Teletouch Announces New and Increased Credit Facilities and Completion of Other Significant Agreements

Business Wire, May 28, 2008

FORT WORTH, Texas -- Teletouch Communications, Inc. (OTC Pink Sheets: TLLE), a leading U.S. cellular, two-way radio, mobile electronics and related services provider, announced today that on May 16, 2008, it successfully completed a new $5 million senior secured revolving credit facility (the "Revolving Credit Facility") for a term of 24 months with Thermo Credit, LLC ("Thermo" or "Lender"). In a related transaction, on February 26, 2008, the Company entered into a second amendment to its Factoring and Security Agreement dated August 11, 2006, under which Thermo agreed to modify such agreement with Teletouch's subsidiary, PCI, providing for, among other items, an increase to the gross amount of sold and uncollected accounts receivable of up to $15.0 million, with a continuance of the same advance rate, a reduction in certain fees and discounts, and an extension of the original termination date to February 26, 2010 (the "Factoring Facility"). The new $15 million Factoring Facility replaces the Company's prior $10 million factoring facility. As of May 16, 2008, Teletouch had combined advances outstanding under the Factoring Facility of approximately $10.3 million against a total gross value of purchased receivables and purchased in-process billings of $12.8 million. The combination of the new credit facilities provides Teletouch greater financial flexibility over the coming years.

"We very much appreciate the strong support that we received from our existing lenders, and from other members of the banking and financial community as we structured these transactions," said T. A. "Kip" Hyde, Jr., President and Chief Operating Officer of Teletouch, and CEO of its wholly-owned subsidiary, Progressive Concepts, Inc. "These facilities allowed us to increase the size of our borrowing capability by a combined total of nearly $10 million, assuming an appropriate borrowing base, which together with the redemption proceeds payment obligation deferral obtained from the common stock warrant holders has given the Company more flexibility and financial muscle as we move forward with our growth plans."

Jack Eumont, Executive Vice President of Internal Operations for Thermo Credit, LLC stated, "We continue to be pleased with the performance of our financial relationship with Teletouch. We feel their strong management team and continued focus on operational efficiencies and bottom-line expansion continues to enhance their ability to grow, improving the overall value of our credit and use of the specialized facilities we offer."

Approximately $4.5 million has been advanced to the Company under the Revolving Credit Facility. Proceeds from this new facility were used, among other things, for the fees and expenses incurred in connection with obtaining the Revolving Credit Agreement as well as the payment by the Company of $1.5 million, or one half of the aggregate redemption obligation, to the owners of those certain outstanding redeemable common stock warrants, which were redeemed at the election of the warrant holders for an aggregate amount of $3.0 million in December 2007.

The Company also announced that it entered into a Lockup Agreement and Amendment to that certain Registration Rights Agreement with the Series A holders of 4,350,000 shares of the Company's common stock, and the Company entered into a Termination Agreement with Fortress Credit Corporation, pursuant to which the prior Transaction Party Agreement between the Company and Fortress, which restricted the Company's ability to secure additional debt financing, among other restricted actions and transaction activities absent their prior consent, was terminated.

THE DISCLOSURES SET FORTH IN THIS PRESS RELEASE ARE SUBJECT TO THE MORE DETAILED DISCLOSURES SET FORTH IN THE COMPANY'S CURRENT REPORT ON FORM 8-K FILED WITH THE SEC ON MAY 27, 2008 ("FORM 8-K"). INVESTORS AND OTHER USERS OF THE COMPANY'S SEC REPORTS ARE STRONGLY ADVISED TO READ THE FORM 8-K FOR A COMPLETE DESCRIPTION OF THE REVOLVING CREDIT FACILITY, AMENDED FACTORING FACILITY, THE WARRANT REDEMPTION PAYMENT AGREEMENTS, THE LOCKUP AGREEMENT, THE TERMINATION AGREEMENT AND RELATED ANCILLARY AGREEMENTS, AND OTHER RELATED MATTERS. A COPY OF THE FORM 8-K MAY BE FOUND AT WWW.SEC.GOV.

About Teletouch Communications

For more than 40 years, Teletouch has offered a comprehensive suite of telecommunications products and services including cellular, two-way radio, GPS-telemetry, wireless messaging and public safety/emergency response vehicle products and services throughout the U.S. Teletouch's wholly-owned subsidiary, Progressive Concepts, Inc. (PCI), is a leading provider of AT&T Mobility[R] services (voice, data, entertainment), as well as other mobile, portable and personal electronics products and services to individuals, businesses and government agencies. PCI operates a chain of retail stores and sells under the "Hawk Electronics" brand; through Hawk-branded sub-agents; its own direct sales force and through the Internet at various sites including www.hawkelectronics.com and www.hawkexpress.com among others. PCI also operates a national wholesale distribution business, known as PCI Wholesale, which serves smaller cellular and automotive retailers, car dealers and rural cellular carriers throughout the country; Dealers and Retailers see www.pciwholesale.com. Additional information on Teletouch's two-way radio group, and its Emergency Vehicle Products group can be found at www.teletouchevp.com. Teletouch's common stock is traded Over-The-Counter on the Pink Sheets electronic exchange under stock symbol: TLLE. Information about Teletouch can be found at http://www.teletouch.com.