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                                                                    Exhibit 10.1


                             AMENDMENT NUMBER SEVEN
                             ----------------------
                         TO LOAN AND SECURITY AGREEMENT
                         ------------------------------

                  THIS AMENDMENT NUMBER SEVEN TO LOAN AND SECURITY AGREEMENT
(this "Amendment") dated as of August 13, 2001, is entered into among PHONETEL
TECHNOLOGIES, INC., an Ohio corporation ("Phonetel"), CHEROKEE COMMUNICATIONS,
INC., a Texas corporation ("Cherokee," and together with Phonetel, each a
"Borrower" and collectively, jointly and severally, the "Borrowers"), on the one
hand, and, on the other hand, Agent (as hereinafter defined) and the financial
institutions (collectively, the "Lenders" and individually, a "Lender") that are
signatories to that certain Loan and Security Agreement, dated as of November
17, 1999 (as amended, restated, supplemented, or otherwise modified from time to
time, the "Loan Agreement"), entered into among the Borrowers, Lenders, and
FOOTHILL CAPITAL CORPORATION, a California corporation, as agent for the Lenders
(herein, in such capacity, referred to as "Agent"), in light of the following:

                                    RECITALS
                                    --------

                  WHEREAS, Borrowers have requested that the Lenders amend the
Loan Agreement; and

                  WHEREAS, Lenders are willing to amend the Loan Agreement under
the terms and conditions set forth in this Amendment.

                  NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:



                                    AGREEMENT
                                    ---------

I.   DEFINITIONS. Capitalized terms not otherwise defined herein shall have the
     meaning ascribed thereto in the Loan Agreement.

II.  AMENDMENTS TO THE LOAN AGREEMENT. Upon the Seventh Amendment Effective
     Date, the parties agree to amend the Loan Agreement as follows:

     2.1  SECTION 1.1 of the Loan Agreement hereby is amended by inserting the
          following new defined terms in the proper alphanumerical order:



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          "SEVENTH AMENDMENT" means that certain Amendment Number Seven to Loan
          and Security Agreement, dated as of August 13, 2001, among Borrowers,
          Lenders and Agent.

          "SEVENTH AMENDMENT EFFECTIVE DATE" means the date that all conditions
          set forth in SECTION 4 of the Seventh Amendment have been satisfied.

     2.2  SECTION 2.6 of the Loan Agreement hereby is amended by inserting the
          following new subsection (l) thereof:

          (l) PAYMENT IN KIND OF CERTAIN INTEREST OWING. Notwithstanding the
          provisions of subsections (c), (h), (i), (j), and (k) above, (A)
          interest accrued during the month of May, 2001, otherwise due and
          payable on June 1, 2001, shall instead be added to principal as of
          June 1, 2001, and shall thereafter accrue interest at the rate then
          applicable to Advances hereunder, (B) interest accrued during the
          month of June, 2001, otherwise due and payable on July 1, 2001, shall
          instead be added to principal as of July 1, 2001, and shall thereafter
          accrue interest at the rate then applicable to Advances hereunder, and
          (C) interest accrued during the month of July, 2001, otherwise due and
          payable on August 1, 2001, shall instead be added to principal as of
          August 1, 2001, and shall thereafter accrue interest at the rate then
          applicable to Advances hereunder.



III. WAIVER TO THE LOAN AGREEMENT. Upon the Seventh Amendment Effective Date,
     the parties agree to certain waivers as follows:

     3.1  WAIVER OF CERTAIN FINANCIAL COVENANTS FOR THE QUARTER ENDED JUNE 30,
          2001. Agent hereby waives any Default or Event of Default solely with
          respect to Borrower's failure to comply with SECTIONS 7.20(a),
          7.20(b), 7.20(c), 7.20(d), 7.20(e), and 7.20(g), only for the period
          ending June 30, 2001.



IV.  CONDITIONS PRECEDENT TO AMENDMENT. The satisfaction of each of the
     following unless waived or deferred by Lenders, in their sole discretion,
     shall constitute conditions precedent to the effectiveness of this
     Amendment and each and every provisions hereof:

     4.1  Agent shall have received this Amendment, in form and substance
          satisfactory to Agent, duly executed by each party hereto, and in full
          force and effect;

     4.2  The representations and warranties in this Amendment, the Loan
          Agreement as amended by this Amendment, and the other Loan Documents
          shall be true and correct in all respects on and as of the date
          hereof, as though made on such date


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          (except to the extent that such representations and warranties relate
          solely to an earlier date);

     4.3  No Default or Event of Default shall have occurred and be continuing
          on the date hereof, nor shall result from the consummation of the
          transactions contemplated herein; and

     4.4  No injunction, writ, restraining order, or other order of any nature
          prohibiting, directly or indirectly, the consummation of the
          transactions contemplated herein shall have been issued and remain in
          force by any Governmental Authority against either of the Borrowers,
          Agent or any of the Lenders.


V.   REPRESENTATIONS AND WARRANTIES. Each Borrower hereby represents and
     warrants to the Lenders that (a) the execution, delivery, and performance
     of this Amendment and of the Loan Agreement, as amended by this Amendment,
     are within such Borrower's corporate powers, have been duly authorized by
     all necessary corporate action, and are not in contravention of any law,
     rule, or regulation, or any order, judgment, decree, writ, injunction, or
     award of any arbitrator, court, or Governmental Authority, or of the terms
     of its Governing Documents, or of any contract or undertaking to which it
     is a party or by which any of its properties may be bound or affected, (b)
     this Amendment and the Loan Agreement, as amended by this Amendment,
     constitute such Borrower's legal, valid, and binding obligation,
     enforceable against such Borrower in accordance with its terms, and (c)
     this Amendment has been duly executed and delivered by such Borrower.


VI.  CHOICE OF LAW. THE VALIDITY OF THIS AMENDMENT, ITS CONSTRUCTION,
     INTERPRETATION AND ENFORCEMENT, THE RIGHTS OF THE PARTIES HEREUNDER, SHALL
     BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS
     OF THE STATE OF NEW YORK.


VII. COUNTERPARTS; TELEFACSIMILE EXECUTION. This Amendment may be executed in
     any number of counterparts and by different parties and separate
     counterparts, each of which when so executed and delivered, shall be deemed
     an original, and all of which, when taken together, shall constitute one
     and the same instrument. Delivery of an executed counterpart of a signature
     page to this Amendment by telefacsimile shall be effective as delivery of a
     manually executed counterpart of this Amendment. Any party delivering an
     executed counterpart of this Amendment by telefacsimile also shall deliver
     a manually executed counterpart of this Amendment but the failure to
     deliver a manually executed counterpart shall not affect the validity,
     enforceability, and binding effect of this Amendment.


VIII. EFFECT ON LOAN AGREEMENT. The Loan Agreement, as amended hereby, shall be
     and remain in full force and effect in accordance with its respective terms
     and hereby is ratified and confirmed in all respects. The execution,
     delivery, and performance of this Amendment shall not operate as a waiver
     of or, except as expressly


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     set forth herein, as an amendment of, any right, power, or remedy of Agent
     or any Lender under the Loan Agreement, as in effect prior to the date
     hereof.


IX.  FURTHER ASSURANCES. Each Borrower shall execute and deliver all agreements,
     documents, and instruments, in form and substance satisfactory to Agent,
     and take all actions as Agent may reasonably request from time to time, to
     perfect and maintain the perfection and priority of Liens in the Collateral
     held by Agent for the benefit of the Lenders and to fully consummate the
     transactions contemplated under this Amendment and the Loan Agreement, as
     amended by this Amendment.


X.   MISCELLANEOUS.

     10.1 Upon and after the effectiveness of this Amendment, each reference in
          the Loan Agreement to "this Agreement", "hereunder", "herein",
          "hereof" or words of like import referring to the Loan Agreement, and
          each reference in the other Loan Documents to "the Loan Agreement",
          "thereunder", "therein", "thereof" or words of like import referring
          to the Loan Agreement, shall mean and be a reference to the Loan
          Agreement as modified and amended hereby.

     10.2 The Loan Agreement and all other Loan Documents, are and shall
          continue to be in full force and effect and are hereby in all respects
          ratified and confirmed and shall constitute the legal, valid, binding
          and enforceable obligations of each Borrower to Agent and Lenders.

                            [signature page follows]


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                  IN WITNESS WHEREOF, the parties have entered into this
Amendment as of the date first above written.

                                         PHONETEL TECHNOLOGIES, INC.,
                                         an Ohio corporation

                                         By /s/ John D. Chichester
                                            ------------------------------------
                                         Name: John D. Chichester
                                               ---------------------------------
                                         Title: Chief Executive Officer
                                                --------------------------------


                                         CHEROKEE COMMUNICATIONS, INC.,
                                         a Texas corporation

                                         By /s/ John D. Chichester
                                            ------------------------------------
                                         Name: John D. Chichester
                                               ---------------------------------
                                         Title: Chief EXECUTIVE Officer
                                                --------------------------------


                                         FOOTHILL CAPITAL CORPORATION, a
                                         California corporation, as Agent
                                         and a Lender

                                         By /s/ Amy Lam
                                            ------------------------------------
                                         Name: Amy Lam
                                               ---------------------------------
                                         Title: Vice President
                                                --------------------------------


                                         FOOTHILL PARTNERS III, L.P.,
                                         a Delaware limited partnership,
                                         as a Lender

                                         By /s/ Dennis R. Ascher
                                            ------------------------------------
                                         Name: Dennis R. Ascher
                                               ---------------------------------
                                         Title: Managing General Partner
                                                --------------------------------


                                         ABLECO FINANCE LLC,
                                         a Delaware limited liability company,
                                         as a Lender and as agent for its
                                         successors and assigns

                                         By /s/ Kevin P. Genda
                                            ------------------------------------
                                         Name: Kevin P. Genda
                                               ---------------------------------
                                         Title: Senior VP and C.C.O.
                                                --------------------------------