TREX MEDICAL CORP, S-1/A, 1996-05-07

TREX MEDICAL CORP
S-1/A, 1996-05-07
X-RAY APPARATUS & TUBES & RELATED IRRADIATION APPARATUS

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 7, 1996

REGISTRATION NO. 333-2926

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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AMENDMENT NO. 1

TO
FORM S-1

REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933

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TREX MEDICAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

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DELAWARE 3844 06-1439632
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION NUMBER)
INCORPORATION OR CLASSIFICATION
ORGANIZATION) CODE NUMBER)

36 APPLE RIDGE ROAD, DANBURY, CONNECTICUT 06810

(203) 790-1188
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

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SANDRA L. LAMBERT, SECRETARY
TREX MEDICAL CORPORATION
C/O THERMO ELECTRON CORPORATION
81 WYMAN STREET
POST OFFICE BOX 9046
WALTHAM, MASSACHUSETTS 02254-9046
(617) 622-1000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)

COPIES TO:
<TABLE>
<S> <C> <C>
SETH H. HOOGASIAN, ESQUIRE DAVID E. REDLICK, ESQUIRE EDWIN L. MILLER, JR., ESQUIRE
GENERAL COUNSEL HALE AND DORR TESTA, HURWITZ & THIBEAULT
TREX MEDICAL CORPORATION 60 STATE STREET 125 HIGH STREET
C/O THERMO ELECTRON BOSTON, MASSACHUSETTS 02109 BOSTON, MASSACHUSETTS 02110
CORPORATION (617) 526-6000 (617) 248-7000
81 WYMAN STREET
POST OFFICE BOX 9046
WALTHAM, MASSACHUSETTS
02254-9046
(617) 622-1000
</TABLE>

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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the Registration Statement has become effective.

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If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]

If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [_]

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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
TITLE OF EACH CLASS OF PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED AGGREGATE OFFERING PRICE(1) REGISTRATION FEE(1)(2)
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<S> <C> <C>
Common Stock, $.01 par
value.................... $46,368,000 $15,989
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</TABLE>
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(1) Calculated pursuant to Rule 457(o).

(2) Of the $15,989 registration fee, $13,325 has previously been paid.

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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

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<PAGE>

TREX MEDICAL CORPORATION

CROSS REFERENCE SHEET
BETWEEN ITEMS OF FORM S-1 AND PROSPECTUS

<TABLE>
<CAPTION>
ITEM LOCATION IN PROSPECTUS
---- ----------------------
<C> <S> <C>
1. Forepart of Registration Statement and
Outside Front Cover Page of
Prospectus............................ Outside Front Cover Page
2. Inside Front and Outside Back Cover
Pages of Prospectus................... Inside Front Cover Page; Outside
Back Cover Page; Additional
Information; Reports to Security
Holders
3. Summary Information, Risk Factors and
Ratio of Earnings to Fixed Charges.... Prospectus Summary; Risk Factors;
The Company
4. Use of Proceeds........................ Prospectus Summary; Use of
Proceeds
5. Determination of Offering Price........ Outside Front Cover Page; The
Rights Offering; Underwriting
6. Dilution............................... Dilution
7. Selling Security Holders............... Not Applicable
8. Plan of Distribution................... Outside Front Cover Page; The
Rights Offering; Underwriting
9. Description of Securities to be Outside Front Cover Page;
Registered............................ Capitalization; Description of
Capital Stock
10. Interests of Named Experts and
Counsel............................... Experts; Legal Opinions
11. Information With Respect to the
Registrant:
(a) Description of Business............ Business; Management's Discussion
and Analysis of Financial
Condition and Results of
Operations
(b) Description of Property............ Business--Facilities
(c) Legal Proceedings.................. Risk Factors--Risks Associated
With Pending and Threatened
Patent Litigation; Business--
Patents and Proprietary
Technology; Business--Legal
Proceedings
(d) Market Price of and Dividends on
the Registrant's Common Equity and
Related Stockholder Matters........ Outside Front Cover Page;
Dividend Policy; Executive
Compensation; Description of
Capital Stock; Shares Eligible
for Future Sale
(e) Financial Statements............... Consolidated Financial
Statements; Capitalization
(f) Selected Financial Data............ Selected Financial Information
(g) Supplementary Financial
Information........................ Not Applicable
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
ITEM LOCATION IN PROSPECTUS
---- ----------------------
<C> <S> <C>
(h) Management's Discussion and
Analysis of Financial Condition and
Results of Operations.............. Management's Discussion and
Analysis of Financial Condition
and Results of Operations
(i) Changes in and Disagreements with
Accountants on Accounting and
Financial Disclosure............... Not Applicable
(j) Directors, Executive Officers,
Promoters and Control Persons...... Relationship and Potential
Conflicts of Interest with Thermo
Electron and ThermoTrex;
Management
(k) Executive Compensation............. Executive Compensation
(l) Security Ownership of Certain
Beneficial Owners and
Management......................... Security Ownership of Certain
Beneficial Owners and Management
(m) Certain Relationships and Related
Transactions....................... Relationship and Potential
Conflicts of Interest with Thermo
Electron and ThermoTrex;
Management--Certain Transactions
12. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities........................... Not Applicable
</TABLE>
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

SUBJECT TO COMPLETION--DATED MAY 7, 1996

PROSPECTUS

2,400,000 Shares

TREX MEDICAL CORPORATION

Common Stock

All of the shares of Common Stock offered hereby are being sold by Trex
Medical Corporation (the "Company"), a majority-owned subsidiary of ThermoTrex
Corporation ("ThermoTrex"), which is a majority-owned subsidiary of Thermo
Electron Corporation ("Thermo Electron"). Following this offering, ThermoTrex
will own approximately 80% of the outstanding shares of Common Stock of the
Company (assuming no exercise of the Underwriters' over-allotment option).

Prior to this offering, there has been no public market for the Common Stock
of the Company. It is currently estimated that the initial public offering
price will be between $12.00 and $14.00 per share. See "Underwriting" for
information relating to the factors to be considered in determining the initial
public offering price. The Company has applied to have the Common Stock
approved for listing on the American Stock Exchange.

Concurrently with the offering of Common Stock hereby, the Company is
offering approximately 1,250,000 shares of Common Stock (excluding shares
issuable upon exercise of subscription rights distributed by ThermoTrex to
Thermo Electron, which by their terms cannot be exercised by Thermo Electron,
and subscription rights retained by ThermoTrex, but with respect to which
ThermoTrex has made an irrevocable election not to exercise and will therefore
expire unexercised) in a rights offering to holders of record of its Common
Stock as of , 1996 (the "Rights Offering"). A total of approximately
3,650,000 shares of Common Stock (or up to a total of 4,010,000 shares if the
Underwriters' over-allotment option is exercised in full) will be offered
hereby and in the Rights Offering. As of , 1996, subscription rights had been
exercised for the purchase of shares of Common Stock. The effective
subscription price per share in the Rights Offering will be the initial public
offering price specified below. However, if the initial public offering price
is greater than $16.00 per share, the Rights Offering will be terminated. The
closing of the offering made hereby is a condition to the closing of the Rights
Offering. See "The Rights Offering."

THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 6.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

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<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS (1) COMPANY (2)
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<S> <C> <C> <C>
Per Share................................. $ $ $
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Total (3)................................. $ $ $
</TABLE>
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(1) The Company, ThermoTrex and Thermo Electron have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."

(2) Before deducting expenses payable by the Company estimated at $700,000.

(3) The Company has granted to the Underwriters a 30-day option to purchase up
to an additional 360,000 shares of Common Stock solely to cover over-
allotments, if any. If this option is fully exercised, the total price to
the public would be $ , the total underwriting discounts and commissions
would be $ and the total proceeds to the Company before estimated
expenses would be $ . See "Underwriting."

-----------

The shares of Common Stock offered by this Prospectus are offered by the
Underwriters subject to prior sale, to withdrawal, cancellation or modification
of the offer without notice, to delivery to and acceptance by the Underwriters
and to certain further conditions. It is expected that delivery of the shares
will be made in New York, New York on or about , 1996.

NatWest Securities Limited
Lehman Brothers
Oppenheimer & Co., Inc.

The date of this Prospectus is , 1996.
<PAGE>

The Company's LORAD M-IV mammography system, which the Company expects to
begin shipping in mid-1996, features enhanced image quality as well as modular
upgrades. The Contour mammography system offers a patented tilt C-arm, which
permits the system to tilt toward or away from the patient for imaging of a
greater area of breast tissue.

The picture at the upper left-hand side of the page illustrates the
Company's Lorad M-IV Mammography System, which consists of a rectangular base or
platform standing upright on its side (for wall mounting) with an attached arm
which may be moved vertically up and down, and attached to the arm is a
rotatable X-ray stem.

The picture at the upper right-hand side of the page illustrates a
laboratory technician taking a mammographic image of a patient using the
Company's Console Mammography System. The patient's image is being taken by the
systems C-arm, which consists of a rotatable C-shape apparatus with X-ray
equipment mounted on both ends of the "C", and which apparatus is shown titled
toward the patient.

[PICTURES]

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IN CONNECTION WITH THE UNDERWRITTEN PUBLIC OFFERING, THE UNDERWRITERS MAY
OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE
OF THE COMMON STOCK OF THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE
PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE AMERICAN
STOCK EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING,
IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

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FOR UNITED KINGDOM PURCHASERS: THIS MEMORANDUM DOES NOT CONSTITUTE AN OFFER
TO THE PUBLIC (AS DEFINED IN THE COMPANIES ACT 1985) AND NO PROSPECTUS HAS
BEEN OR WILL BE REGISTERED OR ISSUED IN THE UNITED KINGDOM IN RESPECT OF THE
COMMON STOCK. CONSEQUENTLY, THE COMMON STOCK MUST NOT BE OFFERED FOR SALE OR
SOLD IN THE UNITED KINGDOM EXCEPT TO PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE
THEM IN ACQUIRING, HOLDING, MANAGING OR DISPOSING OF INVESTMENTS (AS PRINCIPAL
OR AGENT) FOR THE PURPOSES OF THEIR BUSINESSES OR TO PERSONS WHO IT IS
REASONABLE TO EXPECT WILL ACQUIRE, HOLD, MANAGE OR DISPOSE OF INVESTMENTS (AS
PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR BUSINESS OR ARE OTHERWISE
OFFERED TO PERSONS IN THE CONTEXT OF THEIR TRADES, PROFESSIONS OR OCCUPATIONS.

THIS MEMORANDUM MAY ONLY BE ISSUED OR PASSED ON TO ANY PERSON IN THE UNITED
KINGDOM IF THAT PERSON IS OF A KIND DESCRIBED IN ARTICLE 11(3) OF THE
FINANCIAL SERVICES ACT 1986 (INVESTMENTS ADVERTISEMENTS) (EXEMPTIONS) ORDER
1995 OR WITHIN ARTICLE 8(1) OF THE FINANCIAL SERVICES ACT 1986 (INVESTMENT
ADVERTISEMENTS) (EXEMPTIONS) (NO. 2) ORDER 1995.

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LORAD, LORAD DSM, StereoLoc, StereoGuide and Contour are registered
trademarks, and Bennett is a trademark, of Trex Medical Corporation. All other
trademarks or tradenames referred to in this Prospectus are the property of
their respective owners.

<PAGE>

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and the Consolidated Financial Statements and Notes thereto
appearing elsewhere in this Prospectus. Except as otherwise indicated, all
information contained in this Prospectus (i) assumes the exercise of all
subscription rights distributed in the Rights Offering (other than subscription
rights distributed to Thermo Electron or to be retained by ThermoTrex), and
(ii) assumes no exercise of the Underwriters' over-allotment option. Investors
should carefully consider the information set forth under the heading "Risk
Factors."

THE COMPANY

The Company is a worldwide leader in the design, manufacture and marketing of
mammography equipment and minimally invasive stereotactic needle biopsy systems
used for the detection of breast cancer, as well as a leading designer and
manufacturer of general radiography (X-ray) equipment. A mammography system is
a dedicated radiographic system designed specifically to image breast tissue.
Stereotactic needle biopsy systems, which use a guided hollow needle to extract
a sample of tissues from the breast, offer a cost-effective, less invasive
alternative to open surgery for the biopsy of suspicious breast lesions. The
Company recently broadened its product base by acquiring Bennett X-Ray
Corporation ("Bennett"), a leading producer of specialty and general purpose
radiographic systems, including mammography systems.

The Company's mammography and stereotactic needle biopsy systems are used by
radiologists and physicians in offices, hospitals and dedicated breast-care
centers, and its general radiography systems are used by physicians and
radiologists, both in office and hospital settings, as well as by veterinarians
and chiropractors. The Company sells its systems worldwide principally through
a network of independent dealers. In addition, the Company manufactures
mammography and radiography systems and components as an original equipment
manufacturer for other medical equipment companies such as United States
Surgical Corporation ("U.S. Surgical"), the GE Medical Systems division of
General Electric Company, Inc. ("GE"), and the Philips Medical Systems North
America Company subsidiary of Philips N.V. ("Philips").

The Company's strategy includes maintaining its market position and expanding
into complementary markets through continued technological innovation and
strategic acquisitions. The Company recently introduced a proprietary High
Transmission Cellular ("HTC") grid for use with its mammography systems that
provides better image contrast than existing grids at lower radiation doses,
and a patented autoexposure tomography option to its general radiography
systems that reduces the need for multiple exposures during tomography
procedures, thereby reducing the radiation exposure to the patient. The Company
believes the most promising technological advances in the radiography field
will be derived from the substitution of electronic detectors for the film
currently used in substantially all radiographic systems. This digital imaging
technology is expected to be capable of higher image quality, permit the
enhancement of an X-ray image through software and allow near-real-time, off-
site analysis of the X-ray image by radiologists. The Company is currently
developing a full-view digital imaging mammography system and has working
prototypes at two clinical sites. The Company believes that the digital imaging
technology being developed for this system may be adaptable to general
radiography and cardiac diagnostic imaging systems, and the Company will seek
to develop applications in these markets.

The Company also intends to expand or augment its product line through the
acquisition of one or more additional companies or technologies. The Company's
strategy includes making acquisitions of companies that can benefit from the
Company's distribution channels and technology. In February 1996, the Company
signed a non-binding letter of intent to acquire XRE Corporation ("XRE"). XRE
designs, manufactures and markets X-ray imaging systems used for cardiac
catheterization and angiography. XRE manufactures systems and system components
as an original equipment manufacturer for other medical equipment companies
such as Philips and the Picker International, Inc. subsidiary of GEC, Inc.
("Picker International"). It also sells its systems in the United States
directly and through distributors. In April 1996, the Company signed a non-
binding letter of intent to acquire Continental X-Ray Corporation and certain
of its affiliates (collectively, "Continental"). Continental designs,
manufactures and markets radiographic/fluoroscopic products, general
radiography systems, electrophysiology products used in cardiac laboratories
and dedicated mammography systems. There can be no assurance that either the
XRE or Continental transactions will be successfully completed.

3
<PAGE>

THE RIGHTS OFFERING

Concurrently with the offering of the shares of Common Stock hereby (the
"Underwritten Public Offering"), the Company is distributing to holders of its
Common Stock of record on , 1996 (the "Record Date"), including
ThermoTrex, subscription rights (the "Rights") to subscribe for and purchase
additional shares of Common Stock (the "Rights Offering" and, together with the
Underwritten Public Offering, the "Offerings"). The purpose of the Rights
Offering is to provide existing stockholders of the Company and ThermoTrex with
an opportunity to participate in the initial public offering of the Company's
Common Stock and to provide the Company with the ability to raise additional
capital in a cost-effective manner. The Rights are generally non-transferable,
except that ThermoTrex may distribute Rights to holders of its Common Stock.

Of the Rights received by ThermoTrex, it will distribute to each holder of
ThermoTrex common stock on the Record Date, including Thermo Electron, one
Right for every ten shares of ThermoTrex common stock held by them and will
retain the remaining Rights. ThermoTrex has irrevocably elected not to exercise
the Rights which it does not distribute to its shareholders and such Rights
will expire unexercised. The terms of the Rights provide that they may not be
exercised by any person holding a majority of the outstanding shares of
ThermoTrex common stock. As holder of a majority of the outstanding shares of
ThermoTrex common stock, Thermo Electron will have no right to exercise the
Rights it receives from ThermoTrex and such Rights will therefore expire
unexercised. Accordingly, there will be a total of approximately 1,250,000
shares of Common Stock which may be issued upon the exercise of all Rights
which may be exercised in the Rights Offering.

The purchase price per share to subscribers in the Rights Offering will be
the initial public offering price per share of Common Stock set forth on the
cover page of this Prospectus up to a maximum of $16.00 per share. If the
initial public offering price is greater than $16.00 the Rights Offering will
be terminated because the Company intends to issue the shares in the
Underwritten Public Offering and the Rights Offering at the same price and
because participants in the Rights Offering are only being asked to commit
funds based upon a maximum public offering price of $16.00 per share. As of
, 1996 a total of Rights had been exercised. The closing of the
Rights Offering is conditioned upon the closing of the Underwritten Public
Offering.

THE OFFERINGS

<TABLE>
<S> <C>
Common Stock Offered by the Company in
the Underwritten Public Offering...... 2,400,000 shares
Common Stock Offered by the Company in
the Rights Offering................... 1,250,000 shares
Common Stock to be Outstanding after
the Offerings (1)..................... 25,866,452 shares
Proposed AMEX Symbol................... TXM
Use of Proceeds........................ For acquisitions, to fund research and
development and for general
corporate purposes
</TABLE>
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(1) Does not include 1,925,000 shares of Common Stock reserved for issuance
under the Company's stock-based compensation plans and 3,307,888 shares of
Common Stock reserved for issuance upon the conversion of $39,000,000
principal amount of the Company's 4.2% Subordinated Convertible Note, due
to ThermoTrex (the "Convertible Note"). Options to purchase 1,161,000
shares of Common Stock had been granted and were outstanding under the
Company's stock-based compensation plans as of May 6, 1996. See
"Capitalization," "Dilution," "Management--Compensation of Directors,"
"Executive Compensation," "Relationship and Potential Conflicts of Interest
with Thermo Electron and ThermoTrex" and Note 9 of Notes to Consolidated
Financial Statements.

4
<PAGE>

SUMMARY CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
PRO FORMA COMBINED (6)
------------------------
SIX MONTHS
FISCAL YEAR (1)(2) NINE MONTHS ENDED (1)(2) ENDED (1)(4) NINE MONTHS SIX MONTHS
------------------------------------ ------------------------ ------------------ ENDED ENDED
OCTOBER 1, SEPTEMBER 30, APRIL 1, MARCH 30, SEPTEMBER 30, MARCH 30,
1991 (4) 1992 (3)(4) 1993 1994 1994 (4) 1995 (5) 1995 1996 1995 1996
-------- ----------- ------ ------- ---------- ------------- -------- --------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Revenues........ $ -- $ 4,128 $37,519 $54,410 $39,196 $55,291 $31,315 $66,829 $126,185 $92,959
Gross Profit.... -- 1,964 18,930 26,616 19,542 27,111 15,190 29,237 47,783 38,622
Research and
Development
Expenses........ 313 1,683 7,182 10,662 7,320 8,595 6,270 8,170 13,918 10,825
Operating Income
(Loss).......... (313) (746) 1,960 2,682 2,428 6,342 1,803 7,372 4,277 7,952
Net Income
(Loss).......... (190) (544) 827 1,194 1,085 3,483 966 3,734 598 3,678
Earnings (Loss) per Share
(7)............. (.01) (.03) .04 .06 .05 .17 .05 .17 .02 .15
Weighted Average Shares
(7)............. 20,151 20,151 20,151 20,151 20,151 20,151 20,151 21,547 24,667 24,700
</TABLE>
<TABLE>
<CAPTION>
MARCH 30, 1996
----------------------------------------------
AS ADJUSTED,
PRO FORMA AS INCLUDING
COMBINED (8) ADJUSTED (9) RIGHTS OFFERING (10)
------------ ------------ --------------------
<S> <C> <C> <C>
BALANCE SHEET DATA:
Working Capital................................ $ 10,626 $ 39,068 $ 55,318
Total Assets................................... 161,295 189,737 205,987
Long-term Obligations.......................... 39,236 39,236 39,236
Shareholders' Investment ...................... 63,432 91,874 108,124
</TABLE>

- ----
(1) All periods presented include ThermoTrex Corporation's ("ThermoTrex")
research and development business pertaining to its Sonic CT system.
(2) The Company's 1991, 1992, 1993 and 1994 fiscal years, set forth in this
table and referred to elsewhere in this Prospectus, ended on December 28,
1991, January 2, 1993, January 1, 1994, and December 31, 1994,
respectively. In September 1995, the Company changed its fiscal year-end
from the Saturday nearest December 31 to the Saturday nearest September
30. Accordingly, the Company's transition period from January 1, 1995 to
September 30, 1995 ("fiscal 1995") is presented. The unaudited data for
the nine months ended October 1, 1994 is presented for comparative
purposes only.
(3) Includes the results of Lorad Corporation ("Lorad") since its acquisition
by ThermoTrex on November 17, 1992.
(4) Derived from unaudited financial statements.
(5) Includes the results of Bennett X-Ray Corporation ("Bennett") since its
acquisition by ThermoTrex on September 15, 1995.

(6) The pro forma combined statement of income data was derived from the pro
forma combined condensed statements of income included elsewhere in this
Prospectus. The pro forma combined statement of income data sets forth the
results of operations for the nine months ended September 30, 1995 and the
six months ended March 30, 1996, as if the acquisitions of Bennett, XRE
Corporation ("XRE") and Continental X-Ray Corporation and certain of its
affiliates ("Continental") had occurred on January 1, 1995.
(7) Pursuant to Securities and Exchange Commission requirements, earnings
(loss) per share have been presented for all periods. Weighted average
shares for all periods include the 20,000,000 shares issued to ThermoTrex
in connection with the initial capitalization of the Company and the
effect of the assumed exercise of stock options issued within one year
prior to the Company's proposed initial public offering.

(8) The pro forma combined balance sheet data as of March 30, 1996 sets forth
the financial position of the Company as if the acquisitions of XRE and
Continental had occurred on March 30, 1996. See the pro forma combined
condensed balance sheet included elsewhere in this Prospectus.

(9) Adjusted to reflect the sale by the Company of 2,400,000 shares of Common
Stock offered in the Underwritten Public Offering at an assumed initial
public offering price of $13.00, after deducting estimated underwriting
discounts and commissions and offering expenses payable by the Company.

(10) Adjusted to reflect the sale by the Company of 2,400,000 shares of Common
Stock offered in the Underwritten Public Offering and 1,250,000 shares
offered in the Rights Offering at an assumed initial public offering
price of $13.00, after deducting estimated underwriting discounts and
commissions and offering expenses payable by the Company.

5
<PAGE>

RISK FACTORS

An investment in the shares of Common Stock offered hereby involves a high
degree of risk. Accordingly, the following factors should be considered
carefully in evaluating the Company and its business before purchasing any of
such shares.

Technological Change and New Products. The market for the Company's products
is characterized by rapid and significant technological change, evolving
industry standards and new product introductions. Many of the Company's
products are technologically innovative, and require significant planning,
design, development and testing at the technological, product and
manufacturing process levels. These activities require significant capital
commitments and investment by the Company. The high cost of technological
innovation is matched by the rapid and significant change in the technologies
governing the products that are competitive in the Company's market, by
industry standards that may change on short notice and by the introduction of
new products and technologies such as magnetic resonance imaging and
ultrasound which may render existing products and technologies uncompetitive
or obsolete. There can be no assurance that the Company's products or
proprietary technologies will not become uncompetitive or obsolete.

Patents and Proprietary Rights. The Company places considerable importance
on obtaining patent and trade secret protection for significant new
technologies, products and processes because of the length of time and expense
associated with bringing new products through the development and regulatory
approval process and to the marketplace. The Company's success depends in part
on whether it can develop patentable products and obtain and enforce patent
protection for its products both in the United States and in other countries.
The Company has filed and intends to file applications as appropriate for
patents covering both its products and manufacturing processes. No assurance
can be given that patents will issue from any pending or future patent
applications owned by or licensed to the Company or that the claims allowed
under any issued patents will be sufficiently broad to protect the Company's
technology. In addition, no assurance can be given that any issued patents
owned by or licensed to the Company will not be challenged, invalidated or
circumvented, or that the rights granted thereunder will provide competitive
advantages to the Company. The Company could incur substantial costs in
defending itself in suits brought against it or in suits in which the Company
may assert its patent rights against others. If the outcome of any such
litigation is unfavorable to the Company, the Company's business and results
of operations could be materially adversely affected.

The Company relies on trade secrets and proprietary know-how which it seeks
to protect, in part, by confidentiality agreements with its collaborators,
employees and consultants. There can be no assurance that these agreements
will not be breached, that the Company would have adequate remedies for any
breach or that the Company's trade secrets will not otherwise become known or
be independently developed by competitors. See "Business--Patents and
Proprietary Technology."

Risks Associated With Pending and Threatened Patent Litigation. In April
1992, Fischer Imaging Corporation ("Fischer") commenced a lawsuit in the
United States District Court, District of Colorado, against the Company's
Lorad division, alleging that the Lorad StereoGuide prone breast biopsy system
infringes a Fischer patent on a precision mammographic needle biopsy system.
As of September 30, 1995, the Company had sold 351 StereoGuide systems for
aggregate revenues of approximately $34.4 million. The suit requests a
permanent injunction, treble damages and attorneys' fees and expenses. If the
Company is unsuccessful in defending this lawsuit, it may be enjoined from
manufacturing and selling its StereoGuide system without a license from
Fischer. No assurance can be given that the Company will be able to obtain
such a license, if required, on commercially reasonable terms, if at all. In
addition, the Company may be subject to damages for past infringement. No
assurance can be given as to whether the Company will be subject to such
damages or, if so, the amount of damages which the Company may be required to
pay. The outcome of patent litigation, particularly in jury trials, is
inherently uncertain, and an unfavorable outcome in the Fischer litigation
could have a material adverse effect on the Company's business and results of
operations.

6
<PAGE>

The Company also is aware of a U.S. patent held by Nicola E. Yanaki which
has been asserted by him against certain automatic exposure control features
included in most of the Company's current mammography systems. The Company has
been informed by the holder of this patent that a competitor of the Company
has obtained a license for use of this patent. If Mr. Yanaki were successful
in enforcing such patent, the Company could be subject to damages for past
infringement and enjoined from manufacturing and selling imaging equipment
utilizing certain automatic exposure control features, which would have a
material adverse effect on the Company's business and results of operations.

The Company is also aware of an issued European patent with counterparts in
other non-U.S. countries applicable to imaging equipment utilizing certain
automatic exposure control features. The European patent is the subject of an
opposition proceeding before the European Patent Office. There can be no
assurance as to the outcome of such opposition.

In connection with the organization of the Company, ThermoTrex agreed to
indemnify the Company for any and all cash damages in connection with the
Fischer lawsuit and any potential claims by Mr. Yanaki with respect to sales
of the Company's products occurring prior to October 1995, when the businesses
of Lorad and Bennett were transferred to the Company. Notwithstanding this
indemnification, the Company would be required to report as an expense the
full amount, including any reimbursable amount, of any damages in excess of
the amount accrued ($2.3 million as of March 30, 1996), with any
indemnification payment it receives from ThermoTrex being treated as a
contribution to shareholders' investment. An unsuccessful outcome in any of
these matters may have a material adverse effect on the business of the
Company and on its results of operations for the period in which such outcome
occurs. See "Business--Patents and Proprietary Technology."

The Company is aware of two U.S. patents owned by a former employee which
have been asserted against the Company relating to its HTC grid to be used
with the Company's mammography systems. If the former employee were successful
in enforcing such patents, the Company could be subject to damages and
enjoined from manufacturing and selling the HTC grid.

The Company's competitors and other parties hold various patents and patent
applications in the fields in which the Company operates. There can be no
assurance that the Company will not be found to have infringed third-party
patents and, in the event of such infringement, the Company could be required
to alter its products or processes, pay licensing fees or cease making and
selling any infringing products and pay damages for past infringement.

No Assurance of Development and Commercialization of Products Under
Development. A number of the Company's potential products are currently under
development. There are a number of technological challenges that the Company
must successfully address to complete any of its development efforts. Product
development involves a high degree of risk, and returns to investors are
dependent upon successful development and commercialization of such products.
Proposed products based on the Company's technologies will require significant
additional research and development. There can be no assurance that any of the
products currently being developed by the Company, or those to be developed in
the future by the Company, will be technologically feasible or accepted by the
marketplace, or that any such development will be completed in any particular
timeframe.

Risks Associated with Acquisition Strategy. The Company's strategy includes
the acquisition of businesses and technologies that complement or augment the
Company's existing product lines. For example, in September 1995, the Company
acquired its Bennett subsidiary, in February 1996, the Company signed a non-
binding letter of intent to acquire XRE, a manufacturer of X-ray imaging
systems for cardiac catheterization and angiography, and in April 1996, the
Company signed a non-binding letter of intent to acquire Continental, a
manufacturer of radiographic/fluoroscopic products, general radiography
systems, electrophysiology products and dedicated mammography systems.
Promising acquisitions are difficult to identify and complete for a number of
reasons, including competition among prospective buyers and the need for
regulatory approvals, including antitrust

7
<PAGE>

approvals. There can be no assurance that the Company will be able to complete
future acquisitions or that the Company will be able to successfully integrate
any acquired businesses. In order to finance such acquisitions, it may be
necessary for the Company to raise additional funds through public or private
financings. Any equity or debt financing, if available at all, may be on terms
which are not favorable to the Company and, in the case of equity financing,
may result in dilution to the Company's stockholders.

Intense Competition. The Company encounters and expects to continue to
encounter intense competition in the sale of its products. The Company
believes that the principal competitive factors effecting the market for its
products include product features, product performance and reputation, price,
and service. The Company's competitors include large multinational
corporations and their operating units, including GE, Philips, the Siemens
Corporation subsidiary of Siemens AG ("Siemens"), Toshiba American Medical
Systems, Inc. and Toshiba America MRI, Inc. (collectively, "Toshiba"),
Shimadzu, and Picker International. These companies and certain of the
Company's other competitors have substantially greater financial, marketing
and other resources than the Company. As a result, they may be able to adapt
more quickly to new or emerging technologies and changes in customer
requirements, or to devote greater resources to the promotion and sale of
their products than the Company. Moreover, a significant portion of the
Company's sales are to GE and Philips through original equipment manufacturer
("OEM") arrangements. The products sold by such OEMs compete with products
offered by the Company and its independent dealers. Competition could increase
if new companies enter the market or if existing competitors expand their
product lines or intensify efforts within existing product lines. There can be
no assurance that the Company's current products, products under development
or ability to discover new technologies will be sufficient to enable it to
compete effectively with its competitors. See "Business--Competition."

Government Regulation; No Assurance of Regulatory Approval. The Company's
products are subject to regulation by the U.S. Food and Drug Administration
(the "FDA") and equivalent agencies in foreign countries. Failure to comply
with applicable regulatory requirements can result in, among other things,
civil and criminal fines, suspensions of approvals, recalls of products,
seizures, injunctions and criminal prosecutions.

To date, all of the Company's products have been classified by the FDA as
Class II medical devices and have been eligible for FDA marketing clearance
pursuant to the FDA's 510(k) premarket notification process, which is
generally shorter than the more involved premarket approval ("PMA") process.
The Company believes that most of its currently anticipated future products
and substantial modifications to existing products will be eligible for the
510(k) premarket notification process. However, the FDA has not yet classified
full-view digital imaging mammography systems like the one being developed by
the Company. If such systems are classified as Class III devices, the Company
would be required to file for FDA marketing clearance for its full-view
digital imaging mammography system under the PMA process, which would require
substantial additional clinical trials and would take a number of years. While
not classifying such systems, the FDA recently issued a preliminary protocol
for marketing clearance of full-view digital imaging mammography systems
suggesting that clearance may be obtained through an enhanced 510(k)
application with more extensive clinical trials. The preliminary protocol
calls for clinical trials on 400 subjects prior to applying to the FDA for
clearance to commercially market such a system and a multi-year, follow-up
study including comparative film and digital images on 12,000 subjects
following commercial introduction. If the preliminary protocol is adopted as
currently drafted, the Company believes this follow-up study will be
burdensome and may limit the commercialization of full-view digital imaging
mammography systems. The period for submitting comments to the preliminary
protocol has expired, and the Company can make no prediction as to when a
final protocol will be issued or if one will be issued at all. There can be no
assurance that the necessary clearances for any of the Company's products will
be obtained on a timely basis, if at all.

FDA regulations also require manufacturers of medical devices to adhere to
certain "Good Manufacturing Practices" ("GMP"), which include testing, quality
control and documentation procedures. The Company's manufacturing facilities
are subject to periodic inspection by the FDA. No assurances can be given that
the FDA

8
<PAGE>

will not in the future find the Company to be in violation of one or more such
regulations, which violation may adversely impact the operations of the
Company. See "Business--Government Regulation."

Healthcare Reform; Uncertainty of Patient Reimbursement. The Federal
government has in the past and may in the future consider, and certain state
and local as well as a number of foreign governments are considering or have
adopted, healthcare policies intended to curb rising healthcare costs. Such
policies include rationing of government-funded reimbursement for healthcare
services and imposing price controls upon providers of medical products and
services. The Company cannot predict what healthcare reform legislation or
regulation, if any, will be enacted in the United States or elsewhere.
Significant changes in the healthcare systems in the United States or
elsewhere are likely to have a significant impact over time on the manner in
which the Company conducts its business. Such changes could have a material
adverse effect on the Company. In addition, the Federal government regulates
reimbursement of fees for certain diagnostic examinations and capital
equipment acquisition costs connected with services to Medicare beneficiaries.
Recent legislation has limited Medicare reimbursement for diagnostic
examinations. These policies may have the effect of limiting the availability
or reimbursement for procedures, and as a result may inhibit or reduce demand
by healthcare providers for products in the markets in which the Company
competes. While the Company cannot predict what effect the policies of
government entities and other third party payors will have on future sales of
the Company's products, there can be no assurance that such policies would not
have an adverse impact on the operations of the Company. See "Business--
Reimbursement."

Dependence Upon Significant OEM Relationships. A significant portion of the
Company's sales are to GE and Philips through OEM arrangements. In fiscal
1995, sales to Philips accounted for 18% of the Company's net sales. Sales to
Philips accounted for 45% of XRE's sales in the 12 months ended December 31,
1995. The Company's sales depend, in part, on the continuation of these OEM
arrangements and the level of end-user sales by such OEMs. There can be no
assurance that the Company will be able to maintain its existing, or establish
new, OEM relationships and any failure to do so could have a material adverse
effect on its business. See "Business--Sales and Marketing--OEM Agreements."

Potential Product Liability. The Company's business exposes it to potential
product liability claims which are inherent in the manufacturing, marketing
and sale of medical devices, and as such the Company may face substantial
liability to patients for damages resulting from the faulty design or
manufacture of products. The Company currently maintains product liability
insurance, but there can be no assurance that this insurance will provide
sufficient coverage in the event of a claim, that the Company will be able to
maintain such coverage on acceptable terms, if at all, or that a product
liability claim would not materially adversely affect the business or
financial condition of the Company.

Dependence on Key Personnel. The Company is highly dependent on the members
of its senior management, research and engineering, manufacturing, marketing
and sales staff, the loss of one or more of whom could have a material adverse
effect on the Company. In particular, the Company's future performance is
dependent in part on the continued services of Anthony J. Pellegrino, the
Company's Vice Chairman, and Hal Kirshner, the Company's President and Chief
Executive Officer. The Company has no written employment agreements with
either Mr. Pellegrino or Mr. Kirshner. In addition, the Company believes that
its future success will depend in part on whether it can attract and retain
highly qualified engineering, management, manufacturing, marketing and sales
personnel, particularly as the Company expands its business activities. The
Company faces significant competition for the services of such personnel from
other companies. There can be no assurance that the Company will be able to
continue to attract and retain the personnel it requires for continued growth.
The failure to hire and retain such personnel could materially adversely
affect the Company.

Risks Associated With International Operations. International sales
accounted for 21% and 14% of the Company's revenues in fiscal 1995 and 1994,
respectively. The Company intends to continue to expand its presence in
international markets. International revenues are subject to a number of
risks, including the following: agreements may be difficult to enforce and
receivables difficult to collect through a foreign country's legal system;
foreign customers may have longer payment cycles; foreign countries may impose
additional

9
<PAGE>

withholding taxes or otherwise tax the Company's foreign income, impose
tariffs or adopt other restrictions on foreign trade; U.S. export licenses may
be difficult to obtain; and the protection of intellectual property in foreign
countries may be more difficult to enforce. There can be no assurance that any
of these factors will not have a material adverse impact on the Company's
business and results of operations.

Control by ThermoTrex. The Company's stockholders do not have the right to
cumulate votes for the election of directors. ThermoTrex, which will own
approximately 80% of the outstanding Common Stock of the Company after the
Offerings, has the power to elect the entire Board of Directors of the Company
and to approve or disapprove any corporate actions submitted to a vote of the
Company's stockholders. See "Relationship and Potential Conflicts of Interest
with Thermo Electron and ThermoTrex" and "Security Ownership of Certain
Beneficial Owners and Management."

Potential Conflicts of Interest. The Company may be subject to potential
conflicts of interest from time to time as a result of its relationship with
Thermo Electron and ThermoTrex. For example, conflicts may arise in the
development and licensing of digital detector technology by ThermoTrex to the
Company, the manufacture of digital detectors by ThermoTrex for sale to the
Company and the Company's manufacturing of lasers for sale to ThermoLase
Corporation. See "Relationship and Potential Conflicts of Interest with Thermo
Electron and ThermoTrex." Certain officers of the Company are also officers of
ThermoTrex, Thermo Electron and/or other subsidiaries of Thermo Electron, and
are full-time employees of ThermoTrex or Thermo Electron. Such officers will
devote only a portion of their working time to the affairs of the Company. For
financial reporting purposes, the Company's financial results are included in
the consolidated financial statements of ThermoTrex and Thermo Electron. The
members of the Board of Directors of the Company who are also affiliated with
Thermo Electron or ThermoTrex will consider not only the short-term and the
long-term impact of operating decisions on the Company, but also the impact of
such decisions on the consolidated financial results of ThermoTrex and Thermo
Electron. In some instances the impact of such decisions could be
disadvantageous to the Company while advantageous to ThermoTrex or Thermo
Electron, or vice versa. The Company is a party to various agreements with
Thermo Electron that may limit the Company's operating flexibility. See
"Relationship and Potential Conflicts of Interest with Thermo Electron and
ThermoTrex."

Significant Additional Shares Eligible for Sale After the Offerings. At the
conclusion of the 120-day period following the closing of the Offerings, the
Company will file a registration statement pursuant to the Securities Act
covering the resale of 1,962,000 shares of Common Stock held by existing
investors other than ThermoTrex. The 20,254,452 shares of Common Stock owned
by ThermoTrex will become eligible for resale under Rule 144 in October 1997.
In addition, as long as ThermoTrex is able to elect a majority of the
Company's Board of Directors, it will have the ability to cause the Company at
any time to register for resale all or a portion of the Common Stock owned by
ThermoTrex. ThermoTrex and the Company have agreed not to sell any shares of
Common Stock without the prior written consent of the Representatives of the
Underwriters for a 180-day period after the date of this Prospectus, other
than (i) shares of Common Stock to be sold to the Underwriters in the
Offerings, (ii) the grant of options to purchase shares of Common Stock
pursuant to existing stock-based compensation plans, (iii) shares of Common
Stock which may be sold to ThermoTrex, (iv) the issuance of shares of Common
Stock as consideration for the acquisition of one or more businesses (provided
that such Common Stock may not be resold prior to the expiration of the 180-
day period referenced above), and (v) shares of Common Stock to be sold in
connection with the Rights Offering.

Additional shares of Common Stock issuable upon exercise of options granted
under the Company's stock-based compensation plans will become available for
future sale in the public market at prescribed times. Sales of a significant
number of shares of Common Stock in the public market following the Offerings
could adversely affect the market price of the Common Stock. See "Relationship
and Potential Conflicts of Interest with Thermo Electron and ThermoTrex,"
"Shares Eligible for Future Sale" and "Underwriting."

Immediate and Substantial Dilution. Purchasers of the Common Stock in the
Offerings will incur an immediate and substantial dilution in the net tangible
book value per share of the Common Stock from the initial public offering
price of $12.47 per share, assuming the sale of no shares in the Rights
Offering, or $11.87 per

10
<PAGE>

share, assuming the maximum proceeds to the Company from the Rights Offering.
Additional dilution is likely to occur upon the exercise of outstanding stock
options. See "Dilution."

No Prior Public Market; Potential Volatility of Stock Price. Prior to the
Offerings, there has been no public market for the Common Stock, and there can
be no assurance that an active trading market will develop or be sustained
after the Offerings or that the market price of the Common Stock will not
decline below the initial public offering price. The initial public offering
price will be determined by negotiations among the Company and the
Representatives of the Underwriters. See "Underwriting" for a discussion of
the factors to be considered in determining the initial public offering price.
Factors such as fluctuations in the Company's operating results, announcements
of technological innovations or new contracts or products by the Company or
its competitors, government regulation and approvals, developments in patent
or other proprietary rights and market conditions for stocks of companies
similar to the Company could have a significant impact on the market price of
the Common Stock.

Lack of Dividends. The Company anticipates that for the foreseeable future
the Company's earnings, if any, will be retained for use in the business and
that no cash dividends will be paid on the Common Stock. Declaration of
dividends on the Common Stock will depend upon, among other things, future
earnings, the operating and financial condition of the Company, its capital
requirements and general business conditions. See "Dividend Policy."

11
<PAGE>

THE COMPANY

The Company was incorporated in Delaware in September 1995 as a wholly-owned
subsidiary of ThermoTrex. ThermoTrex acquired all of the outstanding shares of
capital stock of Bennett in September 1995 for approximately $42,000,000 in
cash. On October 2, 1995, the Company acquired all of the outstanding shares
of capital stock of Bennett from ThermoTrex in exchange for a $42,000,000
principal amount subordinated convertible note due 2000 (the "Convertible
Note"). The Convertible Note bears interest at a rate of 4.2% per annum and is
convertible into shares of Common Stock at a conversion price of $11.79 per
share. Subsequently, on October 16, 1995, ThermoTrex contributed all of the
assets and liabilities relating to its Lorad division ("Lorad") and the
development of its Sonic CT system to the Company in exchange for 20,000,000
shares of Common Stock of the Company.

Unless the context otherwise requires, references in this Prospectus to the
Company or Trex Medical Corporation refer to Trex Medical Corporation and its
subsidiaries. As of March 27, 1996, ThermoTrex beneficially owned 91% of the
Company's outstanding Common Stock, excluding the shares of Common Stock
issuable upon the conversion of the outstanding principal amount of the
Convertible Note. The Company's principal executive offices are located at 36
Apple Ridge Road, Danbury, Connecticut, and its telephone number is (203) 790-
1188.

THE RIGHTS OFFERING

Concurrently with the offering of shares of Common Stock hereby, the Company
is distributing Rights to holders of its Common Stock of record on the Record
Date, including ThermoTrex. The Rights are generally non-transferable, except
that ThermoTrex may distribute Rights to holders of its Common Stock. Of the
Rights received by ThermoTrex, it will distribute to each holder of ThermoTrex
Common Stock on the Record Date, including Thermo Electron, one Right for
every ten shares of ThermoTrex Common Stock held by them and will retain the
remaining Rights. ThermoTrex has irrevocably elected not to exercise the
Rights which it does not distribute to its shareholders and such Rights will
expire unexercised. The terms of the Rights provide that they may not be
exercised by any person holding a majority of the outstanding shares of
ThermoTrex Common Stock. As holder of a majority of the outstanding shares of
ThermoTrex Common Stock, Thermo Electron will have no right to exercise the
Rights it receives from ThermoTrex and such Rights will therefore expire
unexercised. Accordingly, there will be a total of approximately 1,250,000
shares of Common Stock which may be issued upon the exercise of all Rights
which may be exercised in the Rights Offering.

The purpose of the Rights Offering is to provide existing stockholders of
the Company and ThermoTrex with an opportunity to participate in the initial
public offering of the Company's Common Stock and to provide the Company with
the ability to raise additional capital in a cost-effective manner.

The purchase price per share to subscribers in the Rights Offering will be
the initial public offering price per share of Common Stock set forth on the
cover page of this Prospectus up to a maximum of $16.00 per share. If the
initial public offering price is greater than $16.00, the Rights Offering will
be terminated because the Company intends to issue the shares in the
Underwritten Public Offering and the Rights Offering at the same price and
because participants in the Rights Offering are only being asked to commit
funds based upon a maximum public offering price of $16.00 per share. As of
, 1996 a total of Rights had been exercised. The closing of the Rights
Offering is conditioned upon the closing of the Underwritten Public Offering.

12
<PAGE>

USE OF PROCEEDS

The net proceeds to the Company from the sale of the shares of Common Stock
in the Offerings are estimated to be $28,442,000 ($32,817,800 if the
Underwriters' over-allotment option is exercised in full) assuming no shares
are issued in the Rights Offering, and $44,692,000 ($49,067,800 if the
Underwriters' over-allotment option is exercised in full) if all 1,250,000
shares are issued in the Rights Offering, in each case assuming an initial
public offering price of $13.00 per share and after deducting estimated
underwriting discounts and commissions and offering expenses. The principal
purposes of the Offerings are to increase the Company's equity capital, to
create a public market for the Common Stock and to facilitate future access by
the Company to public equity markets.

The Company expects to use the net proceeds from the Offerings for the
acquisitions of XRE and Continental, the purchase prices of which are
currently expected to be approximately $17,000,000 and $18,200,000,
respectively. The Company expects to use any excess proceeds (none, assuming
no shares are issued in the Rights Offering, and approximately $9,492,000
($13,867,800 if the Underwriters' over-allotment option is exercised in full),
assuming all 1,250,000 shares are issued in the Rights Offering) to fund
research and development of future products, including the development of
full-view digital imaging mammography systems (currently estimated to be
approximately $4,700,000 in fiscal 1996), and for working capital and other
general corporate purposes, including the possible acquisition of one or more
businesses whose products are complementary with those offered by the Company.
However, except for XRE and Continental, the Company has no specific
agreements, commitments or understandings with respect to any acquisition that
would be material to the Company. There can be no assurance that the XRE and
Continental acquisitions will be consummated on the proposed terms, if at all.

Pending these uses, the Company expects to invest the net proceeds from the
Offerings primarily in investment grade interest bearing or dividend bearing
instruments, either directly by the Company or pursuant to a repurchase
agreement with Thermo Electron. See "Relationship and Potential Conflicts of
Interest with Thermo Electron and ThermoTrex--Miscellaneous."

DIVIDEND POLICY

The Company anticipates that for the foreseeable future the Company's
earnings, if any, will be retained for use in the business and that no cash
dividends will be paid on the Common Stock.

13
<PAGE>

CAPITALIZATION

The following table sets forth as of March 30, 1996 the capitalization of
the Company (i) stated on a pro forma basis to reflect the proposed
acquisitions of XRE and Continental, and assumed short-term borrowings from
Thermo Electron of $18.2 million, (ii) as adjusted to reflect the issuance and
sale by the Company of the 2,400,000 shares of Common Stock offered in the
Underwritten Public Offering and assuming no shares of Common Stock are sold
in the Rights Offering, and (iii) as adjusted to reflect the issuance and sale
of 3,650,000 shares of Common Stock in both the Underwritten Public Offering
and the Rights Offering, in each case at an assumed initial public offering
price of $13.00 per share and after deducting estimated underwriting discounts
and commissions and offering expenses payable by the Company.

<TABLE>
<CAPTION>
MARCH 30, 1996
------------------------------------------
AS ADJUSTED,
INCLUDING
PRO FORMA RIGHTS
COMBINED AS ADJUSTED OFFERING
------------ ------------ -------------
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
Short-term Obligations:
<S> <C> <C> <C>
Note Payable to Thermo Electron.... $ 18,200 $ -- $ --
============ ============ ============
Long-term Obligations:
Subordinated Convertible Note, Due
to Parent Company................. $ 39,000 $ 39,000 $ 39,000
Other.............................. 236 236 236
------------ ------------ ------------
39,236 39,236 39,236
------------ ------------ ------------
Shareholders' Investment:
Common stock, $.01 par value,
50,000,000 shares authorized;
22,216,452 shares issued and
outstanding, 24,616,452 shares, as
adjusted and 25,866,452 shares, as
adjusted for the Rights Offering
(1)............................... 222 246 259
Capital in excess of par value..... 59,476 87,894 104,131
Retained earnings.................. 3,734 3,734 3,734
------------ ------------ ------------
Total Shareholders' Investment.... 63,432 91,874 108,124
------------ ------------ ------------
Total Capitalization (Long-term
Obligations and Shareholders'
Investment)..................... $102,668 $131,110 $147,360
============ ============ ============
</TABLE>
- --------

(1) Does not include 1,925,000 shares of Common Stock reserved for issuance
under the Company's stock-based compensation plans and 3,307,888 shares of
Common Stock reserved for issuance upon conversion of the outstanding
principal amount of the Convertible Note. Options to purchase 1,161,000
shares of Common Stock had been granted and were outstanding under the
Company's stock-based compensation plans as of May 6, 1996. See
"Management--Compensation of Directors" and "Executive Compensation" and
Note 9 of Notes to Consolidated Financial Statements.

14
<PAGE>

DILUTION

As of March 30, 1996, the Company had negative net tangible book value of
$15,337,000, or $.69 per share, stated on a pro forma basis to reflect the
acquisitions of XRE and Continental (see the pro forma combined condensed
balance sheet included elsewhere in this Prospectus). Negative net tangible
book value per share is determined by dividing negative net tangible book
value (total tangible assets less total liabilities) by the number of shares
of Common Stock outstanding. After giving effect to the sale by the Company of
2,400,000 shares of Common Stock in the Underwritten Public Offering (after
deducting the estimated underwriting discounts and commissions and offering
expenses), and assuming no shares are sold in the Rights Offering, the pro
forma net tangible book value of the Company as of March 30, 1996 would have
been $13,105,000 or $.53 per share. This represents an immediate increase in
pro forma net tangible book value of $1.22 per share to existing shareholders
and an immediate dilution in pro forma net tangible book value of $12.47 per
share to new investors purchasing Common Stock in the Underwritten Public
Offering. See "Risk Factors--Immediate and Substantial Dilution." The
following table illustrates this per share dilution:

<TABLE>
<S> <C> <C>
Assumed price to public....................................... $13.00
------
Pro forma negative net tangible book value per share as of
March 30, 1996, before the Underwritten Public Offering.... $(.69)
Increase in net tangible book value per share attributable
to the Underwritten Public Offering........................ 1.22
-----
Pro forma net tangible book value per share as of March 30,
1996, after the Underwritten Public Offering (1)(2).......... .53
------
Dilution per share to new investors (1)(2).................... $12.47
======
</TABLE>
- --------

(1) If the Underwriters' over-allotment option were exercised in full, the pro
forma net tangible book value per share after the Underwritten Public
Offering would be $.70, resulting in an immediate dilution of $12.30 per
share to investors purchasing shares in the Underwritten Public Offering.
See "Underwriting."

(2) If all options outstanding as of May 6, 1996 to purchase an aggregate of
1,161,000 shares of Common Stock were exercised in full, and the
$39,000,000 principal amount Convertible Note which was outstanding as of
May 6, 1996 was converted by ThermoTrex into 3,307,888 shares of the
Company's Common Stock, in addition to the Underwriters' exercise of the
over-allotment option, the pro forma net tangible book value per share
after the Underwritten Public Offering would be $2.35, resulting in an
immediate dilution of $10.65 per share to investors purchasing shares in
the Underwritten Public Offering.

The following table sets forth on a pro forma basis as of March 30, 1996,
the number of shares of Common Stock purchased from the Company, the total
consideration paid to the Company and the average price paid per share by
existing shareholders and by the investors purchasing shares of Common Stock
in the Underwritten Public Offering, assuming no shares are sold in the Rights
Offering:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
------------------ ------------------- PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- ------- ----------- ------- ---------
<S> <C> <C> <C> <C> <C>
ThermoTrex (1)............ 20,254,452 82.3% $41,010,000 44.4% $ 2.02
Other existing investors
(2)...................... 1,962,000 8.0 20,161,000 21.8 10.28
New investors............. 2,400,000 9.7 31,200,000 33.8 13.00
---------- ----- ----------- -----
Total................... 24,616,452 100.0% $92,371,000 100.0%
========== ===== =========== =====
</TABLE>
- --------

(1) Calculated on the basis of (i) the book value of net assets transferred by
ThermoTrex to the Company in exchange for 20,000,000 shares of the
Company's Common Stock and (ii) the conversion price of the shares issued
to ThermoTrex upon conversion of $3,000,000 principal amount of the
Convertible Note.
(2) Represents the price paid for shares of the Company's Common Stock
purchased for cash.

15
<PAGE>

After giving effect to the Rights Offering, which assumes the sale of
1,250,000 shares upon the exercise of Rights, the pro forma net tangible book
value of the Company as of March 30, 1996 would have been $29,355,000 or $1.13
per share. This represents an immediate increase in pro forma net tangible
book value of $1.82 per share to existing shareholders and an immediate
dilution in pro forma net tangible book value of $11.87 per share to new
investors purchasing Common Stock in the Offerings. See "Risk Factors--
Immediate and Substantial Dilution." The following table illustrates per share
dilution:

<TABLE>
<S> <C> <C>
Assumed price to public...................................... $13.00
------
Pro forma negative net tangible book value per share as of
March 30, 1996, before the Offerings...................... $(.69)
Increase in net tangible book value per share attributable
to the Offerings.......................................... 1.82
-----
Pro forma net tangible book value per share as of March 30,
1996, after the Offerings (1)(2)............................ 1.13
------
Dilution per share to new investors (1)(2)................... $11.87
======
</TABLE>
- --------

(1) If the Underwriters' over-allotment option were exercised in full, the pro
forma net tangible book value per share after the Offerings would be
$1.29, resulting in an immediate dilution of $11.71 per share to investors
purchasing shares in the Offerings. See "Underwriting."

(2) If all options outstanding as of May 6, 1996 to purchase an aggregate of
1,161,000 shares of Common Stock were exercised in full, and the
$39,000,000 principal amount Convertible Note which was outstanding as of
May 6, 1996 was converted by ThermoTrex into 3,307,888 shares of the
Company's Common Stock, in addition to the Underwriters' exercise of the
over-allotment option, the pro forma net tangible book value per share
after the Offerings would be $2.78, resulting in an immediate dilution of
$10.22 per share to investors purchasing shares in the Offerings.

The following table sets forth on a pro forma basis as of March 30, 1996,
the number of shares of Common Stock purchased from the Company, the total
consideration paid to the Company and the average price paid per share by
existing shareholders and by the investors purchasing shares of Common Stock
in the Offerings, assuming the maximum proceeds to the Company from the Rights
Offering:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
------------------ -------------------- PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- ------- ------------ ------- ---------
<S> <C> <C> <C> <C> <C>
ThermoTrex (1).............. 20,254,452 78.3% $ 41,010,000 37.8% $ 2.02
Other existing investors
(2)........................ 1,962,000 7.6 20,161,000 18.5 10.28
New investors............... 3,650,000 14.1 47,450,000 43.7 13.00
---------- ----- ------------ -----
Total....................... 25,866,452 100.0% $108,621,000 100.0%
========== ===== ============ =====
</TABLE>
- --------

16
<PAGE>

SELECTED FINANCIAL INFORMATION

The selected financial information below as of and for the years ended
January 1, 1994 and December 31, 1994, and the nine months ended September 30,
1995 has been derived from the Company's Consolidated Financial Statements,
which have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report included elsewhere in this
Prospectus. The selected financial information for the fiscal years ended
December 28, 1991 and January 2, 1993, the nine months ended October 1, 1994
and the six month periods ended April 1, 1995 and March 30, 1996 has not been
audited but, in the opinion of the Company, includes all adjustments
(consisting only of normal, recurring adjustments) necessary to present fairly
such information in accordance with generally accepted accounting principles
applied on a consistent basis. The results of operations for the six months
ended March 30, 1996 are not necessarily indicative of results for the entire
year.

<TABLE>
<CAPTION>
PRO FORMA COMBINED (5)
------------------------
FISCAL YEAR (1) NINE MONTHS ENDED (1)(2) SIX MONTHS ENDED (1) NINE MONTHS SIX MONTHS
---------------------------------- ------------------------ ---------------------- ENDED ENDED
OCTOBER 1, SEPTEMBER 30, APRIL 1, MARCH 30, SEPTEMBER 30, MARCH 30,
1991 1992 (3) 1993 1994 1994 1995 (4) 1995 1996 (4) 1995 1996
------ -------- ------- ------- ---------- ------------- --------- ---------- ------------- ----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF
INCOME DATA:
Revenues......... $ -- $ 4,128 $37,519 $54,410 $39,196 $ 55,291 $ 31,315 $ 66,829 $126,185 $ 92,959
------ ------- ------- ------- ------- -------- --------- ---------- -------- --------
Costs and
Operating
Expenses:
Cost of
revenues........ -- 2,164 18,589 27,794 19,654 28,180 16,125 37,592 78,402 54,337
Selling, general
and
administrative
expenses........ -- 1,027 9,788 13,272 9,794 12,174 7,117 13,695 29,588 19,845
Research and
development
expenses........ 313 1,683 7,182 10,662 7,320 8,595 6,270 8,170 13,918 10,825
------ ------- ------- ------- ------- -------- --------- ---------- -------- --------
313 4,874 35,559 51,728 36,768 48,949 29,512 59,457 121,908 85,007
------ ------- ------- ------- ------- -------- --------- ---------- -------- --------
Operating Income
(Loss)........... (313) (746) 1,960 2,682 2,428 6,342 1,803 7,372 4,277 7,952
Interest and
Other Income
(Expense), Net... -- -- (158) (22) (11) 22 (2) (397) (1,809) (1,127)
------ ------- ------- ------- ------- -------- --------- ---------- -------- --------
Income (Loss)
Before Income
Taxes............ (313) (746) 1,802 2,660 2,417 6,364 1,801 6,975 2,468 6,825
Income Tax
Provision
(Benefit)........ (123) (202) 975 1,466 1,332 2,881 835 3,241 1,870 3,147
------ ------- ------- ------- ------- -------- --------- ---------- -------- --------
Net Income
(Loss)........... $ (190) $ (544) $ 827 $ 1,194 $ 1,085 $ 3,483 $ 966 $ 3,734 $ 598 $ 3,678
====== ======= ======= ======= ======= ======== ========= ========== ======== ========
Earnings (Loss)
per Share (6).... $ (.01) $ (.03) $ .04 $ .06 $ .05 $ .17 $ .05 $ .17 $ .02 $ .15
====== ======= ======= ======= ======= ======== ========= ========== ======== ========
Weighted Average
Shares (6)....... 20,151 20,151 20,151 20,151 20,151 20,151 20,151 21,547 24,667 24,700
====== ======= ======= ======= ======= ======== ========= ========== ======== ========
BALANCE SHEET
DATA (AT END OF
PERIOD):
Working Capital.. $ -- $ 4,410 $ 6,148 $ 8,584 $ 7,333 $ 13,171 $ 35,555 $ 10,626
Total Assets..... -- 35,004 44,553 48,000 47,465 102,374 129,575 161,295
Long-term
Obligations...... -- -- -- -- -- -- 39,000 39,236
Shareholders'
Investment....... (28) 28,636 36,694 37,033 37,471 80,010 63,432 63,432

</TABLE>
- ----
(1) All periods presented include ThermoTrex's research and development
business pertaining to its Sonic CT system.
(2) In September 1995, the Company changed its fiscal year-end from the
Saturday nearest December 31 to the Saturday nearest September 30.
Accordingly, the Company's transition period from January 1, 1995 to
September 30, 1995 ("fiscal 1995") is presented. The unaudited data for
the nine months ended October 1, 1994 is presented for comparative
purposes only.
(3) Includes the results of Lorad since its acquisition by ThermoTrex on
November 17, 1992.
(4) Includes the results of Bennett since its acquisition by ThermoTrex on
September 15, 1995.

(5) The pro forma combined statement of income data was derived from the pro
forma combined condensed statements of income included elsewhere in this
Prospectus. The pro forma combined statement of income data sets forth the
results of operations for the nine months ended September 30, 1995 and six
months ended March 30, 1996, as if the acquisitions of Bennett, XRE and
Continental had occurred on January 1, 1995. The pro forma combined
balance sheet data is derived from the pro forma combined condensed
balance sheet included elsewhere in this Prospectus, which was prepared as
if the acquisitions of XRE and Continental had occurred on March 30, 1996.

(6) Pursuant to Securities and Exchange Commission requirements, earnings
(loss) per share have been presented for all periods. Weighted average
shares for all periods include the 20,000,000 shares issued to ThermoTrex
in connection with the initial capitalization of the Company and the
effect of the assumed exercise of stock options issued within one year
prior to the Company's proposed initial public offering.

17
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

The Company designs, manufactures and markets mammography equipment and
minimally invasive stereotactic needle biopsy systems used for the detection
of breast cancer, and also designs, manufactures and markets general
radiography (X-ray) equipment. The Company sells its systems worldwide
principally through a network of independent dealers. In addition, the Company
manufactures mammography and radiography systems as an original equipment
manufacturer for other medical equipment companies such as U.S. Surgical, GE
and Philips. The Company has two operating units, Lorad, a manufacturer of
mammography and stereotactic biopsy systems, and Bennett, a manufacturer of
general radiography and mammography equipment.

The Company conducts all of its manufacturing operations in the United
States and sells its products on a worldwide basis. The Company anticipates
that an increasing percentage of its revenues will be from export sales. The
Company denominates its export sales in U.S. dollars and therefore, neither
its revenue nor earnings are significantly affected by exchange rate
fluctuations.

RESULTS OF OPERATIONS

In September 1995, the Company changed its fiscal year-end from the Saturday
nearest December 31 to the Saturday nearest September 30. Accordingly, the
results of operations for 1995 compares the nine months ended September 30,
1995 ("fiscal 1995") with the unaudited nine months ended October 1, 1994
("fiscal 1994").

Six Months Ended March 30, 1996 Compared With Six Months Ended April 1, 1995

Revenues increased 113% to $66.8 million in the six months ended March 30,
1996, from $31.3 million in the six months ended April 1, 1995, due primarily
to the inclusion of $23.3 million in revenues from Bennett, which was acquired
in September 1995. Revenues at Lorad increased 39% to $43.5 million in the six
months ended March 30, 1996 from $31.3 million in the six months ended April
1, 1995 as a result of increased demand for mammography and biopsy systems.
Under an OEM agreement with Philips, Lorad will receive minimum orders for two
models of imaging systems totaling $40 million over a five-year period that
began in January 1994, subject to certain conditions. As of March 30, 1996,
the Company had recognized cumulative revenue of $21.3 million under this
contract. Revenues from Philips were $7.4 million in the six months ended
March 30, 1996, compared with $4.7 million in the six months ended April 1,
1995. Export sales accounted for 28% of the Company's revenues in the six
months ended March 30, 1996, compared with 26% in the six months ended April
1, 1995.

The gross profit margin declined to 44% in the six months ended March 30,
1996, from 49% in the six months ended April 1, 1995, due to the inclusion of
lower-margin revenues at Bennett.

Selling, general and administrative expenses as a percentage of revenues
decreased to 20% in the six months ended March 30, 1996 from 23% in the six
months ended April 1, 1995, due to increased revenues at Lorad. Research and
development expenses increased to $8.2 million in the six months ended March
30, 1996 from $6.3 million in the six months ended April 1, 1995, reflecting
the Company's continued efforts to develop and commercialize new products
including the Company's M-IV mammography system, full-breast digital
mammography system, and direct-detection X-ray sensor, as well as enhancements
of existing systems. Under a license agreement between the Company and
ThermoTrex, the Company may elect to expend approximately $2 million each year
during fiscal 1996, 1997 and 1998 in order to expand the field of use in which
it is entitled to use the digital imaging detection technology. See
"Relationship and Potential Conflicts of Interest with Thermo Electron and
ThermoTrex."

Interest income in the six months ended March 30, 1996 represents interest
on the proceeds of the Company's private placements of Common Stock in
November 1995 and January 1996. Interest expense in the six months ended March
30, 1996 represents interest associated with the $42 million principal amount
Convertible Note issued to ThermoTrex in October 1995 in connection with the
Bennett acquisition.

18
<PAGE>

The effective tax rate was 46% in both periods. This tax rate differs from
the statutory federal income tax rate due to the impact of state income taxes
and nondeductible amortization of cost in excess of net assets of acquired
companies.

The Company is involved with certain patent litigation that arose at Lorad
prior to its acquisition by ThermoTrex. See Note 2 of Notes to Consolidated
Financial Statements. In addition, a third party has alleged that the
Company's mammography systems infringe a patent held by the third party. See
Note 8 of Notes to Consolidated Financial Statements. In another matter, a
former employee of the Company has asserted that a component of a newly
introduced product infringes two U.S. patents owned by the former employee.
See "Risk Factors--Risks Associated with Pending and Threatened Patent
Litigation" for a discussion of these matters.

Nine Months Ended September 30, 1995 ("Fiscal 1995") Compared With Nine
Months Ended October 1, 1994 ("Fiscal 1994")

Revenues increased 41% to $55.3 million in fiscal 1995 from $39.2 million in
fiscal 1994. The increase resulted from higher demand across all product
lines, with significant growth coming from international sales through the
Company's OEM agreement with Philips. Revenues from Philips were $9.8 million
in fiscal 1995, compared with $4.1 million in fiscal 1994. Export sales
accounted for 21% of the Company's revenues in fiscal 1995, compared with 11%
in fiscal 1994.

The gross profit margin declined to 49% in fiscal 1995 from 50% in fiscal
1994, due to an adjustment to expense of $0.3 million for inventory revalued
at the time of Bennett's acquisition.

Selling, general and administrative expenses as a percentage of revenues
decreased to 22% in fiscal 1995 from 25% in fiscal 1994, due primarily to
increased revenues. Research and development expenses increased to $8.6
million in fiscal 1995 from $7.3 million in fiscal 1994, reflecting the
Company's continued efforts to develop and commercialize the full-view digital
imaging mammography system, as well as efforts to enhance existing systems.

The effective tax rate was 45% in fiscal 1995, compared with 55% in fiscal
1994. These tax rates exceed the federal statutory federal income tax rate due
primarily to state income taxes and nondeductible amortization of cost in
excess of net assets of acquired companies. The decrease in the effective tax
rate in 1995 resulted from the lower relative impact of nondeductible
amortization of cost in excess of net assets of acquired companies and state
income taxes.

Twelve Months Ended December 31, 1994 Compared With Twelve Months Ended
January 1, 1994

Revenues increased 45% to $54.4 million in 1994 from $37.5 million in 1993.
The increase resulted from the initiation of OEM sales under the Philips
agreement, an increase in digital spot mammography sales and increased demand
for StereoGuide needle-biopsy, mammography and industrial imaging equipment
due to increased demand. Revenues from Philips were $5.8 million in 1994.
Export sales accounted for 14% of the Company's revenues in 1994, compared
with 10% of revenues in 1993.

The gross profit margin declined to 49% in 1994 from 50% in 1993, due to a
change in sales mix.

Selling, general and administrative expenses as a percentage of revenues
declined to 24% in 1994 from 26% in 1993, due primarily to an increase in
total revenues. Research and development expenses increased to $10.7 million
in 1994 from $7.2 million in 1993, reflecting the Company's continued efforts
to develop and commercialize the full-view digital imaging mammography system
and the Sonic CT system, and the development of the Philips OEM product.

The effective tax rate during 1994 was 55%, compared with 54% in 1993. These
rates exceed the statutory federal income tax rate due to nondeductible
amortization of cost in excess of net assets of acquired companies and the
impact of state income taxes.

19
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

Consolidated working capital was $35.6 million at March 30, 1996, compared
with $13.2 million at September 30, 1995. Included in working capital are cash
and cash equivalents of $19.2 million at March 30, 1996 and $0.2 million at
September 30, 1995. Cash provided by operating activities was $1.8 million in
the six months ended March 30, 1996. The Company used cash of $4.1 million and
$1.9 million to fund increases in accounts receivable and inventories,
respectively, during the first six months of fiscal 1996. The increase in
receivables resulted from higher sales while the inventory increase resulted
from business growth and a new product that will be shipped in the third
fiscal quarter. The Company expended $1.5 million on purchases of property,
plant and equipment during the first half of fiscal 1996. The Company expects
to expend approximately $1.4 million for additional purchases of property,
plant and equipment during the remainder of fiscal 1996.

In connection with the transfer of the outstanding shares of capital stock
of Bennett, the Company issued to ThermoTrex the $42,000,000 principal amount
Convertible Note. In March 1996, ThermoTrex converted $3,000,000 principal
amount of the Convertible Note into 254,452 shares of Common Stock. In
November 1995, the Company completed a private placement of 1,862,000 shares
of its Common Stock for net proceeds of approximately $17.6 million. In
January 1996, the Company sold 100,000 shares of its Common Stock in a private
placement for net proceeds of $1.1 million.

In February 1996, the Company signed a non-binding letter of intent to
acquire XRE, a Massachusetts company that designs, manufactures and markets X-
ray imaging systems used for cardiac catheterization and angiographs, for
approximately $17.0 million. The purchase price is subject to a post-closing
adjustment based on the net asset value of XRE as of the closing date. If the
acquisition is completed, the Company intends to finance the acquisition
through the proceeds of the Offerings or through its existing cash balances.

In April 1996, the Company signed a non-binding letter of intent to acquire
Continental, an Illinois company that designs, manufactures and markets
general purpose and specialty X-ray systems for approximately $18.2 million in
cash, including the repayment of $5.7 million in debt. The purchase price is
subject to a post-closing adjustment based on the net asset value of
Continental as of the closing date. If the acquisition is completed, the
Company intends to finance the acquisition through the proceeds of the
Offerings.

Working capital at March 30, 1996, on a pro forma basis assuming the
acquisitions of XRE and Continental, which are assumed to have been financed
through cash on hand and borrowings from Thermo Electron, had occurred on that
date, would have been $10.6 million. (See the pro forma combined condensed
balance sheet included elsewhere in this Prospectus.)

Although the Company expects to have positive cash flow from its existing
operations, the Company anticipates it will require significant amounts of
cash to pursue the acquisition of complementary businesses and technologies.
The Company expects that it will finance these acquisitions through a
combination of internal funds, the net proceeds of the Offerings, additional
debt or equity financing and/or short-term borrowings from ThermoTrex or
Thermo Electron, although it has no agreement with these companies to ensure
that funds will be available on acceptable terms or at all. The Company
believes that its existing resources are sufficient to meet the capital
requirements of its existing businesses for the foreseeable future, including
at least the next 24 months.

20
<PAGE>

BUSINESS

The Company is a worldwide leader in the design, manufacture and marketing
of mammography equipment and minimally invasive stereotactic needle biopsy
systems used for the detection of breast cancer, as well as a leading designer
and manufacturer of general radiography (X-ray) equipment. A mammography
system is a dedicated radiographic system designed specifically to image
breast tissue. Stereotactic needle biopsy systems, which use a guided hollow
needle to extract a sample of tissues from the breast, offer a cost-effective,
less invasive alternative to open surgery for the biopsy of suspicious breast
lesions. The Company recently broadened its product base by acquiring Bennett
X-Ray Corporation ("Bennett"), a leading producer of specialty and general
purpose radiographic systems, including mammography systems.

The Company believes the introduction of technologically innovative products
has made a significant contribution to the achievement of its leadership
position. In 1984, the Company introduced the first mammography system with a
high frequency generator, which improved image quality while reducing
radiation dosage. The Company's Bennett Contour mammography system is designed
with a patented tilt C-arm which permits imaging of breast tissue closer to
the chest wall and greater flexibility in the positioning of patients. The
Company's Lorad StereoGuide stereotactic needle biopsy system is one of two
dedicated prone systems sold in the world, and its LORAD DSM digital spot
mammography option was one of the first digital imaging systems available for
use with stereotactic needle biopsy. The Bennett high frequency generator,
introduced in 1989, was the first generator to offer 100 kHz high frequency
power for general radiographic systems, resulting in improved image quality
while reducing radiation dosage.

The Company's mammography and stereotactic needle biopsy systems are used by
radiologists and physicians in offices, hospitals and dedicated breast-care
centers, and its general radiography systems are used by physicians and
radiologists, both in office and hospital settings, as well as by
veterinarians and chiropractors. The Company sells its systems worldwide
principally through a network of independent dealers. In addition, the Company
manufactures mammography and radiography systems and components as an original
equipment manufacturer for other medical equipment companies such as United
States Surgical Corporation ("U.S. Surgical"), the GE Medical Systems division
of General Electric Company, Inc. ("GE") and the Philips Medical Systems North
America Company subsidiary of Philips N.V. ("Philips").

End-user sales of mammography systems in the United States in 1994 were
approximately $165 million. The Company believes that sales in this market
will be driven by acceptance of mammography as an effective cancer screening
tool and improvements in performance through technological innovation such as
full-view digital imaging. The Company estimates that worldwide end-user sales
of stereotactic needle biopsy systems in 1994 were approximately $65 million.
The Company believes that growth in this market will be driven by increasing
recognition in the medical community of the effectiveness of this procedure as
an alternative to more invasive procedures, as well as by general health-care
cost-containment trends. End-user sales of general radiographic systems in the
United States in 1994 were approximately $250 million. The Company believes
that sales in this market are driven primarily by replacement of older
systems. Since the Company sells its systems principally to dealers for resale
to end-users, the Company's revenues generally reflect sales at wholesale
prices.

The Company's strategy includes maintaining its market position and
expanding into complementary markets through continued technological
innovation and strategic acquisitions. The Company recently introduced a
proprietary High Transmission Cellular ("HTC") grid for use with its
mammography systems that provides better image contrast than existing grids at
lower radiation doses, and a patented autoexposure tomography option to its
general radiography systems that reduces the need for multiple exposures in
tomography procedures, thereby reducing the radiation exposure to the patient.
The Company believes the most promising technological advances in the
radiography field will be derived from the substitution of electronic
detectors for the film currently used in substantially all radiographic
systems. This digital imaging technology is expected to be capable of higher
image quality, to permit the enhancement of an X-ray image through software
and to allow near-real-time, off-site analysis of the X-ray image by
radiologists. The Company is currently developing a full-view digital imaging
mammography system and has working prototypes at two clinical sites. The
Company believes

21
<PAGE>

that the digital imaging technology being developed for this system may be
adaptable to general radiography and cardiac diagnostic imaging systems and
the Company will seek to develop applications in these markets.

The Company also intends to expand or to augment its product line through
the acquisition of one or more additional companies or technologies. The
Company's strategy includes making acquisitions of companies that can benefit
from the Company's distribution channels and technology. In February 1996, the
Company entered into a non-binding letter of intent for the acquisition of XRE
Corporation ("XRE"). XRE designs, manufactures and markets X-ray imaging
systems used for cardiac catheterization and angiography. XRE manufactures
systems and system components as an original equipment manufacturer for other
medical equipment companies such as Philips and the Picker International, Inc.
subsidiary of GEC, Inc. ("Picker International"). It also sells its systems in
the United States directly and through distributors. In April 1996, the
Company signed a non-binding letter of intent to acquire Continental X-Ray
Corporation and certain of its affiliates (collectively, "Continental").
Continental designs, manufactures and markets radiographic/fluoroscopic
products, general radiography systems, electrophysiology products used in
cardiac laboratories and dedicated mammography systems. There can be no
assurance that either the XRE or Continental transactions will be successfully
completed.

INTRODUCTION TO RADIOGRAPHY

Radiography involves the use of X-rays to produce images of matter beneath
an opaque surface. Radiography has been used as a medical diagnostic tool
since the turn of the century. A radiographic imaging system principally
consists of a generator, an X-ray tube and an image recording system, which is
usually film. The object to be imaged is placed between the X-ray tube and the
film. Typically, filters or grids are placed between the X-ray tube and the
object, or the object and the film, to reduce extraneous X-rays. Some
radiographic systems include a bucky, or moving grid, to increase image
contrast by reducing scattering X-rays.

X-rays, which are not reflected by opaque surfaces, pass through the object
and expose the film. However, if the object is comprised of areas of varying
densities or chemical compositions, X-rays will be absorbed by the denser
areas or areas of certain chemical compositions in proportion to the density
or chemical composition of the matter. As a result, the film will be exposed
to a varying degree, thereby producing an image of the density or chemical
variation within the object. For example, since bone has a greater density
than the surrounding tissue in the body, X-rays can be used to produce an
image of a skeleton.

Radiographic imaging systems are differentiated on the basis of the power
and frequency of the generator, the configuration of the X-ray tube relative
to the film and the software that controls the operation of the system. In
certain areas, the specialized requirements of the imaging procedure have
resulted in the development of dedicated systems. For example, mammography
systems, which are designed exclusively to image breast tissue, have the
ability to compress the breast, adjust X-ray power levels and use automated
software controls programmed to provide the best image of breast tissue.

BREAST CANCER DETECTION

Breast cancer is the second leading cause of cancer fatalities in women. The
incidence of breast cancer in American women has grown from one in 20 in 1940
to one in 11 in 1980 to one in eight in 1994. The American Cancer Society
("ACS") estimates that in 1996 over 184,000 new cases of breast cancer in
American women will be reported and approximately 44,000 American women will
die from the disease.

Successful treatment of breast cancer depends in large part on the early
detection of malignant lesions in the breast. Current detection procedures
typically include clinical and self examination, screening mammography and, if
necessary, a biopsy. Physical examination is only useful for detecting lesions
that can be felt, while mammography has the ability to reveal lesions that
have not advanced to that stage. If a suspicious lesion is discovered in a
screening mammogram, the woman typically will undergo a biopsy, which is a
procedure to physically remove cells from the lesion for testing in a
laboratory. If the cells are cancerous, the woman generally

22
<PAGE>

undergoes some form of cancer treatment. The Company designs, manufactures and
markets both mammography and biopsy systems.

Mammography Systems

Most experts agree that mammography is the best method for detecting breast
cancer. The ACS and eighteen other health organizations, including the
American Medical Association, recommend that women aged 40 to 49 undergo a
screening mammogram every one to two years and that women over the age of 50
undergo an annual screening mammogram. However, only approximately 40% of
women in the United States comply with the ACS guidelines. The National Cancer
Institute and the American College of Physicians currently only recommend
screening mammography for women over the age of 50.

Current mammography systems are limited in their ability to image dense
breast tissue, typically found in women under the age of 50. This is
significant since approximately one-quarter of the women diagnosed with breast
cancer are under the age of 50. In addition, women with a family history of
breast cancer are at a higher risk of getting the disease and are therefore
encouraged to start undergoing screening mammography at a younger age.

Successful imaging of dense breast tissue requires high contrast images. The
Company recently introduced a new proprietary HTC grid that, compared to
existing grids, reduces scattering X-rays, while blocking fewer primary X-
rays, resulting in higher contrast images with lower radiation doses. In
addition, the Company is developing a full-view digital imaging mammography
system designed to substantially increase image contrast without a significant
decrease in image resolution.

Demand in the market for mammography systems is driven primarily by
technological innovation that produces better image quality. End-user sales of
mammography systems in the United States in 1994 were approximately $165
million. Although growth of the installed base has slowed, demand for new
systems continues as older models are replaced with ones offering new
technological innovations. In addition, the Company believes that the market
outside the United States will grow as more countries adopt mammography
quality standards similar to those recently adopted in the United States.

The Company currently markets six different mammography systems. The
Company's systems are generally differentiated on the basis of price and
performance. The Company's high-end models are the recently introduced Lorad
M-IV and the Bennett Contour, which have retail list prices of approximately
$96,000 and $89,000, respectively. The Lorad M-IV offers enhanced image
quality and system features over the Lorad M-III, which has been Lorad's high-
end model for the last five years. Many of the Lorad M-IV's features were
developed in response to user demands, including upgradability and modular
systems. The Bennett Contour offers a patented tilt C-arm which permits the
system to tilt toward or away from the patient to aid in imaging breast
tissue. The Company's lower-priced models are the Lorad M-III and the Bennett
MF-150, which have retail list prices of approximately $82,500 and $48,000,
respectively. These models do not offer all of the features of the high-end
models and are marketed to more cost-conscious customers. In addition, the
Company offers the Lorad T-350 and the Bennett MD-5 mobile mammography
systems.

The Company is also developing a next generation mammography system which
replaces the film with a solid-state detector capable of directly recording
the X-ray image in an electronic format. The Company anticipates that this
digital imaging system will be able to record 4,000 different shades of grey
compared to only 200 shades of grey in conventional film-recorded images,
resulting in significantly greater image contrast. In addition, since the
image is recorded in electronic format, it can be enhanced and manipulated,
transmitted over telephone lines to remote locations, and stored on magnetic
or optical media.

The Company currently offers a DSM digital spot mammography option for use
primarily with stereotactic needle biopsy. However, this system is capable of
imaging only a small area of the breast. The Company currently has prototype
full-view digital imaging mammography systems in operation at Good Samaritan

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Hospital in New York and the University of Virginia. At the Radiology Society
of North America Conventions in 1994 and 1995, the Company displayed superior
images from its prototypes to radiologists. The Company expects to submit a
modified design of this prototype to the United States Food and Drug
Administration ("FDA") for clearance, which is required before the Company can
commercially market its full-view digital imaging mammography system. There
can be no assurance that the Company will receive all necessary FDA
clearances. See "Risk Factors--Government Regulation" and "Business--
Government Regulation."

Stereotactic Needle Biopsy Systems

Mammography is only one of the first steps in the diagnosis of breast
cancer. If a mammogram reveals a suspicious lesion that cannot be identified
as benign or malignant, the next step typically is to perform a biopsy to
remove cells from the suspicious lesion to determine whether or not they are
cancerous. Studies indicate that between 1% and 2% of women undergoing their
first screening mammography in the United States will have a biopsy. However,
only 20% to 40% of women biopsied will be diagnosed with breast cancer.

Traditionally, biopsies have been performed in open surgery under general
anesthetic. Surgical biopsies can be painful procedures, and surgeons
generally remove a large area of breast tissue, about the size of a golf ball,
to ensure the collection of tissue from the suspicious lesion. These surgeries
can leave visible scarring on the breast and scar tissue in the breast that
can make detecting cancers in future mammograms more difficult.

The Company offers a variety of needle biopsy systems that provide an
alternative to surgical biopsy. Stereotactic needle biopsy systems were
introduced to address the disadvantages of surgical biopsy. Stereotactic
needle biopsy procedures can be performed on an out-patient basis under local
anesthetic. These procedures generally remove only a small tissue sample,
resulting in minimal scarring both on and in the breast. Recent studies
indicate that stereotactic needle biopsy is equally effective compared to
surgical biopsy in determining whether a suspicious lesion is malignant. The
typical cost of a stereotactic needle biopsy procedure is approximately $1,000
compared to approximately $3,000 for a surgical biopsy. However, because this
procedure was only recently introduced and is still gaining acceptance by the
medical community, less than 10% of breast tissue biopsies performed in 1994
used a stereotactic needle biopsy procedure.

The basic principle of a stereotactic needle biopsy system is that a hollow
needle is inserted into the breast to remove cells from the suspicious lesion.
The needle is guided to the suspicious lesion by use of stereotactic images of
the breast. Stereotactic images are two images of the same fixed breast, one
taken at a 15 degree angle off true vertical in one direction and the other
taken at a 15 degree angle off true vertical in the other direction. The
stereotactic images are input into a computer and then used to plot the
coordinates of the lesion to aim a computer-controlled needle gun.

The Company offers upright, add-on systems, the StereoLoc II and MF-CYTO,
that can be attached to most of its mammography systems. Add-on systems are
principally comprised of a needle gun attachment that fits onto the
mammography system in place of the breast compression paddle. The stereotactic
images required to plot the location of the lesion are taken by the
mammography system. These systems enhance the functionality of a mammography
system and are beneficial to customers which have only periodic demand for
stereotactic needle biopsy procedures.

The Company also offers a dedicated prone table, the StereoGuide, for
customers with greater demand for biopsy procedures. With the dedicated prone
table, the patient lies down with her breast suspended through an aperture in
the table. The X-ray imaging equipment and needle gun are mounted below the
table. Patients on the prone table are more comfortable, increasing the
likelihood they will remain still during the procedure, and cannot see the
needle being inserted in their breast, reducing the chance of fainting. The
Company's Stereoguide system is the subject of a lawsuit by Fischer alleging
infringement of a Fischer patent. See "Risk Factors--Risks Associated With
Pending and Threatened Patent Litigation" and "Business--Patents and
Proprietary Technology."

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The Company offers a digital spot imaging option with all of its
stereotactic needle biopsy systems. Although not capable of imaging the entire
breast, digital spot imagers are capable of capturing an area large enough to
cover a suspicious lesion. The Company's digital spot imaging systems can
record and display an X-ray image in approximately ten seconds. Since the
image is recorded directly in electronic format, a computer can quickly plot
the location of the lesion and aim the needle gun once the lesion has been
located with a cursor on the computer screen. A stereotactic needle biopsy
procedure using digital spot imaging can be performed in as short a time as
ten minutes compared with a typical time of 45 minutes using a film-based
system. The retail list price for the StereoGuide table with the digital spot
imaging option is $234,000 and for the add-on system with the digital spot
imaging option ranges from $135,000 to $140,000.

The Company estimates that worldwide end-user sales of stereotactic needle
biopsy systems grew from their introduction in 1988 to approximately $65
million in 1994. The Company believes that this market will grow as the
procedure becomes more widely accepted by the medical community and as
pressures to contain health-care costs increase.

GENERAL RADIOGRAPHY

The Company is a leading designer and manufacturer of office-based
radiographic systems, which are basic systems generally used in medical
outpatient facilities, such as doctors' offices and surgi-care centers, as
well as by chiropractors and veterinarians. The Company has focused on this
segment of the market and achieved its leadership position by providing low-
cost, reliable systems. In 1993, the Company broadened its focus by offering
the more sophisticated and expensive radiographic systems typically used in
hospitals.

The Company entered the hospital market with systems based on its high
frequency generator, which permits shorter exposure times, resulting in lower
radiation doses and greater image contrast and resolution. The Company
believes this generator currently provides it with a technological advantage
over its competitors. In addition to this generator, the Company has also
developed an overhead tube crane and table targeted to the hospital market.

End-user sales of general radiographic equipment in the United States in
1994 were approximately $250 million, of which a significant portion can be
attributed to the sale of such systems to hospitals. The United States market
for general radiographic systems is stable and consists primarily of
replacement sales as customers upgrade older equipment. The Company believes
that the international market is substantially larger than the United States
market and that the installed base of systems is still growing, particularly
in developing countries. The Company has recently been expanding its
international sales efforts.

The Company recently introduced the first, and currently only, general
radiographic system to receive the World Health Organization ("WHO") World
Health Imaging System--Radiographic ("WHIS-RAD") certificate of approval. The
Company's WHIS-RAD system is a flexible and easy to use general purpose
radiographic system. WHO will subsidize purchases of WHIS-RAD-approved systems
by qualifying health care organizations in developing countries.

The Company's radiographic systems typically include a generator, a tube
stand and a table or bucky structure. For each of these components the Company
offers a variety of options and features that can be configured to create
systems with different price and performance characteristics. A high-end,
hospital-based system, which has a retail list price of approximately $80,000,
may be comprised of a 60 kilowatt, high frequency generator; a ceiling-mounted
overhead tube crane; a four-way floating, elevating table; and an upright
bucky stand. An office-based system, which has a retail list price of
approximately $30,000, may be comprised of a 25 kilowatt, high frequency
generator; a floor-mounted, free standing tube stand and an upright bucky
stand.

The Company recently introduced a tomography unit with a patented automatic
exposure option for use with its general radiographic systems. In a tomography
system, during the exposure the X-ray tube sweeps over the subject with the
film tray sweeping under the subject in the opposite direction. The resulting
image provides an

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unobstructed view at a desired plane within the subject's body. Prior to the
introduction of the Company's automatic exposure option, multiple exposures
were generally required to obtain a correctly exposed image. The Company
believes that for a number of applications its $80,000-$110,000 tomography
system may be a cost-effective alternative to CT scanners which can cost up to
$800,000.

The Company believes digital imaging will have significant application in
the general radiographic and radiographic/flouroscopy markets and that the
technology it develops for its full-view digital imaging mammography system
may be adaptable to these applications. In general radiographic applications,
the Company believes digital imaging will produce better quality images and
reduce operating costs by eliminating the need for film and processing
equipment and chemicals. In addition, digital imaging will permit the
electronic storage of images on magnetic or optical media, as well as the
transmission of images to multiple locations. Furthermore, the Company
believes digital imaging in radiographic/fluoroscopy systems will be able to
replace the image intensifier and spot film device, which are both large and
expensive components.

OTHER PRODUCTS

The Company uses its technological and manufacturing expertise to produce a
number of other products.

The Company's LPX-160 portable imaging system is based on the Company's
medical imaging technology. This system is designed to produce high-resolution
images of metals, composites and plastics. Customers for this system include
the United States Air Force and several commercial airlines, which use the
system to test for stress fractures and other defects in aircraft, and
Canadian and American utilities, which use the system to inspect pipelines and
turbines. The Company was recently awarded a $9.7 million contract for these
systems from the United States Air Force. Sales to the United States Air Force
were approximately $1.1 million or 2.1% of the Company's revenues for the nine
months ended September 30, 1995 and approximately $3.2 million or 4.8% of the
Company's revenues for the six months ended March 30, 1996.

The Company manufactures an X-ray source that is used as a component to a
fill-measuring device sold by Thermedics Inc., a publicly-traded majority-
owned subsidiary of Thermo Electron. Through February 1996, the Company has
sold approximately 98 such devices under this arrangement.

The Company also manufactures the laser used in ThermoLase Corporation's
hair removal process. ThermoLase Corporaton is a publicly-traded, majority-
owned subsidiary of ThermoTrex. The Company has sold 54 lasers to ThermoLase
under this arrangement and has committed to deliver 126 additional lasers.

CARDIAC CATHETERIZATION AND ANGIOGRAPHY

In February 1996, the Company entered into a non-binding letter of intent to
acquire XRE. XRE is a designer, manufacturer and marketer of complete cardiac
catheterization laboratories and positioners for cardiovascular imaging
systems. XRE systems consist of a mechanical positioner which is used to
position an X-ray source and, an image intensifier around a patient who lies
prone on an angiographic table. The entire system is designed to provide real
time images of the heart and coronary arteries for physicians performing
interventional procedures, such as a diagnostic angiogram or balloon
angioplasty.

Coronary artery disease is the leading cause of death in the United States
and represents an increasing health risk throughout the world. According to an
industry source, between 20 and 25 million individuals in the United States
suffer from some form of coronary artery disease, with an estimated cost to
the United States health care system of approximately $120 billion annually.
One of the most common forms of cardiovascular disease is atherosclerosis
which can lead to atheroma, or a narrowing of the arteries. In addition to the
coronary arteries, atherosclerosis can effect blood vessels in the brain, legs
and arteries throughout the body.

Traditionally, cardiac catheterization has been the tool of choice for
diagnosing atherosclerosis and certain other cardiovascular diseases because
it provides the clearest and most accurate depiction of the coronary arteries.
Cardiac catheterization involves X-ray imaging of the heart and large blood
vessels following the injection of a radio-opaque solution into the patient.

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Historically, the primary form of treatment for coronary artery disease has
been open-heart bypass surgery. However, in recent years significant advances
have been made in the treatment of atherosclerosis and other coronary artery
diseases without extensive surgery. A common alternative treatment is
angioplasty, a procedure in which a segment of a narrowed coronary artery is
stretched by the inflation of a balloon introduced into the affected artery. A
more recent development involves the permanent implantation of devices such as
a stent into the blood vessel in order to keep the restricted vessel open.

Angioplasty is less invasive than surgery and generally does not require a
lengthy hospitalization (typically no more than two days). The Company
believes vascular and cardiovascular surgeons will increasingly use balloon
angioplasty and these other less invasive techniques to treat vascular
diseases in a non-surgical setting. Each of these procedures is performed
under the guidance of X-ray imaging.

Founded more than twenty years ago, XRE's products include the Unicath C
cardiovascular imaging system, and the Unicath LP biplane cardiovascular
imaging system. XRE recently introduced the Unicath SP, its top of the line
single plane and cardiovascular system with enhanced features such as a larger
X-ray tube and advanced image intensifier. XRE also recently introduced the
Poly Cx, a lower-cost alternative it believes is ideally suited for suburban
and smaller hospitals, as well as the export market. XRE also designs,
manufactures and sells other specialized X-ray systems, such as the Unicath EP
electrophysiology laboratory.

XRE also offers a complete line of digital imaging products. XRE has
developed and introduced a high speed digital imaging system, DVFX, which is
capable of acquiring images which may be stored on a variety of media. This
system is capable of providing high resolution real-time digital images at 30
frames per second. DVFX employs a proprietary digital filtering system
developed expressly for use in interventional imaging. Its open system
architecture facilitates image transfer and storage using industry standard,
high speed networks.

XRE's products are sold worldwide under the Angiographic Devices tradename
through its own direct sales force and a network of independent dealers. As of
December 31, 1995, XRE employed a six person direct sales force and
approximately twenty-five dealers covering primarily North America, Eastern
Europe, Western Europe and the Pacific Rim.

XRE also manufactures gantries or "positioners" for Philips' PolyDiagnost C2
cardiovascular system and Picker International's Cardicon-L and Omnicon-L
cardiovascular systems. Sales to original equipment manufacturers ("OEMs")
represented approximately 50% of XRE's total revenues in 1995.

Many of XRE's positioners are based on its parallelogram-based design. This
design permits multi-angular views of the heart and coronary arteries while
the patient remains stationary on the table. As of December 31, 1995, over
4,000 cardiac catheterization and angiographic positioners and systems
manufactured by XRE had been installed throughout the world.

The market for cardiac catheterization and angiographic imaging equipment is
intensively competitive. The Company believes that competition in this market
is likely to increase as a result of health care cost-containment pressures
and the development of alternative diagnostic and interventional technologies.
XRE's competitors include large multinational corporations such as GE,
Philips, the Siemens Corporation subsidiary of Siemens AG ("Siemens"), Toshiba
and Picker International. XRE competes in these markets primarily on the basis
of product features, product performance and reputation as well as price and
service.

As of December 31, 1995, XRE held a number of United States patents and
certain foreign counterparts and employed over 180 individuals.

The Company's strategy is to increase sales of XRE products by marketing
them through the Company's dealer network and to incorporate the Company's
digital imaging technology into XRE's product offerings. In addition, the XRE
acquisition will permit the Company to broaden its product offerings and
leverage its sales and service organizations.

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The terms relating to the proposed acquisition of XRE by the Company are set
forth in a non-binding letter of intent between the parties. However, the
Company and XRE have yet to enter into a definitive purchase agreement, and
there can be no assurance that the final arrangements between the parties will
be as set forth in the letter of intent or that the parties will consummate
the transactions contemplated therein.

RADIOGRAPHIC/FLUOROSCOPY

In April 1996, the Company entered into a non-binding letter of intent to
acquire all of the assets of Continental. Continental designs, manufactures
and markets radiographic/fluoroscopic products, general radiography systems,
electrophysiology products used in cardiac laboratories and dedicated
mammography systems.

A radiographic/fluoroscopic ("R/F") system is able to record dynamic events
by capturing a series of images in a short period of time. For example, R/F
systems are used for various gastrointestinal procedures which image in real
time the progress of a radio-opaque ingested solution (typically barium)
throughout the body. According to an industry source, end-user sales of R/F
equipment in the United States in 1994 were approximately $440 million.

Founded more than 60 years ago, Continental produces R/F systems using
advanced high frequency generators that provide pulsed power, resulting in
substantially reduced radiation exposure to the patient. Continental's R/F
products include the DigiSpot 2000, a high speed digital imaging system that
directly records the image in electronic format, permitting the electronic
storage of images on magnetic or optical media and the transmission of images
to multiple locations with image quality comparable with film-based systems.

Continental also manufactures a line of general radiographic products
targeted to hospital and clinical customers. Its general radiography product
line features high frequency generators with anatomical programming and other
operator selected features. Continental recently introduced its PMT
radiographic/tomographic line of products, which has the flexibility both to
image particular isolated organs, such as kidneys, and to function as a
general purpose radiographic suite, permitting hospitals to contain costs by
reducing the amount of space occupied by radiographic equipment.

Continental's electrophysiology product line is used by hospitals in the
treatment of cardioarrythmia, which is characterized by the sudden wild
beating of the heart that can result in death. The EP 2000 system consists of
a positioner, an elevating/tilting table and a high frequency X-ray generator.
The system features variable pulsed power with high performance digital
imaging.

Continental also manufactures the MAM CP System, an advanced mammography
system using high frequency generators, a biased focused X-ray tube and
automatic exposure control.

Continental's products are sold worldwide through a network of independent
dealers. In addition, Continental sells electrophysiology products to GE,
Toshiba and Shimadzu through OEM arrangements. Continental recently entered
into a two-year agreement with Columbia/HCA Healthcare Corporation to be one
of its two exclusive providers of general radiographic imaging equipment.
Continental also has group purchasing agreements with AmeriNet and Health
Services Corporation of America which extend through late 1997. Continental
manufactures its products at its 150,000 square-foot manufacturing plant in
Broadview, Illinois.

The Company's strategy is to increase sales by merging the Company's and
Continental's products into a full line of X-ray imaging systems, thereby
enhancing their desirability to dealer networks and OEM customers. The Company
also believes that the ability to offer a full line of products will enable it
to compete more effectively for contracts with national hospital chains and
international customers. In addition, the Company believes that the companies'
respective digital technologies may have application to each others' products.

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The terms relating to the proposed acquisition of Continental by the Company
are set forth in a non-binding letter of intent between the parties. However,
the Company and Continental have yet to enter into a definitive purchase
agreement, and there can be no assurance that the final arrangements between
the parties will be as set forth in the letter of intent or that the parties
will consummate the transactions contemplated therein.

SALES AND MARKETING

Sales by Dealers and Distributors

The Company's products are sold worldwide under both the Lorad and Bennett
names through separate networks of independent dealers. Lorad systems are sold
domestically through a network of approximately 50 dealers managed by six
regional offices. Bennett systems are sold domestically to physicians, clinics
and hospitals through a network of approximately 50 dealers supported by three
Bennett regional sales managers and six direct sales people focused on
mammography. Overseas, Lorad systems are sold by approximately 40 distributors
covering 50 countries and Bennett systems are sold by approximately 100
distributors covering more than 75 countries. The Company and its network of
independent dealers maintain a staff of factory-trained service technicians to
support the Lorad and Bennett systems.

OEM Agreements

In addition to manufacturing and marketing its own systems, the Company
manufactures systems and system components as an OEM for other medical
equipment companies. In general, under the Company's OEM agreements, which
could expire between 1996 and 1998, the manufacturers are obligated to
purchase from the Company certain minimum quantities of systems, system
components and subsystems manufactured by the Company. There can be no
assurance that upon the expiration of these agreements they will be renewed or
that new OEM customers can be identified.

The Company is party to several agreements with Philips pursuant to which
the Company's Lorad division manufactures mammography systems based on Philips
and Lorad design criteria and a mobile general purpose X-ray system, both for
sale by Philips under the Philips nameplate. The agreement for the purchase of
the Lorad mammography systems has an initial term of five years expiring in
1998, and is renewable upon mutual agreement of the parties for successive 12-
month terms. The agreement requires Philips to purchase a minimum of 800 units
over the term of the agreement, in gradually increasing increments of between
76 and 200 per year. The agreement for the purchase of mobile general purpose
X-ray systems and is renewable upon mutual agreement of the parties for
successive 12-month terms. The agreement requires Philips to purchase a
minimum of 300 units over the term of the agreement, although this agreement
is cancellable by either party if Philips fails to purchase at least 200 units
in any calendar year beginning after December 31, 1995. Sales to Philips
accounted for 18% of the Company's total revenues in fiscal 1995. Sales to
Philips accounted for 45% of XRE's sales in the twelve months ended December
31, 1995.

The Company is party to an agreement with GE pursuant to which the Company's
Bennett subsidiary manufactures radiographic systems utilizing Bennett's high
frequency generators for sale by GE under the GE nameplate. The agreement with
GE is for an initial term of three years expiring December 31, 1997.

The Company is a party to an agreement with Philips Medizin Systeme
Unternehmensbereich der Philips GmbH ("Philips Germany") pursuant to which the
Company's Bennett subsidiary manufactures radiographic systems for sale by
Philips Germany outside of the United States and Canada under the Smit Rontgen
nameplate. The agreement is renewable upon mutual agreement of the parties for
successive 12-month terms. The agreement does not require Philips Germany to
purchase any minimum quantity of products, but Philips Germany is required to
provide Bennett with a 12-month non-binding rolling forecast of its purchasing
requirements.

In October 1995, the Company entered into an agreement with U.S. Surgical
pursuant to which the Company's Lorad division is manufacturing its
StereoGuide prone stereotactic biopsy table modified to accept a U.S. Surgical
biopsy device for sale by U.S. Surgical under the U.S. Surgical nameplate.
U.S. Surgical has agreed

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to purchase a minimum of 60 tables during the first year of this agreement and
certain minimum purchase requirements to maintain exclusivity thereafter.

RESEARCH AND DEVELOPMENT

The Company maintains active programs for the development of new mammography
and X-ray imaging systems. The Company's current development efforts are
focused on the development of a full-view digital imaging mammography system,
direct detection X-ray sensors and the enhancement of existing mammography
products. The Company believes that the digital imaging technology developed
for this system also will be readily adaptable to general radiographic and
cardiac diagnostic imaging systems. No assurance can be given that the
Company's development programs will be successfully completed.

One of the Company's long-term research and development programs is the
development of a Sonic CT (Computed Tomography) system that uses acoustic
waves to form high-resolution images of breast tissue. Sonic CT uses no
ionizing radiation, provides near real-time images and has the potential to
detect some of the masses that are undetectable using conventional X-ray
mammography. The Company is collecting patient data with a clinical test unit
in conjunction with radiologists at the University of California, San Diego.

The Company is developing products based upon digital imaging technology
developed by scientists at ThermoTrex. ThermoTrex has granted the Company a
fully-paid, exclusive, worldwide, perpetual license to use and sell such
technology in the fields of mammography and general radiography. Under the
terms of the license agreement with ThermoTrex, if the Company elects to fund
approximately $6 million of ThermoTrex's research and development over the
next three years, the Company's license will be extended to cover the fields
of radiographic/fluoroscopy, mobile C-arm fluoroscopy and
cardiology/angiography. The Company will purchase digital imaging detectors
from ThermoTrex. See "Relationship and Potential Conflicts of Interest with
Thermo Electron and ThermoTrex."

Research and development expenses of the Company were $7.2 million, $10.7
million and $8.6 million for 1993, 1994 and the nine months ended September
30, 1995, respectively.

COMPETITION

The health care industry in general, and the market for imaging products in
particular, is highly competitive. The Company competes with a number of
companies, many of which have substantially greater financial, marketing and
other resources than the Company. The Company's competitors include large
companies such as GE, Philips, Siemens, Toshiba American Medical Systems, Inc.
and Toshiba America MRI, Inc. (collectively, "Toshiba"), Shimadzu and Picker
International, which compete in most diagnostic imaging modalities, including
X-ray imaging. In addition, a significant portion of the Company's sales are
to GE and Philips through OEM arrangements. The products sold by such OEMs
compete with those offered by the Company and its independent dealers. The
Company's StereoLoc II, MF-CYTO and StereoGuide stereotactic needle biopsy
systems compete with products offered by GE, Fischer Imaging Corporation and
Philips and with conventional surgical biopsy procedures.

The Company competes in these markets primarily on the basis of product
features, product performance and reputation as well as price and service.
Although the Company believes that its products currently compete favorably
with respect to such factors, there can be no assurance that the Company can
maintain its competitive position against current and potential competitors,
especially those with greater financial, manufacturing, marketing, service,
support, technical and other competitive resources. Competition could increase
if new companies enter the market or if existing competitors expand their
product lines. See "Risk Factors--Competition" and "--Technological Change and
New Products."

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PATENTS AND PROPRIETARY TECHNOLOGY

The Company's policy is to protect its intellectual property rights and to
apply for patent protection when appropriate. The Company currently holds 13
issued United States patents expiring at various dates ranging from 2003 to
2014. The Company also has 7 applications pending for additional United States
patents and a number of foreign counterparts for its patents in various
foreign countries. In addition, the Company has registered or other
trademarks. Patent protection provides the Company with competitive advantages
with respect to certain systems. The Company believes, however, that technical
know-how and trade secrets are more important to its business than patent
protection.

Competitors of the Company and other third-parties hold issued patents and
pending patent applications relating to imaging and other related
technologies, and it is uncertain whether these patents and patent
applications will require the Company to alter its products or processes, pay
licensing fees or cease certain activities. See "Risk Factors--Patents and
Proprietary Rights" and "--Risks Associated With Pending and Threatened Patent
Litigation."

In April 1992, Fischer Imaging Corporation ("Fischer") commenced a lawsuit
in the United States District Court, District of Colorado, against the
Company's Lorad division, alleging that the Lorad StereoGuide prone breast
biopsy system infringes a Fischer patent on a precision mammographic needle
biopsy system. As of September 30, 1995 the Company had sold 351 StereoGuide
systems, for aggregate revenues of approximately $34.4 million. The suit
requests a permanent injunction, treble damages and attorneys' fees and
expenses. If the Company is unsuccessful in defending this lawsuit it may be
enjoined from manufacturing and selling its StereoGuide system without a
license from Fischer. No assurance can be given that the Company will be able
to obtain such a license, if required, on commercially reasonable terms, if at
all. In addition, the Company may be subject to damages for past infringement.
No assurance can be given as to the amount which the Company may eventually be
required to pay in expenses or in such damages. The outcome of patent
litigation, particularly in jury trials, is inherently uncertain, and an
unfavorable outcome in the Fischer litigation could have a material adverse
effect on the Company's business and results of operations.

The Company also is aware of a U.S. patent held by Nicola E. Yanaki which
has been asserted by him against certain automatic exposure control features
included in most of the Company's current mammography systems. The Company has
been informed by Mr. Yanaki that a competitor of the Company has obtained a
license for use of this patent. Although the Company believes that the
validity of this patent may be questionable and subject to a successful
challenge, if the patent holder were successful in enforcing such patent the
Company could be subject to damages for past infringement and enjoined from
manufacturing and selling imaging equipment utilizing certain automatic
exposure control features, which would have a material adverse effect on the
Company's financial condition and results of operations.

The Company is also aware of an issued European patent with counterparts in
other non-U.S. countries relating to imaging equipment utilizing certain
automatic exposure control features. The European patent is the subject of an
opposition proceeding before the European Patent Office. There can be no
assurance as to the outcome of such opposition.

In connection with the organization of the Company, ThermoTrex agreed to
indemnify the Company for any and all cash damages in connection with the
Fischer lawsuit and any potential claims by the holder of the automatic
exposure control patent described above, with respect to sales of the
Company's products occurring prior to October 1995, when the businesses of
Lorad and Bennett were transferred to the Company. Notwithstanding this
indemnification, the Company would be required to report as an expense in its
results of operations the full amount, including any reimbursable amount, of
any damages in excess of the amount accrued ($2.3 million as of March 30,
1996), with any indemnification payment it receives from ThermoTrex being
treated as a contribution to shareholders' investment. An unsuccessful outcome
of this litigation may have a material adverse effect on the business of the
Company and on the results of operations of the Company for the period in
which such outcome occurs.

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<PAGE>

The Company is aware of two U.S. patents owned by a former employee which
have been asserted against the Company relating to its HTC grid to be used
with the Company's mammography systems. Although the Company believes that the
HTC grid does not infringe either of these patents, if the holder of the
patents were successful in enforcing such patents, the Company could be
subject to damages and enjoined from manufacturing and selling the HTC grid.

GOVERNMENT REGULATION

The Company's products and its research, development and manufacturing
activities are subject to regulation by numerous governmental authorities in
the United States and other countries. In the United States, medical devices
are subject to rigorous FDA review. The federal Food, Drug and Cosmetic Act,
the Public Health Services Act and other federal statutes and regulations
govern or influence the testing, manufacture, safety, labeling, storage,
record keeping, reporting, approval, advertising and promotion of products
such as those offered by the Company. Noncompliance with applicable
requirements can result in fines, recalls or seizures of products, total or
partial suspension of production and criminal prosecution.

Pursuant to the Medical Device Amendments of 1976 (the "1976 Amendments") to
the Federal Food, Drug and Cosmetic Act, and regulations promulgated
thereunder, medical devices intended for human use are classified into three
categories, Classes I, II and III, depending upon the degree of regulatory
control to which they will be subject. The Company believes its current
systems are classified as Class II devices.

If a new medical device, irrespective of whether it is a Class II or III
device, is substantially equivalent to an existing device that has been
continuously marketed since the effective date of the 1976 Amendments (May 28,
1976) (a "Substantially Equivalent Device"), FDA requirements may be satisfied
through a procedure known as a "510(k) Submission," under which the applicant
provides product information supporting its claim of substantial equivalence.
In a 510(k) Submission, the FDA may also require that it be provided with
clinical test results demonstrating the safety and efficacy of the device.

In connection with new product development, the Company from time to time
files 510(k) Submissions. While there can be no assurance in this regard, all
of the Company's X-ray components and products previously included in 510(k)
Submissions have received findings of substantial equivalence.

Class III medical devices (which consist of life support/life sustaining
devices, diagnostic or implanted devices) that are not Substantially
Equivalent Devices are subject to a more stringent and time-consuming FDA
approval process.

The Safe Medical Devices Act of 1990 substantially changed certain aspects
of the regulation of the sale of medical devices and, depending on how it is
interpreted and enforced, could make it substantially more difficult and time-
consuming to comply with pre-marketing clearance and approval processes.
Pursuant to this Act, the FDA is required to adopt implementing regulations,
which will require among other things that clinical test results supporting
the safety and efficacy of a medical device be included with a 510(k)
Submission. The regulations also provide that manufacturers of high-risk
medical devices (implantable devices, life sustaining/life support devices and
such other devices as the FDA may designate) must establish post-market
surveillance programs for devices that are first marketed after January 1,
1991.

The FDA has not yet classified full-view digital imaging mammography systems
like the one being developed by the Company. If such systems are classified as
Class III devices, the Company would be required to file for FDA marketing
clearance for its full-view digital imaging mammography system under the PMA
process, which would require substantial clinical trials and would take a
number of years. While not classifying such systems, the FDA recently issued a
preliminary protocol for marketing clearance of full-view digital imaging
mammography systems suggesting that clearance may be obtained through an
enhanced 510(k) application with more extensive clinical trials. The
preliminary protocol calls for clinical trials on 400 subjects

32
<PAGE>

prior to applying to the FDA for clearance to commercially market such a
system and a multi-year, follow-up study including comparative film and
digital images on 12,000 subjects following commercial introduction. If the
preliminary protocol is adopted as currently drafted, the Company believes
this follow-up study will be overburdensome and may limit the
commercialization of full-view digital imaging mammography systems. The period
for submitting comments to the preliminary protocol has expired and the
Company can make no prediction as to when the FDA will issue a final protocol
or if one will be issued at all.

The Company is also subject to periodic inspections by the FDA whose primary
purpose is to audit the Company's compliance with Good Manufacturing Practices
("GMP"). Enforcement of GMP regulations has increased significantly in the
last several years, and the FDA has publicly stated that compliance will be
more strictly scrutinized. In the event that the Company or any of its
facilities was determined to be in noncompliance, and to the extent that the
Company or such facility was unable to convince the FDA of the adequacy of its
compliance, the FDA has the power to assert penalties or remedies, including a
recall or temporary suspension of product shipment until compliance is
achieved. Such penalties or remedies could have a material adverse effect on
the Company's business and results of operations.

The Company is also regulated by the FDA under the Radiation Control for
Health and Safety Act of 1968 (Public Law 90-602) which specifically addresses
radiation emitting products. Under this law, the Company is responsible for
submitting initial reports on all new X-ray systems that require certification
to FDA performance standards. The Company must also submit a quality assurance
and test program for FDA review to ensure continued compliance with X-ray
performance standards.

Historically, the Company has been subject to recalls of certain of its
products from time to time under Public Law 90-602. Under this law, any
product which is not in compliance with the relevant performance standard must
be repaired, refurbished or returned at the manufacturer's expense.

The Company is also subject to regulation under the Occupational Safety and
Health Act, the Environmental Protection Act, the Toxic Substances Act, the
Federal Water Pollution Control Act, the National Environmental Policy Act and
other federal, state or local statutes and regulations. The Company believes
that it is in material compliance with these and other applicable federal,
state and foreign legal and regulatory requirements under which it operates.
However, there can be no assurance that such legal or regulatory requirements
will not be amended or that new legal or regulatory requirements will not be
adopted, any one of which could have a material adverse effect on the
Company's business or results of operations.

REIMBURSEMENT

Suppliers of health care products and services are affected by Medicare,
Medicaid and other government insurance programs, as well as by private
insurance reimbursement programs. Third party payors (Medicare, Medicaid,
private health insurance, health administration authorities in foreign
countries and other organizations) may affect the pricing or relative
attractiveness of the Company's products by regulating the maximum amount of
reimbursement provided for by such payors to the physicians, hospitals and
clinics utilizing the Company's products or by taking the position that such
reimbursement is not available at all.

Since 1983, Medicare reimbursement has been based on a fixed amount for
admitting a patient with a specific diagnosis. Hospital profit margins have
been reduced significantly since the introduction of Diagnosis Related Groups
("DRGs"). As DRG reimbursement is a fixed amount based on a specific
diagnosis, hospitals have incentives to use less costly treatment methods. If
a new technology is considered to be more cost effective, hospitals will
frequently make capital expenditures to provide cost savings. Frequently DRG
reimbursement is reduced to reflect the adoption of a new procedure or
technique, and as a result hospitals are generally willing to implement new
cost saving technologies before these downward adjustments in DRG rates take
effect.

The diagnostic procedures for which the Company's products are intended to
be used generally have been approved for Medicare reimbursement. Many of the
therapeutic procedures for which the Company's systems

33
<PAGE>

can be used have also been approved for Medicare reimbursement. In addition,
prior to 1991, hospitals received Medicare reimbursement for the cost of
capital equipment such as the Company's products as a "capital pass through,"
which provided for an 85% reimbursement of the Medicare utilization portion of
the equipment cost, pro rated over the depreciable life of the equipment.

In 1991, the Health Care Financing Administration of the U.S. Department of
Health and Human Services published rules to change the method of capital
reimbursement for hospitals. The rules changed capital reimbursement from a
system based on costs to one based on prospective payment. The rules provide
for a ten year transition and permit hospitals with unusually low or high
capital reimbursement methods to be reimbursed fairly. The Company believes
that the new capital reimbursement rules have impacted facilities expansion
more heavily than medical equipment purchases.

In early 1992, Medicare also began to phase in over a five-year period a new
system whereby reimbursement to physicians will be based on the lower of their
actual charges or a fee schedule amount based on "resource-based" relative
value "scale". This replaced a "charge-based" fee schedule, and is anticipated
to generally lower the reimbursements received by radiologists from the
previous method.

The Company believes, however, that since minimally invasive surgical
techniques are generally less expensive than open or conventional surgery,
stereotactic breast biopsy and other systems offered by the Company provide
hospitals the opportunity to save costs and, therefore, possibly benefit from
a revised reimbursement system.

BACKLOG

At both December 30, 1995 and March 30, 1996, the Company's backlog of firm
orders was approximately $53 million. The Company includes in backlog only
those orders for which it has received completed purchase orders and for which
delivery has been specified within twelve months. Most orders are subject to
cancellation by the customer. Because of the possibility of customer changes
in delivery schedules, cancellation of orders and potential delays in product
shipments, the Company's backlog as of any particular date may not be
representative of actual sales for any succeeding period.

FACILITIES

The Company operates from two facilities: a 63,500 square foot office and
manufacturing facility in Danbury, Connecticut owned by the Company and a
120,000 square foot office and manufacturing facility in Copiague, New York
leased by the Company pursuant to a lease expiring in 2005. As of December 30,
1995, the annual base rent for the Company's New York facility was
approximately $600,000. The Company has entered into a lease for a new 60,000
square foot building to be constructed adjacent to its existing facility in
Danbury, Connecticut. The lease will commence upon completion of the building,
which is expected to occur in late 1996, and has a term of ten years with an
initial annual base rent of $771,600.

PERSONNEL

As of February 24, 1996, the Company had 604 employees, of which 11 were
engaged in senior management, 37 were engaged in administration and
accounting, 94 in research and development, 55 in sales and marketing, 38 in
product support and 369 in manufacturing. None of the Company's employees are
represented by a labor union, and the Company considers its relations with its
employees to be good.

LEGAL PROCEEDINGS

Except as described above under "Business--Patents and Proprietary
Technology," "Risk Factors--Patents and Proprietary Rights" and "--Risks
Associated With Pending and Threatened Patent Litigation," the Company is not
a party to any litigation that it believes could reasonably be expected to
have a material adverse effect on the Company or its business.

34
<PAGE>

RELATIONSHIP AND POTENTIAL CONFLICTS OF INTEREST WITH THERMO ELECTRON AND
THERMOTREX

The Company was incorporated in September 1995 as a wholly-owned subsidiary
of ThermoTrex. ThermoTrex acquired all of the outstanding capital stock of
Bennett in September 1995 for approximately $42,000,000 in cash. On October 2,
1995, the Company acquired all of the outstanding shares of capital stock of
Bennett from ThermoTrex in exchange for the $42,000,000 principal amount
Convertible Note. Subsequently, on October 16, 1995, ThermoTrex contributed
all of the assets and liabilities relating to its Lorad division and the
development of its Sonic CT system to the Company in exchange for 20,000,000
shares of Common Stock of the Company.

Thermo Electron has adopted a strategy of selling a minority interest in
subsidiary companies to outside investors as an important tool in its future
development. As part of this strategy, Thermo Electron and certain of its
subsidiaries have created publicly and/or privately held majority-owned
subsidiaries. The Company and the other Thermo Electron subsidiaries are
referred to herein as the "Thermo Subsidiaries."

In October 1995, ThermoTrex granted to the Company an exclusive, paid-up,
royalty-free license for the use of certain technology relating to digital
imaging detectors in the fields of mammography and general radiography. Under
the license agreement, if the Company funds approximately $6 million of
ThermoTrex's research and development of the digital imaging technology in the
fields of radiographic/fluoroscopy, mobile C-arm fluoroscopy and
cardiology/angiography over the next three years, then ThermoTrex will be
obligated to grant the Company a fully-paid, exclusive, worldwide, perpetual
license to use and sell the digital imaging technology in these fields. The
license agreement provides that ThermoTrex will manufacture products based on
the digital imaging technology for the Company in the applicable fields.
ThermoTrex will sell the products to the Company at ThermoTrex's cost until
the Company has received an amount of Net Profit (as defined below) from the
resale of such products equal to amounts paid by the Company for research and
development as set forth above less any additional research and development
costs incurred by ThermoTrex with the prior written approval of the Company,
and thereafter at ThermoTrex's cost plus one-half of Net Profit. For purposes
of the preceding sentence, "Net Profit" means the difference between the
prices the Company receives upon resale of such products and the aggregate
costs of the Company and ThermoTrex relating to such sales.

The Company has an arrangement with ThermoTrex whereby ThermoTrex provides
certain research and development services to the Company and the Company pays
ThermoTrex its fully burdened cost of providing such services. For the nine
months ended September 30, 1995, the Company paid ThermoTrex approximately
$1,536,000 under this arrangement.

The Company has an arrangement with the Tecomet division of Thermo Electron
for the manufacture of the Company's proprietary HTC grid. Under this
arrangement Tecomet manufactures the grid for the Company pursuant to written
purchase orders. The Company owns the intellectual property rights to the
grid. For the nine months ended September 30, 1995, the Company paid Tecomet
$250,000 under this arrangement.

Under an arrangement with ThermoLase Corporation, a publicly-traded,
majority-owned subsidiary of ThermoTrex, the Company manufactures the laser
used in ThermoLase's hair-removal process. The Company manufactures these
lasers for ThermoLase pursuant to written purchase orders. The Company has
sold 54 lasers to ThermoLase under this arrangement for an aggregate purchase
price of approximately $3.8 million and has committed to deliver 126
additional lasers for an aggregate purchase price of approximately $6.7
million.

Under an arrangement with Thermedics Detection Inc., a subsidiary of
Thermedics, a publicly-traded, majority-owned subsidiary of Thermo Electron,
the Company manufactures an X- ray source that is used as a component to a
fill-measuring device produced by Thermedics Detection. The Company
manufactures these X-ray sources for Thermedics Detection pursuant to written
purchase orders. For the nine months ended September 30, 1995, Thermedics
Detection paid the Company $120,000 under this arrangement.

35
<PAGE>

The Company believes that the arrangements set forth above are on terms
comparable to those the Company would receive from unaffiliated parties.

On October 2, 1995, in exchange for all of the outstanding shares of capital
stock of Bennett, the Company issued the $42,000,000 principal amount
Convertible Note to ThermoTrex. The Convertible Note has an interest rate of
4.2% per annum and is convertible into shares of the Company's Common Stock at
a conversion price of $11.79 per share. In March 1996, ThermoTrex converted
$3,000,000 principal amount of the Convertible Note into 254,452 shares of
Common Stock.

ThermoTrex develops advanced technologies, which it is incorporating into
commercial products for the personal-care and avionics industries. For the
nine months ended September 30, 1995, ThermoTrex had consolidated revenues of
$86,531,000 and consolidated net income of $36,341,000, including a gain on
the issuance of stock by a subsidiary of $34,721,000.

Thermo Electron and its subsidiaries develop, manufacture and market
environmental monitoring and analysis instruments, biomedical products
including heart-assist systems and respiratory care products, papermaking and
paper-recycling equipment, alternative-energy systems, industrial process
equipment and other specialized products. Thermo Electron and its subsidiaries
also provide environmental and metallurgical services and conduct advanced
technology research and development. For its fiscal year ended December 30,
1995, Thermo Electron had consolidated revenues of $2,207,417,000 and
consolidated net income of $140,080,000. See "Risk Factors--Potential
Conflicts of Interest" and "--Significant Additional Shares Eligible for Sale
After the Offerings."

THE THERMO ELECTRON CORPORATE CHARTER

Thermo Electron and the Thermo Subsidiaries, including the Company,
recognize that the benefits and support that derive from their affiliation are
essential elements of their individual performance. Accordingly, Thermo
Electron and each of the Thermo Subsidiaries, including the Company, have
adopted the Thermo Electron Corporate Charter (the "Charter") to define the
relationships and delineate the nature of such cooperation among themselves.
The purpose of the Charter is to ensure that (1) all of the companies and
their shareholders are treated consistently and fairly, (2) the scope and
nature of the cooperation among the companies, and each company's
responsibilities, are adequately defined, (3) each company has access to the
combined resources and financial, managerial and technological strengths of
the others, and (4) Thermo Electron and the Thermo Subsidiaries, in the
aggregate, are able to obtain the most favorable terms from outside parties.

To achieve these ends, the Charter identifies the general principles to be
followed by the companies, addresses the role and responsibilities of the
management of each company, provides for the sharing of group resources by the
companies and provides for centralized administrative, banking and credit
services to be performed by Thermo Electron. The services provided by Thermo
Electron include collecting and managing cash generated by members,
coordinating the access of Thermo Electron and the Thermo Subsidiaries (the
"Thermo Group") to external financing sources, ensuring compliance with
external financial covenants and internal financial policies, assisting in the
formulation of long-range planning and providing other banking and credit
services. Pursuant to the Charter, Thermo Electron may also provide guarantees
of debt obligations of the Thermo Subsidiaries or may obtain external
financing at the parent level for the benefit of the Thermo Subsidiaries. In
certain instances, the Thermo Subsidiaries may provide credit support to, or
on behalf of, the consolidated entity or may obtain financing directly from
external financing sources. Under the Charter, Thermo Electron is responsible
for ensuring that the Thermo Group remains in compliance with all covenants
imposed by external financing sources, including covenants related to
borrowings of Thermo Electron or other members of the Thermo Group, and for
apportioning such constraints within the Thermo Group. In addition, Thermo
Electron establishes certain internal policies and procedures applicable to
members of the Thermo Group. The cost of the services provided by Thermo
Electron to the Thermo Subsidiaries is covered under existing corporate
services agreements between Thermo Electron and each of the Thermo
Subsidiaries.

36
<PAGE>

The Charter presently provides that it shall continue in effect so long as
Thermo Electron and at least one Thermo Subsidiary participate. The Charter
may be amended at any time by agreement of the participants. Any Thermo
Subsidiary, including the Company, may withdraw from participation in the
Charter upon 30 days' prior notice. In addition, Thermo Electron may terminate
a subsidiary's participation in the Charter in the event the subsidiary ceases
to be controlled by Thermo Electron or ceases to comply with the Charter or
the policies and procedures applicable to the Thermo Group. A withdrawal from
the Charter automatically terminates the corporate services agreement in
effect between the withdrawing company and Thermo Electron. The withdrawal
from participation does not terminate outstanding commitments to third parties
made by the withdrawing company, or by Thermo Electron or other members of the
Thermo Group, prior to the withdrawal. However, a withdrawing company is
required to continue to comply with all policies and procedures applicable to
the Thermo Group and to provide certain administrative functions mandated by
Thermo Electron so long as the withdrawing company is controlled by or
affiliated with Thermo Electron.

CORPORATE SERVICES AGREEMENT

As provided in the Charter, Thermo Electron and the Company have entered
into a Corporate Services Agreement (the "Services Agreement") under which
Thermo Electron's corporate staff provides certain administrative services,
including certain legal advice and services, risk management, certain employee
benefit administration, tax advice and preparation of tax returns, centralized
cash management and certain financial and other services to the Company. In
1994 and 1995, Thermo Electron assessed the Company an annual fee for these
services equal to 1.25% and 1.20%, respectively, of the Company's total
revenues. Effective January 1, 1996, the fee was reduced to 1.0% of the
Company's total revenues. The fee may be changed by mutual agreement of the
Company and Thermo Electron. During the nine months ended September 30, 1995,
Thermo Electron assessed the Company $663,000 in fees under the Services
Agreement. The Company believes that the charges under the Services Agreement
are representative of the expenses the Company would have incurred on a stand-
alone basis and that the terms of the Services Agreement are reasonable. For
additional items such as employee benefit plans, insurance coverage and other
identifiable costs, Thermo Electron charges the Company based upon costs
attributable to the Company. The Services Agreement automatically renews for
successive one-year terms, unless canceled by the Company upon 30 days' prior
notice. In addition, the Services Agreement terminates automatically in the
event the Company ceases to be a member of the Thermo Group or ceases to be a
participant in the Charter. In the event of a termination of the Services
Agreement, the Company will be required to pay a termination fee equal to the
fee that was paid by the Company for services under the Services Agreement for
the nine-month period prior to termination. Following termination, Thermo
Electron may provide certain administrative services on an as-requested basis
by the Company or as required in order to meet the Company's obligations under
Thermo Electron's policies and procedures. Thermo Electron will charge the
Company a fee equal to the market rate for comparable services if such
services are provided to the Company following termination.

TAX ALLOCATION AGREEMENT

The Tax Allocation Agreement between ThermoTrex and the Company outlines the
terms under which the Company is to be included in ThermoTrex's consolidated
federal and state income tax returns. Under current law, the Company will be
included in such tax returns so long as ThermoTrex owns at least 80% of the
outstanding Common Stock of the Company. In years in which the Company has
taxable income, it will pay to ThermoTrex amounts comparable to the taxes it
would have paid if it had filed its own separate corporate tax returns. If
ThermoTrex's equity ownership of the Company were to drop below 80%, then the
Company would file its own income tax returns.

MASTER GUARANTEE REIMBURSEMENT AGREEMENTS

The Company has entered into a Master Guarantee Reimbursement Agreement with
Thermo Electron which provides that the Company will reimburse Thermo Electron
for any costs it incurs in the event it is required to pay third parties
pursuant to any guarantees it issues on the Company's behalf. ThermoTrex has
entered into a

37
<PAGE>

similar agreement with Thermo Electron with regard to the Company's
obligations which are guaranteed by Thermo Electron. The Company has also
entered into a Master Guarantee Reimbursement Agreement with ThermoTrex which
provides that the Company will reimburse ThermoTrex for any costs it incurs in
the event that ThermoTrex is required to pay Thermo Electron or any other
party pursuant to any guarantees it issues on the Company's behalf.

MISCELLANEOUS

Currently, ThermoTrex beneficially owns 91% of the outstanding shares of
Common Stock (excluding shares of Common Stock issuable upon the conversion of
the Convertible Note). ThermoTrex presently intends to maintain at least an
80% interest in the Company. This may require ThermoTrex to convert additional
principal amounts of the Convertible Note or to purchase additional shares of
Common Stock from time to time as the number of outstanding shares issued by
the Company increases. These purchases may be made either in the open market
or directly from the Company. See "Risk Factors--Control by ThermoTrex."

The Company's cash equivalents may be invested from time to time pursuant to
a repurchase agreement with Thermo Electron. Under this agreement, the Company
in effect lends excess cash to Thermo Electron, which Thermo Electron
collateralizes with investments principally consisting of corporate notes,
United States government agency securities, money market funds, commercial
paper and other marketable securities, in the amount of at least 103% of such
obligation. The Company's funds subject to the repurchase agreement will be
readily convertible into cash by the Company and have an original maturity of
three months or less. The repurchase agreement earns a rate based on the
Commercial Paper Composite Rate plus 25 basis points, set at the beginning of
each quarter.

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<PAGE>

MANAGEMENT

The directors and executive officers of the Company and their ages as of May
6, 1996 are as follows:

<TABLE>
<CAPTION>
AGE POSITION
NAME --- --------
<S> <C> <C>
Gary S. Weinstein.................... 38 Chairman of the Board and Director
Anthony J. Pellegrino................ 55 Vice Chairman of the Board and
Director
Hal Kirshner......................... 55 Chief Executive Officer, President and
Director
John N. Hatsopoulos.................. 61 Vice President, Chief Financial
Officer and Director
Paul F. Kelleher..................... 53 Chief Accounting Officer
Steven J. Kemper..................... 41 Vice President, Finance
Elias P. Gyftopoulos (2)............. 68 Director
Robert C. Howard..................... 65 Director
Earl R. Lewis........................ 52 Director
James W. May, Jr. (1)(2)............. 53 Director
Hutham S. Olayan (1)(2).............. 42 Director
Firooz Rufeh......................... 58 Director
Kenneth Y. Tang...................... 48 Director
</TABLE>
- --------

(1) Member of the Audit Committee.
(2) Member of the Human Resources Committee.

All of the Company's directors are elected annually by the shareholders and
hold office until their respective successors are duly elected and qualified.
Executive officers are elected annually by the Board of Directors and serve at
its discretion. Mr. Weinstein, Mr. Hatsopoulos, Mr. Kelleher, Mr. Kemper, Mr.
Howard, Mr. Lewis, Mr. Rufeh and Dr. Tang are full-time employees of Thermo
Electron, ThermoTrex or other subsidiaries of Thermo Electron, but these
individuals devote such time to the affairs of the Company as the Company's
needs reasonably require from time to time. Because each of these individuals
owes duties to each of the entities for which he serves as an officer or
director, there may be circumstances in which such individual has a conflict
of interest. See "Risk Factors--Potential Conflicts of Interest" and
"Relationship and Potential Conflicts of Interest with Thermo Electron and
ThermoTrex."

Mr. Weinstein has been Chairman of the Board and a Director of the
Corporation since February 1996. Mr. Weinstein has also been Chairman and
Chief Executive Officer of ThermoTrex and a Vice President of Thermo Electron
since February 1996. Mr. Weinstein was a Managing Director of Lehman Brothers
Inc. from 1992 until February 1996, serving most recently as Managing
Director, head of Global Syndicate and Equity Capital Markets since March
1995. Prior to that appointment, Mr. Weinstein served in various positions at
Lehman Brothers since joining the firm in 1988, including head of Equities in
Europe, head of Equity New Issues in North and South America and head of
Global Convertible Securities. Mr. Weinstein is also a Director of ThermoTrex
and ThermoLase Corporation.

Mr. Pellegrino has been Vice Chairman of the Board and a Director of the
Company since its inception in October 1995. Mr. Pellegrino has been a Senior
Vice President of ThermoTrex since July 1995 and was Chairman of Lorad for
more than five years prior to that time. Mr. Pellegrino is also a Director of
ThermoQuest Corporation and ThermoLase Corporation.

39
<PAGE>

Mr. Kirshner has been Chief Executive Officer, President and a Director of
the Company since its inception in October 1995. Mr. Kirshner has been
President of Lorad since February 1991. Prior to that time, he served as Chief
Operating Officer and President of Electrolux Water Systems, Inc.

Mr. Hatsopoulos has been Vice President, Chief Financial Officer and a
Director of the Company since its inception in October 1995. Mr. Hatsopoulos
has been a Vice President and Chief Financial Officer of ThermoTrex since
1990, the Chief Financial Officer of Thermo Electron since 1988 and an
Executive Vice President of Thermo Electron since 1986. He is also a director
of Thermo Ecotek Corporation, Thermo Fibertek Inc., Thermo Instrument Systems
Inc., Thermo Power Corporation, Thermo TerraTech Inc., ThermoQuest
Corporation, Thermo Sentron Inc., ThermoTrex and Lehman Brothers Funds, Inc.,
an open-end investment management company.

Mr. Kelleher has been the Chief Accounting Officer of the Company since its
inception in October 1995. Mr. Kelleher has been Vice President, Finance of
Thermo Electron since 1987 and served as its Controller from 1982 to January
1996. He is a director of ThermoLase Corporation.

Mr. Kemper has been Vice President, Finance of the Company since its
inception in October 1995. Mr. Kemper has also been Vice President, Finance of
ThermoTrex since July 1995. Prior to joining ThermoTrex, Mr. Kemper was
controller for the Satellite Business unit of the communications division of
General Instrument Corporation, a cable television equipment manufacturer, for
more than five years.

Dr. Gyftopoulos has been a Director of the Company since its inception in
October 1995. Dr. Gyftopoulos has been the Ford Professor of Mechanical
Engineering and of Nuclear Engineering at the Massachusetts Institute of
Technology for more than five years. Dr. Gyftopoulos is also a director of
Thermo Cardiosystems Inc., Thermo Electron, ThermoLase Corporation, Thermo
Instrument Systems Inc., Thermo Remediation Inc., ThermoSpectra Corporation
and Thermo Voltek Corp.

Mr. Howard has been a Director of the Company since its inception in October
1995. Mr. Howard has been an Executive Vice President of Thermo Electron since
1986. He is also a Director of Thermedics Inc., Thermo Cardiosystems Inc.,
ThermoLase Corporation, Thermo Power Corporation, Thermo Instrument Systems
Inc. and ThermoTrex.

Mr. Lewis has been a Director of the Company since its inception in October
1995. Mr. Lewis has been Executive Vice President and Chief Operating Officer
of Thermo Instrument Systems Inc. since December 1995 and served as a Vice
President of that company from 1990 to 1995. He has also served as Chief
Executive Officer, President and a Director of Thermo Optek Corporation since
August 1995, and President of Thermo Jarrell Ash Corporation for more than
five years. Mr. Lewis is also Chairman of the Board and a Director of
ThermoSpectra Corporation.

Dr. May has been a Director of the Company since February 1996. He has been
Professor of Surgery at Harvard Medical School since 1994 and was Associate
Clinical Professor of Surgery for more than five years prior to that time.

Ms. Olayan has been a Director of the Company since February 1996. She has
served as President and a director of Olayan America Corporation since 1995
and Competrol Real Estate Limited since 1986, which are members of the Olayan
Group engaged in advisory services and private real estate investments,
respectively. Ms. Olayan also served as President and a director of Crescent
Diversified Limited, another member of the Olayan Group engaged in private
investments, from 1985 until 1994. Ms. Olayan is also a Director of Thermo
Electron.

Mr. Rufeh has been a Director of the Company since its inception in October
1995 and was its Chairman of the Board from October 1995 to February 1996. Mr.
Rufeh has been the President of ThermoTrex since 1988 and a Vice President of
Thermo Electron since January 1986. From 1985 to 1990, he was Chairman of the
Board of Thermo Power Corporation. He is also a Director of ThermoTrex.

40
<PAGE>

Dr. Tang has been a Director of the Company since its inception in October
1995. Dr. Tang has been Senior Vice President of ThermoTrex for more than five
years and was President of ThermoLase Corporation from December 1992 to May
1995. He is also a director of ThermoLase Corporation.

The Vice President and General Manager of Bennett since January 1996 has
been Mr. Walter F. Schneider, who has been an employee of Bennett since 1986
and had previously served as its Vice President of Operations. He replaced Mr.
Calvin Kleinman, who left the Company.

COMPENSATION OF DIRECTORS

Directors who are not employees of the Company, Thermo Electron or any other
companies affiliated with Thermo Electron (also referred to as "outside
directors") receive an annual retainer of $2,000 and a fee of $1,000 per day
for attending regular meetings of the Board of Directors and $500 per day for
participating in meetings of the Board of Directors held by means of
conference telephone and for participating in certain meetings of committees
of the Board of Directors. Payment of director fees is made quarterly. Messrs.
Weinstein, Pellegrino, Kirshner, Hatsopoulos, Howard, Lewis and Rufeh and Dr.
Tang are employees of members of the Thermo Electron companies and do not
receive any cash compensation from the Company for their services as
directors. Directors are also reimbursed for reasonable out-of-pocket expenses
incurred in attending such meetings.

Directors Deferred Compensation Plan. Under the Company's Deferred
Compensation Plan for Directors (the "Deferred Compensation Plan"), a director
has the right to defer receipt of his or her fees until he or she ceases to
serve as a director, dies or retires from his or her principal occupation. In
the event of a change in control or proposed change in control of the Company
that is not approved by the Board of Directors, deferred amounts become
payable immediately. For purposes of the Deferred Compensation Plan, a change
of control is defined as: (a) the occurrence, without the prior approval of
the Board of Directors, of the acquisition, directly or indirectly, by any
person of 50% or more of the outstanding Common Stock or the outstanding
common stock of ThermoTrex or 25% or more of the outstanding common stock of
Thermo Electron or (b) the failure of the persons serving on the Board of
Directors immediately prior to any contested election of directors or any
exchange offer or tender offer for the Common Stock or the common stock of
ThermoTrex or Thermo Electron to constitute a majority of the Board of
Directors at any time within two years following any such event. Amounts
deferred pursuant to the Deferred Compensation Plan are valued at the end of
each quarter as units of Common Stock. When payable, amounts deferred may be
disbursed solely in shares of Common Stock accumulated under the Deferred
Compensation Plan. The Company has reserved 25,000 shares under this Plan. The
Deferred Compensation Plan will not become effective until completion of the
Offerings. As of the date of this Prospectus, no units had been accumulated
under the Deferred Compensation Plan.

Directors Stock Option Plan. The Company has adopted a directors stock
option plan (the "Plan") providing for the grant of stock options to purchase
shares of Common Stock to outside directors as additional compensation for
their service as directors. The Plan provides for the grant of stock options
upon a Director's initial appointment and, beginning in 2000, awards options
to purchase 1,000 shares annually to eligible directors, provided the Common
Stock is then publicly traded. A total of 200,000 shares of Common Stock have
been reserved for issuance under the Plan.

Under the Plan, each eligible director and each new outside director
initially joining the Board of Directors in 1996 will be granted an option to
purchase 40,000 shares of Common Stock upon the later of the adoption of the
plan or the director's appointment or election. The size of the award to new
directors appointed to the Board of Directors after 1996 will be reduced by
10,000 shares in each subsequent year. Directors initially joining the Board
of Directors after 1999 would not receive an option grant upon their
appointment or election to the Board of Directors, but would be eligible to
participate in the annual option awards described below. Options evidencing
initial grants to directors vest and are exercisable upon the fourth
anniversary of the date of grant, unless the Common Stock underlying the
option grant is registered under Section 12 ("Section 12 Registration") of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), prior to the
fourth anniversary of such grant. In the event that the effective date of
Section 12 Registration occurs prior to the fourth anniversary

41
<PAGE>

of the date of grant, then the option becomes exercisable (on the later of 90
days after Section 12 Registration or six months after the date of grant) and
the shares acquired upon exercise will be subject to restrictions on transfer
and the right of the Company to repurchase such shares at the exercise price
in the event the director ceases to serve as a director of the Company or any
other Thermo Electron company. In such event, the restrictions and repurchase
rights shall lapse or be deemed to have lapsed in annual installments of
10,000 shares per year, starting with the first anniversary of the date of
grant, provided the director has continuously served as a director of the
Company, Thermo Electron or any subsidiary of Thermo Electron since the grant
date. These options expire on the fifth anniversary of the grant date, unless
the director dies, ceases to be an eligible director or otherwise ceases to
serve as a director of the Company, Thermo Electron or any subsidiary of
Thermo Electron prior to that date.

Commencing in 2000, eligible directors will also receive an annual grant of
options to purchase 1,000 shares of Common Stock, provided the Common Stock is
then publicly traded. The annual grant would be made at the close of business
on the date of each annual meeting of shareholders of the Company to each
outside director then holding office, commencing with the annual meeting to be
held in 2000. Options evidencing annual grants may be exercised at any time
from and after the six-month anniversary of the date of grant and prior to the
expiration of the option on the third anniversary of the date of grant. Shares
acquired upon exercise of the options would be subject to repurchase by the
Company at the exercise price if the recipient ceased to serve as a director
of the Company or any other Thermo Electron company prior to the first
anniversary of the date of grant for any reason other than death.

The exercise price for options granted under the Plan will be determined by
the average of the closing prices reported by the American Stock Exchange (or
such other principal exchange on which the Common Stock is then traded) for
the five trading days immediately preceding and including the date the option
is granted or, if the shares underlying the option are not so traded, at the
last price paid per share by independent investors in an arms' length
transaction with the Company prior to the date of grant.

Grants of stock options to outside directors have consisted of 40,000 shares
granted in November 1995 at an exercise price of $10.25 per share and 80,000
shares granted in February 1996 at an exercise price of $10.75 per share.

CERTAIN TRANSACTIONS

On November 22, 1995, November 30, 1995 and January 31, 1996, the Company
completed private placements primarily to outside investors of minority
investments in its Common Stock at purchase prices of $10.25 per share in the
November 1995 private placements and $10.75 per share in the January 1996
private placement. Crescent Holding GmbH purchased an aggregate of 200,000
shares of the Common Stock of the Company in such private placements. Crescent
Holding GmbH is indirectly controlled by Suliman S. Olayan, the father of
Hutham S. Olayan, a Director of the Company. In addition, the following
directors and officers purchased the number of shares of the Company's Common
Stock set forth below in such private placements: Anthony J. Pellegrino, Vice
Chairman and Director, 20,000 shares; Hal Kirshner, Chief Executive Officer,
President and Director, 100,000 shares; Robert C. Howard, Director, 2,500
shares; Firooz Rufeh, Director, 19,600 shares; and Kenneth Y. Tang, Director,
1,200 shares.

42
<PAGE>

EXECUTIVE COMPENSATION

COMPENSATION OF EXECUTIVE OFFICERS

Summary Compensation Table

The following table summarizes compensation for services to the Company in
all capacities awarded to, earned by or paid to the Company's Chief Executive
Officer for the last full fiscal year ("fiscal 1994") and for the nine-month
period from January 1, 1995 to September 30, 1995 ("fiscal 1995"), reflecting
a change in the Corporation's fiscal year end to September 30. No other
executive officer of the Company met the definition of "highly compensated"
within the meaning of the Securities and Exchange Commission's executive
compensation disclosure rules during these periods.

The Company is required to appoint certain executive officers and full-time
employees of Thermo Electron as executive officers of the Company in
accordance with the Thermo Electron Corporate Charter. The compensation for
these executive officers is determined and paid entirely by Thermo Electron.
The time and effort devoted by these individuals to the Company's affairs is
provided to the Company under the Services Agreement between the Company and
Thermo Electron. Accordingly, the compensation for these individuals is not
reported in the following table. See "Relationship and Conflicts of Interest
with Thermo Electron and ThermoTrex."

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION COMPENSATION
-------------------- ---------------------
FISCAL SECURITIES ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS UNDERLYING OPTIONS(2) COMPENSATION(3)
- --------------------------- ------ -------- -------- --------------------- ---------------
<S> <C> <C> <C> <C> <C>
Hal Kirshner
Chief Executive Officer
and President.......... 1995 $150,000(1) $200,000 150,000(TXM) $7,005
1994 200,000 180,000 15,000(TMO) 6,750
</TABLE>
- --------
(1) Compensation for executive officers is reviewed and determined annually at
the end of each calendar year. However, the salary data for fiscal 1995
reflects salary paid during the nine-month period from January 1, 1995 to
September 30, 1995, as a result of the change in the Company's fiscal
year-end.
(2) All options to purchase shares of the Company's Common Stock shown in the
table were granted after the end of fiscal 1995 but are included in the
table for clarity of presentation. In addition to receiving options to
purchase Common Stock (designated in the table as TXM), Mr. Kirshner was
granted options to purchase shares of the common stock of Thermo Electron
(designated in the table as TMO). Information with respect to options to
purchase the common stock of Thermo Electron reflect a three-for-two split
effected in May 1995.
(3) Represents the amount of matching contributions made by the individual's
employer on behalf of the Chief Executive Officer under the Thermo
Electron 401(k) plan.

43
<PAGE>

Stock Options Granted During Fiscal 1995

The following table sets forth certain information concerning grants of
stock options made during fiscal 1995 to the Chief Executive Officer. It has
not been the Company's policy in the past to grant stock appreciation rights,
and no such rights were granted during fiscal 1995.

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
NUMBER OF % OF STOCK PRICE
SHARES TOTAL OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM(2)
OPTIONS EMPLOYEES PRICE PER EXPIRATION ---------------------
NAME GRANTED(1) IN FISCAL YEAR SHARE DATE 5% 10%
---- ----------- -------------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Hal Kirshner............ 150,000(TXM) 14.4% $11.00 3/26/08 $1,312,500 $3,528,000
</TABLE>
- --------

(l) All options to purchase shares of the Common Stock of the Company
(designated in the table as TXM) were granted after the end of fiscal 1995
to the Chief Executive Officer but are included in the table for clarity
of presentation. No other options to purchase Common Stock of Thermo
Electron or its subsidiaries were granted in fiscal 1995 to the Chief
Executive Officer. The options to purchase shares of the Common Stock of
the Company are not exercisable until the earlier of (i) 90 days after the
effective date of the registration of the Common Stock under Section 12 of
the Exchange Act and (ii) nine years after the grant date. In all cases,
the shares acquired upon exercise are subject to repurchase by the
granting corporation at the exercise price if the optionee ceases to be
employed by the granting corporation or another Thermo Electron company.
The granting corporation may exercise its repurchase rights within six
months after the termination of the optionee's employment. The repurchase
rights lapse in their entirety on the ninth anniversary of the grant date,
unless the company's common stock becomes publicly-traded before that
date, in which event the repurchase rights are deemed to have lapsed 20%
per year commencing on the fifth anniversary of the grant date. The
granting corporation may permit the holders of all options to exercise
options and satisfy tax withholding obligations by surrendering shares
equal in fair market value to the exercise price or withholding
obligation.
(2) The amounts shown on this table represent hypothetical gains that could be
achieved for the respective options if exercised at the end of the option
term. These gains are based on assumed rates of stock appreciation of 5%
and 10%, compounded annually from the date the respective options were
granted to their expiration date. The gains shown are net of the option
exercise price, but do not include deductions for taxes or other expenses
associated with the exercise. Actual gains, if any, on stock option
exercises will depend on the future performance of the Common Stock, the
optionholders' continued employment through the option period and the date
on which the options are exercised.

44
<PAGE>

Stock Options Exercised During Fiscal Year 1995 and Fiscal Year-End Option
Values

The following table sets forth certain information concerning each exercise
of a stock option during fiscal 1995 and outstanding stock options held at the
end of fiscal 1995 by the Chief Executive Officer. No stock appreciation
rights were exercised or outstanding during fiscal 1995.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL OPTIONS AT FISCAL
YEAR-END YEAR-END
----------------- -----------------
NUMBER OF
SHARES
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME COMPANY EXERCISE REALIZED UNEXERCISABLE(1) UNEXERCISABLE
---- ------- ----------- ---------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
Hal Kirshner............ Trex Medical Corporation -- -- 0/150,000 $ --/300,000(2)
ThermoTrex 94,376 $1,953,583 149,500/0 3,541,613/--
ThermoLase -- -- 36,400/0 677,950/--
Thermo Electron -- -- 77,250/0(3) 1,857,192/--
</TABLE>
- --------
(l) Options to purchase shares of the Common Stock of the Company were granted
after the end of fiscal 1995 but are included in the table for clarity of
presentation. All of the options reported outstanding at the end of the
fiscal year were immediately exercisable, except the options to purchase
shares of the Company's Common Stock which are not exercisable until the
earlier of (i) 90 days after the effective date of the registration of
such company's Common Stock under Section 12 of the Exchange Act and (ii)
nine years after the grant date. In all cases, the shares acquired upon
exercise of the options reported in the table are subject to repurchase by
the granting corporation at the exercise price if the optionee ceases to
be employed by such corporation or another Thermo Electron company. The
granting corporation may exercise its repurchase rights within six months
after the termination of the optionee's employment. For companies whose
shares are not publicly traded, the repurchase rights lapse in their
entirety on the ninth anniversary of the grant date. For publicly traded
companies, the repurchase rights generally lapse ratably over a five to
ten year period, depending on the option term, which may vary from seven
to twelve years, provided that the optionee continues to be employed by
the granting corporation or another Thermo Electron company.

(2) No public market existed for the shares underlying the options as of
December 31, 1995. Accordingly, this value has been calculated on the
basis of an assumed market value of $13.00 per share, which is the mid-
point of the estimated public offering price range.
(3) Options to purchase 15,000 shares of the common stock of Thermo Electron
granted to Mr. Kirshner are subject to the same terms described in
footnote (1), except that the repurchase rights of the granting
corporation generally do not lapse until the tenth anniversary of the
grant date. In the event of the employee's death or involuntary
termination prior to the tenth anniversary of the grant date, the
repurchase rights of the granting corporation shall be deemed to have
lapsed ratably over a five-year period commencing with the fifth
anniversary of the grant date.

EMPLOYMENT AGREEMENTS

In connection with the acquisition of the LORAD Corporation ("LORAD") in
November 1992, the Company entered into an employment agreement with Mr. Hal
Kirshner. Mr. Kirshner's agreement called for Mr. Kirshner to serve as
President and Chief Operating Officer of LORAD until December 31, 1995, at a
base salary of $200,000 per year plus bonus.

45
<PAGE>

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

PRINCIPAL STOCKHOLDER

The following table sets forth certain information regarding the beneficial
ownership of the Common Stock of the Company as of May 6, 1996, and as
adjusted to reflect the sale of the shares of Common Stock offered in the
Offerings, by ThermoTrex, which is the only person or entity that owns
beneficially more than 5% of the outstanding shares of Common Stock. See "Risk
Factors--Control by ThermoTrex."

<TABLE>
<CAPTION>
PERCENTAGE OF
NAME AND ADDRESS NUMBER OF SHARES OUTSTANDING SHARES
OF BENEFICIAL OWNER BENEFICIALLY OWNED BENEFICIALLY OWNED
------------------- ------------------ ------------------
<S> <C> <C>
ThermoTrex Corporation(1)................. 23,562,340(2) 92.3%
10455 Pacific Center Court
San Diego, CA 92121
</TABLE>
- --------

(l) ThermoTrex is a majority-owned subsidiary of Thermo Electron and,
therefore, Thermo Electron may be deemed a beneficial owner of the shares
of Common Stock beneficially owned by ThermoTrex. Thermo Electron
disclaims beneficial ownership of these shares. After the sale of the
Common Stock in the Offerings, ThermoTrex will beneficially own
approximately 80% of the outstanding Common Stock.

(2) Includes 3,307,888 shares of Common Stock issuable upon conversion of the
Convertible Note.

ThermoTrex has adopted a stock option plan with respect to the Common Stock
that it beneficially owns. Under this plan, options to purchase up to 400,000
shares of such stock may be granted to any person within the discretion of the
human resources committee of the Board of Directors of ThermoTrex, including
officers and key employees of ThermoTrex.

MANAGEMENT

The following table sets forth certain information regarding the beneficial
ownership of the Common Stock of the Company as of January 1, 1996 as well as
information regarding the beneficial ownership of the common stock of
ThermoTrex and Thermo Electron, as of January 1, 1996, with respect to (i)
each of the Company's directors, (ii) the Chief Executive Officer, and (iii)
all directors and executive officers of the Company as a group.

<TABLE>
<CAPTION>
TREX MEDICAL THERMOTREX THERMO ELECTRON
NAME(1) CORPORATION(2) CORPORATION(3) CORPORATION(4)
- ------- -------------- -------------- ---------------
<S> <C> <C> <C>
Gary S. Weinstein............... 0 0 225
Anthony J. Pellegrino........... 20,000 1,179,621 77,250
Hal Kirshner.................... 100,000 151,177 77,973
Elias P. Gyftopoulos............ 0 4,500 46,380
John N. Hatsopoulos............. 0 33,194 478,355
Robert C. Howard................ 2,500 35,554 134,593
Earl L. Lewis................... 0 0 106,273
James W. May, Jr................ 0 0 0
Hutham S. Olayan................ 0 4,500 14,420
Firooz Rufeh.................... 19,600 101,788 88,076
Kenneth Y. Tang................. 1,200 79,203 30,399
All directors and executive
officers as a group (12
persons)....................... 143,300 1,589,537 942,314
</TABLE>
- --------
(l) Except as reflected in the footnotes to this table, shares of Common Stock
and common stock of ThermoTrex and Thermo Electron beneficially owned
consist of shares owned by the indicated person or by that person for the
benefit of minor children, and all share ownership involves sole voting
and investment power.
(2) Certain officers and directors have been granted options to purchase
496,000 shares of Common Stock; however, these options will not become
exercisable until 90 days after the Offerings. Shares beneficially owned
by Ms. Olayan do not include 100,000 shares owned by Crescent Holding
GmbH, a member of the

46
<PAGE>

Olayan Group. Crescent Holding GmbH is indirectly controlled by Suliman S.
Olayan, Ms. Olayan's father. Mr. Olayan disclaims beneficial ownership of
the shares owned by Crescent Holding GmbH. No director or executive officer
beneficially owned more than 1% of the Common Stock outstanding as of such
date, and all directors and executive officers as a group beneficially
owned less than 1% of the Common Stock outstanding as of such date.

(3) Shares of the common stock of ThermoTrex beneficially owned by Mr.
Pellegrino, Mr. Kirshner, Dr. Gyftopoulos, Mr. Hatsopoulos, Mr. Howard,
Ms. Olayan, Mr. Rufeh, Dr. Tang and by all directors and executive
officers as a group include 134,500, 149,500, 4,500, 24,000, 31,320,
4,500, 66,000, 63,318 and 477,638 shares, respectively, that such person
or group has the right to acquire within 60 days of March 1, 1996, through
the exercise of stock options. Shares beneficially owned by Mr. Pellegrino
include 10,408 shares held in a trust of which Mr. Pellegrino's spouse is
the trustee. No director or executive officer beneficially owned more than
1% of the common stock of ThermoTrex outstanding as of January 1, 1996,
other than Mr. Pellegrino, who beneficially owned approximately 6.2% of
such common stock; all directors and executive officers as a group
beneficially owned 8.1% of such common stock outstanding as of such date.

(4) The shares of common stock of Thermo Electron have been adjusted to
reflect a three-for-two stock split effected in May 1995, but do not
reflect a proposed three-for-two split of such stock to be effected in the
form of a 50% stock dividend on June 5, 1996 to stockholders of record on
May 22, 1996. Shares of the common stock of Thermo Electron beneficially
owned by Mr. Pellegrino, Mr. Kirshner, Dr. Gyftopoulos, Mr. Hatsopoulos,
Mr. Howard, Mr. Lewis, Ms. Olayan, Mr. Rufeh, Dr. Tang and by all
directors and executive officers as a group include 77,250, 77,250, 5,250,
297,880, 40,185, 103,750, 5,250, 57,975, 28,650 and 693,440 shares,
respectively, that such person or group has the right to acquire within 60
days of January 1, 1996, through the exercise of stock options. Shares
beneficially owned by Mr. Hatsopoulos, Mr. Howard, Mr. Lewis, Mr. Rufeh,
Dr. Tang and by all directors and executive officers as a group include
1,225, 1,963, 617, 1,142, 538 and 5,485 full shares, respectively,
allocated through January 1, 1996 to their respective accounts maintained
pursuant to Thermo Electron's Employee Stock Purchase Plan of which the
trustees who have investment power over its assets are executive officers
of Thermo Electron. Shares beneficially owned by Mr. Hatsopoulos include
112,500 shares held by a QTIP trust of which Mr. Hatsopoulos is a trustee.
Shares beneficially owned by Ms. Olayan do not include 3,266,400 shares
owned by Crescent Holding GmbH, a member of the Olayan Group. Crescent
Holding GmbH is indirectly controlled by Suliman S. Olayan, Ms. Olayan's
father. Ms. Olayan disclaims beneficial ownership of the shares owned by
Crescent Holding GmbH. No director or executive officer beneficially owned
more than 1% of the common stock of Thermo Electron outstanding as of
January 1, 1996; all directors and executive officers as a group
beneficially owned 1.1% of the common stock of Thermo Electron outstanding
as of January 1, 1996.

47
<PAGE>

DESCRIPTION OF CAPITAL STOCK

As of May 6, 1996, the Company had 50,000,000 shares of Common Stock
authorized for issuance, of which 22,216,452 were issued and outstanding. Each
share of Common Stock is entitled to pro rata participation in distributions
upon liquidation and to one vote on all matters submitted to a vote of
shareholders. Dividends may be paid to the holders of Common Stock when and if
declared by the Board of Directors out of funds legally available therefor.
Holders of Common Stock have no preemptive, subscription, redemption,
conversion or similar rights. The outstanding shares of Common Stock are, and
the shares offered hereby when issued will be, legally issued, fully paid and
nonassessable.

The shares of Common Stock have noncumulative voting rights. As a result,
the holders of more than 50% of the shares voting can elect all the directors
if they so choose, and in such event, the holders of the remaining shares
cannot elect any directors. Upon completion of the Offerings, ThermoTrex will
continue to beneficially own at least a majority of the outstanding Common
Stock, and will have the power to elect all of the members of the Company's
Board of Directors. ThermoTrex is a majority-owned subsidiary of Thermo
Electron and, therefore, Thermo Electron may be deemed a beneficial owner of
the shares of Common Stock beneficially owned by ThermoTrex. Thermo Electron
disclaims beneficial ownership of these shares.

The Company's Certificate of Incorporation contains certain provisions
permitted under the General Corporation Law of Delaware relating to the
liability of directors. These provisions eliminate a director's liability for
monetary damages for a breach of fiduciary duty, except in certain
circumstances involving wrongful acts, such as the breach of a director's duty
of loyalty or acts or omissions which involve intentional misconduct or a
knowing violation of law. The Company's By-Laws also contains provisions to
indemnify the directors and officers of the Company to the fullest extent
permitted by the General Corporation Law of Delaware. The Company believes
that these provisions will assist the Company in attracting and retaining
qualified individuals to serve as directors and officers.

The transfer agent and registrar for the Common Stock is American Stock
Transfer & Trust Company.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offerings, there will be 25,866,452 shares of Common
Stock of the Company outstanding (assuming no exercise of the Underwriters'
over-allotment option and the exercise of all Rights and other than those
distributed to Thermo Electron). The shares issued in the Offerings will be
freely tradable without restriction or further registration under the
Securities Act of 1933, as amended (the "Securities Act"), except that any
shares purchased in the Offerings by affiliates of the Company, as that term
is defined in Rule 144 under the Securities Act (an "Affiliate"), may
generally only be resold in compliance with applicable provisions of Rule 144.

The Company has agreed, pursuant to a Stock Purchase Agreement with the
shareholders of the Company other than ThermoTrex, to file a registration
statement under the Securities Act covering the sale of the 1,962,000 shares
of Common Stock owned by them (the "Registrable Shares") within 120 days of
the closing of the Underwritten Public Offering. All fees, costs and expenses
of the registration of the Registrable Shares will be paid by the Company. See
"Risk Factors--Significant Additional Shares Eligible for Sale After the
Offerings."

As of May 6, 1996, ThermoTrex owned 20,254,452 of the outstanding shares of
Common Stock. Thermo Electron, ThermoTrex and the Company have agreed, without
the prior written consent of the Representatives of Underwriters, not to
offer, sell or otherwise dispose of any shares of Common Stock within a 180-
day period after the date of this Prospectus, other than (i) shares of Common
Stock to be sold to Underwriters in the Offerings, (ii) the issuance of
options to purchase Common Stock pursuant to existing stock-based compensation
plans, (iii) shares of Common Stock which may be sold to ThermoTrex, (iv) the
issuances of shares of Common Stock in consideration for the acquisition of
one or more businesses (provided that such Common Stock may not

48
<PAGE>

be resold prior to the expiration of the 180-day period referenced above), and
(v) shares issued upon the closing of the Rights Offering. So long as
ThermoTrex is able to elect a majority of the Board of Directors it will be
able to cause the Company at any time to register under the Securities Act all
or a portion of the Common Stock owned by ThermoTrex or its affiliates, in
which case it would be able to sell such shares without restriction upon
effectiveness of the registration statement.

In general, under Rule 144 as currently in effect, beginning approximately
90 days after the effective date of the Registration Statement of which this
Prospectus is a part, a stockholder, including an Affiliate, who has
beneficially owned his or her restricted securities (as that term is defined
in Rule 144) for at least two years from the later of the date such securities
were acquired from the Company or (if applicable) the date they were acquired
from an Affiliate is entitled to sell, within any three-month period, a number
of such shares that does not exceed the greater of (i) 1% of the then
outstanding shares of Common Stock (approximately 258,664 after the Offerings)
or (ii) the average weekly trading volume in the Common Stock during the four
calendar weeks preceding the date on which notice of such sale was filed
pursuant to Rule 144 provided certain requirements concerning availability of
public information, manner of sale and notice of sale are satisfied. In
addition, under Rule 144(k), if a period of at least three years has elapsed
between the later of the date restricted securities were acquired from the
Company or (if applicable) the date they were acquired from an Affiliate of
the Company, a stockholder who is not an Affiliate of the Company at the time
of sale and has not been an Affiliate of the Company for at least three months
prior to the sale is entitled to sell the shares immediately without
compliance with the foregoing requirements under Rule 144. The Securities and
Exchange Commission has proposed an amendment to Rule 144 which would reduce
the holding period required for shares subject to Rule 144 to become eligible
for sale in the public market from two years to one year, and from three years
to two years in the case of Rule 144(k).

The Company has reserved 1,925,000 shares of Common Stock for grants under
its existing stock-based compensation plans. As of May 6, 1996 the Company had
options outstanding to purchase up to 1,161,000 shares of Common Stock to
certain of its officers and directors at a weighted average exercise price of
$10.96 per share. Ninety days after the completion of the Company's initial
public offering such options will become immediately exercisable, subject to
the right of the Company to repurchase shares at the exercise price if the
optionee ceases to be employed by the Company. This repurchase right lapses
ratably (on an annual basis) over a five to ten year period depending upon the
term of the option. As of May 6, 1996, the repurchase right had lapsed as to
no shares issuable upon exercise of outstanding options. The Company has
reserved 764,000 shares for future grant under plans. The Company intends to
file registration statements under the Securities Act to register all shares
of Common Stock issuable under such plans. Shares covered by these
registration statements that are not subject to transferability restrictions
will be eligible for sale in the public market immediately upon the filing of
such registration statements, subject to Rule 144 limitations applicable to
Affiliates as noted above.

Prior to the Offerings, there has been no public market for the Common Stock
of the Company, and no prediction can be made as to the effect, if any, that
market sales of shares of Common Stock or the availability of shares for sale
will have on the market price of the Common Stock prevailing from time to
time. Nevertheless, sales of significant numbers of shares of the Common Stock
in the public market could adversely affect the market price of the Common
Stock and could impair the Company's future ability to raise capital through
an offering of its equity securities. See "Risk Factors--Significant
Additional Shares Eligible for Sale After the Offerings."

49
<PAGE>

UNDERWRITING

Subject to the terms and conditions set forth in the Underwriting Agreement,
each of the Underwriters named below, for whom NatWest Securities Limited,
Lehman Brothers Inc. and Oppenheimer & Co., Inc. are acting as Representatives
(the "Representatives"), has severally agreed to purchase from the Company the
following respective number of shares of Common Stock at the public offering
price less the underwriting discounts and commissions set forth on the cover
page of this Prospectus:

<TABLE>
<CAPTION>
UNDERWRITER NUMBER OF SHARES
----------- ----------------
<S> <C>
NatWest Securities Limited..................................
Lehman Brothers Inc. .......................................
Oppenheimer & Co., Inc. ....................................
---------
Total..................................................... 2,400,000
=========
</TABLE>

The Underwriting Agreement provides that the obligations of the Underwriters
are subject to certain conditions precedent. The nature of the Underwriters'
obligations is that they are committed to purchase all shares of Common Stock
offered in the Underwritten Public Offering if any such shares are purchased.

The closing of the Rights Offering is conditioned upon the closing of the
Underwritten Public Offering.

The Company has been advised by the Representatives that the Underwriters
propose to offer shares of Common Stock directly to the public at the public
offering price set forth on the cover page of this Prospectus, and to certain
selected dealers (who may include the Underwriters) at such price less a
selling concession not in excess of $ per share. The Underwriters may allow
and such dealers may re-allow a concession not in excess of $ per share to
certain other dealers (who may include the Underwriters). After commencement
of the offering to the public, the public offering price and other selling
terms may be changed by the Representatives. The Representatives have informed
the Company that the Underwriters do not intend to confirm sales of shares of
Common Stock to any accounts over which they exercise discretionary authority.

The Company has granted to the several Underwriters an option, exercisable
not later than 30 days after the date of this Prospectus, to purchase up to
360,000 additional shares of Common Stock at the public offering price, less
the aggregate underwriting discounts and commissions, set forth on the cover
page of this Prospectus, solely to cover over-allotments. To the extent that
the Underwriters exercise such option, each of the Underwriters will be
committed, subject to certain conditions, to purchase a number of option
shares proportionate to such Underwriter's initial commitment.

The Underwriters have reserved for sale at the initial public offering price
up to 240,000 shares which may be sold to employees of the Company or
ThermoTrex, persons associated with the Company or ThermoTrex and persons
affiliated with any director, officer or employee of the Company or
ThermoTrex. Such reserved shares will be sold to such purchasers on the
condition that each purchaser will agree not to sell or otherwise dispose of
the shares purchased for a period of one year from the date of purchase. The
number of shares available for sale to the general public will be reduced to
the extent any reserved shares are so purchased. Any reserved shares not so
purchased will be offered to the public by the Underwriters on the same basis
as the other shares offered hereby.

The Underwriting Agreement provides that the Company, ThermoTrex and Thermo
Electron will indemnify the Underwriters against certain liabilities,
including liabilities under the Securities Act, and to contribute to payments
that the Underwriters may be required to make in respect thereof.

50
<PAGE>

Thermo Electron, ThermoTrex and the Company have also agreed that they will
not, without the Representatives' prior written consent, sell or otherwise
dispose of any shares of Common Stock within a 180-day period after the date
of this Prospectus, other than (i) shares of Common Stock to be sold to the
Underwriters in the Offerings, (ii) the grant of options to purchase Common
Stock pursuant to currently existing stock-based compensation plans, (iii)
shares of Common Stock which may be sold to ThermoTrex, (iv) the issuance of
shares of Common Stock as in consideration for the acquisition of one or more
businesses (provided that such Common Stock may not be resold prior to the
expiration of the 180-day period referenced above), and (v) shares issued upon
the closing of the Rights Offering. See "Risk Factors--Significant Additional
Shares Eligible for Sale After the Offerings" and "Shares Eligible for Future
Sale."

Certain of the Underwriters from time to time have performed, and expect to
provide in the future, various investment banking services for Thermo Electron
and its subsidiaries.

NatWest Securities Limited, a United Kingdom broker-dealer and a member of
the Securities and Futures Authority Limited, has agreed that, as part of the
distribution of the shares of Common Stock offered hereby and subject to
certain exceptions, it will not offer or sell any shares of Common Stock
within the United States, its territories or possessions or to persons who are
citizens thereof or residents therein. The Underwriting Agreement does not
limit sales of shares of Common Stock offered hereby outside of the United
States.

NatWest Securities Limited has also represented and agreed that (i) it has
not offered or sold and will not offer or sell any Common Stock to persons in
the United Kingdom prior to admission of the Common Stock to listing in
accordance with Part IV of the Financial Services Act 1986 (the "Act") except
to persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the purpose
of their businesses or otherwise in circumstances which have not resulted and
will not result in an offer to the public in the United Kingdom within the
meaning of the Public Offers of Securities Regulations 1995 or the Act, (ii)
it has complied and will comply with all applicable provisions of the Act with
respect to anything done by it in relation to the Common Stock in, from or
otherwise involving the United Kingdom, and (iii) it has only issued or passed
on, and will only issue or pass on, in the United Kingdom any document
received by it in connection with the issue of the Common Stock, other than
any document which consists of or any part of listing particulars,
supplementary listing particulars or any other document required or permitted
to be published by listing rules under Part IV of the Act, to a person who is
of a kind described in Article 11(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1995 or is a person to whom the
document may otherwise lawfully be issued or passed on.

Prior to the Offerings there has been no public market for the Common Stock.
The initial public offering price for the Common Stock will be determined by
negotiation among the Company and the Representatives. Among the factors to be
considered in determining the initial public offering price will be prevailing
market and economic conditions, estimates of the business potential and
prospects of the Company, the state of the Company's business operations, an
assessment of the Company's management, the consideration of the above factors
in relation to market valuations of companies in related businesses and other
factors deemed relevant. The estimated initial public offering price range set
forth on the cover page of this preliminary prospectus is subject to change as
a result of market conditions and other factors.

LEGAL OPINIONS

The validity of the issuance of the Common Stock offered in the Offerings
will be passed upon for the Company by Seth H. Hoogasian, Esq., General
Counsel of Thermo Electron, ThermoTrex and the Company, and certain legal
matters in connection with the Underwritten Public Offering will be passed
upon for the Underwriters by Testa, Hurwitz & Thibeault, Boston,
Massachusetts. Mr. Hoogasian owns or has the right to acquire 6,000 shares of
Common Stock, 7,800 shares of common stock of ThermoTrex and 82,385 shares of
common stock of Thermo Electron.

51
<PAGE>

EXPERTS

The Consolidated Financial Statements of the Company, Bennett and XRE
included in this Prospectus and the financial statement schedule included in
the Registration Statement of which this Prospectus forms a part have been
audited by Arthur Andersen LLP, independent public accountants, to the extent
and for the periods as indicated in their reports with respect thereto, and
are included herein in reliance upon the authority of said firm as experts in
accounting and auditing in giving said reports.

The Consolidated Financial Statements of Continental included in this
Prospectus have been audited by Topel Forman L.L.C., independent public
accountants, to the extent and for the periods as indicated in their reports
with respect thereto, and are included herein in reliance upon the authority
of said firm as experts in accounting and auditing in giving said reports.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement (which term shall include all
amendments, exhibits and schedules thereto) on Form S-1 under the Securities
Act with respect to the shares of Common Stock offered hereby. This
Prospectus, which constitutes a part of the Registration Statement, does not
contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and
regulations of the Commission, to which Registration Statement reference is
hereby made. Although statements made in this Prospectus as to the contents of
any contract, agreement or other document referred to set forth all material
elements of such documents, such statements are not necessarily complete. With
respect to each such contract, agreement or other document filed as an exhibit
to the Registration Statement, reference is made to the exhibit for a more
complete description of the matter involved, and each such statement, although
setting forth all material elements of such documents, shall be deemed
qualified by such reference. The Registration Statement and the exhibits
thereto may be inspected and copied at prescribed rates at the public
reference facilities maintained by the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the regional
offices of the Commission located at Seven World Trade Center, 13th Floor, New
York, New York 10048 and 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661.

REPORTS TO SECURITY HOLDERS

The Company intends to furnish holders of the Common Stock offered hereby
with annual reports containing financial statements audited by an independent
public accounting firm and with quarterly reports containing unaudited summary
financial statements for each of the first three quarters of each fiscal year.

52
<PAGE>

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<S> <C>
TREX MEDICAL CORPORATION
Report of Independent Public Accountants................................ F-2
Consolidated Statement of Income for the years ended January 1, 1994 and
December 31, 1994, for the nine months ended October 1, 1994 and Sep-
tember 30, 1995 and for the six months ended April 1, 1995 and March
30, 1996............................................................... F-3
Consolidated Balance Sheet as of December 31, 1994, September 30, 1995
and
March 30, 1996......................................................... F-4
Consolidated Statement of Cash Flows for the years ended January 1, 1994
and December 31, 1994, for the nine months ended October 1, 1994 and
September 30, 1995 and for the six months ended April 1, 1995 and March
30, 1996............................................................... F-5
Consolidated Statement of Shareholders' Investment for the years ended
January 1, 1994 and December 31, 1994, for the nine months ended
September 30, 1995 and for the six months ended March 30, 1996......... F-6
Notes to Consolidated Financial Statements.............................. F-7
BENNETT X-RAY CORPORATION
Report of Independent Public Accountants................................ F-15
Consolidated Statement of Operations for the fiscal years ended February
28, 1993, 1994 and 1995, for the six months ended August 31, 1994 and
for the period from March 1, 1995 through September 14, 1995........... F-16
Consolidated Balance Sheet as of February 28, 1994 and 1995 ............ F-17
Consolidated Statement of Cash Flows for the fiscal years ended February
28, 1993, 1994 and 1995, for the six months ended August 31, 1994 and
for the period from March 1, 1995 through September 14, 1995........... F-18
Consolidated Statement of Shareholders' Investment for the fiscal years
ended February 28, 1993, 1994 and 1995 and for the period from March 1,
1995 through September 14, 1995........................................ F-19
Notes to Consolidated Financial Statements.............................. F-20
XRE CORPORATION
Report of Independent Public Accountants................................ F-23
Consolidated Statement of Income for the year ended December 31, 1995
and for the three months ended April 1, 1995 and March 30, 1996........ F-24
Consolidated Balance Sheet as of December 31, 1995 and March 30, 1996... F-25
Consolidated Statement of Cash Flows for the year ended December 31,
1995 and for the three months ended April 1, 1995 and March 30, 1996... F-26
Consolidated Statement of Stockholders' Investment for the year ended
December 31, 1995 and for the three months ended March 30, 1996........ F-27
Notes to Consolidated Financial Statements.............................. F-28
CONTINENTAL GROUP
Report of Independent Public Accountants................................ F-32
Combined Statement of Income for the years ended December 31, 1994 and
1995 and for the three months ended March 31, 1995 and 1996............ F-33
Combined Balance Sheet as of December 31, 1994 and 1995 and March 31,
1996................................................................... F-34
Combined Statement of Cash Flows for the years ended December 31, 1994
and 1995 and for the three months ended March 31, 1995 and 1996........ F-35
Combined Statement of Stockholders' Equity for the years ended December
31, 1994 and 1995 and for the three months ended March 31, 1996........ F-36
Notes to Combined Financial Statements.................................. F-37
</TABLE>

PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION OF TREX MEDICAL CORPORATION,
BENNETT X-RAY CORPORATION, XRE CORPORATION AND CONTINENTAL GROUP (UNAUDITED)

<TABLE>
<S> <C>
Pro Forma Combined Condensed Statement of Income for the nine months
ended
September 30, 1995..................................................... F-41
Pro Forma Combined Condensed Statement of Income for the six months
ended
March 30, 1996......................................................... F-42
Pro Forma Combined Condensed Balance Sheet as of March 30, 1996......... F-43
Notes to Pro Forma Combined Condensed Financial Statements.............. F-44
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Trex Medical Corporation:

We have audited the accompanying consolidated balance sheet of Trex Medical
Corporation (a Delaware corporation and 100%-owned subsidiary of ThermoTrex
Corporation) and subsidiaries as of December 31, 1994 and September 30, 1995,
and the related consolidated statements of income, cash flows and
shareholders' investment for the years ended January 1, 1994 and December 31,
1994 and for the nine months ended September 30, 1995. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards 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. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Trex
Medical Corporation and subsidiaries as of December 31, 1994 and September 30,
1995 and the results of their operations and their cash flows for the years
ended January 1, 1994 and December 31, 1994 and for the nine months ended
September 30, 1995, in conformity with generally accepted accounting
principles.

Arthur Andersen LLP

Boston, Massachusetts

March 26, 1996 (except with respect
to certain matters discussed in Note
9, as to which the date is May 6,
1996)

F-2
<PAGE>

TREX MEDICAL CORPORATION

CONSOLIDATED STATEMENT OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
NINE MONTHS ENDED SIX MONTHS ENDED
------------------------- -------------------
OCTOBER 1, SEPTEMBER 30, APRIL 1, MARCH 30,
1993 1994 1994 1995 1995 1996
------- ------- ----------- ------------- -------- ---------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Revenues (includes $350
and $2,240 to an af-
filiated company in
the nine months ended
September 30, 1995 and
the six months ended
March 30, 1996)
(Note 7).............. $37,519 $54,410 $39,196 $55,291 $31,315 $66,829
------- ------- ------- ------- ------- -------
Costs and Operating Ex-
penses:
Cost of revenues
(includes $175 and
$1,120 for
affiliated company
revenues in the nine
months ended
September 30, 1995
and the six months
ended March 30,
1996)............... 18,589 27,794 19,654 28,180 16,125 37,592
Selling, general and
administrative
expenses (Note 6)... 9,788 13,272 9,794 12,174 7,117 13,695
Research and develop-
ment
expenses (Note 6)... 7,182 10,662 7,320 8,595 6,270 8,170
------- ------- ------- ------- ------- -------
35,559 51,728 36,768 48,949 29,512 59,457
------- ------- ------- ------- ------- -------
Operating Income....... 1,960 2,682 2,428 6,342 1,803 7,372
Interest Income........ -- -- -- -- -- 440
Interest Expense, Re-
lated Party
(Note 1).............. -- -- -- -- -- (872)
Other Income (Expense),
Net................... (158) (22) (11) 22 (2) 35
------- ------- ------- ------- ------- -------
Income Before Provision
for
Income Taxes.......... 1,802 2,660 2,417 6,364 1,801 6,975
Provision for Income
Taxes (Note 4)........ 975 1,466 1,332 2,881 835 3,241
------- ------- ------- ------- ------- -------
Net Income............. $ 827 $ 1,194 $ 1,085 $ 3,483 $ 966 $ 3,734
======= ======= ======= ======= ======= =======
Earnings per Share..... $ .04 $ .06 $ .05 $ .17 $ .05 $ .17
======= ======= ======= ======= ======= =======
Weighted Average
Shares................ 20,151 20,151 20,151 20,151 20,151 21,547
======= ======= ======= ======= ======= =======
</TABLE>

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

F-3
<PAGE>

TREX MEDICAL CORPORATION

CONSOLIDATED BALANCE SHEET
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30, MARCH 30,
1994 1995 1996
------------ ------------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents............. $ -- $ 202 $ 19,245
Accounts receivable, less allowances
of $525, $870, and $921.............. 9,909 14,937 18,936
Inventories........................... 6,722 16,667 18,615
Prepaid expenses...................... 158 113 938
Due from Thermo Electron Corporation
and affiliated companies............. -- -- 1,401
Prepaid income taxes (Note 4)......... 2,649 3,474 3,474
-------- -------- --------
19,438 35,393 62,609
-------- -------- --------
Property, Plant and Equipment, at Cost,
Net.................................... 6,310 7,811 8,628
-------- -------- --------
Cost in Excess of Net Assets of Acquired
Companies (Note 2)..................... 22,252 59,170 58,338
-------- -------- --------
$ 48,000 $102,374 $129,575
======== ======== ========
LIABILITIES AND SHAREHOLDERS'
INVESTMENT
Current Liabilities:
Accounts payable...................... $ 3,742 $ 7,381 $ 7,671
Accrued payroll and employee bene-
fits................................. 991 2,338 2,078
Accrued warranty costs................ 1,126 2,991 3,434
Customer deposits..................... 742 771 1,496
Accrued income taxes.................. -- -- 2,723
Other accrued expenses (Note 2)....... 4,210 8,245 9,652
Due to Thermo Electron Corporation and
affiliated companies................. 43 496 --
-------- -------- --------
10,854 22,222 27,054
-------- -------- --------
Deferred Income Taxes (Note 4).......... 113 142 89
-------- -------- --------
Subordinated Convertible Note, Due to
Parent Company (Notes 1 and 9)......... -- -- 39,000
-------- -------- --------
Commitments and Contingencies (Notes 2,
5, 6 and 8)
Shareholders' Investment:
Net parent company investment......... 37,033 80,010 --
Common stock, $.01 par value,
50,000,000 shares authorized;
22,216,452 shares issued and
outstanding.......................... -- -- 222
Capital in excess of par value........ -- -- 59,476
Retained earnings..................... -- -- 3,734
-------- -------- --------
37,033 80,010 63,432
-------- -------- --------
$ 48,000 $102,374 $129,575
======== ======== ========
</TABLE>

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

F-4
<PAGE>

TREX MEDICAL CORPORATION

CONSOLIDATED STATEMENT OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
NINE MONTHS ENDED SIX MONTHS ENDED
------------------------- ------------------
OCTOBER 1, SEPTEMBER 30, APRIL 1, MARCH 30,
1993 1994 1994 1995 1995 1996
------- ------- ----------- ------------- -------- ---------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income............. $ 827 $ 1,194 $ 1,085 $ 3,483 $ 966 $ 3,734
Adjustments to
reconcile net income
to net cash provided
by (used in) operating
activities:
Depreciation and
amortization......... 1,207 1,491 1,104 1,315 809 1,463
Provision for losses
on accounts
receivable........... -- 175 125 25 50 51
Increase (decrease)
in deferred income
taxes................ (22) 32 -- 29 32 (53)
Other noncash items... 3 -- -- (15) -- (29)
Changes in current
accounts, excluding
the effects of
acquisition:
Accounts
receivable......... (2,132) (3,316) (2,704) (693) (1,793) (4,050)
Inventories......... (792) 153 (790) (1,476) (799) (1,948)
Other current as-
sets............... (150) 125 49 (82) (756) (771)
Accounts payable.... (802) 1,861 140 621 885 290
Other current lia-
bilities........... 85 411 1,994 444 (964) 3,138
------- ------- ------- ------- ------ -------
Net cash provided by
(used in)
operating
activities.......... (1,776) 2,126 1,003 3,651 (1,570) 1,825
------- ------- ------- ------- ------ -------
INVESTING ACTIVITIES:
Purchases of property,
plant and equipment... (1,754) (1,300) (724) (957) (893) (1,505)
Proceeds from sale of
property, plant and
equipment............. 27 29 29 14 31 35
------- ------- ------- ------- ------ -------
Net cash used in
investing
activities.......... (1,727) (1,271) (695) (943) (862) (1,470)
------- ------- ------- ------- ------ -------
FINANCING ACTIVITIES:
Net proceeds from
private placements of
Company common stock
(Note 9).............. -- -- -- -- -- 18,688
Net transfers (to) from
parent company ....... 3,503 (855) (308) (2,506) 2,432 --
------- ------- ------- ------- ------ -------
Net cash provided by
(used in)
financing
activities.......... 3,503 (855) (308) (2,506) 2,432 18,688
------- ------- ------- ------- ------ -------
Increase in Cash and
Cash Equivalents....... -- -- -- 202 -- 19,043
Cash and Cash 202
Equivalents at
Beginning of Period.... -- -- -- -- --
------- ------- ------- ------- ------ -------
Cash and Cash
Equivalents at End of
Period................. $ -- $ -- $ -- $ 202 $ -- $19,245
======= ======= ======= ======= ====== =======
CASH PAID FOR:
Interest............... $ -- $ -- $ -- $ -- $ -- $ 882
======= ======= ======= ======= ====== =======
Income taxes........... $ -- $ -- $ -- $ -- $ -- $ 279
======= ======= ======= ======= ====== =======
NONCASH ACTIVITIES:
Contribution of land
and building from
parent company........ $ 3,728 $ -- $ -- $ -- $ -- $ --
======= ======= ======= ======= ====== =======
Transfer of acquired
business from parent
company, net of cash
(Note 2).............. $ -- $ -- $ -- $42,000 $ -- $ --
======= ======= ======= ======= ====== =======
Issuance of subordi-
nated convertible note
to parent
company (Note 1)...... $ -- $ -- $ -- $ -- $ -- $42,000
======= ======= ======= ======= ====== =======
Conversion of subordi-
nated convertible note
by
parent company (Note
9).................... $ -- $ -- $ -- $ -- $ -- $ 3,000
======= ======= ======= ======= ====== =======
</TABLE>

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

F-5
<PAGE>

TREX MEDICAL CORPORATION

CONSOLIDATED STATEMENT OF SHAREHOLDERS' INVESTMENT
(IN THOUSANDS)

<TABLE>
<CAPTION>
NET PARENT COMMON CAPITAL IN
COMPANY STOCK, $.01 EXCESS OF RETAINED
INVESTMENT PAR VALUE PAR VALUE EARNINGS
---------- ----------- ---------- --------
<S> <C> <C> <C> <C>
BALANCE JANUARY 2, 1993............ $ 28,636 $ -- $ -- $ --
Net income......................... 827 -- -- --
Contribution of land and building
from parent company............... 3,728 -- -- --
Net transfers from parent company.. 3,503 -- -- --
-------- ----- -------- ------
BALANCE JANUARY 1, 1994............ 36,694 -- -- --
Net income......................... 1,194 -- -- --
Net transfers to parent company.... (855) -- -- --
-------- ----- -------- ------
BALANCE DECEMBER 31, 1994.......... 37,033 -- -- --
Net income......................... 3,483 -- -- --
Net transfers to parent company.... (2,506) -- -- --
Transfer of acquired business from
parent company, net of cash (Note
2)................................ 42,000 -- -- --
-------- ----- -------- ------
BALANCE SEPTEMBER 30, 1995......... 80,010 -- -- --
<CAPTION>
(UNAUDITED)
<S> <C> <C> <C> <C>
Issuance of subordinated
convertible note to parent company
(Note 1).......................... -- -- (42,000) --
Capitalization of Company.......... (80,010) 200 79,810 --
Net income......................... -- -- -- 3,734
Net proceeds from private
placements of Company common stock
(Note 9).......................... -- 19 18,669 --
Conversion of subordinated
convertible note by parent company
(Note 9).......................... -- 3 2,997 --
-------- ----- -------- ------
BALANCE MARCH 30, 1996............. $ -- $ 222 $ 59,476 $3,734
======== ===== ======== ======
</TABLE>

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

F-6
<PAGE>

TREX MEDICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Trex Medical Corporation (the "Company") designs, manufactures and markets
mammography equipment and minimally invasive stereotactic needle biopsy
systems used in the detection of breast cancer. The Company also designs and
manufactures general X-ray equipment. The Company's mammography and
stereotactic needle biopsy systems are used by radiologists and physicians in
offices, hospitals and dedicated breast-care centers, and its general
radiography systems are used by physicians and radiologists, both in office
and hospital settings, as well as by veterinarians and chiropractors.

Relationship with ThermoTrex Corporation and Thermo Electron Corporation

The Company was incorporated in September 1995 as a wholly owned subsidiary
of ThermoTrex Corporation ("ThermoTrex"). On October 2, 1995, ThermoTrex
transferred to the Company all of the outstanding capital stock of Bennett X-
Ray Corporation ("Bennett"), in exchange for a $42,000,000 principal amount
4.2% subordinated convertible note, due 2000, convertible into shares of the
Company's common stock at $11.79 per share. On October 16, 1995, ThermoTrex
transferred to the Company the assets, liabilities and businesses of
ThermoTrex's Lorad division ("Lorad") and ThermoTrex's research and
development activities pertaining to its Sonic CT system, in exchange for
20,000,000 shares of the Company's common stock. ThermoTrex acquired Lorad and
Bennett in November 1992 and September 1995, respectively. As of September 30,
1995, ThermoTrex was a 51%-owned subsidiary of Thermo Electron Corporation
("Thermo Electron").

The accompanying financial statements include the assets, liabilities,
income and expenses of the Company as included in ThermoTrex's consolidated
financial statements.

Principles of Consolidation

The accompanying financial statements include the accounts of the Company
and its wholly owned subsidiaries. All material intercompany accounts and
transactions have been eliminated.

Fiscal Year

In September 1995, the Company changed its fiscal year-end from the Saturday
nearest December 31 to the Saturday nearest September 30. Accordingly, the
Company's transition period, which ended on September 30, 1995, is the 39-week
period from January 1, 1995 through September 30, 1995 (fiscal 1995), and
fiscal 1996 will be the 52-week period ending September 28, 1996. References
to 1993 and 1994 are for the fiscal years ended January 1, 1994 and December
31, 1994, respectively. Fiscal years 1993 and 1994 each included 52 weeks. The
unaudited statements of income and cash flows for the nine months ended
October 1, 1994 are presented for comparative purposes only and include 39
weeks.

Revenue Recognition

The Company recognizes revenues upon shipment of its products. The Company
provides a reserve for its estimate of warranty costs at the time of shipment.

Income Taxes

The Company and ThermoTrex have a tax allocation agreement under which the
Company is included in the consolidated income tax returns filed by
ThermoTrex. The agreement provides that in years in which the Company has
taxable income, it will pay to ThermoTrex amounts comparable to the taxes the
Company would have paid upon filing separate tax returns. If ThermoTrex's
equity ownership of the Company were to decrease below 80%, the Company would
file its own income tax returns.

F-7
<PAGE>

TREX MEDICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
In accordance with Statement of Financial Accounting Standards ("SFAS") No.
109, "Accounting for Income Taxes," the Company recognizes deferred income
taxes based on the expected future tax consequences of differences between the
financial statement basis and the tax basis of assets and liabilities,
calculated using enacted tax rates in effect for the year in which the
differences are expected to be reflected in the tax return.

Earnings per Share

Pursuant to Securities and Exchange Commission requirements, earnings per
share have been presented for all periods. Weighted average shares for all
periods include the 20,000,000 shares issued to ThermoTrex in connection with
the initial capitalization of the Company and the effect of the assumed
exercise of stock options issued within one year prior to the Company's
proposed initial public offering. Fully-diluted earnings per share have not
been presented as they do not materially differ from primary earnings per
share.

Cash and Cash Equivalents

Prior to its incorporation in September 1995, the Company's cash receipts
and disbursements were combined with other ThermoTrex corporate cash
transactions and balances. Therefore, cash is not included in the accompanying
balance sheet as of December 31, 1994.

Inventories

Inventories are stated at the lower of cost (on a first-in, first-out basis)
or market value and include materials, labor and manufacturing overhead. The
components of inventories are as follows:

<TABLE>
<CAPTION>
1994 1995
------- -------
(IN THOUSANDS)
<S> <C> <C>
Raw materials and supplies.................................. $ 3,576 $ 9,414
Work in process............................................. 1,472 5,195
Finished goods.............................................. 1,674 2,058
------- -------
$ 6,722 $16,667
======= =======
</TABLE>

Property, Plant and Equipment

The costs of additions and improvements are capitalized, while maintenance
and repairs are charged to expense as incurred. The Company provides for
depreciation and amortization principally using the straight-line method over
the estimated useful lives of the property as follows: building, 30 years;
machinery and equipment, 3 to 7 years; and leasehold improvements, the shorter
of the term of the lease or the life of the asset. Property, plant and
equipment consist of the following:

<TABLE>
<CAPTION>
1994 1995
------- -------
(IN THOUSANDS)
<S> <C> <C>
Land......................................................... $1,000 $1,000
Building..................................................... 2,728 2,728
Machinery, equipment and leasehold improvements.............. 4,000 6,211
------- -------
7,728 9,939
Less: Accumulated depreciation and amortization.............. 1,418 2,128
------- -------
$6,310 $7,811
======= =======
</TABLE>

F-8
<PAGE>

TREX MEDICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Cost in Excess of Net Assets of Acquired Companies

The excess of cost over the fair value of net assets of acquired companies is
amortized using the straight-line method over 40 years. Accumulated
amortization was $1,357,000 and $1,935,000 as of December 31, 1994 and
September 30, 1995, respectively. The Company assesses the future useful life
of this asset whenever events or changes in circumstances indicate that the
current useful life has diminished. The Company considers the future
undiscounted cash flows of the acquired businesses in assessing the
recoverability of this asset.

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Interim Financial Statements

The financial statements as of March 30, 1996, for the six-month periods
ended April 1, 1995 and March 30, 1996 and for the nine-month period ended
October 1, 1994, are unaudited but, in the opinion of management, reflect all
adjustments of a normal recurring nature necessary for a fair presentation of
results for these interim periods. The results of operations for the six-month
period ended March 30, 1996 are not necessarily indicative of the results to be
expected for the entire year.

2. Acquisitions

In September 1995, ThermoTrex acquired all of the outstanding capital stock
of Bennett for $42,865,000 in cash. Bennett is a manufacturer of high frequency
specialty and general purpose radiographic systems. This acquisition has been
accounted for using the purchase method of accounting, and Bennett's results of
operations have been included in the accompanying financial statements from the
date of acquisition. The cost of the acquisition exceeded the estimated fair
value of the acquired net assets by $37,496,000, which is being amortized over
40 years. Allocation of the purchase price was based on estimates of the fair
value of the net assets acquired and is subject to adjustment upon finalization
of the purchase price allocation. To date, no information has been gathered
that would cause the Company to believe that the final allocation of the
purchase price will be materially different than the preliminary estimate.

Based on unaudited data, the following table presents selected financial
information for the Company and Bennett on a pro forma basis, assuming the
companies had been combined since the beginning of 1994.
<TABLE>
<CAPTION>
Year Ended Nine Months Ended
December 31, September 30,
1994 1995
------------ -----------------
(In thousands,
except per share amounts)
<S> <C> <C>
Revenues.................... $96,943 $85,749
Net income (loss)........... (1,236) 2,224
Earnings (loss) per share... (.06) .11
</TABLE>

F-9

<PAGE>

TREX MEDICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The pro forma results are not necessarily indicative of future operations or
the actual results that would have occurred had the acquisition of Bennett
been made at the beginning of 1994. Additional pro forma information for the
Company and Bennett is included elsewhere in this Prospectus.

In November 1992, ThermoTrex acquired Lorad for $5.3 million in cash,
assumption of $6.7 million of pre-existing debt of Lorad, and shares of
ThermoTrex common stock and stock options valued at $12.3 million. In
addition, in March 1995, ThermoTrex made a cash payment of $2.3 million to the
holders of approximately 9.2% of Lorad's common stock who had earlier voted
against the acquisition, in exchange for their interest in Lorad.

Other accrued expenses in the accompanying balance sheet include $3.0
million as of December 31, 1994 and $4.0 million as of September 30, 1995, for
estimated reserves associated with acquisitions, including a reserve of $2.3
million at December 31, 1994 and September 30, 1995 for legal fees and other
costs associated with a patent infringement suit that existed prior to
ThermoTrex's acquisition of Lorad. This suit was brought by Fischer Imaging
Corporation ("Fischer"), which alleges that Lorad infringed a Fischer patent
on a precision mammographic needle-biopsy system. In connection with the
organization of the Company, ThermoTrex agreed to indemnify the Company for
any and all cash damages under this lawsuit, with respect to sales occurring
prior to October 16, 1995, the date Lorad was transferred to the Company. Any
payments received under such indemnity would be recorded as capital
contributions. While the Company believes that it has meritorious legal
defenses to the allegation, due to the inherent uncertainties of litigation,
the Company is unable to predict the outcome of this matter. Although an
unsuccessful resolution could have a material adverse effect on the Company's
results of operations, in the opinion of management any resolution will not
have a material adverse effect on the Company's financial position.

3. EMPLOYEE BENEFIT PLANS

Employee Stock Purchase Plan

Substantially all of the Company's full-time U.S. employees are eligible to
participate in an employee stock purchase plan sponsored by ThermoTrex. Prior
to the November 1995 plan year, shares of ThermoTrex's and Thermo Electron's
common stock could be purchased at the end of a 12-month plan year at 85% of
the fair market value at the beginning of the plan year, and the shares
purchased were subject to a one-year resale restriction. Effective November 1,
1995, the applicable shares of common stock may be purchased at 95% of the
fair market value at the beginning of the plan year, and the shares purchased
are subject to a six-month resale restriction. Shares are purchased through
payroll deductions of up to 10% of each participating employee's gross wages.

401(k) Savings Plan

The majority of the Company's full-time employees are eligible to
participate in Thermo Electron's 401(k) savings plan. Prior to 1994, the
Company's Lorad division participated in its own 401(k) savings plan.
Contributions to the Thermo Electron and the Lorad 401(k) savings plans are
made by both the employee and the Company. Company contributions are based
upon the level of employee contributions. The Company contributed and charged
to expense for these plans $111,000, $313,000 and $242,000 in 1993, 1994 and
fiscal 1995, respectively.

F-10
<PAGE>

TREX MEDICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

4. INCOME TAXES

The components of the provision for income taxes are as follows:

<TABLE>
<CAPTION>
1993 1994 1995
------ ------ ------
(IN THOUSANDS)
<S> <C> <C> <C>
Currently payable:
Federal............................................. $ 426 $1,119 $2,474
State............................................... 99 547 808
------ ------ ------
525 1,666 3,282
------ ------ ------
Net deferred (prepaid):
Federal............................................. 329 (146) (228)
State............................................... 121 (54) (173)
------ ------ ------
450 (200) (401)
------ ------ ------
$ 975 $1,466 $2,881
====== ====== ======
</TABLE>

The provision for income taxes in the accompanying statement of income
differs from the provision calculated by applying the statutory federal income
tax rate of 34% to income before provision for income taxes due to the
following:

<TABLE>
<CAPTION>
1993 1994 1995
------ ------ ------
(IN THOUSANDS)
<S> <C> <C> <C>
Provision for income taxes at statutory rate............ $ 613 $ 904 $2,164
Increases resulting from:
State income taxes, net of federal tax................ 145 325 419
Amortization of cost in excess of net assets of
acquired companies................................... 209 228 197
Nondeductible expenses................................ 8 9 101
------ ------ ------
$ 975 $1,466 $2,881
====== ====== ======
</TABLE>

Prepaid income taxes and deferred income taxes in the accompanying balance
sheet consist of the following:

<TABLE>
<CAPTION>
1994 1995
------- -------
(IN THOUSANDS)
<S> <C> <C>
Prepaid income taxes:
Reserves and accruals..................................... $1,777 $1,725
Allowance for doubtful accounts........................... 215 348
Inventory basis difference................................ 576 918
Accrued compensation...................................... 60 463
Other, net................................................ 21 20
------- -------
$2,649 $3,474
======= =======
Deferred income taxes:
Depreciation.............................................. $ 113 $ 142
======= =======
</TABLE>

F-11
<PAGE>

TREX MEDICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

5. COMMITMENTS

The Company leases portions of its office and operating facilities under
various noncancelable operating lease arrangements expiring between fiscal
1997 and fiscal 2005. The accompanying statement of income includes expenses
from operating leases of $132,000, $40,000 and $44,000 in 1993, 1994 and
fiscal 1995, respectively. Future minimum payments due under noncancelable
operating leases at September 30, 1995, are $625,000 in fiscal 1996; $627,000
in fiscal 1997; $600,000 in each of fiscal 1998, 1999 and 2000; and $2,975,000
in fiscal 2001 and thereafter. Total future minimum lease payments are
$6,027,000.

6. RELATED PARTY TRANSACTIONS

Corporate Services Agreement

The Company and Thermo Electron have a corporate services agreement under
which Thermo Electron's corporate staff provides certain administrative
services, including certain legal advice and services, risk management,
certain employee benefit administration, tax advice and preparation of tax
returns, centralized cash management, and certain financial and other
services, for which the Company pays Thermo Electron annually an amount equal
to 1.20% of the Company's revenues. Prior to January 1, 1995, the Company paid
an annual fee equal to 1.25% of the Company's revenues. Effective December 31,
1995, the Company will pay an annual fee equal to 1.0% of the Company's
revenues. For these services, the Company was charged $469,000, $680,000 and
$663,000 in 1993, 1994 and fiscal 1995, respectively. The annual fee is
reviewed and adjusted annually by mutual agreement of the parties. Management
believes that the service fee charged by Thermo Electron is reasonable and
that such fees are representative of the expenses the Company would have
incurred on a stand-alone basis. The corporate services agreement is renewed
annually but can be terminated upon 30 days' prior notice by the Company or
upon the Company's withdrawal from the Thermo Electron Corporate Charter (the
Thermo Electron Corporate Charter defines the relationship among Thermo
Electron and its majority-owned subsidiaries). For additional items such as
employee benefit plans, insurance coverage and other identifiable costs,
Thermo Electron charges the Company based upon costs attributable to the
Company.

Other Related Party Services

ThermoTrex provides certain research and development contract services to
the Company, which are charged to the Company based on actual cost and usage.
For these services, the Company was charged $1,470,000, $2,816,000 and
$1,536,000 in 1993, 1994 and fiscal 1995, respectively.

Laser Manufacturing Agreement

ThermoLase Corporation ("ThermoLase"), a majority-owned subsidiary of
ThermoTrex, has engaged the Company to design and manufacture a laser to be
used in ThermoLase's laser-based hair-removal system. During fiscal 1995, the
Company recorded $350,000 of revenue under this agreement.

Vendor Agreement

During fiscal 1995, the Company placed an order for $2,500,000 for the
design and production of high-transmission cellular grids from the Tecomet
division of Thermo Electron, which will be received in fiscal 1996 and 1997.
In addition, the Company recorded expense of $250,000 during fiscal 1995
related to research and development funding provided to Tecomet.

F-12
<PAGE>

TREX MEDICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

7. SIGNIFICANT CUSTOMER, EXPORT SALES AND CONCENTRATION OF CREDIT RISK

Sales to one customer accounted for 11%, 11% and 18% of the Company's total
revenues in 1993, 1994 and fiscal 1995, respectively. Export sales to Germany
accounted for 1%, 3% and 11% of the Company's total revenues in 1993, 1994 and
fiscal 1995, respectively. Other export sales accounted for 9%, 11% and 10% of
the Company's total revenues in 1993, 1994 and fiscal 1995, respectively. In
general, export sales are denominated in U.S. dollars. The Company sells its
products primarily to customers in the healthcare industry. The Company does
not normally require collateral or other security to support its accounts
receivable. Management does not believe that this concentration of credit risk
has or will have a significant negative impact on the Company.

8. CONTINGENCY

The owner of a U.S. patent related to automatic exposure control has claimed
that the Company's mammography systems infringe such patent. The patent owner
has offered a nonexclusive license under the patent on terms not acceptable to
the Company. Although the Company believes that the validity of the patent may
be questionable and subject to a successful challenge, if the patent holder
were successful in enforcing such patent the Company could be enjoined from
manufacturing and selling mammography systems. The Company will be indemnified
by ThermoTrex for any cash damages relating to sales of such systems occurring
prior to the dates on which ThermoTrex transferred certain businesses to the
Company, although any payments under such indemnity would be recorded as
capital contributions. Due to the inherent uncertainty of litigation,
management cannot predict the outcome of this matter. While an unfavorable
outcome could have a material adverse effect on the Company's results of
operations, in the opinion of management any resolution will not have a
material effect on the Company's financial position.

See Note 2 for a discussion of certain litigation.

9. SUBSEQUENT EVENTS

Private Placements of Common Stock

In November 1995, the Company issued 1,862,000 shares of its common stock in
a private placement at $10.25 per share for net proceeds of $17,618,000. In
January 1996, the Company issued 100,000 shares of its common stock in a
private placement at $10.75 per share for net proceeds of $1,070,000. Certain
officers and directors of the Company and a corporation affiliated with a
director of the Company purchased an aggregate of 343,300 shares of the
Company's common stock issued in these private placements.

Stock-based Compensation Plans

On November 1, 1995, the Company adopted a stock-based compensation plan for
its key employees, directors and others, which permits the grant of a variety
of stock and stock-based awards as determined by the human resources committee
of the Company's Board of Directors (the Board Committee), including
restricted stock, stock options, stock bonus shares or performance-based
shares. In March 1996, the Board Committee granted options to purchase
1,041,000 shares of the Company's common stock at $11.00 per share, which was
the fair market value on the date of grant. The option recipients and the
terms of options granted under this plan are determined by the Board
Committee. Options granted to date generally vest and become immediately
exercisable on the ninth anniversary of the grant date, unless the Company's
common stock becomes publicly traded prior to such date. In such an event,
options become exercisable 90 days after the Company becomes subject to the
Securities Exchange Act of 1934, but will be subject to certain transfer
restrictions and the right of the Company to repurchase shares issued upon
exercise of the options at the exercise price, upon certain events. The
restrictions and repurchase rights generally will be deemed to have lapsed
ratably over periods ranging from five to ten years after the first
anniversary of the grant date, depending on the term of the option, which will
generally range from ten to twelve years. Nonqualified stock options may be
granted at any price determined by the Board Committee, although incentive
stock options must be granted at not less than the fair market value of the
Company's common stock on the date of grant.

F-13
<PAGE>

TREX MEDICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONCLUDED)

The Company also has a directors' stock option plan, adopted on November 1,
1995, that provides for the grant of stock options, at fair market value, to
outside directors pursuant to a formula approved by the Company's
shareholders. Options granted under this plan will generally vest and become
immediately exercisable on the fourth anniversary of the grant date, unless
the Company's common stock becomes publicly traded prior to such date. In such
an event, options granted under this plan will have the same general terms as
options granted under the stock-based compensation plan described above,
except that the restrictions and repurchase rights generally will be deemed to
have lapsed ratably over a four-year period and the option term is five years.
In November 1995, pursuant to this plan, the Company granted options to
purchase 40,000 shares of the Company's common stock at $10.25 per share. In
February 1996, the Company granted options to purchase 80,000 shares of the
Company's common stock at $10.75 per share.

In addition to the Company's stock-based compensation plans, certain
officers and key employees may also participate in the stock-based
compensation plans of Thermo Electron or its majority-owned subsidiaries.

No accounting recognition is given to options granted at fair market value
until they are exercised. Upon exercise, net proceeds, including tax benefits
realized, are credited to equity.

Reserved Shares

As of May 6, 1996, the Company had reserved 5,232,888 unissued shares of its
common stock for possible issuance under stock-based compensation plans and
conversion of the Company's 4.2% subordinated convertible note.

Proposed Acquisitions

In February 1996, the Company signed a non-binding letter of intent to
acquire XRE Corporation ("XRE"), a Massachusetts company that designs,
manufactures and markets X-ray imaging systems used for cardiac
catheterization and angiography, for approximately $17,000,000 in cash.

In April 1996, the Company signed a non-binding letter of intent to acquire
Continental X-Ray Corporation and affiliates ("Continental"), an Illinois
company that designs, manufactures, and markets general purpose and specialty
X-ray systems for approximately $18,200,000 in cash, including the repayment
of approximately $5,700,000 in debt.

The completion of these acquisitions is subject to the satisfaction of
certain closing conditions, including negotiation of definitive agreements;
receipt of regulatory approvals, including clearance from the Federal Trade
Commission; due diligence; and approval of the boards of directors of the
Company, ThermoTrex, XRE, and Continental. The purchase price for both XRE and
Continental will be subject to post-closing adjustments based on the net asset
value of the respective companies as of the closing dates. These acquisitions
will be accounted for using the purchase method of accounting. Pro forma
information for the Company, XRE and Continental is available elsewhere in
this Prospectus.

Conversion of Subordinated Convertible Note

In March 1996, ThermoTrex converted $3,000,000 principal amount of the
Company's subordinated convertible note into 254,452 shares of the Company's
common stock. Subsequent to the conversion, ThermoTrex owned 91% of the
Company's outstanding common stock.

F-14
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Bennett X-Ray Corporation:

We have audited the accompanying consolidated balance sheet of Bennett X-Ray
Corporation (a New York corporation) and subsidiaries as of February 28, 1994
and 1995, and the related consolidated statements of operations, cash flows
and shareholders' investment for each of the three years in the period ended
February 28, 1995. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Bennett X-
Ray Corporation and subsidiaries as of February 28, 1994 and 1995 and the
results of their operations and their cash flows for each of the three years
in the period ended February 28, 1995, in conformity with generally accepted
accounting principles.

Arthur Andersen LLP

Boston, Massachusetts
November 3, 1995

F-15
<PAGE>

BENNETT X-RAY CORPORATION

CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
FISCAL YEAR ENDED SIX MONTHS MARCH 1, 1995
FEBRUARY 28, ENDED THROUGH
---------------------------- AUGUST 31, SEPTEMBER 14,
1993 1994 1995 1994 1995
-------- --------- -------- ---------- -------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues................ $ 28,618 $ 32,501 $ 42,533 $ 21,267 $ 23,369
-------- --------- -------- -------- --------
Costs and Operating
Expenses:
Cost of revenues....... 17,919 21,760 26,622 13,311 14,941
Selling, general and
administrative
expenses.............. 7,678 8,271 11,913 5,957 6,653
Research and
development expenses.. 1,951 2,711 3,346 1,673 1,505
-------- --------- -------- -------- --------
27,548 32,742 41,881 20,941 23,099
-------- --------- -------- -------- --------
Operating Income
(Loss)................. 1,070 (241) 652 326 270
Other Income............ 321 74 93 47 74
-------- --------- -------- -------- --------
Income (Loss) Before In-
come Tax
Provision.............. 1,391 (167) 745 373 344
Income Tax Provision
(Note 3)............... 493 48 388 194 170
-------- --------- -------- -------- --------
Net Income (Loss)....... $ 898 $ (215) $ 357 $ 179 $ 174
======== ========= ======== ======== ========
Earnings (Loss) per
Share.................. $ 893.53 $ (213.93) $ 355.22 $ 178.11 $ 173.13
======== ========= ======== ======== ========
Shares Outstanding...... 1,005 1,005 1,005 1,005 1,005
======== ========= ======== ======== ========
</TABLE>

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

F-16
<PAGE>

BENNETT X-RAY CORPORATION

CONSOLIDATED BALANCE SHEET
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
FEBRUARY 28,
---------------
1994 1995
------- -------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents..................................... $ 785 $ 397
Available-for-sale investments, at quoted market value (Note
2)........................................................... 812 844
Accounts receivable, less allowances of $231 and $464......... 3,494 3,101
Inventories................................................... 4,791 6,426
Prepaid expenses.............................................. 68 71
Prepaid income taxes (Note 3)................................. 208 422
------- -------
10,158 11,261
------- -------
Property and Equipment, at Cost, Net........................... 1,442 1,350
------- -------
$11,600 $12,611
======= =======
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities:
Accounts payable.............................................. $ 1,564 $ 2,173
Accrued payroll and employee benefits......................... 993 1,058
Accrued warranty costs........................................ 1,195 1,370
Other accrued expenses........................................ 2,008 1,851
------- -------
5,760 6,452
------- -------
Deferred Income Taxes (Note 3)................................. 143 145
------- -------
Commitments and Contingency (Note 5)
Shareholders' Investment:
Common stock, no par value; 2,500 shares authorized;
1,005 shares issued and outstanding.......................... 21 21
Retained earnings............................................. 5,676 5,993
------- -------
5,697 6,014
------- -------
$11,600 $12,611
======= =======
</TABLE>

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

F-17
<PAGE>

BENNETT X-RAY CORPORATION

CONSOLIDATED STATEMENT OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
FISCAL YEAR ENDED SIX MONTHS MARCH 1, 1995
FEBRUARY 28, ENDED THROUGH
------------------------- AUGUST 31, SEPTEMBER 14,
1993 1994 1995 1994 1995
------- ------- ------- ---------- -------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Operating Activities:
Net income (loss)...... $ 898 $ (215) $ 357 $ 179 $ 174
Adjustments to
reconcile net income
(loss) to net cash
used in operating
activities:
Depreciation and
amortization........ 166 299 257 108 67
Increase (decrease)
in deferred
income taxes........ 186 (43) 2 (9) 855
Changes in current
accounts:
Accounts
receivable......... (466) (791) 393 254 (1,259)
Inventories......... (712) (608) (1,635) (983) (1,256)
Other current
assets............. (95) (52) (217) (111) 845
Accounts payable.... (1,091) 585 609 (180) 845
Other current
liabilities........ 552 647 83 517 (649)
------- ------- ------- ----- -------
Net cash used in
operating
activities......... (562) (178) (151) (225) (378)
------- ------- ------- ----- -------
Investing Activities:
Purchases of available-
for-sale investments.. -- (812) (32) -- --
Proceeds from sale and
maturities of
available-for-sale
investments........... -- -- -- -- 844
Purchases of property
and equipment......... (1,405) (151) (165) (67) --
------- ------- ------- ----- -------
Net cash provided by
(used in) investing
activities......... (1,405) (963) (197) (67) 844
------- ------- ------- ----- -------
Financing Activities:
Cash dividends paid.... (40) (40) (40) -- --
------- ------- ------- ----- -------
Increase (Decrease) in
Cash and Cash
Equivalents............ (2,007) (1,181) (388) (292) 466
Cash and Cash
Equivalents at
Beginning of Period.... 3,973 1,966 785 785 397
------- ------- ------- ----- -------
Cash and Cash
Equivalents at End of
Period................. $ 1,966 $ 785 $ 397 $ 493 $ 863
======= ======= ======= ===== =======
Supplemental Cash Flow
Information:
Cash paid during the
period for
income taxes......... $ 354 $ 76 $ 472 $ 232 $ 149
======= ======= ======= ===== =======
</TABLE>

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

F-18
<PAGE>

BENNETT X-RAY CORPORATION

CONSOLIDATED STATEMENT OF SHAREHOLDERS' INVESTMENT
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
COMMON
STOCK,
NO PAR RETAINED
VALUE EARNINGS
------ --------
<S> <C> <C>
BALANCE, FEBRUARY 28, 1992.................................. $ 21 $5,073
Net income................................................. -- 898
Payment of $40 per share cash dividend..................... -- (40)
---- ------
BALANCE, FEBRUARY 28, 1993.................................. 21 5,931
Net loss................................................... -- (215)
Payment of $40 per share cash dividend..................... -- (40)
---- ------
BALANCE, FEBRUARY 28, 1994.................................. 21 5,676
Net income................................................. -- 357
Payment of $40 per share cash dividend..................... -- (40)
---- ------
BALANCE, FEBRUARY 28, 1995.................................. 21 5,993
<CAPTION>
(UNAUDITED)
<S> <C> <C>
Net income................................................. -- 174
---- ------
BALANCE, SEPTEMBER 14, 1995................................. $ 21 $6,167
==== ======
</TABLE>

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

F-19
<PAGE>

BENNETT X-RAY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Bennett X-Ray Corporation was incorporated in 1967 and is engaged in the
manufacture of high frequency diagnostic radiographic (X-ray) equipment with a
focus on health care imaging products in the private office, clinic and
hospital markets.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of
Bennett X-Ray Corporation and its wholly owned subsidiaries, Bennett
International Corporation and Island X-Ray Incorporated (collectively referred
to as the "Company"). All significant intercompany accounts and transactions
have been eliminated in consolidation.

Fiscal Year

The Company has adopted a fiscal year ending February 28. References to
1993, 1994 and 1995 are for the fiscal years ended February 28, 1993, 1994 and
1995, respectively.

Revenue Recognition

The Company recognizes product revenues upon shipment of its products. The
Company provides a reserve for its estimate of warranty costs at the time of
shipment.

Cash and Cash Equivalents

The Company considers liquid investments with an original maturity of three
months or less when purchased to be cash equivalents.

Available-for-sale Investments

Pursuant to Statement of Financial Accounting Standards ("SFAS") No. 115,
"Accounting for Certain Investments in Debt and Equity Securities," the
Company's debt and marketable equity securities are accounted for at market
value (Note 2).

Inventories

Inventories are stated at the lower of cost (on a first-in, first-out basis)
or market value and include material, labor and manufacturing overhead. The
components of inventories are as follows:

<TABLE>
<CAPTION>
1994 1995
------- -------
(IN THOUSANDS)
<S> <C> <C>
Raw material and supplies.................................... $2,511 $3,876
Work in process and finished goods........................... 2,280 2,550
------- -------
$4,791 $6,426
======= =======
</TABLE>

F-20
<PAGE>

BENNETT X-RAY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Property and Equipment

The costs of additions and improvements are capitalized, while maintenance
and repairs are charged to expense as incurred. The Company provides for
depreciation and amortization using the straight-line method over the
estimated useful lives of the property as follows: machinery and equipment--3
to 7 years; automobiles--3 years; and leasehold improvements--the shorter of
the term of the lease or the life of the asset. Property and equipment consist
of the following:

<TABLE>
<CAPTION>
1994 1995
------- -------
(IN THOUSANDS)
<S> <C> <C>
Leasehold
improvements...... $1,319 $ 1,447
Machinery and
equipment......... 648 535
Automobiles........ 211 156
------- -------
2,178 2,138
Less: Accumulated
depreciation and
amortization...... 736 788
------- -------
$ 1,442 $1,350
======= =======
</TABLE>

Income Taxes

In accordance with SFAS No. 109, "Accounting for Income Taxes," the Company
recognizes deferred income taxes based on the expected future tax consequences
of differences between the financial statement basis and the tax basis of
assets and liabilities calculated using enacted tax rates in effect for the
year in which the differences are expected to be reflected in the tax return.

Interim Financial Statements

The financial statements for the six-month period ended August 31, 1994 and
for the period from March 1, 1995 through September 14, 1995 are unaudited
but, in the opinion of management, reflect all adjustments of a normal
recurring nature necessary for a fair presentation of results for these
interim periods. The results of operations for the period from March 1, 1995
through September 14, 1995 are not necessarily indicative of the results to be
expected for the entire year.

2. AVAILABLE-FOR-SALE INVESTMENTS

In accordance with SFAS No. 115, the Company's debt and marketable equity
securities are considered available-for-sale investments in the accompanying
balance sheet and are carried at market value, with the difference between
cost and market value, net of related tax effects, recorded currently as a
component of shareholders' investment. Available-for-sale investments in the
accompanying 1994 and 1995 balance sheets represent investments in U.S.
Government securities with maturities of one year or less. There was no
difference between the market value and the cost basis of available-for-sale
investments at February 28, 1994 and 1995.

3. INCOME TAXES

The components of the income tax provision are as follows:

<TABLE>
<CAPTION>
1993 1994 1995
---- ---- ----
<S> <C> <C> <C>
(IN THOUSANDS)
Currently payable:
Federal.................................................... $291 $190 $527
State...................................................... 35 37 73
---- ---- ----
326 227 600
---- ---- ----
Net deferred (prepaid):
Federal.................................................... 77 (142) (224)
State...................................................... 90 (37) 12
---- ---- ----
167 (179) (212)
---- ---- ----
$493 $ 48 $388
==== ==== ====
</TABLE>

F-21
<PAGE>

BENNETT X-RAY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONCLUDED)
The income tax provision in the accompanying statement of operations differs
from the amounts calculated by applying the statutory federal income tax rate
of 34% to income (loss) before income tax provision due to the following:

<TABLE>
<CAPTION>
1993 1994 1995
----- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Income tax provision
(benefit) at statutory
rate..................... $ 473 $ (57) $ 253
Differences resulting
from:
State income taxes, net
of federal tax......... 82 -- 56
Foreign sales corpora-
tion benefit........... (66) (43) (25)
Research and development
tax credit............. (171) -- --
Nondeductible expenses
and other.............. 175 148 104
----- ------- -------
$ 493 $ 48 $ 388
===== ======= =======

Prepaid income taxes and deferred income taxes in the accompanying balance
sheet consist of the following:

<CAPTION>
1994 1995
------- -------
(IN THOUSANDS)
<S> <C> <C>
Prepaid income taxes:
Reserves and accruals......... $ 208 $ 422
======= =======
Deferred income taxes:
Depreciation.................. $ 143 $ 145
======= =======
</TABLE>

4. EMPLOYEE BENEFIT PLAN

The Company has a noncontributory discretionary profit sharing plan covering
substantially all employees. Profit sharing expense amounted to $105,000,
$110,000 and $120,000 in fiscal 1993, 1994 and 1995, respectively.

5. RELATED PARTY LEASE AND CONTINGENCY

Facility Lease

The Company leases its main operating facility under a short-term operating
lease with a real estate trust, controlled by certain officers/shareholders of
the Company. The accompanying statement of operations includes expense from
this operating lease of $1,148,000, $1,224,000 and $1,318,000 in fiscal 1993,
1994 and 1995, respectively.

Guaranty

The Company guarantees a mortgage of its lessor. The amount outstanding
under this mortgage was $658,000 at February 28, 1995. This mortgage is also
secured by the underlying building and improvements.

6. SUBSEQUENT EVENT

In September 1995, all of the outstanding capital stock of the Company was
acquired by ThermoTrex Corporation, a majority-owned subsidiary of Thermo
Electron Corporation, for $42,865,000 in cash.

F-22
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To XRE Corporation:

We have audited the accompanying consolidated balance sheet of XRE
Corporation (a Massachusetts corporation) and subsidiary as of December 31,
1995 and the related consolidated statements of income, stockholders'
investment and cash flows for the year then ended. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards 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. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of XRE
Corporation and subsidiary as of December 31, 1995 and the results of their
operations and their cash flows for the year then ended, in conformity with
generally accepted accounting principles.

Arthur Andersen LLP

Boston, Massachusetts February 20, 1996

F-23
<PAGE>

XRE CORPORATION

CONSOLIDATED STATEMENT OF INCOME

(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
----------------------------
1995 APRIL 1, 1995 MARCH 30, 1996
------- ------------- --------------
(UNAUDITED)
<S> <C> <C> <C>
Revenues (Note 6):
Product revenues...................... $25,099 $7,247 $4,780
Service revenues...................... 4,207 854 813
------- ------ ------
29,306 8,101 5,593
------- ------ ------
Costs and Operating Expenses:
Cost of product revenues.............. 16,908 4,725 2,723
Cost of service revenues.............. 3,449 789 803
General and administrative expenses... 2,787 798 630
Research and development expenses..... 3,578 880 1,063
Selling and marketing expenses........ 2,029 706 845
------- ------ ------
28,751 7,898 6,064
------- ------ ------
Operating Income (Loss)................. 555 203 (471)
Interest Income......................... -- -- 5
Interest Expense........................ (132) (24) (10)
Other Income............................ -- -- 8
Minority Interest Income................ 31 -- --
------- ------ ------
Income Before Benefit for State Income
Taxes (Note 3)......................... 454 179 (468)
Provision (Benefit) for State Income
Taxes.................................. (80) 25 7
------- ------ ------
Net Income (Loss)....................... $ 534 $ 154 $ (475)
======= ====== ======
</TABLE>

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

F-24
<PAGE>

XRE CORPORATION

CONSOLIDATED BALANCE SHEET

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 30,
1995 1996
------------ -----------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents........................... $ 320 $ 51
Accounts receivable, less allowance of $37 and $55.. 2,705 2,698
Inventories......................................... 6,600 8,511
Prepaid expenses.................................... 223 361
Deferred tax asset (Note 3) ........................ 156 156
------- -------
10,004 11,777
------- -------
Property and Equipment, at Cost, Net.................. 1,790 2,376
------- -------
Other Assets.......................................... 410 414
------- -------
$12,204 $14,567
======= =======
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current Liabilities:
Current maturities of long-term obligations......... $ 108 $ 108
Due to affiliate (Note 8)........................... 442 32
Accounts and drafts payable......................... 1,389 3,227
Accrued expenses.................................... 2,412 2,622
Deferred revenue ................................... 2,415 3,805
------- -------
6,766 9,794
------- -------
Long-term Obligations (Note 2)........................ 266 236
------- -------
Minority Interest..................................... 21 21
------- -------
Commitment (Note 8)
Stockholders' Investment:
Common stock, no par value, 500 shares authorized;
240 shares issued.................................. 608 608
Capital in excess of par value...................... 3,783 3,783
Retained earnings................................... 1,126 491
Treasury stock at cost, 17 shares................... (366) (366)
------- -------
5,151 4,516
------- -------
$12,204 $14,567
======= =======
</TABLE>

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

F-25
<PAGE>

XRE CORPORATION

CONSOLIDATED STATEMENT OF CASH FLOWS

(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
----------------------------
1995 APRIL 1, 1995 MARCH 30, 1996
------- ------------- --------------
(UNAUDITED)
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income.............................. $ 534 $ 154 $ (475)
Adjustments to reconcile net income to
net cash
provided by operating activities:
Depreciation and amortization......... 546 123 109
Minority interest income.............. (31) -- --
Deferred tax benefit.................. (156) -- --
Provision for doubtful accounts....... 37 -- 18
Compensation expense.................. 76 58 (43)
Changes in current accounts:
Accounts receivable.................. 1,994 (190) (11)
Inventories.......................... 1,071 (637) (1,911)
Other current assets................. 8 (127) (137)
Accounts and drafts payable.......... (579) 618 1,839
Accrued expenses..................... 88 986 252
Deferred revenue..................... (345) (540) 1,390
------- ------- -------
Net cash provided by operating ac-
tivities........................... 3,243 445 1,031
------- ------- -------
INVESTING ACTIVITIES:
Purchases of property and equipment..... (977) (39) (695)
Increase in other assets................ (32) (8) (4)
------- ------- -------
Net cash used in investing
activities......................... (1,009) (47) (699)
------- ------- -------
FINANCING ACTIVITIES:
Net borrowing (repayments) under note
payable to a bank...................... (560) 827 --
Borrowings from affiliate............... 903 80 255
Repayment of borrowings from affiliate.. (2,616) (1,830) (665)
Borrowings under an equipment line of
credit................................. 205 -- --
Capital contribution by stockholders.... 600 600 --
S corporation cash distributions........ (407) (60) (160)
Repayment of long-term obligations...... (94) (24) (31)
------- ------- -------
Net cash used in financing activi-
ties............................... (1,969) (407) (601)
------- ------- -------
Increase (Decrease) in Cash and Cash
Equivalents............................. 265 (9) (269)
Cash and Cash Equivalents at Beginning of
Period.................................. 55 55 320
------- ------- -------
Cash and Cash Equivalents at End of Peri-
od...................................... $ 320 $ 46 $ 51
======= ======= =======
CASH PAID FOR:
Interest................................ $ 138 $ 16 $ 8
======= ======= =======
Income taxes............................ $ 18 $ 18 $ 36
======= ======= =======
</TABLE>

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

F-26
<PAGE>

XRE CORPORATION

CONSOLIDATED STATEMENT OF STOCKHOLDERS' INVESTMENT

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
COMMON STOCK TREASURY STOCK
---------------- ----------------
CAPITAL IN
NUMBER OF EXCESS OF RETAINED NUMBER OF
SHARES AMOUNT PAR VALUE EARNINGS SHARES AMOUNT
--------- ------ ---------- -------- --------- ------
<S> <C> <C> <C> <C> <C> <C>
BALANCE DECEMBER 31,
1994................... 240 $608 $3,183 $ 999 17 $(366)
S corporation cash dis-
tributions............. -- -- -- (407) -- --
Capital contribution by
stockholders........... -- -- 600 -- -- --
Net income.............. -- -- -- 534 -- --
--- ---- ------ ------ --- -----
BALANCE DECEMBER 31,
1995................... 240 $608 $3,783 $1,126 17 $(366)
=== ==== ====== ====== === =====
<CAPTION>
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
S corporation cash
distributions.......... -- -- -- (160) -- --
Net loss................ -- -- -- (475) -- --
--- ---- ------ ------ --- -----
BALANCE MARCH 30, 1996.. 240 $608 $3,783 $ 491 17 $(366)
=== ==== ====== ====== === =====
</TABLE>

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

F-27
<PAGE>

XRE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

XRE Corporation (the "Company") designs, manufactures and sells specialized
X-ray systems used in the diagnosis and treatment of coronary artery disease
and other vascular conditions to OEM customers and hospitals.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Principles of Consolidation

The Company owns 51% of Angiographic Devices Corp. Ohio ("ADCO"), a
Massachusetts corporation which sells and services the Company's equipment.
The accompanying consolidated financial statements reflect the consolidation
of ADCO after elimination of all significant intercompany transactions. The
amount in minority interest at December 31, 1995 represents the 49% ownership
of ADCO's net book value held by the minority stockholders of ADCO. On April
30, 1996, the Company sold its 51% ownership in ADCO. This transaction had an
immaterial effect on the financial position of the Company. The estimated fair
value of the Company's financial instruments, which include cash equivalents,
accounts receivable and long-term debt, approximates their carrying value.

A real estate partnership of the principal officers/stockholders of the
Company owns the land and building in which the Company operates, as further
discussed in Note 8. The partnership's financial position and results of
operations are not included in these consolidated financial statements.

Interim Financial Statements

In the opinion of management, the unaudited interim consolidated financial
statements have been prepared on the same basis as the audited financial
statements and include all adjustments (consisting of normal recurring
adjustments) which management considers necessary for a fair presentation of
the results for such periods. The results of operations for the period ended
March 30, 1996 are not necessarily indicative of the results of operations for
the full year.

Revenue Recognition

The Company recognizes product revenues upon shipment and recognizes service
revenues upon completion of services rendered. Warranty costs related to
products are accrued at the date of shipment. The Company has recognized
approximately $313,000 of revenue in 1995 for a system that was completed and
ready to ship but which was physically being stored at the Company's facility
at the customer's request. This system will be shipped in 1996.

Cash and Cash Equivalents

The Company considers liquid investments with original maturities of three
months or less when purchased to be cash equivalents.

F-28
<PAGE>

XRE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Inventories

Inventories, which include material, labor and manufacturing overhead, are
stated at the lower of cost (on a last-in, first-out ("LIFO") basis) or
market. Inventories consist of the following at December 31, 1995 (In
thousands):

<TABLE>
<S> <C>
Raw materials...................................................... $4,378
Work-in-process and finished goods................................. 2,222
------
$6,600
======
</TABLE>

If the first-in, first-out ("FIFO") method of inventory costing had been
used instead of LIFO, inventory would have been reported as follows (In
thousands):

<TABLE>
<S> <C>
Inventory on FIFO basis............................................ $6,861
Less: LIFO reserve................................................. 261
------
Inventory on a LIFO basis........................................ $6,600
======
</TABLE>

Property and Equipment

The Company provides for depreciation and amortization using the straight-
line method to allocate the cost of property and equipment over their
estimated useful lives as follows (In thousands):

<TABLE>
<CAPTION>
ESTIMATED
CLASSIFICATION USEFUL LIFE
-------------- -----------
<S> <C> <C>
Equipment.............................................. 3-8 Years $8,326
Motor vehicles......................................... 3 Years 275
Leasehold improvements................................. 5 Years 565
------
9,166
Less: Accumulated depreciation and amortization........ 7,376
------
$1,790
======
</TABLE>

Accrued Expenses

At December 31, 1995, accrued expenses consist of the following (In
thousands):

<TABLE>
<S> <C>
Accrued warranty................................................... $1,115
Accrued payroll costs.............................................. 371
Accrued professional fees.......................................... 350
Accrued other...................................................... 576
------
$2,412
======
</TABLE>

2. LONG-TERM OBLIGATIONS AND OTHER FINANCING ARRANGEMENTS

In May 1995, the Company entered into a $1,000,000 equipment line of credit
agreement (the "Agreement") with a bank. Under the terms of the Agreement, the
Company may make borrowings from time to time for the sole purpose of
purchasing equipment. Each borrowing will be evidenced by a secured term note.
Borrowings bear interest at the prime rate (8.5% at December 31, 1995) plus 50
basis points. Principal is payable in 36 equal monthly installments.
Borrowings may not exceed 75% of the purchase price of the equipment. The
Company's ability to make additional borrowings under this equipment line of
credit expires on June 30, 1996. The Company had $176,000 outstanding under
the Agreement at December 31, 1995.

During 1994, the Company entered into three capital leases for the purchase
of certain equipment. Monthly payments are $5,879 including interest at
varying rates from 9.4% to 10.2%. There was approximately $192,000 outstanding
on these leases as of December 31, 1995. The leases are secured by the
equipment and expire through August 1999.

F-29
<PAGE>

XRE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Future minimum payments, as of December 31, 1995, under the equipment line
of credit and capital leases are as follows (In thousands):

<TABLE>
<S> <C>
1996................................................................... $ 145
1997................................................................... 139
1998................................................................... 110
1999................................................................... 31
-----
425
Less: Amount representing interest..................................... 51
-----
Long-term obligations and present value of minimum lease payments...... 374
Less: Current maturities of long-term obligations ..................... 108
-----
$ 266
=====
</TABLE>

The Company has a $5,000,000 revolving line of credit with a bank.
Borrowings are permitted up to 80% of qualified accounts receivable, as
defined, plus the lesser of $1,500,000 or 20% of the value of qualified
inventory, as defined, plus $899,000. The line bears interest at the prime
rate (8.5% at December 31, 1995) for borrowings up to $2,000,000, and prime
plus 50 basis points for borrowings in excess of $2,000,000. Borrowings are
secured by substantially all of the Company's assets and mature on June 30,
1996. In addition, the Company has approximately $450,000 outstanding under
letters of credit as of December 31, 1995. The revolving line of credit
contains certain covenants that, among other things, require certain financial
ratios and balances, limit the annual purchases of capital equipment and limit
additional indebtedness. As of December 31, 1995 and March 30, 1996 the
Company had received waivers or was in compliance with all covenants.

3. INCOME TAXES

The Company has elected to be taxed as an S corporation for federal and
state income tax purposes. As an S corporation, taxable income of the Company
is reported on the individual income tax returns of its stockholders, although
certain states require a corporate-level tax. The Company provides for state
income taxes in accordance with Statement of Financial Accounting Standards
("SFAS") No. 109, "Accounting for Income Taxes."

Under SFAS No. 109, deferred tax assets or liabilities are computed based on
the differences between the financial reporting basis and income tax basis of
assets and liabilities as measured by the enacted tax laws and rates expected
to be applicable when the differences reverse.

The principal differences between assets and liabilities for financial
reporting and tax return purposes result primarily from depreciation and
expenses not currently deductible for tax return purposes.

The components of the benefit for state income taxes at December 31, 1995
are as follows (In thousands):

<TABLE>
<S> <C>
Current............................................................... $ 76
Deferred.............................................................. (156)
-----
$ (80)
=====
</TABLE>

Due to the uncertainty surrounding the timing of realizing the benefits of
its favorable tax attributes in future income tax returns, the Company had
placed a valuation allowance against its otherwise recognizable deferred tax
asset prior to 1995. During 1995, the management of the Company evaluated its
deferred tax asset in conjunction with its historical and projected operating
performance and determined that the deferred tax asset was fully realizable.
Accordingly, the Company reversed its tax valuation allowance during 1995.

4. STOCK REPURCHASE AGREEMENTS

Under the terms of an agreement with its stockholders, the Company must
purchase all of the shares owned by either stockholder upon the occurrence of
certain events, with payments to be made over a 10-year period.

F-30
<PAGE>

XRE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONCLUDED)
The price to be paid under the agreement is book value per share, as defined.
To partially fund its obligations under this agreement, the Company has
purchased two life insurance policies, each in the amount of $1,000,000, on
the lives of each of the stockholders of the Company. The cash surrender
values of these life insurance policies, which total approximately $406,000 at
December 31, 1995, are included in other assets in the accompanying
consolidated balance sheet.

5. PROFIT SHARING PLAN

The Company has a qualified profit sharing plan that covers all employees
who meet certain employment requirements. The Company's contribution is
determined each year by the Board of Directors. In 1995, the Company
contributed and charged to expense $100,000 for the profit sharing plan.

6. SIGNIFICANT CUSTOMER

One customer, under an exclusive distributorship agreement with the Company,
accounted for approximately 45% of revenues in 1995. The Company's exclusive
distribution agreement expired at the end of 1995. The Company and this
customer are presently in negotiations to extend this contract.

7. PHANTOM STOCK PLAN

In November 1994, the Company adopted a Phantom Stock Plan (the "Plan") for
a key officer/employee of the Company. Under the terms of the Plan, this
officer/employee earns compensation equal to 5.26% of certain corporate
distributions, as well as for increases in the net book value of the Company.
Upon the occurrence of certain events, including the sale of the Company, the
Plan will be terminated and the officer/employee shall receive a final Plan
payment. The Company is accounting for the Plan in accordance with Financial
Accounting Standards Board Interpretation No. 28, "Accounting for Stock
Appreciation Rights and Other Variable Stock Option or Award Plans."
Accordingly, compensation is measured based on the increase in value as
determined under the Agreement. During 1995, approximately $76,000 in
compensation expense was recorded under this Plan based upon the increase in
the value due to the officer/employee.

8. RELATED PARTY TRANSACTION

On February 28, 1995, the Company entered into a 17-year facility lease with
an affiliated real estate partnership, Concord Associates ("Concord"), which
expires on February 28, 2012. Future minimum lease payments under this lease
are as follows (In thousands):

<TABLE>
<S> <C>
1996.............................................................. $ 631
1997.............................................................. 631
1998.............................................................. 631
1999.............................................................. 631
2000.............................................................. 631
2001 and thereafter............................................... 7,046
-------
$10,201
=======
</TABLE>

Rental expense paid to Concord was approximately $792,000 in 1995. Due to
affiliate in the accompanying consolidated balance sheet represents non-
interest-bearing advances from Concord.

9. PROPOSED SALE OF THE COMPANY

On February 16, 1996, the Company entered into a letter of intent with Trex
Medical Corporation ("Trex Medical") whereby Trex Medical will purchase assets
and assume certain liabilities from the Company for approximately $17.0
million.

F-31
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Continental Group Broadview, Illinois

We have audited the accompanying combined balance sheet of the Continental
Group as of December 31, 1994 and 1995, and the related combined statements of
income, cash flows and stockholders' equity for the years then ended. These
combined financial statements are the responsibility of the Group's
management. Our responsibility is to express an opinion on these combined
financial statements based on our audits.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of Continental Group
as of December 31, 1994 and 1995 and the results of their operations and their
cash flows for the years then ended in conformity with generally accepted
accounting principles.

Topel Forman L.L.C.

Chicago, Illinois March 15, 1996

F-32
<PAGE>

CONTINENTAL GROUP

COMBINED STATEMENT OF INCOME

(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
-------------------
MARCH 31, MARCH 31,
1994 1995 1995 1996
------- ------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C>
Sales................................... $21,699 $25,037 $6,595 $6,630
------- ------- ------ ------
Costs and Operating Expenses:
Cost of sales......................... 15,558 17,913 4,453 4,375
Operating expenses.................... 5,621 5,670 1,647 1,798
------- ------- ------ ------
21,179 23,583 6,100 6,173
------- ------- ------ ------
Operating Income........................ 520 1,454 495 457
Interest Expense........................ (432) (513) (123) (128)
Other Income (Expense), Net............. 7 (302) (76) (76)
------- ------- ------ ------
Income Before Provision for Income
Taxes.................................. 95 639 296 253
Provision for Income Taxes.............. 4 11 7 6
------- ------- ------ ------
Net Income.............................. $ 91 $ 628 $ 289 $ 247
======= ======= ====== ======
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-33
<PAGE>

CONTINENTAL GROUP

COMBINED BALANCE SHEET

(IN THOUSANDS)

<TABLE>
<CAPTION>
1994 1995 MARCH 31, 1996
------- ------- --------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash.......................................... $ 163 $ 23 $ 36
Accounts receivable, less allowance of $36,
$36 and $36.................................. 3,265 4,378 4,335
Inventories................................... 5,353 5,974 5,910
Prepaid expenses.............................. 89 91 59
------- ------- -------
8,870 10,466 10,340
------- ------- -------
Property, Plant and Equipment, at Cost, Net..... 2,054 1,922 1,905
------- ------- -------
Other Assets.................................... 78 64 60
------- ------- -------
$11,002 $12,452 $12,305
======= ======= =======
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities:
Notes payable................................. $ 3,122 $ 3,991 $ 3,637
Current maturities of long-term obligations... 255 254 263
Accounts payable.............................. 2,655 2,878 2,838
Accrued expenses.............................. 518 625 631
------- ------- -------
6,550 7,748 7,369
------- ------- -------
Long-term Obligations, Net of Current
Maturities..................................... 2,029 1,780 1,773
------- ------- -------
Contingencies
Stockholders' Equity:
Common stock.................................. 416 1,093 1,093
Additional paid-in capital.................... 64 64 64
Retained earnings............................. 1,943 1,767 2,006
------- ------- -------
2,423 2,924 3,163
------- ------- -------
$11,002 $12,452 $12,305
======= ======= =======
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-34
<PAGE>

CONTINENTAL GROUP

COMBINED STATEMENT OF CASH FLOWS

(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
-------------------
MARCH 31, MARCH 31,
1994 1995 1995 1996
------- ------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income.............................. $ 91 $ 628 $ 289 $ 247
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities:
Depreciation and amortization.......... 316 298 78 71
Provision for losses on accounts
receivable............................ 4 -- -- --
Loss on sale of property, plant and
equipment............................. -- 12 -- --
Changes in current accounts:
Accounts receivable................... (2,663) (1,113) (564) 43
Inventories........................... (442) (621) (325) 64
Prepaid expenses...................... 98 (2) 56 32
Accounts payable...................... 2,525 223 226 (40)
Other current liabilities............. 85 107 125 6
------- ------- ----- -----
Net cash provided by (used in)
operating activities................ 14 (468) (115) 423
------- ------- ----- -----
INVESTING ACTIVITIES:
Purchases of property, plant and
equipment.............................. (149) (164) (24) (50)
------- ------- ----- -----
Net cash used in investing
activities.......................... (149) (164) (24) (50)
------- ------- ----- -----
FINANCING ACTIVITIES:
Net cash received (paid) under line of
credit................................. 249 705 42 (381)
Net cash received (paid) on notes
payable................................ (184) 164 16 27
Payments of long-term obligations....... (214) (250) (64) (62)
Proceeds from long-term obligations..... 400 -- -- 64
Dividends paid.......................... (29) (128) -- (8)
Decrease in cash overdraft.............. (86) -- -- --
Payment of loan fees.................... (9) -- -- --
Net proceeds from issuance of common
stock.................................. -- 1 -- --
------- ------- ----- -----
Net cash provided by (used in)
financing activities................ 127 492 (6) (360)
------- ------- ----- -----
Increase (Decrease) in Cash.............. (8) (140) (145) 13
Cash at Beginning of Period.............. 171 163 163 23
------- ------- ----- -----
Cash at End of Period.................... $ 163 $ 23 $ 18 $ 36
======= ======= ===== =====
CASH PAID FOR:
Interest................................ $ 446 $ 513 $ 115 $ 128
======= ======= ===== =====
Income taxes............................ $ 1 $ 5 $ 5 $ 10
======= ======= ===== =====
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-35
<PAGE>

CONTINENTAL GROUP

COMBINED STATEMENT OF STOCKHOLDERS' EQUITY

(IN THOUSANDS)

<TABLE>
<CAPTION>
ADDITIONAL
COMMON PAID-IN RETAINED
STOCK CAPITAL EARNINGS
------ ---------- --------
<S> <C> <C> <C>
BALANCE DECEMBER 31, 1993.......................... $ 416 $64 $1,881
Net income......................................... -- -- 91
Dividends paid..................................... -- -- (29)
------ --- ------
BALANCE DECEMBER 31, 1994.......................... 416 64 1,943
Net income......................................... -- -- 628
Issuance of common stock........................... 1 -- --
Dividends paid..................................... -- -- (128)
Reclass of retained earnings upon merger of Allied
Fabrication Corporation into Continental X-Ray
Corporation....................................... 676 -- (676)
------ --- ------
BALANCE DECEMBER 31, 1995.......................... 1,093 64 1,767
<CAPTION>
(UNAUDITED)
<S> <C> <C> <C>
Net income......................................... -- -- 247
Dividends paid..................................... -- -- (8)
------ --- ------
BALANCE MARCH 31, 1996............................. $1,093 $64 $2,006
====== === ======
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-36
<PAGE>

CONTINENTAL GROUP

NOTES TO COMBINED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Combination

The combined financial statements include the accounts of Continental X-Ray
Corporation ("Continental"), Allied Fabrication Corporation ("Allied"),
Alphatek Corporation ("Alphatek"), Broadview Manufacturing Corporation
("Broadview"), Haymarket Square Associates ("Haymarket"), Advanced Medical
Imaging, Inc. ("AMI") and Trans-Continental X-Ray Corporation ("Trans-
Continental"). The companies share common management. Certain stockholders of
Continental own 100% of the stock of Trans-Continental and AMI, 66.67% of the
stock of Alphatek, and 60% of the stock of Broadview. Haymarket is owned
66.67% by Continental and 33.33% by Alphatek.

Continental merged with Allied on March 31, 1995. The stockholders of
Continental owned 100% of the issued and outstanding stock of Allied.
Continental issued 1,727 shares of common stock for the net assets of Allied.
The net assets were recorded at historical book value at the date of the
merger. The accompanying financial statements are based on the assumption that
the companies were merged for the full year.

All intercompany transactions have been eliminated in combination.

Revenue Recognition

The Company recognizes revenues upon shipment of its products.

Income Taxes

The stockholders of Continental, Allied, Broadview, Alphatek and AMI have
elected to be treated as "S" Corporations under provisions of the Internal
Revenue Code. In addition, Haymarket is a partnership. Accordingly, each
stockholder and partner will report his pro-rata share of the taxable income
or loss of the companies and partnership on their respective individual or
corporate income tax returns. Income taxes represent Illinois Replacement Tax.

Advertising Costs

Advertising costs are charged to operations when incurred (when the
advertising first takes place). Advertising costs during the year ended
December 31, 1995 amounted to $124,000.

Inventories

Inventories are valued at the lower of cost (on a first-in, first-out basis)
or market.

Property, Plant and Equipment

The costs of additions and improvements are capitalized, while maintenance
and repairs are charged to expense as incurred. The Company provides for
depreciation and amortization using the straight-line and accelerated methods
over the estimated useful lives of the property as follows: building and
building improvements, 19 years; office furniture and equipment, 5 years; and
equipment, 7 years.

F-37
<PAGE>

CONTINENTAL GROUP

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

Property, plant and equipment consist of the following:

<TABLE>
<CAPTION>
1994 1995
------- -------
(IN THOUSANDS)
<S> <C> <C>
Land........................................................ $ 194 $ 194
Building and building improvements.......................... 2,343 2,343
Office furniture and fixtures............................... 493 518
Equipment................................................... 2,572 2,683
------- -------
5,602 5,738
Less: Accumulated depreciation ............................. 3,548 3,816
------- -------
$ 2,054 $ 1,922
======= =======
</TABLE>

Depreciation expense was $302,000 and $284,000 for 1994 and 1995,
respectively.

Fair Value of Financial Instruments

Based upon the borrowing rates currently available for bank loans with
similar terms and average maturities, the fair value of the Company's notes
payable and long-term debt, inclusive of current maturities, approximated its
carrying value at December 31, 1994 and 1995.

Use of Estimates

The process of preparing financial statements in conformity with generally
accepted accounting principles requires the use of estimates and assumptions
regarding certain types of assets, liabilities, revenues and expenses. Such
estimates primarily relate to unsettled transactions and events as of the date
of the financial statements. Accordingly, upon settlement, actual results may
differ from estimated amounts.

Interim Financial Statements

The financial statements as of and for the three-month periods ended March
31, 1995 and 1996 are unaudited but, in the opinion of management, reflect all
adjustments of a normal recurring nature necessary for a fair presentation of
results for these interim periods. The results of operations for the three-
month period ended March 31, 1996 are not necessarily indicative of the
results to be expected for the entire year.

2. NOTES PAYABLE

Notes payable consist of the following:

<TABLE>
<CAPTION>
1994 1995
------- -------
(IN THOUSANDS)
<S> <C> <C>
Borrowings under lines of credit............................ $ 2,621 $ 3,326
Notes payable to officers and related individuals........... 501 665
------- -------
$ 3,122 $ 3,991
======= =======
</TABLE>

F-38
<PAGE>

CONTINENTAL GROUP

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

Continental and Alphatek have established lines of credit providing for
borrowings of up to $3,250,000 and $350,000, respectively, with interest
computed at the prime rate plus 3/4%. At December 31, 1994, Continental and
Alphatek had borrowings outstanding of $2,541,000 and $80,000 respectively,
under these lines of credit. At December 31, 1995, Continental and Alphatek
had borrowings outstanding of $3,246,000 and $80,000 respectively, under these
lines of credit. Borrowings under the lines of credit are secured by
substantially all assets of the companies and are guaranteed by certain
officers of the companies.

Notes payable to officers and related individuals bear interest at the prime
rate plus 2%.

3. LONG-TERM OBLIGATIONS

Long-term obligations consist of the following:

<TABLE>
<CAPTION>
1994 1995
------- -------
(IN THOUSANDS)
<S> <C> <C>
Note payable to bank, payable in monthly installments of
$1,933 plus interest at the prime rate plus 3/4%. (9.25% at
December 31, 1995). Final payment is due in December 1998.
The note is secured by substantially all assets of
Continental and is guaranteed by certain officers of
Continental.................................................. $ 93 $ 70
Note payable to bank, payable in monthly installments of
$3,333 plus interest at the prime rate plus 3/4%. Final pay-
ment is due in April 1997. The note is secured by substan-
tially all assets of Continental and is guaranteed by certain
officers of Continental...................................... 93 53
Note payable due October 2007, with interest payable monthly
at the rate of 12%........................................... 120 120
Note payable to bank, payable in monthly installments of
$3,833 plus interest at the prime rate plus 3/4%. Final pay-
ment is due in April 1997. The note is secured by substan-
tially all assets of Continental and is guaranteed by certain
officers of Continental...................................... 107 62
Note payable to bank, payable in monthly installments of
$5,000 plus interest at the prime rate plus 3/4%. Final pay-
ment is due in August 1999. The note is secured by substan-
tially all assets of Continental and is guaranteed by certain
officers of Continental...................................... 280 220
Mortgage payable in monthly payments of $6,667 plus interest
at 7.85%. Final payment in the amount of $1,280,000 is due in
December 1998. The mortgage is secured by real estate and is
guaranteed by Continental, Alphatek and certain officers of
the companies................................................ 1,520 1,440
Note payable in monthly installments of $463 including inter-
est at 10.5%. Final payment is due in March 1995. The note is
secured by the related automobile............................ 2 --
Present value of settlement agreement with former employee due
in monthly payments of $800 for remaining life expectancy.
Discounted at 10%............................................ 69 69
------- -------
2,284 2,034
Less: Current maturities...................................... 255 254
------- -------
$ 2,029 $ 1,780
======= =======
</TABLE>

F-39
<PAGE>

CONTINENTAL GROUP

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONCLUDED)

Maturities of long-term obligations, as of December 31, 1995, are as follows
(In thousands):

<TABLE>
<S> <C>
1996.................................................................. $ 254
1997.................................................................. 197
1998.................................................................. 1,369
1999.................................................................. 46
2000.................................................................. 6
Thereafter............................................................ 162
------
$2,034
======
</TABLE>

4. CONTINGENCIES

Continental Group is a party to various claims, legal actions and complaints
arising out of the normal course of business. Management is of the opinion that
the resolution of these matters will not have a significant effect on the
Group's financial position or results of operations.

F-40
<PAGE>

TREX MEDICAL CORPORATION

PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME

(UNAUDITED)

On September 15, 1995, ThermoTrex Corporation ("ThermoTrex") acquired all of
the outstanding capital stock of Bennett X-Ray Corporation ("Bennett") for
$42.9 million in cash. On October 2, 1995, ThermoTrex transferred to the
Company all of the outstanding capital stock of Bennett in exchange for a
$42.0 million principal amount 4.2% subordinated convertible note, due 2000,
convertible into shares of the Company's common stock at $11.79 per share.
This acquisition has been accounted for using the purchase method of
accounting. Subsequent to September 30, 1995, ThermoTrex converted $3.0
million principal amount of the subordinated convertible note into 254,452
shares of the Company's common stock. On October 16, 1995, ThermoTrex
transferred to the Company the assets, liabilities and businesses of
ThermoTrex's Lorad division ("Lorad") and ThermoTrex's research and
development activities pertaining to its Sonic CT system, in exchange for
20,000,000 shares of the Company's common stock.

In February 1996, the Company signed a letter of intent to acquire XRE
Corporation ("XRE") for approximately $17.0 million in cash. If the
acquisition of XRE is completed, the Company assumes that the purchase price
will be funded from cash on hand. The Company will account for this
acquisition using the purchase method of accounting.

In April 1996, the Company signed a letter of intent to acquire Continental
X-Ray Corporation and affiliates ("Continental") for approximately $18.2
million in cash, including the repayment of $5.7 million in debt. If the
acquisition of Continental is completed, the Company assumes that the purchase
price will be funded with borrowings from Thermo Electron Corporaton ("Thermo
Electron") which are assumed to be repaid with the proceeds of the Company's
proposed Underwritten Public Offering. The Company will account for this
acquisition using the purchase method of accounting.

F-41
<PAGE>

TREX MEDICAL CORPORATION

PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
Nine Months Ended September 30, 1995
(Unaudited)

The following unaudited pro forma combined condensed statement of income sets
forth the results of operations for the nine months ended September 30, 1995,
as if the issuance of 1,862,000 shares of the Company's common stock in its
November 1995 private placement, the acquisition of XRE, which is assumed to be
financed by the private placement proceeds, the acquisition of Continental,
which is assumed to be financed through borrowings of $18.2 million from Thermo
Electron, which are assumed to be repaid with the proceeds of the Company's
proposed Underwritten Public Offering, and the acquisition of Bennett had
occurred on January 1, 1995. Bennett, XRE and Continental have fiscal years
which differ from the Company's fiscal year-end. The historical results of
operations for Bennett, XRE and Continental presented below have been adjusted
to conform to the Company's fiscal year-end for purposes of the pro forma
combined condensed statement of income. The pro forma historical results of
operations for Bennett presented below include compensation expense and related
party rent expense in excess of amounts that will be paid in the future,
pursuant to agreements executed in connection with the acquisition, totaling
$2.5 million for the nine months ended September 30, 1995. The pro forma
results of operations are not necessarily indicative of future operations or
the actual results that would have occurred had the acquisitions of Bennett,
XRE and Continental been made on January 1, 1995. This statement should be read
in conjunction with the accompanying notes, the pro forma combined condensed
balance sheet and the respective historical financial statements and related
notes of the Company, Bennett, XRE and Continental appearing elsewhere in this
Prospectus.

<TABLE>
<CAPTION>
Historical Pro Forma
----------------------------------------- ---------------------
Trex Medical Bennett XRE Continental Adjustments Combined
------------ ------- -------- ----------- ----------- ---------
(In thousands, except per share amounts)
<S> <C> <C> <C> <C> <C> <C>
Revenues............................ $55,291 $30,458 $21,900 $18,536 $- $126,185
------------ ------- -------- ----------- ----------- ---------
Costs and Operating Expenses:
Cost of revenues.................... 28,180 19,379 15,365 13,582 1,896 78,402
Selling, general and administrative
expenses............................ 12,174 8,638 3,390 3,488 1,898 29,588
Research and development expenses... 8,595 2,062 2,519 742 - 13,918
------------ ------- -------- ----------- ----------- ---------
48,949 30,079 21,274 17,812 3,794 121,908
------------ ------- -------- ----------- ----------- ---------
Operating Income.................... 6,342 379 626 724 (3,794) 4,277
Interest Income..................... - - - - - -
Interest Expense.................... - - (116) (368) (1,228) (1,712)
Other Income (Expense), Net......... 22 90 - (209) - (97)
------------ ------- -------- ----------- ----------- ---------
Income Before Income Taxes.......... 6,364 469 510 147 (5,022) 2,468
Income Tax Provision (Benefit)...... 2,881 236 76 4 (1,327) 1,870
------------ ------- -------- ----------- ----------- ---------
Net Income.......................... $3,483 $233 $434 $143 $(3,695) $598
============ ======= ======== =========== =========== =========
Earnings per Share.................. $.17 $.02
============ =========
Weighted Average Shares ............ 20,151 4,516 24,667
============ =========== =========
</TABLE>
F-42

<PAGE>

TREX MEDICAL CORPORATION

PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME

SIX MONTHS ENDED MARCH 30, 1996
(UNAUDITED)

The following unaudited pro forma combined condensed statement of income
sets forth the results of operations for the six months ended March 30, 1996,
as if the issuance of 1,862,000 shares of the Company's common stock in its
November 1995 private placement, the acquisition of XRE, which is assumed to
be financed by the private placement proceeds, the acquisition of Continental,
which is assumed to be financed through borrowings from Thermo Electron, which
borrowings are assumed to be repaid with the proceeds of the Company's
proposed Underwritten Public Offering, and the acquisition of Bennett had
occurred on January 1, 1995. XRE and Continental have fiscal years which
differ from the Company's fiscal year-end. The historical results of
operations for XRE and Continental presented below have been adjusted to
conform to the Company's fiscal year-end for purposes of the pro forma
combined condensed statement of income. The pro forma results of operations
are not necessarily indicative of future operations or the actual results that
would have occurred had the acquisitions of Bennett, XRE and Continental been
made on January 1, 1995. This statement should be read in conjunction with the
accompanying notes, the pro forma combined condensed balance sheet and the
respective historical financial statements and related notes of the Company,
XRE, and Continental appearing elsewhere in this Prospectus.

<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
--------------------------------- --------------------
TREX MEDICAL XRE CONTINENTAL ADJUSTMENTS COMBINED
------------ ------- ----------- ----------- --------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
Revenues................ $66,829 $12,999 $13,131 $ -- $92,959
------- ------- ------- ------ -------
Costs and Operating Ex-
penses:
Cost of revenues....... 37,592 8,518 8,706 (479) 54,337
Selling, general and
administrative ex-
penses................ 13,695 2,901 2,705 544 19,845
Research and develop-
ment expenses......... 8,170 2,122 533 -- 10,825
------- ------- ------- ------ -------
59,457 13,541 11,944 65 85,007
------- ------- ------- ------ -------
Operating Income
(Loss)................. 7,372 (542) 1,187 (65) 7,952
Interest Income......... 440 5 -- (369) 76
Interest Expense........ (872) (26) (273) 63 (1,108)
Other Income (Expense),
Net.................... 35 39 (169) -- (95)
------- ------- ------- ------ -------
Income (Loss) Before In-
come Taxes............. 6,975 (524) 745 (371) 6,825
Income Tax Provision
(Benefit) ............. 3,241 (149) 13 42 3,147
------- ------- ------- ------ -------
Net Income (Loss)....... $ 3,734 $ (375) $ 732 $ (413) $ 3,678
======= ======= ======= ====== =======
Earnings per Share...... $ .17 $ .15
======= =======
Weighted Average
Shares................. 21,547 3,153 24,700
======= ====== =======
</TABLE>

F-43
<PAGE>

TREX MEDICAL CORPORATION

PRO FORMA COMBINED CONDENSED BALANCE SHEET

MARCH 30, 1996
(UNAUDITED)

The following unaudited pro forma combined condensed balance sheet sets
forth the financial position as of March 30, 1996, to reflect the acquisitions
of XRE and Continental as if the acquisitions had occurred on March 30, 1996.
This statement should be read in conjunction with the accompanying notes, the
pro forma combined condensed statements of income and the respective
historical financial statements and related notes of the Company, XRE and
Continental appearing elsewhere in this Prospectus.

<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
--------------------------------- --------------------
TREX MEDICAL XRE CONTINENTAL ADJUSTMENTS COMBINED
------------ ------- ----------- ----------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equiva-
lents................. $ 19,245 $ 51 $ 36 $(17,000) $ 2,332
Accounts receivable,
net................... 18,936 2,698 4,335 -- 25,969
Inventories............ 18,615 8,511 5,910 1,417 34,453
Other current assets... 5,813 517 59 -- 6,389
-------- ------- ------- -------- --------
62,609 11,777 10,340 (15,583) 69,143
-------- ------- ------- -------- --------
Property, Plant and
Equipment, at Cost,
Net.................... 8,628 2,376 1,905 -- 12,909
-------- ------- ------- -------- --------
Other Assets............ -- 414 60 -- 474
-------- ------- ------- -------- --------
Cost in Excess of Net
Assets of Acquired
Companies.............. 58,338 -- -- 20,431 78,769
-------- ------- ------- -------- --------
$129,575 $14,567 $12,305 $ 4,848 $161,295
======== ======= ======= ======== ========
LIABILITIES AND SHAREHOLDERS' INVEST-
MENT
Current Liabilities:
Notes payable.......... $ -- $ -- $ 3,637 $ (3,637) $ --
Note payable to Thermo
Electron Corpora-
tion ................. -- -- -- 18,200 18,200
Current maturities of
long-term obliga-
tions................. -- 108 263 (263) 108
Accounts payable....... 7,671 3,227 2,838 -- 13,736
Other accrued ex-
penses................ 19,383 2,622 631 -- 22,636
Due to affiliates...... -- 32 -- -- 32
Deferred revenue....... -- 3,805 -- -- 3,805
-------- ------- ------- -------- --------
27,054 9,794 7,369 14,300 58,517
-------- ------- ------- -------- --------
Deferred Income Taxes... 89 -- -- -- 89
-------- ------- ------- -------- --------
Long-term Obligations:
Subordinated
convertible note, due
to parent company..... 39,000 -- -- -- 39,000
Other.................. -- 236 1,773 (1,773) 236
-------- ------- ------- -------- --------
39,000 236 1,773 (1,773) 39,236
-------- ------- ------- -------- --------
Minority Interest....... -- 21 -- -- 21
-------- ------- ------- -------- --------
Shareholders' Invest-
ment:
Common stock........... 222 608 1,093 (1,701) 222
Capital in excess of
par value............. 59,476 3,783 64 (3,847) 59,476
Retained earnings...... 3,734 491 2,006 (2,497) 3,734
Treasury stock......... -- (366) -- 366 --
-------- ------- ------- -------- --------
63,432 4,516 3,163 (7,679) 63,432
-------- ------- ------- -------- --------
$129,575 $14,567 $12,305 $ 4,848 $161,295
======== ======= ======= ======== ========
</TABLE>

F-44
<PAGE>

TREX MEDICAL CORPORATION

NOTES TO PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 1--PRO FORMA ADJUSTMENTS TO PRO FORMA COMBINED CONDENSED STATEMENT OF
INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 (IN THOUSANDS, EXCEPT
IN TEXT)

<TABLE>
<CAPTION>
DEBIT (CREDIT)
--------------
<S> <C>
COST OF REVENUES
Increase of $479,000, $1,150,000 and $267,000 in the work in
process and finished goods inventories of Bennett, XRE and
Continental, respectively, to the estimated selling price,
less the sum of the costs of disposal and a reasonable profit
allowance for the Company's selling efforts................... $ 1,896
-------
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Service fee of 1.20% of the revenues of Bennett, XRE and Conti-
nental for services provided under a services agreement be-
tween the Company and Thermo Electron......................... 851
Amortization over 40 years of $37,496,000, $11,334,000 and
$9,097,000 of cost in excess of net assets of acquired compa-
nies created by the acquisitions of Bennett, XRE and Continen-
tal, respectively............................................. 1,047
-------
1,898
-------
INTEREST EXPENSE
Record interest expense on the $42,000,000 principal amount
4.2% subordinated convertible note issued to ThermoTrex, net
of $3,000,000 principal amount converted into common stock by
ThermoTrex.................................................... 1,228
-------
INCOME TAX PROVISION (BENEFIT)
Income tax benefit associated with the adjustments above
(excluding amortization of cost in excess of net assets of
acquired companies), calculated at the Company's statutory
income tax rate of 40%........................................ (1,590)
Income tax provision associated with XRE's and Continental's
earnings, calculated at the Company's statutory income tax
rate of 40%................................................... 263
-------
(1,327)
-------
WEIGHTED AVERAGE SHARES
Increase in weighted average shares outstanding due to the
assumed issuance on January 1, 1995 of 1,862,000, 2,400,000
and 254,452 shares of the Company's common stock from its
November 1995 private placement, its proposed Underwritten
Public Offering and the assumed conversion of $3,000,000
principal amount of the 4.2% subordinated convertible note by
ThermoTrex, respectively
</TABLE>

F-45
<PAGE>

TREX MEDICAL CORPORATION

NOTES TO PRO FORMA CONDENSED FINANCIAL STATEMENTS--(CONTINUED)
(UNAUDITED)

NOTE 2--PRO FORMA ADJUSTMENTS TO PRO FORMA COMBINED CONDENSED STATEMENT OF
INCOME FOR THE SIX MONTHS ENDED MARCH 30, 1996 (IN THOUSANDS, EXCEPT IN
TEXT)

<TABLE>
<CAPTION>
DEBIT (CREDIT)
--------------
<S> <C>
COST OF REVENUES
Reversal of the adjustment to record Bennett's inventory at
estimated selling price, less the sum of the costs of disposal
and a reasonable profit allowance for the Company's selling
efforts....................................................... $(479)
-----
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Service fee of 1.20% for the three month period ended December
30, 1995 and 1.0% for the three month period ended March 30,
1996 of the revenues of XRE and Continental for services
provided under a services agreement between the Company and
Thermo Electron............................................... 289
Amortization over 40 years of cost in excess of net assets of
acquired companies created by the acquisitions of XRE and
Continental................................................... 255
-----
544
-----
INTEREST INCOME
Decrease in interest income due to the $17,000,000 cash payment
to acquire XRE, calculated at an average interest rate of
5.94%......................................................... 369
-----
INTEREST EXPENSE
Decrease in interest expense on the $42,000,000 principal
amount 4.2% subordinated convertible note issued to
ThermoTrex, due to the assumed conversion by ThermoTrex on
January 1, 1995 of $3,000,000 principal amount into common
stock......................................................... (63)
-----
INCOME TAX PROVISION (BENEFIT)
Income tax benefit associated with the adjustments above
(excluding amortization of cost in excess of net assets of
acquired companies), calculated at the Company's statutory
income tax rate of 40%........................................ (46)
Net income tax provision associated with XRE's loss and
Continental's earnings, calculated at the Company's statutory
income tax rate of 40%........................................ 88
-----
42
-----
WEIGHTED AVERAGE SHARES
Increase in weighted average shares outstanding due to the
assumed issuance on January 1,
1995 of 1,862,000, 2,400,000, and 254,452 shares of the
Company's common stock from
its November 1995 private placement, its proposed Underwritten
Public Offering and the
assumed conversion of $3,000,000 principal amount of the 4.2%
subordinated convertible
note by ThermoTrex, respectively
</TABLE>

F-46
<PAGE>

TREX MEDICAL CORPORATION

NOTES TO PRO FORMA CONDENSED FINANCIAL STATEMENTS--(CONCLUDED)

(UNAUDITED)

NOTE 3--PRO FORMA ADJUSTMENTS TO PRO FORMA COMBINED CONDENSED BALANCE SHEET (IN
THOUSANDS, EXCEPT IN TEXT)

<TABLE>
<CAPTION>
DEBIT (CREDIT)
--------------
<S> <C>
CASH AND CASH EQUIVALENTS
Cash payments to acquire XRE and Continental.................... $(35,200)
Proceeds from the issuance of note payable to Thermo Electron
Corporation.................................................... 18,200
--------
(17,000)
--------
INVENTORIES
Increase of $1,150,000 and $267,000 in the work in process and
finished goods inventories of XRE and Continental,
respectively, to the estimated selling price, less the sum of
the costs of disposal and a reasonable profit allowance for the
Company's selling efforts...................................... 1,417
--------
COST IN EXCESS OF NET ASSETS OF ACQUIRED COMPANIES
Excess of $11,334,000 and $9,097,000 of cost over the fair value
of the net assets acquired of XRE and Continental, respective-
ly............................................................. 20,431
--------
NOTES PAYABLE
Decrease in notes payable due to the repayment of Continental
debt by the Company............................................ 3,637
--------
NOTE PAYABLE TO THERMO ELECTRON CORPORATION
Record note payable to Thermo Electron Corporation to finance
the acquisition of Continental................................. (18,200)
--------
CURRENT MATURITIES OF LONG-TERM OBLIGATIONS
Decrease in current maturities of long-term obligations due to
the repayment of Continental debt by the Company............... 263
--------
LONG-TERM OBLIGATIONS
Decrease in other long-term obligations due to the repayment of
Continental debt by the Company................................ 1,773
--------
SHAREHOLDERS' INVESTMENT
Elimination of XRE's and Continental's equity accounts.......... 7,679
--------
</TABLE>

F-47
<PAGE>

The picture at the upper right-hand side of the page illustrates two seated
laboratory technicians with their hands at the controls of the Company's Lorad
Sterotactic Needle Biopsy System, which consists of a vertical floor-mounted
platform supporting the rotatable needle-biopsy apparatus, as well as a
horizontal platform which sits above the apparatus, upon which a patient lays in
a prone position.

The picture at the middle left-hand side of the page illustrates two X-ray
systems that are attached to vertical, floor-mounted bases. A patient is
standing up against the X-ray apparatus on the left-hand side of the photograph,
and a patient table with the Bennett logo is shown in the foreground in front of
the X-ray apparatus on the right-hand side of the page.

The picture at the lower right-hand side of the page illustrates a patient
table, above which is a moveable, rotatable X-ray apparatus suspended from a
platform which is mounted to the ceiling. Two large, flexible tubes are shown
running from the X-ray apparatus toward the wall, and another system component
is shown between the patient table and the wall.
<PAGE>

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

NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER TO SELL ANY SECURITIES OTHER THAN THOSE TO WHICH IT RELATES OR AN OF-
FER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, TO ANY PERSON IN ANY JURIS-
DICTION WHERE SUCH AN OFFER OR SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DE-
LIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUM-
STANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS COR-
RECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary....................................................... 3
Risk Factors............................................................. 6
The Company.............................................................. 12
The Rights Offering...................................................... 12
Use of Proceeds.......................................................... 13
Dividend Policy.......................................................... 13
Capitalization........................................................... 14
Dilution................................................................. 15
Selected Consolidated Financial Information.............................. 17
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 18
Business................................................................. 21
Relationship and Potential Conflicts of Interest with Thermo Electron and
ThermoTrex.............................................................. 35
Management............................................................... 39
Executive Compensation................................................... 43
Security Ownership of Certain Beneficial Owners and Management........... 46
Description of Capital Stock............................................. 48
Shares Eligible for Future Sale.......................................... 48
Underwriting............................................................. 50
Legal Opinions........................................................... 51
Experts.................................................................. 52
Additional Information................................................... 52
Reports to Security Holders.............................................. 52
Index to Consolidated Financial Statements............................... F-1
</TABLE>

----------------
UNTIL , 1996 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT PARTICI-
PATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS
IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING
AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

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

2,400,000 Shares

TREX MEDICAL CORPORATION

Common Stock

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

PROSPECTUS
, 1996
----------------

NatWest Securities Limited
Lehman Brothers
Oppenheimer & Co., Inc.

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the various expenses in connection with the
sale and distribution of the securities being registered, other than the
underwriting discounts and commissions. All amounts shown are estimates except
for the Securities and Exchange Commission (the "Commission") registration
fee, the NASD filing fee and the American Stock Exchange listing fee.

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee................ $ 15,989
NASD filing fee.................................................... 5,137
American Stock Exchange listing fee................................ 50,000
Legal fees and expenses............................................ 150,000
Accounting fees and expenses....................................... 140,000
Blue Sky fees and expenses (including legal fees).................. 10,000
Printing and engraving expenses.................................... 200,000
Transfer agent fees................................................ 5,000
Miscellaneous...................................................... 123,874
--------
Total............................................................ $700,000
========
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Delaware General Corporation Law and the Registrant's Certificate of
Incorporation and By-Laws limit the monetary liability of directors to the
Registrant and to its shareholders and provide for indemnification of the
Registrant's officers and directors for liabilities and expenses that they may
incur in such capacities. In general, officers and directors are indemnified
with respect to actions taken in good faith in a manner reasonably believed to
be in, or not opposed to, the best interests of the Registrant and, with
respect to any criminal action or proceeding, actions that the indemnitee had
no reasonable cause to believe were unlawful. The Registrant also has
indemnification agreements with its directors and officers that provide for
the maximum indemnification allowed by law. Reference is made to the
Registrant's Certificate of Incorporation, By-Laws and form of Indemnification
Agreement for Officers and Directors incorporated by reference as Exhibits
3.1, 3.2 and 10.18 hereto, respectively.

Thermo Electron has an insurance policy which insures the directors and
officers of Thermo Electron and its subsidiaries, including the Registrant,
against certain liabilities which might be incurred in connection with the
performance of their duties.

Under Section 6 of the Underwriting Agreement, the Underwriters are
obligated, under certain circumstances, to indemnify directors and officers of
the Registrant against certain liabilities, including liabilities under the
Securities Act of 1933, as amended (the "Securities Act"). Reference is made
to the form of Underwriting Agreement filed as Exhibit 1 hereto.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

On October 2, 1995, ThermoTrex transferred to the Registrant all outstanding
capital stock of its Bennett X-Ray Corporation subsidiary in exchange for a
$42,000,000 principal amount subordinated convertible note due 2000. Exemption
from registration for this transaction is claimed under Section 4(2) of the
Securities Act.

On October 16, 1995, ThermoTrex contributed all of the assets and
liabilities relating to its Lorad division and its Sonic CT system to the
Registrant in exchange for 20,000,000 shares of Common Stock. Exemption for
registration for this transaction is claimed under Section 4(2) of the
Securities Act.

II-1
<PAGE>

On November 22, 1995 and November 30, 1995 the Registrant sold an aggregate
of 1,862,000 shares of Common Stock to 159 accredited investors pursuant to
Regulation D of the Commission promulgated under the Securities Act.

On January 31, 1996, the Registrant sold 100,000 shares of Common Stock to
an accredited investor pursuant to Regulation D of the Commission promulgated
under the Securities Act.

From September 27, 1995 (the date of the Registrant's incorporation) through
March 27, 1996, the Registrant granted options under its stock-based
compensation plans to purchase an aggregate of 1,161,000 shares of Common
Stock at a weighted average exercise price of $10.96 per share. None of these
options have been exercised. Exemption from registration for these grants is
claimed under Section 4(2) of the Securities Act.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE

(A) EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
<C> <S>
1 Form of Underwriting Agreement.
*3.1 Certificate of Incorporation, as amended, of the Registrant.
*3.2 By-Laws of the Registrant.
4.1 Specimen Common Stock Certificate.
*4.2 $42,000,000 Subordinated Convertible Note due 2000 of the
Registrant issued to ThermoTrex.
5 Opinion of Seth H. Hoogasian, Esq. with respect to the validity of
the securities being offered.
*10.1 Corporate Services Agreement dated as of September 27, 1995
between Thermo Electron Corporation ("Thermo Electron") and the
Registrant.
10.2 Thermo Electron Corporate Charter, as amended and restated
effective January 3, 1993 (incorporated by reference herein form
Exhibit 10.1 to Thermo Electron's Annual Report on form 10-K for
the fiscal year ended January 2, 1993 (File No. 1-8002)).
*10.3 Tax Allocation Agreement dated as of September 27, 1995 between
Thermo Electron and the Registrant.
*10.4 Master Repurchase Agreement dated as of September 27, 1995 between
Thermo Electron and the Registrant.
*10.5 Master Guarantee Reimbursement Agreement dated as of September 27,
1995 between Thermo Electron and the Registrant.
*10.6 Master Guarantee Reimbursement Agreement dated as of September 27,
1995 between ThermoTrex and the Registrant.
*+10.7 OEM Agreement between Philips Medical Systems North American
Company and Lorad dated as of November 2, 1993.
*+10.8 OEM Agreement between Philips Medical Systems North American
Company and ThermoTrex dated November 17, 1993.
*+10.9 Purchase Agreement between General Electric Company and Bennett
dated November 17, 1994.
*+10.10 Agreement between Philips Medizin Systeme Unternehmensbereich der
Philips GmbH and Bennett dated February 12, 1992.
*+10.11 Distributor Agreement between ThermoTrex and US Surgical
Corporation dated October 20, 1995, as amended.
* 10.12 Note Purchase and Sale Agreement dated as of October 2, 1995
between ThermoTrex and the Registrant.
</TABLE>

II-2
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
<C> <S>
10.13 Lease dated as of September 15, 1995, by and among ThermoTrex and
BK Realty Associates, L.P. and Calrob Realty Associates (filed as
Exhibit 10.26 to ThermoTrex's Annual Report on Form
10-K for the fiscal year ended September 30, 1995 [File No. 1-
10791] and incorporated herein by reference).
*10.14 Lease dated as of December 20, 1995, between Melvyn J. Powers and
Mary P. Powers D/B/A M&M Realty and Lorad, as amended.
*10.15 Equity Incentive Plan of the Registrant.
*10.16 Deferred Compensation Plan for Directors of the Registrant.
*10.17 Directors Stock Option Plan of the Registrant.
*10.18 Form of Indemnification Agreement for Officers and Directors.
In addition to the stock-based compensation plans of the
Registrant, the executive officers of the Registrant may be
granted awards under stock-based compensation plans of the
Registrant's parent, Thermo Electron Corporation, and its
subsidiaries, for services rendered to the Registrant or to such
affiliated corporations. Such plans are listed under Exhibits
10.19-10.74.
10.19 Thermo Electron Corporation Incentive Stock Option Plan (filed as
Exhibit 4(d) to Thermo Electron's Registration Statement on Form
S-8 [Reg. No. 33-8993] and incorporated herein by reference).
(Maximum number of shares issuable in the aggregate under this
plan and the Thermo Electron Nonqualified Stock Option Plan is
9,035,156 shares, after adjustment to reflect share increases
approved in 1984 and 1986, share decrease approved in 1989, and 3-
for-2 stock splits effected in October 1986, October 1993 and May
1995).
10.20 Thermo Electron Corporation Nonqualified Stock Option Plan (filed
as Exhibit 4(e) to Thermo Electron's Registration Statement on
Form S-8 [Reg. No. 33-8993] and incorporated herein by reference).
(Plan amended in 1984 to extend expiration date to December 14,
1994; maximum number of shares issuable in the aggregate under
this plan and the Thermo Electron Incentive Stock Option Plan is
9,035,156 shares, after adjustment to reflect share increases
approved in 1984 and 1986, share decrease approved in 1989, and 3-
for-2 stock splits effected in October 1986, October 1993 and May
1995).
10.21 Thermo Electron Corporation Equity Incentive Plan (filed as
Exhibit 10.1 to Thermo Electron's Quarterly Report on Form 10-Q
for the quarter ended July 2, 1994 [File No. 1-8002] and
incorporated herein by reference). (Plan amended in 1989 to
restrict exercise price for SEC reporting persons to not less than
50% of fair market value or par value; maximum number of shares
issuable is 7,050,000 shares, after adjustment to reflect 3-for-2
stock splits effected in October 1993 and May 1995 and share
increase approved in 1994).
10.22 Thermo Electron Corporation--Thermedics Inc. Nonqualified Stock
Option Plan (filed as Exhibit 4 to a Registration Statement on
Form S-8 of Thermedics [Reg. No. 2-93747] and incorporated herein
by reference). (Maximum number of shares issuable is 450,000
shares, after adjustment to reflect share increase approved in
1988, 5-for-4 stock split effected in January 1985, 4-for-3 stock
split effected in September 1985, and 3-for-2 stock splits
effected in October 1986 and November 1993).
10.23 Thermo Electron Corporation--Thermo Instrument Systems Inc.
(formerly Thermo Environmental Corporation) Nonqualified Stock
Option Plan (filed as Exhibit 4(c) to a Registration Statement on
Form S-8 of Thermo Instrument [Reg. No. 33-8034] and incorporated
herein by reference). (Maximum number of shares issuable is
421,875 shares, after adjustment to reflect 3-for-2 stock splits
effected in July 1993 and April 1995 and a 5-for-4 stock split
effected in December 1995).
10.24 Thermo Electron Corporation--Thermo Instrument Systems Inc.
(formerly Thermo Environmental Corporation) Nonqualified Stock
Option Plan (filed as Exhibit 10.12 to Thermo Electron's Annual
Report on Form 10-K for the fiscal year ended January 3, 1987
[File No. 1-8002] and incorporated herein by reference). (Maximum
number of shares issuable is 600,285 shares, after adjustment to
reflect share increase approved in 1988 and 3-for-2 stock splits
effected in January 1988, July 1993 and April 1995 and a 5-for-4
stock split effected in December 1995).
</TABLE>

II-3
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
<C> <S>
10.25 Thermo Electron Corporation--Thermo Terra Tech Inc. (formerly
Thermo Process Systems Inc.) Nonqualified Stock Option Plan (filed
as Exhibit 10.13 to Thermo Electron's Annual Report on Form 10-K
for the fiscal year ended January 3, 1987 [File No. 1-8002] and
incorporated herein by reference). (Maximum number of shares
issuable is 108,000 shares, after adjustment to reflect 6-for-5
stock splits effected in July 1988 and March 1989, and 3-for-2
stock split effected in September 1989).
10.26 Thermo Electron Corporation--Thermo Power Corporation (formerly
Tecogen Inc.) Nonqualified Stock Option Plan (filed as Exhibit
10.14 to Thermo Electron's Annual Report on Form 10-K for the
fiscal year ended January 3, 1987 [File No. 1-8002] and
incorporated herein by reference). (Amended in September 1995 to
extend the plan expiration date to December 31, 2005).
10.27 Thermo Electron Corporation--Thermo Cardiosystems Inc.
Nonqualified Stock Option Plan (filed as Exhibit 10.11 to Thermo
Electron's Annual Report on Form 10-K for the fiscal year ended
December 29, 1990 [File No. 1-8002] and incorporated herein by
reference). (Maximum number of shares issuable is 130,500 shares,
after adjustment to reflect share increases approved in 1990 and
1992, 3-for-2 stock split effected in January 1990, 5-for-4 stock
split effected in May 1990 and 2-for-1 stock split effected in
November 1993).
10.28 Thermo Electron Corporation--Thermo Ecotek Corporation (formerly
Thermo Energy Systems Corporation) Nonqualified Stock Option Plan
(filed as Exhibit 10.12 to Thermo Electron's Annual Report on Form
10-K for the fiscal year ended December 29, 1990 [File No. 1-8002]
and incorporated hereby by reference).
10.29 Thermo Electron Corporation--ThermoTrex Corporation (formerly
Thermo Electron Technologies Corporation) Nonqualified Stock
Option Plan (filed as Exhibit 10.13 to Thermo Electron's Annual
Report on Form 10-K for the fiscal year ended December 29, 1990
[File No. 1-8002] and incorporated herein by reference). (Maximum
number of shares issuable is 180,000 shares, after adjustment to
reflect 3-for-2 stock split effected in October 1993).
10.30 Thermo Electron Corporation--Thermo Fibertek Inc. Nonqualified
Stock Option Plan (filed as Exhibit 10.14 to Thermo Electron's
Annual Report on Form 10-K for the fiscal year ended December 28,
1991 [File No. 1-8002] and incorporated herein by reference).
(Maximum number of shares issuable is 600,000 shares, after
adjustment to reflect 2-for-1 stock split effected in September
1992 and 3-for-2 stock split effected in September 1995).
10.31 Thermo Electron Corporation--Thermo Voltek Corp. (formerly
Universal Voltronics Corp.) Nonqualified Stock Option Plan (filed
as Exhibit 10.17 to Thermo Electron's Annual Report on Form 10-K
for the fiscal year ended January 2, 1993 [File No. 1-8002] and
incorporated herein by reference). (Maximum number of shares
issuable is 57,500 shares after adjustment to reflect 3-for-2
stock split effected in November 1993 and share increase approved
in September 1995).
10.32 Thermo Electron Corporation--Thermo BioAnalysis Corporation
Nonqualified Stock Option Plan (filed as Exhibit 10.31 to Thermo
Power's Annual Report on Form 10-K for the fiscal year ended
September 30, 1995 [File No. 1-10573] incorporated herein by
reference).
10.33 Thermo Electron Corporation--ThermoLyte Corporation Nonqualified
Stock Option Plan (filed as Exhibit 10.32 to Thermo Power's Annual
Report on Form 10-K for the fiscal year ended September 30, 1995
[File No. 1-10573] and incorporated herein by reference).
10.34 Thermo Electron Corporation--Thermo Remediation Inc. Nonqualified
Stock Option Plan (filed as Exhibit 10.33 to Thermo Power's Annual
Report on Form 10-K for the fiscal year ended September 30, 1995
[File No. 1-10573] and incorporated herein by reference).
10.35 Thermo Electron Corporation--ThermoSpectra Corporation
Nonqualified Stock Option Plan (filed as Exhibit 10.34 to Thermo
Power's Annual Report on Form 10-K for the fiscal year ended
September 30, 1995 [File No. 1-10573] and incorporated herein by
reference).
10.36 Thermo Electron Corporation--ThermoLase Corporation Nonqualified
Stock Option Plan (filed as Exhibit 10.35 to Thermo Power's Annual
Report on Form 10-K for the fiscal year ended September 30, 1995
[File No. 1-10573] and incorporated herein by reference).
</TABLE>

II-4
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
<C> <S>
10.37 Thermo Electron Corporation--ThermoQuest Corporation Nonqualified
Stock Option Plan (filed as Exhibit 10.41 to Thermo Cardiosystems'
Annual Report on Form 10-K for the fiscal year ended December 30,
1995 [File No. 1-10114] and incorporated herein by reference).
10.38 Thermo Electron Corporation--Thermo Optek Corporation Nonqualified
Stock Option Plan (filed as Exhibit 10.42 to Thermo Cardiosystems'
Annual Report on Form 10-K for the fiscal year ended December 30,
1995 [File No. 1-10114] and incorporated herein by reference).
10.39 Thermo Electron Corporation--Thermo Sentron Inc. Nonqualified
Stock Option Plan (filed as Exhibit 10.43 to Thermo Cardiosystems'
Annual Report on Form 10-K for the fiscal year ended December 30,
1995 [File No. 1-10114] and incorporated herein by reference).
10.40 Thermo Electron Corporation--Trex Medical Corporation Nonqualified
Stock Option Plan (filed as Exhibit 10.44 to Thermo Cardiosystems'
Annual Report on Form 10-K for the fiscal year ended December 30,
1995 [File No. 1-10114] and incorporated herein by reference).
10.41 Thermo Ecotek Corporation (formerly Thermo Energy Systems
Corporation) Incentive Stock Option Plan (filed as Exhibit 10.18
to Thermo Electron's Annual Report on Form 10-K for the fiscal
year ended January 2, 1993 [File No. 1-8002] and incorporated
herein by reference). (Maximum number of shares issuable in the
aggregate under this plan and the Thermo Ecotek Nonqualified Stock
Option Plan is 900,000 shares, after adjustment to reflect share
increase approved in December 1993).
10.42 Thermo Ecotek Corporation (formerly Thermo Energy Systems
Corporation) Nonqualified Stock Option Plan (filed as Exhibit
10.19 to Thermo Electron's Annual Report on Form 10-K for the
fiscal year ended January 2, 1993 [File No. 1-8001] and
incorporated herein by reference). (Maximum number of shares
issuable in the aggregate under this plan and the Thermo Ecotek
Incentive Stock Option Plan is 900,000 shares, after adjustment to
reflect share increase approved in December 1993).
10.43 Thermo Ecotek Corporation (formerly Thermo Energy Systems
Corporation) Equity Incentive Plan (filed as Exhibit 10.39 to
Thermo Instrument's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994 [File No. 1-9786] and incorporated herein
by reference).
10.44 Thermedics Inc. Incentive Stock Option Plan (filed as Exhibit
10(d) to Thermedics' Registration Statement on Form S-1 [Reg. No.
33-84380) and incorporated herein by reference). (Maximum number
of shares issuable in the aggregate under this plan and the
Thermedics Nonqualified Stock Option Plan is 1,931,923 shares,
after adjustment to reflect share increases approved in 1986 and
1992, 5-for-4 stock split effected in January 1985, 4-for-3 stock
split effected in September 1985, and 3-for-2 stock splits
effected in October 1986 and November 1993).
10.45 Thermedics Inc. Nonqualified Stock Option Plan (filed as Exhibit
10(e) to Thermedics' Registration Statement on Form S-1 [Reg. No.
33-84380) and incorporated herein by reference). (Maximum number
of shares issuable in the aggregate under this plan and the
Thermedics Incentive Stock Option Plan is 1,931,923 shares, after
adjustment to reflect share increases approved in 1986 and 1992,
5-for-4 stock split effected in January 1985, 4-for-3 stock split
effected in September 1985, and 3-for-2 stock splits effected in
October 1986 and November 1993).
10.46 Thermedics Inc. Equity Incentive Plan (filed as Appendix A to the
Proxy Statement dated May 10, 1993 of Thermedics [File No. 1-9567]
and incorporated herein by reference). (Maximum number of shares
issuable is 1,500,000, after adjustment to reflect 3-for-2 stock
split effected in November 1993).
10.47 Thermedics Inc.--Thermo Sentron Inc. Nonqualified Stock Option
Plan (filed as Exhibit 10.51 to Thermo Cardiosystems Annual Report
on Form 10-K for the fiscal year ended December 30, 1995 [File No.
1-10114] and incorporated herein by reference).
</TABLE>

II-5
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
<C> <S>
10.48 Thermedics Inc.--Thermedics Detection Inc. Nonqualified Stock
Option Plan (filed as Exhibit 10.20 to Thermo Electron's Annual
Report on Form 10-K for the fiscal year ended January 2, 1993
[File No. 1-8002] and incorporated herein by reference).
10.49 Thermedics Detection Inc.--Equity Incentive Plan (fiuled as
Exhibit 10.69 to Thermo Instrument's Annual Report on Form 10-K
for the fiscal year ended December 31, 1994 [File No. 1-9786] and
incorporated herein by reference).
10.50 Thermo Cardiosystems Inc. Incentive Stock Option Plan (filed as
Exhibit 10(f) to Thermo Cardiosystems' Registration Statement on
Form S-1 [Reg. No. 33-25144] and incorporated herein by
reference). (Maximum number of shares issuable in the aggregate
under this plan and the Thermo Cardiosystems Nonqualified Stock
Option Plan is 1,143,750 shares, after adjustment to reflect share
increase approved in 1992, 3-for-2 stock split effected in January
1990, 5-for-4 stock split effected in May 1990 and 2-for-1 stock
split effected in November 1993).
10.51 Thermo Cardiosystems Inc. Nonqualified Stock Option Plan (filed as
Exhibit 10(g) to Thermo Cardiosystems' Registration Statement on
Form S-1 [Reg. No. 33-25144] and incorporated herein by
reference). (Maximum number of shares issuable in the aggregate
under this plan and the Thermo Cardiosystems Incentive Stock
Option Plan is 1,143,750 shares, after adjustment to reflect share
increase approved in 1992, 3-for-2 stock split effected in January
1990, 5-for-4 stock split effected in May 1990 and 2-for-1 stock
split effected in November 1993).
10.52 Thermo Cardiosystems Inc. Equity Incentive Plan (filed as Exhibit
10.46 to Thermo Instrument's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994 [File No. 1-9786] and
incorporated herein by reference).
10.53 Thermo Voltek Corp. (formerly Universal Voltronics Corp.) 1985
Stock Option Plan (filed as Exhibit 10.14 to Thermo Voltek's
Annual Report on Form 10-K for the fiscal year ended June 30, 1985
[File No. 0-8245] and incorporated herein by reference). (Maximum
number of shares issuable is 200,000 shares, after adjustment to
reflect 1-for-3 reverse stock split effected in November 1992 and
3-for-2 stock split effected in November 1993).
10.54 Thermo Voltek Corp. (formerly Universal Voltronics Corp.) 1990
Stock Option Plan (filed as Exhibit 10.2 to Thermo Voltek's Annual
Report on Form 10-K for the fiscal year ended June 30, 1990 [File
No. 1-10574] and incorporated herein by reference). (Maximum
number of shares issuable is 400,000 shares, after adjustment to
reflect share increases in 1993 and 1994. 1-for-3 reverse stock
split effected in November 1992, and 3-for-2 stock split effected
in November 1993).
10.55 Thermo Voltek Corp. Equity Incentive Plan (filed as Exhibit 10.49
to Thermo Instrument's Annual Report on Form 10-K for the fiscal
year ended December 31, 1994 [File No. 1-9786] and incorporated
herein by reference).
10.56 Thermo Instrument Systems Inc. Incentive Stock Option Plan (filed
as Exhibit 10(c) to Thermo Instrument's Registration Statement on
Form S-1 [Reg. No. 33-6762] and incorporated herein by reference).
(Maximum number of shares issuable in the aggregate under this
plan and the Thermo Instrument Nonqualified Stock Option Plan is
2,812,500 shares, after adjustment to reflect share increase
approved in 1990 and 3-for-2 stock splits effected in January
1988, July 1993 and April 1995 and 5-for-4 stock split effected in
December 1995).
10.57 Thermo Instrument Systems Inc. Nonqualified Stock Option Plan
(filed as Exhibit 10(d) to Thermo Instrument's Registration
Statement on Form S-1 [Reg. No. 33-6762] and incorporated herein
by reference). (Maximum number of shares issuable in the aggregate
under this plan and the Thermo Instrument Incentive Stock Option
Plan is 2,812,500 shares, after adjustment to reflect share
increase approved in 1990 and 3-for-2 stock splits effected in
January 1988, July 1993 and April 1995 and 5-for-4 stock split
effected in December 1995).
</TABLE>

II-6
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
<C> <S>
10.58 Thermo Instrument Systems Inc. Equity Incentive Plan (filed as
Appendix A to the Proxy Statement dated April 27, 1993 of Thermo
Instrument [File No. 1-9786] and incorporated herein by
reference). (Maximum number of shares issuable is 4,031,250
shares, after adjustment to reflect share increase approved in
December 1993 and 3-for-2 stock split effected in July 1993 and
April 1995 and 5-for-4 stock split effected in December 1995).
10.59 Thermo Instrument Systems Inc. (formerly Thermo Environmental
Corporation) Incentive Stock Option Plan (filed as Exhibit 10(d)
to Thermo Environmental's Registration Statement on Form S-1 [Reg.
No. 33-329] and incorporated herein by reference). (Maximum number
of shares issuable in the aggregate under this plan and the Thermo
Instrument (formerly Thermo Environmental Corporation)
Nonqualified Stock Option Plan is 1,160,156 shares, after
adjustment to reflect share increase approved in 1987 and 3-for-2
stock splits effected in July 1993 and April 1995 and 5-for-4
stock split effected in December 1995).
10.60 Thermo Instrument Systems Inc. (formerly Thermo Environmental
Corporation) Nonqualified Stock Option Plan (filed as Exhibit
10(e) to Thermo Environmental's Registration Statement on Form S-1
[Reg. No. 33-329] and incorporated herein by reference). (Maximum
number of shares issuable in the aggregate under this plan and the
Thermo Instrument (formerly Thermo Environmental Corporation)
Incentive Stock Option Plan is 1,160,156 shares, after adjustment
to reflect share increase approved in 1987 and 3-for-2 splits
effected in July 1993 and April 1995 and 5-for-4 stock split
effected in December 1995).
10.61 Thermo Instrument Systems Inc.--ThermoSpectra Corporation
Nonqualified Stock Option Plan (filed as Exhibit 10.51 to Thermo
Instrument's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994 [File No. 1-9786] and incorporated herein by
reference).
10.62 Thermo Instrument Systems Inc.--Thermo BioAnalysis Corporation
Nonqualified Stock Option Plan (filed as Exhibit 10.64 to Thermo
Cardiosystems' Annual Report on Form 10-K for the fiscal year
ended December 30, 1995 [File No. 1-10114] and incorporated herein
by reference).
10.63 Thermo Instrument Systems Inc.--ThermoQuest Corporation
Nonqualified Stock Option Plan (filed as Exhibit 10.65 to Thermo
Cardiosystems' Annual Report on Form 10-K for the fiscal year
ended December 30, 1995 [File No. 1-10114] and incorporated herein
by reference).
10.64 ThermoSpectra Corporation Equity Incentive Plan (filed as Exhibit
10.52 to Thermo Instrument's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994 [File No. 1-9786] and
incorporated herein by reference).
10.65 Thermo BioAnalysis Corporation Equity Incentive Plan (filed as
Exhibit 10.67 to Thermo Cardiosystems' Annual Report on Form 10-K
for the fiscal year ended December 30, 1995 [File No. 1-10114] and
incorporated herein by reference).
10.66 Thermo Optek Corporation Equity Incentive Plan (filed as Exhibit
10.68 to Thermo Cardiosystems' Annual Report on Form 10-K for the
fiscal year ended December 30, 1995 [File No. 1-10114] and
incorporated herein by reference).
10.67 ThermoQuest Corporation Equity Incentive Plan (filed as Exhibit
10.69 to Thermo Cardiosystems' Annual Report on Form 10-K for the
fiscal year ended December 30, 1995 [File No. 1-10114] and
incorporated herein by reference).
10.68 ThermoTrex Corporation (formerly Thermo Electron Technologies
Corporation) Incentive Stock Option Plan (filed as Exhibit 10(h)
to ThermoTrex's Registration Statement on Form S-1 [Reg. No. 33-
40972] and incorporated herein by reference) (Maximum number of
shares issuable in the aggregate under this plan and the
ThermoTrex Nonqualified Stock Option Plan is 1,945,000 shares,
after adjustment to reflect share increases approved in 1992 and
1993 and 3-for-2 stock split effected in October 1993).
</TABLE>

II-7
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
<C> <S>
10.69 ThermoTrex Corporation (formerly Thermo Electron Technologies
Corporation) Nonqualified Stock Option Plan (filed as Exhibit
10(i) to ThermoTrex's Registration Statement on Form S-1 [Reg. No.
33-40972] and incorporated herein by reference) (Maximum number of
shares issuable in the aggregate under this plan and the
ThermoTrex Nonqualified Stock Option Plan is 1,945,000 shares,
after adjustment to reflect share increases approved in 1992 and
1993 and 3-for-2 stock split effected in October 1993).
10.70 ThermoTrex Corporation-ThermoLase Corporation (formerly ThermoLase
Inc.) Nonqualified Stock Option Plan (filed on Exhibit 10.53 to
ThermoTrex Corporation's Annual Report on Form 10-K for the fiscal
year ended January 1, 1994 [File No. 1-10791] and incorporated
herein by reference.
10.71 ThermoTrex Corporation--Trex Medical Corporation Nonqualified
Stock Option Plan (filed as Exhibit 10.73 to Thermo Cardiosystems'
Annual Report on Form 10-K for the fiscal year ended December 30,
1995 [File No. 1-10114] and incorporated herein by reference).
10.72 ThermoLase Corporation (formerly ThermoLase Inc.) Nonqualified
Stock Option Plan (filed as Exhibit 10.54 to ThermoTrex's Annual
Report on Form 10-K for the fiscal year ended January 1, 1994
[File No. 1-10791] and incorporated herein by reference). (Maximum
number of shares issuable in the aggregate under this plan and the
ThermoLase Incentive Stock Option Plan is 2,800,000 shares, after
adjustment to reflect share increase approved in 1993 and 2-for-1
stock splits effected in March 1994 and June 1995).
10.73 ThermoLase Corporation (formerly ThermoLase Inc.) Incentive Stock
Option Plan (filed as Exhibit 10.55 to ThermoTrex Corporation's
Annual Report on Form 10-K for the fiscal year ended January 1,
1994 [File No. 1-10791] and incorporated herein by reference).
(Maximum number of shares issuable in the aggregate under this
plan and the ThermoLase Nonqualified Stock Option Plan is
2,800,000 shares, after adjustment to reflect share increase
approved in 1993 and 2-for-1 stock splits effected in March 1994
and June 1995).
10.74 ThermoLase Corporation Equity Incentive Plan (filed as Exhibit
10.81 to Thermo TerraTech's Annual Report on Form 10-K for the
fiscal year ended April 1, 1995 [File No. 1-9549] and incorporated
herein by reference).
10.75 Thermo Fibertek Inc. Incentive Stock Option Plan (filed as Exhibit
10(k) to Thermo Fibertek's Registration Statement on Form S-1
[Reg. No. 33-51172] and incorporated herein by reference.
10.76 Thermo Fibertek Inc. Nonqualified Stock Option Plan (filed as
Exhibit 10(l) to Thermo Fibertek's Registration Statement on Form
S-1 [Reg. No. 33-51172] and incorporated herein by reference.
10.77 Thermo Fibertek Inc. Equity Incentive Plan (filed as Exhibit 10.60
to Thermo Instrument's Annual Report on Form 10-K for the fiscal
year ended December 31, 1994 [File No. 1-9786] and incorporated
herein by reference.
10.78 Thermo Power Corporation (formerly Tecogen Inc.) Incentive Stock
Option Plan (filed as Exhibit 10(h) to Thermo Power's Quarterly
Report on Form 10-Q for the quarter ended April 3, 1993 [Reg. No.
33-10573] and incorporated herein by reference). (Maximum number
of shares issuable in the aggregate under this plan and the Thermo
Power Nonqualified Stock Option Plan is 950,000 shares, after
adjustment to reflect share increases approved in 1990, 1992 and
1993).
10.79 Thermo Power Corporation (formerly Tecogen Inc.) Nonqualified
Stock Option Plan (filed as Exhibit 10(i) to Thermo Power's
Quarterly Report on Form 10-Q for the quarter ended April 3, 1993
[Reg. No. 33-10573] and incorporated herein by reference).
(Maximum number of shares issuable in the aggregate under this
plan and the Thermo Power Incentive Stock Option Plan is 950,000
shares, after adjustment to reflect share increases approved in
1990, 1992 and 1993).
10.80 Thermo Power Corporation Equity Incentive Plan (filed as Exhibit
10.63 to Thermo Instrument's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994 [File No. 1-9786] and
incorporated herein by reference).
</TABLE>

II-8
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
<C> <S>
10.81 Thermo Power Corporation--ThermoLyte Corporation Nonqualified
Stock Option Plan (filed as Exhibit 10.84 to Thermo Cardiosystems'
Annual Report on Form 10-K for the fiscal year ended December 30,
1995 [File No. 1-10114] and incorporated herein by reference).
10.82 ThermoLyte Corporation Equity Incentive Plan (filed as Exhibit
10.71 to Thermo Power's Annual Report on Form 10-K for the fiscal
year ended September 30, 1995 [File No. 1-10573] and incorporated
herein by reference).
10.83 Thermo TerraTech Inc. (formerly Thermo Process Systems Inc.)
Incentive Stock Option Plan (filed as Exhibit 10(h) to Thermo
Process' Registration Statement on Form S-1 [Reg. No. 33-6763] and
incorporated herein by reference). (Maximum number of shares
issuable in the aggregate under this plan and the Thermo TerraTech
Nonqualified Stock Option Plan is 1,850,000 shares, after
adjustment to reflect share increases approved in 1987, 1989 and
1992, 6-for-5 stock splits effected in July 1988 and March 1989
and 3-for-2 stock split effected in September 1989).
10.84 Thermo TerraTech Inc. (formerly Thermo Process Systems Inc.)
Nonqualified Stock Option Plan (filed as Exhibit 10(i) to Thermo
Process' Registration Statement on Form S-1 [Reg. No. 33-6763] and
incorporated herein by reference). (Maximum number of shares
issuable in the aggregate under this plan and the Thermo TerraTech
Incentive Stock Option Plan is 1,850,000 shares, after adjustment
to reflect share increases approved in 1987, 1989 and 1992, 6-for-
5 stock splits effected in July 1988 and March 1989 and 3-for-2
stock split effected in September 1989).
10.85 Thermo TerraTech Inc. (formerly Thermo Process Systems Inc.)
Equity Incentive Plan (filed as Exhibit 10.63 to Thermedics'
Annual Report on Form 10-K for the fiscal year ended January 1,
1994 [File No. 1-9567] and incorporated herein by reference).
(Maximum number of shares issuable is 1,750,000 shares, after
adjustment to reflect share increase approved in 1994).
10.86 Thermo TerraTech Inc. (formerly Thermo Process Systems Inc.)--
Thermo Remediation Inc. Nonqualified Stock Option Plan (filed as
Exhibit 10(l) to Thermo Process' Quarterly Report on Form 10-Q for
the fiscal quarter ended January 1, 1994 [File No. 1-9549] and
incorporated herein by reference).
10.87 Thermo Remediation Inc. Equity Incentive Plan (filed as Exhibit
10.7 to Thermo Remediation's Registration Statement on Form S-1
[Reg. No. 33-70544] and incorporated herein by reference).
11 Computation of Earnings per Share
*21 Subsidiaries of the Registrant
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Arthur Andersen LLP
23.3 Consent of Arthur Andersen LLP
23.4 Consent of Topel Forman L.L.C.
23.5 Consent of Seth H. Hoogasian, Esq. (included in Exhibit 5)
*24 Power of Attorney
27 Financial Data Schedule
</TABLE>
- --------

* Previously Filed.

+ Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.

(B) FINANCIAL STATEMENT SCHEDULE

The financial Statement Schedule as of September 30, 1995 and the Report of
Independent Public Accountants on such schedule are included in this
Registration Statement. All other schedules are omitted because they are not
applicable or are not required under Regulation S-X.

II-9
<PAGE>

ITEM 17. UNDERTAKINGS

(a) The undersigned Registrant hereby undertakes to provide to the
Underwriters at the closing specified in the Underwriting Agreement
certificates in such denominations and registered in such names as required by
the Underwriters to permit prompt delivery to each purchaser.

(b) The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in the form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions contained in the Certificate of
Incorporation and By-Laws of the Registrant and the laws of the State of
Delaware, or otherwise, the Registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

II-10
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Danbury, Connecticut, on
this 7th day of May, 1996.

TREX MEDICAL CORPORATION

By: *
_________________________________
Hal Kirshner
Chief Executive Officer,
President and Director

SIGNATURES

Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
Chief Executive May 7, 1996
* Officer, President
____________________________________ and Director
HAL KIRSHNER (Principal
Executive Officer)

Vice President, Chief May 7, 1996
* Accounting Officer
____________________________________ and Director
JOHN N. HATSOPOULOS (Principal
Financial Officer)

Chief Accounting May 7, 1996
* Officer (Principal
____________________________________ Accounting
PAUL F. KELLEHER Officer)

Director May 7, 1996
*
____________________________________
DR. ELIAS P. GYFTOPOULOS

Director May 7, 1996
*
____________________________________
ROBERT C. HOWARD

</TABLE>
II-11
<PAGE>

SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
Director May 7, 1996
*
____________________________________
EARL R. LEWIS

Director May 7, 1996
*
____________________________________
DR. JAMES W. MAY JR.

Director May 7, 1996
*
____________________________________
HUTHAM S. OLAYAN

Director May 7, 1996
*
____________________________________
ANTHONY J. PELLEGRINO

Director May 7, 1996
*
____________________________________
FIROOZ RUFEH

Director May 7, 1996
*
____________________________________
KENNETH Y. TANG

Director and May 7, 1996
* Chairman of the
____________________________________ Board
GARY S. WEINSTEIN

</TABLE>

*By: /s/ Jonathan W. Painter
__________________________
JONATHAN W. PAINTER
ATTORNEY-IN-FACT

II-12
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Trex Medical Corporation:

We have audited in accordance with generally accepted auditing standards the
consolidated balance sheet of Trex Medical Corporation and subsidiaries as of
December 31, 1994 and September 30, 1995, and the related consolidated
statements of income, cash flows and shareholders' investment for the years
ended January 1, 1994 and December 31, 1994 and for the nine months ended
September 30, 1995. These financial statements have been included in Trex
Medical Corporation's Form S-1 and we have issued our report thereon dated
March 26, 1996 (except with respect to certain matters discussed in Note 9, as
to which the date is May 6, 1996.) Our audits were made for the purpose of
forming an opinion on the basic consolidated financial statements taken as a
whole. Trex Medical Corporation's schedule of Valuation and Qualifying
Accounts, included in Schedule II on page S-2, is the responsibility of the
Company's management and is presented for purposes of complying with the
Securities and Exchange Commission's rules and is not part of the basic
consolidated financial statements. This schedule has been subjected to the
auditing procedures applied in the audits of the basic consolidated financial
statements and, in our opinion, fairly states in all material respects the
financial data required to be set forth therein in relation to the basic
consolidated financial statements taken as a whole.

Arthur Andersen LLP

Boston, Massachusetts
March 26, 1996

S-1
<PAGE>

SCHEDULE II
TREX MEDICAL CORPORATION

VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)

<TABLE>
<CAPTION>
BALANCE AT CHARGES TO BALANCE
BEGINNING COSTS AND AT END
OF PERIOD EXPENSES OTHER (A) OF PERIOD
---------- ---------- --------- ---------
<S> <C> <C> <C> <C>
NINE MONTHS ENDED SEPTEMBER 30, 1995
Allowance for Doubtful Accounts.... $525 $ 25 $320 $870
YEAR ENDED DECEMBER 31, 1994
Allowance for Doubtful Accounts.... $350 $175 $-- $525
YEAR ENDED JANUARY 1, 1994
Allowance for Doubtful Accounts.... $350 $-- $-- $350
</TABLE>
- --------
(a) Allowance of business acquired during the year as described in Note 2 to
Consolidated Financial Statements of the Company.

S-2
<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT PAGE
----------- ---------------------- ----
<C> <S> <C>
1 Form of Underwriting Agreement ............................
*3.1 Certificate of Incorporation, as amended, of the
Registrant.................................................
*3.2 By-Laws of the Registrant..................................
4.1 Specimen Common Stock Certificate..........................
*4.2 $42,000,000 Subordinated Convertible Note due 2000 of the
Registrant issued to ThermoTrex............................
5 Opinion of Seth H. Hoogasian, Esq. with respect to the
validity of the securities being offered...................
*10.1 Corporate Services Agreement dated as of September 27, 1995
between Thermo Electron Corporation ("Thermo Electron") and
the Registrant.............................................
10.2 Thermo Electron Corporate Charter, as amended and restated
effective January 3, 1993 (incorporated by reference herein
form Exhibit 10.1 to Thermo Electron's Annual Report on
form 10-K for the fiscal year ended January 2, 1993 (File
No. 1-8002))...............................................
*10.3 Tax Allocation Agreement dated as of September 27, 1995
between Thermo Electron and the Registrant.................
*10.4 Master Repurchase Agreement dated as of September 27, 1995
between Thermo Electron and the Registrant.................
*10.5 Master Guarantee Reimbursement Agreement dated as of
September 27, 1995 between Thermo Electron and the
Registrant.................................................
*10.6 Master Guarantee Reimbursement Agreement dated as of
September 27, 1995 between ThermoTrex and the Registrant...
*+10.7 OEM Agreement between Philips Medical Systems North
American Company and Lorad dated as of November 2, 1993....
*+10.8 OEM Agreement between Philips Medical Systems North
American Company and ThermoTrex dated November 17, 1993....
*+10.9 Purchase Agreement between General Electric Company and
Bennett dated November 17, 1994............................
*+10.10 Agreement between Philips Medizin Systeme
Unternehmensbereich der Philips GmbH and Bennett dated
February 12, 1992..........................................
*+10.11 Distributor Agreement between ThermoTrex and US Surgical
Corporation dated October 20, 1995, as amended.............
*10.12 Note Purchase and Sale Agreement dated as of October 2,
1995 between ThermoTrex and the Registrant.................
10.13 Lease dated as of September 15, 1995, by and among
ThermoTrex and BK Realty Associates, L.P. and Calrob Realty
Associates (filed as Exhibit 10.26 to ThermoTrex's Annual
Report on Form 10-K for the fiscal year ended September 30,
1995 [File No. 1-10791] and incorporated herein by
reference).................................................
*10.14 Lease dated as of December 20, 1995, between Melvyn J.
Powers and Mary P. Powers D/B/A M&M Realty and Lorad, as
amended....................................................
*10.15 Equity Incentive Plan of the Registrant....................
*10.16 Deferred Compensation Plan for Directors of the
Registrant.................................................
*10.17 Directors Stock Option Plan of the Registrant..............
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT PAGE
----------- ---------------------- ----
<C> <S> <C>
*10.18 Form of Indemnification Agreement for Officers and
Directors.
In addition to the stock-based compensation plans of the
Registrant, the executive officers of the Registrant may be
granted awards under stock-based compensation plans of the
Registrant's parent, Thermo Electron Corporation, and its
subsidiaries, for services rendered to the Registrant or to
such affiliated corporations. Such plans are listed under
Exhibits 10.19-10.74 ......................................
10.19 Thermo Electron Corporation Incentive Stock Option Plan
(filed as Exhibit 4(d) to Thermo Electron's Registration
Statement on Form S-8 [Reg. No. 33-8993] and incorporated
herein by reference). (Maximum number of shares issuable in
the aggregate under this plan and the Thermo Electron
Nonqualified Stock Option Plan is 9,035,156 shares, after
adjustment to reflect share increases approved in 1984 and
1986, share decrease approved in 1989, and 3-for-2 stock
splits effected in October 1986, October 1993 and May
1995) .....................................................
10.20 Thermo Electron Corporation Nonqualified Stock Option Plan
(filed as Exhibit 4(e) to Thermo Electron's Registration
Statement on Form S-8 [Reg. No. 33-8993] and incorporated
herein by reference). (Plan amended in 1984 to extend
expiration date to December 14, 1994; maximum number of
shares issuable in the aggregate under this plan and the
Thermo Electron Incentive Stock Option Plan is 9,035,156
shares, after adjustment to reflect share increases
approved in 1984 and 1986, share decrease approved in 1989,
and 3-for-2 stock splits effected in October 1986, October
1993 and May 1995) ........................................
10.21 Thermo Electron Corporation Equity Incentive Plan (filed as
Exhibit 10.1 to Thermo Electron's Quarterly Report on Form
10-Q for the quarter ended July 2, 1994 [File No. 1-8002]
and incorporated herein by reference). (Plan amended in
1989 to restrict exercise price for SEC reporting persons
to not less than 50% of fair market value or par value;
maximum number of shares issuable is 7,050,000 shares,
after adjustment to reflect 3-for-2 stock splits effected
in October 1993 and May 1995 and share increase approved in
1994) .....................................................
10.22 Thermo Electron Corporation--Thermedics Inc. Nonqualified
Stock Option Plan (filed as Exhibit 4 to a Registration
Statement on Form S-8 of Thermedics [Reg. No. 2-93747] and
incorporated herein by reference). (Maximum number of
shares issuable is 450,000 shares, after adjustment to
reflect share increase approved in 1988, 5-for-4 stock
split effected in January 1985, 4-for-3 stock split
effected in September 1985, and 3-for-2 stock splits
effected in October 1986 and November 1993) ...............
10.23 Thermo Electron Corporation--Thermo Instrument Systems Inc.
(formerly Thermo Environmental Corporation) Nonqualified
Stock Option Plan (filed as Exhibit 4(c) to a Registration
Statement on Form S-8 of Thermo Instrument [Reg. No. 33-
8034] and incorporated herein by reference). (Maximum
number of shares issuable is 421,875 shares, after
adjustment to reflect 3-for-2 stock splits effected in July
1993 and April 1995 and a 5-for-4 stock split effected in
December 1995) ............................................
10.24 Thermo Electron Corporation--Thermo Instrument Systems Inc.
(formerly Thermo Environmental Corporation) Nonqualified
Stock Option Plan (filed as Exhibit 10.12 to Thermo
Electron's Annual Report on Form 10-K for the fiscal year
ended January 3, 1987 [File No. 1-8002] and incorporated
herein by reference). (Maximum number of shares issuable is
600,285 shares, after adjustment to reflect share increase
approved in 1988 and -for-2 stock splits effected in
January 1988, July 1993 and April 1995 and a 5-for-4 stock
split effected in December 1995)...........................
10.25 Thermo Electron Corporation--Thermo Terra Tech Inc.
(formerly Thermo Process Systems Inc.) Nonqualified Stock
Option Plan (filed as Exhibit 10.13 to Thermo Electron's
Annual Report on Form 10-K for the fiscal year ended
January 3, 1987 [File No. 1-8002] and incorporated herein
by reference). (Maximum number of shares issuable is
108,000 shares, after adjustment to reflect 6-for-5 stock
splits effected in July 1988 and March 1989, and 3-for-2
stock split effected in September 1989) ...................
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT PAGE
----------- ---------------------- ----
<C> <S> <C>
10.26 Thermo Electron Corporation--Thermo Power Corporation
(formerly Tecogen Inc.) Nonqualified Stock Option Plan
(filed as Exhibit 10.14 to Thermo Electron's Annual Report
on Form 10-K for the fiscal year ended January 3, 1987
[File No. 1-8002] and incorporated herein by reference).
(Amended in September 1995 to extend the plan expiration
date to December 31, 2005) ................................
10.27 Thermo Electron Corporation--Thermo Cardiosystems Inc.
Nonqualified Stock Option Plan (filed as Exhibit 10.11 to
Thermo Electron's Annual Report on Form 10-K for the fiscal
year ended December 29, 1990 [File No. 1-8002] and
incorporated herein by reference). (Maximum number of
shares issuable is 130,500 shares, after adjustment to
reflect share increases approved in 1990 and 1992, 3-for-2
stock split effected in January 1990, 5-for-4 stock split
effected in May 1990 and 2-for-1 stock split effected in
November 1993).............................................
10.28 Thermo Electron Corporation--Thermo Ecotek Corporation
(formerly Thermo Energy Systems Corporation) Nonqualified
Stock Option Plan (filed as Exhibit 10.12 to Thermo
Electron's Annual Report on Form 10-K for the fiscal year
ended December 29, 1990 [File No. 1-8002] and incorporated
hereby by reference) ......................................
10.29 Thermo Electron Corporation--ThermoTrex Corporation
(formerly Thermo Electron Technologies Corporation)
Nonqualified Stock Option Plan (filed as Exhibit 10.13 to
Thermo Electron's Annual Report on Form 10-K for the fiscal
year ended December 29, 1990 [File No. 1-8002] and
incorporated herein by reference). (Maximum number of
shares issuable is 180,000 shares, after adjustment to
reflect 3-for-2 stock split effected in October 1993) .....
10.30 Thermo Electron Corporation--Thermo Fibertek Inc.
Nonqualified Stock Option Plan (filed as Exhibit 10.14 to
Thermo Electron's Annual Report on Form 10-K for the fiscal
year ended December 28, 1991 [File No. 1-8002] and
incorporated herein by reference). (Maximum number of
shares issuable is 600,000 shares, after adjustment to
reflect 2-for-1 stock split effected in September 1992 and
3-for-2 stock split effected in September 1995) ...........
10.31 Thermo Electron Corporation--Thermo Voltek Corp. (formerly
Universal Voltronics Corp.) Nonqualified Stock Option Plan
(filed as Exhibit 10.17 to Thermo Electron's Annual Report
on Form 10-K for the fiscal year ended January 2, 1993
[File No. 1-8002] and incorporated herein by reference).
(Maximum number of shares issuable is 57,500 shares after
adjustment to reflect 3-for-2 stock split effected in
November 1993 and share increase approved in September
1995) .....................................................
10.32 Thermo Electron Corporation--Thermo BioAnalysis Corporation
Nonqualified Stock Option Plan (filed as Exhibit 10.31 to
Thermo Power's Annual Report on Form 10-K for the fiscal
year ended September 30, 1995 [File No. 1-10573]
incorporated herein by reference) .........................
10.33 Thermo Electron Corporation--ThermoLyte Corporation
Nonqualified Stock Option Plan (filed as Exhibit 10.32 to
Thermo Power's Annual Report on Form 10-K for the fiscal
year ended September 30, 1995 [File No. 1-10573] and
incorporated herein by reference) .........................
10.34 Thermo Electron Corporation--Thermo Remediation Inc.
Nonqualified Stock Option Plan (filed as Exhibit 10.33 to
Thermo Power's Annual Report on Form 10-K for the fiscal
year ended September 30, 1995 [File No. 1-10573] and
incorporated herein by reference) .........................
10.35 Thermo Electron Corporation--ThermoSpectra Corporation
Nonqualified Stock Option Plan (filed as Exhibit 10.34 to
Thermo Power's Annual Report on Form 10-K for the fiscal
year ended September 30, 1995 [File No. 1-10573] and
incorporated herein by reference) .........................
10.36 Thermo Electron Corporation--ThermoLase Corporation
Nonqualified Stock Option Plan (filed as Exhibit 10.35 to
Thermo Power's Annual Report on Form 10-K for the fiscal
year ended September 30, 1995 [File No. 1-10573] and
incorporated herein by reference) .........................
10.37 Thermo Electron Corporation--ThermoQuest Corporation
Nonqualified Stock Option Plan (filed as Exhibit 10.41 to
Thermo Cardiosystems' Annual Report on Form 10-K for the
fiscal year ended December 30, 1995 [File No. 1-10114] and
incorporated herein by reference) .........................
</TABLE>
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<TABLE>
<CAPTION>
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10.38 Thermo Electron Corporation--Thermo Optek Corporation
Nonqualified Stock Option Plan (filed as Exhibit 10.42 to
Thermo Cardiosystems' Annual Report on Form 10-K for the
fiscal year ended December 30, 1995 [File No. 1-10114] and
incorporated herein by reference) .........................
10.39 Thermo Electron Corporation--Thermo Sentron Inc.
Nonqualified Stock Option Plan (filed as Exhibit 10.43 to
Thermo Cardiosystems' Annual Report on Form 10-K for the
fiscal year ended December 30, 1995 [File No. 1-10114] and
incorporated herein by reference) .........................
10.40 Thermo Electron Corporation--Trex Medical Corporation
Nonqualified Stock Option Plan (filed as Exhibit 10.44 to
Thermo Cardiosystems' Annual Report on Form 10-K for the
fiscal year ended December 30, 1995 [File No. 1-10114] and
incorporated herein by reference) .........................
10.41 Thermo Ecotek Corporation (formerly Thermo Energy Systems
Corporation) Incentive Stock Option Plan (filed as Exhibit
10.18 to Thermo Electron's Annual Report on Form 10-K for
the fiscal year ended January 2, 1993 [File No. 1-8002] and
incorporated herein by reference). (Maximum number of
shares issuable in the aggregate under this plan and the
Thermo Ecotek Nonqualified Stock Option Plan is 900,000
shares, after adjustment to reflect share increase approved
in December 1993) .........................................
10.42 Thermo Ecotek Corporation (formerly Thermo Energy Systems
Corporation) Nonqualified Stock Option Plan (filed as
Exhibit 10.19 to Thermo Electron's Annual Report on Form
10-K for the fiscal year ended January 2, 1993 [File No. 1-
8001] and incorporated herein by reference). (Maximum
number of shares issuable in the aggregate under this plan
and the Thermo Ecotek Incentive Stock Option Plan is
900,000 shares, after adjustment to reflect share increase
approved in December 1993) ................................
10.43 Thermo Ecotek Corporation (formerly Thermo Energy Systems
Corporation) Equity Incentive Plan (filed as Exhibit 10.39
to Thermo Instrument's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994 [File No. 1-9786] and
incorporated herein by reference) .........................
10.44 Thermedics Inc. Incentive Stock Option Plan (filed as
Exhibit 10(d) to Thermedics' Registration Statement on Form
S-1 [Reg. No. 33-84380) and incorporated herein by
reference). (Maximum number of shares issuable in the
aggregate under this plan and the Thermedics Nonqualified
Stock Option Plan is 1,931,923 shares, after adjustment to
reflect share increases approved in 1986 and 1992, 5-for-4
stock split effected in January 1985, 4-for-3 stock split
effected in September 1985, and 3-for-2 stock splits
effected in October 1986 and November 1993) ...............
10.45 Thermedics Inc. Nonqualified Stock Option Plan (filed as
Exhibit 10(e) to Thermedics' Registration Statement on Form
S-1 [Reg. No. 33-84380) and incorporated herein by
reference). (Maximum number of shares issuable in the
aggregate under this plan and the Thermedics Incentive
Stock Option Plan is 1,931,923 shares, after adjustment to
reflect share increases approved in 1986 and 1992, 5-for-4
stock split effected in January 1985, 4-for-3 stock split
effected in September 1985, and 3-for-2 stock splits
effected in October 1986 and November 1993) ...............
10.46 Thermedics Inc. Equity Incentive Plan (filed as Appendix A
to the Proxy Statement dated May 10, 1993 of Thermedics
[File No. 1-9567] and incorporated herein by reference).
(Maximum number of shares issuable is 1,500,000, after
adjustment to reflect 3-for-2 stock split effected in
November 1993) ............................................
10.47 Thermedics Inc.--Thermo Sentron Inc. Nonqualified Stock
Option Plan (filed as Exhibit 10.51 to Thermo Cardiosystems
Annual Report on Form 10-K for the fiscal year ended
December 30, 1995 [File No. 1-10114] and incorporated
herein by reference) ......................................
</TABLE>
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<TABLE>
<CAPTION>
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10.48 Thermedics Inc.--Thermedics Detection Inc. Nonqualified
Stock Option Plan (filed as Exhibit 10.20 to Thermo
Electron's Annual Report on Form 10-K for the fiscal year
ended January 2, 1993 [File No. 1-8002] and incorporated
herein by reference) ......................................
10.49 Thermedics Detection Inc.--Equity Incentive Plan (fiuled as
Exhibit 10.69 to Thermo Instrument's Annual Report on Form
10-K for the fiscal year ended December 31, 1994 [File No.
1-9786] and incorporated herein by reference) .............
10.50 Thermo Cardiosystems Inc. Incentive Stock Option Plan
(filed as Exhibit 10(f) to Thermo Cardiosystems'
Registration Statement on Form S-1 [Reg. No. 33-25144] and
incorporated herein by reference). (Maximum number of
shares issuable in the aggregate under this plan and the
Thermo Cardiosystems Nonqualified Stock Option Plan is
1,143,750 shares, after adjustment to reflect share
increase approved in 1992, 3-for-2 stock split effected in
January 1990, 5-for-4 stock split effected in May 1990 and
2-for-1 stock split effected in November 1993) ............
10.51 Thermo Cardiosystems Inc. Nonqualified Stock Option Plan
(filed as Exhibit 10(g) to Thermo Cardiosystems'
Registration Statement on Form S-1 [Reg. No. 33-25144] and
incorporated herein by reference). (Maximum number of
shares issuable in the aggregate under this plan and the
Thermo Cardiosystems Incentive Stock Option Plan is
1,143,750 shares, after adjustment to reflect share
increase approved in 1992, 3-for-2 stock split effected in
January 1990, 5-for-4 stock split effected in May 1990 and
2-for-1 stock split effected in November 1993) ............
10.52 Thermo Cardiosystems Inc. Equity Incentive Plan (filed as
Exhibit 10.46 to Thermo Instrument's Annual Report on Form
10-K for the fiscal year ended December 31, 1994 [File No.
1-9786] and incorporated herein by reference) .............
10.53 Thermo Voltek Corp. (formerly Universal Voltronics Corp.)
1985 Stock Option Plan (filed as Exhibit 10.14 to Thermo
Voltek's Annual Report on Form 10-K for the fiscal year
ended June 30, 1985 [File No. 0-8245] and incorporated
herein by reference). (Maximum number of shares issuable is
200,000 shares, after adjustment to reflect 1-for-3 reverse
stock split effected in November 1992 and 3-for-2 stock
split effected in November 1993) ..........................
10.54 Thermo Voltek Corp. (formerly Universal Voltronics Corp.)
1990 Stock Option Plan (filed as Exhibit 10.2 to Thermo
Voltek's Annual Report on Form 10-K for the fiscal year
ended June 30, 1990 [File No. 1-10574] and incorporated
herein by reference). (Maximum number of shares issuable is
400,000 shares, after adjustment to reflect share increases
in 1993 and 1994. 1-for-3 reverse stock split effected in
November 1992, and 3-for-2 stock split effected in November
1993) .....................................................
10.55 Thermo Voltek Corp. Equity Incentive Plan (filed as Exhibit
10.49 to Thermo Instrument's Annual Report on Form 10-K for
the fiscal year ended December 31, 1994 [File No. 1-9786]
and incorporated herein by reference) .....................
10.56 Thermo Instrument Systems Inc. Incentive Stock Option Plan
(filed as Exhibit 10(c) to Thermo Instrument's Registration
Statement on Form S-1 [Reg. No. 33-6762] and incorporated
herein by reference). (Maximum number of shares issuable in
the aggregate under this plan and the Thermo Instrument
Nonqualified Stock Option Plan is 2,812,500 shares, after
adjustment to reflect share increase approved in 1990 and
3-for-2 stock splits effected in January 1988, July 1993
and April 1995 and 5-for-4 stock split effected in December
1995) .....................................................
</TABLE>

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<TABLE>
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10.57 Thermo Instrument Systems Inc. Nonqualified Stock Option
Plan (filed as Exhibit 10(d) to Thermo Instrument's
Registration Statement on Form S-1 [Reg. No. 33-6762] and
incorporated herein by reference). (Maximum number of
shares issuable in the aggregate under this plan and the
Thermo Instrument Incentive Stock Option Plan is 2,812,500
shares, after adjustment to reflect share increase approved
in 1990 and 3-for-2 stock splits effected in January 1988,
July 1993 and April 1995 and 5-for-4 stock split effected
in December 1995) .........................................
10.58 Thermo Instrument Systems Inc. Equity Incentive Plan (filed
as Appendix A to the Proxy Statement dated April 27, 1993
of Thermo Instrument [File No. 1-9786] and incorporated
herein by reference). (Maximum number of shares issuable is
4,031,250 shares, after adjustment to reflect share
increase approved in December 1993 and 3-for-2 stock split
effected in July 1993 and April 1995 and 5-for-4 stock
split effected in December 1995) ..........................
10.59 Thermo Instrument Systems Inc. (formerly Thermo
Environmental Corporation) Incentive Stock Option Plan
(filed as Exhibit 10(d) to Thermo Environmental's
Registration Statement on Form S-1 [Reg. No. 33-329] and
incorporated herein by reference). (Maximum number of
shares issuable in the aggregate under this plan and the
Thermo Instrument (formerly Thermo Environmental
Corporation) Nonqualified Stock Option Plan is 1,160,156
shares, after adjustment to reflect share increase approved
in 1987 and 3-for-2 stock splits effected in July 1993 and
April 1995 and 5-for-4 stock split effected in December
1995) .....................................................
10.60 Thermo Instrument Systems Inc. (formerly Thermo
Environmental Corporation) Nonqualified Stock Option Plan
(filed as Exhibit 10(e) to Thermo Environmental's
Registration Statement on Form S-1 [Reg. No. 33-329] and
incorporated herein by reference). (Maximum number of
shares issuable in the aggregate under this plan and the
Thermo Instrument (formerly Thermo Environmental
Corporation) Incentive Stock Option Plan is 1,160,156
shares, after adjustment to reflect share increase approved
in 1987 and 3-for-2 splits effected in July 1993 and April
1995 and 5-for-4 stock split effected in December 1995) ...
10.61 Thermo Instrument Systems Inc.--ThermoSpectra Corporation
Nonqualified Stock Option Plan (filed as Exhibit 10.51 to
Thermo Instrument's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994 [File No. 1-9786] and
incorporated herein by reference) .........................
10.62 Thermo Instrument Systems Inc.--Thermo BioAnalysis
Corporation Nonqualified Stock Option Plan (filed as
Exhibit 10.64 to Thermo Cardiosystems' Annual Report on
Form 10-K for the fiscal year ended December 30, 1995 [File
No. 1-10114] and incorporated herein by reference) ........
10.63 Thermo Instrument Systems Inc.--ThermoQuest Corporation
Nonqualified Stock Option Plan (filed as Exhibit 10.65 to
Thermo Cardiosystems' Annual Report on Form 10-K for the
fiscal year ended December 30, 1995 [File No. 1-10114] and
incorporated herein by reference) .........................
10.64 ThermoSpectra Corporation Equity Incentive Plan (filed as
Exhibit 10.52 to Thermo Instrument's Annual Report on Form
10-K for the fiscal year ended December 31, 1994 [File No.
1-9786] and incorporated herein by reference) .............
10.65 Thermo BioAnalysis Corporation Equity Incentive Plan (filed
as Exhibit 10.67 to Thermo Cardiosystems' Annual Report on
Form 10-K for the fiscal year ended December 30, 1995 [File
No. 1-10114] and incorporated herein by reference) ........
10.66 Thermo Optek Corporation Equity Incentive Plan (filed as
Exhibit 10.68 to Thermo Cardiosystems' Annual Report on
Form 10-K for the fiscal year ended December 30, 1995 [File
No. 1-10114] and incorporated herein by reference) ........
</TABLE>

<PAGE>

<TABLE>
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10.67 ThermoQuest Corporation Equity Incentive Plan (filed as
Exhibit 10.69 to Thermo Cardiosystems' Annual Report on
Form 10-K for the fiscal year ended December 30, 1995 [File
No. 1-10114] and incorporated herein by reference) ........
10.68 ThermoTrex Corporation (formerly Thermo Electron
Technologies Corporation) Incentive Stock Option Plan
(filed as Exhibit 10(h) to ThermoTrex's Registration
Statement on Form S-1 [Reg. No. 33-40972] and incorporated
herein by reference) (Maximum number of shares issuable in
the aggregate under this plan and the ThermoTrex
Nonqualified Stock Option Plan is 1,945,000 shares, after
adjustment to reflect share increases approved in 1992 and
1993 and 3-for-2 stock split effected in October 1993) ....
10.69 ThermoTrex Corporation (formerly Thermo Electron
Technologies Corporation) Nonqualified Stock Option Plan
(filed as Exhibit 10(i) to ThermoTrex's Registration
Statement on Form S-1 [Reg. No. 33-40972] and incorporated
herein by reference) (Maximum number of shares issuable in
the aggregate under this plan and the ThermoTrex
Nonqualified Stock Option Plan is 1,945,000 shares, after
adjustment to reflect share increases approved in 1992 and
1993 and 3-for-2 stock split effected in October 1993) ....
10.70 ThermoTrex Corporation-ThermoLase Corporation (formerly
ThermoLase Inc.) Nonqualified Stock Option Plan (filed on
Exhibit 10.53 to ThermoTrex Corporation's Annual Report on
Form 10-K for the fiscal year ended January 1, 1994 [File
No. 1-10791] and incorporated herein by reference .........
10.71 ThermoTrex Corporation--Trex Medical Corporation
Nonqualified Stock Option Plan (filed as Exhibit 10.73 to
Thermo Cardiosystems' Annual Report on Form 10-K for the
fiscal year ended December 30, 1995 [File No. 1-10114] and
incorporated herein by reference) .........................
10.72 ThermoLase Corporation (formerly ThermoLase Inc.)
Nonqualified Stock Option Plan (filed as Exhibit 10.54 to
ThermoTrex's Annual Report on Form 10-K for the fiscal year
ended January 1, 1994 [File No. 1-10791] and incorporated
herein by reference). (Maximum number of shares issuable in
the aggregate under this plan and the ThermoLase Incentive
Stock Option Plan is 2,800,000 shares, after adjustment to
reflect share increase approved in 1993 and 2-for-1 stock
splits effected in March 1994 and June 1995) ..............
10.73 ThermoLase Corporation (formerly ThermoLase Inc.) Incentive
Stock Option Plan (filed as Exhibit 10.55 to ThermoTrex
Corporation's Annual Report on Form 10-K for the fiscal
year ended January 1, 1994 [File No. 1-10791] and
incorporated herein by reference). (Maximum number of
shares issuable in the aggregate under this plan and the
ThermoLase Nonqualified Stock Option Plan is 2,800,000
shares, after adjustment to reflect share increase approved
in 1993 and 2-for-1 stock splits effected in March 1994 and
June 1995) ................................................
10.74 ThermoLase Corporation Equity Incentive Plan (filed as
Exhibit 10.81 to Thermo TerraTech's Annual Report on Form
10-K for the fiscal year ended April 1, 1995 [File No. 1-
9549] and incorporated herein by reference) ...............
10.75 Thermo Fibertek Inc. Incentive Stock Option Plan (filed as
Exhibit 10(k) to Thermo Fibertek's Registration Statement
on Form S-1 [Reg. No. 33-51172] and incorporated herein by
reference .................................................
10.76 Thermo Fibertek Inc. Nonqualified Stock Option Plan (filed
as Exhibit 10(l) to Thermo Fibertek's Registration
Statement on Form S-1 [Reg. No. 33-51172] and incorporated
herein by reference .......................................
10.77 Thermo Fibertek Inc. Equity Incentive Plan (filed as
Exhibit 10.60 to Thermo Instrument's Annual Report on Form
10-K for the fiscal year ended December 31, 1994 [File No.
1-9786] and incorporated herein by reference ..............
</TABLE>

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<TABLE>
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10.78 Thermo Power Corporation (formerly Tecogen Inc.) Incentive
Stock Option Plan (filed as Exhibi 10(h) to Thermo Power's
Quarterly Report on Form 10-Q for the quarter ended April
3, 1993 [Reg. No. 33-10573] and incorporated herein by
reference). (Maximum number of shares issuable in the
aggregate under this plan and the Thermo Power Nonqualified
Stock Option Plan is 950,000 shares, after adjustment to
reflect share increases approved in 1990, 1992 and 1993) ..
10.79 Thermo Power Corporation (formerly Tecogen Inc.)
Nonqualified Stock Option Plan (filed as Exhibit 10(i) to
Thermo Power's Quarterly Report on Form 10-Q for the
quarter ended April 3, 1993 [Reg. No. 33-10573] and
incorporated herein by reference). (Maximum number of
shares issuable in the aggregate under this plan and the
Thermo Power Incentive Stock Option Plan is 950,000 shares,
after adjustment to reflect share increases approved in
1990, 1992 and 1993) ......................................
10.80 Thermo Power Corporation Equity Incentive Plan (filed as
Exhibit 10.63 to Thermo Instrument's Annual Report on Form
10-K for the fiscal year ended December 31, 1994 [File No.
1-9786] and incorporated herein by reference) .............
10.81 Thermo Power Corporation--ThermoLyte Corporation
Nonqualified Stock Option Plan (filed as Exhibit 10.84 to
Thermo Cardiosystems' Annual Report on Form 10-K for the
fiscal year ended December 30, 1995 [File No. 1-10114] and
incorporated herein by reference) .........................
10.82 ThermoLyte Corporation Equity Incentive Plan (filed as
Exhibit 10.71 to Thermo Power's Annual Report on Form 10-K
for the fiscal year ended September 30, 1995 [File No. 1-
10573] and incorporated herein by reference) ..............
10.83 Thermo TerraTech Inc. (formerly Thermo Process Systems
Inc.) Incentive Stock Option Plan (filed as Exhibit 10(h)
to Thermo Process' Registration Statement on Form S-1 [Reg.
No. 33-6763] and incorporated herein by reference).
(Maximum number of shares issuable in the aggregate under
this plan and the Thermo TerraTech Nonqualified Stock
Option Plan is 1,850,000 shares, after adjustment to
reflect share increases approved in 1987, 1989 and 1992, 6-
for-5 stock splits effected in July 1988 and March 1989 and
3-for-2 stock split effected in September 1989) ...........
10.84 Thermo TerraTech Inc. (formerly Thermo Process Systems
Inc.) Nonqualified Stock Option Plan (filed as Exhibit
10(i) to Thermo Process' Registration Statement on Form S-1
[Reg. No. 33-6763] and incorporated herein by reference).
(Maximum number of shares issuable in the aggregate under
this plan and the Thermo TerraTech Incentive Stock Option
Plan is 1,850,000 shares, after adjustment to reflect share
increases approved in 1987, 1989 and 1992, 6-for-5 stock
splits effected in July 1988 and March 1989 and 3-for-2
stock split effected in September 1989) ...................
10.85 Thermo TerraTech Inc. (formerly Thermo Process Systems
Inc.) Equity Incentive Plan (filed as Exhibit 10.63 to
Thermedics' Annual Report on Form 10-K for the fiscal year
ended January 1, 1994 [File No. 1-9567] and incorporated
herein by reference). (Maximum number of shares issuable is
1,750,000 shares, after adjustment to reflect share
increase approved in 1994) ................................
10.86 Thermo TerraTech Inc. (formerly Thermo Process Systems
Inc.)--Thermo Remediation Inc. Nonqualified Stock Option
Plan (filed as Exhibit 10(l) to Thermo Process' Quarterly
Report on Form 10-Q for the fiscal quarter ended January 1,
1994 [File No. 1-9549] and incorporated herein by
reference) ................................................
10.87 Thermo Remediation Inc. Equity Incentive Plan (filed as
Exhibit 10.7 to Thermo Remediation's Registration Statement
on Form S-1 [Reg. No. 33-70544] and incorporated herein by
reference) ................................................
11 Computation of Earnings per Share..........................
</TABLE>

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<TABLE>
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*21 Subsidiaries of the
Registrant..............
23.1 Consent of Arthur
Andersen LLP............
23.2 Consent of Arthur
Andersen LLP............
23.3 Consent of Arthur
Andersen LLP............
23.4 Consent of Topel Forman
L.L.C. .................
23.5 Consent of Seth H.
Hoogasian, Esq.
(included in Exhibit
5)......................
*24 Power of Attorney.......
27 Financial Data
Schedule................
</TABLE>
- --------

* Previously filed.

+ Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.

<PAGE>

TH&T DRAFT 5/2/96
-----------------

2,400,000 Shares

TREX MEDICAL CORPORATION

Common Stock
($.01 par value)

UNDERWRITING AGREEMENT
----------------------

____________,1996

NATWEST SECURITIES LIMITED
LEHMAN BROTHERS INC.
OPPENHEIMER & CO., INC.
As Representatives of the several
Underwriters named in Schedule I hereto
c/o NatWest Securities Limited
135 Bishopsgate
London EC2M3UR
England

Dear Sirs:

Trex Medical Corporation, a Delaware corporation (the "Company"), proposes to
issue and sell to the several underwriters named in Schedule I hereto (the
"Underwriters") 2,400,000 shares (the "Firm Shares") of Common Stock, $.01 par
value (such class of stock being herein called the "Common Stock"), of the
Company. In addition, for the sole purpose of covering over-allotments in
connection with the sale of the Firm Shares, the Company proposes to grant to
the Underwriters an option to purchase up to an additional 360,000 shares (the
"Option Shares") of Common Stock. The Firm Shares and any Option Shares
purchased pursuant to this Agreement are referred to herein as the "Shares."

This is to confirm the agreement concerning the purchase of the Shares from
the Company by the Underwriters. You represent and warrant that you are acting
as the representatives (the "Representatives") of the Underwriters and that you
have been authorized by each of the other Underwriters to enter into this
Underwriting Agreement on its behalf and to act for it in the manner herein
provided.
<PAGE>

-2-

The Company currently is a wholly-owned subsidiary of ThermoTrex Corporation
Inc., a Delaware corporation ("ThermoTrex"), which is, in turn, a majority-owned
subsidiary of Thermo Electron Corporation, a Delaware corporation ("Thermo
Electron"). To the extent provided herein and for good and valuable
consideration, each of ThermoTrex and Thermo Electron has become a party to this
Underwriting Agreement.

1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY, THERMOTREX AND THERMO
ELECTRON. The Company, ThermoTrex and Thermo Electron jointly and severally
represent and warrant to, and agree with, each Underwriter as follows. The
following representations, warranties and agreements shall be deemed to apply to
each Subsidiary (as defined in Section 13) of the Company, unless the context
does not permit:

(a) A registration statement on Form S-1 (File No. 333- ) with
respect to the Shares (i) has been prepared by the Company in material
conformity with the requirements of the Securities Act of 1933, as amended
(the "Securities Act"), and the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder, (ii) has been filed with the Commission under the Securities Act
and (iii) has become effective under the Securities Act. If any post-
effective amendment to such registration statement has been filed with the
Commission prior to the execution and delivery of this Agreement, the most
recent such amendment has been declared effective by the Commission. Copies
of such registration statement as amended to date have been delivered by the
Company to the Representatives. For purposes of this Agreement, "Effective
Time" means the date and the time as of which such registration statement, or
the most recent post-effective amendment thereto, if any, was declared
effective by the Commission; "Effective Date" means the date of the Effective
Time; "Preliminary Prospectus" means each prospectus included in such
registration statement, or amendments thereof, before it became effective
under the Securities Act and any prospectus filed with the Commission by the
Company pursuant to Rule 424(a) of the Rules and Regulations; "Registration
Statement" means such registration statement, as amended at the Effective
Time, including all information deemed to be a part thereof as of the
Effective Time pursuant to paragraph (b) of Rule 430A of the Rules and
Regulations together with any registration statement filed by the Company
pursuant to Rule 462(b) of the Rules and Regulations; and "Prospectus" means
(i) the form of prospectus relating to the Shares, as first filed pursuant to
paragraph (1) or (4) of Rule 424(b) of the Rules and Regulations or (ii) the
term sheet or abbreviated term sheet described in Rule 434(b) of the Rules
and Regulations, as first filed pursuant to paragraph (7) of Rule 424(b) of
the Rules and Regulations together with the last preliminary prospectus
included in the Registration Statement filed prior to the Effective Time or
filed pursuant to Rule 424(a) of the Rules and Regulations that is delivered
by the Company to the Underwriters for delivery to purchasers of the Shares.
The Commission has not issued any order preventing or suspending the use of
any Preliminary Prospectus or the Prospectus.

(b) The Registration Statement contains, and any post-effective
amendment to the Registration Statement filed with the Commission after the
Effective Time, the Prospectus and the Prospectus as amended or supplemented
will contain, all statements which are
<PAGE>

-3-

required by the Securities Act and the Rules and Regulations; at the time of
filing thereof, any Preliminary Prospectus did not, and on the Effective
Date, the Registration Statement did not, and any post-effective amendment to
the Registration Statement filed with the Commission after the Effective
Time, the Prospectus and the Prospectus as amended or supplemented will not,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading; provided that the Company, ThermoTrex and Thermo
Electron make no representation or warranty as to information contained in or
omitted from the Registration Statement, the Preliminary Prospectus or the
Prospectus in reliance upon, and in conformity with, written information
furnished to the Company by you, or by any Underwriter through you,
specifically for inclusion therein. There is no contract or document required
to be described in the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement which is not described or
filed as required.

(c) The accounting firm whose report appears in the Prospectus are
independent certified public accountants as required by the Securities Act
and the Rules and Regulations. The financial statements and schedules
(including the related notes) included in the Registration Statement, any
Preliminary Prospectus or the Prospectus present fairly, in all material
respects, the financial condition, results of operations and cash flows of
the entities purported to be shown thereby at the dates and for the periods
indicated and have been prepared in accordance with generally accepted
accounting principles.

(d) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, with full corporate power and authority to own or lease its
properties and conduct its business as described in the Prospectus, and is
duly qualified to do business and is in good standing in each jurisdiction in
which the character of the business conducted by it or the location of the
properties owned or leased by it makes such qualification necessary except
where the failure to so qualify or be in good standing would not have a
material adverse effect on the Company and its Subsidiaries taken as a whole;
and, except as described in the Prospectus, the Company holds all material
licenses, certificates and permits from governmental authorities necessary
for the conduct of its business as described in the Prospectus.

(e) All of the outstanding shares of Common Stock have been, and the
Shares, upon issuance and delivery and payment therefor in the manner herein
described, will be, duly authorized, validly issued, fully paid and
nonassessable. Other than as described in the Prospectus, there are no
preemptive rights or other rights to subscribe for or to purchase, or any
restriction upon the voting or transfer of, any shares of Common Stock
pursuant to the Company's corporate charter, by-laws or other governing
documents or any agreement or other instrument to which the Company is a
party or by which it may be bound. Neither the filing of the Registration
Statement nor the offering or sale of the Shares as contemplated by this
Agreement gives rise to any rights, other than those which have been waived
or satisfied and other than as described in the Prospectus, for or relating
to the registration of any shares of Common Stock or other securities of the
Company. The capitalization of the Company as of __________ is as set forth
in the Prospectus and the Common Stock
<PAGE>

-4-

conforms to the description thereof contained in the Prospectus. All of the
outstanding shares of capital stock of each Subsidiary (as defined in Section
13) of the Company have been duly authorized and validly issued, are fully
paid and nonassessable and are owned directly or indirectly by the Company,
free and clear of any claim, lien, encumbrance, security interest,
restriction upon voting or transfer or any other claim of any third party.

(f) Except as described in or contemplated by the Registration
Statement and the Prospectus, there has not been any material adverse change
in, or any adverse development which materially affects, the condition
(financial or other), results of operations, business or prospects of the
Company on a consolidated basis from the date as of which information is
given in the Prospectus.

(g) The Company is not, and would not be with the giving of notice or
lapse of time or both, in violation of or in default under, nor will the
execution or delivery hereof or consummation of the transactions contemplated
hereby result in a violation of, or constitute a default under, the corporate
charter, by-laws or other governing documents of the Company, or any material
agreement, indenture or other instrument to which the Company is a party or
by which it is bound, or to which any of its properties is subject, nor will
the performance by the Company of its obligations hereunder violate any
existing law, rule, administrative regulation or decree of any court or any
governmental agency or body having jurisdiction over the Company or any of
its properties, or result in the creation or imposition of any lien, charge,
claim or encumbrance upon any property or asset of the Company, which would
be material to the Company and its Subsidiaries taken as a whole. Except for
permits and similar authorizations required under the Securities Act and the
securities or "Blue Sky" laws of certain jurisdictions and for such permits
and authorizations as have been obtained, no consent, approval, authorization
or order of any U.S. court, governmental agency or body or any financial
institution is required in connection with the consummation by the Company of
the transactions contemplated by this Agreement.

(h) This Agreement has been duly authorized, executed and delivered by
the Company.

(i) The Company owns, or has valid rights to use, all items of real
and personal property which are material to the business of the Company and
its Subsidiaries taken as a whole, free and clear of all liens, encumbrances
and claims which may materially interfere with the business, properties,
financial condition or results of operations of the Company on a consolidated
basis.

(j) Except as described in the Prospectus, there is no litigation or
governmental proceeding to which the Company or ThermoTrex or Thermo Electron
is a party or to which any property of the Company is subject or which is
pending or, to the knowledge of the Company, ThermoTrex or Thermo Electron,
contemplated against the Company or ThermoTrex that is required to be
disclosed in the Prospectus and that is not so disclosed.
<PAGE>

-5-

(k) The Company is not in violation of any law, ordinance,
governmental rule or regulation or court decree to which it is subject, which
violation could have a material adverse effect on the condition (financial or
other), results of operations, business or prospects of the Company on a
consolidated basis.

(l) The Company owns or possesses adequate licenses or other rights to
use all intellectual property rights, including patents and trademarks,
necessary to conduct its business as described or referred to in the
Prospectus, and, except as disclosed in the Prospectus, neither Thermo
Electron, ThermoTrex nor the Company has received any notice of infringement
of or conflict with (or knows of any such infringement of or conflict with)
rights or claims of others with respect to any patents, trademarks, service
marks, trade names, copyrights or know-how, that if the subject of an
unfavorable decision, ruling or finding, would result in a material adverse
effect upon the Company on a consolidated basis, and, except as disclosed in
the Prospectus, all products or processes referred to in the Prospectus and
relating to the business of the Company now conducted by it do not infringe
upon or conflict with any right or patent, or with any discovery, invention,
product or process which is the subject of any patent application known to
the Company or Thermo Electron, in a manner which would materially and
adversely affect the Company on a consolidated basis.

(m) The Corporate Services Agreement between the Company and Thermo
Electron (the "Services Agreement"), and the other agreements between the
Company and ThermoTrex or Thermo Electron pursuant to which the Company was
initially organized and capitalized (collectively, the "Organization
Agreements"), and the Tax Allocation Agreement between Thermo Electron and
the Company (all of the foregoing agreements being referred to herein as the
"Inter-corporate Agreements") each has been duly and validly authorized,
executed and delivered by the Company and is the valid and binding agreement
of the Company enforceable in accordance with its terms, except as provided
by bankruptcy, insolvency, reorganization or other similar laws affecting
creditors' rights generally and subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or
at law) (collectively, "applicable bankruptcy laws"). The execution,
delivery and performance of the Inter-corporate Agreements by the Company,
the consummation of the transactions therein contemplated and compliance with
the terms thereof do not and will not result in a violation of, or constitute
a default under, the corporate charter, by-laws or other governing documents
of the Company, or any agreement, indenture or other instrument to which the
Company is a party or by which it is bound, or to which any of its properties
is subject, and do not and will not violate any existing law, rule,
administrative regulation or decree of any court or any governmental agency
or body having jurisdiction over the Company or any of its properties, or
result in the creation or imposition of any lien, charge, claim or
encumbrance upon any property or asset of the Company, which would be
material to the Company and its Subsidiaries taken as a whole. No consent,
approval, authorization or order of any court, governmental agency or body or
financial institution is required in connection with the consummation of the
transactions contemplated by such Inter-corporate Agreements.
<PAGE>

-6-

(n) Neither the Company nor Thermo Electron nor ThermoTrex or any
other Subsidiary of Thermo Electron has taken and none of such companies
shall take, directly or indirectly, any action designed to cause or result
in, or which has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of the shares of
Common Stock to facilitate the sale or resale of the Shares.

(o) The Shares have been approved for listing on the American Stock
Exchange, subject only to official notice of issuance.

1A. REPRESENTATIONS AND WARRANTIES OF THERMOTREX AND THERMO ELECTRON.
ThermoTrex and Thermo Electron each represent and warrant to, and agree with,
each Underwriter that:

(a) Each of ThermoTrex and Thermo Electron has been duly organized and
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with full power and authority (corporate
and other) to own or lease its properties and conduct its business, and is
duly qualified to do business and is in good standing in each jurisdiction in
which the character of the business conducted by it or the location of the
properties owned or leased by it makes such qualification necessary, except
where the failure to so qualify or be in good standing would not have a
material adverse effect on Thermo Electron and its Subsidiaries taken as a
whole.

(b) There has not been any material adverse change in, or any adverse
development which materially affects, the condition (financial or other),
results of operations, business or prospects of Thermo Electron and its
Subsidiaries taken as a whole, from the date as of which information is given
in the most recent quarterly or annual report filed by Thermo Electron
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), except any as may have been disclosed to the public.

(c) Neither ThermoTrex nor Thermo Electron is, nor with the giving of
notice or lapse of time or both would be, in violation of or in default
under, nor will the execution or delivery hereof or consummation of the
transactions contemplated hereby result in a violation of, or constitute a
default under, the corporate charter, by-laws or other governing documents of
ThermoTrex or Thermo Electron, or any material agreement, indenture or other
instrument to which ThermoTrex or Thermo Electron is a party or by which any
of them is bound, or to which any of their properties is subject, nor will
the performance by ThermoTrex or Thermo Electron of its obligations hereunder
violate any existing law, rule, administrative regulation or decree of any
court or any governmental agency or body having jurisdiction over ThermoTrex
or Thermo Electron or any of their respective properties, or result in the
creation or imposition of any lien, charge, claim or encumbrance upon any
property or asset of ThermoTrex or Thermo Electron, which would be material
to Thermo Electron and its Subsidiaries taken as a whole. Except for permits
and similar authorizations required under the Securities Act and the
securities or "Blue Sky" laws of certain jurisdictions and for such permits
and authorizations as have been obtained, no consent, approval, authorization
or order of any court, governmental agency or body or

<PAGE>

-7-

financial institution is required in connection with the consummation by
ThermoTrex and Thermo Electron of the transactions contemplated by this
Agreement.

(d) This Agreement has been duly authorized, executed and delivered by
ThermoTrex and Thermo Electron.

(e) ThermoTrex owns, and will own as of each Closing Date (as defined
below), of record and beneficially, the number of shares of Common Stock of
the Company set forth in the Prospectus, free and clear of any liens,
encumbrances, claims or restrictions, except that certain of such shares are
reserved for issuance pursuant to stock option and other benefit plans under
which options to purchase Common Stock of the Company owned by ThermoTrex are
granted to certain employees, directors or consultants of Thermo Electron and
its Subsidiaries.

(f) The most recent Annual Report on Form 10-K of ThermoTrex and of
Thermo Electron and any subsequent reports filed pursuant to the Exchange Act
complied as of the date thereof in all material respects with the Exchange
Act and the rules and regulations thereunder.

(g) The transfer by ThermoTrex to the Company of certain stock and/or
assets, as described in the Prospectus and in the Organization Agreements,
has been completed by all required corporate and other action. Each of the
Inter-corporate Agreements to which ThermoTrex is a party has been duly and
validly authorized, executed and delivered by ThermoTrex and is the valid and
binding agreement of ThermoTrex enforceable in accordance with its terms,
except as provided by applicable bankruptcy laws. The execution, delivery
and performance of each of the Inter-corporate Agreements to which ThermoTrex
is a party by ThermoTrex, the consummation of the transactions therein
contemplated and compliance with the terms thereof do not and will not result
in a violation of, or constitute a default under, the corporate charter, by-
laws or other governing documents of ThermoTrex, or any agreement, indenture
or other instrument to which ThermoTrex is a party or by which it is bound,
or to which any of its properties is subject, and do not and will not violate
any existing law, rule, administrative regulation or decree of any court or
any governmental agency or body having jurisdiction over ThermoTrex or any of
its properties, or result in the creation or imposition of any lien, charge,
claim or encumbrance upon any property or asset of ThermoTrex, which would be
material to ThermoTrex. No consent, approval, authorization or order of any
court, governmental agency or body or financial institution is required in
connection with the consummation by ThermoTrex of the transactions
contemplated by the Inter-corporate Agreements to which ThermoTrex is a
party, except such as have been obtained.

(h) The Services Agreement has been duly and validly authorized,
executed and delivered by Thermo Electron and is the valid and binding
agreement of Thermo Electron, enforceable in accordance with its terms.
<PAGE>

-8-

1B. REPRESENTATIONS AND WARRANTIES OF NATWEST SECURITIES LIMITED. NatWest
Securities Limited represents and agrees that (i) it has not offered or sold and
will not offer or sell any Shares to persons in the United Kingdom prior to
admission of the Shares to listing in accordance with Part IV of the Financial
Services Act 1986 (the "Act") except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purpose of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995 or the Act, (ii) it has complied and will comply
with all applicable provisions of the Act with respect to anything done by it in
relation to the Shares in, from or otherwise involving the United Kingdom and
(iii) it has only issued or passed on, and will only issue or pass on, in the
United Kingdom any document received by it in connection with the issue of the
Shares, other than any document which consists of or any part of listing
particulars, supplementary listing particulars or any other document required or
permitted to be published by listing rules under Part IV of the Act, to a person
who is of a kind described in Article 11(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1995 or is a person to whom the
document may otherwise lawfully be issued or passed on.

2. PURCHASE OF THE SHARES BY THE UNDERWRITERS. (a) Subject to the terms
and conditions and upon the basis of the representations and warranties herein
set forth, the Company agrees to issue and sell to the Underwriters the Firm
Shares and each of the Underwriters agrees, severally and not jointly, to
purchase at a price of $_____ per Share, the number of Firm Shares set forth
opposite such Underwriter's name in Schedule I hereto. The Underwriters agree
to offer the Firm Shares to the public as set forth in the Prospectus.

(b) The Company hereby grants to the Underwriters an option to
purchase from the Company, solely for the purpose of covering over-allotments in
the sale of Firm Shares, all or any portion of the Option Shares for a period of
thirty (30) days from the date hereof at the purchase price per Share set forth
above. Option Shares shall be purchased from the Company, severally and not
jointly, for the accounts of the several Underwriters in proportion to the
number of Firm Shares set forth opposite such Underwriter's name in Schedule I
hereto, except that the respective purchase obligations of each Underwriter
shall be adjusted by the Representatives so that no Underwriter shall be
obligated to purchase Option Shares other than in 100-share quantities.

(c) The Company and the Underwriters agree that up to 240,000 Firm
Shares to be purchased by the Underwriters (the "Reserved Shares") shall be
reserved for sale by the Underwriters to certain eligible employees of the
Company, ThermoTrex or Thermo Electron, and persons having business
relationships with the Company, ThermoTrex or Thermo Electron, as part of the
distribution of the Shares by the Underwriters, subject to the terms of this
Agreement, the applicable rules, regulations and interpretations of the National
Association of Securities Dealers, Inc. and all other applicable laws, rules and
regulations. To the extent that such Reserved Shares are not so purchased by
such eligible employees and persons having such business relationships, such
Reserved Shares may be offered to the public as part of the public offering
contemplated hereby.
<PAGE>

-9-

3. DELIVERY OF AND PAYMENT FOR THE SHARES. Delivery of certificates for
the Firm Shares and certificates for the Option Shares, if the option to
purchase the same is exercised on or before the second Business Day (as defined
in Section 13 hereof) prior to the First Closing Date (as defined below), to be
purchased by the Underwriters from the Company and payment therefor shall be
made at the offices of Testa, Hurwitz & Thibeault, 125 High Street, Boston,
Massachusetts 02110 (or such other place as mutually may be agreed upon), at
10:00 A.M., Eastern time, on the [______] business day after the date of this
Agreement (the "First Closing Date").

The option to purchase Option Shares from the Company granted in Section 2
hereof may be exercised during the term thereof by written notice to the Company
from the Representatives. Such notice shall set forth the aggregate number of
Option Shares as to which the option is being exercised and the time and date,
not earlier than either the First Closing Date or the second Business Day after
the date on which the option shall have been exercised nor later than the third
Business Day after the date of such exercise, as determined by the
Representatives, when the Option Shares are to be delivered (the "Option Closing
Date"). Delivery and payment for such Option Shares are to be at the offices
set forth above for delivery and payment of the Firm Shares. (The First Closing
Date and the Option Closing Date are herein individually referred to as a
"Closing Date" and collectively referred to as the "Closing Dates.")

Delivery of certificates for the Shares shall be made by or on behalf of
the Company to you, for the respective accounts of the Underwriters, against
payment by you, for the several accounts of the Underwriters, of the purchase
price therefor by certified or official bank check payable in New York Clearing
House funds to the order of the Company. The certificates for the Shares shall
be registered in such names and denominations as you shall have requested at
least two full Business Days prior to the applicable Closing Date, and shall be
made available for checking and packaging at a location in New York, New York as
may be designated by you at least one full Business Day prior to such Closing
Date. Time shall be of the essence and delivery at the time and place specified
in this Agreement is a further condition to the obligations of each Underwriter.

4. COVENANTS OF THE COMPANY, THERMOTREX AND THERMO ELECTRON. The
Company, ThermoTrex and Thermo Electron, jointly and severally, covenant and
agree with each Underwriter that:

(a) The Company shall comply with the provisions of, and make all
requisite filings with the Commission pursuant to, Rule 430A and Rule 424(b)
of the Rules and Regulations and shall notify you promptly (in writing, if
requested) of all such filings. The Company shall notify you promptly of any
request by the Commission for any amendment of or supplement to the
Registration Statement or the Prospectus or for additional information; the
Company shall prepare and file with the Commission, promptly upon your
request, any amendments or supplements to the Registration Statement or the
Prospectus which, in your opinion, may be necessary or advisable in
connection with the distribution of the Shares; and the Company shall not
file any amendment or supplement to the Registration Statement or the
Prospectus, which filing is not consented to by you after reasonable notice
thereof,
<PAGE>

-10-

such consent not to be unreasonably withheld or delayed. The Company shall
advise you promptly of its receipt of notice of the issuance by the
Commission or any state or other regulatory body of any stop order or other
order suspending the effectiveness of the Registration Statement, suspending
or preventing the use of any Preliminary Prospectus or the Prospectus or
suspending the qualification of the Shares for offering or sale in any
jurisdiction, or of the institution of any proceedings for any such purpose;
and the Company shall use its best efforts to prevent the issuance of any
stop order or other such order and, should a stop order or other such order
be issued, to obtain as soon as possible the lifting thereof.

(b) The Company shall furnish to each of the Representatives and to
counsel for the Underwriters a signed copy of the Registration Statement as
originally filed and each amendment thereto filed with the Commission,
including all consents and exhibits filed therewith, and shall furnish to the
Underwriters such number of conformed copies of the Registration Statement,
as originally filed and each amendment thereto (excluding exhibits other than
this Agreement), the Prospectus and all amendments and supplements to any of
such documents in each case as soon as available and in such quantities as
the Representatives may from time to time reasonably request.

(c) Within the time during which a prospectus relating to the Shares
is required to be delivered under the Securities Act, the Company shall
comply with all requirements imposed upon it by the Securities Act, as now
and hereafter amended, and by the Rules and Regulations, as from time to time
in force, so far as is necessary to permit the continuance of sales of or
dealings in the Shares as contemplated by the provisions hereof and by the
Prospectus. If during such period any event occurs as a result of which the
Prospectus as then amended or supplemented would include an untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances then existing, not
misleading, or if during such period it is necessary to amend the
Registration Statement or to supplement the Prospectus in order to comply
with the Securities Act or to file any document, the Company shall promptly
notify you and shall amend the Registration Statement or supplement the
Prospectus or file such document (at the expense of the Company) so as to
correct such statement or omission or to effect such compliance.

(d) The Company shall take or cause to be taken all necessary action
and furnish to whomever you may direct such information as may be required in
qualifying the Shares for sale under the laws of such jurisdictions as you
shall designate, and to continue such qualifications in effect for as long as
may be necessary for the distribution of the Shares; except that in no event
shall the Company be obligated in connection therewith to qualify as a
foreign corporation or to execute a general consent to service of process.

(e) The Company shall make generally available to its security holders
(and shall deliver to the Representatives), in the manner contemplated by
Rule 158(b) of the Rules and Regulations or otherwise, as soon as practicable
but in any event not later than 45 days after the end of its fiscal quarter
in which the first anniversary date of the Effective Date occurs,
<PAGE>

-11-

an earnings statement satisfying the requirements of Section 11(a) of the
Securities Act and covering a period of at least 12 consecutive months
beginning after the Effective Date.

(f) The Company, ThermoTrex and Thermo Electron shall not, during the
180-day period following the date of the Prospectus, except with your prior
written consent, offer for sale, sell or otherwise dispose of, directly or
indirectly, any shares of Common Stock (except for the issuance of shares of
Common Stock pursuant to existing stock option, purchase and compensation
plans, or upon conversion of any currently outstanding convertible securities
described in the Prospectus, except for sales of shares of Common Stock by
the Company to ThermoTrex), or sell or grant options, rights or warrants with
respect to any shares of Common Stock (other than the grant of options
pursuant to existing stock option, purchase and compensation plans),
otherwise than in accordance with this Agreement or as contemplated in the
Prospectus. The Company, ThermoTrex and Thermo Electron will not permit any
employee stock option, director stock option or other stock option to
purchase Common Stock of the Company granted by it to be exercised, and the
Common Stock issued upon exercise of the stock option to be sold, prior to
the expiration of the 180-day period following the date of this Prospectus,
without your prior written consent.

(g) The Company shall take such steps as shall be necessary to ensure
that neither the Company nor any Subsidiary shall become an "investment
company" within the meaning of such term under the Investment Company Act of
1940, as amended, and the rules and regulations thereunder.

(h) Whether or not this Agreement is terminated or the sale of the
Shares to the Underwriters is consummated, the Company shall pay or cause to
be paid (A) all expenses (including stock transfer taxes) incurred in
connection with the delivery to the several Underwriters of the Shares, (B)
all fees and expenses (including, without limitation, fees and expenses of
the Company's accountants and counsel, but excluding fees and expenses of
counsel for the Underwriters) in connection with the preparation, printing,
filing, delivery and shipping of the Registration Statement (including the
financial statements therein and all amendments and exhibits thereto), each
Preliminary Prospectus, the Prospectus and any amendments or supplements of
the foregoing and the printing, delivery and shipping of this Agreement and
other underwriting documents, including, but not limited to, any
Underwriters' Questionnaires, Underwriters' Powers of Attorney, Blue Sky
Memoranda, Agreements Among Underwriters and Selected Dealer Agreements, (C)
all filing fees and fees and disbursements of counsel to the Underwriters
incurred in connection with qualification of the Shares under state
securities laws as provided in Section 4(d) hereof, (D) the filing fee of the
National Association of Securities Dealers, Inc., (E) any applicable listing
or other fees, (F) the cost of printing certificates representing the Shares,
(G) the cost and charges of any transfer agent or registrar, (H) all costs
and expenses of the Underwriters, including the fees and disbursements of
counsel for the Underwriters, in connection with matters related to the
Reserved Shares and (I) all other costs and expenses incident to the
performance of its obligations hereunder for which provision is not otherwise
made in this Section. It is understood, however, that, except as provided in
this Section, Section 6 and Section 8 hereof, the Underwriters shall pay all
of their own costs and
<PAGE>

-12-

expenses, including the fees of their counsel, stock transfer taxes due upon
resale of any of the Shares by them and any advertising expenses incurred in
connection with any offers they may make. If the sale of the Shares provided
for herein is not consummated by reason of any failure, refusal or inability
on the part of the Company, ThermoTrex or Thermo Electron to perform any
agreement on its part to be performed or because any other condition of the
Underwriters' obligations hereunder is not fulfilled or if the Underwriters
shall decline to purchase the Shares for any reason permitted under this
Agreement, the Company shall reimburse the several Underwriters for all
reasonable out-of-pocket disbursements (including fees and disbursements of
counsel) incurred by the Underwriters in connection with any investigation or
preparation made by them in respect of the marketing of the Shares or in
contemplation of the performance by them of their obligations hereunder.

(i) The Company shall on or prior to each Closing Date use its best
efforts to cause the Shares to be purchased on such date by the Underwriters
to be approved for listing on the American Stock Exchange, subject only to
official notice of issuance, and shall take such action as shall be necessary
to comply with the rules and regulations of the American Stock Exchange with
respect to such Shares.

(j) During a period of five years from the Effective Date, the Company
shall furnish to the Representatives copies of all reports or other
communications furnished to shareholders and copies of any reports or
financial statements furnished to or filed with the Commission or any
national securities exchange on which any class of securities of the Company
is listed.

5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters hereunder are subject to the accuracy, as of the date
hereof and each Closing Date (as if made at such Closing Date), of the
representations and warranties of the Company, ThermoTrex and Thermo Electron
contained herein, to the performance by the Company, ThermoTrex and Thermo
Electron of their respective obligations hereunder and to the following
additional conditions:

(a) The Prospectus shall have been filed with the Commission in a
timely fashion in accordance with Section 4(a) hereof, all post-effective
amendments to the Registration Statement shall have become effective, all
filings required by Rule 430A and Rule 424 of the Rules and Regulations shall
have been made and no such filings shall have been made without the consent of
the Representatives; no stop order suspending the effectiveness of the
Registration Statement or any amendment or supplement thereto shall have been
issued; no proceedings for the issuance of any such order shall have been
initiated or threatened; and any request of the Commission for additional
information (to be included in the Registration Statement or the Prospectus or
otherwise) shall have been disclosed to you and complied with to your
satisfaction.

(b) No Underwriter shall have been advised by the Company, ThermoTrex
or Thermo Electron or shall have discovered and disclosed to the Company that
the Registration Statement, or the Prospectus or any amendment or supplement
thereto, contains an untrue
<PAGE>

-13-

statement of fact which in your reasonable opinion, or in the reasonable opinion
of counsel for the Underwriters, is material, or omits to state a fact which, in
your reasonable opinion, or in the reasonable opinion of counsel to the
Underwriters, is material and is required to be stated therein or is necessary
to make the statements therein not misleading.

(c) On or prior to each Closing Date, you shall have received from
Testa, Hurwitz & Thibeault, counsel for the Underwriters, such opinion or
opinions with respect to corporate proceedings by the Company, ThermoTrex and
Thermo Electron, the form of the Registration Statement and Prospectus (other
than financial statements and other financial or statistical data), the validity
of the Shares, and other related matters as you may reasonably request and such
counsel shall have received such documents and information as they reasonably
request to enable them to pass upon such matters.

(d) On each Closing Date there shall have been furnished to you the
opinion (addressed to the Underwriters) of Seth H. Hoogasian, Esq., General
Counsel of Thermo Electron, ThermoTrex and the Company, dated such Closing Date
and in form and substance satisfactory to counsel for the Underwriters, to the
effect that:

(i) Each of the Company and its Subsidiaries has been duly organized
and is validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, with full corporate power and
authority to own or lease its properties and conduct its business as
described in the Prospectus, and is duly qualified to do business and is in
good standing in each jurisdiction in which the character of the business
conducted by it or the location of the properties owned or leased by it makes
such qualification necessary, except where the failure to so qualify or be in
good standing would not have a material adverse effect on the Company and its
Subsidiaries taken as a whole.

(ii) Each of Thermo Electron and its Significant Subsidiaries (as
defined in Section 13) has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, with full corporate power and authority to own or lease its
properties and conduct its business as described in the Prospectus, and is
duly qualified to do business and is in good standing in each jurisdiction in
which the character of the business conducted by it or the location of the
properties owned or leased by it makes such qualification necessary, except
where the failure to so qualify or be in good standing would not have a
material adverse effect on Thermo Electron and its Subsidiaries taken as a
whole.

(iii) All of the outstanding shares of Common Stock have been and the
Shares, upon issuance and delivery and payment therefor in the manner herein
described, will be, duly authorized, validly issued, fully paid and
nonassessable. There are no preemptive or other rights to subscribe for or
to purchase, or any restriction upon the voting or transfer of, any of the
Shares pursuant to the Company's corporate charter, by-laws, other governing
documents, or any agreement or other instrument known to such counsel to
which the Company or a Subsidiary thereof is a party or by which the Company
or a Subsidiary
<PAGE>

-14-

thereof may be bound or to which any of their respective properties is
subject; and, to the best of such counsel's knowledge, neither the filing of
the Registration Statement nor the offering or sale of the Shares as
contemplated by this Agreement gives rise to any rights for or relating to
the registration of any shares of Common Stock except such as have been
waived or satisfied, other than as described in the Prospectus. The Common
Stock conforms in all material respects to the description thereof contained
in the Prospectus. All of the outstanding shares of capital stock of each
Subsidiary of the Company have been duly authorized and validly issued, are
fully paid and nonassessable and are owned directly or indirectly by the
Company free and clear of any claim, lien, encumbrance or security interest
known to such counsel (except for certain obligations of the Company pursuant
to stock and employee benefit plans maintained for the benefit of employees,
officers, directors and consultants of the Company and its Subsidiaries).

(iv) Each of the Company and its Subsidiaries is not, nor with the
giving of notice or lapse of time or both would be, in violation of or in
default under, nor will the execution or delivery hereof or consummation of
the transactions contemplated hereby result in a violation of, or constitute
a default under, the corporate charter, by-laws or other governing documents
of the Company or any of its Subsidiaries or, to the best knowledge of such
counsel, any material agreement, indenture or other instrument to which the
Company or any of its Subsidiaries is a party or by which the Company or any
of its Subsidiaries may be bound, or to which any of the properties of the
Company or any of its Subsidiaries is subject, nor, to best of such counsel's
knowledge, will the performance by the Company of its obligations hereunder
violate any existing law, rule, administrative regulation or decree of any
court or any governmental agency or body having jurisdiction over the Company
or any of its Subsidiaries or the properties of the Company or any of its
Subsidiaries, or, to the best knowledge of such counsel, result in the
creation or imposition of any lien, charge, claim or encumbrance upon the
properties or assets of the Company or any of its Subsidiaries which would be
material to the Company and its Subsidiaries taken as a whole. Except for
permits and similar authorizations required under the Securities Act and the
securities or "Blue Sky" laws of certain jurisdictions and for such permits
and authorizations as have been obtained, no consent, approval, authorization
or order of any court, governmental agency or body or financial institution
is required in connection with the consummation by the Company, ThermoTrex or
Thermo Electron of the transactions contemplated by this Agreement.

(v) Each of Thermo Electron and its Significant Subsidiaries is not,
nor with the giving of notice or lapse of time or both would be, in violation
of or in default under, nor will the execution or delivery hereof or
consummation of the transactions contemplated hereby result in a violation
of, or constitute a default under, the corporate charter, by-laws or other
governing documents of Thermo Electron or any of its Significant Subsidiaries
or, except as described in the Exchange Act filings of ThermoTrex and Thermo
Electron, to the best knowledge of such counsel, any material agreement,
indenture, or other instrument to which Thermo Electron or any of its
Significant Subsidiaries is a party or by which Thermo Electron or any of it
Significant Subsidiaries may be bound, or to which any of the properties of
Thermo Electron or any of its Significant Subsidiaries is subject, nor will
the
<PAGE>

-15-

performance by Thermo Electron of its obligations hereunder violate any
existing law, rule, administrative regulation or decree of any court or any
governmental agency or body having jurisdiction over Thermo Electron or any
of its Significant Subsidiaries or the properties of Thermo Electron or any
of its Significant Subsidiaries, or, to the best knowledge of such counsel,
result in the creation or imposition of any lien, charge, claim or
encumbrance upon the properties or assets of Thermo Electron or any of its
Significant Subsidiaries, which would be material to Thermo Electron and its
Subsidiaries taken as a whole.

(vi) This Agreement has been duly authorized, executed and delivered
by the Company, ThermoTrex and Thermo Electron.

(vii) Each of the Inter-corporate Agreements has been duly
authorized, executed and delivered by the Company, ThermoTrex and Thermo
Electron, as the case may be, and is the valid and binding agreement of each
of the parties thereto enforceable in accordance with its terms except as
provided by applicable bankruptcy laws. The execution, delivery and
performance of each of the Inter-corporate Agreements by each of the parties
thereto, the consummation of the transactions therein contemplated and
compliance with the terms thereof do not and will not result in a violation
of, or constitute a default under the corporate charter, by-laws or other
governing documents of the Company (or any of its Subsidiaries), ThermoTrex
or Thermo Electron, or any material agreement, indenture or other instrument
known to such counsel to which the Company (or any of its Subsidiaries),
ThermoTrex or Thermo Electron is a party or by which any of them is bound, or
to which any of their properties is subject and do not and will not violate
any existing law, rule, administrative regulation or decree of any court or
any governmental agency or body having jurisdiction over the Company,
ThermoTrex or Thermo Electron or any of their properties, or, to the best of
such counsel's knowledge, result in the creation or imposition of any lien,
charge, claim or encumbrance upon any property or asset of the Company,
ThermoTrex or Thermo Electron, which would be material to the Company or to
Thermo Electron and their respective Subsidiaries taken as a whole. Except
for permits and similar authorizations required under the Securities Act and
the securities or "Blue Sky" laws of certain jurisdictions and for such
permits and authorizations as have been obtained, no consent, approval,
authorization or order of any court, governmental agency or body or, to the
knowledge of such counsel, financial institution is required in connection
with the consummation of the transactions contemplated by the Inter-corporate
Agreements.

(viii) The Registration Statement and all post-effective amendments
thereto have become effective under the Securities Act and, to the best of
such counsel's knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose
have been instituted or are pending before or contemplated by the Commission.
All filings required by Rule 424 and Rule 430A of the Rules and Regulations
have been made; the Registration Statement as of the Effective Date, and the
Prospectus and any amendment or supplement thereto as of their respective
dates, complied as to form in all material respects with the requirements of
the Securities Act and the Rules and Regulations (it being understood that
such counsel need express no opinion on the financial statements or other
financial and statistical data included therein). Such counsel
<PAGE>

-16-

has no reason to believe that (i) the Registration Statement, as of its
Effective Date, or any amendment thereto, at the time it became effective
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading, or (ii) the Prospectus or any supplement
or amendment thereto, or any supplement or amendment thereto, on such Closing
Date or at the time such Prospectus or supplement or amendment thereto was
issued contains or contained any untrue statement of a material fact or omits
or omitted to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading (it being understood
that such counsel need express no opinion with respect to the financial
statements or other financial and statistical data included in the
Registration Statement and the Prospectus).

(ix) To the best knowledge of such counsel, all descriptions in the
Prospectus of statutes, regulations, legal or governmental proceedings,
contracts and other documents are accurate in all material respects, and
fairly present in all material respects the information required to be shown
and such counsel does not know of any contracts or documents of a character
required to be summarized or described therein or to be filed as exhibits
thereto that are not so summarized, described or filed, nor does such counsel
know of any pending or threatened litigation or any governmental proceeding,
statute or regulation required to be described in the Prospectus that is not
so described.

In rendering the foregoing opinion, counsel may rely, as to matters of
fact, upon certificates of officers of the Company, ThermoTrex and Thermo
Electron and certificates of public officials. Certificates so relied upon shall
be furnished to you and shall be satisfactory to you and your counsel.

(e) There shall have been furnished to you a certificate, dated such
Closing Date and addressed to you, signed by the President or a Vice President
and by the Treasurer or Secretary of the Company to the effect that: (i) the
representations and warranties of the Company contained in this Agreement are
true and correct, as if made at and as of such Closing Date, and the Company has
complied with all the agreements and satisfied all the conditions on its part to
be performed or satisfied at or prior to such Closing Date; (ii) no stop order
suspending the effectiveness of the Registration Statement has been issued, and
no proceedings for that purpose have been initiated or, to the knowledge of the
signers of such certificate, threatened; (iii) all filings required by Rule 424
and Rule 430A of the Rules and Regulations have been made; (iv) the signers of
said certificate have carefully examined the Registration Statement and the
Prospectus, and any amendments or supplements thereto and such documents contain
all statements and information required to be included therein, and do not
include any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading; and (v) since the effective date of the Registration Statement,
there has occurred no event required to be set forth in an amendment or
supplement to the Registration Statement or the Prospectus which has not been so
set forth.
<PAGE>

-17-

(f) There shall have been furnished to you certificates, dated such
Closing Date and addressed to you, signed by the President or a Vice President
and by the Treasurer or Secretary of each of ThermoTrex and Thermo Electron to
the effect that: (i) the representations and warranties of Thermo Electron or
ThermoTrex (as applicable) contained in this Agreement are true and correct, as
if made at and as of such Closing Date, and Thermo Electron and ThermoTrex (as
applicable) has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to such Closing
Date; (ii) the signers of said certificate have carefully examined the
Registration Statement and the Prospectus, and any amendments or supplements
thereto, and such documents contain all statements and information required to
be included therein and do not include any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading; and (iii) since the effective date
of the Registration Statement, there has occurred no event required to be set
forth in an amendment or supplement to the Registration Statement or the
Prospectus which has not been so set forth.

(g) Since the Effective Time, neither the Company nor any of the
Subsidiaries of the Company shall have sustained any loss by fire, flood,
accident or other calamity, or shall have become a party to or the subject of
any litigation, which is material to the Company and its Subsidiaries taken as a
whole, nor shall there have been a material adverse change in the general
affairs, operations, business, prospects, key personnel, capitalization,
financial condition or net worth of the Company and its Subsidiaries taken as a
whole, whether or not arising in the ordinary course of business, which loss,
litigation or change, in your judgment, shall render it inadvisable to proceed
with the payment for and delivery of the Shares.

(h) On the date of this Agreement and on each Closing Date you shall
have received a letter from each accounting firm whose report appears in the
Prospectus, dated the date of this Underwriting Agreement or such Closing Date,
as the case may be, and addressed to you, confirming that they are independent
certified public accountants within the meaning of the Securities Act and the
applicable published Rules and Regulations, and stating, as of the date of such
letter (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date of each such
letter), the conclusions and findings of each such firm with respect to the
financial information and other matters covered by its letter delivered to you
concurrently with the execution of this Agreement, and with respect to each
letter delivered on a Closing Date confirming the conclusions and findings set
forth in such prior letter.

(i) You shall have been furnished with such additional documents and
certificates as you or counsel for the Underwriters may reasonably request.

(j) The Shares to be purchased on such Closing Date by the
Underwriters shall be approved for listing on the American Stock Exchange,
subject only to official notice of issuance.

All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to you and to
<PAGE>

-18-

counsel for the Underwriters. The Company, ThermoTrex and Thermo Electron shall
furnish to you such conformed copies of such opinions, certificates, letters and
other documents as you shall reasonably request. If any of the conditions
specified in this Section 5 shall not have been fulfilled when and as required
by this Agreement, this Agreement and all obligations of the Underwriters
hereunder may be canceled at, or at any time prior to, such Closing Date, by
you. Any such cancellation shall be without liability of the Underwriters to the
Company, ThermoTrex or Thermo Electron. Notice of such cancellation shall be
given to the Company in writing, or by telegraph or telephone and confirmed in
writing.

6. INDEMNIFICATION AND CONTRIBUTION.

(a) The Company, ThermoTrex and Thermo Electron, jointly and severally,
shall indemnify and hold harmless each Underwriter against any loss, claim,
damage or liability (or any action in respect thereof), joint or several, to
which such Underwriter may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage or liability (or action in
respect thereof) arises out of or is based upon (i) any untrue statement or
alleged untrue statement made by the Company, ThermoTrex or Thermo Electron in
Section 1 hereof or by ThermoTrex or Thermo Electron in Section 1A hereof, or
(ii) any untrue statement or alleged untrue statement of a material fact
contained (A) in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement to any thereof, or (B) in any "Blue
Sky" application or other document executed by the Company specifically for that
purpose or based upon any written information furnished by the Company filed in
any state or other jurisdiction in order to qualify any or all of the Shares
under the securities laws thereof (any such application, document or information
being hereinafter called "Blue Sky Information"), or (iii) the omission or
alleged omission to state in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any amendment or supplement to any thereof, or in
any Blue Sky Information a material fact required to be stated therein or
necessary to make the statements therein not misleading or (iv) any act or
failure to act or any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Shares or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon matters
covered by clause (ii) or (iii) above (provided that the Company, Thermo
Instrument and Thermo Electron shall not be liable under this clause (iv) to the
extent that it is determined in a final judgment by a court of competent
jurisdiction that such loss, claim, damage, liability or action resulted
directly or indirectly from any such acts or failures to act undertaken or
omitted to be taken by such Underwriter through its gross negligence or willful
misconduct); and shall reimburse each Underwriter promptly after receipt of
invoices from such Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending
against or appearing as a third-party witness in connection with any such loss,
claim, damage, liability or action, notwithstanding the possibility that
payments for such expenses might later be held to be improper, in which case the
person receiving them shall promptly refund them; provided, however, that the
-------- -------
Company, ThermoTrex and Thermo Electron shall not be liable in any such case to
the extent, but only to the extent, that any such loss, claim, damage or
liability arises out of or is based upon an untrue
<PAGE>

-19-

statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with written information furnished to the
Company through you by or on behalf of any Underwriter specifically for use in
the preparation of the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement to any thereof, or any Blue Sky
Information; and provided, further, that as to any Preliminary Prospectus this
-------- -------
indemnity agreement shall not inure to the benefit of any Underwriter on account
of any loss, claim, damage, liability or action arising from the sale of Shares
to any person by that Underwriter if that Underwriter failed to send or give a
copy of the Prospectus, as the same may be amended or supplemented, to that
person within the time required by the Securities Act and the Rules and
Regulations, and the untrue statement or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact in such
Preliminary Prospectus was corrected in the Prospectus, unless such failure
resulted from non-compliance by the Company with Section 4(b). The Company,
ThermoTrex and Thermo Electron, jointly and severally, shall also indemnify and
hold harmless each Underwriter against against any and all loss, liability,
claim, damage and expense whatsoever, as incurred, arising out of (i) the
failure of eligible employees and other persons with a business relationship
with the Company, ThermoTrex or Thermo Electron to pay for and accept delivery
of Reserved Shares which were subject to a properly confirmed agreement to
purchase or (ii) the violation of any securities laws of foreign jurisdictions
where Reserved Shares have been offered.

(b) Each Underwriter severally, but not jointly, shall indemnify and
hold harmless the Company, ThermoTrex and Thermo Electron against any loss,
claim, damage or liability (or action in respect thereof) to which the Company,
ThermoTrex or Thermo Electron may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage or liability (or action in
respect thereof) arises out of or is based upon (i) any untrue statement or
alleged untrue statement of a material fact contained (A) in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any amendment or
supplement to any thereof, or (B) in any Blue Sky Information, or (ii) the
omission or alleged omission to state in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement to any
thereof, or in any Blue Sky Information a material fact required to be stated
therein or necessary to make the statements therein not misleading; and shall
reimburse any legal or other expenses reasonably incurred by the Company,
ThermoTrex or Thermo Electron promptly after receipt of invoices from the
Company, ThermoTrex or Thermo Electron in connection with investigating or
defending against any such loss, claim, damage, liability or action,
notwithstanding the possibility that payments for such expenses might later be
held to be improper, in which case the Company, ThermoTrex and Thermo Electron
shall promptly refund them; provided, however, that such indemnification shall
-------- -------
be available in each such case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished to
the Company through you by or on behalf of such Underwriter specifically for use
in the preparation thereof.

(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the
<PAGE>

-20-

indemnifying party in writing of the claim or the commencement of that action;
provided, however, that the failure to notify the indemnifying party shall not
- -------- -------
relieve it from any liability which it may have under this Section 6 except to
the extent it has been prejudiced in any material respect by such failure or
from any liability which it may have to an indemnified party otherwise than
under this Section 6. If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it or they wish, jointly with any other similarly notified indemnifying
party, to assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under such
subsection for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation, except that the Representatives shall have the right to
employ counsel to represent you and those other Underwriters who may be subject
to liability arising out of any claim in respect of which indemnity may be
sought by the Underwriters against the Company, ThermoTrex or Thermo Electron
under such subsection if, in your reasonable judgment, it is advisable for you
and those Underwriters to be represented by separate counsel, and in that event
the fees and expenses of such separate counsel shall be paid by the indemnifying
party or parties; provided, however, in no event, shall the indemnifying party
or parties be responsible for the expenses of more than one separate counsel for
all such indemnified parties.

(d) If the indemnification provided for in this Section 6 is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company,
ThermoTrex and Thermo Electron on the one hand and the Underwriters on the other
from the offering of the Shares or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company, ThermoTrex and Thermo Electron on the
one hand and the Underwriters on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Company, ThermoTrex and Thermo Electron on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Shares (before deducting expenses)
received by the Company bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover page of the Prospectus. Relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by one of the parties and such parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Company, ThermoTrex, Thermo Electron and
the Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were to be determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take into account the equitable
<PAGE>

-21-

considerations referred to in the first sentence of this subsection (d). The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending against any
action or claim which is the subject of this subsection (d), subject to the
proviso in the last sentence of subsection (c). Notwithstanding the provisions
of this subsection (d), no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint. Each party entitled to contribution agrees that upon
the service of a summons or other initial legal process upon it in any action
instituted against it in respect of which contribution may be sought, it shall
promptly give written notice of such service to the party or parties from whom
contribution may be sought, but the omission so to notify such party or parties
of any such service shall not relieve the party from whom contribution may be
sought from any obligation it may have hereunder or otherwise (except as
specifically provided in subsection (c) hereof).

(f) The obligations of the Company, ThermoTrex and Thermo Electron under
this Section 6 shall be in addition to any liability which the Company,
ThermoTrex and Thermo Electron may otherwise have, and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Securities Act or the Exchange Act; and the
obligations of the Underwriters under this Section 6 shall be in addition to any
liability that the respective Underwriters may otherwise have, and shall extend,
upon the same terms and conditions, to each director of the Company (including
any person who, with his consent, is named in the Registration Statement as
about to become a director of the Company), to each officer of the Company who
has signed the Registration Statement and to ThermoTrex and Thermo Electron, and
each other person, if any, who controls the Company within the meaning of the
Securities Act or the Exchange Act.

7. SUBSTITUTION OF UNDERWRITERS. If any Underwriter defaults in its
obligation to purchase the number of Shares which it has agreed to purchase
under this Agreement, the non-defaulting Underwriters shall be obligated to
purchase (in the respective proportions which the number of Shares set forth
opposite the name of each non-defaulting Underwriter in Schedule I hereto bears
to the total number of Shares set forth in Schedule I hereto) the Shares which
the defaulting Underwriter agreed but failed to purchase; except that the non-
defaulting Underwriters shall not be obligated to purchase any of the Shares if
the total number of Shares which the defaulting Underwriter or Underwriters
agreed but failed to purchase exceed 9.09% of the total number of Shares, and
any non-defaulting Underwriters shall not be obligated to purchase more than
110% of the number of Shares set forth opposite its name in Schedule I hereto
plus the total number of Option Shares purchasable by it pursuant to the terms
of Section 2. If the foregoing maximums are exceeded, the non-defaulting
Underwriters, and any other underwriters
<PAGE>

-22-

satisfactory to you that so agree, shall have the right, but shall not be
obligated, to purchase (in such proportions as may be agreed upon among them)
all of the Shares. If the non-defaulting Underwriters or the other underwriters
satisfactory to you do not elect to purchase the Shares which the defaulting
Underwriter or Underwriters agreed but failed to purchase, the Agreement shall
terminate without liability on the part of any non-defaulting Underwriter, the
Company, ThermoTrex or Thermo Electron except for the payment of expenses to be
borne by the Company, ThermoTrex and Thermo Electron and the Underwriters as
provided in Section 4(h) hereof and the indemnity and contribution agreements of
the Company, ThermoTrex, Thermo Electron and the Underwriters contained in
Section 6 hereof.

Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have for damages caused by its default. If the other
underwriters satisfactory to you are obligated or agree to purchase the Shares
of a defaulting Underwriter, either you or the Company may postpone the First
Closing Date for up to seven full Business Days in order to effect any changes
that may be necessary in the Registration Statement or the Prospectus or in any
other document or agreement, and to file promptly any amendments or any
supplements to the Registration Statement or the Prospectus which in your
opinion may thereby be made necessary.

8. TERMINATION.

(a) Until the First Closing Date, this Agreement may be terminated by you
by giving notice as hereinafter provided to the Company, if (i) the Company,
ThermoTrex or Thermo Electron shall have failed, refused or been unable, at or
prior to the First Closing Date, to perform any agreement on its part to be
performed hereunder, (ii) any other condition of the obligations of the
Underwriters hereunder is not fulfilled, (iii) trading in securities generally
on the New York Stock Exchange or the American Stock Exchange or the
International Stock Exchange of the United Kingdom or the over-the-counter
market shall have been suspended or minimum prices shall have been established
on any of such exchanges or such market by the Commission or by such exchange or
other regulatory body or governmental authority having jurisdiction, (iv) a
banking moratorium shall have been declared by Federal, New York, United Kingdom
or Massachusetts authorities, or (v) the United States or the United Kingdom is
or becomes engaged in hostilities which result in the declaration of a national
emergency or war, or (vi) there shall have been such a material adverse change
in general economic, political or financial conditions, or the effect of
international conditions on the financial markets in the United States or the
United Kingdom shall be such, as to, in the judgment of a majority in interest
of the several Underwriters, make it inadvisable or impracticable to proceed
with the delivery of the Shares. Any termination of this Agreement pursuant to
this Section 8 shall be without liability on the part of the Company,
ThermoTrex, Thermo Electron or any Underwriter, except as otherwise provided in
Sections 4(h) and 6 hereof.

Any notice referred to above may be given at the address specified in
Section 10 hereof in writing or by telegraph or telephone, and if by telegraph
or telephone, shall be immediately confirmed in writing.
<PAGE>

-23-

9. SURVIVAL OF INDEMNITIES, CONTRIBUTION, WARRANTIES AND REPRESENTATIONS.
The agreements contained in Section 6 and the representations, warranties and
agreements of the Company, ThermoTrex and Thermo Electron in Sections 1, 1A and
4 shall survive the delivery of the Shares to the Underwriters hereunder and
shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement or any investigation made by or on behalf of any
indemnified party.

10. NOTICES. Except as otherwise provided in this Agreement, (a) whenever
notice is required by the provisions of this Agreement to be given to the
Company, ThermoTrex or Thermo Electron, such notice shall be in writing
addressed to the Company, ThermoTrex or Thermo Electron at 81 Wyman Street, P.O.
Box 9046, Waltham, Massachusetts 02254-9046; and (b) whenever notice is required
by the provisions of the Agreement to be given to the several Underwriters, such
notice shall be in writing addressed to you in care of NatWest Securities
Limited, 135 Bishopsgate, London EC2M3UR, England, Attention: Syndicate
Department.

11. INFORMATION FURNISHED BY THE UNDERWRITERS. The statements set forth
in the last paragraph on the outside cover page, the paragraph containing
stabilization information on the inside front cover page and the statements
under the caption "Underwriting" in any Preliminary Prospectus and in the
Prospectus, constitute the only written information furnished by or on behalf of
any Underwriter referred to in paragraph (b) of Section 1 hereof and in
paragraphs (a) and (b) of Section 6 hereof.

12. PARTIES. This Agreement shall inure to the benefit of and be binding
upon the several Underwriters, the Company, ThermoTrex and Thermo Electron, and
their respective successors. This Agreement and the terms and provisions hereof
are for the sole benefit of only those persons, except that (a) the
representations, warranties, indemnities and agreements of the Company,
ThermoTrex and Thermo Electron contained in this Agreement shall also be deemed
to be for the benefit of the person or persons, if any, who control any
Underwriter within the meaning of the Securities Act or the Exchange Act and (b)
the indemnity agreement of the Underwriters contained in Section 6 hereof shall
be deemed to be for the benefit of directors of the Company, officers of the
Company who signed the Registration Statement, and any person controlling the
Company, including ThermoTrex and Thermo Electron. Nothing in this Agreement
shall be construed to give any person, other than the persons referred to in
this paragraph, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.

13. DEFINITION OF "BUSINESS DAY", "SUBSIDIARY" AND "SIGNIFICANT
SUBSIDIARY". For purposes of this Agreement, (a) "Business Day" means any day
on which the American Stock Exchange is open for trading, (b) "Subsidiary" has
the meaning set forth in Rule 405 of the Rules and Regulations and (c)
"Significant Subsidiary" has the meaning set forth in Item 1-02(v) of the
Regulation S-X of the Rules and Regulations.

14. PERFORMANCE BY THE COMPANY. Thermo Electron and ThermoTrex agree to
cause the Company to perform each of the agreements and obligations of the
Company contained in this Agreement.
<PAGE>

-24-

15. GOVERNING LAW. This agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to the
choice of law or conflict of law principles thereof.

16. COUNTERPARTS. This agreement may be signed in one or more
counterparts, each of which together shall constitute one and the same
agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

Please confirm, by signing and returning to us eight counterparts of this
Agreement, that you are acting on behalf of yourselves and the other several
Underwriters and that the foregoing correctly sets forth the agreement among the
Company, ThermoTrex, Thermo Electron and the several Underwriters.

Very truly yours,

TREX MEDICAL CORPORATION

By:_________________________
Title:

THERMOTREX INC.

By:_________________________
Title:

THERMO ELECTRON CORPORATION

By:_________________________
Title:
<PAGE>

-25-

Confirmed and accepted as of the
date first above mentioned:

NATWEST SECURITIES LIMITED
LEHMAN BROTHERS INC.
OPPENHEIMER & CO., INC.
as Representatives of the several
Underwriters named in Schedule I hereto

By: NATWEST SECURITIES LIMITED

By:_____________________________
Authorized Signatory
<PAGE>

-26-

SCHEDULE I

Number of Firm
Shares To be
Underwriter Purchased
- ----------- ---------

NatWest Securities Limited.............................
Lehman Brothers Inc....................................
Oppenheimer & Co., Inc......................

-----------
Total......................................... 2,400,000
===========

<PAGE>

EXHIBIT 4.1
-----------

[FRONT OF STOCK CERTIFICATE]

TREX
MEDICAL CORPORATION
<TABLE>
<S> <C> <C>
TXM

COMMON STOCK PAR Incorporated under the laws of the State COMMON STOCK
VALUE $.01 of Delaware
CUSIP 89531R 10 1
SEE REVERSE SIDE FOR
CERTAIN DEFINITIONS
</TABLE>

This certifies that

is the owner of

FULLY PAID AND NON-ACCESSABLE SHARES OF THE COMMON STOCK, $.01 PAR VALUE, OF
TREX MEDICAL CORPORATION

transferable on the books of the Corporation by the holder hereof in person
or by duly authorized attorney upon surrender of this Certificate properly
endorsed. The Certificate and the shares represented hereby are issued under
and shall be subject to the laws of the State of Delaware and all the provision
of the Certificate of Incorporation and the By-Laws of the Corporation, and all
the amendments from time to time made thereto. This Certificate is not valid
unless countersigned and registered by the Transfer Agent and Registrar.

Witness the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.

Dated:

[ Trex Medical Corporation ]
[ Corporate Seal ]

Secretary President and Chief Executive Officer
<PAGE>

[BACK OF STOCK CERTIFICATE]

TREX MEDICAL CORPORATION

This Corporation will furnish without charge to each stockholder who so
requests, a copy of the designations, powers, preferences and relative,
participating, optional or other special rights of each class of stock or
series thereof, and the qualifications, limitation or restrictions of such
preferences and/or rights. Any such requests may be addressed to the Secretary
of the Corporation.

The following abbreviations when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT - _________ Custodian ___________
(Cust) (Minor)
TEN ENT - as tenants by the entities under Uniform Gifts to Minors

JT TEN - as joint tenants with right of Act _______________________
survivorship and not as (State)
tenants in common
</TABLE>

Additional abbreviations may also be used though not in the above list.

For value received, ______________________ hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE

______________________________________________________________________________

______________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF
ASSIGNEE)

______________________________________________________________________________

___________________________________________________________Shares of the Stock

represented by the within Certificate, and do hereby irrevocably constitute
and appoint __________________________________________________________________

______________________________________________________________________________
Attorney to transfer the said Stock on the books of the within-named
Corporation with full power of substitution in the premises.

Dated _______________________________ ______________________
Signature

_________________________________
THE SIGNATURES TO THIS ASSIGNMENT
MUST CORRESPOND WITH THE
CERTIFICATE IN EVERY PARTICULAR
WITHOUT ALTERATION OR ENLARGEMENT
OR ANY CHANGE WHATSOEVER.

<PAGE>

EXHIBIT 5
---------
[LETTERHEAD OF TREX MEDICAL CORPORATION APPEARS HERE]

May 6, 1996

Trex Medical Corporation
36 Apple Ridge Road
Danbury, Connecticut 06810

Re: Registration Statement on Form S-1 (Registration No. 333-2926) Relating
to 2,760,000 Shares of the Common Stock, $.01 par value, of Trex Medical
---------------------------------------------------------------------
Corporation
-----------

Ladies and Gentlemen:

I am General Counsel to Trex Medical Corporation, a Delaware corporation
(the "Company"), and have acted as counsel in connection with the registration
under the Securities Act of 1933, as amended (the "Securities Act"), on Form
S-1 (the "Registration Statement"), of 2,760,000 shares of the Company's Common
Stock, $.01 par value per share (the "Common Stock"). Such shares, together
with any shares of Common Stock registered under a registration statement
related to the offering contemplated by the Registration Statement that is to
be effective upon filing pursuant to Rule 462(b) under the Securities Act (a
"462(b) Registration Statement"), are collectively referred to herein as the
"Shares".

I or a member of my legal staff have reviewed the corporate proceedings
taken by the Company with respect to the authorization of the issuance of the
Shares. I or a member of my legal staff have also examined and relied upon
originals or copies, certified or otherwise authenticated to my satisfaction,
of all corporate records, documents, agreements or other instruments of the
Company and have made all investigations of law and have discussed with the
Company's representatives all questions of fact that I have deemed necessary or
appropriate.

Based upon and subject to the foregoing, I am of the opinion that:

1. The Company is a corporation duly organized, validly existing
and in corporate good standing under the laws of the State of Delaware.

2. The issuance and sale of the Shares registered pursuant to the
Registration Statement have been duly authorized by the Company and the
issuance and sale of the Shares registered pursuant to a 462(b) Registration
Statement will have been duly authorized by the Company prior to their issuance
and sale.
<PAGE>

Trex Medical Corporation
May 6, 1996
Page 2

3. The Shares, when issued and sold in accordance with the
provisions of the Underwriting Agreement between the Company and the several
Underwriters named on Schedule I thereto (in the form of Exhibit 1 to the
Registration Statement) will be validly issued, fully paid and non-assessable.

I hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement or any 462(b) Registration Statement.

Very truly yours,

/s/ Seth H. Hoogasian

Seth H. Hoogasian
General Counsel

<PAGE>

EXHIBIT 11
TREX MEDICAL CORPORATION

COMPUTATION OF EARNINGS PER SHARE

<TABLE>
<CAPTION>
NINE MONTHS ENDED SIX MONTHS ENDED
------------------------- -----------------------
OCTOBER 1, SEPTEMBER 30, APRIL 1, MARCH 30,
1993 1994 1994 1995 1995 1996
----------- ----------- ----------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
COMPUTATION OF PRIMARY
EARNINGS PER SHARE:
Net Income (a).......... $ 827,000 $ 1,194,000 $ 1,085,000 $ 3,483,000 $ 966,000 $ 3,734,000
----------- ----------- ----------- ----------- ----------- -----------
Shares:
Weighted average shares
outstanding........... 20,000,000 20,000,000 20,000,000 20,000,000 20,000,000 21,395,967
Add: Shares issuable
from assumed
exercise of options
(as determined by
the application of
the treasury stock
method)............. 151,414 151,414 151,414 151,414 151,414 151,414
----------- ----------- ----------- ----------- ----------- -----------
Weighted average
shares, as adjusted
(b)................... 20,151,414 20,151,414 20,151,414 20,151,414 20,151,414 21,547,381
----------- ----------- ----------- ----------- ----------- -----------
Primary Earnings per
Share
(a) / (b).............. $ .04 $ .06 $ .05 $ .17 $ .05 $ .17
=========== =========== =========== =========== =========== ===========
</TABLE>

<PAGE>

EXHIBIT 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Trex Medical Corporation:

As independent public accountants, we hereby consent to the use of our
reports (and to all references to our Firm) included in or made a part of this
Registration Statement and related Prospectus of Trex Medical Corporation.

Arthur Andersen LLP

Boston, Massachusetts

May 6, 1996

<PAGE>

EXHIBIT 23.2

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Bennett X-Ray Corporation:

Arthur Andersen LLP

Boston, Massachusetts

May 6, 1996

<PAGE>

EXHIBIT 23.3

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

To XRE Corporation:

Arthur Andersen LLP

Boston, Massachusetts

May 6, 1996

<PAGE>

EXHIBIT 23.4

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Continental Group:

Topel Forman L.L.C.

Chicago, Illinois

May 6, 1996

<PAGE>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM TREX MEDICAL
CORPORATION'S AMENDMENT NO. 1 TO FORM S-1 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C> <C>
<PERIOD-TYPE> 6-MOS 9-MOS
<FISCAL-YEAR-END> SEP-28-1996 SEP-30-1995
<PERIOD-END> MAR-30-1996 SEP-30-1995
<CASH> 19,245 202
<SECURITIES> 0 0
<RECEIVABLES> 19,857 15,807
<ALLOWANCES> 921 870
<INVENTORY> 18,615 16,667
<CURRENT-ASSETS> 62,609 35,393
<PP&E> 11,341 9,939
<DEPRECIATION> 2,686 2,128
<TOTAL-ASSETS> 129,575 102,374
<CURRENT-LIABILITIES> 27,054 22,222
<BONDS> 0 0
0 0
0 0
<COMMON> 222 0
<OTHER-SE> 63,210 80,010
<TOTAL-LIABILITY-AND-EQUITY> 129,575 102,374
<SALES> 66,829 55,291
<TOTAL-REVENUES> 66,829 55,291
<CGS> 37,592 28,180
<TOTAL-COSTS> 37,592 28,180
<OTHER-EXPENSES> 8,170 8,595
<LOSS-PROVISION> 51 25
<INTEREST-EXPENSE> 872 0
<INCOME-PRETAX> 6,975 6,364
<INCOME-TAX> 3,241 2,881
<INCOME-CONTINUING> 3,734 3,483
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 3,734 3,483
<EPS-PRIMARY> .17 .17
<EPS-DILUTED> 0 0

</TABLE>