S-2/A

     As filed with the Securities and Exchange Commission on August 16, 2005
                                                     Registration No. 333-126335
================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                           --------------------------
                               AMENDMENT NO. 1 TO
                                    FORM S-2

                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933
                           --------------------------

                                LYNCH CORPORATION
             (Exact Name of Registrant as Specified in Its Charter)



            Indiana                                             38-1799862
(State or Other Jurisdiction of                              (I.R.S. Employer
Incorporation or Organization)                            Identification Number)

                         140 GREENWICH AVENUE, 4TH FLOOR
                          GREENWICH, CONNECTICUT 06830
                                 (203) 622-1150
    (Address, Including Zip Code, and Telephone Number, Including Area Code,
                  of Registrant's Principal Executive Offices)

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

                                 JOHN C. FERRARA
                      PRESIDENT AND CHIEF EXECUTIVE OFFICER
                                LYNCH CORPORATION
                         140 GREENWICH AVENUE, 4TH FLOOR
                          GREENWICH, CONNECTICUT 06830
                                 (203) 622-1150
 (Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
                              of Agent For Service)

                          -----------------------------
                                    Copy to:
                              DAVID J. ADLER, ESQ.
                 OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP
                                PARK AVENUE TOWER
                               65 EAST 55TH STREET
                            NEW YORK, NEW YORK 10022
                                 (212) 451-2300

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

            Approximate  date of  commencement  of proposed  sale to the public:
From time to time after this Registration Statement becomes effective.

            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, please check the following box.  |X|

            If the  registrant  elects to deliver  its latest  annual  report to
security holders, or a complete and legible facsimile thereof,  pursuant to Item
11(a)(1) of this Form, check the following box.  |X|

            If this  Form is  filed to  register  additional  securities  for an
offering  pursuant to Rule 462(b) under the Securities  Act, 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, 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(d) under the Securities Act, 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, please check the following box.  |_|



                         CALCULATION OF REGISTRATION FEE

TITLE OF EACH CLASS OF                                   PROPOSED MAXIMUM       PROPOSED MAXIMUM
   SECURITIES TO BE                     AMOUNT TO BE    OFFERING PRICE PER     AGGREGATE OFFERING          AMOUNT OF
      REGISTERED                        REGISTERED(1)        SHARE(2)                PRICE              REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------
Common Shares,
$0.01 par value per                        549,945            $8.12               $4,465,534.40            $525.60(3)
share                                   common shares
- ------------------------------------------------------------------------------------------------------------------------

Subscription Rights to
purchase  Common                           1,649,834            -                       -                       -
Shares(4)                             subscription rights
- ------------------------------------------------------------------------------------------------------------------------

(1)   In the event of a share  split,  share  dividend  or  similar  transaction
      involving  the common  shares,  the common shares  registered  hereby will
      automatically  be increased  pursuant to Rule 416 of the Securities Act of
      1933,  as  amended,  to cover the  additional  common  shares  required to
      prevent dilution.
(2)   Estimated  solely for the  purpose of  calculating  the  registration  fee
      pursuant to Rule 457(c) under the Securities Act of 1933, as amended,  and
      based  upon the  average  of the high and low  prices of the  Registrant's
      common shares on the American Stock Exchange on June 30, 2005.
(3)   The registration fee was previously paid with the filing on July 1, 2005.
(4)   Under Rule 457(g) of the Securities  Act of 1933, as amended,  no separate
      registration  fee is required for the rights as they are being  registered
      in the same  registration  statement as the common shares  underlying such
      rights.

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

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, AS AMENDED,  OR UNTIL THE  REGISTRATION  STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,  ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

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



The  information  in this  prospectus  is not complete  and may be changed.  The
selling  shareholder  may not  sell  these  securities  until  the  registration
statement filed with the Securities and Exchange  Commission is effective.  This
prospectus is not an offer to sell these  securities and it is not soliciting an
offer to buy  these  securities  in any  state  where  the  offer or sale is not
permitted.

                  Subject to Completion, dated August 16, 2005

            PROSPECTUS

                                LYNCH CORPORATION

                              539,176 COMMON SHARES
                          1,617,526 SUBSCRIPTION RIGHTS

            We are offering at no cost to you, as a holder of our common shares,
transferable  rights to purchase our common shares.  If you own common shares on
________,  2005,  the record date, you will be entitled to receive one right per
share.  Every  three such rights will  entitle you to  subscribe  for one common
share. The subscription  price will be $_______ per whole share. Each right will
also carry with it an  oversubscription  privilege to subscribe  for  additional
common shares that are not purchased by other holders of rights. The rights will
be evidenced by  Subscription  Certificates  and will expire at _______ p.m. New
York City time on _________, 2005, unless extended for up to 15 days.

            Our common shares are traded on the American  Stock  Exchange  under
the symbol "LGL."

            Our principal executive offices are located at 140 Greenwich Avenue,
4th Floor, Greenwich, Connecticut 06830. Our telephone number is (203) 622-1150.

            AN INVESTMENT  IN OUR COMMON SHARES  INVOLVES A HIGH DEGREE OF RISK.
CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 5 OF THIS PROSPECTUS.

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


                                                              PROCEEDS TO LYNCH
                                PRICE PER SHARE                  CORPORATION
- --------------------------------------------------------------------------------
Offering Price to
Shareholders                    $_____________                $_____________ (1)
- --------------------------------------------------------------------------------

(1)   Before deduction of estimated expenses of $__________, including legal and
      accounting  fees,  printing  expenses  and  other  miscellaneous  fees and
      expenses.

     NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
  COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
 ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
                               CRIMINAL OFFENSE.

                 The date of this prospectus is _________, 2005.



                                TABLE OF CONTENTS

Prospectus Summary.............................................................1

Risk Factors...................................................................4

Special Note Regarding Forward-Looking Statements.............................15

Description of Securities to Be Registered....................................16

Use of Proceeds...............................................................16

The Rights Offering...........................................................17

Material United States Federal Income Tax Consequences........................27

Plan of Distribution..........................................................28

Legal Matters.................................................................30

Experts.......................................................................30

Information with Respect to the Registrant....................................30

Where You Can Find More Information...........................................30

Incorporation by Reference....................................................31



                               PROSPECTUS SUMMARY

            This summary highlights  important features of this offering and the
information  included or  incorporated  by  reference in this  prospectus.  This
summary does not contain all of the information  that you should consider before
investing in our common shares. You should read the entire prospectus carefully,
especially  the risks of investing in our common  shares  discussed  under "Risk
Factors."

            Unless the context  otherwise  requires,  all references to "Lynch,"
"we," "us," or "our" in this prospectus refer collectively to Lynch Corporation,
an Indiana corporation, and its subsidiaries.

                                   THE COMPANY

            We are a diversified  holding company with  subsidiaries  engaged in
manufacturing.  Our  business  development  strategy  is to expand our  existing
operations  through internal growth and acquisitions.  We may also, from time to
time,  consider  the  acquisition  of other  assets or  businesses  that are not
related to our  present  businesses  and the  strategic  disposition  of certain
assets.

M-TRON INDUSTRIES, INC./PIEZO TECHNOLOGY, INC.

            Mtron designs,  manufactures and markets custom designed  electronic
components  used  primarily  to control the  frequency  or timing of  electronic
signals in  communications  equipment.  Its devices,  which are commonly  called
frequency  control  devices,  crystals or oscillators,  support fixed and mobile
wireless,  copper wire,  coaxial cable, wide area networks,  local area networks
and  fiber  optic  systems.   It  sells  its  products  to  original   equipment
manufacturers, contract manufacturers and to distributors.

            On October 15, 2004,  Mtron  completed  its  acquisition  of all the
issued  and  outstanding  common  shares  of  Piezo.  Piezo  is  a  wholly-owned
subsidiary of Mtron that designs,  manufactures  and markets  frequency  control
devices,  crystal  resonators,  crystal  oscillators,  timing devices,  filters,
crystal filters,  liquid crystal filters and related products and  technologies.
The combined operations of Mtron and PTI are referred to herein as "MtronPTI."

LYNCH SYSTEMS, INC.

            Lynch Systems  designs,  develops,  manufactures and markets a broad
range of manufacturing  equipment for the electronic  display and consumer glass
industries.  Lynch Systems also produces  replacement parts for various types of
packaging  and glass  container-making  machines,  which Lynch  Systems does not
manufacture.



                               THE RIGHTS OFFERING

Basic Subscription
 Privilege....................We will distribute to the holders of record of our
                              common   shares  at  the  close  of   business  on
                              ___________,  2005, at no charge, one transferable
                              subscription  right for each common  share  owned.
                              Every three such rights will entitle the holder to
                              subscribe for one common share.

Oversubscription Privilege....Each  subscription  right  will  also  include  an
                              oversubscription  privilege to purchase additional
                              common  shares  that  are not  purchased  by other
                              rights  holders  through their basic  subscription
                              privileges.

                              You   will   be   entitled   to   exercise    your
                              oversubscription  privilege  only if you  exercise
                              your basic subscription  privilege in full. If the
                              number  of  common  shares   remaining  after  the
                              exercise of all basic  subscription  privileges is
                              not  sufficient to satisfy all requests for common
                              shares  pursuant to  oversubscription  privileges,
                              you will be allocated additional common shares pro
                              rata,  based on the  number of common  shares  you
                              purchased through the basic subscription privilege
                              in proportion to the total number of common shares
                              that you and  other  oversubscribing  shareholders
                              purchased    through   the   basic    subscription
                              privilege.

Subscription Price............$______ in cash per share

Common Shares
 Outstanding
 after Rights
 Offering.....................Assuming that all rights are exercised,  including
                              those  that may be  exercised  as a result  of the
                              oversubscription   privilege,   an   aggregate  of
                              approximately 539,176 common shares will be sold.

Transferability of Rights.....The  rights  are   transferable   until  the  last
                              business day prior to the expiration  date and are
                              expected  to be  authorized  for  trading  on  the
                              American Stock  Exchange.  A business day is a day
                              on which  trading  occurs  on the  American  Stock
                              Exchange.  Trading of the rights will be conducted
                              on a regular-way basis from ________, 2005 through
                              the last  business  day  prior  to the  expiration
                              date. Any  commissions in connection with the sale
                              of  rights  will  be paid  by the  selling  rights
                              holder. We cannot assure you that a market for the
                              rights will develop, or the prices at which rights
                              may be  sold  if a  market  does  develop.

Record Date...................______________, 2005.

                                       2


Expiration Time..............._________, 2005, at 5:00 p.m., New York City time,
                              unless extended for up to 15 days.

Procedure for Exercising
 Rights.......................If you want to exercise  rights you must  properly
                              complete  and  sign the  Subscription  Certificate
                              evidencing the rights and forward the Subscription
                              Certificate,    with   full   payment,    to   the
                              subscription  agent at or prior to the  expiration
                              time.

                              YOU MAY NOT REVOKE AN EXERCISE OF RIGHTS UNLESS WE
                              MAKE A  SIGNIFICANT  AMENDMENT TO THE TERMS OF THE
                              OFFERING AFTER YOU HAVE EXERCISED.

Issuance of Common
 Shares.......................We will deliver to you  certificates  representing
                              common shares purchased upon exercise of the basic
                              subscription  and  oversubscription  privileges as
                              soon as  practicable  after the  expiration  date,
                              anticipated  to  be  approximately   seven  to  10
                              business days after the expiration date.

Use of Proceeds...............The net cash  proceeds from the sale of the common
                              shares offered  hereby,  after payment of fees and
                              expenses,   is  anticipated  to  be  approximately
                              $__________. We expect that such net proceeds will
                              be used for general  corporate  purposes,  working
                              capital  and to make  acquisitions,  although  the
                              Company   has   not    identified   any   specific
                              acquisitions at this time.

Risk Factors..................There are  substantial  risks in  connection  with
                              this  offering  that should be  considered by you.
                              See "Risk Factors."

Amendment, Extension or
 Termination Rights
 Offering.....................We reserve the right, in our sole discretion,  to:
                              (a)  amend or  modify  the  terms  of this  rights
                              offering;  (b)  extend  the  expiration  time to a
                              later  date,  but in no  event  for  more  than 15
                              additional  days;  and (c)  terminate  the  rights
                              offering at any time for any reason.

Intentions of the
 Company's officers,
 directors and principal
 shareholders.................Our  officers,  directors  and  certain  of  their
                              affiliates  have  advised  us that they  expect to
                              exercise the basic  subscription  privilege  under
                              their    rights    and    may    exercise    their
                              oversubscription privilege.

                                       3


                                  RISK FACTORS

AN INVESTMENT IN OUR COMMON SHARES INVOLVES A HIGH DEGREE OF RISK. THE FOLLOWING
RISK FACTORS SHOULD BE CONSIDERED CAREFULLY IN ADDITION TO THE OTHER INFORMATION
IN THIS  PROSPECTUS,  INCLUDING THE  INFORMATION  UNDER  "SPECIAL NOTE REGARDING
FORWARD-LOOKING STATEMENTS," BEFORE MAKING AN INVESTMENT IN OUR COMMON SHARES.

RISKS RELATING TO THIS OFFERING

THE  SUBSCRIPTION  PRICE IS NOT AN  INDICATION OF THE VALUE OF OUR COMMON SHARES
AND YOU MAY NOT BE ABLE TO SELL COMMON  SHARES  PURCHASED  UPON THE  EXERCISE OF
YOUR  SUBSCRIPTION  RIGHTS AT A PRICE EQUAL TO OR GREATER THAN THE  SUBSCRIPTION
PRICE.

            The  subscription  price per common share does not necessarily  bear
any  relationship  to the book value per share of our assets,  operations,  cash
flows,  earnings,  financial  condition  or any other  established  criteria for
value.  As a result,  you  should  not  consider  the  subscription  price as an
indication of the current value of our common shares.  We cannot assure you that
you will be able to sell common  shares  purchased  in this  offering at a price
equal to or greater than the subscription price.

THIS OFFERING MAY CAUSE THE PRICE OF OUR COMMON SHARES TO DECREASE  IMMEDIATELY,
AND THIS DECREASE MAY CONTINUE.

            The subscription price per share represents a discount of ____% from
[the closing sale price of our common  shares on _____ __, 2005] [the average of
the closing  sales prices of our common shares over the  ___-trading  day period
ending ______ __, 2005].  This discount,  along with the number of common shares
we propose to issue and ultimately will issue if this offering is completed, may
result in an immediate  decrease in the market value of our common shares.  This
decrease may continue after the completion of this offering.

YOU MAY SUFFER DILUTION OF YOUR PERCENTAGE OWNERSHIP OF OUR COMMON SHARES.

            If you do not exercise  your  subscription  rights and common shares
are purchased by other shareholders in this offering,  your proportionate voting
and  ownership  interest will be reduced and the  percentage  that your original
common  shares   represents  of  our  expanded  equity  after  exercise  of  the
subscription rights will be diluted. For example, if you own 5,000 common shares
before this offering,  or approximately  0.3% of our outstanding  common shares,
and you exercise none of your subscription  rights while all other  subscription
rights are exercised by other shareholders, then your percentage ownership would
be reduced  to  approximately  0.2%.  The  magnitude  of the  reduction  of your
percentage  ownership  will depend upon the number of common shares you hold and
the extent to which you exercise your subscription rights.

ONCE YOU EXERCISE  YOUR  SUBSCRIPTION  RIGHTS,  YOU MAY NOT REVOKE SUCH EXERCISE
EVEN IF THERE IS A DECLINE IN THE PRICE OF OUR COMMON  SHARES OR IF WE DECIDE TO
EXTEND THE EXPIRATION DATE OF THE SUBSCRIPTION PERIOD.

            The public  trading  market  price of our common  shares may decline
after you elect to exercise your subscription  rights. If that occurs,  you will
have committed to buy our common shares at a price above the  prevailing  market

                                       4


price and you will have an immediate  unrealized  loss. We may also, in our sole
discretion,  extend the expiration date of the  subscription  period,  but in no
event beyond an additional 15 days. During any potential  extension of time, the
value of our common shares may decline below the  subscription  price and result
in a loss on your  investment  upon the exercise of rights to acquire our common
shares.  If the expiration date is extended after you send in your  subscription
forms and payment,  you still may not revoke or change your  exercise of rights.
Moreover,  we cannot  assure you that  following  the  exercise of  subscription
rights  you  will be able to sell  your  common  shares  at a price  equal to or
greater than the subscription price.

YOU WILL NOT RECEIVE INTEREST ON SUBSCRIPTION FUNDS RETURNED TO YOU.

            If we cancel  this  offering  or if we are not able to fulfill  your
full  oversubscription,  we will not have any  obligation  with  respect  to the
subscription rights except to return to you, without interest,  any subscription
payments  and/or  oversubscription  payments  you  made  that  were  not used to
purchase common shares.

YOU NEED TO ACT PROMPTLY AND FOLLOW  SUBSCRIPTION  INSTRUCTIONS,  OTHERWISE YOUR
SUBSCRIPTION MAY BE REJECTED.

            Shareholders  who desire to purchase  common shares in this offering
must act  promptly to ensure that all  required  forms and payments are actually
received by the  subscription  agent prior to 5:00 p.m.,  New York City time, on
the expiration date. If you fail to complete and sign the required  subscription
forms,  send an  incorrect  payment  amount,  or  otherwise  fail to follow  the
subscription procedures that apply to your desired transaction, the subscription
agent may, depending on the circumstances, reject your subscription or accept it
to the extent of the payment  received.  Neither we nor our  subscription  agent
undertakes to contact you  concerning,  or attempt to correct,  an incomplete or
incorrect subscription form or payment. We have the sole discretion to determine
whether a subscription exercise properly follows the subscription procedures.

YOU MAY NOT RECEIVE ALL OF THE COMMON SHARES FOR WHICH YOU OVERSUBSCRIBE.

            If an  insufficient  number of common  shares is  available to fully
satisfy all  oversubscription  privilege  requests,  the available common shares
will be distributed  proportionately  among rights  holders who exercised  their
oversubscription  privilege  based on the number of common  shares  each  rights
holder subscribed for under the basic subscription privilege.

YOU MAY NOT WANT TO EXERCISE YOUR RIGHTS AS THE PROCEEDS OF THIS OFFERING MAY BE
USED TO MAKE ACQUISITIONS THAT YOU MAY NOT HAVE THE OPPORTUNITY TO APPROVE.

            We expect that the net cash proceeds from this offering will be used
for  general  corporate  purposes,  working  capital  and to make  acquisitions,
although we have not identified any specific  acquisitions  at this time. If you
exercise your rights,  you may not have an  opportunity to evaluate the specific
merits or risks of any potential future  acquisitions.  As a result,  you may be

                                       5


entirely  dependent on the broad  discretion  and judgment of  management in the
selection of potential future acquisitions.

NEITHER WE, NOR THE SUBSCRIPTION  AGENT, WILL HAVE ANY OBLIGATION TO YOU IF THIS
OFFERING IS CANCELED, OTHER THAN TO REFUND YOUR SUBSCRIPTION PAYMENTS.

            Neither we, nor the subscription  agent, will have any obligation to
you if this  offering  is  canceled,  other  than to  refund  your  subscription
payments, without interest.

RISKS RELATING TO OUR BUSINESS

WE HAVE INCURRED  OPERATING LOSSES FOR THE PAST THREE YEARS AND FACE UNCERTAINTY
IN OUR ABILITY TO ACHIEVE OPERATING PROFITS IN THE FUTURE.

            We have  incurred  substantial  operating  losses for the past three
years.  Without giving effect to gains realized from the deconsolidation in 2002
of one of our holdings,  we suffered operating losses of $2.9 million,  $832,000
and $3.3 million in 2004, 2003 and 2002, respectively.  We are uncertain whether
we will be able to achieve or sustain operating profits in the future.

IF WE ARE UNABLE TO SECURE NECESSARY  FINANCING,  WE MAY NOT BE ABLE TO FUND OUR
OPERATIONS OR STRATEGIC GROWTH.

            In order to achieve our strategic  business  objectives,  we will be
required to seek  additional  financing.  Lynch  Systems'  credit  facility with
SunTrust Bank,  which was to have expired by its terms on May 31, 2005, has been
extended to August 31, 2005.  Lynch  Systems is currently  in  discussions  with
other banks to obtain financing to replace this facility,  however, there can be
no  assurances  that  the  Company  will be  able to  obtain  new  financing  on
acceptable terms, or at all.  MtronPTI's bridge loan from First National Bank of
Omaha is scheduled to mature on October 14, 2005.  MtronPTI is in discussions to
refinance this bridge loan, however, there can be no assurances that the Company
will be able to do so. MtronPTI's  revolving credit facility from First National
Bank of Omaha is  scheduled to mature on May 31, 2006.  Venator  Merchant  Fund,
L.P.'s loan to the Company is due on September  11, 2005,  or within seven days,
after demand.

            Under our existing credit facilities,  we are required to obtain the
lenders'  consent for most  additional  debt  financing and to comply with other
covenants,  including  specific  financial ratios.  For example,  we may require
further capital to continue to develop our technology and infrastructure and for
working capital purposes. In addition,  future acquisitions would likely require
additional  equity  and/or  debt  financing.  Our  failure to secure  additional
financing could have a material  adverse effect on our continued  development or
growth.

AS A HOLDING  COMPANY,  WE DEPEND ON THE OPERATIONS OF OUR  SUBSIDIARIES TO MEET
OUR OBLIGATIONS.

            We are a holding company that transacts all of our business  through
operating  subsidiaries.  Our  primary  assets  are  the  common  shares  of our
operating  subsidiaries.  Our ability to meet our operating  requirements and to
make other payments  depends on the surplus and earnings of our subsidiaries and

                                       6


their  ability  to pay  dividends  or to  advance or repay  funds.  Payments  of
dividends and advances and repayments of inter-company  debt by our subsidiaries
are restricted by our credit agreements.

WE MAY MAKE ACQUISITIONS  THAT ARE NOT SUCCESSFUL OR FAIL TO PROPERLY  INTEGRATE
ACQUIRED BUSINESSES INTO OUR OPERATIONS.

            We intend  to  explore  opportunities  to buy  other  businesses  or
technologies  that could  complement,  enhance or expand our current business or
product lines or that might otherwise offer us growth opportunities. We may have
difficulty finding such opportunities or, if we do identify such  opportunities,
we may not be able to complete such transactions for reasons including a failure
to secure necessary financing.

            Any  transactions  that we are able to  identify  and  complete  may
involve a number of risks, including:

            o  the  diversion of our  management's  attention  from our existing
               business  to  integrate  the  operations  and  personnel  of  the
               acquired or combined business or joint venture;
            o  possible  adverse  effects on our  operating  results  during the
               integration process;
            o  substantial acquisition related expenses,  which would reduce our
               net income in future years;
            o  the loss of key employees and customers as a result of changes in
               management; and
            o  our possible inability to achieve the intended  objectives of the
               transaction.

            In  addition,  we may  not be  able to  successfully  or  profitably
integrate,  operate,  maintain  and  manage  our newly  acquired  operations  or
employees.  We  may  not  be  able  to  maintain  uniform  standards,  controls,
procedures and policies, and this may lead to operational inefficiencies.

PROVISIONS IN OUR CHARTER DOCUMENTS AND UNDER INDIANA LAW MAY PREVENT OR DELAY A
CHANGE OF CONTROL  OF US AND COULD  ALSO  LIMIT THE  MARKET  PRICE OF OUR COMMON
SHARES.

            Provisions of our certificate of incorporation  and bylaws,  as well
as  provisions  of Indiana  corporate  law, may  discourage,  delay or prevent a
merger,  acquisition  or other change in control of our company,  even if such a
change in control would be beneficial to our shareholders.  These provisions may
also prevent or frustrate  attempts by our shareholders to replace or remove our
management. These provisions include those:

            o  prohibiting  our  shareholders  from  fixing  the  number  of our
               directors;
            o  requiring   advance   notice  for   shareholder   proposals   and
               nominations; and
            o  prohibiting  shareholders from acting by written consent,  unless
               unanimous.

            We  are  subject  to  certain  provisions  of the  Indiana  Business
Corporation Law, or IBCL, that limit business combination  transactions with 10%
shareholders during the first five years of their ownership,  absent approval of
our  board of  directors.  The IBCL  also  contains  control  share  acquisition
provisions  that limit the ability of certain  shareholders to vote their common
shares  unless  their  control  share  acquisition  was  approved  in advance by
shareholders.  These  provisions  and  other  similar  provisions  make  it more

                                       7


difficult  for  shareholders  or  potential  acquirers  to  acquire  us  without
negotiation  and could limit the price that  investors are willing to pay in the
future for our common shares.

COMPLIANCE  WITH  CHANGING   REGULATION  OF  CORPORATE   GOVERNANCE  AND  PUBLIC
DISCLOSURE WILL REQUIRE US EITHER TO INCUR ADDITIONAL  EXPENSES OR CEASE TO BE A
REPORTING COMPANY.

            Keeping  abreast  of,  and  in  compliance   with,   changing  laws,
regulations   and  standards   relating  to  corporate   governance  and  public
disclosure,  including the  Sarbanes-Oxley  Act of 2002, new SEC regulations and
American Stock Exchange  rules,  will require an increased  amount of management
attention  and  external  resources.  We would be required to invest  additional
resources  to comply with  evolving  standards,  which would result in increased
general and  administrative  expenses  and a diversion  of  management  time and
attention from revenue-generating activities to compliance activities.

            Our  Board  of  Directors  may  determine  that  it is in  the  best
interests of shareholders to eliminate or reduce such expense by ceasing to be a
reporting  company  for  purposes of the  Securities  Exchange  Act of 1934,  as
amended. One commonly used method, subject to shareholder approval, is to effect
a reverse  share split to reduce the number of  shareholders  to fewer than 300,
permitting termination of registration.  Under this method, shareholders who own
less than one whole common share  following  the reverse split would cease to be
shareholders and would receive a cash payment for their fractional shares. After
a reverse  split,  there might be no  established  trading market for our common
shares,  although  we expect  that our  common  shares may then be quoted on the
"pink sheets."

WE MAY BE EXPOSED TO  LIABILITY  AS A RESULT OF BEING NAMED AS A DEFENDANT  IN A
LAWSUIT  BROUGHT UNDER THE SO-CALLED  "QUI TAM"  PROVISIONS OF THE FEDERAL FALSE
CLAIMS ACT.

            The Company, Lynch Interactive  Corporation,  which was formed via a
tax-free   spin-off  from  Lynch   Corporation  on  September  1,  1999  ("Lynch
Interactive"),  and various  other parties are  defendants in a lawsuit  brought
under the so-called "qui tam"  provisions of the federal False Claims Act in the
United States  District Court for the District of Columbia.  The main allegation
in the  case is that the  defendants  participated  in the  creation  of  "sham"
bidding  entities  that  allegedly  defrauded  the U.S.  Treasury  Department by
improperly participating in Federal Communications  Commission spectrum auctions
restricted to small  businesses,  and obtained bidding credits in other spectrum
auctions  allocated  to "small" and "very small"  businesses.  While the lawsuit
seeks to recover an  unspecified  amount of  damages,  which would be subject to
mandatory  trebling  under the  statute,  a report  prepared  for the relator (a
private  individual who filed the action on behalf of the United States) in 2005
alleges  damages of  approximately  $91  million in respect of bidding  credits,
approximately $70 million in respect of government loans and approximately  $206
million in  respect of  subsequent  resales of  licenses,  in each case prior to
trebling.  Although Lynch Interactive is contractually bound to indemnify us for
any  losses  or  damages  we may  incur  as a  result  of  this  lawsuit,  Lynch
Interactive  may lack the capital  resources to do so. As a result,  we could be
held liable and forced to pay a significant amount of damages without recourse.

                                       8


WE DO  NOT  ANTICIPATE  PAYING  CASH  DIVIDENDS  ON  OUR  COMMON  SHARES  IN THE
FORESEEABLE FUTURE.

            We  anticipate  that all of our  earnings  will be retained  for the
development of our business.  The Board of Directors has adopted a policy of not
paying cash  dividends on our common shares.  We do not  anticipate  paying cash
dividends on our common shares in the foreseeable future.

THERE IS A LIMITED  MARKET FOR OUR COMMON  SHARES.  OUR  COMMON  SHARE  PRICE IS
LIKELY TO BE HIGHLY VOLATILE AND COULD DROP UNEXPECTEDLY.

            There is a limited  public  market  for our  common  shares,  and we
cannot assure you that an active trading market will develop. As a result of low
trading volume in our common shares,  the purchase or sale of a relatively small
number of common shares could result in  significant  share price  fluctuations.
Our share price may fluctuate  significantly in response to a number of factors,
including the following, several of which are beyond our control:

            o  changes in financial  estimates or investment  recommendations by
               securities analysts relating to our common shares;
            o  loss  of a  major  customer;
            o  announcements by us or our competitors of significant  contracts,
               acquisitions,  strategic partnerships,  joint ventures or capital
               commitments; and
            o  changes in key personnel.

            In the past,  securities  class  action  litigation  has often  been
brought against a company following periods of volatility in the market price of
its  securities.  We could be the target of similar  litigation  in the  future.
Securities  litigation,  regardless of merit or ultimate  outcome,  would likely
cause  us  to  incur  substantial  costs,  divert  management's   attention  and
resources,  harm our reputation in the industry and the  securities  markets and
reduce our profitability.

SECURITIES  ANALYSTS MAY NOT INITIATE COVERAGE OF OUR COMMON SHARES OR MAY ISSUE
NEGATIVE REPORTS, AND THIS MAY HAVE A NEGATIVE IMPACT ON THE MARKET PRICE OF OUR
COMMON SHARES.

            We cannot assure you that securities analysts will initiate coverage
and publish  research  reports on us. It is difficult for companies with smaller
market  capitalizations,  such as us, to attract independent  financial analysts
who will cover our common  shares.  If securities  analysts do not, this lack of
research coverage may adversely affect the market price of our common shares.

IF WE ARE UNABLE TO INTRODUCE INNOVATIVE  PRODUCTS,  DEMAND FOR OUR PRODUCTS MAY
DECREASE.

            Our  future  operating  results  are  dependent  on our  ability  to
continually  develop,  introduce  and  market  innovative  products,  to  modify
existing products,  to respond to technological  change and to customize some of
our products to meet customer requirements. There are numerous risks inherent in
this  process,  including  the risks  that we will be unable to  anticipate  the
direction  of  technological  change or that we will be unable  to  develop  and
market new products and  applications  in a timely or  cost-effective  manner to
satisfy customer demand.

                                       9


OUR OPERATING  RESULTS AND  FINANCIAL  CONDITION  COULD BE MATERIALLY  ADVERSELY
AFFECTED BY ECONOMIC,  POLITICAL,  HEALTH, REGULATORY AND OTHER FACTORS EXISTING
IN FOREIGN COUNTRIES IN WHICH WE OPERATE.

            As we  have  significant  international  operations,  our  operating
results  and  financial  condition  could be  materially  adversely  affected by
economic,  political,  health,  regulatory and other factors existing in foreign
countries  in which we  operate.  Our  international  operations  are subject to
inherent risks, which may materially adversely affect us, including:

            o  political  and  economic  instability  in  countries in which our
               products are manufactured and sold;
            o  expropriation or the imposition of government controls;
            o  sanctions or  restrictions  on trade imposed by the United States
               government;
            o  export license requirements;
            o  trade restrictions;
            o  currency controls or fluctuations in exchange rates;
            o  high levels of inflation or deflation;
            o  greater  difficulty in  collecting  our accounts  receivable  and
               longer payment cycles;
            o  changes in labor  conditions  and  difficulties  in staffing  and
               managing our international operations; and
            o  limitations on insurance  coverage  against  geopolitical  risks,
               natural disasters and business operations.

            In addition,  these same factors may also place us at a  competitive
disadvantage  when compared to some of our foreign  competitors.  In response to
competitive  pressures  and  customer   requirements,   we  may  further  expand
internationally at lower cost locations.  If we expand into these locations,  we
will be required to incur additional capital expenditures.

OUR  BUSINESSES  ARE CYCLICAL.  THE RECENT  DECLINE IN DEMAND IN THE  ELECTRONIC
COMPONENT AND GLASS COMPONENT  INDUSTRIES MAY CONTINUE,  RESULTING IN ADDITIONAL
ORDER  CANCELLATIONS  AND  DEFERRALS AND LOWER  AVERAGE  SELLING  PRICES FOR OUR
PRODUCTS.

            Our  subsidiaries  sell to  industries  that are subject to cyclical
economic  changes.  The electronic  component and glass component  industries in
general,  and  specifically  the  Company,  have  for  the  past  several  years
experienced a decline in product  demand on a global  basis,  resulting in order
cancellations  and deferrals and lower average selling  prices.  This decline is
primarily  attributable to a slowing of growth in the demand for components used
by  telecommunications   infrastructure  manufacturers  and  newer  technologies
introduced in the glass display industry. We cannot assure you that any expected
or perceived  improvements in the economy and the electronic component and glass
component  industry  will occur.  The  slowdown may continue and may become more
pronounced.  A slowdown in demand, as well as recessionary  trends in the global
economy,  make it more difficult for us to predict our future sales,  which also
makes it more difficult to manage our operations.

                                       10


OUR  MARKETS  ARE HIGHLY  COMPETITIVE,  AND WE MAY LOSE  BUSINESS  TO LARGER AND
BETTER-FINANCED COMPETITORS.

            Our   markets   are   highly   competitive   worldwide,   with   low
transportation  costs and few import  barriers.  We compete  principally  on the
basis of  product  quality  and  reliability,  availability,  customer  service,
technological  innovation,  timely delivery and price.  All of the industries in
which we compete have become increasingly  concentrated and globalized in recent
years.  Our major  competitors,  some of which are larger than us, and potential
competitors have  substantially  greater financial  resources and more extensive
engineering,  manufacturing, marketing and customer support capabilities than we
have.

OUR SUCCESS  DEPENDS ON OUR ABILITY TO RETAIN OUR KEY  MANAGEMENT  AND TECHNICAL
PERSONNEL AND ATTRACTING, RETAINING, AND TRAINING NEW TECHNICAL PERSONNEL.

            Our future  growth and  success  will  depend in large part upon our
ability to retain our existing  management and technical team and to recruit and
retain  highly  skilled  technical  personnel,  including  engineers.  The labor
markets in which we operate are highly  competitive  and most of our  operations
are not located in highly  populated  areas. As a result,  we may not be able to
retain and recruit key  personnel.  Our  failure to hire,  retain or  adequately
train key personnel could have a negative impact on our performance.

WE MAY NOT REALIZE THE SYNERGIES OR ACHIEVE THE INTENDED  OBJECTIVES SOUGHT FROM
MTRON'S ACQUISITION OF PTI.

            Effective  September 30, 2004,  Mtron  completed its  acquisition of
PTI. The value of this  acquisition  is largely based on the  synergies  that we
believe will be created by the integration of these two companies.  This process
involves  a  number  of  risks,  including  the  diversion  of our  management's
attention  from  our  existing   business  to  integrate  PTI's  operations  and
personnel,  and possible  adverse  effects on our operating  results  during the
integration  process.  In  addition,  we may be  unable to  integrate,  operate,
maintain and manage PTI's  operations or  employees.  We also may not be able to
maintain uniform standards, controls, procedures and policies, and this may lead
to operational inefficiencies.

MTRONPTI'S  BACKLOG  MAY NOT BE  INDICATIVE  OF FUTURE  SALES AND MAY  ADVERSELY
AFFECT OUR BUSINESS.

            MtronPTI's  backlog  comprises  orders  that are subject to specific
production release orders under written contracts,  oral and written orders from
customers with which MtronPTI has had  long-standing  relationships  and written
purchase  orders  from sales  representatives.  MtronPTI's  customers  may order
components  from  multiple  sources to ensure  timely  delivery  when backlog is
particularly  long and may cancel or defer orders without  significant  penalty.
They often cancel orders when business is weak and inventories are excessive,  a
phenomenon that MtronPTI has experienced in the recent economic  slowdown.  As a
result,  MtronPTI's  backlog as of any particular date may not be representative
of actual net sales for any succeeding period.

                                       11


MTRONPTI RELIES UPON ONE CONTRACT  MANUFACTURER FOR A SIGNIFICANT PORTION OF ITS
FINISHED  PRODUCTS,  AND A DISRUPTION IN ITS RELATIONSHIP  COULD HAVE A NEGATIVE
IMPACT ON MTRONPTI'S SALES.

            In 2004,  approximately 12% of MtronPTI's net sales was attributable
to  finished  products  that  were  manufactured  by  an  independent   contract
manufacturer  located in both Korea and China.  We expect this  manufacturer  to
account for a smaller but  substantial  portion of MtronPTI's  net sales in 2005
and a material portion of MtronPTI's sales for the next several years.  MtronPTI
does not have a written,  long-term supply contract with this  manufacturer.  If
this manufacturer  becomes unable to provide products in the quantities  needed,
or at acceptable prices,  MtronPTI would have to identify and qualify acceptable
replacement  manufacturers  or  manufacture  the  products  internally.  Due  to
specific  product  knowledge and process  capability,  MtronPTI could  encounter
difficulties  in  locating,  qualifying  and  entering  into  arrangements  with
replacement manufacturers. As a result, a reduction in the production capability
or financial viability of this manufacturer, or a termination of, or significant
interruption in, MtronPTI's  relationship with this manufacturer,  may adversely
affect MtronPTI's results of operations and our financial condition.

CONTINUED MARKET ACCEPTANCE OF MTRONPTI'S  PACKAGED QUARTZ CRYSTALS,  OSCILLATOR
MODULES AND  ELECTRONIC  FILTERS IS CRITICAL TO OUR SUCCESS,  BECAUSE  FREQUENCY
CONTROL DEVICES ACCOUNT FOR NEARLY ALL OF MTRONPTI'S SALES.

            Virtually all of MtronPTI's  2003 and 2004 net sales came from sales
of  frequency  control  devices,  which  consist of  packaged  quartz  crystals,
oscillator modules and electronic filters. We expect that this product line will
continue  to  account  for  substantially  all of  MtronPTI's  net sales for the
foreseeable  future.  Any decline in demand for this  product line or failure to
achieve continued market acceptance of existing and new versions of this product
line may harm MtronPTI's business and our financial condition.

MTRONPTI'S  FUTURE RATE OF GROWTH IS HIGHLY  DEPENDENT  ON THE  DEVELOPMENT  AND
GROWTH OF THE MARKET FOR COMMUNICATIONS AND NETWORK EQUIPMENT.

            MtronPTI's business depends heavily upon capital expenditures by the
providers  of  communications  and network  services.  In 2004,  the majority of
MtronPTI's  net  sales  were to  manufacturers  of  communications  and  network
infrastructure  equipment,  including  indirect sales through  distributors  and
contract  manufacturers.  In 2005,  MtronPTI  expects a smaller but  significant
portion of its net sales to be to  manufacturers of  communications  and network
infrastructure   equipment.   MtronPTI   intends  to   increase   its  sales  to
communications and network infrastructure equipment manufacturers in the future.
Communications  and  network  service  providers  have  experienced  periods  of
capacity shortage and periods of excess capacity. In periods of excess capacity,
communications systems and network operators cut purchases of capital equipment,
including  equipment that incorporates  MtronPTI's  products.  A slowdown in the
manufacture and purchase of communications and network infrastructure  equipment
could  substantially  reduce  MtronPTI's  net sales and  operating  results  and
adversely  affect  our  financial  condition.   Moreover,   if  the  market  for
communications  or network  infrastructure  equipment fails to grow as expected,
MtronPTI  may be unable to sustain its growth.  In addition,  MtronPTI's  growth
depends  upon the  acceptance  of its  products  by  communications  and network

                                       12


infrastructure equipment manufacturers.  If, for any reason, these manufacturers
do not find  MtronPTI's  products to be  appropriate  for their use,  our future
growth will be adversely affected.

COMMUNICATIONS AND NETWORK INFRASTRUCTURE  EQUIPMENT MANUFACTURERS  INCREASINGLY
RELY UPON CONTRACT MANUFACTURERS, THEREBY DIMINISHING MTRONPTI'S ABILITY TO SELL
ITS PRODUCTS DIRECTLY TO THOSE EQUIPMENT MANUFACTURERS.

            There  is  a  growing   trend  among   communications   and  network
infrastructure  equipment  manufacturers to outsource the manufacturing of their
equipment  or  components.  As a result,  MtronPTI's  ability to persuade  these
original  equipment  manufacturers to specify our products has been reduced and,
in the absence of a  manufacturer's  specification of MtronPTI's  products,  the
prices that MtronPTI can charge for them may be subject to greater competition.

MTRONPTI'S  GOVERNMENT  CONTRACTS CONTAIN  PROVISIONS THAT ARE UNFAVORABLE TO IT
AND HAVE A NUMBER OF SPECIFIC RISKS THAT MAY RESULT IN LOST ORDERS AND PROFITS.

            Many  of  MtronPTI's  contracts  with  government  agencies  contain
provisions that give the governments  rights and remedies not typically found in
private commercial contracts, including provisions enabling the government to:

            o  terminate  or cancel  existing  contracts  without good reason or
               penalty;
            o  suspend MtronPTI from doing business with a foreign government or
               prevent MtronPTI from selling its products in certain countries;
            o  audit  and  object  to  MtronPTI's   contract-related  costs  and
               expenses, including allocated indirect costs; and
            o  change  specific  terms and  conditions in MtronPTI's  contracts,
               including  changes that would reduce the value of the contract to
               MtronPTI.

            MtronPTI's  business  generated from  government  contracts could be
materially and adversely affected if:

            o  MtronPTI's  reputation or relationship  with government  agencies
               were impaired;
            o  MtronPTI were suspended or otherwise  prohibited from contracting
               with a domestic or foreign government;
            o  any of MtronPTI's  products were to fail to meet the requirements
               of certain applicable  specified military standards;
            o  levels of government spending were to decrease;
            o  MtronPTI were barred from entering into new government  contracts
               or extending existing government contracts based on violations or
               suspected violations of laws or regulations; or
            o  MtronPTI were not granted security clearances required to provide
               its  services  and  solutions to  governments,  or such  security
               clearances were revoked.

                                       13


FUTURE CHANGES IN MTRONPTI'S  ENVIRONMENTAL LIABILITY AND COMPLIANCE OBLIGATIONS
MAY INCREASE COSTS AND DECREASE PROFITABILITY.

            MtronPTI's   manufacturing   operations,   products  and/or  product
packaging  are  subject to  environmental  laws and  regulations  governing  air
emissions,  wastewater discharges, and the handling, disposal and remediation of
hazardous substances,  wastes and other chemicals.  In addition,  more stringent
environmental  regulations may be enacted in the future, and we cannot presently
determine the  modifications,  if any, in MtronPTI's  operations that any future
regulations  might require,  or the cost of compliance  that would be associated
with these regulations.

MTRONPTI  MAY BE UNABLE TO MODIFY ITS PRODUCTS OR MAY INCUR  INCREASED  COSTS TO
MEET  THE  REQUIREMENTS  OF  THE  EUROPEAN  UNION'S   RESTRICTION  ON  HAZARDOUS
SUBSTANCES DIRECTIVE.

            MtronPTI may be unable to modify its products or may incur increased
costs to meet the requirements of the European Union's  Restriction on Hazardous
Substances Directive. If MtronPTI is unable to comply with these regulations, it
may not be permitted to ship its products to the European Union.

LYNCH SYSTEMS'  REVENUE IS LARGELY  DEPENDENT ON DEMAND FOR ITS  TELEVISIONS AND
COMPUTER  MONITORS BASED ON CATHODE-RAY  TUBE  TECHNOLOGY.  THIS TECHNOLOGY WILL
EVENTUALLY BE REPLACED BY PLASMA AND LIQUID CRYSTAL DISPLAYS.

            Lynch Systems  generates a  significant  portion of its revenue from
sales to glass producers that supply  television and computer  monitor  displays
that are based on  cathode-ray  tube  technology.  This market is being  rapidly
penetrated  by  thinner,  lighter  weight  plasma  displays  and liquid  crystal
displays.  Although cathode-ray tube televisions and computer monitors currently
retain  advantages  in image  quality and price,  glass  producers are investing
billions  of dollars to improve  the quality and lower the unit price of plasma,
liquid  crystal and other display types.  We believe that market  penetration by
plasma and liquid crystal display  producers will continue and eventually render
obsolete cathode-ray tube technology and this Lynch Systems product line.

LYNCH SYSTEMS' DEPENDENCE ON A FEW SIGNIFICANT CUSTOMERS EXPOSES IT TO OPERATING
RISKS.

            Lynch  Systems'  sales to its ten largest  customers  accounted  for
approximately  80% of its net sales in 2004, 2003 and 2002. Lynch Systems' sales
to its largest customer  accounted for approximately 36%, 42% and 27% of its net
sales in 2004,  2003 and 2002.  If a  significant  customer  reduces,  delays or
cancels its orders for any reason,  the  business and results of  operations  of
Lynch Systems would be negatively affected.

AN ORDER TO BUILD MULTIPLE MACHINES IN THE FUTURE WITH A SIGNIFICANT CUSTOMER IN
THE  TABLEWARE  MARKET  IS  CONTINGENT  UPON  THE  SUCCESSFUL  INSTALLATION  AND
OPERATION OF THE MACHINES CURRENTLY IN PRODUCTION.

            Lynch  Systems  has a  significant  order  for  glass  manufacturing
machines  that are  scheduled  to be shipped  and  installed  in the  customer's
factories in 2005. We expect that this contract will represent approximately 33%

                                       14


of Lynch Systems' revenues in 2005. Many of these machines utilize new processes
and require  customer  training.  The ability of the  customer's  personnel  and
resources to operate these machines  successfully  is critical.  If the customer
does not  realize the full  benefit  from these  machines,  new orders from this
customer may be canceled.

THE RESULTS OF LYNCH  SYSTEMS'  OPERATIONS  ARE SUBJECT TO  FLUCTUATIONS  IN THE
AVAILABILITY AND COST OF STEEL USED TO MANUFACTURE GLASS FORMING EQUIPMENT.

            Lynch Systems uses large amounts of steel to  manufacture  its glass
forming  equipment.  The price of steel has risen  substantially  and demand for
steel is very  high.  Lynch  Systems  has  only  been  able to pass  some of the
increased costs to its customers.  As a result, Lynch Systems' profit margins on
glass forming  equipment  have  decreased.  If the price of and demand for steel
continues to rise, our profit margins will continue to decrease.

LYNCH SYSTEMS MAY BE UNABLE TO PROTECT ITS INTELLECTUAL PROPERTY.

            The success of Lynch Systems'  business  depends,  in part, upon its
ability to protect  trade  secrets,  designs,  drawings and  patents,  obtain or
license  patents and operate  without  infringing on the  intellectual  property
rights of  others.  Lynch  Systems  relies on a  combination  of trade  secrets,
designs, drawings,  patents,  nondisclosure agreements and technical measures to
protect its proprietary  rights in its products and technology.  The steps taken
by Lynch Systems in this regard may not be adequate to prevent  misappropriation
of its  technology.  In addition,  the laws of some  foreign  countries in which
Lynch Systems operates do not protect its proprietary  rights to the same extent
as do the  laws of the  United  States.  Although  Lynch  Systems  continues  to
evaluate and  implement  protective  measures,  we cannot  assure you that these
efforts will be successful. Lynch Systems' inability to protect its intellectual
property rights could diminish or eliminate the  competitive  advantages that it
derives from its technology, cause Lynch Systems to lose sales or otherwise harm
its business.

               SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

            This  prospectus and documents  incorporated  by reference into this
prospectus contain forward-looking  statements within the meaning of Section 27A
of the  Securities  Act of 1933, as amended,  and Section 21E of the  Securities
Exchange Act of 1934, as amended,  that are not historical facts, but rather are
based on current expectations,  estimates and projections about our business and
industry, our beliefs and assumptions.  Words such as "anticipates,"  "expects,"
"intends," "plans,"  "believes,"  "seeks,"  "estimates," and variations of these
words  and  similar   expressions  are  intended  to  identify   forward-looking
statements. These statements are based on our current plans and expectations and
involve risks and uncertainties over which we have no control,  that could cause
actual future  activities  and results of operations to be materially  different
from those set forth in the forward-looking  statements.  Important factors that
could cause actual future  activities  and operating  results to differ  include
fluctuating  demand for capital goods such as large glass presses,  delay in the
recovery  of demand for  components  used by  telecommunications  infrastructure
manufacturers and exposure to foreign economies. Important information regarding
risks and uncertainties is also set forth elsewhere in this document,  including
in those  described in "Risk Factors"  beginning on page 5, as well as elsewhere
in  this  prospectus  and in  documents  incorporated  by  reference  into  this
prospectus.   You  are   cautioned   not  to  place  undue   reliance  on  these

                                       15


forward-looking  statements,  which reflect our management's view only as of the
date of  this  prospectus  or as of the  date of any  document  incorporated  by
reference into this prospectus.  All subsequent written or oral  forward-looking
statements  attributable  to us or persons  acting on our  behalf are  expressly
qualified  in their  entirety by these  cautionary  statements.  We undertake no
obligation  to update these  statements  or publicly  release the results of any
revisions to the  forward-looking  statements that we may make to reflect events
or  circumstances  after the date of this prospectus or the date of any document
incorporated  into this prospectus or to reflect the occurrence of unanticipated
events.

            You are also urged to  carefully  review and  consider  the  various
disclosures  made by us in this  document,  as  well  as in our  prior  periodic
reports on Forms 10-K,  10-Q and 8-K,  filed with the  Securities  and  Exchange
Commission and listed under the caption  "Incorporation by Reference" on page 31
of this prospectus.

            We make available,  free of charge,  our annual report on Form 10-K,
quarterly reports on Form 10-Q, and current reports on Form 8-K, if any.

            We  also  make  this   information   available  on  our  website  at
WWW.LYNCHCORP.COM.

                   DESCRIPTION OF SECURITIES TO BE REGISTERED

            Our authorized  capital consists of 10,000,000  common shares with a
par value of $.0.01 per share.  As of July 31,  2005,  there were  approximately
1,617,526 common shares issued and outstanding. Additionally, there were 600,000
common shares  reserved for issuance  upon exercise of options  granted or to be
granted  pursuant  our 2001  Equity  Incentive  Plan.  The holders of our common
shares  are  entitled  to one vote for each  common  share held of record on all
matters to be voted on by  shareholders.  The  holders of our common  shares are
entitled to receive such  dividends,  if any, as may be declared by the Board of
Directors in its discretion out of funds legally available.  Upon liquidation or
dissolution  of the  Company,  the holders of our common  shares are entitled to
receive  on  a  pro  rata  basis  all  assets   remaining  for  distribution  to
shareholders  after the  payment  of debts and  liquidation  preferences  on any
capital stock. Our common shares have no preemptive or other subscription rights
and  there  are no  other  conversion  rights  or  redemption  or  sinking  fund
provisions with respect to such common shares.

            The  Company's  Transfer  Agent and  Registrar  is  Mellon  Investor
Services LLC.

                                USE OF PROCEEDS

            If all of the rights are exercised in full at $_______ per share, we
would receive net cash proceeds of approximately $_______ million, after payment
of fees and expenses.  No discount or  commission is payable in connection  with
any such exercise.

            The funds, if any, received upon exercise of the rights will be used
for  general  corporate  purposes,  working  capital  and to make  acquisitions,
although the Company has not identified any specific acquisitions at this time.

                                       16


                              THE RIGHTS OFFERING

            Our Board of  Directors  has proposed  that we raise equity  capital
through this offering to all of our  shareholders.  Through this prospectus,  we
are offering  common  shares that rights  holders may purchase  upon  exercising
their subscription rights.

SUBSCRIPTION RIGHTS

            BASIC SUBSCRIPTION  PRIVILEGE.  We will distribute to the holders of
record of our common shares,  at the close of business on ___________,  2005, at
no charge, one transferable  subscription right for each common share owned. The
subscription rights will be evidenced by Subscription Certificates.  Every three
such rights will entitle the holder to subscribe for one common share.  Assuming
that all rights are exercised, including those that may be exercised as a result
of the oversubscription  privilege, an aggregate of approximately 539,176 common
shares will be sold. We will deliver to  subscribers  certificates  representing
common shares purchased through the exercise of the basic subscription privilege
as  soon  as  practicable   after  the  expiration   date,   anticipated  to  be
approximately seven to 10 business days. You are not required to exercise any or
all of your subscription rights.

            If, pursuant to the exercise of subscription  rights,  the number of
common  shares that a rights holder would be entitled to receive would result in
receipt of fractional  shares,  the  aggregate  number of common shares that the
holder is entitled to purchase  will be rounded up to the nearest  whole number.
Rights holders will not receive cash in lieu of fractional shares.

            OVERSUBSCRIPTION  PRIVILEGE.  Subject  to the  allocation  described
below, each  subscription  right will include an  oversubscription  privilege to
purchase additional common shares that are not purchased by other rights holders
pursuant to the other rights holders' basic  subscription  privileges.  A rights
holder will be entitled to exercise its  oversubscription  privilege  only if it
exercises  its basic  subscription  privilege  in full.  If the number of common
shares remaining after the exercise of all basic subscription  privileges is not
sufficient to satisfy  requests from all shareholders for common shares pursuant
to oversubscription  privileges,  you will be allocated additional common shares
pro rata,  based on the number of common shares you purchased  through the basic
subscription  privilege in  proportion to the total number of common shares that
you  and  other  oversubscribing   shareholders   purchased  through  the  basic
subscription privilege. Once you have exercised your oversubscription privilege,
you may not revoke your exercise.

            If you wish to exercise your oversubscription  privilege, you should
indicate the number of additional  common shares that you would like to purchase
in the space provided on your  Subscription  Certificate.  When you send in your
Subscription  Certificate,  you must also send the full  purchase  price for the
number of  additional  common  shares that you have  requested  to purchase  (in
addition to the  payment  due for common  shares  purchased  through  your basic
subscription privilege). After all common shares requested pursuant to the basic
subscription  privilege are allocated,  a  determination  will be made as to the
number  of common  shares  available  for  issuance  under the  oversubscription
privilege.   For   purposes  of   allocating   the  common   shares   under  the
oversubscription privilege, there shall be calculated for each holder seeking to
exercise  the  oversubscription  privilege a proration  factor.  This  proration
factor  will be based on the  number  of  common  shares  purchased  by a holder
through the basic  subscription  privilege in  proportion to the total number of

                                       17


common  shares  purchased  by all  holders  pursuant  to the basic  subscription
privilege.  For each holder, this proration factor will be applied to the common
shares  available for purchase upon exercise of the  oversubscription  privilege
and common shares will be allocated  accordingly.  This process will be repeated
until one of the following  conditions is met: (i) all oversubscribing  holders'
requests  are filled,  or (ii) there are no more  common  shares  available  for
allocation.

            As soon as practicable  after the expiration  date,  Mellon Investor
Services LLC,  acting as our  subscription  agent,  will determine the number of
common shares that you may purchase pursuant to the oversubscription  privilege.
You will receive certificates  representing these common shares and a refund for
any excess  subscription  payments as soon as  practicable  after the expiration
date,  anticipated  to be  approximately  seven to 10  business  days  after the
expiration  date.  If you  request  and pay for  more  common  shares  than  are
allocated  to  you,  we will  refund  that  overpayment,  without  interest.  In
connection with the exercise of the oversubscription  privilege,  banks, brokers
and other nominee holders of subscription rights who act on behalf of beneficial
owners will be required to certify to us and to the subscription agent as to the
aggregate number of subscription rights that have been exercised, and the number
of  common  shares  that  are  being  requested  through  the   oversubscription
privilege,  by each  beneficial  owner on whose  behalf  the  nominee  holder is
acting.

SUBSCRIPTION PRICE

            Three  subscription  rights  plus  $______  entitles  the  holder to
purchase one common share.  The per share price  represents a discount of ____ %
from [the closing sale price of our common shares on ____ __, 2005] [the average
of the closing sales prices of our common shares over the  __-trading day period
ending _____ __, 2005].  The  subscription  price does not necessarily  bear any
relationship to our past or expected  future results of operations,  cash flows,
current financial  condition,  or any other  established  criteria for value. No
change will be made to the cash  subscription  price by reason of changes in the
trading price of our common shares prior to the closing of this offering.

DETERMINATION OF SUBSCRIPTION PRICE

            Our Board of Directors  set all of the terms and  conditions of this
offering,  including the  subscription  price. In establishing  the subscription
price, our Board of Directors considered the following factors:

            o  strategic alternatives for capital raising,
            o  the market price of our common shares,
            o  the pricing of similar transactions,
            o  the amount of proceeds desired,
            o  our business prospects,
            o  our recent and anticipated operating results, and
            o  general conditions in the securities markets.

            We determined the  subscription  price after taking into account the
preceding  factors.  We did not seek or obtain any opinion of financial advisors
or investment  bankers in establishing the subscription  price for the offering.

                                       18


You should not consider the subscription  price as an indication of the value of
our company or our common shares.  We cannot assure you that you will be able to
sell common shares purchased during this offering at a price equal to or greater
than the subscription  price. On _________,  2005, the closing sale price of our
common shares was $_____ per share.

EXPIRATION DATE, EXTENSIONS AND TERMINATION

            You may  exercise  your  subscription  right at any time before 5:00
p.m.,  New York City time, on __________,  2005,  the  expiration  date for this
offering.  However,  we may  extend the  offering  period  for  exercising  your
subscription  rights  in our sole  discretion,  but in no event by more  than 15
additional  days.  If you do not exercise  your  subscription  rights before the
expiration date, your unexercised  subscription rights will be null and void. We
will not be  obligated  to honor your  exercise  of  subscription  rights if the
subscription  agent  receives the documents  relating to your exercise after the
expiration  date,  regardless of when you transmitted the documents,  unless you
have timely transmitted the documents under the guaranteed  delivery  procedures
described below.

            We have the sole  discretion to extend the expiration date by giving
oral or written  notice to the  subscription  agent on or before  the  scheduled
expiration date. If we elect to extend the expiration of this offering,  we will
issue a press release announcing the extension no later than 9:00 a.m., New York
City time, on the next business day after the most recently announced expiration
date.

WITHDRAWAL AND AMENDMENT

            We reserve the right to withdraw or terminate  this  offering at any
time for any reason. In the event that this offering is withdrawn or terminated,
all funds received from  subscriptions by shareholders  will be returned as soon
as  practicable,  anticipated  to be  approximately  three to five business days
after such date of such withdrawal or termination.  Interest will not be payable
on any returned funds.

            We reserve the right to amend the terms of this offering. If we make
an amendment that we consider material, we will:

            o  mail notice of the amendment to all  shareholders of record as of
               the record date;
            o  extend the expiration date by at least 10 days; and
            o  offer  all  subscribers  no  less  than 10  days  to  revoke  any
               subscription already submitted.

            The extension of the expiration date will not, in and of itself,  be
treated as a material amendment for these purposes.

INTENTIONS OF THE COMPANY'S OFFICERS, DIRECTORS AND PRINCIPAL SHAREHOLDERS

            Our officers, directors and certain of their affiliates have advised
us that they expect to exercise  the basic  subscription  privilege  under their
rights and may exercise their oversubscription privilege.

                                       19


METHOD OF SUBSCRIPTION - EXERCISE OF SUBSCRIPTION RIGHTS

            You  may  exercise  your  subscription   rights  by  delivering  the
following to the  subscription  agent,  at or prior to 5:00 p.m.,  New York City
time, on ______________, 2005, the date on which the rights expire:

            o  your  properly  completed and executed  Subscription  Certificate
               with any  required  signature  guarantees  or other  supplemental
               documentation; and
            o  your  full  subscription  price  payment  for each  common  share
               subscribed for under your basic  subscription  privilege and your
               oversubscription privilege.

            You  should  read  and  follow  the  Instructions  for Use of  Lynch
Corporation Subscription Certificates carefully.

SIGNATURE GUARANTEE MAY BE REQUIRED

            Your signature on each  Subscription  Certificate must be guaranteed
by an  eligible  institution  such as a  member  firm of a  registered  national
securities  exchange  or a member  of the  National  Association  of  Securities
Dealers,  Inc., or from a commercial  bank or trust company  having an office or
correspondent in the United States,  subject to standards and procedures adopted
by the subscription agent, unless:

            o  your Subscription  Certificate provides that common shares are to
               be  delivered  to you as  record  holder  of  those  subscription
               rights; or
            o  you are an eligible institution.

DELIVERY OF SUBSCRIPTION MATERIALS AND PAYMENT

            You should deliver your Subscription  Certificate and payment of the
subscription  price  or,  if  applicable,  Notice  of  Guaranteed  Delivery  for
Subscription  Certificates,  to the  subscription  agent by mail,  by  overnight
courier or by hand to:

BY UNITED STATES MAIL DELIVERY:          BY OVERNIGHT COURIER:                      BY HAND:
- ------------------------------           --------------------                       -------
Mellon Investor Services LLC       Mellon Investor Services LLC              Mellon Investor Services LLC
Post Office Box 3301               85 Challenger Road - Mail Drop - Reorg    120 Broadway, 13th Floor
South Hackensack, NJ 07606         Ridgefield Park, NJ 07660                 New York, NY 10271
Attn: Reorganization Department    Attn: Reorganization Department           Attn: Reorganization Department

            You are responsible for the method of delivery of your  Subscription
Certificate(s)  with your subscription price payment to the subscription  agent.
If you send your Subscription  Certificate(s)  and subscription price payment by
mail, we recommend that you send them by registered mail, properly insured, with

                                       20


return receipt requested. You should allow a sufficient number of days to ensure
delivery to the subscription agent prior to the time this offering expires.

            DO NOT SEND YOUR SUBSCRIPTION  CERTIFICATE(S) AND SUBSCRIPTION PRICE
PAYMENT TO THE COMPANY.  Your  delivery to an address other than the address set
forth above will not constitute valid delivery.

METHOD OF PAYMENT

            Your payment of the subscription  price must be made in U.S. dollars
for the full number of common shares you are  subscribing  (or  oversubscribing)
for by either bank draft (cashier's  check) or certified check drawn upon a U.S.
bank or money order payable to the subscription agent.

PLEASE  NOTE THAT  COMMON  SHARES  MAY NOT BE PAID FOR BY  UNCERTIFIED  PERSONAL
CHECK.

RECEIPT OF PAYMENT

            Your payment will be considered  received by the subscription  agent
only upon receipt by the  subscription  agent of a certified check or bank draft
drawn upon a U.S. bank or a money order.

CALCULATION OF SUBSCRIPTION RIGHTS EXERCISED

            If you do not  indicate  the  number of  subscription  rights  being
exercised,  or do not forward full payment of the total  subscription  price for
the number of subscription  rights that you indicate are being  exercised,  then
you will be deemed to have  exercised  your basic  subscription  privilege  with
respect to the maximum number of rights that may be exercised with the aggregate
subscription price payment you delivered to the subscription agent.

YOUR FUNDS WILL BE HELD BY THE SUBSCRIPTION AGENT UNTIL COMMON SHARES ARE ISSUED

            The  subscription  agent will hold your payment of the  subscription
price payment in a segregated  account with other  payments  received from other
rights holders until we issue your common shares to you. If this offering is not
completed,  or we do not apply  your full  subscription  price  payment  to your
purchase  of  common  shares,  the  subscription  agent  will  return as soon as
practicable, without interest, all excess subscription payments.

NO REVOCATION

            Once you have exercised your  subscription  privileges,  you may not
revoke your exercise.  Subscription rights not exercised prior to the expiration
date of this offering will expire.

TRANSFERABILITY OF RIGHTS

            The rights are transferable until the last business day prior to the
expiration  date. A business day is a day on which the American  Stock  Exchange
trades.  We have  applied to list the rights  and  expect to be  authorized  for

                                       21


trading  of the  rights on the  American  Stock  Exchange.  Any  commissions  in
connection with the sale of rights will be paid by the selling rights holder. We
cannot assure that a market for the rights will develop,  or the prices at which
rights may be sold if a market does develop.

            You  may  transfer  all of the  rights,  including  oversubscription
rights,   evidenced  by  a  single  Subscription   Certificate  by  signing  the
Subscription  Certificate for transfer in accordance  with the appropriate  form
printed  on the  Subscription  Certificate.  You may  transfer  a portion of the
rights,  including  oversubscription  rights, evidenced by a single Subscription
Certificate  by  delivering  to Mellon  Investor  Services LLC the  Subscription
Certificate properly signed for transfer,  with separate written instructions to
register a portion of the rights in the name of your  transferee  and to issue a
new Subscription  Certificate to the transferee covering the transferred rights.
In that event and by appropriate written instructions,  you may elect to receive
a new Subscription Certificate covering the rights you did not transfer.

            If you wish to transfer all or a portion of your rights,  you should
allow a sufficient amount of time prior to the expiration time for:

            o  the transfer  instructions to be received and processed by Mellon
               Investor  Services  LLC;
            o  new Subscription Certificates to be issued and transmitted; and
            o  the rights evidenced by the new  Subscription  Certificates to be
               exercised or sold by the intended recipients.

            It may require from two to 10 business  days,  or more,  to complete
transfers of rights, depending upon how you deliver the Subscription Certificate
and payment and the number of transactions you request.  Neither the Company nor
the  subscription  agent  will be liable to you or any  transferee  of rights if
Subscription  Certificates  or any other required  documents are not received in
time for exercise or sale prior to the expiration time.

            If  you  exercise  or  sell  rights  in  part,  a  new  Subscription
Certificate  for  the  remaining  rights  will  be  issued  to you  only  if the
subscription  agent receives a properly endorsed  Subscription  Certificate from
you no later than 5:00 p.m.,  Eastern Time,  on the fifth  business day prior to
the expiration  date.  The  subscription  agent will not issue new  Subscription
Certificates for partially exercised or sold Subscription Certificates submitted
after that time and date. If you do submit a Subscription Certificate after that
time and  date,  you will not be able to  exercise  the  unexercised  or  unsold
rights.

            Unless you make other  arrangements  with the subscription  agent, a
new Subscription  Certificate issued after 5:00 p.m., Eastern Time, on the fifth
business day before the expiration date will be held for pick-up by you at:

                                Mellon Bank, N.A.
                          c/o Mellon Investor Services
                            120 Broadway, 13th Floor
                            New York, New York 10271
                         Attn: Reorganization Department

                                       22


            If you  request a  reissuance  of a  Subscription  Certificate,  the
delivery of that document will be at your risk.

            You,  and  not  the  Company  or the  subscription  agent,  will  be
responsible  for  paying any  commissions,  fees and other  expenses,  including
brokerage  commissions and transfer  taxes,  that you may incur in the purchase,
sale or exercise of rights.

ISSUANCE OF SHARE CERTIFICATES

            Share certificates for common shares purchased in this offering will
be issued as soon as practicable  after the expiration  date,  anticipated to be
approximately  seven  to  10  business  days  after  the  expiration  date.  Our
subscription  agent  will  deliver  subscription   payments  to  us  only  after
consummation  of this  offering  and the issuance of share  certificates  to our
shareholders  that  exercised  rights.  Unless you  instruct  otherwise  in your
Subscription  Certificate  form,  common  shares  purchased  by the  exercise of
subscription  rights will be registered in the name of the person exercising the
rights.

GUARANTEED DELIVERY PROCEDURES

            If you wish to exercise  your  subscription  rights,  but you do not
have sufficient  time to deliver the  Subscription  Certificate  evidencing your
rights to the subscription agent on or before the time your subscription  rights
expire,  you may exercise your subscription  rights by the following  guaranteed
delivery procedures:

            o  deliver your  subscription  price payment in full for each common
               share you  subscribed for under your  subscription  privileges in
               the manner set forth in "Method of Payment"  to the  subscription
               agent on or prior to the expiration date;
            o  deliver  the form  entitled  Notice of  Guaranteed  Delivery  for
               Subscription  Certificates,  substantially  in the form  provided
               with the Instructions as to Use of Lynch Corporation Subscription
               Certificates distributed with your Subscription Certificates,  at
               or prior to the expiration date; and
            o  deliver   the   properly   completed   Subscription   Certificate
               evidencing  your rights being  exercised and the related  nominee
               holder certification, if applicable, with any required signatures
               guaranteed,  to the subscription agent within three business days
               following the expiration date.

            Your Notice of  Guaranteed  Delivery for  Subscription  Certificates
must be delivered in substantially  the same form provided with the Instructions
as to  Use  of  Lynch  Corporation  Subscription  Certificates,  which  will  be
distributed to you with your Subscription Certificate. Your Notice of Guaranteed
Delivery for Subscription  Certificates must come from an eligible  institution,
or other eligible  guarantee  institutions which are members of, or participants
in, a signature guarantee program acceptable to the subscription agent.

                                       23


            In your Notice of Guaranteed Delivery for Subscription Certificates,
you must state:

            o  your name;
            o  the   number  of   subscription   rights   represented   by  your
               Subscription Certificates and the number of common shares you are
               subscribing (and oversubscribing) for; and
            o  your  guarantee that you will deliver to the  subscription  agent
               any Subscription  Certificates evidencing the subscription rights
               you are  exercising  within three  business  days  following  the
               expiration date.

            You may deliver your Notice of Guaranteed  Delivery for Subscription
Certificates to the subscription  agent in the same manner as your  Subscription
Certificates  at the address set forth above  under  "Delivery  of  Subscription
Materials and  Payment."  Alternately,  on the third  business day following the
expiration  date ONLY,  you may transmit your Notice of Guaranteed  Delivery for
Subscription  Certificates to the subscription agent via facsimile  transmission
(Facsimile No.:  201-296-4293).  ALL FACSIMILE DELIVERIES MUST BE CONFIRMED.  To
confirm facsimile deliveries, you must call 201-296-4860.

            Please call the information  agent to request any additional  copies
of the form of Notice of Guaranteed  Delivery for Subscription  Certificates you
may need.

DETERMINATIONS REGARDING THE EXERCISE OF YOUR SUBSCRIPTION RIGHTS

            We will decide all questions  concerning the  timeliness,  validity,
form and  eligibility  of your  exercise  of your  subscription  rights  and our
determinations will be final and binding. We, in our sole discretion,  may waive
any defect or  irregularity,  or permit a defect or irregularity to be corrected
within such time as we may  determine.  Non-material  defects or  irregularities
that do not result in multiple potential interpretations will be waived. In such
event, we will treat any identical  defects or  irregularities  the same way for
all shareholders.  We may reject the exercise of any of your subscription rights
because  of any  defect or  irregularity.  We will not  receive  or  accept  any
subscription  until all  irregularities  have been  waived by us or cured by you
within such time as we decide, in our sole discretion.

            Neither  we nor the  subscription  agent  will be under  any duty to
notify you of any defect or  irregularity  in connection with your submission of
Subscription Certificates and we will not be liable for failure to notify you of
any defect or  irregularity.  We reserve  the right to reject  your  exercise of
subscription rights if your exercise is not in accordance with the terms of this
offering or in proper form.  We will also not accept your  exercise of rights if
our issuance of common shares to you could be deemed  unlawful under  applicable
law or is materially burdensome to us. Under Section 18 of the Securities Act of
1933, as amended,  our common stock and the  subscription  rights offered hereby
are exempt from state  regulation  or "blue sky" laws because our common  shares
are listed on the American Stock Exchange.

            If you are given notice of a defect in your  subscription,  you will
have five  business days after the giving of notice to correct it. You will not,
however, be allowed to cure any defect later than 5:00 p.m., New York City time,
on ________________, 2005. We will not consider an exercise to be made until all
defects have been cured or waived.

                                       24


NOTICE TO BANKERS, TRUSTEES OR OTHER DEPOSITARIES

            If you are a broker,  a trustee or a depositary  for  securities who
holds  common  shares for the  account of others at the close of business on the
record date, you should notify the respective  beneficial  owners of such common
shares of this  offering as soon as possible to find out their  intentions  with
respect to exercising their subscription  rights. You should obtain instructions
from the beneficial owners with respect to the subscription rights, as set forth
in the instructions we have provided to you for your  distribution to beneficial
owners.  If  the  beneficial  owner  so  instructs,   you  should  complete  the
appropriate Subscription  Certificates and submit them to the subscription agent
with the proper payment. If you hold common shares for the accounts of more than
one  beneficial  owner,  you may exercise the number of  subscription  rights to
which all such  beneficial  owners in the  aggregate  otherwise  would have been
entitled had they been direct record  holders of our common shares on the record
date,  provided that you, as a nominee record  holder,  make a proper showing to
the   subscription   agent  by  submitting  the  form  entitled  Nominee  Holder
Certification which we will provide to you with your offering materials.

NOTICE TO BENEFICIAL OWNERS

            If you are a beneficial  owner of our common  shares or will receive
your subscription  rights through a broker,  custodian bank or other nominee, we
will ask your  broker,  custodian  bank or other  nominee  to notify you of this
offering.  If you wish to exercise your  subscription  rights,  you will need to
have your  broker,  custodian  bank or other  nominee  act for you.  If you hold
certificates of our common shares directly and would prefer to have your broker,
custodian bank or other nominee exercise your  subscription  rights,  you should
contact  your  nominee  and  request it to effect the  transaction  for you.  To
indicate  your  decision with respect to your  subscription  rights,  you should
complete and return to your  broker,  custodian  bank or other  nominee the form
entitled  Beneficial Owner Election Form. You should receive this form from your
broker,  custodian bank or other nominee with the other offering  materials.  If
you wish to obtain a separate Subscription  Certificate,  you should contact the
nominee as soon as possible and request that a separate Subscription Certificate
be issued to you.

COMMON SHARES OUTSTANDING AFTER THIS OFFERING

            Upon the  issuance  of the common  shares  offered in this  offering
(assuming that all of the subscription  rights are exercised),  2,156,702 common
shares will be issued and  outstanding.  This would represent an approximate 33%
increase in the number of outstanding  common shares.  If only 10% or 50% of the
subscription  rights are exercised,  then 1,671,444 and 1,887,114  common shares
will be issued and outstanding, respectively, which represents an approximate 3%
and 17% increase in the number of outstanding common shares, respectively.

SUBSCRIPTION AGENT

            We have appointed Mellon Investor Services LLC as subscription agent
for this offering. We will pay the fees and certain expenses of the subscription
agent,  which we estimate will total  approximately  $__________.  Under certain
circumstances,  we may indemnify the subscription agent from certain liabilities
that may arise in connection with this offering.

                                       25


INFORMATION AGENT

            We have appointed Mellon Investor  Services LLC as information agent
for this offering.  We will pay the fees and certain expenses of the information
agent,  which we estimate will total  approximately  $__________.  Under certain
circumstances,  we may indemnify the information agent from certain  liabilities
that may arise in connection with this offering.

FEES AND EXPENSES

            Other  than  for  fees  charged  by the  information  agent  and the
subscription agent, you are responsible for paying any other commissions,  fees,
taxes or  other  expenses  incurred  in  connection  with  the  exercise  of the
subscription  rights.  Neither we, the  information  agent nor the  subscription
agent will pay such expenses.

NO BOARD RECOMMENDATION

            An investment  in our common  shares must be made  according to each
investor's  evaluation  of its own best  interests.  Accordingly,  our  Board of
Directors  makes no  recommendation  to rights  holders  regarding  whether they
should exercise their subscription  rights. Our officers,  directors and certain
of their  affiliates  have  advised us that they  expect to  exercise  the basic
subscription   privilege   under   their   rights   and   may   exercise   their
oversubscription  privilege.  John  C.  Ferrara  (Chief  Executive  Officer  and
Director),  Marc Gabelli (Chairman of the Board of Directors and 5% holder),  E.
Val Cerutti (Director),  Avrum Gray (Director),  Anthony R. Pustorino (Director)
and Eugene Hynes (Vice President)  collectively  beneficially own 349,198 common
shares or 21.6% of the common shares  outstanding as of July 31, 2005.  Assuming
that each of the  persons  mentioned  above  exercises  his  basic  subscription
privilege in full,  they will  collectively  own an  additional  116,401  common
shares, or a total of 465,599 common shares after this offering is completed.

IF YOU HAVE QUESTIONS ABOUT EXERCISING RIGHTS

            If you have  questions or need  assistance  concerning the procedure
for exercising  subscription  rights,  or if you would like additional copies of
this prospectus or other forms related to this offering,  you should contact the
information agent at the following address and telephone number:

BY UNITED STATES MAIL DELIVERY:          BY OVERNIGHT COURIER:                      BY HAND:
- ------------------------------           --------------------                       -------
Mellon Investor Services LLC       Mellon Investor Services LLC              Mellon Investor Services LLC
Post Office Box 3301               85 Challenger Road - Mail Drop - Reorg    120 Broadway, 13th Floor
South Hackensack, NJ 07606         Ridgefield Park, NJ 07660                 New York, NY 10271
Attn: Reorganization Department    Attn: Reorganization Department           Attn: Reorganization Department

                       Toll Free Telephone: (866) 340-1578
                Direct Line for Banks and Brokers: (201) 373-5156

                                       26


             MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

            The following  discussion is a summary of the material U.S.  federal
income tax  consequences  of (i) the  dividend by us of  subscription  rights to
holders of common  shares  that hold such common  shares as a capital  asset for
federal  income  tax  purposes,  and  (ii) the  exercise  of such  rights.  This
discussion is based on laws, regulations, rulings and decisions in effect on the
date of this  prospectus,  all of which are  subject  to change  (possibly  with
retroactive  effect) and to differing  interpretations.  This discussion applies
only to holders that are U.S. persons, which is defined as a citizen or resident
of the United States, a domestic partnership, a domestic corporation, any estate
(other  than a  foreign  estate),  and any trust so long as a court  within  the
United States is able to exercise primary supervision over the administration of
the  trust  and one or more U.S.  persons  have the  authority  to  control  all
substantial decisions of the trust.  Generally,  for federal income tax purposes
an estate is  classified  as a "foreign  estate"  based on the  location  of the
estate assets, the country of the estate's domiciliary  administration,  and the
nationality and residency of the domiciliary's personal representative.

            This  discussion  does not  address  all  aspects of federal  income
taxation  that  may  be  relevant  to  holders  in  light  of  their  particular
circumstances  or to holders who may be subject to special tax  treatment  under
the Internal Revenue Code of 1986, as amended,  including  holders of options or
warrants,  holders who are dealers in  securities or foreign  currency,  foreign
persons (defined as all persons other than U.S. persons),  insurance  companies,
tax-exempt organizations, banks, financial institutions, broker-dealers, holders
who hold common  shares as part of a hedge,  straddle,  conversion or other risk
reduction transaction, or who acquired common shares pursuant to the exercise of
compensatory share options or warrants or otherwise as compensation.

            We have not  sought,  and will not seek,  an opinion of counsel or a
ruling from the  Internal  Revenue  Service  regarding  the  federal  income tax
consequences  of the  distribution  of the rights or the related share issuance.
The following  summary does not address the tax consequences of the distribution
of the rights or the related share issuance under foreign,  state,  or local tax
laws.  ACCORDINGLY,  EACH  HOLDER OF COMMON  SHARES  SHOULD  CONSULT ITS OWN TAX
ADVISOR WITH RESPECT TO THE PARTICULAR TAX  CONSEQUENCES OF THE  DISTRIBUTION OF
THE RIGHTS OR THE RELATED COMMON SHARE ISSUANCE TO SUCH HOLDER.

            The federal income tax consequences for a holder of common shares on
the  receipt of  subscription  rights  and the  exercise  of such  rights are as
follows:

            o  A holder will not recognize taxable income for federal income tax
               purposes in connection with the receipt of subscription rights.

            o  Except as provided in the  following  sentence,  the tax basis of
               the  subscription  rights  received by a holder will be zero.  If
               either (i) the fair market  value of the  subscription  rights on

                                       27


               the date such subscription  rights are distributed is equal to at
               least 15% of the fair  market  value on such  date of the  common
               shares with respect to which the subscription rights are received
               or (ii) the holder  irrevocably  elects, by attaching a statement
               to its federal  income tax return for the  taxable  year in which
               the subscription rights are received, to allocate part of the tax
               basis of such common shares to the subscription rights, then upon
               exercise of the  subscription  rights,  the holder's tax basis in
               the common shares will be allocated between the common shares and
               the  subscription  rights in proportion to their  respective fair
               market   values  on  the  date  the   subscription   rights   are
               distributed.  A  holder's  holding  period  for the  subscription
               rights received will include the holder's  holding period for the
               common shares with respect to which the subscription  rights were
               received. We intend to notify the holders whether the fair market
               value of the subscription  rights will equal or exceed 15% of the
               fair market value of the common shares to which the  subscription
               rights  relate and the fair  market  value of those  subscription
               rights.

            o  A holder  that  sells  the  subscription  rights  will  recognize
               capital gain or loss,  depending on the amount  realized upon the
               sale and the  holder's  tax  basis  (if any) in the  subscription
               rights.  The  gain  or  loss  will  be  long-term  or  short-term
               depending on the  holder's  holding  period for the  subscription
               rights (discussed above).

            o  A holder that allows the  subscription  rights received to expire
               will not  recognize  any gain or loss,  and the tax  basis of the
               common  shares  owned by such holder  with  respect to which such
               subscription  rights  were  distributed  will be equal to the tax
               basis of such common shares immediately before the receipt of the
               subscription rights.

            o  A holder will not recognize any gain or loss upon the exercise of
               the subscription rights.

            o  The tax basis of the common shares acquired  through  exercise of
               the  subscription  rights will equal the sum of the  subscription
               price for the common  shares and the holder's tax basis,  if any,
               in the subscription rights as described above.

            o  The  holding  period  for  the  common  shares  acquired  through
               exercise  of the  subscription  rights will begin on the date the
               subscription rights are exercised.

                              PLAN OF DISTRIBUTION

            We are offering our common shares  underlying the rights directly to
you. We have not employed any brokers,  dealers or  underwriters  in  connection
with the solicitation or exercise of subscription rights in this offering and no
commissions,  fees or discounts  will be paid in connection  with this offering.
Mellon Investor  Services LLC is acting as our subscription  agent to effect the
exercise  of the  rights  and the  issuance  of the  underlying  common  shares.
Therefore,  we anticipate that our officers' and employees' role will be limited
to:

            o  Responding  to inquiries of  potential  purchasers,  provided the
               response is limited to information  contained in the registration
               statement of which this prospectus is a part; and
            o  Ministerial and clerical work involved in effecting  transactions
               pertaining to the sale of common shares underlying the rights.

                                       28


            We intend to  distribute  and deliver this  prospectus by hand or by
mail  only,  and not by  electronic  delivery.  Also,  we intend to use  printed
prospectuses only, and not any other forms of prospectus.

            We have  distributed  to the holders of record of our common shares,
at the close of business on  __________,  2005, at no charge,  one  transferable
subscription  right for each common share they own. Every three such rights will
entitle  the holder  thereof to  subscribe  for a right to  purchase  one of our
common shares at a subscription  price of $_____ per share. You may exercise any
number of your  subscription  rights,  or you may  choose  not to  exercise  any
subscription  rights. We will not distribute any fractional common shares or pay
cash in lieu of fractional common shares, but will round up the aggregate number
of common shares you are entitled to receive to the nearest whole number.

            We do not expect that all of our  shareholders  will exercise all of
their basic subscription privileges. By extending oversubscription privileges to
our shareholders, we are providing shareholders that exercise all of their basic
subscription  privileges  with the  opportunity  to purchase those common shares
that are not purchased by other shareholders.

            If you wish to exercise your oversubscription  privilege, you should
indicate the number of additional  common shares that you would like to purchase
in the space provided on your  Subscription  Certificate.  When you send in your
Subscription  Certificate,  you must also send the full  purchase  price for the
number of  additional  common  shares that you have  requested  to purchase  (in
addition to the  payment  due for common  shares  purchased  through  your basic
subscription  privilege).  If the number of common  shares  remaining  after the
exercise of all basic  subscription  privileges is not sufficient to satisfy all
requests for common shares pursuant to oversubscription  privileges, you will be
allocated   additional  common  shares  pro  rata  (subject  to  elimination  of
fractional  common  shares),  based on the number of common shares you purchased
through the basic  subscription  privilege in  proportion to the total number of
common shares that you and other oversubscribing  shareholders purchased through
the basic subscription  privilege.  However, if your pro rata allocation exceeds
the number of common shares you requested on your Subscription Certificate, then
you will receive only the number of common  shares that you  requested,  and the
remaining  common  shares from your pro rata  allocation  will be divided  among
other rights holders exercising their oversubscription privileges.

            As soon as practicable  after the expiration  date,  Mellon Investor
Services LLC, acting as our subscription agent, and we will determine the number
of  common  shares  that  you  may  purchase  pursuant  to the  oversubscription
privilege.  You will receive  certificates  representing  these common shares as
soon as practicable  after the expiration date,  anticipated to be approximately
seven to 10 business days after the expiration  date. If you request and pay for
more common shares than are  allocated to you, we will refund that  overpayment,
without  interest.  In  connection  with the  exercise  of the  oversubscription
privilege,  banks,  brokers and other nominee holders of subscription rights who
act on behalf of beneficial  owners will be required to certify to us and to the
subscription  agent as to the aggregate number of subscription  rights that have
been exercised, and the number of common shares that are being requested through
the  oversubscription  privilege,  by each beneficial  owner on whose behalf the
nominee holder is acting.

                                       29


            We will pay Mellon Investor Services LLC, as the information  agent,
a fee of approximately  $______ plus expenses,  and as the subscription agent, a
fee of  approximately  $________ plus  expenses,  for its services in connection
with  this   offering.   We  also  have  agreed  to  indemnify,   under  certain
circumstances,  Mellon  Investor  Services  LLC, in its capacity as  information
agent and subscription agent, from any liability it may incur in connection with
this offering.

            Our  subscription  rights  will  be  listed  on the  American  Stock
Exchange  under the symbol  "LGL.RT." Our common shares issued upon the exercise
of  subscription  rights will be listed on the American Stock Exchange under the
symbol  "LGL," the same symbol  under  which our  currently  outstanding  common
shares now trade.

                                  LEGAL MATTERS

            The  validity of the common  shares  offered  hereby has been passed
upon by Olshan  Grundman Frome  Rosenzweig & Wolosky LLP, Park Avenue Tower,  65
East 55th Street, New York, New York 10022.

                                     EXPERTS

            Ernst & Young LLP,  independent  registered  public accounting firm,
has audited our consolidated  financial statements and schedules included in our
Annual Report on Form 10-K for the year ended December 31, 2004, as set forth in
their report, which is incorporated by reference in this registration statement.
Our financial statements and schedules are incorporated by reference in reliance
on Ernst & Young LLP's report, given on their authority as experts in accounting
and auditing.

                   INFORMATION WITH RESPECT TO THE REGISTRANT

            This prospectus is accompanied by a copy of our latest Annual Report
on Form 10-K and Quarterly Report on Form 10-Q.

                       WHERE YOU CAN FIND MORE INFORMATION

            We have filed a registration  statement on Form S-2 with the SEC for
our common shares offered in this offering. This prospectus does not contain all
the information set forth in the registration statement. You should refer to the
registration statement and its exhibits for additional information.  Whenever we
make references in this prospectus to any of our contracts,  agreements or other
documents,  the references are not necessarily  complete and you should refer to
the exhibits attached to the registration statement for the copies of the actual
contract, agreement or other document.

            The  SEC  maintains  an  Internet  site at  http://www.sec.gov  that
contains  reports,  proxy and  information  statements,  and  other  information
regarding  us. You may also read and copy any  document  we file with the SEC at
its Public  Reference Room at 450 Fifth Street,  N.W.,  Washington,  D.C. 20549.
Please call the SEC at 1-800-SEC-0330  for further  information on the operation
of the Public Reference Room.

                                       30


            Our common shares are listed on the American  Stock Exchange and our
reports and other  information  about us may also be inspected at the offices of
the  American  Stock  Exchange at 86 Trinity  Place,  New York,  New York 10006.
Additional  information  about us is available over the Internet at our web site
at WWW.LYNCHCORP.COM.

                           INCORPORATION BY REFERENCE

            The following documents filed by us with the SEC are incorporated by
reference in this prospectus:

(1)   Our Annual Report on Form 10-K for the fiscal year ended December 31, 2004;
(2)   Our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2005;
(3)   Our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2005;
(4)   Our Current Report on Form 8-K/A filed on January 3, 2005;
(5)   Our Current Report on Form 8-K filed on January 4, 2005;
(6)   Our Current Report on Form 8-K filed on April 29, 2005;
(7)   Our Current Report on Form 8-K filed on May 16, 2005;
(8)   Our Current Report on Form 8-K filed on July 6, 2005.

            You may request a copy of these filings  (excluding  the exhibits to
such filings  that we have not  specifically  incorporated  by reference in such
filings) at no cost, by writing or telephoning us as follows:

                                Lynch Corporation
                         140 Greenwich Avenue, 4th Floor
                          Greenwich, Connecticut 06830
                              Attention: Secretary
                                 (203) 622-1150

                                       31


                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14.    OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
- -------     -------------------------------------------

            The  following  table sets forth the various  expenses  that will be
paid  by us in  connection  with  the  securities  being  registered.  With  the
exception of the Securities and Exchange Commission ("SEC") registration fee and
the  American  Stock  Exchange  ("AMEX")  listing  fee,  all  amounts  shown are
estimates.

SEC registration fee.........................................   $      525.60
AMEX listing fee.............................................   $   10,783.52
Printing and engraving.......................................   $   30,000.00
Legal fees and expenses (including Blue Sky fees)............   $   50,000.00
Accounting Fees and Expenses.................................   $   10,000.00
Miscellaneous................................................   $    5,000.00
Subscription Agent...........................................   $   30,000.00
Information Agent............................................   $   10,000.00
                                                              ------------------
      Total..................................................   $  146,309.12

ITEM 15.    INDEMNIFICATION OF DIRECTORS AND OFFICERS.
- -------     -----------------------------------------

            Except  as  hereinafter  set  forth,  there is no  statute,  charter
provision,  by-law,  contract or other  arrangement  under which any controlling
person,  director  or officer of the  Company is insured or  indemnified  in any
manner against liability which he may incur in his capacity as such.

            Article  VI,  Section  6.2  of  Registrant's  Restated  Articles  of
Incorporation  provides that to the extent not inconsistent with applicable law,
every  director  and officer  shall be  indemnified  by  Registrant  against all
liability  and  reasonable  expense  that may be  incurred  by such  director or
officer in connection with or resulting from any claim,  (i) if such director or
officer is wholly  successful  with respect to the claim,  or (ii) if not wholly
successful, then if such director or officer is determined to have acted in good
faith,  in what the  director  or  officer  reasonably  believed  to be the best
interests of  Registrant  or at least not opposed to its best  interest  and, in
addition,  with  respect  to any  criminal  claim  is  determined  to  have  had
reasonable  cause to believe  that his conduct  was lawful or had no  reasonable
cause to believe that his conduct was unlawful. The termination of any claim, by
judgment,  order,  settlement  (whether  with or  without  court  approval),  or
conviction or upon a plea of guilty or of nolo  contendere,  or its  equivalent,
shall not  create a  presumption  that a director  or  officer  did not meet the
standards  of  conduct  set forth in clause  (ii)  hereof.  For a more  detailed
description,  reference is made to Article VI,  Section 6.2 of the  Registrant's
Restated  Articles of Incorporation  filed as Exhibit 3(a) hereto which contains
certain  indemnification  provisions  pursuant  to  authority  contained  in the
Indiana Business Corporation Law.

            Registrant's   directors   and  officers  are  also  covered   under
Registrant's  directors  and  officers  insurance  policy up to a maximum of $10
million.

                                      II-1


            Insofar  as  indemnification   for  liabilities  arising  under  the
Securities  Act of 1933 may be  permitted  to  directors,  officers  or  persons
controlling the Registrant pursuant to the foregoing provisions,  the Registrant
has been informed that in the opinion of the Securities and Exchange  Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is therefore unenforceable.

            The  following  sections  of  Chapter  37 of  the  Indiana  Business
Corporation Law provide as follows:

Section 23-1-37-8  Permissive Indemnification

            (a) A  corporation  may  indemnify an  individual  made a party to a
proceeding  because  the  individual  is or  was a  director  against  liability
incurred in the proceeding if:

            (1) the individual's conduct was in good faith; and

            (2) the individual reasonably believed:

                        (A) in the case of conduct in the individual's  official
capacity with the  corporation,  that the  individual's  conduct was in its best
interests; and

                        (B) in all other cases,  that the  individual's  conduct
was at least not opposed to its best interests; and

            (3) in the case of any criminal proceeding, the individual either:

                        (A) had  reasonable  cause to believe  the  individual's
conduct was lawful; or

                        (B) had no reasonable  cause to believe the individual's
conduct was unlawful.

            (b) A director's  conduct  with respect to an employee  benefit plan
for a purpose the  director  reasonably  believed to be in the  interests of the
participants  in and  beneficiaries  of the plan is conduct that  satisfies  the
requirement of subsection (a)(2)(B).

            (c) The termination of a proceeding by judgment,  order, settlement,
conviction,  or upon a plea of nolo  contendere  or its  equivalent  is not,  of
itself,  determinative  that the  director  did not meet the standard of conduct
described in this section.

Section 23-1-37-9  Mandatory Indemnification

            Unless limited by its articles of incorporation, a corporation shall
indemnify a director who was wholly successful,  on the merits or otherwise,  in
the defense of any  proceeding  to which the  director  was a party  because the
director is or was a director of the  corporation  against  reasonable  expenses
incurred by the director in connection with the proceeding.

Section 23-1-37-10  Advance Indemnification

            (a) A corporation  may pay for or reimburse the reasonable  expenses
incurred  by a  director  who is a party to a  proceeding  in  advance  of final
disposition of the proceeding if:

                                      II-2


            (1) the director furnishes the corporation a written  affirmation of
the  director's  good faith  belief that the  director  has met the  standard of
conduct described in section 8 of this chapter;

            (2) the director  furnishes the  corporation a written  undertaking,
executed  personally or on the director's  behalf, to repay the advance if it is
ultimately  determined  that the  director did not meet the standard of conduct;
and

            (3) a  determination  is made  that the  facts  then  known to those
making the determination would not preclude indemnification under this chapter.

            (b)  The  undertaking  required  by  subsection  (a)(2)  must  be an
unlimited general  obligation of the director but need not be secured and may be
accepted without reference to financial ability to make repayment.

            (c) Determinations and authorizations of payments under this section
shall be made in the manner specified in section 12 of this chapter.

Section 23-1-37-11  Application for Indemnification

            Unless a corporation's  articles of incorporation provide otherwise,
a  director  of the  corporation  who is a party to a  proceeding  may apply for
indemnification  to the court  conducting  the proceeding or to another court of
competent jurisdiction. On receipt of an application, the court after giving any
notice the court considers necessary may order indemnification if it determines:

            (1) the  director  is entitled to  mandatory  indemnification  under
section  9 of this  chapter,  in which  case the  court  shall  also  order  the
corporation  to pay  the  director's  reasonable  expenses  incurred  to  obtain
court-ordered indemnification; or

            (2)  the   director   is   fairly   and   reasonably   entitled   to
indemnification  in view of all the relevant  circumstances,  whether or not the
director met the standard of conduct set forth in section 8 of this chapter.

Section 23-1-37-12  Procedure for Determining Indemnification

            (a) A corporation  may not  indemnify a director  under section 8 of
this chapter unless  authorized in the specific case after a  determination  has
been  made  that   indemnification   of  the  director  is  permissible  in  the
circumstances  because the director has met the standard of conduct set forth in
section 8 of this chapter.

            (b) The determination  shall be made by any one (1) of the following
procedures:

                        (1) By the  board of  directors  by  majority  vote of a
quorum consisting of directors not at the time parties to the proceeding.

                        (2) If a quorum  cannot be  obtained  under  subdivision
(1), by majority vote of a committee  duly  designated by the board of directors
(in which  designation  directors who are parties may  participate),  consisting
solely of two (2) or more directors not at the time parties to the proceeding.

                                      II-3


                        (3) By special legal counsel:

                                    (A)  selected by the board of  directors  or
its committee in the manner prescribed in subdivision (1) or (2); or

                                    (B) if a quorum  of the  board of  directors
cannot be obtained under  subdivision  (1) and a committee  cannot be designated
under  subdivision (2), selected by majority vote of the full board of directors
(in which selection directors who are parties may participate).

                        (4) By the  shareholders,  but common shares owned by or
voted  under  the  control  of  directors  who are at the  time  parties  to the
proceeding may not be voted on the determination.

            (d)   Authorization   of   indemnification   and  evaluation  as  to
reasonableness of expenses shall be made in the same manner as the determination
that indemnification is permissible, except that if the determination is made by
special legal counsel,  authorization  of  indemnification  and evaluation as to
reasonableness  of expenses  shall be made by those  entitled  under  subsection
(b)(3) to select counsel.

Section 23-1-37-13  Indemnification of Officers, Agents and Employees

            Unless a corporation's articles of incorporation provide otherwise:

            (1) an officer of the  corporation,  whether or not a  director,  is
entitled to mandatory  indemnification  under section 9 of this chapter,  and is
entitled to apply for  court-ordered  indemnification  under  section 11 of this
chapter, in each case to the same extent as a director;

            (2) the  corporation  may indemnify and advance  expenses under this
chapter to an officer,  employee, or agent of the corporation,  whether or not a
director, to the same extent as to a director; and

            (3) a  corporation  may also  indemnify  and advance  expenses to an
officer,  employee,  or  agent,  whether  or  not a  director,  to  the  extent,
consistent  with  public  policy,  that  may  be  provided  by its  articles  of
incorporation,  bylaws, general or specific action of its board of directors, or
contract.

Section 23-1-37-14  Insurance

            A  corporation  may purchase and maintain  insurance on behalf of an
individual  who  is or  was a  director,  officer,  employee,  or  agent  of the
corporation,  or who,  while a  director,  officer,  employee,  or  agent of the
corporation,  is or was serving at the request of the corporation as a director,
officer,  partner,  member,  manager,  trustee,  employee,  or agent of  another
foreign or domestic corporation,  partnership,  limited liability company, joint
venture,  trust,  employee benefit plan, or other enterprise,  against liability
asserted  against or incurred by the individual in that capacity or arising from
the individual's status as a director,  officer,  member, manager,  employee, or

                                      II-4


agent,  whether  or not the  corporation  would  have  power  to  indemnify  the
individual against the same liability under section 8 or 9 of this chapter. The:

            (1) corporation may purchase insurance under this section from; and

            (2) insurance purchased under this section may be reinsured in whole
or in part by;

an insurer that is owned by or otherwise affiliated with the corporation whether
the insurer does or does not do business with other persons.

Section 23-1-37-15  Indemnification Under Chapter Not Exclusive

            (a) The  indemnification  and advance for  expenses  provided for or
authorized by this chapter does not exclude any other rights to  indemnification
and advance for expenses that a person may have under:

            (1) a corporation's articles of incorporation or bylaws;

            (2) a resolution  of the board of directors or of the  shareholders;
or

            (3) any other  authorization,  whenever adopted,  after notice, by a
majority vote of all the voting common shares then issued and outstanding.

            (b) If the articles of  incorporation,  bylaws,  resolutions  of the
board of directors or of the shareholders,  or other duly adopted  authorization
of indemnification or advance for expenses limit  indemnification or advance for
expenses,  indemnification and advance for expenses are valid only to the extent
consistent with the articles, bylaws, resolution of the board of directors or of
the  shareholders,  or other duly adopted  authorization of  indemnification  or
advance for expenses.

            (c) This  chapter  does not  limit a  corporation's  power to pay or
reimburse  expenses  incurred  by a  director,  officer,  employee,  or agent in
connection  with the person's  appearance as a witness in a proceeding at a time
when the  person  has not  been  made a named  defendant  or  respondent  to the
proceeding.

ITEM 16.    EXHIBITS.
- -------     --------

  EXHIBIT
    NO.                             DESCRIPTION
- -----------                         -----------
   3(a)        Restated  Articles of Incorporation of the Company  (incorporated
               by reference to Exhibit 3(a) to the  Company's  Annual  Report on
               Form 10-K for the period ended December 31, 2004).
    (b)        Articles of  Amendment of the  Articles of  Incorporation  of the
               Company  (incorporated  by  reference  to  Exhibit  3(b)  to  the
               Company's  Annual  Report  on  Form  10-K  for the  period  ended
               December 31, 2004).
    (c)        By-laws of the Company  (incorporated by reference to Exhibit 3.1
               to the Company's  Current  Report on Form 8-K dated  December 22,
               2004).
   5*          Opinion of Olshan Grundman Frome Rosenzweig & Wolosky LLP.


                                      II-5


  10(a)        Lynch Corporation  401(k) Savings Plan (incorporated by reference
               to Exhibit 10(b) to the Company's  Annual Report on Form 10-K for
               the period ended December 31, 1995).
    (b)        Directors Stock Plan  (incorporated by reference to Exhibit 10(o)
               to the Company's Form 10-K for the year ended December 31, 1997).
               (c) Lynch Corporation 2001 Equity Incentive Plan adopted December
               10,  2001  (incorporated  by  reference  to Exhibit  10(y) to the
               Company's Form 10-K for the year ended December 31, 2001).
    (d)        Amended  and  Restated  Credit  Agreement  by and  between  Lynch
               Systems,  Inc.  and  SunTrust  Bank  dated  as of June  10,  2002
               (incorporated by reference to Exhibit 10(z) to the Company's Form
               10-K for the year ended December 31, 2002).
    (e)        Unlimited  Continuing  Guaranty  Agreement  by  Guarantor,  Lynch
               Corporation,  dated June 10, 2002  (incorporated  by reference to
               Exhibit  10(aa) to the  Company's  Form  10-K for the year  ended
               December 31, 2002).
    (f)        First  Amendment  and  Waiver  to  Amended  and  Restated  Credit
               Agreement between Lynch Systems, Inc. and SunTrust Bank dated May
               30, 2003  (incorporated  by  reference  to Exhibit  10(ee) to the
               Company's Form 10-Q for the period ending June 30, 2003).
    (g)        Term  Loan  Promissory  Note  between  Lynch  Systems,  Inc.  and
               SunTrust Bank dated August 4, 2003  (incorporated by reference to
               Exhibit  10(ff) to the Company's  Form 10-Q for the period ending
               June 30, 2003).
    (h)        Second  Amendment to Security Deed and Agreement  dated August 4,
               2003 between Lynch Systems,  Inc. and SunTrust Bank (incorporated
               by reference to Exhibit 10(gg) to the Company's Form 10-Q for the
               period ending June 30, 2003).
    (i)        Mortgage dated October 21, 2002 by Mortgagor,  Mtron  Industries,
               Inc.,  to  Mortgagee,   Yankton  Area  Progressive  Growth,  Inc.
               (incorporated  by  reference to Exhibit  10(hh) to the  Company's
               Annual Report on Form 10-K for the year ended December 31, 2003).
    (j)        Promissory Note between Mtron  Industries,  Inc. and Yankton Area
               Progressive Growth, Inc., dated October 21, 2002 (incorporated by
               reference to Exhibit  10(ii) to the  Company's  Annual  Report on
               Form 10-K for the year ended December 31, 2003).
    (k)        Standard Loan Agreement by and between Mtron Industries, Inc. and
               Areawide  Business  Council,  Inc.,  dated  October  10, 2002 and
               Exhibits thereto  (incorporated by reference to Exhibit 10(jj) to
               the  Company's  Annual  Report  on Form  10-K for the year  ended
               December 31, 2003).
    (l)        Loan  Agreement by and between Mtron  Industries,  Inc. and South
               Dakota  Board of Economic  Development,  dated  December 19, 2002
               (incorporated  by  reference to Exhibit  10(kk) to the  Company's
               Annual Report on Form 10-K for the year ended December 31, 2003).
    (m)        Promissory Note between Mtron  Industries,  Inc. and South Dakota
               Board  of  Economic   Development,   dated   December   19,  2002
               (incorporated  by  reference to Exhibit  10(ll) to the  Company's
               Annual Report on Form 10-K for the year ended December 31, 2003).
    (n)        Employment  Agreement by and between Mtron  Industries,  Inc. and
               South Dakota Board of Economic  Development,  dated  December 19,
               2002   (incorporated  by  reference  to  Exhibit  10(mm)  to  the
               Company's  Annual Report on Form 10-K for the year ended December
               31, 2003).

                                      II-6


    (o)        Loan  Agreement  by  and  among  Mtron  Industries,  Inc.,  Piezo
               Technology,  Inc. and First National Bank of Omaha  (incorporated
               by reference to Exhibit 10.1 to the Company's  Current  Report on
               Form 8-K dated October 20, 2004).
    (p)        Unconditional  Guaranty  for Payment and  Performance  with First
               National Bank of Omaha (incorporated by reference to Exhibit 10.2
               to the  Company's  Current  Report on Form 8-K dated  October 20,
               2004).
    (q)        Registration  Rights  Agreement  by and  between  the Company and
               Venator Merchant Fund, L.P. dated October 15, 2004  (incorporated
               by reference to Exhibit 10.4 to the Company's  Current  Report on
               Form 8-K dated October 20, 2004).
  13(a)        Annual  Report to  Shareholders  for the year ended  December 31,
               2004.
    (b)        Form 10-Q for the quarter ended March 31, 2005.
  23*          Consent of Independent  Registered Public Accounting Firm - Ernst
               & Young LLP.
  24*          Powers of Attorney.
  99(a)*       Form of Instructions  for Use of Lynch  Corporation  Subscription
               Certificates.
    (b)*       Form  of  Notice  of   Guaranteed   Delivery   for   Subscription
               Certificates.
    (c)*       Form of Letter to Shareholders.
    (d)*       Form of Letter to Securities  Dealers,  Commercial  Banks,  Trust
               Companies and Other Nominees.
    (e)*       Form of Letter to Clients of Security  Holders Who Are Beneficial
               Holders.
    (f)*       Form of Nominee Holder Certification Form.
    (g)*       Beneficial Owner Election Form.
    (h)*       Guidelines for Certification of Taxpayer Identification Number on
               Substitute Form W-9.
    (i)*       Form of  Subscription  and Information  Agent  Agreement  between
               Lynch Corporation and Mellon Bank, N.A.
    (j)*       Form of  Subscription Certificate.

- ----------------------
*   Filed herewith



ITEM 17.    UNDERTAKINGS.
- -------     ------------

(a)               The undersigned registrant hereby undertakes:

     (1)  To file,  during any period in which offers or sales are being made, a
          post-effective amendment to this registration statement:

          (i)   to include any  prospectus  required by Section  10(a)(3) of the
                Securities Act of 1933;

          (ii)  to reflect in the  prospectus  any facts or events arising after
                the effective  date of the  registration  statement (or the most
                recent post-effective amendment thereof) which,  individually or
                in  the  aggregate,   represent  a  fundamental  change  in  the
                information   set   forth   in   the   registration   statement.
                Notwithstanding  the  foregoing,  any  increase  or  decrease in
                volume  of  securities  offered  (if the total  dollar  value of

                                      II-7


                securities  offered would not exceed that which was  registered)
                and any  deviation  from  the low or high  end of the  estimated
                maximum   offering  range  may  be  reflected  in  the  form  of
                prospectus filed with the Commission pursuant to Rule 424(b) if,
                in the aggregate,  the changes in volume and price  represent no
                more than 20 percent  change in the maximum  aggregate  offering
                price set forth in the  "Calculation of Registration  Fee" table
                in the effective registration statement; and

          (iii) to include any material  information with respect to the plan of
                distribution  not  previously   disclosed  in  the  registration
                statement  or any  material  change to such  information  in the
                registration statement;

     (2)  That,  for  the  purpose  of  determining   any  liability  under  the
          Securities Act, each such post-effective  amendment 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.

     (3)  To remove from registration by means of a post-effective amendment any
          of  the  securities  being  registered  which  remain  unsold  at  the
          termination of the offering.

     (e)  The undersigned registrant hereby undertakes to deliver or cause to be
          delivered with the  prospectus,  to each person to whom the prospectus
          is sent or given,  the latest annual report,  to security holders that
          is incorporated by reference in the prospectus and furnished  pursuant
          to and meeting the  requirements of Rule 14a-3 or Rule 14c-3 under the
          Securities   Exchange  Act  of  1934;  and,  where  interim  financial
          information required to be presented by Article 3 of Regulation S-X is
          not set forth in the prospectus,  to deliver, or cause to be delivered
          to each  person to whom the  prospectus  is sent or given,  the latest
          quarterly report that is specifically incorporated by reference in the
          prospectus to provide such interim financial information.

     (h)  Insofar  as   indemnification   for  liabilities   arising  under  the
          Securities Act, as amended may be permitted to directors, officers and
          controlling  persons  of the  registrant  pursuant  to  the  foregoing
          provisions,  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 an
          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-8


                                   SIGNATURES

            Pursuant to the  requirements  of the  Securities  Act of 1933,  the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-2 and has duly caused this registration
statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized,  in the Town of  Greenwich,  State of Connecticut on the 16th day of
August, 2005.

                                           LYNCH CORPORATION



                                           By: /s/ John C. Ferrara
                                               ---------------------------------
                                               John C. Ferrara
                                               Chief Executive Officer

                                POWER OF ATTORNEY

            KNOW ALL MEN BY THESE  PRESENTS,  that each person  whose  signature
appears below  constitutes  and appoints John C. Ferrara and Eugene Hynes as his
true  and  lawful  attorney-in-fact,  each  acting  alone,  with  full  power of
substitution and resubstitution for him and in his name, place and stead, in any
and all  capacities,  to sign any and all amendments,  including  post-effective
amendments  to  this  registration  statement,   and  any  related  registration
statement  filed  pursuant to Rule 462(b) of the Act and to file the same,  with
exhibits  thereto,  and  other  documents  in  connection  therewith,  with  the
Securities  and Exchange  Commission,  hereby  ratifying and confirming all that
said attorneys-in-fact or their substitutes,  each acting along, may lawfully do
or cause to be done by virtue hereof.

            Pursuant to the  requirements  of the Securities  Act of 1933,  this
registration  statement  has been signed below by the  following  persons in the
capacities and on the dates indicated.


       SIGNATURE                               TITLE                                   DATE
       ---------                               -----                                   ----

/s/ John C. Ferrara              Chief Executive Officer and Director             August 16, 2005
- ------------------------         (Principal Executive Officer)
John C. Ferrara

*                               Vice President, Treasurer and Secretary           August 16, 2005
- ------------------------        (Principal Financial and Accounting Officer)
Eugene Hynes

*                               Chairman of the Board of Directors                August 16, 2005
- ------------------------
Marc Gabelli

*                               Director                                          August 16, 2005
- ------------------------
E. Val Cerutti

*                               Director                                          August 16, 2005
- ------------------------
Avrum Gray

*                               Director                                          August 16, 2005
- ------------------------
Anthony R. Pustorino


* By John C. Ferrara,
     Attorney-In-Fact
                                      II-9


                                  EXHIBIT INDEX

  EXHIBIT
    NO.                             DESCRIPTION
- -----------                         -----------
   3(a)        Restated  Articles of Incorporation of the Company  (incorporated
               by reference to Exhibit 3(a) to the  Company's  Annual  Report on
               Form 10-K for the period ended December 31, 2004).
    (b)        Articles of  Amendment of the  Articles of  Incorporation  of the
               Company  (incorporated  by  reference  to  Exhibit  3(b)  to  the
               Company's  Annual  Report  on  Form  10-K  for the  period  ended
               December 31, 2004).
    (c)        By-laws of the Company  (incorporated by reference to Exhibit 3.1
               to the Company's  Current  Report on Form 8-K dated  December 22,
               2004).
   5*          Opinion of Olshan Grundman Frome Rosenzweig & Wolosky LLP.
  10(a)        Lynch Corporation  401(k) Savings Plan (incorporated by reference
               to Exhibit 10(b) to the Company's  Annual Report on Form 10-K for
               the period ended December 31, 1995).
    (b)        Directors Stock Plan  (incorporated by reference to Exhibit 10(o)
               to the Company's Form 10-K for the year ended December 31, 1997).
               (c) Lynch Corporation 2001 Equity Incentive Plan adopted December
               10,  2001  (incorporated  by  reference  to Exhibit  10(y) to the
               Company's Form 10-K for the year ended December 31, 2001).
    (d)        Amended  and  Restated  Credit  Agreement  by and  between  Lynch
               Systems,  Inc.  and  SunTrust  Bank  dated  as of June  10,  2002
               (incorporated by reference to Exhibit 10(z) to the Company's Form
               10-K for the year ended December 31, 2002).
    (e)        Unlimited  Continuing  Guaranty  Agreement  by  Guarantor,  Lynch
               Corporation,  dated June 10, 2002  (incorporated  by reference to
               Exhibit  10(aa) to the  Company's  Form  10-K for the year  ended
               December 31, 2002).
    (f)        First  Amendment  and  Waiver  to  Amended  and  Restated  Credit
               Agreement between Lynch Systems, Inc. and SunTrust Bank dated May
               30, 2003  (incorporated  by  reference  to Exhibit  10(ee) to the
               Company's Form 10-Q for the period ending June 30, 2003).
    (g)        Term  Loan  Promissory  Note  between  Lynch  Systems,  Inc.  and
               SunTrust Bank dated August 4, 2003  (incorporated by reference to
               Exhibit  10(ff) to the Company's  Form 10-Q for the period ending
               June 30, 2003).
    (h)        Second  Amendment to Security Deed and Agreement  dated August 4,
               2003 between Lynch Systems,  Inc. and SunTrust Bank (incorporated
               by reference to Exhibit 10(gg) to the Company's Form 10-Q for the
               period ending June 30, 2003).
    (i)        Mortgage dated October 21, 2002 by Mortgagor,  Mtron  Industries,
               Inc.,  to  Mortgagee,   Yankton  Area  Progressive  Growth,  Inc.
               (incorporated  by  reference to Exhibit  10(hh) to the  Company's
               Annual Report on Form 10-K for the year ended December 31, 2003).
    (j)        Promissory Note between Mtron  Industries,  Inc. and Yankton Area
               Progressive Growth, Inc., dated October 21, 2002 (incorporated by
               reference to Exhibit  10(ii) to the  Company's  Annual  Report on
               Form 10-K for the year ended December 31, 2003).
    (k)        Standard Loan Agreement by and between Mtron Industries, Inc. and
               Areawide  Business  Council,  Inc.,  dated  October  10, 2002 and
               Exhibits thereto  (incorporated by reference to Exhibit 10(jj) to
               the  Company's  Annual  Report  on Form  10-K for the year  ended
               December 31, 2003).



    (l)        Loan  Agreement by and between Mtron  Industries,  Inc. and South
               Dakota  Board of Economic  Development,  dated  December 19, 2002
               (incorporated  by  reference to Exhibit  10(kk) to the  Company's
               Annual Report on Form 10-K for the year ended December 31, 2003).
    (m)        Promissory Note between Mtron  Industries,  Inc. and South Dakota
               Board  of  Economic   Development,   dated   December   19,  2002
               (incorporated  by  reference to Exhibit  10(ll) to the  Company's
               Annual Report on Form 10-K for the year ended December 31, 2003).
    (n)        Employment  Agreement by and between Mtron  Industries,  Inc. and
               South Dakota Board of Economic  Development,  dated  December 19,
               2002   (incorporated  by  reference  to  Exhibit  10(mm)  to  the
               Company's  Annual Report on Form 10-K for the year ended December
               31, 2003).
    (o)        Loan  Agreement  by  and  among  Mtron  Industries,  Inc.,  Piezo
               Technology,  Inc. and First National Bank of Omaha  (incorporated
               by reference to Exhibit 10.1 to the Company's  Current  Report on
               Form 8-K dated October 20, 2004).
    (p)        Unconditional  Guaranty  for Payment and  Performance  with First
               National Bank of Omaha (incorporated by reference to Exhibit 10.2
               to the  Company's  Current  Report on Form 8-K dated  October 20,
               2004).
    (q)        Registration  Rights  Agreement  by and  between  the Company and
               Venator Merchant Fund, L.P. dated October 15, 2004  (incorporated
               by reference to Exhibit 10.4 to the Company's  Current  Report on
               Form 8-K dated October 20, 2004).
  13(a)        Annual  Report to  Shareholders  for the year ended  December 31,
               2004.
    (b)        Form 10-Q for the quarter ended March 31, 2005.
  23*          Consent of Independent  Registered Public Accounting Firm - Ernst
               & Young LLP.
  24*          Powers of Attorney.
  99(a)*       Form of Instructions  for Use of Lynch  Corporation  Subscription
               Certificates.
    (b)*       Form  of  Notice  of   Guaranteed   Delivery   for   Subscription
               Certificates.
    (c)*       Form of Letter to Shareholders.
    (d)*       Form of Letter to Securities  Dealers,  Commercial  Banks,  Trust
               Companies and Other Nominees.
    (e)*       Form of Letter to Clients of Security  Holders Who Are Beneficial
               Holders.
    (f)*       Form of Nominee Holder Certification Form.
    (g)*       Beneficial Owner Election Form.
    (h)*       Guidelines for Certification of Taxpayer Identification Number on
               Substitute Form W-9.
    (i)*       Form of  Subscription  and Information  Agent  Agreement  between
               Lynch Corporation and Mellon Bank, N.A.
    (j)*       Form of  Subscription Certificate.

- ----------------------
*   Filed herewith

EX-5

                                                                       EXHIBIT 5

OLSHAN
OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP

                                                               PARK AVENUE TOWER
                                                             65 EAST 55TH STREET
                                                        NEW YORK, NEW YORK 10022
                                                         TELEPHONE: 212.451.2300
                         August 16, 2005                 FACSIMILE: 212.451.2222

                                                               WWW.OLSHANLAW.COM

United States Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

            RE:   LYNCH CORPORATION
                  REGISTRATION STATEMENT ON FORM S-2

Ladies and Gentlemen:

            We  have  acted  as  counsel  to  Lynch   Corporation,   an  Indiana
corporation (the  "Company"),  in connection with the filing of its registration
statement  on Form S-2 (File No.  333-126335)  (the  "Registration  Statement"),
relating to an aggregate of 539,176 shares (the  "Shares"),  par value $0.01 per
share  (the  "Common  Shares"),   issuable  upon  the  exercise  of  outstanding
subscription  rights  (the  "Rights"),  as more  particularly  described  in the
Registration  Statement and the  prospectus  (the  "Prospectus")  forming a part
thereof (the "Rights Offering").

            We advise you that we have examined originals or copies certified or
otherwise identified to our satisfaction of the Registration Statement, the form
of the Rights, the Articles of Incorporation and By-Laws of the Company, each as
amended to date, corporate proceedings of the Company, and such other documents,
instruments and certificates of officers and  representatives of the Company and
of public officials, and we have made such examination of law, as we have deemed
appropriate as the basis for the opinion hereinafter  expressed.  In making such
examination, we have assumed the genuineness of all signatures, the authenticity
of all documents  submitted to us as originals,  and the  conformity to original
documents of documents submitted to us as certified or photostatic copies.

            Based upon the  foregoing,  and in reliance  thereon,  we are of the
opinion that (i) the Shares and the Rights have been duly authorized;  (ii) upon
distribution  pursuant to the Rights  Offering as described in the  Registration
Statement and the Prospectus,  the Rights will be validly issued; and (iii) upon
the issuance and sale of the Shares  against  payment  therefor upon exercise of
Rights,  as described in the  Registration  Statement  and the  Prospectus,  the
Shares will be validly issued, fully paid and non-assessable.

            We are members of the Bar of the State of New York and we express no
opinion  as to any  laws  other  than the laws of the  State  of New  York,  the

                                                               NEW JERSEY OFFICE
                                                       2001 ROUTE 46 / SUITE 202
                                                    PARSIPPANY, NEW JERSEY 07054
                                                         TELEPHONE: 973.335.7400
                                                        FACSIMILED: 973.335.8018



August 16, 2005
Page 2



Business  Corporation  Law of the State of Indiana and the  federal  laws of the
United States of America.

            We hereby consent to the filing of this opinion as an exhibit to the
Registration  Statement and to the reference  made to our firm under the caption
"Legal  Matters"  in  the  Prospectus  constituting  part  of  the  Registration
Statement.



                              Very truly yours,

                              /s/ OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP

                              OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP

EX-23

                                                                      EXHIBIT 23

            Consent of Independent Registered Public Accounting Firm

We consent to the reference to our firm under the caption "Experts" in Amendment
No. 1 to the Registration  Statement (S-2 No. 333-126335)and  related Prospectus
of Lynch  Corporation for the registration of 539,176 shares of its common stock
and 1,617,526  subscription rights and to the incorporation by reference therein
of our report dated March 16, 2005, except as to Note 4, as to which the date is
March 31,  2005,  with  respect to the  consolidated  financial  statements  and
schedules of Lynch Corporation included in its Annual Report (Form 10-K) for the
year ended December 31, 2004 filed with the Securities and Exchange Commission.

                                  /s/ Ernst & Young
                                  ERNST & YOUNG


Providence, Rhode Island
August 12, 2005

EX-99

                                                                   EXHIBIT 99(a)

                             INSTRUCTIONS FOR USE OF

                                LYNCH CORPORATION

                            SUBSCRIPTION CERTIFICATES

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


            CONSULT MELLON INVESTOR SERVICES LLC, YOUR BANK OR BROKER
                        AS TO ANY QUESTIONS YOU MAY HAVE

            The  following  instructions  relate to a rights  offering  by Lynch
Corporation,  an  Indiana  corporation  (the  "Company"),  to the  holders  (the
"Holders")  of its  common  shares,  par  value  $0.01 per  share  (the  "Common
Shares"),  as described in the Company's  prospectus  dated  ________ ___, 2005.
Holders of record of Common Shares at the close of business __________ ___, 2005
(the  "Record   Date")  will  receive  one   transferable   subscription   right
("Subscription  Right")  for each  Common  Share held by them as of the close of
business on the Record Date. An aggregate of 1,617,526  Subscription  Rights are
exercisable  to  purchase  an  aggregate  of  539,176   Common   Shares.   Three
Subscription  Rights plus payment of $_______  (the  "Subscription  Price") will
entitle the Holder to subscribe  for one Common  Share (the "Basic  Subscription
Privilege").   In  addition,  each  Subscription  Right  will  also  include  an
oversubscription  privilege to purchase  additional  Common  Shares that are not
purchased by other Holders  through  their Basic  Subscription  Privileges  (the
"Oversubscription  Privilege").  A  Holder  will be  entitled  to  exercise  the
Oversubscription  Privilege  only if such Holder has exercised in full its Basic
Subscription  Privilege.  If the  number of Common  Shares  remaining  after the
exercise of all Basic  Subscription  Privileges is not sufficient to satisfy all
requests for Common Shares pursuant to Oversubscription  Privileges, each Holder
will be  allocated  additional  Common  Shares pro rata,  based on the number of
Common Shares such Holder purchased through the Basic Subscription  Privilege in
proportion  to the total  number of Common  Shares  that such  Holder  and other
oversubscribing Holders purchased through the Basic Subscription Privilege.

            If, pursuant to the exercise of Subscription  Rights,  the number of
Common Shares that a Holder would be entitled to receive would result in receipt
of fractional  shares,  the aggregate number of Common Shares that the Holder is
entitled to purchase  will be rounded up to the nearest  whole  number.  Holders
will not receive cash in lieu of fractional shares.

            The Subscription  Rights will expire on _________ ___, 2005, at 5:00
p.m.,  New York City time,  unless  extended for up to 15 days (the  "Expiration
Date").

            You should  indicate your wishes with regard to the exercise of your
Subscription  Rights by completing the  appropriate  section on the back of your
Subscription  Certificate and returning the  Subscription  Certificate to Mellon
Bank, N.A. c/o Mellon Investor  Services LLC (the  "Subscription  Agent") in the
envelope provided.



THE SUBSCRIPTION AGENT MUST RECEIVE YOUR COMPLETED  SUBSCRIPTION  CERTIFICATE ON
OR BEFORE THE EXPIRATION DATE. IN ADDITION,  THE SUBSCRIPTION AGENT MUST RECEIVE
PAYMENT OF THE SUBSCRIPTION PRICE,  INCLUDING FINAL CLEARANCE OF ANY CHECKS, FOR
ALL  SUBSCRIPTION  RIGHTS  EXERCISED ON OR BEFORE THE  EXPIRATION  DATE.  ONCE A
HOLDER OF SUBSCRIPTION  RIGHTS HAS EXERCISED THE  SUBSCRIPTION  PRIVILEGE,  SUCH
EXERCISE MAY NOT BE REVOKED.

            1.  SUBSCRIPTION   PRIVILEGES.   To  exercise  Subscription  Rights,
properly  complete  and  execute  your  Subscription  Certificate  and  send it,
together  with payment in full of the  Subscription  Price for each Common Share
subscribed for pursuant to the Basic Subscription Privilege and Oversubscription
Privilege,  to the Subscription Agent. Delivery of the Subscription  Certificate
must be made by mail, by overnight courier or by hand. FACSIMILE DELIVERY OF THE
SUBSCRIPTION  CERTIFICATE  WILL NOT BE ACCEPTED  AND WILL NOT  CONSTITUTE  VALID
DELIVERY.  All  payments  must be made in United  States  dollars  by bank draft
(cashier's  check) or  certified  check  drawn upon a U.S.  bank or money  order
payable to Mellon Investor  Services LLC. The Subscription  Price will be deemed
to have been received by the Subscription  Agent under the conditions  described
in the paragraph below entitled ACCEPTANCE OF PAYMENTS.

            Banks,  brokers and other nominee holders of Subscription Rights who
exercise  the  Subscription   Privilege  on  behalf  of  beneficial   owners  of
Subscription Rights will be required to certify to the Subscription Agent and to
the Company as to the  aggregate  number of  Subscription  Rights that have been
exercised by each beneficial  owner of Subscription  Rights on whose behalf such
nominee  holder  is  acting  by  submitting  the form  entitled  Nominee  Holder
Certification.

            If you hold  certificates  for our Common Shares  directly and would
prefer  to have your  broker,  custodian  bank or other  nominee  exercise  your
Subscription  Rights,  you should  contact your nominee and request it to effect
the  transaction  for you.  To  indicate  your  decision  with  respect  to your
Subscription  Rights,  you should complete and return to your broker,  custodian
bank or other nominee the form entitled Beneficial Owner Election Form.

            ACCEPTANCE  OF  PAYMENTS.  Payments  will be  deemed  to  have  been
received by the  Subscription  Agent only upon the  receipt by the  Subscription
Agent of a certified check or bank draft (cashier's  check) drawn on a U.S. bank
or money order.

            CONTACTING  THE  SUBSCRIPTION  AGENT.  The  addresses  and telephone
numbers of the Subscription Agent are as follows:

                                      - 2 -


BY UNITED STATES MAIL DELIVERY:          BY OVERNIGHT COURIER:                      BY HAND:
- ------------------------------           --------------------                       -------

Mellon Bank, N.A.                   Mellon Bank, N.A.                         Mellon Bank, N.A.
c/o Mellon Investor Services LLC    c/o Mellon Investor Services LLC          c/o Mellon Investor Services LLC
Post Office Box 3301                85 Challenger Road - Mail Drop - Reorg    120 Broadway. 13th Floor
South Hackensack, NJ 07606          Ridgefield Park, NJ 07660                 New York, NY 10271
Attn: Reorganization Department     Attn: Reorganization Department           Attn: Reorganization Department

                       Toll Free Telephone: (866) 340-1578
        Direct Line for Banks and Brokers to Call Collect: (201) 373-5156

            The Subscription Agent must receive the Subscription Certificate and
payment of the estimated  Subscription  Price on or before the Expiration  Date.
DEPOSIT IN THE MAIL WILL NOT CONSTITUTE  DELIVERY TO THE SUBSCRIPTION AGENT. The
Subscription  Agent has discretion to refuse to accept any improperly  completed
or unexecuted rights certificate.

            NO SUBSCRIPTION RIGHTS AMOUNT; EFFECT OF OVER AND UNDERPAYMENTS.  If
you have not indicated the number of Subscription Rights being exercised,  or if
you do not deliver the dollar amount sufficient to purchase the number of Common
Shares  subscribed  for, you will be deemed to have  exercised the  Subscription
Privilege with respect to the maximum number of whole  Subscription  Rights that
may be exercised for the Subscription  Price payment you deliver under the Basic
Subscription Privilege. To the extent that the dollar amount you deliver exceeds
the product of the  Subscription  Price multiplied by the number of Subscription
Rights evidenced by the Subscription  Certificate you deliver, any excess amount
will be returned to you.

            2. DELIVERY OF SHARE  CERTIFICATES.  Share  certificates  for Common
Shares  purchased in this offering will be issued as soon as  practicable  after
the Expiration Date,  anticipated to be approximately seven to 10 business days.
Our  Subscription  Agent will  deliver  subscription  payments  to us only after
consummation  of this  offering  and the issuance of share  certificates  to our
shareholders that exercised their rights.  Unless you instruct otherwise in your
Subscription  Certificate,  Common  Shares  purchased  through  the  exercise of
Subscription  Rights will be registered in the name of the person exercising the
rights.

            The  Subscription  Agent  will  promptly  mail  to  each  Holder  of
Subscription Rights any excess funds received (without interest or deduction) in
payment of the Subscription  Price for Common Shares that are subscribed for but
not allocated to such Holder  pursuant to the Basic  Subscription  Privilege and
the Oversubscription Privilege as soon as practicable after the Expiration Date,
anticipated to be approximately seven to 10 business days.

                                      - 3 -


            3.  TO  HAVE  A  SUBSCRIPTION   CERTIFICATE   DIVIDED  INTO  SMALLER
DENOMINATIONS.  To have a Subscription Certificate divided into certificates for
smaller  numbers of Subscription  Rights,  send your  Subscription  Certificate,
together with complete instructions (including specification of the whole number
of  Subscription  Rights  you  wish to be  evidenced  by each  new  Subscription
Certificate)  signed by you, to the  Subscription  Agent,  allowing a sufficient
amount of time for new  Subscription  Certificates  to be issued and returned so
that they can be used prior to the Expiration Date. Alternatively, you may ask a
bank or broker to effect such actions on your  behalf.  As a result of delays in
the mail, the time of the transmittal,  the necessary  processing time and other
factors,  you may not  receive  such new  Subscription  Certificates  in time to
enable you to complete an exercise by the Expiration  Date.  Neither the Company
nor the Subscription Agent will be liable to you for any such delays.

            4. EXECUTION.

                  (a)  EXECUTION  BY  REGISTERED  HOLDER.  The  signature on the
Subscription  Certificate must correspond with the name of the registered holder
exactly as it appears on the face of the  Subscription  Certificate  without any
alteration or change whatsoever.  Persons who sign the Subscription  Certificate
in a  representative  or other  fiduciary  capacity must indicate their capacity
when  signing  and,  unless  waived  by the  Subscription  Agent in its sole and
absolute  discretion,  must  present  to  the  Subscription  Agent  satisfactory
evidence of their authority to act.

                  (b) EXECUTION BY PERSON OTHER THAN REGISTERED  HOLDER.  If the
Subscription  Certificate is executed by a person other than the Holder named on
the face of the  Subscription  Certificate,  proper evidence of authority of the
person executing the Subscription Certificate must accompany the same unless the
Subscription Agent, in its discretion, dispenses with proof of authority.

                  (c) SIGNATURE GUARANTEES. Your signature must be guaranteed by
an Eligible  Guarantor  Institution if you specify special  issuance or delivery
instructions.

            5.  METHOD OF  DELIVERY.  The  method of  delivery  of  Subscription
Certificates and the payment of the Subscription Price to the Subscription Agent
will be at the election and risk of the Holder of the  Subscription  Rights.  If
sent by mail, it is recommended that they be sent by registered  mail,  properly
insured, with return receipt requested,  and that a sufficient number of days be
allowed to ensure  delivery to the  Subscription  Agent prior to the  Expiration
Date.

            6.  SPECIAL  PROVISIONS  RELATING TO THE  DELIVERY  OF  SUBSCRIPTION
RIGHTS  THROUGH  DEPOSITORY  FACILITY  PARTICIPANTS.  In the case of  holders of
Subscription Rights that are held of record through The Depository Trust Company
("DTC"),  exercises of the Subscription Privilege may be effected by instructing
DTC to transfer  Subscription  Rights from the DTC account of such holder to the
DTC account of the Subscription Agent, together with payment of the Subscription
Price  for  each  Common  Share  subscribed  for  pursuant  to the  Subscription
Privilege.

                                      - 4 -

EX-99

                                                                   EXHIBIT 99(b)

                                LYNCH CORPORATION

                          NOTICE OF GUARANTEED DELIVERY
                          FOR SUBSCRIPTION CERTIFICATES

            This form, or one substantially  equivalent hereto,  must be used to
exercise  subscription  rights  (the  "Subscription  Rights")  pursuant  to  the
offering described in the prospectus dated ________ ___, 2005 (the "Prospectus")
of Lynch Corporation,  an Indiana corporation (the "Company"),  if a holder (the
"Holder") of Subscription  Rights cannot deliver the  certificate(s)  evidencing
the Subscription Rights (the "Subscription Certificate(s)"), to the subscription
agent listed below (the "Subscription Agent") at or prior to 5:00 P.M., New York
City  time,  _________  ___,  2005,  unless  extended  for  up to 15  days  (the
"Expiration Date").

            You may deliver your Notice of Guaranteed  Delivery for Subscription
Certificates to the Subscription  Agent in the same manner as your  Subscription
Certificates  at the address set forth above  under  "Delivery  of  Subscription
Materials and Payment." On the third business day following the Expiration  Date
ONLY,  you may transmit  your Notice of  Guaranteed  Delivery  for  Subscription
Certificates to the  Subscription  Agent via facsimile  transmission  (Facsimile
No.:  201-296-4293).  ALL FACSIMILE  DELIVERIES  MUST BE  CONFIRMED.  To confirm
facsimile deliveries, you must call (201) 296-4860.

            Payment of the  subscription  price for each of the Company's Common
Shares subscribed for upon exercise of such Subscription Rights must be received
by the Subscription  Agent in the manner specified in "Method of Payment" in the
Prospectus at or prior to 5:00 P.M., New York City time, on the Expiration  Date
even if the Subscription  Certificate(s)  evidencing such Subscription Rights is
(are) being delivered pursuant to the Guaranteed Delivery Procedures thereof.

BY UNITED STATES MAIL DELIVERY:          BY OVERNIGHT COURIER:                      BY HAND:
- ------------------------------           --------------------                       -------

Mellon Bank, N.A.                   Mellon Bank, N.A.                        Mellon Bank, N.A.
c/o Mellon Investor Services LLC    c/o Mellon Investor Services LLC         c/o Mellon Investor Services LLC
Post Office Box 3301                85 Challenger Road - Mail Drop - Reorg   120 Broadway, 13th Floor
South Hackensack, NJ 07606          Ridgefield Park, NJ 07660                New York, NY 10271
Attn: Reorganization Department     Attn: Reorganization Department          Attn: Reorganization Department

            Delivery of this  instrument  to an address  other than as set forth
above or  transmission  of this instrument via facsimile other than as set forth
above does not constitute a valid delivery.



            If you have any questions or require  additional  copies of relevant
documents, please contact:

                          Mellon Investor Services LLC
                     85 Challenger Road - Mail Drop - Reorg
                            Ridgefield Park, NJ 07660
                       Toll Free Telephone: (866) 340-1578
        Direct Line for Banks and Brokers to Call Collect: (201) 373-5156


                                       2


Ladies and Gentlemen:

            The undersigned hereby represents that the undersigned is the Holder
of  Subscription  Certificate(s)  representing   _________________  Subscription
Rights and that such  Subscription  Certificate(s)  cannot be  delivered  to the
Subscription Agent at or before 5:00 P.M., New York City time, on the Expiration
Date.  Upon the terms and subject to the conditions set forth in the Prospectus,
receipt  of which is  hereby  acknowledged,  the  undersigned  hereby  elects to
exercise (i) the Basic Subscription  Privilege to subscribe for one Common Share
for  each  three   Subscription   Rights   represented   by  such   Subscription
Certificate(s)  and  (ii)  the  Oversubscription   Privilege  relating  to  such
Subscription  Rights,  to the extent that Common  Shares that are not  otherwise
purchased pursuant to the exercise of Subscription  Rights (the "Excess Shares")
are  available  therefor,  for an  aggregate  of up to  ________________  Excess
Shares, subject to availability and proration as described in the Prospectus.

            The undersigned  understands that payment of the Subscription  Price
for  each  Common  Share  subscribed  for  pursuant  to the  Basic  Subscription
Privilege  and  the   Oversubscription   Privilege   must  be  received  by  the
Subscription Agent at or before 5:00 P.M., New York City time, on the Expiration
Date  and   represents   that  such  payment,   in  the   aggregate   amount  of
$__________________ is being delivered to the Subscription Agent herewith in the
manner set forth below (check appropriate box):

                 |_|  Certified check

                 |_|  Bank draft (cashier's check)

                 |_|  Money Order



Signature(s) _________________________          Address ________________________
______________________________________          ________________________________
Name(s) ______________________________          ________________________________
______________________________________          Area Code and Tel. No(s).

Subscription Certificate No(s). (if available)
__________________________________________________________


                                       3


                              Guarantee of Delivery
        (Not To Be Used For Subscription Certificate Signature Guarantee)

            The undersigned,  a member firm of a registered  national securities
exchange or of the  National  Association  of  Securities  Dealers,  Inc.,  or a
commercial bank or trust company having an office or correspondent in the United
States,  or a bank,  stockbroker,  savings and loan  association or credit union
with membership in an approved signature guarantee  medallion program,  pursuant
to Rule 17Ad-15 of the Securities  Exchange Act of 1934, as amended,  guarantees
that the undersigned  will deliver to the  Subscription  Agent the  certificates
representing the Subscription  Rights being exercised hereby,  with any required
signature  guarantee  and any other  required  documents,  all within  three (3)
business days after the date hereof.

_______________________________________         Dated: _________________________

_______________________________________         ________________________________
(Address)                                       (Name of Firm)

_______________________________________         ________________________________
(Area Code and Telephone Number)                (Authorized Signature)

            The  institution  that  completes  this  form must  communicate  the
guarantee  to  the   Subscription   Agent  and  must  deliver  the  Subscription
Certificate(s)  to the  Subscription  Agent  within the time period shown in the
Prospectus of Lynch  Corporation,  dated __________ ___, 2005.  Failure to do so
could result in a financial loss to such institution.


                                       4

EX-99

                                                                   EXHIBIT 99(c)

                                LYNCH CORPORATION
                         140 GREENWICH AVENUE, 4TH FLOOR
                          GREENWICH, CONNECTICUT 06830





                                                          ___________ ____, 2005

Dear Shareholder:

            On  behalf  of the  Board of  Directors  of Lynch  Corporation  (the
"Company"),  we are pleased to provide details on the Company's  rights offering
to purchase  common  shares (the "Common  Shares").  The Common Shares are being
offered at the subscription price of $______ per share.

            Each  beneficial  owner of the Company's  Common Shares will receive
one  subscription  right  ("Subscription  Right") for each Common  Share that it
owned on  _____________  ___, 2005.  Every three such  Subscription  Rights will
entitle  such  beneficial  owner  to  subscribe  for one  Common  Share  ("Basic
Subscription  Privilege").  If, pursuant to the exercise of Subscription Rights,
the number of Common Shares that a beneficial owner would be entitled to receive
would result in receipt of fractional  shares,  the  aggregate  number of Common
Shares that such beneficial  owner is entitled to purchase will be rounded up to
the  nearest  whole  number.  You will not  receive  cash in lieu of  fractional
shares.

            If you fully  exercise the Basic  Subscription  Privilege  issued to
you, you may subscribe for additional Common Shares through the oversubscription
privilege.  If the Company's other shareholders receiving rights do not elect to
purchase  all of the  Common  Shares  offered  under  their  basic  subscription
privilege,  then Common Shares purchased through the oversubscription  privilege
will be allocated pro rata based on the number of Common Shares each  subscriber
for  additional  Common  Shares  has  purchased  under  the  basic  subscription
privilege, as more fully described in the Company's prospectus,  dated _________
___, 2005.

            Enclosed are copies of the following documents:

            1.     the Prospectus;

            2.     the  Instructions for Use of Lynch  Corporation  Subscription
                   Certificates;

            3.     the Subscription Certificate; and

            4.     a return  envelope  addressed to Mellon Bank, N.A. c/o Mellon
                   Investor Services LLC, the Subscription Agent.

            The  enclosed  Prospectus  describes  the  rights  offering  and the
procedure  to follow if you choose to  exercise  your  rights.  Please  read the
Prospectus and other enclosed materials carefully.



            Your prompt action is requested.  The rights offering will expire at
5:00 p.m., New York City time, on __________  ___, 2005,  unless extended for up
to 15 days (the "Expiration Date").

            To  exercise  your  rights,   a  properly   completed  and  executed
Subscription  Certificate  and  payment  in full  for all of the  Common  Shares
purchased  must be  delivered  to the  Subscription  Agent as  indicated  in the
Prospectus prior to 5:00 p.m., New York City time, on the Expiration Date.

            Additional  copies of the enclosed  materials  may be obtained  from
Mellon  Investor  Services  LLC.  Their  toll-free  telephone  number  is  (866)
340-1578.

            We are pleased to offer you this  opportunity and hope that you will
consider a further investment in the Company.


                                            Very truly yours,



                                            LYNCH CORPORATION



                                      - 2 -

EX-99

                                                                   EXHIBIT 99(d)

                                LYNCH CORPORATION
                         140 Greenwich Avenue, 4th Floor
                          Greenwich, Connecticut 06830


                            1,617,526 COMMON SHARES,
              ISSUABLE UPON EXERCISE OF 539,176 SUBSCRIPTION RIGHTS

- --------------------------------------------------------------------------------
            THE SUBSCRIPTION RIGHTS ARE EXERCISABLE UNTIL 5:00 P.M.,
           NEW YORK CITY TIME, ON ________ ___, 2005 UNLESS EXTENDED.
- --------------------------------------------------------------------------------




                                                            __________ ___, 2005

To:  Securities Dealers, Commercial Banks, Trust Companies, and Other Nominees

            This letter is being distributed to securities  dealers,  commercial
banks,  trust  companies and other  nominees in connection  with the offering by
Lynch  Corporation  of an aggregate of 539,176  common shares at a  subscription
price  of  $_______  per  share   pursuant  to  the  exercise  of   transferable
subscription  rights (the "Subscription  Rights")  initially  distributed to all
holders of record of common shares as of the close of business on _________ ___,
2005. The Subscription  Rights,  including the oversubscription  privilege,  are
described in the enclosed prospectus and evidenced by a Subscription Certificate
registered in your name or in the name of your nominee.

            Each  beneficial  owner of common shares  registered in your name or
the name of your nominee is entitled to one  Subscription  Right for each Common
Share owned by such  beneficial  owner.  A  shareholder  may purchase one Common
Share for every three  Subscription  Rights  exercised (the "Basic  Subscription
Privilege").   In  addition,  each  Subscription  Right  will  also  include  an
oversubscription  privilege to purchase  additional  common  shares that are not
purchased by other holders  through  their Basic  Subscription  Privileges  (the
"Oversubscription  Privilege").  A  holder  will be  entitled  to  exercise  the
Oversubscription  Privilege  only if such holder has exercised in full its Basic
Subscription  Privilege.  If the  number of common  shares  remaining  after the
exercise of all Basic  Subscription  Privileges is not sufficient to satisfy all
requests for common shares pursuant to Oversubscription  Privileges, each holder
will be  allocated  additional  common  shares pro rata,  based on the number of
common shares such holder purchased through the Basic Subscription  Privilege in
proportion  to the total  number of common  shares  that such  holder  and other
oversubscribing holders purchased through the Basic Subscription Privilege.

            If, pursuant to the exercise of Subscription  Rights,  the number of
common  shares that a  Shareholder  would be entitled to receive would result in
receipt of fractional  shares,  the aggregate  number of common shares that such



Shareholder  is  entitled to  purchase  will be rounded up to the nearest  whole
number. Shareholders will not receive cash in lieu of fractional shares.

            We are asking you to contact  your  clients for whom you hold common
shares  registered  in your  name  or in the  name of  your  nominee  to  obtain
instructions with respect to the Subscription Rights.

            Enclosed are copies of the following documents for you to use:

            1.     Prospectus;

            2.     Form of Letter from Lynch Corporation to its Shareholders;

            3.     Instructions  for  Use  of  Lynch  Corporation   Subscription
                   Certificates;

            4.     Return  envelope  addressed to Mellon  Bank,  N.A. c/o Mellon
                   Investor Services LLC as Subscription Agent.

            Your prompt action is requested. The Subscription Rights will expire
at 5:00 P.M., New York City time, on _________ ___, 2005, unless extended for up
to 15 days (the "Expiration Date").

            To exercise  Subscription  Rights,  properly  completed and executed
Subscription  Certificates  and  payment  in full  for all  Subscription  Rights
exercised  must be  delivered  to the  Subscription  Agent as  indicated  in the
Prospectus prior to the Expiration Date.

            Lynch  Corporation  will  not pay any  fees  or  commissions  to any
broker,  dealer or other person for soliciting  subscriptions  for  Subscription
Rights pursuant to the rights offering,  other than the  Subscription  Agent and
Information Agent as described in the Prospectus.

            Additional  copies of the  enclosed  materials  may be  obtained  by
contacting  Mellon Investor  Services LLC toll free at (866) 340-1578 or collect
at (201) 373-5156.


                                            Very truly yours,


                                            LYNCH CORPORATION


NOTHING HEREIN OR IN THE ENCLOSED  DOCUMENTS SHALL  CONSTITUTE YOU OR ANY PERSON
AS AN AGENT OF LYNCH  CORPORATION,  THE  SUBSCRIPTION  AGENT OR ANY OTHER PERSON
MAKING OR DEEMED TO BE MAKING  OFFERS  OF THE  SECURITIES  ISSUABLE  UPON  VALID
EXERCISE  OF THE  RIGHTS,  OR  AUTHORIZE  YOU OR ANY  OTHER  PERSON  TO MAKE ANY
STATEMENTS  ON BEHALF OF ANY OF THEM WITH  RESPECT  TO THE  OFFERING  EXCEPT FOR
STATEMENTS MADE IN THE PROSPECTUS.



                                     - 2 -

EX-99

                                                                   EXHIBIT 99(e)

                                LYNCH CORPORATION



                                                             _________ ___, 2005


TO OUR CLIENTS:


            Enclosed for your  consideration  are a prospectus  dated  _________
___, 2005 (the  "Prospectus"),  and the  "Instructions as to Use of Subscription
Certificates"  relating  to  the  offering  (the  "Rights  Offering")  by  Lynch
Corporation  (the "Company") of its Common Shares (as defined below) pursuant to
transferable  subscription rights (the "Subscription Rights") distributed to all
holders  ("Holders") of record of Common Shares,  $0.01 par value per share (the
"Common  Shares"),  at the close of business on _________ ___, 2005 (the "Record
Date"). The Subscription Rights are described in the Prospectus.

            In the Rights  Offering,  the Company is offering  an  aggregate  of
539,176 Common Shares, as described in the Prospectus.

            The Subscription Rights will expire, if not exercised, at 5:00 P.M.,
New York City time, on _________  ___, 2005,  unless  extended for up to 15 days
(the "Expiration Date").

            As described in the  Prospectus,  you will receive one  Subscription
Right for each Common Share carried by us in your account as of the Record Date.
Every three such  Subscription  Rights will  entitle  you to  subscribe  for one
Common Share (the "Basic Subscription Privilege") at the cash price of $________
per share (the "Subscription Price").

            In  addition,   each   Subscription   Right  will  also  include  an
oversubscription  privilege to purchase  additional  Common  Shares that are not
purchased by other Holders  through  their Basic  Subscription  Privileges  (the
"Oversubscription   Privilege").   You  will  be  entitled   to   exercise   the
Oversubscription  Privilege  only  if  you  exercised  your  Basic  Subscription
Privilege in full. If the number of Common Shares  remaining  after the exercise
of all Basic  Subscription  Privileges is not sufficient to satisfy all requests
for Common Shares pursuant to Oversubscription Privileges, you will be allocated
additional  Common  Shares  prorata,  based on the  number of Common  Shares you
purchased through your Basic  Subscription  Privilege in proportion to the total
number of Common  Shares that you and other  oversubscribing  Holders  purchased
through the Basic Subscription Privilege.

            The Subscription  Rights are evidenced by transferable  Subscription
Certificates  and will cease to have any value at the close of  business  on the
Expiration Date.

            The materials  enclosed are being forwarded to you as the beneficial
owner of Common Shares  carried by us in your account but not registered in your
name.  Exercises  of  Subscription  Rights  may be made only by us as the record
owner and pursuant to your instructions. Accordingly, we request instructions as
to whether you wish us to elect to subscribe  for any Common Shares to which you



are entitled  pursuant to the terms and subject to the  conditions  set forth in
the enclosed  Prospectus.  However, we urge you to read the Prospectus and other
enclosed materials carefully before instructing us to exercise your Subscription
Rights.

            Your  instructions to us should be forwarded as promptly as possible
in  order to  permit  us to  exercise  Subscription  Rights  on your  behalf  in
accordance with the provisions of the Rights  Offering.  Once you have exercised
your Basic  Subscription  Privilege and your  Oversubscription  Privilege,  such
exercise may not be revoked.

            If you wish to have us, on your behalf,  exercise  the  Subscription
Rights for any Common Shares to which you are entitled, please so instruct us by
completing,  executing and returning to us the "Beneficial  Owner Election Form"
included herewith.

            Any  questions  or requests  for  assistance  concerning  the Rights
Offering should be directed to the Information Agent at:

                          Mellon Investor Services LLC
                     85 Challenger Road - Mail Drop - Reorg
                            Ridgefield Park, NJ 07660
                       Toll Free Telephone: (866) 340-1578
                Direct Line for Banks and Brokers: (201) 373-5156



                                       2

EX-99

                                                                   EXHIBIT 99(f)

                                LYNCH CORPORATION


                          NOMINEE HOLDER CERTIFICATION

            The  undersigned,  a bank,  broker,  trustee,  depositary  or  other
nominee of beneficial owners of subscription rights (the "Subscription  Rights")
to purchase  Common  Shares (the  "Common  Shares")  of Lynch  Corporation  (the
"Company"), pursuant to the offering described in the Company's prospectus dated
___________ ___, 2005 (the "Prospectus"), hereby certifies to the Company and to
Mellon Bank,  N.A. c/o Mellon Investor  Services LLC, as Subscription  Agent for
such  offering,  that  (1) the  undersigned  has  exercised,  on  behalf  of the
beneficial  owners  thereof  (which may include the  undersigned),  Subscription
Rights for the number of Common  Shares  specified  below  pursuant to the Basic
Subscription  Privilege (as defined in the Prospectus) and the  Oversubscription
Privilege (as defined in the  Prospectus),  listing  separately  below each such
exercised Basic  Subscription  Privilege and the corresponding  Oversubscription
Privilege  (without  identifying any such beneficial  owner),  and (2) each such
beneficial owner's Basic Subscription Privilege has been exercised in full:

                                      Number of Shares                  Number of Shares
Number of Shares Owned                Subscribed for Pursuant           Subscribed for Pursuant to
on the Record Date                    to Basic Subscription Privilege   Oversubscription Privilege

1.  _______________________           _______________________           _______________________
2.  _______________________           _______________________           _______________________
3.  _______________________           _______________________           _______________________
4.  _______________________           _______________________           _______________________
5.  _______________________           _______________________           _______________________
6.  _______________________           _______________________           _______________________
7.  _______________________           _______________________           _______________________
8.  _______________________           _______________________           _______________________
9.  _______________________           _______________________           _______________________




Provide the following information if applicable:



- ---------------------------------------------
Depository Trust Company ("DTC")
Participant Number



- ---------------------------------------------
Name of Participant


By:
    -----------------------------------------
Name:
Title:


- ---------------------------------------------
DTC Basic Subscription Confirmation Number(s)



                                       2

EX-99

                                                                   EXHIBIT 99(g)

                         BENEFICIAL OWNER ELECTION FORM

                                  INSTRUCTIONS

            The  undersigned  acknowledge(s)  receipt  of  your  letter  and the
enclosed  materials referred to therein relating to the offering of subscription
rights  ("Subscription  Rights")  and  underlying  Common  Shares  (the  "Common
Shares") of Lynch Corporation.

            This will instruct you whether to exercise the  Subscription  Rights
to purchase Common Shares  distributed with respect to the Common Shares held by
you for the account of the undersigned, pursuant to the terms and subject to the
conditions set forth in the Prospectus and the related  "Instructions  as to Use
of Subscription Certificates."

            Box 1. |_|  Please DO NOT EXERCISE SUBSCRIPTION RIGHTS for Common Shares.

            Box 2. |_|  Please EXERCISE SUBSCRIPTION RIGHTS for Common Shares.

                     Number of Shares     Subscription Price       Payment
                     ----------------     ------------------       -------

Basic Subscription
Privilege             ______________     X     [_______]    =    $___________(line 1)

Oversubscription
Privilege             ______________     X     [_______]    =    $__________(line 2)
_
           Total Payment Required (Sum of lines 1 and 2)    =    $__________

            Box 3. |_|  Payment in the following amount is enclosed $__________.
                        (This  amount  must  equal the  amount  set forth  under
                        "Total Payment Required" above).

            Box 4. |_|  Please  deduct   payment  from  the  following   account
                        maintained by you as follows:

______________________________________    ______________________________________
Type of Account                           Account No.

Amount to be deducted: $______________    ______________________________________
                                          ______________________________________
                                          Signature(s)

                                          Please type or print
                                          name(s) below:
                                          ______________________________________
                                          ______________________________________

Date: ________, 2005

EX-99

                                                                   EXHIBIT 99(h)
                            IMPORTANT TAX INFORMATION

Under the Federal  income tax law, you are subject to certain  penalties as well
as withholding  of tax at the  applicable  rate if you have not provided us with
your correct social  security  number or other taxpayer  identification  number.
PLEASE READ THIS NOTICE CAREFULLY.

You (as a payee) are  required by law to provide us (as payer) with your correct
taxpayer  identification  number.  If  you  are  an  individual,  your  taxpayer
identification number is your social security number.  Otherwise,  your taxpayer
identification  number is the employer  identification number issued by the IRS.
If you have not provided us with your correct  taxpayer  identification  number,
you may be subject to a $50 penalty imposed by the Internal Revenue Service.  In
addition,  interest,  dividends,  and other  payments that we make to you may be
subject to backup withholding.

If backup  withholding  applies,  a payor is  required  to  withhold  at the IRS
mandated  applicable  rate from  interest,  dividends and other payments made to
you. Backup  withholding is not an additional tax. Rather,  the tax liability of
persons  subject  to backup  withholding  will be  reduced  by the amount of tax
withheld.  If  withholding  results in an  overpayment of taxes, a refund may be
obtained.

Enclosed is a reply  envelope in which you must return the enclosed  Form W-9 to
furnish us your correct name and taxpayer identification number. Please read the
instructions below, sign and date the Form W-9 and return to us.

            INSTRUCTIONS FOR SUBSTITUTE FORM W-9 FOR CERTIFICATION OF
                         TAXPAYER IDENTIFICATION NUMBER
                         ------------------------------

(SELECTION REFERENCES TO    60-day period. Under        for backup withholding
THE INTERNAL REVENUE        option (1), a payer must    because you failed to
CODE.) PURPOSE OF FORM.-    backup withhold on any      report all your interest
A person who is required    withdrawals you make from   and dividends on your tax
to file an information      your account after 7        return (for reportable
return with the IRS must    business days after the     interest and dividends
obtain your correct TIN     requester receives this     only), or 4. You fail to
to report income paid to    form back from you. Under   certify to the requester
you, real estate            option (2), the payer       that you are not subject
transactions, mortgage      must backup withhold on     to backup withholding
interest you paid, the      any reportable interest     under (3) above (for
acquisition or              or dividend payments made   reportable interest and
abandonment of secured      to your account,            dividend accounts opened
property, or                regardless of whether you   after 1983 only), or 5.
contributions you made to   make any withdrawals. The   You fail to certify your
an IRA. Use Form W-9 to     backup withholding under    TIN. This applies only to
furnish your correct TIN    option (2) must begin no    reportable interest,
to the requester (the       later than 7 business       dividend, broker, or
person asking you to        days after the requester    barter exchange accounts
furnish your TIN) and,      receives this form back.    opened after 1983, or
when applicable, (1) to     Under option (2), the       broker accounts
certify that the TIN you    payer is required to        considered inactive in
are furnishing is correct   refund the amounts          1983. Except as explained
(or that you are waiting    withheld if your            in (5) above, other
for a number to be          certified TIN is received   reportable payments are
issued), (2) to certify     within the 60-day period    subject to backup
that you are not subject    and you were not subject    withholding only if (1)
to backup withholding,      to backup withholding       or (2) above applied.
and (3) to claim            during that period. NOTE:   Certain payees and
exemption from backup       WRITING "APPLIED FOR" ON    payments are exempt from
withholding if you are an   THE FORM MEANS THAT YOU     backup withholding and
exempt payee. Furnishing    HAVE ALREADY APPLIED FOR    information reporting.
your correct TIN and        A TIN OR THAT YOU INTEND    See PAYEES AND PAYMENTS
making the appropriate      TO APPLY FOR ONE IN THE     EXEMPT FROM BACKUP
certifications will         NEAR FUTURE. As soon as     WITHHOLDING, below and
prevent certain payments    you receive your TIN,       EXEMPT PAYEES AND
from being subject to       complete another Form       PAYMENTS under SPECIFIC
backup withholding. NOTE:   W-9, include your TIN,      INSTRUCTIONS, below, if
IF A REQUESTER GIVES YOU    sign and date the form,     you are an exempt payee.
A FORM OTHER THAN A W-9     and give it to the          PAYEES AND PAYMENTS
TO REQUEST YOUR TIN, YOU    requester. WHAT IS BACKUP   EXEMPT FROM BACKUP
MUST USE THE REQUESTER'S    WITHHOLDING?-Persons        WITHHOLDING-The following
FORM. HOW TO OBTAIN A       making certain payments     is a list of payees
TIN.-If you do not have a   to you are required by      exempt from backup
TIN, apply for one          the IRS to withhold at      withholding and for which
immediately. To apply,      the applicable rate from    no information reporting
get FORM SS-5,              payments that meet          is required. For interest
Application for a Social    certain conditions. This    and dividends, all listed
Security Number Card (for   is called "backup           payees are exempt except
individuals), from your     withholding." Payments      item (9). For broker
local office of the         that could be subject to    transactions, payees
Social Security             backup withholding          listed in (1) through
Administration, or FORM     include interest,           (13) and a person
SS-4, Application for       dividends, broker and       registered under the
Employer Identification     barter exchange             Investment Advisers Act
Number (for businesses      transactions, rents,        of 1940 who regularly
and all other entities),    royalties, nonemployee      acts as a broker as
from your local IRS         compensation, and certain   exempt. Payments subject
office. To complete Form    payments from fishing       to reporting under
W-9 if you do not have a    boat operators, but do      sections 6041 and 6041A
TIN, write "Applied for"    not include real estate     are generally exempt from
in the space for the TIN,   transactions. If you give   backup withholding only
sign and date the form,     the requester your          if made to payees
and give it to the          correct TIN, make the       described in items (1)
requester. Generally, you   appropriate                 through (7), except a
will then have 60 days to   certifications, and         corporation that provides
obtain a TIN and furnish    report all your taxable     medical and health care
it to the requester. If     interest and dividends on   services or bills and
the requester does not      your tax return, your       collects payments for
receive your TIN within     payments will not be        such services is not
60 days, backup             subject to backup           exempt from backup
withholding, if             withholding. Payments you   withholding or
applicable, will begin      receive will be subject     information reporting.
and continue until you      to backup withholding if:   Only payees described in
furnish your TIN to the     1. You do not furnish       items (2) through (6) are
requester. For reportable   your TIN to the             exempt from backup
interest or dividends       requester, or 2. The IRS    withholding for barter
payments, the payer must    notifies the requester      exchange transactions,
exercise one of the         that you furnished an       patronage dividend, and
following options           incorrect TIN, or 3. You    payments by certain
concerning backup           are notified by the IRS     fishing boat operators.
withholding during this     that you are subject to



(1) A corporation. (2) An   For details, see sections   services (including
organization exempt from    6041, 6041A(a), 6042,       attorney and accounting
tax under section 501(a),   6044, 6045, 6049, 6050A,    fees), and payments to
or an IRA, or a custodial   and 6050N, and their        certain fishing boat crew
account under section       regulations.                members. (5) MORTGAGE
403(b)(7). (3) The United   PENALTIES FAILURE TO        INTEREST PAID BY YOU,
States or any of its        FURNISH TIN.--If you fail   ACQUISITION OR
agencies or                 to furnish your correct     ABANDONMENT OF SECURED
instrumentalities. (4) A    TIN to a requester, you are PROPERTY, OR IRA
state, the District of      subject to a penalty of     CONTRIBUTIONS. --You are
Columbia, a possession of   $50 for each such failure   required to furnish your
the United States, or any   unless your failure is      correct TIN, but you are
of their political          due to reasonable cause     not required to sign the
subdivisions or             and not to willful          certification. (6) EXEMPT
instrumentalities. (5) A    neglect. CIVIL PENALTY      PAYEES AND PAYMENTS.--If
foreign government or any   FOR FALSE INFORMATION       you are exempt from
of its political            WITH RESPECT TO             backup withholding, you
subdivisions, agencies,     WITHHOLDING.--If you make   should complete this form
or instrumentalities. (6)   a false statement with no   to avoid possible
An international            reasonable basis that       erroneous backup
organization or any of      results in no of backup     withholding. Enter your
its agencies or             withholding, you are        correct TIN write
instrumentalities. (7) A    subject to a $500           "EXEMPT" on Form W-9,
foreign central bank of     penalty. CRIMINAL PENALTY   sign and date the form.
issue. (8) A dealer in      FOR FALSIFYING              If you are a nonresident
securities or commodities   INFORMATION.--Willfully     alien or foreign entity
required to register in     falsifying certifications   not subject to backup
the United States or a      or affirmations may         withholding, give the
possession of the United    subject you to criminal     requester a completed
States. (9) A futures       penalties including fines   FORM W-8, Certificate of
commission merchant         and/or imprisonment.        Foreign Status. (7) TIN
registered with the         SPECIFIC INSTRUCTIONS       "APPLIED FOR."--Follow
Commodity Futures Trading   NAME.--If you are an        the instructions under
Commission. (10) A real     individual, you must        How To Obtain a TIN, on
estate investment trust     generally provide the       page 1, sign and date
(11) An entity registered   name shown on your social   this form.
at all times during the     security card. However,     SIGNATURE.--For a joint
tax year under the          if you have changed your    account, only the person
Investment Company Act of   last name, for instance,    whose TIN is shown in
1940. (12) A common trust   due to marriage, without    Part I should sign the
fund operated by a bank     informing the Social        form. PRIVACY ACT
under section 584(a).       Security Administration     NOTICE.--Section 6109
(13) A financial            of the name change,         requires you to furnish
institution. (14) A         please enter your first     your correct TIN to
middleman known in the      name, the last name shown   persons who must file
investment community as a   on your social security     information returns with
nominee or listed in the    card and your new last      the IRS to report
most recent publication     name. If you are a sole     interest, dividends, and
of the American Society     proprietor, you must        certain other income paid
of Corporate Secretaries    furnish your individual     to you, mortgage interest
exempt from tax under       name and either your SSN    you paid, the acquisition
section 664 or described    or EIN. You may also        or abandonment of secured
in section 4947. Payments   enter your business name    property, or
of dividends and            on Form W-9. Enter your     contributions you made to
patronage dividends         name(s) as shown on your    an IRA. The IRS uses the
generally not subject to    social security card        numbers for
backup withholding          and/or as it was used to    identification purposes
include the following: o    apply for your EIN on       and to help verify the
Payments to nonresident     Form SS-4. SIGNING THE      accuracy of your tax
aliens subject to           CERTIFICATION.-- (1)        return. You must provide
withholding under section   INTEREST, DIVIDEND, AND     your TIN whether or not
1441. o Payments to         BARTER EXCHANGE ACCOUNTS    you are required to file
partnerships not engaged    OPENED BEFORE 1984 AND      a tax return. Payers must
in a trade or business in   BROKER ACCOUNTS             generally withhold the
the United States and       CONSIDERED ACTIVE DURING    applicable taxable
that have at least one      1983.--You are required     interest, dividend, and
nonresident partner. o      to furnish your correct     certain other payments to
Payments of patronage       TIN, but you are not        a payee who does not
dividends not paid in       required to sign the        furnish a TIN to a payer.
money. o Payments made by   certification. (2)          Certain penalties may
certain foreign             INTEREST, DIVIDEND,         also apply.
organizations. o Payments   BROKER AND BARTER
of interest generally not   EXCHANGE ACCOUNTS OPENED    WHAT NAME AND NUMBER TO
subject to backup           AFTER 1983 AND BROKER       GIVE THE REQUESTER
withholding include the     ACCOUNTS CONSIDERED         ----------------------------------
following: o Payments of    INACTIVE DURING             FOR THIS TYPE     GIVE NAME AND
interest on obligations     1983.--You must sign the    OF ACCOUNT:       SSN OF:
issued by individuals.      certification or backup     ----------------------------------
NOTE: YOU MAY BE SUBJECT    withholding will apply.     1. Individual     The individual
TO BACKUP WITHHOLDING IF    If you are subject to
THIS INTEREST IS $600 OR    backup withholding and      2. Two or more    The actual owner
MORE AND IS PAID IN THE     you are merely providing    individuals       of the account
COURSE OF THE PAYER'S       your correct TIN to the     (joint account)   or, if combined
TRADE OR BUSINESS AND YOU   requester, you must cross                     funds, the first
HAVE NOT PROVIDED YOUR      out item (2) in the                           individual on
CORRECT TIN TO THE PAYER.   certification before                          the account(1)
o Payments of tax-exempt    signing the form. (3)
interest (including         REAL ESTATE                 3. The Custodian  The minor(2)
exempt-interest dividends   TRANSACTIONS.--You must     account of a
under section 852). o       sign the certification.     minor (Uniform
Payments described in       You may cross out item      Gift to Minors
section 6049(b)(5) to       (2) of the certification.   Act)
nonresident aliens. o       (4) OTHER PAYMENTS.--You
Payments on tax-free        are required to furnish     4. a. The usual   The grantor-
covenant bonds under        your correct TIN, but you   revocable         trustee(1)
section 1451. o Payments    are not required to sign    savings trust
made by certain foreign     the certification unless    (grantor is also
organizations. o Mortgage   you have been notified of   trustee)
interest paid by you.       an incorrect TIN. Other     b. So-called      The actual
Payments that are not       payments include payments   trust account     owner(1)
subject to information      made in the course of the   that is not a
reporting are also not      requester's trade or        legal Or valid
subject to backup           business for rents,         trust under
withholding.                royalties, goods (other     state law
                            than bills for
                            merchandise), medical and   5. Sole           The owner(3)
                            health care services,       proprietorship
                            payments to a nonemployee   ----------------------------------
                            for




- ----------------------------------
FOR THIS TYPE     GIVE NAME AND
OF ACCOUNT:       EIN OF:
- ----------------------------------
6. Sole           The owner(3)
proprietorship

7. A valid        Legal entity(4)
trust, estate, or
pension trust

8. Corporate      The corporation

9. Association,   The organization
club religious,
charitable,
educational, or
other tax-exempt
organization

10. Partnership   The partnership

11. A broker or   The broker or
registered        nominee
nominee

12. Account with  The public entity
the Department of
Agriculture in
the name of a
public entity
(such as a state
or local
government,
school district,
or prison) that
receives
agricultural
program payments

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

1 List first and circle the name of
  the person whose number you
  furnish.
2 Circle the minor's name and
  furnish the minor's social
  security number.
3 Show the individual's name. See
  item 5 or 6. You may also enter
  your business name.
4 List first and circle the name of
  the legal trust, estate, or
  pension trust. (Do not furnish
  the identification number of the
  personal representative or
  trustee unless the legal entity
  itself is not designated in the
  account title.)
  NOTE: IF NO NAME IS CIRCLED WHEN
  THERE IS MORE THAN ONE NAME, THE
  NUMBER WILL BE CONSIDERED TO BE
  THAT OF THE FIRST NAME LISTED.

EX-99

                                                                   EXHIBIT 99(i)



MELLON







                   SUBSCRIPTION & INFORMATION AGENT AGREEMENT
















     THIS  SUBSCRIPTION  AGENT  AGREEMENT  (this   "Agreement")   between  Lynch
Corporation,  an Indiana  corporation  (the  "Company")  and Mellon Bank N.A., a
Pennsylvania company ("Mellon"), is dated as of _______________.

1.   APPOINTMENT

     (a)  The Company is making an offer (the "Subscription  Offer") to issue to
the holders of record of its outstanding  shares of Common Stock par value $ per
share (the "Common Stock"), at the close of business on (the "Record Date"), the
right to subscribe for and purchase (each a "Right") shares of Common Stock (the
"Additional Common Stock") at a purchase price of per share of Additional Common
Stock (the "Subscription Price"),  payable by cashier's or certified check, upon
the terms and  conditions  set forth herein.  The term  "Subscribed"  shall mean
submitted for purchase from the Company by a stockholder in accordance  with the
terms of the Subscription Offer, and the term "Subscription" shall mean any such
submission.

     (b)  The  Subscription  Offer will expire at , New York City Time,  on (the
"Expiration  Time"),  unless the Company  shall have extended the period of time
for which the  Subscription  Offer is open, in which event the term  "Expiration
Time" shall mean the latest time and date at which the Subscription Offer, as so
extended by the Company from time to time, shall expire.

     (c)  The Company filed a Registration  Statement relating to the Additional
Common Stock with the  Securities and Exchange  Commission  under the Securities
Act of 1933, as amended, on . Said Registration Statement was declared effective
on . The terms of the  Additional  Common Stock are more fully  described in the
Prospectus  forming  part  of the  Registration  Statement  as it  was  declared
effective, and the accompanying Letter of Instruction. Copies of the Prospectus,
the Letter of  Instruction  and the Notice of  Guaranteed  Delivery  are annexed
hereto as Exhibit 2, Exhibit 3 and Exhibit 4,  respectively.  All terms used and
not defined  herein shall have the same meaning as in the  Prospectus.  Promptly
after the Record Date, the Company will provide Mellon with a list of holders of
Common Stock as of the Record Date (the "Record Stockholders List").

     (d)  The Company hereby appoints  Mellon to act as subscription  agent (the
"Subscription  Agent") and information agent (the  "Information  Agent") for the
Subscription  Offer in accordance  with and subject to the  following  terms and
conditions.

2.   SUBSCRIPTION OF RIGHTS

     (a)  The Rights are  evidenced by  transferable  subscription  certificates
(the  "Certificates"),  a copy of the form of which is annexed hereto as Exhibit
5. The  Certificates  entitle  the  holders to  subscribe,  upon  payment of the
Subscription  Price,  for shares of  Additional  Common Stock at the rate of one
share for each three Rights evidenced by a Certificate (the "Basic  Subscription
Privilege").  No fractional  shares will be issued,  but the Subscription  Offer
includes  a  step-up  privilege   entitling  the  holder  of  a  Certificate  or
combination  of  Certificates  evidencing  fewer than three  Rights,  or a total
number of Rights not evenly  divisible by three,  if said holder fully exercises
the  Certificate  or  Certificates   accompanying  the  Subscription  Offer,  to



subscribe and pay the Subscription Price for one full share of Additional Common
Stock in lieu of a fractional  share without  furnishing any  additional  Rights
(the "Step-up  Privilege").  Reference is made to the  Prospectus for a complete
description of the Basic Subscription Privilege and the Step-up Privilege.

     (b)  Further,    the   Subscription   Offer   provides   that   subscribing
shareholders,  and only those subscribing shareholders who exercise their Rights
in full, may exercise an Over-subscription  right as more fully described in the
Registration Statement. Mellon shall, after the initial allocation of Additional
Common Stock to those shareholders  exercising their Basic  Subscription  Right,
allocate  any  remaining  Basic  Subscription,  as more fully  described  in the
Registration Statement.

3.   DUTIES OF SUBSCRIPTION AGENT

     As Subscription Agent, Mellon is authorized and directed to:

     (a)  Issue the  Certificates in accordance with this Agreement in the names
of the  holders of the  Common  Stock of record on the  Record  Date,  keep such
records as are necessary for the purpose of recording such issuance, and furnish
a copy of such records to the Company.  The Certificates may be signed on behalf
of the  Subscription  Agent  by the  manual  or  facsimile  signature  of a Vice
President  or Assistant  Vice  President of the  Subscription  Agent,  or by the
manual signature of any of its other authorized officers.

     (b)  Promptly after Mellon receives the Record  Stockholders  List,  Mellon
shall:

          (i)   mail or cause to be mailed,  by first class mail, to each holder
     of Common  Stock of record on the Record  Date  whose  address of record is
     within the United  States and  Canada,  (i) a  Certificate  evidencing  the
     Rights to which such stockholder is entitled under the Subscription  Offer,
     (ii) a copy of the Prospectus, (iii) a Letter of Instruction, (iv) a Notice
     of  Guaranteed  Delivery  and  (v)  a  return  envelope  addressed  to  the
     Subscription Agent; and

          (ii)  mail or cause to be  mailed,  by air  mail,  to each  holder  of
     Common  Stock of record  on the  Record  Date  whose  address  of record is
     outside the United States and Canada, or is an A.P.O. or F.P.O. address (i)
     a copy of the Prospectus,  (ii) a Notice of Guaranteed Delivery and (iii) a
     Letter of Instruction  (different  from the Letter of  Instruction  sent to
     stockholders  whose  address  of record is within  the  United  States  and
     Canada).  Mellon shall  refrain from mailing  Certificates  issuable to any
     holder of Common Stock of record on the Record Date whose address of record
     is outside the United States and Canada, or is an A.P.O. or F.P.O. address,
     and hold such  Certificates for the account of such stockholder  subject to
     such stockholder  making  satisfactory  arrangements  with the Subscription
     Agent  for the  exercise  or  other  disposition  of the  Rights  evidenced
     thereby,  and follow the instructions of such stockholder for the exercise,
     sale or other  disposition of such Rights if such instructions are received
     at or before 11:00 a.m., New York City Time, on .

     (c)  Mail or  deliver  a copy of the  Prospectus  (i) to each  assignee  or
transferee of Certificates upon receiving  appropriate documents to register the
assignment  or  transfer  thereof  and (ii)  with  certificates  for  shares  of



Additional  Common  Stock  when  such  are  issued  to  persons  other  than the
registered holder of the Certificate.

     (d)  Accept  Subscriptions upon the due exercise  (including payment of the
Subscription  Price) on or prior to the Expiration  Time of Rights in accordance
with the terms of the Certificates and the Prospectus.

     (e)  Subject to the next sentence,  accept  Subscriptions from stockholders
whose  Certificates  are  alleged to have been lost,  stolen or  destroyed  upon
receipt by Mellon of an affidavit of theft,  loss or  destruction  and a bond of
indemnity in form and substance  satisfactory to Mellon,  accompanied by payment
of the  Subscription  Price for the total number of shares of Additional  Common
Stock  Subscribed  for. Upon receipt of such affidavit and bond of indemnity and
compliance with any other applicable  requirements,  stop orders shall be placed
on said  Certificates  and  Mellon  shall  withhold  delivery  of the  shares of
Additional Common Stock Subscribed for until after the Certificates have expired
and it has been determined that the Rights  evidenced by the  Certificates  have
not otherwise been purported to have been exercised or otherwise surrendered.

     (f)  Accept Subscriptions,  without further authorization or direction from
the  Company,  without  procuring  supporting  legal  papers  or other  proof of
authority  to sign  (including  without  limitation  proof of  appointment  of a
fiduciary  or other person  acting in a  representative  capacity),  and without
signatures of co-fiduciaries, co-representatives or any other person:

          (i)   if the  Certificate is registered in the name of a fiduciary and
     is executed by and the Additional  Common Stock is to be issued in the name
     of such fiduciary;

          (ii)  if the  Certificate  is  registered in the name of joint tenants
     and is  executed  by one of the joint  tenants,  provided  the  certificate
     representing the Additional  Common Stock is issued in the names of, and is
     to be delivered to, such joint tenants;

          (iii) if the  Certificate  is  registered in the name of a corporation
     and is  executed  by a person in a manner  which  appears or purports to be
     done  in the  capacity  of an  officer,  or  agent  thereof,  provided  the
     Additional Common Stock is to be issued in the name of such corporation; or

          (iv)  if the  Certificate  is  registered in the name of an individual
     and  is  executed  by a  person  purporting  to act  as  such  individual's
     executor,   administrator  or  personal   representative,   provided,   the
     Additional  Common Stock is to be registered in the name of the  subscriber
     as  executor  or  administrator  of the estate of the  deceased  registered
     holder and there is no evidence  indicating  the subscriber is not the duly
     authorized representative that he purports to be.

     (g)  Accept Subscriptions not accompanied by Certificates if submitted by a
firm  having  membership  in the New York Stock  Exchange  or  another  national
securities exchange or by a commercial bank or trust company having an office in
the  United  States  together  with  the  Notice  of  Guaranteed   Delivery  and
accompanied  by  proper  payment  for the total  number of shares of  Additional
Common Stock Subscribed for.


     (h)  Accept Subscriptions even though unaccompanied by Certificates,  under
the  circumstances  and in compliance with the terms and conditions set forth in
the  Prospectus  under the heading  "SUBSCRIPTION  OFFER - Method of  Exercising
Rights".

     (i)  Refer to the Company for specific  instructions  as to  acceptance  or
rejection,  Subscriptions received after the Expiration Time,  Subscriptions not
authorized  to be  accepted  pursuant  to this  Paragraph  1, and  Subscriptions
otherwise  failing to comply with the  requirements  of the  Prospectus  and the
terms and conditions of the Certificates.

4.   DUTIES AS INFORMATION AGENT

     In its capacity as Information Agent, Mellon shall:

     (a)  assist  in  the   coordination   of  all   printing   activities   and
     advertisement placement if required;

     (b)  establishing contacts with brokers,  dealers, banks and other nominees
     on the Company's behalf;

     (c)  determining the material requirements;

     (d)  assistance with document review;

     (e)  facilitate  the  distribution  of  materials  to  the  registered  and
     beneficial owners and to other interested parties;

     (f)  providing a dedicated toll-free line for all shareholder queries;

     (g)  provide status reporting to Company management; and

     (h)  facilitate  payment  of all  broker-forwarding  invoices,  subject  to
     collection from the Company of monies for this purpose.

5.   ACCEPTANCE OF SUBSCRIPTIONS

     Upon acceptance of a Subscription, Mellon shall:

     (a)  Hold all monies  received in a special  account for the benefit of the
Company.  Promptly  following the Expiration Time Mellon shall distribute to the
Company  the  funds  in such  account  and  issue  certificates  for  shares  of
Additional  Common Stock issuable with respect to  Subscriptions  that have been
accepted.  Mellon will not be  obligated  to  calculate  or pay  interest to any
holder or any other party claiming  through a holder or otherwise.  It is hereby
agreed immediately following the effective date of the Subscription, immediately
available funds,  represented by certified check,  money order, or wire transfer
but not personal check, will be deposited with Mellon.

     (b)  Advise the  Company  daily by  telecopy  and  confirm by letter to the
attention of Eugene Hynes (the "Company  Representative") as to the total number
of shares of  Additional  Common Stock  Subscribed  for,  total number of Rights



sold,  total number of Rights  partially  Subscribed for and the amount of funds
received,  with  cumulative  totals for each; and in addition advise the Company
Representative,  by telephone at (203) 622-1150,  confirmed by telecopy,  of the
amount of funds  received  identified in accordance  with (a) above,  deposited,
available or transferred in accordance with (a) above,  with cumulative  totals;
and

     (c)  As promptly as possible  but in any event on or before 3:30 p.m.,  New
York City Time, on the first full business day  following the  Expiration  Time,
advise the Company  Representative in accordance with (b) above of the number of
shares  Subscribed for, the number of Subscription  guarantees  received and the
number of shares of Additional Common Stock unsubscribed for.

6.   COMPLETION OF SUBSCRIPTION OFFER

     Upon completion of the Subscription Offer:

     (a)  Mellon shall requisition  certificates from the Transfer Agent for the
Common Stock for shares of Additional Common Stock for which  Subscriptions have
been received.

     (b)  The Certificates  shall be issued in registered form only. The Company
shall appoint and have in office at all times a Transfer Agent and Registrar for
the  Certificates,  which shall keep books and records of the  registration  and
transfers and exchanges of Certificates  (such books and records are hereinafter
called the  "Certificate  Register").  The  Company  shall  promptly  notify the
Transfer  Agent and Registrar of the exercise of any  Certificates.  The Company
shall  promptly  notify Mellon of any change in the Transfer Agent and Registrar
of the Certificates.

     (c)  All Certificates  issued upon any registration of transfer or exchange
of Certificates  shall be the valid  obligations of the Company,  evidencing the
same obligations, and entitled to the same benefits under this Agreement, as the
Certificates surrendered for such registration of transfer or exchange.

     (d)  Any   Certificate   when  duly  endorsed  in  blank  shall  be  deemed
negotiable,  and when a  Certificate  shall  have been so  endorsed  the  holder
thereof  may be treated by the  Company,  Mellon and all other  persons  dealing
therewith  as the  absolute  owner  thereof  for any  purpose  and as the person
entitled to exercise the rights represented  thereby, any notice to the contrary
notwithstanding,  but until  such  transfer  is  registered  in the  Certificate
Register,  the Company and Mellon may treat the registered holder thereof as the
owner for all purposes.

     (e)  For so long as this  Agreement  shall be in effect,  the Company  will
reserve for issuance and keep available free from preemptive rights a sufficient
number of shares of  Additional  Common  Stock to permit the exercise in full of
all Rights issued pursuant to the Subscription  Offer.  Subject to the terms and
conditions  of this  Agreement,  Mellon will request the Transfer  Agent for the
Common Stock to issue  certificates  evidencing the appropriate number of shares
of Additional  Common Stock as required from time to time in order to effectuate
the Subscriptions.



     (f)  The  Company  shall  take  any  and  all  action,   including  without
limitation obtaining the authorization, consent, lack of objection, registration
or approval of any  governmental  authority,  or the taking of any other  action
under the laws of the  United  States of America  or any  political  subdivision
thereof,  to insure that all shares of Additional Common Stock issuable upon the
exercise  of the  Certificates  at the  time  of  delivery  of the  certificates
therefor (subject to payment of the Subscription Price) will be duly and validly
issued and fully paid and  non-assessable  shares of Common Stock, free from all
preemptive rights and taxes, liens, charges and security interests created by or
imposed upon the Company with respect thereto.

     (g)  The  Company  shall  from time to time take all  action  necessary  or
appropriate to obtain and keep effective all  registrations,  permits,  consents
and  approvals  of  the  Securities  and  Exchange   Commission  and  any  other
governmental  agency or authority  and make such filings under Federal and state
laws which may be necessary or  appropriate  in  connection  with the  issuance,
sale,  transfer and delivery of Certificates  or Additional  Common Stock issued
upon exercise of Certificates.

7.   PROCEDURE FOR DISCREPANCIES

     Mellon shall  follow its regular  procedures  to attempt to  reconcile  any
discrepancies  between the number of shares of Additional  Common Stock that any
Certificate  may indicate are to be issued to a stockholder  and the number that
the Record Stockholders List indicates may be issued to such stockholder. In any
instance  where Mellon cannot  reconcile  such  discrepancies  by following such
procedures,  Mellon will  consult  with the Company for  instructions  as to the
number of shares of Additional  Common Stock, if any, it is authorized to issue.
In the  absence  of such  instructions,  Mellon is  authorized  not to issue any
shares of Additional Common Stock to such stockholder.

8.   PROCEDURE FOR DEFICIENT ITEMS

     Mellon shall examine the Certificates  received by it as Subscription Agent
to  ascertain  whether  they  appear  to have been  completed  and  executed  in
accordance  with the  applicable  Letter of  Instruction.  In the  event  Mellon
determines that any Certificate does not appear to have been properly  completed
or executed,  or where the  Certificates  do not appear to be in proper form for
Subscription,  or any other  irregularity  in connection  with the  Subscription
appears to exist, Mellon shall follow, where possible, its regular procedures to
attempt to cause such irregularity to be corrected.  Mellon is not authorized to
waive any irregularity in connection with the Subscription,  unless Mellon shall
have received from the Company the Certificate  which was delivered,  duly dated
and  signed  by an  authorized  officer  of the  Company,  indicating  that  any
irregularity  in such  Certificate  has been  cured  or  waived  and  that  such
Certificate  has been  accepted  by the  Company.  If any such  irregularity  is
neither corrected nor waived, Mellon will return to the subscribing  stockholder
(at its  option by either  first  class  mail  under a  blanket  surety  bond or
insurance  protecting Mellon and the Company from losses or liabilities  arising
out of the  non-receipt  or nondelivery of  Certificates  or by registered  mail
insured  separately for the value of such  Certificates)  to such  stockholder's
address  as set  forth  in the  Subscription  any  Certificates  surrendered  in
connection  therewith and any other documents  received with such  Certificates,
and a letter of notice to be furnished by the Company explaining the reasons for
the return of the Certificates and other documents.



9.   DATE/TIME STAMP

     Each document  received by Mellon relating to its duties hereunder shall be
dated and time stamped when received.

10.  TRANSFER PROCEDURES

     If certificates  representing  shares of Additional  Common Stock are to be
delivered  by  Mellon  to a  person  other  than  the  person  in  whose  name a
surrendered  Certificate  is registered,  Mellon shall issue no certificate  for
Additional  Common Stock until the  Certificate so surrendered has been properly
endorsed (or otherwise put in proper form for transfer).

11.  TAX REPORTING

     Should  any  issue  arise   regarding   federal  income  tax  reporting  or
withholding,  Mellon shall take such action as the Company reasonably  instructs
in writing.

12.  TERMINATION

     The Company may terminate this Agreement at any time by so notifying Mellon
in writing.  Mellon may terminate  this  Agreement upon 30 days' prior notice to
the Company. Upon any such termination,  Mellon shall be relieved and discharged
of any  further  responsibilities  with  respect to its duties  hereunder.  Upon
payment of all Mellon's  outstanding fees and expenses,  Mellon shall forward to
the Company or its designee  promptly any Certificate or other document relating
to Mellon's  duties  hereunder that Mellon may receive after its appointment has
so terminated.  Sections 13, 14, 15 and 20 of this  Agreement  shall survive any
termination of this Agreement.

13.  AUTHORIZATIONS AND PROTECTIONS

     As agent for the Company hereunder Mellon:

     (a)  shall have no duties or obligations other than those  specifically set
forth  herein or as may  subsequently  be agreed to in writing by Mellon and the
Company;

     (b)  shall  have no  obligation  to issue any shares of  Additional  Common
Stock unless the Company shall have provided a sufficient number of certificates
for such Additional Common Stock;

     (c)  shall  be  regarded  as  making  no  representations   and  having  no
responsibilities as to the validity,  sufficiency,  value, or genuineness of any
Certificates  surrendered  to Mellon  hereunder or shares of  Additional  Common
Stock issued in exchange therefor, and will not be required to or be responsible
for and will make no representations as to, the validity,  sufficiency, value or
genuineness of the Subscription Offer;

     (d)  shall  not be  obligated  to take  any  legal  action  hereunder;  if,
however,  Mellon  determines to take any legal action  hereunder,  and where the
taking of such action might, in Mellon's  judgment,  subject or expose it to any



expense or  liability  Mellon  shall not be required to act unless it shall have
been furnished with an indemnity satisfactory to it;

     (e)  may rely on and shall be fully  authorized  and protected in acting or
failing  to act upon  any  certificate,  instrument,  opinion,  notice,  letter,
telegram,  telex, facsimile transmission or other document or security delivered
to Mellon and believed by it to be genuine and to have been signed by the proper
party or parties;

     (f)  shall  not be liable  or  responsible  for any  recital  or  statement
contained in the Prospectus or any other documents relating thereto;

     (g)  shall not be liable or responsible  for any failure on the part of the
Company to comply  with any of its  covenants  and  obligations  relating to the
Subscription  Offer,  including without limitation  obligations under applicable
securities laws;

     (h)  may rely on and shall be fully  authorized  and protected in acting or
failing to act upon the written,  telephonic or oral instructions of officers of
the Company with respect to any matter relating to Mellon acting as Subscription
Agent  covered  by this  Agreement  (or  supplementing  or  qualifying  any such
actions);

     (i)  may consult with counsel  satisfactory to Mellon,  including  internal
counsel, and the advice of such counsel shall be full and complete authorization
and  protection in respect of any action taken,  suffered,  or omitted by Mellon
hereunder in good faith and in reliance upon the advice of such counsel;

     (j)  may  perform  any of its duties  hereunder  either  directly  or by or
through  agents or attorneys and Mellon shall not be liable or  responsible  for
any misconduct or negligence on the part of any agent or attorney appointed with
reasonable care by Mellon hereunder; and

     (k)  Are not authorized,  and shall have no obligation, to pay any brokers,
dealers, or soliciting fees to any person.

14.  INDEMNIFICATION

     The Company  agrees to indemnify  Mellon for, and hold it harmless from and
against,  any loss,  liability,  claim or expense  ("Loss") arising out of or in
connection with Mellon's  performance of its duties under this Agreement or this
appointment,  including the costs and expenses of defending  itself  against any
Loss or enforcing this Agreement, except to the extent that such Loss shall have
been determined by a court of competent  jurisdiction to be a result of Mellon's
gross negligence or intentional misconduct.

15.  LIMITATION OF LIABILITY

     (a)  In the absence of gross  negligence or intentional  misconduct on its part,
Mellon shall not be liable for any action taken,  suffered,  or omitted by it or
for any error of judgment made by it in the performance of its duties under this
Agreement.  Anything in this  agreement to the contrary  notwithstanding,  in no
event shall Mellon be liable for special, indirect,  incidental or consequential
loss or  damage  of any  kind  whatsoever  (including  but not  limited  to lost
profits),  even if Mellon has been advised of the likelihood of such damages and



regardless of the form of action. Any liability of Mellon will be limited to the
amount of fees paid by the Company hereunder.

     (b)  In the event any  question  or dispute  arises  with  respect to the proper
interpretation  of this Agreement or Mellon's duties  hereunder or the rights of
the Company or of any holders  surrendering  certificates for Shares pursuant to
the  Subscription  Offer,  Mellon  shall not be required to act and shall not be
held liable or responsible for refusing to act until the question or dispute has
been judicially settled (and Mellon may, if it deems it advisable, but shall not
be obligated to, file a suit in interpleader  or for a declaratory  judgment for
such purpose) by final judgment  rendered by a court of competent  jurisdiction,
binding on all  stockholders  and parties  interested  in the matter which is no
longer subject to review or appeal, or settled by a written document in form and
substance  satisfactory  to Mellon and  executed  by the  Company  and each such
stockholder  and party.  In addition,  Mellon may require for such purpose,  but
shall not be obligated to require,  the execution of such written  settlement by
all the  stockholders  and all other  parties  that may have an  interest in the
settlement.

16.  REPRESENTATIONS, WARRANTIES AND COVENANTS

     The  Company  represents,  warrants  and  covenants  that  (a)  it is  duly
incorporated,  validly  existing  and in good  standing  under  the  laws of its
jurisdiction  of   incorporation,   (b)  the  making  and  consummation  of  the
Subscription   Offer  and  the  execution,   delivery  and  performance  of  all
transactions  contemplated thereby (including without limitation this Agreement)
have been duly authorized by all necessary  corporate action and will not result
in a breach of or constitute a default under the certificate of incorporation or
bylaws of the Company or any indenture,  agreement or instrument to which either
is a party or is bound,  (c) this Agreement has been duly executed and delivered
by the  Company  and  constitutes  a legal,  valid,  binding  obligation  of the
Company,  enforceable  against the Company in accordance with its terms, (d) the
Subscription  Offer will comply in all  material  respects  with all  applicable
requirements  of law  and  (e) to the  best  of  their  knowledge,  there  is no
litigation  pending or threatened  as of the date hereof in connection  with the
Subscription Offer.

17.  NOTICES

     All notices,  demands and other  communications given pursuant to the terms
and provisions hereof shall be in writing, shall be deemed effective on the date
of receipt,  and may be sent by facsimile,  overnight delivery  services,  or by
certified or registered mail, return receipt requested to:

   If to the Company:                 with an additional copy to:

Lynch Corporation                 Mark L. Lakin, Esq.
140 Greenwich Avenue, 4th Floor   Olshan Grundman Frome Rosenzweig & Wolosky LLP
Greenwich, Connecticut 06830      Park Avenue Tower
Attn: Eugene Hynes                65 East 55th Street
Tel: (203) 622-1150               New York, New York 10022
Fax: (203) 622-1360               Tel: (212) 451-2249
                                  Fax: (212) 451-2222



     If to Mellon:                                  with an additional copy to:

Mellon Bank, N.A.                                   Mellon Bank, N.A.
C/O Mellon Investor Services                        C/O Mellon Investor Services
85 Challenger Rd.                                   105 Challenger Rd.
Ridgefield Park, N.J. 07660                         Ridgefield Park, N.J. 07660
Attn: Relationship Administrator                    Attn: Legal Department
Tel:                                                Tel:
Fax:                                                Fax:


18.  SPECIMEN SIGNATURES

     Set  forth  in  Exhibit  6  hereto  is a list  of the  names  and  specimen
signatures  of the  persons  authorized  to  act  for  the  Company  under  this
Agreement.  The Secretary of the Company  shall,  from time to time,  certify to
Mellon the names and  signatures of any other persons  authorized to act for the
Company, as the case may be, under this Agreement.

19.  INSTRUCTIONS

     Any instructions  given to Mellon orally,  as permitted by any provision of
this  Agreement,  shall  be  confirmed  in  writing  by the  Company  as soon as
practicable.  Mellon  shall  not be  liable  or  responsible  and shall be fully
authorized and protected for acting,  or failing to act, in accordance  with any
oral instructions which do not conform with the written confirmation received in
accordance with this Section.

20.  FEES

     Whether or not any Certificates are surrendered to Mellon, for its services
as Subscription Agent and Information Agent hereunder,  the Company shall pay to
Mellon  compensation in accordance  with the fee schedule  attached as Exhibit 1
hereto,  together  with  reimbursement  for  out-of-pocket  expenses,  including
reasonable  fees and  disbursements  of  counsel.  All  amounts  owed to  Mellon
hereunder are due upon receipt of the invoice.  Delinquent  payments are subject
to a late payment charge of one and one half percent (1.5%) per month commencing
forty-five (45) days from the invoice date.

21.  TERMINATION

     Either  party may  terminate  this  Agreement  upon  thirty (30) days prior
written notice to the other party.  Unless so terminated,  this Agreement  shall
continue  in effect  until all  Additional  Shares  of  Common  Stock  have been
received and paid for by eligible holders. In the event of such termination, the
Company will  appoint a successor  Subscription  Agent and inform  Mellon of the
name and address of any successor Subscription Agent so appointed, provided that
no failure by the Company to appoint such a successor  Subscription  Agent shall



affect  the  termination  of  this  Agreement  or the  discharge  of  Mellon  as
Subscription  Agent  hereunder.  Upon  any  such  termination,  Mellon  shall be
relieved  and  discharged  of any further  responsibilities  with respect to its
duties hereunder.  Upon payment of all outstanding fees and expenses  hereunder,
Mellon shall  promptly  forward to the Company or its designee any  certificates
for Shares, Certificates,  Election Forms, or any other document that Mellon may
receive after its appointment has so terminated.

22.  FORCE MAJEURE

     Mellon  shall  not be  liable  for any  failure  or  delay  arising  out of
conditions  beyond its reasonable  control  including,  but not limited to, work
stoppages,  fires, civil disobedience,  riots, rebellions,  storms,  electrical,
mechanical,  computer  or  communications  facilities  failures,  acts of God or
similar occurrences.

23.  MISCELLANEOUS

     (a)  This Agreement  shall be governed by and construed in accordance  with
the laws of the State of New York  without  giving  effect to  conflict of laws,
rules or principles.

     (b)  No provision  of this  Agreement  may be amended,  modified or waived,
except in writing signed by all of the parties hereto.

     (c)  Except  as  expressly  set  forth  elsewhere  in this  Agreement,  all
notices,  instructions  and  communications  under  this  Agreement  shall be in
writing,  shall be  effective  upon  receipt and shall be  addressed,  if to the
Company,  to its address set forth beneath its signature to this Agreement,  or,
if to the Subscription Agent, to Mellon Bank, N.A. c/o Mellon Investor Services,
85 Challenger Road, Ridgefield Park, New Jersey 07660, Attention: Reorganization
Department,  or to such other  address as a party  hereto shall notify the other
parties.

     (d)  In the event that any claim of  inconsistency  between this  Agreement
and the terms of the Subscription  Offer arise, as they may from time to time be
amended, the terms of the Subscription Offer shall control,  except with respect
to  Mellon's  duties,  liabilities  and  rights,  including  without  limitation
compensation and indemnification, which shall be controlled by the terms of this
Agreement.

     (e)  If any provision of this Agreement shall be held illegal,  invalid, or
unenforceable by any court, this Agreement shall be construed and enforced as if
such  provision had not been  contained  herein and shall be deemed an Agreement
among the parties hereto to the full extent permitted by applicable law.

     (f)  This Agreement shall be binding upon,  inure to the benefit of, and be
enforceable by, the respective successors and assigns of the parties hereto.

     (g)  This  Agreement  may not be  assigned  by any party  without the prior
written consent of all parties.

     (h)  Sections 13, 14, 15, and 20 hereof shall survive  termination  of this
Agreement.



     IN WITNESS  WHEREOF,  the parties  hereto have executed  this  Agreement by
their duly authorized officers as of the day and year above written.

LYNCH CORPORATION

By:
       -------------------------------------
Name:  John C. Ferrara
Title: President and Chief Executive Officer

Accepted as of the date
above first written:



MELLON BANK, N.A.
AS SUBSCRIPTION & INFORMATION AGENT

By:
       -------------------------------------
Name:
Title:




Exhibit 1   Fee Schedule
Exhibit 2   Prospectus
Exhibit 3   Letter of Instruction
Exhibit 4   Notice of Guaranteed Delivery
Exhibit 5   Form of Certificate
Exhibit 6   List of Authorized Representatives

EX-99.J

                                                                                                                       Exhibit 99(j)

                                                    LYNCH CORPORATION CERTIFICATE

                                                                    ----------------------------------------------------------------
                                                                    2                     SUBSTITUTE FORM W-9
                                                                    ----------------------------------------------------------------
THIS  LETTER  OF   TRANSMITTAL   INCLUDING   THE   ACCOMPANYING     PLEASE  CERTIFY YOUR TAXPAYER ID OR SOCIAL  SECURITY  NUMBER BY
INSTRUCTIONS,  SHOULD BE READ CAREFULLY  BEFORE THIS .LETTER OF     SIGNING BELOW.
TRANSMITTAL IS COMPLETED.

Lynch  Corporation is conducting a rights offering (the "Rights
Offering')  which entitles the holders of the Company's  common
shares (the  "Common  Shares"),  as of the close of business on
________ (the "Record Date') to receive one subscription  right
("Subscription  Right") for each Common Share held of record on
the Record Date. Hollers of Subscription Rights are entitled to
subscribe  for and  purchase  one Common  Share for every three
Subscription Rights (the "Basic  Subscription  Privilege") at a
subscription price of $xx.xx per share. Each Subscription Right     ----------------------------------------------------------------
will also  include an over  subscription  whereby  holders  who     If  the   Taxpayer  ID  Numbe
exercise  their Basic  Subscription  Privilege  in full will be     printed  above is INCORRECT OR    /__/__/__/__/__/__/__/__/__/
entitled to purchase  additional Common Shares pro rata,  based     if the space is BLANK write in
on the  number of Common  Shares  purchased  through  the Basic     the CORRECT number here.
Subscription  Privilege  in  proportion  to the total number of     ----------------------------------------------------------------
Common Shares that the holder and other oversubscribing holders     Under penalties of perjury. I certify that:
purchased    through   the   Basic    Subscription    Privilege     1.  The  number  shown  on  this  form is my  correct  taxpayer
(the "Oversubscrption Privilege").                                  identification  number  (or I am  waiting  for a  number  to be
                                                                    issued to me), AND
For a more complete  description of the terms and conditions of     2. I am not  subject to backup  withholding  because:  (A) I am
the  Rights  Offering,  please  refer to the  Prospectus  dated     exempt from backup withholding, or (B) I have not been notified
_____, 2005 (the "Prospectus"), which is incorporated herein by     by the  Internal  Revenue  Service  (IRS)  that I am subject to
reference.  Copies of the Prospectus are available upon request     backup  withholding  as a result  of a failure  to  report  all
from Mellon Investor Services LLC (toll free (888) 340-1578).       interest or dividends, or (C) the IRS has notified me that I am
                                                                    no longer subject to backup withholding, AND
I hereby irrevocably  subscribe for the number of Common Shares     3. I am a U.S. person (including a U.S. resident alien).
indicated an this  Subscription  Certificate upon the terms and     CERTIFICATION INSTRUCTIONS.  You must cross out item 2 above if
conditions   specified  in  he   Prospectus.   Receipt  of  the     you  have  been  notified  by the IRS  that  you are  currently
Prospectus is hereby acknowledged.                                  subject to backup withholding because you have failed to report
                                                                    all interest and dividends on your tax return.
PLEASE  COMPLETE  THE  BACK  IT  YOU  WOULD  LIKE  TO  TRANSFER
OWNERSHIP OR REQUEST SPECIAL MAILING.                               Signature:________________________ Date:________________________
                                                                    ----------------------------------------------------------------
                                                                    ----------------------------------------------------------------
                                                                                 SEE INSTRUCTIONS ON THE REVERSE SIDE

                                                                    3 /__/ BASIC SHARES TO SUBSCRIBE   /__/__/__/__/__/__/__/__/
                                                                                                            WHOLE SHARES

                                                                    4 /_/  OVERSUBSCRIPTION FOR SHARES    /__/__/__/__/__/__/__/__/
                                                                                                               WHOLE SHARES
1.  SIGNATURE:  This  form  MUST be  signed  by the  registered
holder(s)   exactly   as   their   name(s)   appears   on   the
certificate(s) or by person(s)  authorized to sign on behalf of
the registered holder(s) by documents transmitted herewith.

X                         /           /
_________________________________________________________________
Signature of Shareholder    Date         Daytime Telephone #

X                         /           /
_________________________________________________________________
Signature of Shareholder    Date         Daytime Telephone #
                                                                    ENCLOSED IS MY PAYMENT FOR $ ______________________________
- -----------------------------------------------------------------   ----------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------------------
5


_____________________________________                                                            __________________________
   SUBSCRIPTION CERTIFICATE NUMBER                                                                    CUSIP NUMBER


_____________________________________                  ____________________                      ___________________________
     BASIC SHARES TO SUBSCRIBE                                RIGHTS                               RECORD DATE SHARES


                                                          LYNCH CORPORATION
                                                  SUBSCRIPTION FOR RIGHTS OFFERING
                                                            RECORD DATE

A.   Number of Common Shares subscribed for through the Basic Subscription Privilege (not to exceed one Common Share for every three
     Subscription Rights held):_________Common Shares

B.   Number of Common Shares subscribed for through the  Oversubscription  Privilege (No limit, except Basic Subscription  Privilege
     must be fully exercised):_________________ Common Shares

C.   Total Subscription Price (sum lines A and B multiplied by $__________): $ _______________

D.   Method of Payment

     Certified or Cashier's  check or money order payable to Mellon Investor Services LLC (acting on behalf of Mellon Bank, N.A.).


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

                                              HOW TO CONTACT MELLON INVESTOR SERVICES

                  By Telephone - 9 a.m. to 6 p.m. New York Time, Monday through Friday, except for bank holidays:

                                             From within the U.S., Canada or Puerto Rico
                                                     1-866-340-1578 (Toll Free)
                                                        From outside the U.S.
                                                      1-201-373-5156 (Collect)

                                         SUBSCRIPTION TO PURCHASE UNITS OF LYNCH CORPORATION
                                    RETURN TO: MELLON BANK, N.A. C/O MELLON INVESTOR SERVICES LLC

                                             WHERE TO FORWARD YOUR TRANSMITTAL MATERIALS


By Mail:                                            By Overnight Courier:                           By Hand

Mellon Bank, N.A.                                   Mellon Bank, N.A                                Mellon Bank, N.A
c/o Mellon Investor Services LLC                    c/o Mellon Investor Services LLC                c/o Mellon Investor Services LLC
Attn: Reorganization Dept.                          Attn: Reorganization Dept                       Attn: Reorganization Dept.
P.O. Box 3301                                       85 Challenger Road                              120 Broadway, 13th Floor
South Hackensack, NJ 07606                          Mail Drop-Reorg                                 New York, NY 10271
                                                    Ridgeffeld Park, NJ 07660



THIS RIGHTS OFFERING EXPIRES AT 5:00 P.M., NEW YORK CITY TIME, ON  _____________XX,  2005 AND THIS SUBSCRIPTION  CERTIFICATE IS VOID
THEREAFTER.
- ------------------------------------------------------------------------------------------------------------------------------------



- ------------------------------------------------------------------------------------------------------------------------------------
                                        6                                                               7
                           Special Transfer Instructions                                  Special Mailing Instructions

If you want  your  LYNCH  CORPORATION  Common      Signature Guarantee Medallion  Fill in ONLY if mailing to someone other than
Shares and any  refund  check to be issued in                                     the  undersigned or to the  undersigned at an
ANOTHER  NAME,  fill in this section with the                                     address other than that shown on the front of
information for the NEW account name.                                             this card. Mail  certificate(s)  and check(s)
                                                                                  to:


_____________________________________________    ________________________________ _____________________________________________
Name (Please Print First, Middle &Last Name)     (Title of Officer Signing this  Name (Please Print First, Middle & Last Name)
                                                            Guarantee)


_____________________________________________    ________________________________ _____________________________________________
   Address            (Number and Street)              (Name of Guarantor -               Address     (Number and Street)
                                                           Please Print)


_____________________________________________    ________________________________ _____________________________________________
           (City, State & Zip Code)                 (Address of Guarantor Firm)



_____________________________________________    ________________________________ _____________________________________________
           (Tax Identification or                                                           (City, State & Zip Code)
           Social Security Number)



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


                            COMPLETE ALL APPLICABLE SECTIONS OF THIS FORM USING THE INSTRUCTIONS BELOW.

1    Sign and date Box 1 and include your daytime phone number.

2    PLEASE SIGN IN BOX 2 TO CERTIFY YOUR TAXPAYER ID OR SOCIAL  SECURITY NUMBER if you are a U.S.  Taxpayer.  If the Taxpayer ID or
     Social Security Number is incorrect or blank, write the corrected number in Box 2 and sign to certify.  Please note that Mellon
     Investor  Services may withhold 28% of your proceeds as required by the IRS if the Taxpayer ID or Social Security Number is not
     certified on our records. If you are a non - U.S. Taxpayer, please complete and return form W-8BEN.

3    Place an /X/ in the box and fill in the number of whole Common Shares you wish to subscribe for under your Basic Subscription

4    Place an /X/ in the box and fill in the number of whole Common Shares you wish to oversubscribe for under your Oversubscription
     Privilege. (No limit, except Basic Subscription Privilege must be fully exercised).

5    Rights card and calculation section for determining your Basic/Oversubscription Privileges.

6    If you want your LYNCH  CORPORATION  Common  Shares and any refund  check to be issued in another  name,  complete  the Special
     Transfer Instructions in Box 6. Signature(s) in Box 6 must be medallion guaranteed.

7    Fill in Box 7 if, mailing to someone other than the  undersigned  or to the  undersigned at an address other than that shown on
     the front of this card.







THIS RIGHTS  OFFERING HAS BEEN  QUALIFIED OR IS BELIEVED TO BE EXEMPT FROM  QUALIFICATION  ONLY UNDER THE FEDERAL LAWS OF THE UNITED
STATES AND THE LAWS OF THE STATES IN THE UNITED STATES.  RESIDENTS OR OTHER  JURISDICTIONS  MAY NOT PURCHASE THE SECURITIES  OFFERED
HEREBY UNLESS THEY CERTIFY THAT THEIR  PURCHASES OF SUCH  SECURITIES  ARE EFFECTED IN ACCORDANCE  WITH THE  APPLICABLE  LAWS OF SUCH
JURISDICTIONS.

THIS  RIGHTS  OFFERING  EXPIRES AT 5:00 P.M.,  NEW YORK CITY TIME,  ON _______ XX, 2005 AND THIS  SUBSCRIPTION  CERTIFICATE  IS VOID
THEREAFTER.

CORRESP

                                LYNCH CORPORATION
                         140 GREENWICH AVENUE, 4TH FLOOR
                          GREENWICH, CONNECTICUT 06830


                                                August 16, 2005


United States Securities and Exchange Commission
Division of Corporate Finance
100 F Street, N.E.
Washington, D.C.  20549
Attn: Russell Mancuso

RE:         LYNCH CORPORATION
            REGISTRATION STATEMENT ON FORM S-2, FILED JULY 1, 2005
            FILE NO. 333-126335

Dear Mr. Mancuso:

            We are securities  counsel to Lynch  Corporation (the "Company") and
are  submitting,  on behalf of the Company,  its responses to the comment letter
from the Division of Corporation  Finance,  dated July 28, 2005, relating to the
filing of the Company's  Registration  Statement on Form S-2 (the  "Registration
Statement").  The Company's  responses are numbered to correspond to the Staff's
comments and are filed together with Amendment No. 1 to  Registration  Statement
on Form S-1 (the "Amended Registration  Statement"),  which amends the Company's
Registration Statement filed July 1, 2005.

GENERAL
- -------

1.          PLEASE  PROVIDE  YOUR  ANALYSIS  AS TO WHY THE  DISTRIBUTION  OF THE
            TRANSFERABLE RIGHTS SHOULD NOT BE REGISTERED.

            The Company has revised the  registration  statement to register the
distribution of the rights.



Mr. Mancuso
August 16, 2005
Page 2


INTENTIONS, PAGE 4
- ------------------

2.          TELL  US WITH  SPECIFICITY  THE  IDENTITY  OF  EACH  PERSON  WHO HAS
            EXPRESSED THEIR INTENTIONS REGARDING THIS OFFERING TO YOU. ALSO TELL
            US HOW YOUR  COMMUNICATIONS  WITH THESE  INDIVIDUALS  REGARDING  THE
            OFFERING WAS CONSISTENT  WITH SECTION 5 OF THE  SECURITIES;  INCLUDE
            SPECIFICS REGARDING THE DATES AND CONTENTS OF EACH COMMUNICATION.

            On June 22, 2005, Lynch Corporation held a telephonic meeting of the
Board of  Directors  in which each  member of its Board of  Directors,  its Vice
President and its securities counsel participated. The participants engaged in a
full  discussion of the proposed terms of the offering,  as well as a discussion
regarding their intentions as shareholders.

            Marc  Gabelli,  Chairman  of the Board of the  Company,  owns shares
directly and is also deemed to beneficially  own shares through Venator Merchant
Fund,  L.P.  ("Venator  Fund");  therefore  Venator  Fund may be  deemed to have
participated in these discussions.

            These are, to the knowledge of  Management of the Company,  the only
conversations  that have taken place with  stockholders of the Company regarding
their intentions to subscribe in the offering.

SPECIAL NOTE, PAGE 15
- ---------------------

3.          FUTURE  FILINGS  MAY  NOT  BE   INCORPORATED  BY  REFERENCE  INTO  A
            REGISTRATION  STATEMENT ON FORM S-2.  PLEASE  REVISE THE FIRST THREE
            FULL  PARAGRAPHS  ON  PAGE  16 TO  REMOVE  THE  IMPLICATION  TO  THE
            CONTRARY.

            The Company has revised its disclosure to reference previously filed
periodic reports with the Securities and Exchange Commission as listed under the
caption "Incorporation by Reference."

THE RIGHTS OFFERING, PAGE 17
- ----------------------------

4.          PLEASE  RECONCILE YOUR STATEMENT IN THE SECOND  PARAGRAPH ON PAGE 17
            THAT YOU  WILL  DELIVER  TO  SUBSCRIBERS  CERTIFICATES  REPRESENTING
            EXERCISED  RIGHTS AS SOON AS  PRACTICABLE  AFTER  PAYMENT  WITH YOUR
            STATEMENT  IN THE LAST  PARAGRAPH  ON PAGE 22 THAT YOU WILL  DELIVER
            CERTIFICATES AFTER THE EXPIRATION DATE.

            All references in the Amended  Registration  Statement regarding the
delivery of certificates  representing  exercised  rights have been conformed to
indicate  that  such  delivery  will  occur  as soon as  practicable  after  the
expiration date, anticipated to be approximately seven to 10 business days after
the expiration date.



Mr. Mancuso
August 16, 2005
Page 3


OVER-SUBSCRIPTION PRIVILEGE, PAGE 17

5.          PLEASE EXPAND YOUR DISCLOSURE TO EXPLAIN MORE FULLY THE OPERATION OF
            THE OVER-SUBSCRIPTION RIGHTS. FOR INSTANCE, INDICATE:

            o       WHETHER OVER-SUBSCRIBERS WILL BE ABLE TO REVOKE THE EXERCISE
                    OF OVER-SUBSCRIPTION RIGHTS; AND

            o       THE LENGTH OF TIME IT WILL TAKE TO REFUND  ANY  OVERPAYMENTS
                    IN THE OVER-SUBSCRIPTION.

            The Company has added disclosure  indicating that subscribers cannot
revoke the exercise of their oversubscription rights. The Company has also added
disclosure  to  clarify  that  overpayments  relating  to  the  oversubscription
privilege  will be returned as soon as practicable  after the  expiration  date,
anticipated to be  approximately  seven to 10 business days after the expiration
date.

6.          ADDITIONALLY,   IN  THE   EVENT   THAT  A   SUBSCRIBER'S   PRO  RATA
            OVERSUBSCRIPTION  ALLOCATION EXCEEDS THE NUMBER OF  OVERSUBSCRIPTION
            SHARES  REQUESTED,  AS  DESCRIBED  IN THE LAST  SENTENCE ON PAGE 17,
            PLEASE  EXPLAIN IN  GREATER  DETAIL  HOW THESE  ADDITIONAL  PRO RATA
            ALLOCATION SHARES WILL BE DIVIDED AMONG THE OTHER RIGHTS HOLDERS.

            The Company has provided  additional  disclosure relating to the pro
rata   allocation   and   distribution   among  the  rights  holders  under  the
oversubscription privilege.

EXPIRATION DATE, EXTENSIONS AND TERMINATION, PAGE 19
- ----------------------------------------------------

7.          WE NOTE YOUR STATEMENT THAT YOU MAY EXTEND THE  SUBSCRIPTION  PERIOD
            FROM  TIME  TO  TIME.  PLEASE  REVISE  HERE  AND  ELSEWHERE  IN YOUR
            PROSPECTUS  WHERE SIMILAR  DISCLOSURE  APPEARS TO INCLUDE THE LATEST
            DATE TO WHICH THE OFFERING MAY BE EXTENDED.

            The Company has removed "time to time" from all such  disclosures to
clarify that there may be one extension for a maximum length of 15 days.

WITHDRAWAL AND AMENDMENT, PAGE 19
- ---------------------------------

8.          IN THE RISK FACTORS SECTION OF THE PROSPECTUS, PLEASE DESCRIBE UNDER
            APPROPRIATE  HEADING THE RISKS TO  SUBSCRIBERS  ASSOCIATED  WITH THE
            FACT THAT YOU MAY WITHDRAW OR TERMINATE  THE RIGHTS  OFFERING AT ANY
            TIME FOR ANY REASON.

            The Company has added this risk factor.



Mr. Mancuso
August 16, 2005
Page 4


9.          PLEASE REVISE YOUR DISCLOSURE TO PROVIDE THE  APPROXIMATE  LENGTH OF
            TIME  IT  WILL  TAKE  FOR  FUNDS  TO  BE  RETURNED  TO   SUBSCRIBING
            SHAREHOLDERS IF THE OFFERING IS WITHDRAWN OR TERMINATED.

            The Company has revised its  disclosure to provide that in the event
that  the  offering  in  withdrawn  or  terminated,   all  funds  received  from
subscriptions by shareholders will be returned as soon as practicable,  which is
anticipated to be three to five business days after the date of such  withdrawal
or termination.

TRANSFERABILITY OF RIGHTS, PAGE 21
- ----------------------------------

10.         PLEASE  DESCRIBE IN GREATER  DETAIL THE  EXPENSES  THAT  HOLDERS MAY
            INCUR IN EXERCISING THE RIGHTS.  WE REFER YOU TO YOUR  DISCLOSURE IN
            THE PENULTIMATE PARAGRAPH ON PAGE 22.

            The  Company is not aware of any other  expenses  that  holders  may
incur in  exercising  their  rights other than those that might be specific to a
given seller.

GUARANTEED DELIVERY PROCEDURES, PAGE 23
- ---------------------------------------

11.  PLEASE  CLARIFY WHAT YOU MEAN BY THE  "GUARANTEE  PERIOD"  MENTIONED IN THE
PENULTIMATE PARAGRAPH.

            This language has been removed and replaced with language  referring
to the third business day following the expiration date.

DETERMINATION REGARDING THE EXERCISE OF YOUR SUBSCRIPTION RIGHTS, PAGE 24
- -------------------------------------------------------------------------

12.         WE NOTE YOUR  DISCLOSURE IN THE FIRST PARAGRAPH ON PAGE 24 THAT YOU,
            IN YOUR  SOLE  DISCRETION,  MAY WAIVE  ANY  DEFECT  OR  IRREGULARITY
            REGARDING THE EXERCISE OF THE SUBSCRIPTION  RIGHTS.  PLEASE DISCLOSE
            THE FACTORS YOU MAY  CONSIDER  IN  DETERMINING  WHETHER TO WAIVE ANY
            SUCH DEFECT OR IRREGULARITY.

            The Company has amended its disclosure to provide that  non-material
defects   or   irregularities   that  do  not  result  in   multiple   potential
interpretations will be waived.

13.         IDENTIFY THE  JURISDICTIONS  IN WHICH YOU BELIEVE EXERCISE OF RIGHTS
            WOULD BE DEEMED UNLAWFUL OR MATERIALLY BURDENSOME. ALSO DISCLOSE THE
            NUMBER OF SHARES HELD IN THOSE JURISDICTIONS.

            Under  Section 18 of the  Securities  Act of 1933,  as amended,  the
Company's common stock and the  subscription  rights offered in the registration
statement  are exempt  from state  regulation  or "blue  sky" laws  because  the



Mr. Mancuso
August 16, 2005
Page 5


Company is listed on the American Stock Exchange.  Accordingly,  the Company has
added such disclosure.

NO BOARD RECOMMENDATION, PAGE 25
- --------------------------------

14.         WE NOTE YOUR DISCLOSURE THAT YOU HAVE BEEN ADVISED BY YOUR OFFICERS,
            DIRECTORS  AND  CERTAIN  OF THEIR  AFFILIATES  THAT  THEY  EXPECT TO
            EXERCISE THE BASIC  SUBSCRIPTION  PRIVILEGE  AND MAY EXERCISE  THEIR
            OVERSUBSCRIPTION PRIVILEGE. PLEASE DISCLOSE THE AGGREGATE PERCENTAGE
            OF YOUR OUTSTANDING COMMON STOCK CURRENTLY HELD BY THESE PARTIES AND
            QUANTIFY THE APPROXIMATE NUMBER OF SHARES THAT WILL BE SOLD TO THESE
            PARTIES ASSUMING ALL RIGHTS ARE EXERCISED.

            The Company has added these  disclosures  relating to its  officers,
directors and certain of their affiliates.

MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES, PAGE 26
- ---------------------------------------------------------------

15.         PLEASE  CLARIFY  HOW  INVESTORS  ARE TO  DETERMINE  WHETHER THE FAIR
            MARKET  VALUE OF THEIR  SUBSCRIPTION  WILL EXCEED THE 15%  THRESHOLD
            MENTIONED IN THE SECOND BULLET POINT, AND PROVIDE THE BASIS FOR YOUR
            BELIEF THAT THE FAIR MARKET VALUE OF THE RIGHTS WILL NOT EXCEED THIS
            THRESHOLD.

            The Company has added  disclosure  to the effect that it will notify
holders of whether the fair market value of the  subscription  rights will equal
or  exceed  15% of the fair  market  value of the  common  shares  to which  the
subscription  rights  relate  and the fair  market  value of those  subscription
rights.

16.         PLEASE INCLUDE A DESCRIPTION OF THE TAX CONSEQUENCES TO SHAREHOLDERS
            WHO SELL THE SUBSCRIPTION RIGHTS THEY HOLD.

            The Company has added disclosure indicating that a holder that sells
the subscription  rights will recognize  capital gain or loss,  depending on the
amount  realized,  upon the  sale and the  holder's  tax  basis  (if any) in the
subscription  rights. The gain or loss will be long-term or short-term depending
on the holder's holding period for the subscription rights.



Mr. Mancuso
August 16, 2005
Page 6


INCORPORATION BY REFERENCE, PAGE 30
- -----------------------------------

17.         PLEASE REVISE THIS SECTION TO SPECIFICALLY  INCORPORATE BY REFERENCE
            THE FORM 10-K FOR THE FISCAL YEAR ENDED  DECEMBER 31, 2004, THE FORM
            10-Q FOR THE FISCAL  QUARTER  ENDED  MARCH 31, 2005 AND THE FORM 8-K
            FILED ON JULY 6, 2005. REFER TO ITEMS 12(A)(1) AND (2) FORM S-2.

            The Company has made the requested changes.

EXHIBITS
- --------

18.         WE  MAY  HAVE  FURTHER  COMMENT  AFTER  YOU  FILE  THE  SUBSCRIPTION
            AGREEMENT AND OTHER DOCUMENTS TO BE FILED AS AMENDMENT.

            The  offering  documents  are filed  with the  Amended  Registration
Statement and we welcome any further discussion raised by these documents.




                                     CLOSING

            For your  convenience,  under  separate cover we will deliver to you
four (4) marked copies (compared to the Registration  Statement filed on July 1,
2005) and four clean copies of Amended Registration Statement.

            We  welcome  a further  discussion  on any of our  points  addressed
within this response letter. I may be reached at (212) 451-2244.



                                                   Very truly yours,



                                                   /s/ David J. Adler
                                                   ------------------
                                                   David J. Adler
cc:  Adelaja K. Heyliger
     John C. Ferrara
     Eugene Hynes
     Mark L. Lakin