall not
                  cure an Event of Default, as defined in the Note, or affect
                  such proceedings or sale.

                           This Assignment shall be governed by and construed in
                  accordance with the laws of the State of California.

                            [SIGNATURE PAGE FOLLOWS]

                                        5

<PAGE>

         IN WITNESS WHEREOF, Assignor has caused this instrument to be executed
and delivered as of the date first above written.

                                       ASSIGNOR:
                                       --------

                                       TERADYNE, INC.,
                                       a Massachusetts corporation



                                       By:    /s/ Stuart M. Osattin
                                          --------------------------------------
                                       Print: Stuart M. Osattin
                                             -----------------------------------
                                       Its:   Vice President and Treasurer
                                           -------------------------------------

                                        6

<PAGE>

                          COMMONWEALTH OF MASSACHUSETTS

Suffolk County                                                 December 14, 2001


         Then, before me personally appeared Stuart M. Osattin, to me personally
known, who, being duly sworn, did depose and say that he is the Vice President
and Treasurer of Teradyne, Inc., and acknowledged the foregoing instrument to be
his free act and deed and the free act and deed of Teradyne, Inc.

                                       /s/ Unknown
                                       -----------------------------------------
                                       Notary Public
                                       My Commission expires: 10/20/06

                                        7

<PAGE>

                                    EXHIBIT A
                                    ---------

                                LEGAL DESCRIPTION
                                -----------------


                              See Attached Schedule

                                        8

<PAGE>

                                    EXHIBIT B
                                    ---------

                                 LIST OF LEASES
                                 --------------

                                      None.

                                        9

<PAGE>

        Schedule Pursuant to Instruction 2 to Rule 601 of Regulation S-K
    under the Securities Act of 1933 and the Securities Exchange Act of 1934


         Teradyne, Inc. entered into five of the foregoing Assignment of Rents
and Leases agreements. The agreements are substantially identical but for the
Exhibits A attached thereto. Such Exhibits A are attached to and follow this
schedule.

<PAGE>

                                   EXHIBIT "A"
                                   -----------

                                Legal Description


THE LAND REFERRED TO IN THIS COMMITMENT IS IN THE STATE OF CALIFORNIA, COUNTY OF
LOS ANGELES, AND IS DESCRIBED AS FOLLOWS:

LOT 3, OF TRACT NO. 43597, IN THE CITY OF AGOURA HILLS, AS PER MAP RECORDED IN
BOOK 1078 PAGES 72 TO 80 INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER
OF SAID COUNTY.

EXCEPT FROM A PORTION THEREOF AN UNDIVIDED ONE-HALF OF ALL OIL, GAS, PETROLEUM
AND OTHER MINERAL OR HYDROCARBON SUBSTANCES IN AND TO THAT PORTION OF SAID LAND
LYING BELOW THE DEPTH OF 500 FEET FROM THE SURFACE, WITHOUT THE RIGHT OF SURFACE
ENTRY, AS RESERVED IN THE DEED FROM MAX H. GOLDSMITH AND SHIRLEY H. GOLDSMITH,
HUSBAND AND WIFE AS JOINT TENANTS, IN DEED RECORDED AS INSTRUMENT NO. 1450 ON
DECEMBER 29, 1960 IN BOOK D1076 PAGE 565 OF OFFICIAL RECORDS.

ALSO EXCEPTING TO THE COUNTY OF LOS ANGELES ALL OIL, GAS HYDROCARBONS, OR OTHER
MINERALS IN AND UNDER THE ABOVE DESCRIBED PARCEL OF LAND WITHOUT THE RIGHT OF
SURFACE ENTRY FOR DEVELOPMENT THEREOF.

<PAGE>

                                   EXHIBIT "A"
                                   -----------

                                Legal Description


THE LAND REFERRED TO IN THIS COMMITMENT IS IN THE STATE OF CALIFORNIA, COUNTY OF
LOS ANGELES, AND IS DESCRIBED AS FOLLOWS:

LOT 2, OF TRACT NO. 43597, IN THE CITY OF AGOURA HILLS, AS PER MAP RECORDED IN
BOOK 1078 PAGES 72 TO 80 INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER
OF SAID COUNTY.

EXCEPT FROM A PORTION THEREOF AN UNDIVIDED ONE-HALF OF ALL OIL, GAS, PETROLEUM
AND OTHER MINERAL OR HYDROCARBON SUBSTANCES IN AND TO THAT PORTION OF SAID LAND
LYING BELOW THE DEPTH OF 500 FEET FROM THE SURFACE, WITHOUT THE RIGHT OF SURFACE
ENTRY, AS RESERVED IN THE DEED FROM MAX H. GOLDSMITH AND SHIRLEY H. GOLDSMITH,
HUSBAND AND WIFE AS JOINT TENANTS, IN DEED RECORDED AS INSTRUMENT NO. 1450 ON
DECEMBER 29,1960 IN BOOK D1076 PAGE 565 OF OFFICIAL RECORDS.

ALSO EXCEPTING TO THE COUNTY OF LOS ANGELES ALL OIL, GAS, HYDROCARBONS, OR OTHER
MINERALS IN AND UNDER THE ABOVE DESCRIBED PARCEL OF LAND WITHOUT THE RIGHT OF
SURFACE ENTRY FOR DEVELOPMENT THEREOF.

<PAGE>

                                   EXHIBIT "A"
                                   -----------

                                Legal Description


THE LAND REFERRED TO IN THIS COMMITMENT IS IN THE STATE OF CALIFORNIA, COUNTY OF
LOS ANGELES, AND IS DESCRIBED AS FOLLOWS:

LOT 1 OF TRACT 43597, IN THE CITY OF AGOURA HILLS, AS PER MAP RECORDED IN BOOK
1078 PAGE 72 TO 80 INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF
SAID COUNTY.

EXCEPT FROM A PORTION THEREOF AN UNDIVIDED ONE-HALF OF ALL OIL, GAS, PETROLEUM
AND OTHER MINERAL OR HYDROCARBON SUBSTANCES IN AND TO THAT PORTION OF SAID LAND
LYING BELOW THE DEPTH OF 500 FEET FROM THE SURFACE, WITHOUT THE RIGHT OF SURFACE
ENTRY, AS RESERVED IN THE DEED FROM MAX H. GOLDSMITH AND SHIRLEY H. GOLDSMITH,
HUSBAND AND WIFE AS JOINT TENANTS, IN DEED RECORDED AS INSTRUMENT NO. 1450 ON
DECEMBER 29,1960 IN BOOK D1076 PAGE 565 OF OFFICIAL RECORDS.

ALSO EXCEPT TO THE COUNTY OF LOS ANGELES ALL OIL, GAS, HYDROCARBONS, OR OTHER
MINERALS IN AND UNDER THE ABOVE DESCRIBED PARCEL OF LAND WITHOUT THE RIGHT OF
SURFACE ENTRY FOR DEVELOPMENT THEREOF.

<PAGE>

                                   EXHIBIT "A"
                                   -----------

                                Legal Description


REAL PROPERTY in the City of San Jose, County of Santa Clara, State of
California, described as follows:

LOT 2, so designated and delineated on the Map of Tract No. 7422 recorded April
25, 1983 in Book 511 of Maps, pages 20, 21, 22 and 23, Santa Clara County
Records.

TOGETHER WITH an appurtenant easement for the purposes of mutual ingress and
egress, as granted by Cad N. Swenson, Co., Inc. and CA. Swenson, Inc. to Fox
Lane Investment Company recorded June 1, 1983 in Book H597, page 745, Official
Records.

TOGETHER WITH mutual access easement established by Map of Tract No. 7422
recorded April 25, 1983 in Book 511 of Maps, pages 20, 21, 22 and 23, Santa
Clara County Records.

<PAGE>

                                   EXHIBIT "A"
                                   -----------

                                Legal Description


REAL PROPERTY in the City of San Jose, County of Santa Clara, State of
California, described as follows:

LOT 1, so designated and delineated on the Map of Tract No. 7422 recorded April
25, 1983 in Book 511 of Maps, pages 20, 21, 22 and 23, Santa Clara County
Records.

TOGETHER WITH an appurtenant easement for the purposes of mutual ingress and
egress, as granted by Cad N. Swenson, Co., Inc. and CA. Swenson, Inc. to Fox
Lane Investment Company recorded June 1, 1983 in Book H597, page 745, Official
Records.

TOGETHER WITH mutual access easement established by Map of Tract No. 7422
recorded April 25, 1983 in Book 511 of Maps, pages 20, 21, 22 and 23, Santa
Clara County Records.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.28
<SEQUENCE>17
<FILENAME>dex1028.txt
<DESCRIPTION>REAL ESTATE MORTGAGE FINANCING DOCUMENTS
<TEXT>
<PAGE>

                                                                   Exhibit 10.28


                                                           Loan No. 050-8563-001


                       CERTIFICATE AND INDEMNITY AGREEMENT
                         REGARDING HAZARDOUS SUBSTANCES

         In connection with and as partial consideration for the making of a
loan in the amount of FORTY-FIVE MILLION AND NO/100 DOLLARS ($45,000,000.00)
(the "Loan"), by GENERAL ELECTRIC CAPITAL BUSINESS ASSET FUNDING CORPORATION, a
Delaware corporation ("GE CAPITAL"), to TERADYNE INC. ("Borrower"), Borrower
certifies, represents, warrants, covenants and agrees to and with GE CAPITAL as
follows as of December 19, 2001:

                  A.       Borrower has furnished to GE CAPITAL a Phase I
Environmental Site Assessment dated November, 2001, prepared by CDM Dresser &
McKee and an Environmental Questionnaire executed by Borrower and dated November
29, 2001 (collectively, the "Report"). Except as disclosed to GE CAPITAL in the
Report, Borrower has no knowledge of (a) the presence of any Hazardous
Substances (as defined below) on that certain real property and improvements
thereon situated in Los Angeles County, California, which real property is more
particularly described in Exhibit A attached hereto (including the improvements
                          ---------
thereon, the "Property"), or (b) any spills, releases, discharges or disposal of
Hazardous Substances that have occurred or are presently occurring on or onto
the Property or any Other Property (as defined below).

                  B.       Borrower represents that, as of the date of this
Agreement, Borrower has no knowledge of any failure to comply with all
applicable local, state and federal environmental laws, regulations, ordinances
and administrative and judicial orders relating to the generation, recycling,
reuse, sale, storage, handling, transport, disposal, discharge, release or
presence of any Hazardous Substances on or with respect to the Property,
including, without limitation, the Applicable Laws (as defined below).

                  C.       Borrower has duly investigated the present and past
uses of the Property and has made due inquiry of the appropriate governmental
agencies and offices having jurisdiction over the Property and has examined, or
been advised of the Applicable Laws, to determine whether the Property is or has
been the site of storage of or contamination by any Hazardous Substances.
Borrower has provided GE CAPITAL with a written summary of its investigations.

                  D.       Borrower has not released and will not release or
waive the liability of any previous owner, lessee, or operator of the Property
or any party who may be potentially responsible for the presence, release,
discharge, disposal or removal of Hazardous Substances on or from the Property.
Borrower has made no promises of indemnification regarding Hazardous Substances
with respect to the Property to any person or entity other than GE CAPITAL.

                  E.       Borrower agrees to notify GE CAPITAL immediately if
Borrower becomes aware of (a) any Hazardous Substances or other environmental
problem or liability with respect to the Property or any Other Property, or (b)
any lien, action or notice resulting from violation of any of the Applicable
Laws. If GE CAPITAL reasonably determines that a release

                                        1

<PAGE>

of Hazardous Substances has occurred on the Property or that a violation of the
Applicable Laws has occurred, Borrower shall, at Borrower's sole cost and
expense, (i) obtain and furnish to GE CAPITAL an environmental audit or survey
from an expert satisfactory to GE CAPITAL with respect to the Property and (ii)
proceed in a timely manner, and in accordance with all Applicable Laws to take
all actions which are necessary to clean up any Hazardous Substances affecting
the Property and to comply with the Applicable Laws. Following the completion of
any such actions, Borrower shall proceed in a timely manner to restore the
Property to its former state of productive use.

                  F.       Borrower shall indemnify and hold GE CAPITAL harmless
from and against any and all claims, demands, damages, losses, liens,
liabilities, penalties, fines, lawsuits and other proceedings and costs and
expenses (including attorneys' fees and disbursements), which accrue to or are
made against or are incurred by GE CAPITAL at any time (whether prior to or on
or after transfer of the Property pursuant to foreclosure or by deed in lieu
thereof), and which arise directly or indirectly from or out of, or are in any
way connected with (a) the inaccuracy of the certifications, representations or
warranties contained herein, (b) any activities on the Property during
Borrower's ownership, possession or control of the Property which directly or
indirectly result in the Property or any Other Property becoming contaminated
with Hazardous Substances, (c) any clean up or removal of Hazardous Substances
from the Property or any Other Property, or (d) any violation of any of the
Applicable Laws with respect to the Property. Borrower acknowledges that except
as provided in the following sentence, Borrower will be solely responsible for
all costs and expenses relating to the clean up of Hazardous Substances from the
Property or from any Other Property as between Borrower and GE CAPITAL, and that
the indemnity in this Paragraph 6 shall cover all such costs and expenses.
                      -----------
Notwithstanding the foregoing, Borrower shall not be responsible for costs or
expenses relating to the clean up of Hazardous Substances from the Property or
from any Other Property to the extent such Hazardous Substances are first placed
on the Property after GE CAPITAL acquires title to the Property pursuant to a
foreclosure of the Deed of Trust (as such term is defined below) or pursuant to
a deed given by Borrower (and accepted by GE CAPITAL) in lieu of foreclosure.

                  G.       Borrower's obligations under this Agreement are
unconditional and irrevocable and shall not be limited by any nonrecourse or
other limitations of liability provided for in any other document relating to
the Loan ("Loan Documents"). The representations, warranties and covenants of
Borrower set forth in this Agreement (including without limitation the indemnity
provided for in Paragraph 6 above) (a) are separate and distinct obligations
                -----------
from and in addition to Borrower's obligations under the Loan Documents, (b) are
not secured by the Deed of Trust (the "Deed of Trust") or other security
documents securing the Loan and shall not be discharged or satisfied by
foreclosure of the liens created by the Deed of Trust or other security
documents and (c) shall continue in effect after any transfer of the Property,
including without limitation transfers pursuant to foreclosure proceedings
(whether judicial or nonjudicial), or by deed in lieu of foreclosure.

                  H.       As used in this Agreement, "Hazardous Substances"
shall mean the following: asbestos, polychlorinated biphenyls and petroleum
products and any chemical, substance or material defined, classified or
designated as hazardous, toxic or radioactive, or any other similar term, by any
of the Applicable Laws. It is the intent of Borrower that the term "Hazardous
Substances" be construed in the broadest sense possible under this Agreement. As

                                        2

<PAGE>

used in this Agreement, "Other Property" means any property which becomes
contaminated with Hazardous Substances as a result of construction, operations
or other activities on, or the contamination of, the Property. The term
"Applicable Laws" as used in this Agreement shall include, without limitation,
(a) The Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended by The Superfund Amendments and Reauthorization Act, (b) The
Resource Conservation and Recovery Act, as amended by The Hazardous and Solid
Waste Amendments of 1985, (c) any local, state or federal laws, rules,
regulations or ordinances (whether in existence on the date of this Agreement or
executed or promulgated after the date hereof) concerning the management,
control, discharge, treatment, containment, removal or remediation of substances
or materials that are or may become a threat to public health or the
environment, or (d) any common law theory involving materials or substances
which are (or are alleged to be) hazardous to human health or the environment.

                  I.       Borrower acknowledges and agrees that neither this
Agreement nor any of the Loan Documents shall put GE CAPITAL in the position of
an owner of the Property prior to any acquisition of the Property by GE CAPITAL.
The rights granted GE CAPITAL herein and in the Loan Documents are granted
solely for the protection of GE CAPITAL's liens and security interests covering
the Property, and do not grant to GE CAPITAL the right to control Borrower's
actions, decisions or policies regarding Hazardous Substances.

                  J.       This Agreement shall be binding upon its heirs,
representatives, successors and assigns. This Agreement shall inure to the
benefit of GE CAPITAL, any subsequent holder, in whole or in part, of the
documents evidencing and/or securing the Loan, any assignees or participants of
GE CAPITAL, and any person or entity who acquires the Property in connection
with a foreclosure of the Deed of Trust or pursuant to a deed given in lieu of
foreclosure. This Agreement shall be governed under the laws of the State of
California. In any suit, action or appeal therefrom to enforce or interpret this
Agreement, the prevailing party shall be entitled to recover its costs incurred
therein including attorneys' fees and disbursements at trial and on appeal.

                  K.       If Borrower includes more than one person or entity,
each shall be jointly and severally liable hereunder.


                            [SIGNATURE PAGE FOLLOWS]

                                        3

<PAGE>

                  IN WITNESS WHEREOF, Borrower has executed this Instrument or
         has caused the same to be executed by its representatives thereunto
         duly authorized.

                                       BORROWER:

                                       TERADYNE, INC.,
                                       a Massachusetts corporation



                                       By:    /s/ Stuart M. Osattin
                                          --------------------------------------
                                       Print: Stuart M. Osattin
                                             -----------------------------------
                                       Its:   Vice President and Treasurer
                                           -------------------------------------

                                        4

<PAGE>

                                    EXHIBIT A
                                    ---------

                                LEGAL DESCRIPTION


                              See Attached Schedule

                                        5

<PAGE>

        Schedule Pursuant to Instruction 2 to Rule 601 of Regulation S-K
    under the Securities Act of 1933 and the Securities Exchange Act of 1934


         Teradyne, Inc. entered into five of the foregoing Certificate and
Indemnity Agreement Regarding Hazardous Substances agreements. The agreements
are substantially identical but for the Exhibits A attached thereto. Such
Exhibits A are attached to and follow this schedule.

<PAGE>

                                   EXHIBIT "A"
                                   -----------

                                Legal Description


THE LAND REFERRED TO IN THIS COMMITMENT IS IN THE STATE OF CALIFORNIA, COUNTY OF
LOS ANGELES, AND IS DESCRIBED AS FOLLOWS:

LOT 3, OF TRACT NO. 43597, IN THE CITY OF AGOURA HILLS, AS PER MAP RECORDED IN
BOOK 1078 PAGES 72 TO 80 INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER
OF SAID COUNTY.

EXCEPT FROM A PORTION THEREOF AN UNDIVIDED ONE-HALF OF ALL OIL, GAS, PETROLEUM
AND OTHER MINERAL OR HYDROCARBON SUBSTANCES IN AND TO THAT PORTION OF SAID LAND
LYING BELOW THE DEPTH OF 500 FEET FROM THE SURFACE, WITHOUT THE RIGHT OF SURFACE
ENTRY, AS RESERVED IN THE DEED FROM MAX H. GOLDSMITH AND SHIRLEY H. GOLDSMITH,
HUSBAND AND WIFE AS JOINT TENANTS, IN DEED RECORDED AS INSTRUMENT NO. 1450 ON
DECEMBER 29, 1960 IN BOOK D1076 PAGE 565 OF OFFICIAL RECORDS.

ALSO EXCEPTING TO THE COUNTY OF LOS ANGELES ALL OIL, GAS HYDROCARBONS, OR OTHER
MINERALS IN AND UNDER THE ABOVE DESCRIBED PARCEL OF LAND WITHOUT THE RIGHT OF
SURFACE ENTRY FOR DEVELOPMENT THEREOF.

<PAGE>

                                   EXHIBIT "A"
                                   -----------

                                Legal Description


THE LAND REFERRED TO IN THIS COMMITMENT IS IN THE STATE OF CALIFORNIA, COUNTY OF
LOS ANGELES, AND IS DESCRIBED AS FOLLOWS:

LOT 2, OF TRACT NO. 43597, IN THE CITY OF AGOURA HILLS, AS PER MAP RECORDED IN
BOOK 1078 PAGES 72 TO 80 INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER
OF SAID COUNTY.

EXCEPT FROM A PORTION THEREOF AN UNDIVIDED ONE-HALF OF ALL OIL, GAS, PETROLEUM
AND OTHER MINERAL OR HYDROCARBON SUBSTANCES IN AND TO THAT PORTION OF SAID LAND
LYING BELOW THE DEPTH OF 500 FEET FROM THE SURFACE, WITHOUT THE RIGHT OF SURFACE
ENTRY, AS RESERVED IN THE DEED FROM MAX H. GOLDSMITH AND SHIRLEY H. GOLDSMITH,
HUSBAND AND WIFE AS JOINT TENANTS, IN DEED RECORDED AS INSTRUMENT NO. 1450 ON
DECEMBER 29,1960 IN BOOK D1076 PAGE 565 OF OFFICIAL RECORDS.

ALSO EXCEPTING TO THE COUNTY OF LOS ANGELES ALL OIL, GAS, HYDROCARBONS, OR OTHER
MINERALS IN AND UNDER THE ABOVE DESCRIBED PARCEL OF LAND WITHOUT THE RIGHT OF
SURFACE ENTRY FOR DEVELOPMENT THEREOF.

<PAGE>

                                   EXHIBIT "A"
                                   -----------

                                Legal Description


THE LAND REFERRED TO IN THIS COMMITMENT IS IN THE STATE OF CALIFORNIA, COUNTY OF
LOS ANGELES, AND IS DESCRIBED AS FOLLOWS:

LOT 1 OF TRACT 43597, IN THE CITY OF AGOURA HILLS, AS PER MAP RECORDED IN BOOK
1078 PAGE 72 TO 80 INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF
SAID COUNTY.

EXCEPT FROM A PORTION THEREOF AN UNDIVIDED ONE-HALF OF ALL OIL, GAS, PETROLEUM
AND OTHER MINERAL OR HYDROCARBON SUBSTANCES IN AND TO THAT PORTION OF SAID LAND
LYING BELOW THE DEPTH OF 500 FEET FROM THE SURFACE, WITHOUT THE RIGHT OF SURFACE
ENTRY, AS RESERVED IN THE DEED FROM MAX H. GOLDSMITH AND SHIRLEY H. GOLDSMITH,
HUSBAND AND WIFE AS JOINT TENANTS, IN DEED RECORDED AS INSTRUMENT NO. 1450 ON
DECEMBER 29,1960 IN BOOK D1076 PAGE 565 OF OFFICIAL RECORDS.

ALSO EXCEPT TO THE COUNTY OF LOS ANGELES ALL OIL, GAS, HYDROCARBONS, OR OTHER
MINERALS IN AND UNDER THE ABOVE DESCRIBED PARCEL OF LAND WITHOUT THE RIGHT OF
SURFACE ENTRY FOR DEVELOPMENT THEREOF.

<PAGE>

                                   EXHIBIT "A"
                                   -----------

                                Legal Description


REAL PROPERTY in the City of San Jose, County of Santa Clara, State of
California, described as follows:

LOT 2, so designated and delineated on the Map of Tract No. 7422 recorded April
25, 1983 in Book 511 of Maps, pages 20, 21, 22 and 23, Santa Clara County
Records.

TOGETHER WITH an appurtenant easement for the purposes of mutual ingress and
egress, as granted by Cad N. Swenson, Co., Inc. and CA. Swenson, Inc. to Fox
Lane Investment Company recorded June 1, 1983 in Book H597, page 745, Official
Records.

TOGETHER WITH mutual access easement established by Map of Tract No. 7422
recorded April 25, 1983 in Book 511 of Maps, pages 20, 21, 22 and 23, Santa
Clara County Records.

<PAGE>

                                   EXHIBIT "A"
                                   -----------

                                Legal Description


REAL PROPERTY in the City of San Jose, County of Santa Clara, State of
California, described as follows:

LOT 1, so designated and delineated on the Map of Tract No. 7422 recorded April
25, 1983 in Book 511 of Maps, pages 20, 21, 22 and 23, Santa Clara County
Records.

TOGETHER WITH an appurtenant easement for the purposes of mutual ingress and
egress, as granted by Cad N. Swenson, Co., Inc. and CA. Swenson, Inc. to Fox
Lane Investment Company recorded June 1, 1983 in Book H597, page 745, Official
Records.

TOGETHER WITH mutual access easement established by Map of Tract No. 7422
recorded April 25, 1983 in Book 511 of Maps, pages 20, 21, 22 and 23, Santa
Clara County Records.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12.1
<SEQUENCE>18
<FILENAME>dex121.txt
<DESCRIPTION>COMPUTATION OF RATIO OF EARNINGS
<TEXT>
<PAGE>

                                                                   EXHIBIT 12.1

                      RATIO OF EARNINGS TO FIXED CHARGES

   The following summary represents our computation of the ratio of earnings to
fixed charges (unaudited) for the respective periods:

<TABLE>
<CAPTION>
                                               Year Ended December 31,
                                            ----------------------------
                                            1996 1997 1998 1999 2000 2001
                                            ---- ---- ---- ---- ---- ----
      <S>                                   <C>  <C>  <C>  <C>  <C>  <C>
      Ratio of earnings to fixed charges(A) 20.1 27.6 20.5 35.6 83.7  (B)
</TABLE>
- --------

(A) The ratio of earnings to fixed charges is calculated by dividing (a)
    earnings before income taxes and cumulative effect of change in accounting
    principle adjusted for fixed charges by (b) fixed charges. Fixed charges
    include interest expense under operating leases Teradyne deems a reasonable
    approximation of the interest factor.

(B) Due to Teradyne's loss for the year ended December 31, 2001, the ratio
    coverage was less than 1:1. Income before income taxes and cumulative
    effect of change in accounting principle was insufficient to cover fixed
    charges by $326.2 million.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21.1
<SEQUENCE>19
<FILENAME>dex211.txt
<DESCRIPTION>LIST OF SUBSIDIARIES
<TEXT>
<PAGE>
                                                                   EXHIBIT 21.1

                                 SUBSIDIARIES

                             PRESENT SUBSIDIARIES

<TABLE>
<CAPTION>
                                                      State or Jurisdiction   Percentage of Voting
                    Entity Name                           Incorporation         Securities Owned
                    -----------                     ------------------------- --------------------
<S>                                                 <C>                       <C>

Teradyne Assembly Holdings Ltd..................... United Kingdom                    100%
Teradyne Assembly Limited.......................... United Kingdom                    100%
Teradyne ATE (Wuxi) Co., Ltd....................... Peoples Republic of China         100%
Teradyne Benelux, Inc. (Ltd.)...................... Delaware                          100%
Teradyne Canada Limited............................ Canada                            100%
Teradyne Connection Systems de Mexico, S.A. de C.V. Mexico                            100%
Teradyne Connection Systems SDN BHD................ Malaysia                          100%
Teradyne de Costa Rica S.A......................... Costa Rica                        100%
Teradyne EMS Inc................................... Delaware                          100%
Teradyne GmbH...................................... Germany                           100%
Teradyne Holdings Limited.......................... United Kingdom                    100%
   Teradyne Limited................................ United Kingdom                    100%
Teradyne Hong Kong, Ltd............................ Delaware                          100%
Teradyne International, Ltd........................ Barbados                          100%
Teradyne Ireland Limited........................... Ireland                           100%
Teradyne Italia S.r.L.............................. Italy                             100%
Teradyne Japan, Ltd................................ Delaware                          100%
   Teradyne K.K.................................... Japan                             100%
Teradyne Korea, Ltd................................ Delaware                          100%
Teradyne Leasing, Inc.............................. Massachusetts                     100%
Teradyne Malaysia, Ltd............................. Delaware                          100%
Teradyne de Mexico, S.A. de C.V.................... Mexico                            100%
Teradyne Netherlands B.V........................... Netherlands                       100%
Teradyne Netherlands, Ltd.......................... Delaware                          100%
Teradyne Performance Systems Limited............... United Kingdom                    100%
Teradyne Philippines Limited....................... Delaware                          100%
Teradyne Realty, Inc............................... Massachusetts                     100%
Teradyne S.A.S..................................... France                            100%
Teradyne Scandinavia, Inc.......................... Delaware                          100%
Teradyne Singapore, Ltd............................ Delaware                          100%
Teradyne Software and Systems Test, Inc............ Delaware                          100%
Teradyne Spain, Inc................................ Delaware                          100%
Teradyne Taiwan, Ltd............................... Delaware                          100%
Teradyne Thailand Inc.............................. Delaware                          100%
Alternative Delivery Systems Support, Inc.......... North Carolina                    100%
Control Automation, Inc............................ Delaware                          100%
GenRad, Inc........................................ Massachusetts                     100%
   Autodiagnos, Inc................................ Delaware                          100%
   Autodiagnos AB.................................. Sweden                            100%
   Autodiagnos BV.................................. Netherlands                       100%
   Autodiagnos GmbH................................ Germany                           100%
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                  State or Jurisdiction   Percentage of Voting
          Entity Name                 Incorporation         Securities Owned
          -----------           ------------------------- --------------------
  <S>                           <C>                       <C>
     Autodiagnos LTD........... United Kingdom                    100%
     GenRad AB................. Sweden                            100%
     GenRad GmbH............... Germany                           100%
     GenRad Limited............ United Kingdom                    100%
     GenRad SA................. France                            100%
     GenRad Asia PTE Limited... Singapore                         100%
     GenRad Benelux B.V........ Netherlands                       100%
     GenRad Canada Limited..... Canada                            100%
     GenRad China Limited...... Peoples Republic of China         100%
     GenRad Europe Limited..... United Kingdom                    100%
     GenRad Holdings Limited... United Kingdom                    100%
     GenRad Ireland LTD........ Ireland                           100%
     GenRad Mexico, Inc........ Delaware                          100%
     Mastertech Automotive Ltd. United Kingdom                    100%
     Mitron Europe Limited..... United Kingdom                    100%
  Herco Technology Corp........ California                        100%
  Kinetrix, Inc................ Delaware                          100%
  Megatest H.K. Ltd............ Hong Kong                         100%
  Teradyne Philippines Ltd..... California                        100%
  Perception Laminates, Inc.... California                        100%
  Softbridge, Inc.............. Delaware                          100%
  Zehntel Holdings, Inc........ California                        100%
  1000 Washington, Inc......... Massachusetts                     100%
</TABLE>


                                      2

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>20
<FILENAME>dex231.txt
<DESCRIPTION>CONSENT OF PRICEWATERHOUSECOOPERS LLP
<TEXT>
<PAGE>

                                                                   EXHIBIT 23.1

                      CONSENT OF INDEPENDENT ACCOUNTANTS

   We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (Nos. 333-32547; 333-26045; 33-16077; 33-42352; 33-55123;
33-64683; 333-07177; 333-56373; 333-68074; and 333-73700) and Form S-3 (Nos.
333-75632 and 333-47564) of Teradyne, Inc. of our report dated January 15, 2002
relating to the financial statements and financial statement schedule, which
appears in this Form 10-K.

                                          PricewaterhouseCoopers LLP

Boston, Massachusetts
March 27, 2002

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
