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                                                                   Exhibit 10.12

                                CO-SALE AGREEMENT

     This Co-Sale Agreement (the "Agreement") is entered into as of May 17,
2002, by and between TLL Partners, L.L.C., a Delaware limited liability company
("TLL Partners"), and GM Holdings, LLC, a Tennessee limited liability company
("Holdings"). Holdings and, except as otherwise expressly provided herein, its
successors and assigns, are sometimes referred to herein individually as an
"Investor" and collectively as the "Investors".

                                    RECITALS

     WHEREAS, TLL Partners, Holdings and Teletouch Communications, Inc. (the
"Company") propose to enter into a Restructuring Agreement dated as of the date
hereof (the "Restructuring Agreement"); and

     WHEREAS, prior to the execution and delivery of this Agreement by any party
hereto, TLL Partners has purchased: (a) from CIVC Partners I, a Delaware
partnership, 295,649 shares of Common Stock and (b) from Continental Illinois
Venture Corporation, a Delaware corporation, warrants to purchase 2,660,840
shares of Common Stock ; and

     WHEREAS, as of the date hereof, each party "beneficially owns" (as such
term is defined in Rule 13d-3 promulgated under the Securities Exchange Act of
1934, as amended) and each Stockholder is entitled to dispose of (or to direct
the disposition of) and to vote (or to direct the voting of) (a) the number of
shares of common stock, par value $0.001 per share of the Company (the "Common
Stock") and (b) the number of shares of Common Stock that may be issued upon
exercise of any options, warrants and other rights of any kind that are then
exercisable, and all shares of Common Stock that may be issued upon conversion
or exchange of any convertible securities which are by their terms then
convertible into or exchangeable for Common Stock, including without limitation,
warrants to purchase common stock and preferred stock, in each case set forth
opposite the party's name on Annex A hereto, as such shares may be adjusted by
stock dividend, stock split, recapitalization, combination, merger,
consolidation, reorganization or other change in the capital structure of the
Company affecting the Common Stock (such shares of Common Stock, together with
any other shares of Common Stock the voting power over which is acquired by TLL
Partners or the Investors during the period from and including the date hereof
through and including the date on which this Agreement is terminated in
accordance with its terms, together with the underlying securities which are
convertible into such shares of Common Stock, are collectively referred to
herein as the "Subject Shares"); and
               --------------

     WHEREAS, as a condition to the willingness of Holdings to enter into the
Restructuring Agreement, and as an inducement and in consideration therefor,
Holdings has required that TLL Partners agree, and TLL Partners has agreed, to
enter into this Agreement.

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     NOW, THEREFORE, in consideration of the foregoing and the mutual premises,
representations, warranties, covenants and agreements contained herein, the
parties hereto, intending to be legally bound, hereby agree as follows:

1.   Rights of Co-Sale.
     -----------------

1.1 Investors' Rights. Each time TLL Partners (the "Transferring Investor")
    -----------------
    proposes to sell, transfer or otherwise dispose of Subject Shares other than
    to any wholly owned subsidiary or parent of, or to any corporation that is,
    within the meaning of the Securities Act of 1933, as amended (the "Act"),
    controlling, controlled by or under common control with, such Transferring
    Investor, in the case of a limited liability company, to its members, or
    gift transfers to its family members or one or more trusts (each, a
    "Permitted Transferee") for the benefit of the foregoing (in each case a
    "Transfer"), each Investor (referred to herein individually as an "Other
    Investor" and collectively as the "Other Investors") shall have a right of
    co-sale with respect to the sale of Subject Shares owned by such Other
    Investor in accordance with the provisions of this Section 1.
    Notwithstanding anything contained herein to the contrary, the parties
    hereto expressly agree that provisions of this Agreement shall continue and
    be binding against TLL Partners and any Permitted Transferee holding Subject
    Shares.

1.2 Notice of Proposed Transfer. Before the Transferring Investor may Transfer
    ---------------------------
    its Subject Shares, the Transferring Investor shall provide notice (a
    "Transferring Investor Notice") to the Other Investor stating: (a) its bona
    fide intention to Transfer such Subject Shares: (b) the number of Subject
    Shares proposed to be transferred (the "Offered Stock"); (c) the name of
    each proposed transferee; and (d) the cash price or other consideration
    (including the cash equivalent value of any non-cash consideration) per
    share for which the Transferring Investor proposes to transfer the Offered
    Stock (the "Offered Price").

1.3 Right of Co-Sale.
    ----------------

(a) Exercise of Right of Co-Sale. The Other Investors shall have the right to
    ----------------------------
    participate in the Transferring Investor's transfer of the Offered Stock to
    the proposed transferee pursuant to the specified terms and conditions of
    the Transfer as set forth in the Transferring Investor Notice and in
    accordance with the terms and conditions of the Transfer as set forth in
    this Section 1.3 (the "Right of Co-Sale"). For purposes of the preceding
    sentence, the participation of the Other Investor shall be on the same terms
    as the Transferring Investor. To the extent an Other Investor exercises his,
    her or its Right of Co-Sale, the number of shares of Offered Stock that the
    Transferring Investor may transfer pursuant to the Transferring Investor
    Notice shall be correspondingly reduced. Each Other Investor shall be
    responsible for its pro rata share of the reasonable fees and expenses of
    the Transferring Investor relating to the negotiation of the transaction.
    The Right of Co-Sale of the Other Investors shall be subject to the
    following terms and conditions:

(i) Each Other Investor may transfer all or any part of such Other Investor's
    Subject Shares that is not in excess of the number obtained by multiplying
    the aggregate number of shares of Subject Shares constituting the Offered
    Stock by a fraction (A) the numerator of which is the

                                        2

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     number of shares of such Other Investor's Subject Shares, and (B) the
     denominator of which is the total number of Subject Shares then owned by
     the Transferring Investor, the Other Investors and investors, if any, who
     are parties to any other similar co-sale agreement with the Transferring
     Investor which is in existence at the time of the Transfer.

(ii) By written notice received by TLL Partners within fifteen (15) calendar
     days of the mailing of the Transferring Investor Notice by the Transferring
     Investor to the Other Investors, each Other Investor may effect its
     election to participate in the transfer subject to this Section 1.3. Such
     written notice shall contain the Other Investor's election to participate
     in the Transfer of the Offered Stock setting forth the number and type of
     shares that the Other Investor elects to include in the Transfer,
     accompanied by one or more certificates or other documentation, properly
     endorsed for transfer, representing those shares (if the Other Investor so
     elects, then such Other Investor shall be referred to in this Agreement as
     a "Participant").

(b)  Delivery of Stock Certificates and Proceeds. Upon the closing of the
     -------------------------------------------
     Transfer subject to this Section 1.3, the stock certificate(s) or other
     documentation representing the Subject Shares to be transferred shall be
     transferred and delivered to the investor or transferee pursuant to the
     terms and conditions specified in the Transferring Investor Notice, and
     there shall be promptly thereafter remitted to the Participant that portion
     of the proceeds from the Transfer to which it is entitled by reason of
     participating in the Transfer.

1.4  Offering Investor's Right to Transfer. The Transferring Investor may
     -------------------------------------
     transfer that portion of the Offered Stock permitted to be transferred by
     the Transferring Investor, after application of the Right of Co-Sale
     contained in Section 1.3 hereof, to any person named as an investor or
     other transferee in the Transferring Investor Notice, at the Offered Price,
     provided that the transfer: (a) is consummated within ninety (90) days
     after the date of the Transferring Investor Notice; and (b) is in
     accordance with all the terms of this Agreement. If the Offered Stock is
     transferred in accordance with the terms and conditions of this Agreement,
     then the transferee(s) of the Offered Stock shall thereafter hold the
     Offered Stock free of this Agreement and the Right of Co-Sale set forth
     herein. If the Offered Stock is not so transferred during such ninety (90)
     day period, then the Transferring Investor shall not transfer any of the
     Offered Stock without complying again in full with the provisions of this
     Agreement.

1.5  Effect of Prohibited Transfer. In the event TLL Partners should sell any
     -----------------------------
     Subject Shares in contravention of the co-sale rights of the Investors
     under this Agreement (TLL Partners in such capacity a "Violating Investor";
     such a transaction a "Prohibited Transfer"), the Investors, in addition to
     all other remedies available at law, in equity or hereunder, shall have the
     put option provided below, and the Violating Investor shall be bound by the
     applicable provisions of that option. Any attempt by a Violating Investor
     to transfer Subject Shares in violation of Section 1 hereof shall be void.

1.6  Put Option. Notwithstanding Section 1.5 hereof, in the event of a
     ----------
     Prohibited Transfer, the other Investor shall have the right to sell to the
     Violating Investor the type and number of shares of Subject Shares equal to
     the number of shares such Investor would have been entitled to sell to the
     Violating Investor or transferee under Section 1.3 hereof had the

<PAGE>

    Prohibited Transfer been effected pursuant to and in compliance with the
    terms hereof. This sale shall be made on the following terms and
    conditions:

(a) The price per share at which the Subject Shares are to be sold to the
    Violating Investor shall be equal to the price per share (on an as-converted
    basis) paid by the transferee to the Violating Investor in the Prohibited
    Transfer. The Violating Investor shall also reimburse the Investors for any
    and all fees and expenses, including legal fees and expenses, incurred
    pursuant to the exercise or the attempted exercise of the Investors' rights
    under Section 1.

(b) Within ninety (90) days after the later of the dates on which the Investors:
    (i) receive notice of the Prohibited Transfer; or (ii) otherwise become
    aware of the Prohibited Transfer, the Investors, if exercising the option
    created hereby, shall deliver to the Violating Investor the certificate or
    certificates representing shares to be sold, each certificate to be properly
    endorsed for transfer.

(c) The Violating Investor shall, upon receipt of the certificate or
    certificates for the shares to be sold by the Investors pursuant to this
    Section 1.6, pay the aggregate purchase price therefor and the amount of
    reimbursable fees and expenses, as specified in Section 1.6(a), in cash or
    by other means acceptable to the other Investor.

2.     Exceptions, Termination.
       -----------------------

2.1 Exceptions. Notwithstanding anything in this Agreement to the contrary, the
    ----------
    Right of Co-Sale set forth in this Agreement shall not apply to any Transfer
    or series of Transfers of Subject Shares by TLL Partners: (a) pursuant to a
    reorganization or merger of the Company with or into any other corporation
    or entity, or a sale of all or substantially all of the assets of the
    Company, in which the Investors and TLL Partners in the aggregate own
    immediately after such transaction less than 5% of the voting equity
    securities of the surviving entity; or (b) pursuant to the winding up and
    dissolution of the Company.

2.2 Termination of Rights. The Right of Co-Sale set forth herein shall terminate
    ---------------------
    the date on which this Agreement is terminated by a written agreement to
    such effect executed by TLL Partners and the Investors.

3.     Restrictive Legend and Stop-Transfer Orders.
       -------------------------------------------

3.1 Legend. TLL Partners shall cause the legend set forth below, or a legend
    ------
    substantially equivalent thereto, to be placed upon any certificate(s)
    evidencing ownership of its Subject Shares:

          THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
          CERTAIN RESTRICTIONS ON TRANSFER SET FORTH IN A AGREEMENT
          ENTERED INTO BY THE ORIGINAL HOLDER OF THESE SHARES, AND
          OTHER PERSONS, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL
          OFFICE OF THE COMPANY. SUCH

                                  4

<PAGE>

          RESTRICTIONS ARE BINDING ON TRANSFEREES OF THESE SHARES
          UNDER SOME CIRCUMSTANCES.

3.2 Stop Transfer Instructions. TLL Partners agrees, to ensure compliance with
    --------------------------
    the restrictions referred to herein, that the Company may issue appropriate
    "stop transfer" certificates or instructions with respect to the Subject
    Shares and that, the Company may make appropriate notations to the same
    effect in its records.

4.     Miscellaneous Provisions.
       ------------------------

4.1 Notices. All notices, requests, demands and other communications which are
    -------
    required to be or may be given under this Agreement to any party by any of
    the other parties shall be in writing and shall be deemed to have been duly
    given when: (a) delivered in person; (b) the day following dispatch by a
    nationally recognized overnight courier service (such as Federal Express or
    UPS, etc.) for next day delivery; (c) five (5) days after dispatch by
    certified or registered first class mail, postage prepaid, return receipt
    requested, to the party to whom the same is so given or made; or (d) in the
    case of notice sent by telecopy, on the date of dispatch, provided that the
    report generated by the sender's telecopy machine shows that all pages of
    such notice or other communication were properly transmitted to each
    recipient's telecopy number. Any notice or other communication given
    hereunder shall be addressed to TLL Partners, at its principal offices as
    set forth below or to the Investors at their addresses indicated on the
    signature page hereto; or to such other address as the parties hereto may
    designate by delivering notice thereof to such the other parties in
    accordance herewith.

4.2 Severability. If one or more of the provisions of this Agreement should, for
    ------------
    any reason, be held to be invalid, illegal or unenforceable in any respect,
    such invalidity, illegality or unenforceability shall not affect any other
    provisions of this Agreement, and such invalid, illegal or unenforceable
    provision shall be enforced to the extent permissible.

4.3 Amendment. Any amendment, modification or waiver of this Agreement shall be
    ---------
    effective only with the written consent of TLL Partners and Investors
    holding more than seventy five percent (75%) of the then outstanding Subject
    Shares of all Investors (calculated on a fully diluted basis as if such
    Subject Shares had been converted into Common Stock); provided, however,
    that any person may waive, reduce or release (in whole or in part) any of
    its rights hereunder without the consent of any other parties hereto. Any
    waiver by a party of its rights hereunder shall be effective only if
    evidenced by a written instrument executed by a duly authorized
    representative of such party.

4.4 Governing Law. This Agreement shall be governed by and construed in
    -------------
    accordance with the internal laws (and not the laws pertaining to choice of
    conflict of laws) of the State of Delaware.

4.5 Expenses. If any action at law or in equity is necessary to enforce or
    --------
    interpret the terms of this Agreement, the prevailing party shall be
    entitled to reasonable attorneys' fees, costs and necessary disbursements in
    addition to any other relief to which such party may be entitled.

                                       5

<PAGE>

4.6 Counterparts. This Agreement may be executed in any number of counterparts,
    ------------
    each of which shall be deemed an original and all of which together shall
    constitute one and the same instrument.

4.7 Facsimile Signatures. Any signature page delivered by a fax machine or
    --------------------
    telecopy machine shall be binding to the same extent as an original
    signature page, with regard to any agreement subject to the terms hereof or
    any amendment thereto. Any party who delivers such a signature page agrees
    to later deliver an original counterpart to any party which requests it.

4.8 Binding Effect; Assignment. This Agreement shall be binding upon the parties
    --------------------------
    hereto and their respective successors and assigns. Except as expressly
    provided in this Agreement, this Agreement shall not be construed so as to
    confer any right or benefit upon any person other than the parties to this
    Agreement, and their respective successors and assigns. The parties hereto
    recognize that Holdings intends to transfer to its members its Subject
    Shares or the right to receive such Subject Shares and it is expressly
    acknowledged that, from and after such transfer, such members shall be
    "Investors" under this Agreement. Upon any assignment as contemplated in
    this paragraph, the assignor shall provide written notice of such assignment
    to TLL Partners.

                            [Signature pages follow.]

                                       6

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.

                                           TLL PARTNERS, L.L.C.


                                           By:  /s/ Robert M. McMurrey
                                              --------------------------------
                                              Name:  Robert M. McMurrey
                                              Title: President


                                           GM HOLDINGS, LLC

                                           By:  /s/ John C. Maggart
                                              --------------------------------
                                              Name:  John C. Maggart
                                              Title: Manager

                                       S-1

<PAGE>

                                     ANNEX A
                       LIST OF STOCKHOLDERS AND OWNERSHIP

                                OF SUBJECT SHARES

                              (as of May 17, 2002)

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
Stockholders         Address                   Common       Series A    Series B    Series B
                                                Stock       Preferred   Preferred   Warrants
----------------------------------------------------------------------------------------------
<S>             <C>                           <C>           <C>         <C>         <C>
TLL             TLL Partners, L.L.C.          2,956,509(1)    13,200      36,019     324,173
Partners,       110 North College
L.L.C.          Suite 200
                Tyler, Texas 75702
                Attn: Robert M. McMurrey
----------------------------------------------------------------------------------------------
GM              GM Holdings, LLC                405,276        1,800      49,375       -0-
Holdings,       c/o John C. Maggart
LLC             Aintree Capital
                201 Fourth Avenue North
                Nashville, Tennessee 37219
                Telecopier: 615-782-4111
----------------------------------------------------------------------------------------------
</TABLE>

(1)  Includes warrants to purchase 2,660,860 shares of Common Stock.

                                      S-2