Correction to Loan Agreement ("Loan Agreement")
                   dated as of August 12, 1996
                          by and between
                 Lynch Corporation, as "Borrower"
                               and
                 Gabelli Funds, Inc., as "Lender"


     Whereas the Borrower and the Lender agree that the Section
2.01(d), as originally executed, was incorrect and desire to
correct said provision;

     Now Therefore, the Borrower and Lender agree that Section
2.01(d) shall be corrected in its entirety to read as follows:

          "(d) Special Fee.  If Borrower has not prepaid the Loan
in full within five Business Days after the end of the F-Block
Auction, Borrower shall pay Lender a special fee equal to 20.04008%
of the Net Profits of PCSF's partnership interest in Bidder, from
time to time as and when realized.  Net Profits shall not include
any amounts received by PCSF pursuant to the Bidder Loan Agreement
and shall be net of any losses of PCSF under the Bidder Loan
Agreement.  For purposes of computing Net Profits, capital
contributions by PCSF to Bidder shall be deemed to be loans to
Bidder under the Bidder Loan Agreement and interest under the
Bidder Loan Agreement shall include deemed commitment fees and
interest on such capital contributions.  Net Profits shall mean and
shall be deemed to be realized at the time of (i) any profits
received by PCSF from the sale, directly or indirectly, of all or
a substantial portion of the assets of Bidder and the distribution
of the proceeds to the partners (after payments of the principal
and interest under the Bidder Loan Agreement), (ii) any payments
or distributions by Bidder to Borrower or its Affiliates, including
loans (other than principal, interest and other amounts as
contemplated in the Bidder Loan Agreement and the Expenses
Agreement referred to therein) including loans, (iii) the proceeds
from any sale, directly or indirectly, including a merger or
similar transaction, by Borrower of any of its partnership interest
in Bidder, and/or (iv) the net proceeds from any sale of the stock
of PCSF, whether by the existing stockholder or an Affiliate, to
a person or entity that is not its Affiliate of PCSF.  The term
"Affiliate" shall have the meaning in Rule 12b-2 under the
Securities Exchange Act of 1934, as amended.  Any dispute under
this Section 2(d), including without limitation the amount of
profit, the value of any non-cash items or other matters, if the
parties cannot otherwise agree, shall be submitted to binding
arbitration under the rules of the American Arbitration
Association."    

     IN WITNESS WHEREOF, the Borrower and the Lender have executed
this Correction effective as of August 12, 1996.

                LYNCH CORPORATION                  GABELLI FUNDS, INC.



                By:                                By:                       
                Robert E. Dolan                
                Chief Financial Officer