PROMISSORY NOTE


$5,000,000                                        March 17, 1997

     FOR VALUE RECEIVED, LYNCH CORPORATION, an Indiana corporation
("Borrower"), promises to pay to Gabelli Funds, Inc. ("Lender") or
order, by wire transfer sent to an account designated in writing
to Borrower from time to time by the holder hereof (or in such
other manner or at such other place as the holder hereof shall
notify Borrower in writing), the principal amount of Five Million
Dollars ($5,000,000), with interest from the date hereof on the
unpaid principal balance hereunder at the rate of  prime rate in
effect from time to time as reported in the Wall Street Journal,
payable at Maturity.  The principal amount of this Note, and all
accrued and unpaid interest thereon, shall be due and payable on
the earlier (i) of May 19, 1997, or (ii) the date of closing of a
loan to Lynch Michigan Telephone Holding Corporation for the
permanent financing of the acquisition of Upper Peninsula Telephone
Company (the "Maturity Date").  On the Maturity Date, Borrower
shall also pay to Lender $50,000 as a commitment fee.

          Each payment under this Note shall first be credited
against accrued and unpaid interest, and the remainder shall be
credited against principal.  This Note may be prepaid in whole or
in part at any time, after five (5) Business Days written notice
of Borrower's intention to make any such prepayment, which notice
shall specify the date and amount of such prepayment.  Partial
payment hereunder shall be in an aggregate principal amount of
Fifty Thousand Dollars ($50,000) or any integral multiple thereof. 
The written notice of Borrower to make a prepayment hereunder shall
create an obligation of Borrower to pay the amount specified on the
date specified in such notice.  Any prepayment shall be without
penalty except that interest shall be paid to the date of payment
on the principal amount prepaid.

          Principal and interest shall be payable in lawful money
of the United States of America.

          In no event shall such interest or other amounts be
charged under this Note which would violate any applicable usury
law.

          If any default occurs in any payment due under this Note,
Borrower promises to pay all reasonable costs and expenses,
including reasonable attorneys' fees and expenses, incurred by each
holder hereof in collecting or attempting to collect the
indebtedness under this Note, whether or not any action or
proceeding is commenced, and hereby waives the right to plead any
and all statutes of limitation as a defense to a demand hereunder
to the full extent permitted by law.  None of the provisions hereof
and none of the holders' rights or remedies hereunder on account
of any past or future defaults shall be deemed to have been waived
by the holders' acceptance of any past due installments or by any
indulgence granted by the holder to Borrower.

          Borrower waives presentment, demand, protest and notice
thereof or of dishonor, and agree that they shall remain liable for
all amounts due hereunder notwithstanding any extension of time or
change in the terms of payment of this Note granted by any holder
hereof, any change, alteration or release of any property now or
hereafter securing the payment hereof or any delay or failure by
the holder hereof to exercise any rights under this Note or the
Loan Agreement.

     All amounts payable by Borrower pursuant to this Note shall
be secured by a security interest in certain assets as provided for
in the Pledge and Security Agreement.

     This Note shall be governed by, and construed in accordance
with, the laws of the State of New York without giving effect to
its choice of law doctrine.

     IN WITNESS WHEREOF, Borrower has caused this Note to be duly
executed the day and year first above written.

                              LYNCH CORPORATION



                              By:                          
                                  Name: Robert E. Dolan
                                  Title: Chief Financial Officer

<PAGE>
                         PROMISSORY NOTE


$5,000,000                                        March 17, 1997

     FOR VALUE RECEIVED, LYNCH CORPORATION, an Indiana corporation
("Borrower"), promises to pay to Gabelli Securities, Inc.
("Lender") or order, by wire transfer sent to an account designated
in writing to Borrower from time to time by the holder hereof (or
in such other manner or at such other place as the holder hereof
shall notify Borrower in writing), the principal amount of Five
Million Dollars ($5,000,000), with interest from the date hereof
on the unpaid principal balance hereunder at the rate of  prime
rate in effect from time to time as reported in the Wall Street
Journal, payable at Maturity.  The principal amount of this Note,
and all accrued and unpaid interest thereon, shall be due and
payable on the earlier (i) of May 19, 1997, or (ii) the date of
closing of a loan to Lynch Michigan Telephone Holding Corporation
for the permanent financing of the acquisition of Upper Peninsula
Telephone Company (the "Maturity Date").  On the Maturity Date,
Borrower shall also pay to Lender $50,000 as a commitment fee.

          Each payment under this Note shall first be credited
against accrued and unpaid interest, and the remainder shall be
credited against principal.  This Note may be prepaid in whole or
in part at any time, after five (5) Business Days written notice
of Borrower's intention to make any such prepayment, which notice
shall specify the date and amount of such prepayment.  Partial
payment hereunder shall be in an aggregate principal amount of
Fifty Thousand Dollars ($50,000) or any integral multiple thereof. 
The written notice of Borrower to make a prepayment hereunder shall
create an obligation of Borrower to pay the amount specified on the
date specified in such notice.  Any prepayment shall be without
penalty except that interest shall be paid to the date of payment
on the principal amount prepaid.

          Principal and interest shall be payable in lawful money
of the United States of America.

          In no event shall such interest or other amounts be
charged under this Note which would violate any applicable usury
law.

          If any default occurs in any payment due under this Note,
Borrower promises to pay all reasonable costs and expenses,
including reasonable attorneys' fees and expenses, incurred by each
holder hereof in collecting or attempting to collect the
indebtedness under this Note, whether or not any action or
proceeding is commenced, and hereby waives the right to plead any
and all statutes of limitation as a defense to a demand hereunder
to the full extent permitted by law.  None of the provisions hereof
and none of the holders' rights or remedies hereunder on account
of any past or future defaults shall be deemed to have been waived
by the holders' acceptance of any past due installments or by any
indulgence granted by the holder to Borrower.

          Borrower waives presentment, demand, protest and notice
thereof or of dishonor, and agree that they shall remain liable for
all amounts due hereunder notwithstanding any extension of time or
change in the terms of payment of this Note granted by any holder
hereof, any change, alteration or release of any property now or
hereafter securing the payment hereof or any delay or failure by
the holder hereof to exercise any rights under this Note or the
Loan Agreement.

     All amounts payable by Borrower pursuant to this Note shall
be secured by a security interest in certain assets as provided for
in the Pledge and Security Agreement.

     This Note shall be governed by, and construed in accordance
with, the laws of the State of New York without giving effect to
its choice of law doctrine.

     IN WITNESS WHEREOF, Borrower has caused this Note to be duly
executed the day and year first above written.

                              LYNCH CORPORATION



                              By:                          
                                  Name: Robert E. Dolan
                                  Title: Chief Financial Officer