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

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

FORT WORTH, Texas--(Business Wire)--
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.

About Thermo Credit, LLC

Thermo Credit, LLC is a financial services company focused
exclusively on the telecommunications industry. Thermo Credit serves
established, well-run companies that need capital to expand or improve
their operations. Thermo Credit provides asset based solutions, loans,
lines of credit and capital investment programs to every segment of
the telecommunications market. For more information, visit
www.thermocredit.com.

All statements in this news release that are not based on
historical fact, including without limitation references to the funds
that will be available to the Company under the financing facilities,
and the adequacy of those facilities to address future working capital
needs and to facilitate future growth of the Company's business, are
"forward-looking statements" within the meaning of the PSLRA of 1995
and the provisions of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. While management has based any forward-looking statements
contained herein on its current expectations, the information on which
such expectations were based may change. These forward-looking
statements rely on a number of assumptions concerning future events
and are subject to a number of risks, uncertainties, and other
factors, many of which are outside of our control, that could cause
actual results to materially differ from such statements. Such risks,
uncertainties, and other factors include, but are not necessarily
limited to, those set forth under the caption "Risk Factors" in the
Company's most recent Form 10-K and 10-Q filings, and amendments
thereto, the disclosures set forth in the Form 8-K as well as other
public filings with the SEC since the date of filing of each such
report. The Company operates in a rapidly changing and competitive
environment, and new risks may arise. Accordingly, investors should
not place any reliance on forward-looking statements as a prediction
of actual results. The Company disclaims any intention to, and
undertakes no obligation to, update or revise any forward-looking
statement.

Teletouch Communications, Inc.
Investor Relations:
Amy Gossett, 800-232-3888
investors@teletouch.com

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