Document:

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                                                                   EXHIBIT 10.28

                        COMMERCIAL PAPER DEALER AGREEMENT
                                  4(2) PROGRAM

                                      AMONG

               TELECOMUNICACIONES DE PUERTO RICO, INC., AS ISSUER;

                PUERTO RICO TELEPHONE COMPANY, INC. AND CELULARES
                        TELEFONICA, INC., AS GUARANTORS;

                                       AND

  Popular Securities, Inc., as Dealer for Notes with maturities up to 365 days.

     Concerning Notes to be issued pursuant to an Issuing and Paying Agency
        Agreement dated as of November 9, 2000 between the Issuer and The
                Chase Manhattan Bank, as Issuing and Paying Agent

                                   DATED AS OF

                                NOVEMBER 9, 2000

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                        COMMERCIAL PAPER DEALER AGREEMENT
                                  4(2) PROGRAM

         This agreement ("Agreement") sets forth the understandings among the
Issuer, the Guarantors and the Dealer in connection with the issuance and sale
by the Issuer of its short-term promissory notes through the Dealer (the
"Notes").

         Each of the Guarantors, jointly and severally, has agreed
unconditionally and irrevocably to guarantee payment in full of the principal
and interest (if any) on all such Notes of the Issuer, pursuant to guarantees,
dated the date hereof, in the form of Exhibit C hereto (the "Guarantee").

         Certain terms used in this Agreement are defined in Section 6 hereof.

         The Addendum to this Agreement, and any Annexes or Exhibits described
in this Agreement or such Addendum, are hereby incorporated into this Agreement
and made fully a part hereof.

Section 1.   Offers, Sales and Resales of Notes

         1.1 While (i) the Issuer has and shall have no obligation to sell the
Notes to the Dealer or to permit the Dealer to arrange any sale of the Notes for
the account of the Issuer, and (ii) the Dealer has and shall have no obligation
to purchase the Notes from the Issuer or to arrange any sale of the Notes for
the account of the Issuer, the parties hereto agree that in any case where the
Dealer purchases Notes from the Issuer, or arranges for the sale of Notes by the
Issuer, such Notes will be purchased or sold by the Dealer in reliance on the
representations, warranties, covenants and agreements of the Issuer contained
herein or made pursuant hereto and on the terms and conditions and in the manner
provided herein.

         1.2 So long as this Agreement shall remain in effect, and in addition
to the limitations contained in Section 1.7 hereof, the Issuer shall not,
without the consent of the Dealer, offer, solicit or accept offers to purchase,
or sell, any Notes except (a) in transactions with one or more dealers which may
from time to time after the date hereof become dealers with respect to the Notes
by executing with the Issuer one or more agreements which contain provisions
substantially identical to Section 1 of this Agreement, of which the Issuer
hereby undertakes to provide the Dealer prompt notice or (b) in transactions
with the other dealers listed on the Addendum hereto, which are executing
agreements with the Issuer which contain provisions substantially identical to
Section 1 of this Agreement contemporaneously herewith. In no event shall the
Issuer offer, solicit or accept offers to purchase, or sell, any Notes directly
on its own behalf in transactions with persons other than broker-dealers as
specifically permitted in this Section 1.2.

         1.3 The Notes shall be in a minimum denomination or minimum amount,
whichever is applicable, of $250,000 or integral multiples of $1,000 in excess
thereof, will bear such interest rates, if interest bearing, or will be sold at
such discount from their face amounts, as shall be agreed upon by the Dealer and
the Issuer, shall have a maturity not exceeding 365 days from the date of
issuance (exclusive of days of grace) and shall not contain any provision for
extension, renewal or automatic "rollover."

         1.4 The authentication, delivery and payment of the Notes shall be
effected in accordance with the Issuing and Paying Agency Agreement and the
Notes shall be either individual bearer physical certificates or represented by
book-entry Notes registered in the name of DTC or its nominee in the form or
forms annexed to the Issuing and Paying Agency Agreement.

         1.5 If the Issuer and the Dealer shall agree on the terms of the
purchase of any Note by the Dealer or the sale of any Note arranged by the
Dealer (including, but not limited to, agreement with respect to the date of
issue, purchase price, principal amount, maturity and interest rate (in the case
of interest-

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bearing Notes) or discount thereof (in the case of Notes issued on a
discount basis), and appropriate compensation for the Dealer's services
hereunder) pursuant to this Agreement, the Issuer shall cause such Note to be
issued and delivered in accordance with the terms of the Issuing and Paying
Agency Agreement and payment for such Note shall be made by the purchaser
thereof, either directly or through the Dealer, to the Issuer. Except as
otherwise agreed, in the event that the Dealer is acting as an agent and a
purchaser shall either fail to accept delivery of or make payment for a Note on
the date fixed for settlement, the Dealer shall promptly notify the Issuer, and
if the Dealer has theretofore paid the Issuer for the Note, the Issuer will
promptly return such funds to the Dealer against its return of the Note to the
Issuer, in the case of a certificated Note, and upon notice of such failure in
the case of a book-entry Note. If such failure occurred for any reason other
than default by the Dealer, the Issuer shall reimburse the Dealer on an
equitable basis for the Dealer's loss of the use of such funds for the period
such funds were credited to the Issuer's account.

         1.6 The Dealer and the Issuer hereby establish and agree to observe the
following procedures in connection with offers, sales and subsequent resales or
other transfers of the Notes:

                  (a) Offers and sales of the Notes by or through the Dealer
         shall be made only to the following types of investors: (i) investors
         reasonably believed by the Dealer to be Institutional Accredited
         Investors, (ii) non-bank fiduciaries or agents that will be purchasing
         Notes for one or more accounts, each of which is an Institutional
         Accredited Investor, and (iii) Qualified Institutional Buyers.

                  (b) Resales and other transfers of the Notes by the holders
         thereof shall be made only in accordance with the restrictions in the
         legends described in clause (e) below.

                  (c) No general solicitation or general advertising shall be
         used in connection with the offering of the Notes. Without limiting the
         generality of the foregoing, without the prior written approval of
         Dealer, the Issuer shall not issue any press release or place or
         publish any "tombstone" or other advertisement relating to the Notes.

                  (d) No sale of Notes to any one purchaser shall be for less
         than $250,000 principal or face amount, and no Note shall be issued in
         a smaller principal or face amount. If the purchaser is a non-bank
         fiduciary acting on behalf of others, each person for whom such
         purchaser is acting must purchase at least $250,000 principal or face
         amount of Notes.

                  (e) Offers and sales of the Notes by the Issuer through the
         Dealer acting as agent for the Issuer shall be made in accordance with
         Rule 506 under the Securities Act, and shall be subject to the
         restrictions described in the legend appearing on Exhibit A hereto. A
         legend substantially to the effect of such Exhibit A shall appear as
         part of the Private Placement Memorandum used in connection with offers
         and sales of Notes hereunder, as well as on each Note offered and sold
         pursuant to this Agreement.

                  (f) Dealer shall furnish or shall have furnished to each
         purchaser of Notes being sold to an ultimate purchaser for the first
         time a copy of the then-current Private Placement Memorandum unless
         such purchaser has previously received a copy of the Private Placement
         Memorandum as then in effect. The Private Placement Memorandum shall
         expressly state that any person to whom Notes are offered shall have an
         opportunity to ask questions of, and receive information from, the
         Issuer and the Dealer and shall provide the names, addresses and
         telephone numbers of the persons from whom information regarding the
         Issuer may be obtained.

                  (g) The Issuer agrees, for the benefit of the Dealer and each
         of the holders and prospective purchasers from time to time of the
         Notes that, if at any time the Issuer shall not be subject to Section
         13 or 15(d) of the Exchange Act, the Issuer will furnish, upon request
         and at its expense, to the Dealer and to holders and prospective
         purchasers of Notes information required by Rule 144A(d)(4)(i) in
         compliance with Rule 144A(d).

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                  (h) In the event that any Note offered or to be offered by
         Dealer would be ineligible for resale under Rule 144A, the Issuer shall
         immediately notify Dealer (by telephone, confirmed in writing) of such
         fact and shall promptly prepare and deliver to Dealer an amendment or
         supplement to the Private Placement Memorandum describing the Notes
         that are ineligible, the reason for such ineligibility and any other
         relevant information relating thereto.

                  (i) The Issuer represents that it is not currently issuing
         commercial paper in the United States market in reliance upon, and in
         compliance with, the exemption provided by Section 3(a)(3) of the
         Securities Act. In the event the issuer launches a 3(a)(3) commercial
         paper program, the Issuer agrees that (a) the proceeds from the sale of
         the Notes will be segregated from the proceeds of the sale of any such
         commercial paper by being placed in a separate account; (b) the Issuer
         will institute appropriate corporate procedures to ensure that the
         offers and sales of notes issued by the Issuer pursuant to the Section
         3(a)(3) exemption are not integrated with offerings and sales of Notes
         hereunder; and (c) the Issuer will comply with each of the requirements
         of Section 3(a)(3) of the Act in selling commercial paper or other
         short-term debt securities other than the Notes in the United States.

         1.7 The Issuer hereby represents and warrants to the Dealer, in
connection with offers, sales and resales of Notes, as follows:

                  (a) Issuer hereby confirms to the Dealer that (except as
         permitted by Section 1.6(i)) within the preceding six months neither
         the Issuer nor any person other than the Dealer or the other dealers
         referred to in Section 1.2 hereof acting on behalf of the Issuer has
         offered or sold any Notes, or any substantially similar security of the
         Issuer (including, without limitation, medium-term notes issued by the
         Issuer), to, or solicited offers to buy any such security from, any
         person other than the Dealer or the other dealers referred to in
         Section 1.2 hereof. The Issuer also agrees that, as long as the Notes
         are being offered for sale by the Dealer and the other dealers referred
         to in Section 1.2 hereof as contemplated hereby and until at least six
         months after the offer of Notes hereunder has been terminated, neither
         the Issuer nor any person other than the Dealer or the other dealers
         referred to in Section 1.2 hereof (except as contemplated by Section
         1.2 hereof) will offer the Notes or any substantially similar security
         of the Issuer for sale to, or solicit offers to buy any such security
         from, any person other than the Dealer and the other dealers referred
         to in Section 1.2 hereof, it being understood that such agreement is
         made with a view to bringing the offer and sale of the Notes within the
         exemption provided by Section 4(2) of the Securities Act and Rule 506
         thereunder and shall survive any termination of this Agreement. The
         Issuer hereby represents and warrants that it has not taken or omitted
         to take, and will not take or omit to take, any action that would cause
         the offering and sale of Notes hereunder to be integrated with any
         other offering of securities, whether such offering is made by the
         Issuer or some other party or parties.

                  (b) The Issuer represents and agrees that the proceeds of the
         sale of the Notes are not currently contemplated to be used for the
         purpose of buying, carrying or trading securities within the meaning of
         Regulation T and the interpretations thereunder by the Board of
         Governors of the Federal Reserve System. In the event that the Issuer
         determines to use such proceeds for the purpose of buying, carrying or
         trading securities, whether in connection with an acquisition of
         another company or otherwise, the Issuer shall give the Dealer at least
         five business days' prior written notice to that effect. The Issuer
         shall also give the Dealer prompt notice of the actual date that it
         commences to purchase securities with the proceeds of the Notes.
         Thereafter, in the event that the Dealer purchases Notes as principal
         and does not resell such Notes on the day of such purchase, to the
         extent necessary to comply with Regulation T and the interpretations
         thereunder, the Dealer will sell such Notes only to offerees it
         reasonably believes to be QIBs or to QIBs it reasonably believes are
         acting for other QIBs, in each case in accordance with Rule 144A.

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Section 2.   Representations and Warranties of Issuer

The Issuer, with respect to Sections 2.1 through 2.10, and each of the
Guarantors, with respect to Sections 2.11 through 2.17, represents and warrants
that:

         2.1 The Issuer is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation and has
all the requisite power and authority to execute, deliver and perform its
obligations under the Notes, this Agreement and the Issuing and Paying Agency
Agreement.

         2.2 This Agreement and the Issuing and Paying Agency Agreement have
been duly authorized, executed and delivered by the Issuer and constitute legal,
valid and binding obligations of the Issuer enforceable against the Issuer in
accordance with their terms subject to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally, and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).

         2.3 The Notes have been duly authorized, and when issued and delivered
as provided in the Issuing and Paying Agency Agreement, will be duly and validly
issued and delivered and will constitute legal, valid and binding obligations of
the Issuer enforceable against the Issuer in accordance with their terms subject
to applicable bankruptcy, insolvency and similar laws affecting creditors'
rights generally, and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity or
at law).

         2.4 The offer and sale of Notes in the manner contemplated hereby do
not require registration of the Notes under the Securities Act, pursuant to the
exemption from registration contained in Section 4(2) thereof and Regulation D
thereunder, and no indenture in respect of the Notes is required to be qualified
under the Trust Indenture Act of 1939, as amended.

         2.5 The Notes will rank at least pari passu with all other unsecured
and unsubordinated indebtedness of the Issuer.

         2.6 No consent or action of, or filing or registration with, any
governmental or public regulatory body or authority, including the SEC, is
required to authorize, or is otherwise required in connection with the
execution, delivery or performance of, this Agreement, the Notes or the Issuing
and Paying Agency Agreement, except as may be required by the securities or Blue
Sky laws of the various states in connection with the offer and sale of the
Notes.

         2.7 Neither the execution and delivery of this Agreement and the
Issuing and Paying Agency Agreement, nor the issuance and delivery of the Notes
in accordance with the Issuing and Paying Agency Agreement, nor the fulfillment
of or compliance with the terms and provisions hereof or thereof by the Issuer,
will (i) result in the creation or imposition of any mortgage, lien, charge or
encumbrance of any nature whatsoever upon any of the properties or assets of the
Issuer, or (ii) violate or result in a breach or an event of default under any
of the terms of the Issuer's charter documents or by-laws, any contract or
instrument to which the Issuer is a party or by which it or its property is
bound, or any law or regulation, or any order, writ, injunction or decree of any
court or government instrumentality, to which the Issuer is subject or by which
it or its property is bound, which breach or event of default might have a
material adverse effect on the condition (financial or otherwise), operations or
business prospects of the Issuer or the ability of the Issuer to perform its
obligations under this Agreement, the Notes or the Issuing and Paying Agency
Agreement.

         2.8 There is no litigation or governmental proceeding pending, or to
the knowledge of the Issuer threatened, against or affecting the Issuer or any
of its subsidiaries which might result in a material adverse change in the
condition (financial or otherwise), operations or business prospects of the
Issuer or the ability of the Issuer to perform its obligations under this
Agreement, the Notes or the Issuing and Paying Agency Agreement.

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         2.9 The Issuer is not an "investment company" or an entity "controlled"
by an "investment company" within the meaning of the Investment Company Act of
1940, as amended.

         2.10 Neither the Private Placement Memorandum nor the Company
Information contains any untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.

         2.11 Each of the Guarantors is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has all the requisite power and authority to execute, deliver
and perform its respective obligations under the Guarantees, this Agreement and
the Issuing and Paying Agency Agreement.

         2.12 This Agreement, the Issuing and Paying Agency Agreement and the
Guarantees have been duly authorized, executed and delivered by each of the
Guarantors and constitute legal, valid and binding obligations of the Guarantors
enforceable against the Guarantors in accordance with their terms subject to
applicable bankruptcy, insolvency and similar laws affecting creditors' rights
generally, and subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law) and except as enforceability of the indemnification provisions of this
Agreement may be limited by federal securities laws.

         2.13 No consent or action of, or filing or registration with, any
governmental or public regulatory body or authority, including the SEC, is
required to authorize, or is otherwise required in connection with the
execution, delivery or performance by the Guarantors of, this Agreement, the
Guarantees or the Issuing and Paying Agency Agreement, except as may be required
by the securities or Blue Sky laws of the various states in connection with the
offer and sale of the Notes.

         2.14 Neither the execution and delivery by the Guarantors of this
Agreement, the Issuing and Paying Agency Agreement and the Guarantees, nor the
fulfillment of or compliance with the terms and provisions hereof or thereof by
each of the Guarantors, will (i) result in the creation or imposition of any
mortgage, lien, charge or encumbrance of any nature whatsoever upon any of the
properties or assets of the Guarantors, or (ii) violate or result in a breach or
an event of default under any of the terms of the Guarantors' charter documents
or by-laws, any contract or instrument to which each of the Guarantors is a
party or by which it or its property is bound, or any law or regulation, or any
order, writ, injunction or decree of any court or government instrumentality, to
which each of the Guarantors is subject or by which it or its property is bound,
which breach or event of default might have a material adverse effect on the
condition (financial or otherwise), operations or business prospects of each of
the Guarantors or the ability of either Guarantor to perform its obligations
under this Agreement, the Guarantees or the Issuing and Paying Agency Agreement.

         2.15 Neither of the Guarantors is an "investment company" or an entity
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.

         2.16 The information concerning the Guarantors contained in the Private
Placement Memorandum does not contain any untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.

         2.17 The Guarantees do not require registration under the Securities
Act, pursuant to the exemption from registration contained in Section 4(2)
thereof.

         2.18 Each (a) issuance of Notes by the Issuer hereunder and (b)
amendment or supplement of the Private Placement Memorandum shall be deemed a
representation and warranty by each of the Issuer and the Guarantors (as to
itself) to the Dealer, as of the date thereof, that, both before and after
giving effect to such issuance and after giving effect to such amendment or
supplement, (i) the representations and

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warranties given by the Issuer and the Guarantors set forth above in this
Section 2 remain true and correct on and as of such date as if made on and as of
such date, (ii) in the case of an issuance of Notes, the Notes being issued on
such date have been duly and validly issued and constitute legal, valid and
binding obligations of the Issuer, enforceable against the Issuer in accordance
with their terms, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law) and (iii) in the case of an issuance of Notes,
since the date of the most recent Private Placement Memorandum, there has been
no material adverse change in the condition (financial or otherwise), operations
or business prospects of the Issuer or the Guarantors which would impact the
ability of the Issuer or either of the Guarantors to perform its obligations
under the Notes or the Guarantees, as the case may be, and which has not been
disclosed to the Dealer in writing.

Section 3.   Covenants and Agreements of Issuer

The Issuer covenants and agrees that:

         3.1 The Issuer will give the Dealer prompt notice (but in any event
prior to any subsequent issuance of Notes hereunder) of any amendment to,
modification of, or waiver with respect to, the Notes or the Issuing and Paying
Agency Agreement, including a complete copy of any such amendment, modification
or waiver.

         3.2 The Issuer shall, whenever there shall occur any change in the
Issuer's condition (financial or otherwise), operations or business prospects or
any development or occurrence in relation to the Issuer that would be material
to holders of the Notes or potential holder of the Notes (including any
downgrading or receipt of any notice of intended or potential downgrading or any
review for potential change in the rating accorded any of the Issuer's
securities by any nationally recognized statistical rating organization which
has published a rating of the Notes), promptly, and in any event prior to any
subsequent issuance of Notes hereunder, notify the Dealer (by telephone,
confirmed in writing) of such change, development, or occurrence.

         3.3 The Issuer shall from time to time furnish to the Dealer such
information as the Dealer may reasonably request, including, without limitation,
any press releases or material provided by the Issuer to any national securities
exchange or rating agency, regarding (i) the Issuer's operations and financial
condition, (ii) the due authorization and execution of the Notes, and (iii) the
Issuer's ability to pay the Notes as they mature.

         3.4 The Issuer will take all such action as the Dealer may reasonably
request to ensure that each offer and each sale of the Notes will comply with
any applicable state Blue Sky laws; provided, that the Issuer shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation in any jurisdiction in which it is not so qualified or
subject itself to taxation in respect of doing business in any jurisdiction in
which it is not otherwise so subject.

         3.5 The Issuer will not be in default of any of its obligations
hereunder, under the Notes or under the Issuing and Paying Agency Agreement, at
any time that any of the Notes are outstanding.

         3.6 The Issuer shall not issue Notes hereunder until the Dealer shall
have received (a) an opinion of counsel to the Issuer, addressed to the Dealer,
satisfactory in form and substance to the Dealer, (b) an opinion of counsel to
the Guarantors, addressed to the Dealer, satisfactory in form and substance to
the Dealer, (c) copies of the executed Guarantees, (d) a copy of the executed
Issuing and Paying Agency Agreement as then in effect, (e) a copy of resolutions
adopted by the Board of Directors of the Issuer, satisfactory in form and
substance to the Dealer and certified by the Secretary or similar officer of the
Issuer, authorizing execution and delivery by the Issuer of this Agreement the
Issuing and Paying Agency Agreement and the Notes and consummation by the Issuer
of the transactions contemplated hereby and thereby, (f) copies of resolutions
adopted by the Board of Directors of the Guarantors, satisfactory in form

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and substance to the Dealer and certified by the Secretary or similar officer of
each of the Guarantors authorizing the execution and delivery by each of the
Guarantors of this Agreement and the Guarantees, and consummation by each of the
Guarantors of the transactions contemplated hereby and thereby, (g) prior to the
issuance of any Notes represented by a book-entry note registered in the name of
DTC or its nominee, a copy of the executed Letter of Representations among the
Issuer, the Issuing and Paying Agent and DTC and (h) such other certificates,
opinions, letters and documents as the Dealer shall have reasonably requested.

Section 4.   Disclosure

         4.1 The Private Placement Memorandum and its contents (other than the
Dealer Information) shall be the sole responsibility of the Issuer. The Private
Placement Memorandum shall contain a statement expressly offering an opportunity
for each prospective purchaser to ask questions of, and receive answers from,
the Issuer concerning the offering of Notes and to obtain relevant additional
information which the Issuer possesses or can acquire without unreasonable
effort or expense.

         4.2 The Issuer agrees promptly to furnish the Dealer the Company
Information as it becomes available.

         4.3 (a) The Issuer further agrees to notify the Dealer promptly upon
the occurrence of any event relating to or affecting the Issuer that would cause
the Company Information then in existence to include an untrue statement of
material fact or to omit to state a material fact necessary in order to make the
statements contained therein, in light of the circumstances under which they are
made, not misleading.

                  (b) In the event that the Issuer gives the Dealer notice
pursuant to Section 4.3(a) and the Dealer notifies the Issuer that it then has
Notes it is holding in inventory, the Issuer agrees promptly to supplement or
amend the Private Placement Memorandum so that such Private Placement
Memorandum, as amended or supplemented, when taken together with the Company
Information, shall not contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading, and the
Issuer shall make such supplement or amendment available to the Dealer.

                  (c) In the event that (i) the Issuer gives the Dealer notice
pursuant to Section 4.3(a) and (ii) the Dealer does not notify the Issuer that
it is then holding Notes in inventory and (iii) the Issuer chooses not to
promptly amend or supplement the Private Placement Memorandum in the manner
described in clause (b) above, then all solicitations and sales of Notes shall
be suspended until such time as the Issuer has so amended or supplemented the
Private Placement Memorandum, and made such amendment or supplement available to
the Dealer.

         4.4 The Issuer agrees that it shall not have outstanding at any time
Notes issued in aggregate amount in excess of the authorized amount of the
Guarantees.

Section 5.   Indemnification and Contribution

         5.1 The Issuer will indemnify and hold harmless the Dealer, each
individual, corporation, partnership, trust, association or other entity
controlling the Dealer, any affiliate of the Dealer or any such controlling
entity and their respective directors, officers, employees, partners,
incorporators, shareholders, servants, trustees and agents (hereinafter the
"Indemnitees") against any and all liabilities, penalties, suits, causes of
action, losses, damages, claims, costs and expenses (including, without
limitation, fees and disbursements of counsel) or judgments of whatever kind or
nature (each a "Claim"), imposed upon, incurred by or asserted against the
Indemnitees arising out of or based upon (i) any allegation that the Private
Placement Memorandum or the Company Information included (as of any relevant
time) or includes an untrue statement of a material fact or omitted (as of any
relevant time) or omits to state any material fact

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necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. This indemnification shall not apply to
the extent that the Claim arises out of or is based upon Dealer Information. In
addition, this indemnification shall not inure to the benefit of the Dealer (or
to the benefit of any person controlling the Dealer) on account of any losses,
claims, damages or liabilities from the sale any Notes by the Dealer to any
investor if a copy of the Private Placement Memorandum (as amended or
supplemented, if prior to distribution of the Private Placement Memorandum by
the Dealer to such investor, the Issuer shall have made any supplements or
amendments which have been furnished to the Dealer) shall not have been sent or
given by or on behalf of the Dealer to such investor at or prior to the written
confirmation of the sale of the Notes to such investor and such statement or
omission is cured in the Private Placement Memorandum.

         5.2 Provisions relating to claims made for indemnification under this
Section 5 are set forth on Exhibit B to this Agreement.

         5.3 In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 5 is
held to be unavailable or insufficient to hold harmless the Indemnitees,
although applicable in accordance with the terms of this Section 5, the Issuer
shall contribute to the aggregate costs incurred by the Dealer in connection
with any Claim in the proportion of the respective economic interests of the
Issuer and the Dealer; provided, however, that such contribution by the Issuer
shall be in an amount such that the aggregate costs incurred by the Dealer do
not exceed the aggregate of the commissions and fees earned by the Dealer
hereunder with respect to the issue or issues of Notes to which such Claim
relates. The respective economic interests shall be calculated by reference to
the aggregate proceeds to the Issuer of the Notes issued hereunder and the
aggregate commissions and fees earned by the Dealer hereunder. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.

Section 6.   Definitions

         6.1 "Claim" shall have the meaning set forth in Section 5.1.

         6.2 "Company Information" at any given time shall mean the Private
Placement Memorandum together with, to the extent applicable, (i) the Issuer's
most recent report on Form 10-K filed with the SEC and each report on Form 10-Q
or 8-K filed by the Issuer with the SEC since the most recent Form 10-K, (ii)
the Issuer's most recent annual audited financial statements and each interim
financial statement or report prepared subsequent thereto, if not included in
item (i) above, and (iii) the Issuer's and its affiliates' other publicly
available recent reports, including, but not limited to, any publicly available
filings or reports provided to their respective shareholders. For the purposes
of this Agreement, any statement contained in any Company Information shall be
deemed to be modified or superseded to the extent that a statement contained in
any then available Company Information subsequent to such statement modifies or
supersedes such statement; and such statement shall not be deemed to be Company
Information except as so modified or superseded.

         6.3 "Dealer" shall mean Popular Securities, Inc..

         6.4 "Dealer Information" shall mean material concerning the Dealer and
provided by the Dealer in writing expressly for inclusion in the Private
Placement Memorandum.

         6.5 "DTC" shall mean The Depository Trust Company.

         6.6 "Exchange Act" shall mean the U.S. Securities Exchange Act of 1934,
as amended.

         6.7 "Indemnitee" shall have the meaning set forth in Section 5.1.

                                       8
<PAGE>   10

         6.8 "Institutional Accredited Investor" shall mean an institutional
investor that is an accredited investor within the meaning of Rule 501 under the
Securities Act and that has such knowledge and experience in financial and
business matters that it is capable of evaluating and bearing the economic risk
of an investment in the Notes, including, but not limited to, a bank, as defined
in Section 3(a)(2) of the Securities Act, or a savings and loan association or
other institution, as defined in Section 3(a)(5)(A) of the Securities Act,
whether acting in its individual or fiduciary capacity.

         6.9 "Issuing and Paying Agency Agreement" shall mean the issuing and
paying agency agreement described on the cover page of this Agreement, as such
agreement may be amended or supplemented from time to time.

         6.10 "Issuing and Paying Agent" shall mean the party designated as such
on the cover page of this Agreement, as issuing and paying agent under the
Issuing and Paying Agency Agreement.

         6.11 "Non-bank fiduciary or agent" shall mean a fiduciary or agent
other than (a) a bank, as defined in Section 3(a)(2) of the Securities Act, or
(b) a savings and loan association, as defined in Section 3(a)(5)(A) of the
Securities Act.

         6.12 "Private Placement Memorandum" shall mean offering materials
prepared in accordance with Section 4 (including materials referred to therein
or incorporated by reference therein) provided to purchasers and prospective
purchasers of the Notes, and shall include amendments and supplements thereto
which may be prepared from time to time in accordance with this Agreement (other
than any amendment or supplement that has been completely superseded by a later
amendment or supplement).

         6.13 "Qualified Institutional Buyer" shall have the meaning assigned to
that term in Rule 144A under the Securities Act.

         6.14 "Rule 144A" shall mean Rule 144A under the Securities Act.

         6.15 "SEC" shall mean the U.S. Securities and Exchange Commission.

         6.16 "Securities Act" shall mean the U.S. Securities Act of 1933, as
amended.

Section 7.   General

         7.1 Unless otherwise expressly provided herein, all notices under this
Agreement to parties hereto shall be in writing and shall be effective when
received at the address of the respective party set forth in the Addendum to
this Agreement.

         7.2 This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Puerto Rico, without regard to its conflict
of laws provisions.

         7.3 The Issuer and the Guarantors each agrees that any suit, action or
proceeding brought by the Issuer or the Guarantors against the Dealer in
connection with or arising out of this Agreement or the Notes or the offer and
sale of the Notes shall be brought solely in the United States federal courts
located in the Commonwealth of Puerto Rico or the courts of the Commonwealth of
Puerto Rico located in the City of San Juan, Puerto Rico. EACH OF THE DEALER AND
THE ISSUER AND THE GUARANTORS WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY SUIT,
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

         7.4 This Agreement may be terminated, at any time, by the Issuer or the
Guarantors, upon one business day's prior notice to such effect to the Dealer,
or by the Dealer upon one business day's prior notice to such effect to the
Issuer or the Guarantors. Any such termination, however, shall not affect the

                                       9
<PAGE>   11

obligations of the Issuer or the Guarantors under Sections 5 and 7.3 hereof or
the respective representations, warranties, agreements, covenants, rights or
responsibilities of the parties made or arising prior to the termination of this
Agreement.

         7.5 This Agreement is not assignable by any party hereto without the
written consent of the other parties; provided, however, that the Dealer may
assign its rights and obligations under this Agreement to any affiliate.

         7.6 This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.

         7.7 This Agreement is for the exclusive benefit of the parties hereto,
and their respective permitted successors and assigns hereunder, and shall not
be deemed to give any equitable or legal right; remedy or claim to any other
person whatsoever; provided, however, that Section 7.8 is hereby exclusively and
specifically acknowledged to also be for the benefit of the holders from time to
time of the Notes, as third party beneficiaries.

         7.8 Any payments in respect of the Notes, the Guarantees or to the
Dealer hereunder, whether pursuant to Sections 5.1 or otherwise, shall be in US
dollars and shall be free of all withholding, stamp and other similar taxes and
of all other governmental charges of any nature whatsoever. In the event any
withholding is required by law, the Issuer and the Guarantors each agrees to (i)
pay the same and (ii) pay such additional amounts to the holders of the Notes or
to the Dealer which, after deduction of any such withholding, stamp or other
taxes or governmental charges of any nature whatsoever imposed with respect to
the payment of such additional amount, shall equal the amount withheld pursuant
to clause (i).

                                       10
<PAGE>   12

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date and year first above written.

                                    TELECOMUNICACIONES DE PUERTO RICO, INC.,
                                     AS ISSUER

                                    By:    /s/ Frank P. Gatto
                                       -----------------------------------------
                                    Name:  Frank P. Gatto
                                    Title: Chief Financial Officer

                                    PUERTO RICO TELEPHONE COMPANY, INC.
                                     AS GUARANTOR

                                    By:    /s/ Frank P. Gatto
                                       -----------------------------------------
                                    Name:  Frank P. Gatto
                                    Title: Chief Financial Officer

                                    CELULARES TELEFONICA, INC.,
                                     AS GUARANTOR

                                    By:    /s/ Frank P. Gatto
                                       -----------------------------------------
                                    Name:  Frank P. Gatto
                                    Title: Chief Financial Officer

                                    POPULAR SECURITIES, INC.,
                                    AS DEALER FOR NOTES WITH MATURITIES UP TO
                                    365 DAYS

                                    By:    /s/ Carlos J. Ortiz
                                       -----------------------------------------
                                    Name:  Carlos J. Ortiz
                                    Title: Managing Director

                                       11
<PAGE>   13

                                    ADDENDUM

1. The other dealers referred to in clause (b) of Section 1.2 of the Agreement
are Salomon Smith Barney Inc., Bank of America Securities and Popular
Securities, Inc.

2. The following Section 3.8 is hereby added to the Agreement:

         3.8 Without limiting any obligation of the Issuer pursuant to this
         Agreement to provide the Dealer with credit and financial information,
         the Issuer hereby acknowledges and agrees that the Dealer may share the
         Company Information and any other information or matters relating to
         the Issuer or the transactions contemplated hereby with affiliates of
         the Dealer, including, but not limited to Banco Popular de Puerto Rico
         and Banco Popular North America and that such affiliates may likewise
         share information relating to the Issuer or such transactions with the
         Dealer.

3. The addresses of the respective parties for purposes of notices under Section
7.1 are as follows:

         For the Issuer & the Guarantors:

                  Telecomunicaciones de Puerto Rico, Inc.
                  P.O. Box 360998
                  San Juan, Puerto Rico  00936-0998

                  Attention:  Ms. Aurora M. Casablanca
                  Telephone number: (787) 792-2297
                  Fax number: (787) 792-8640

         For the Dealer:

                  Popular Securities, Inc.
                  Popular Center, Suite 1020
                  209 Munoz Rivera Avenue
                  Hato Rey, Puerto Rico 00918-1075

                  Attention: Mr. Carlos J. Ortiz
                  Telephone number: (787) 766-4163
                  Fax number: (787) 763-3485

<PAGE>   14

EXHIBIT A

                               FORM OF LEGEND FOR
                     PRIVATE PLACEMENT MEMORANDUM AND NOTES

              THE NOTES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
              1933, AS AMENDED (THE "ACT"), OR ANY OTHER APPLICABLE SECURITIES
              LAW, AND OFFERS AND SALES THEREOF MAY BE MADE ONLY IN COMPLIANCE
              WITH AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
              THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. BY ITS
              ACCEPTANCE OF A NOTE, THE PURCHASER WILL BE DEEMED TO REPRESENT
              THAT IT HAS BEEN AFFORDED AN OPPORTUNITY TO INVESTIGATE MATTERS
              RELATING TO THE ISSUER AND THE NOTES, THAT IT IS NOT ACQUIRING
              SUCH NOTE WITH A VIEW TO ANY DISTRIBUTION THEREOF AND THAT IT IS
              EITHER (A) AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED
              INVESTOR WITHIN THE MEANING OF RULE 501(a) UNDER THE ACT AND
              POSSESSES SUCH KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND BUSINESS
              MATTERS THAT IS CAPABLE OF EVALUATING AND BEARING THE ECONOMIC
              RISK OF AN INVESTMENT IN THE NOTES (AN "INSTITUTIONAL ACCREDITED
              INVESTOR" AND THAT EITHER IS PURCHASING NOTES FOR ITS OWN ACCOUNT,
              IS A U.S. BANK (AS DEFINED IN SECTION 3(a)(2) OF THE ACT) OR A
              SAVINGS AND LOAN ASSOCIATION OR OTHER INSTITUTION (AS DEFINED IN
              SECTION 3(a)(5)(A) OF THE ACT) ACTING IN ITS INDIVIDUAL OR
              FIDUCIARY CAPACITY OR IS A FIDUCIARY OR AGENT (OTHER THAN A U.S.
              BANK OR SAVINGS AND LOAN) PURCHASING NOTES FOR ONE OR MORE
              ACCOUNTS EACH OF WHICH IS SUCH AN INSTITUTIONAL ACCREDITED
              INVESTOR (i) WHICH ITSELF POSSESSES SUCH KNOWLEDGE AND EXPERIENCE
              OR (ii) WITH RESPECT TO WHICH SUCH PURCHASER HAS SOLE INVESTMENT
              DISCRETION; OR (B) A QUALIFIED INSTITUTIONAL BUYER ("QIB") WITHIN
              THE MEANING OF RULE 144A UNDER THE ACT WHICH IS ACQUIRING NOTES
              FOR ITS OWN ACCOUNT OR FOR ONE OR MORE ACCOUNTS, EACH OF WHICH IS
              A QIB AND WITH RESPECT TO EACH OF WHICH THE PURCHASER HAS SOLE
              INVESTMENT DISCRETION; AND THE PURCHASER ACKNOWLEDGES THAT IT IS
              AWARE THAT THE SELLER MAY RELY UPON THE EXEMPTION FROM THE
              REGISTRATION PROVISIONS OF SECTION 5 OF THE ACT PROVIDED BY RULE
              144A. BY ITS ACCEPTANCE OF A NOTE, THE PURCHASER THEREOF SHALL
              ALSO BE DEEMED TO AGREE THAT ANY RESALE OR OTHER TRANSFER THEREOF
              WILL BE MADE ONLY (A) IN A TRANSACTION EXEMPT FROM REGISTRATION
              UNDER THE ACT, EITHER (1) TO THE ISSUER OR TO POPULAR SECURITIES,
              INC. OR ANOTHER PERSON DESIGNATED BY THE ISSUER AS A PLACEMENT
              AGENT FOR THE NOTES (COLLECTIVELY, THE "PLACEMENT AGENTS"), NONE
              OF WHICH SHALL HAVE ANY OBLIGATION TO ACQUIRE SUCH NOTE, (2)
              THROUGH A PLACEMENT AGENT TO AN INSTITUTIONAL ACCREDITED INVESTOR
              OR A QIB BY A PLACEMENT AGENT, OR (3) TO A QIB IN A TRANSACTION
              THAT MEETS THE REQUIREMENTS OF RULE 144A AND (B) IN MINIMUM
              AMOUNTS OF $250,000.

<PAGE>   15

EXHIBIT B

                           FURTHER PROVISIONS RELATING
                               TO INDEMNIFICATION

         (a) The Issuer agrees to reimburse each Indemnitee for all expenses
(including reasonable fees and disbursements of internal and external counsel)
as they are incurred by it in connection with investigating or defending any
loss, claim, damage, liability or action in respect of which indemnification may
be sought under Section 5 of the Agreement (whether or not it is a party to any
such proceedings).

         (b) Promptly after receipt by an Indemnitee of notice of the existence
of a Claim, such Indemnitee will, if a claim in respect thereof is to be made
against the Issuer, notify the Issuer in writing of the existence thereof;
provided that (i) the omission so to notify the Issuer will not relieve it from
any liability which it may have hereunder unless and except to the extent it did
not otherwise learn of such Claim and such failure results in the forfeiture by
the Issuer of substantial rights and defenses, and (ii) the omission so to
notify the Issuer will not relieve it from liability which it may have to an
Indemnitee otherwise than on account of this indemnity agreement. In case any
such Claim is made against any Indemnitee and it notifies the Issuer of the
existence thereof, the Issuer will be entitled to participate therein, and to
the extent that it may elect by written notice delivered to the Indemnitee, to
assume the defense thereof, with counsel reasonably satisfactory to such
Indemnitee; provided that if the defendants in any such Claim include both the
Indemnitee and the Issuer, and the Indemnitee shall have concluded that there
may be legal defenses available to it which are different from or additional to
those available to the Issuer, the Issuer shall not have the right to direct the
defense of such Claim on behalf of such Indemnitee, and the Indemnitee shall
have the right to select separate counsel to assert such legal defenses on
behalf of such Indemnitee. Upon receipt of notice from the Issuer to such
Indemnitee of the Issuer's election so to assume the defense of such Claim and
approval by the Indemnitee of counsel, the Issuer will not be liable to such
Indemnitee for expenses incurred thereafter by the Indemnitee in connection with
the defense thereof (other than reasonable costs of investigation) unless (i)
the Indemnitee shall have employed separate counsel in connection with the
assertion of legal defenses in accordance with the proviso to the next preceding
sentence (it being understood, however, that the Issuer shall not be liable for
the expenses of more than one separate counsel (in addition to any local counsel
in the jurisdiction in which any Claim is brought), approved by the Dealer,
representing the Indemnitee who is party to such Claim), (ii) the Issuer shall
not have employed counsel reasonably satisfactory to the Indemnitee to represent
the Indemnitee within a reasonable time after notice of existence of the Claim
or (iii) the Issuer has authorized in writing the employment of counsel for the
Indemnitee. The indemnity, reimbursement and contribution obligations of the
Issuer hereunder shall be in addition to any other liability the Issuer may
otherwise have to an Indemnitee and shall be binding upon and inure to the
benefit of any successors, assigns, heirs and personal representatives of the
Issuer and any Indemnitee. The Issuer agrees that without the Dealer's prior
written consent, it will not settle, compromise or consent to the entry of any
judgment in any Claim in respect of which indemnification may be sought under
the indemnification provision of the Agreement (whether or not the Dealer or any
other Indemnitee is an actual or potential party to such Claim), unless such
settlement, compromise or consent includes an unconditional release of each
Indemnitee from all liability arising out of such Claim. The Dealer agrees that
without the Issuer's prior written consent, which consent will not be
unreasonably withheld, it will not settle, compromise or consent to the entry of
any judgment in any Claim in respect of which indemnification may be sought
under the indemnification provision of the Agreement (whether or not the Issuer
is an actual or potential party to such Claim).<PAGE>   1
                                                                   EXHIBIT 10.29

                                                                  EXECUTION COPY

                       ISSUING AND PAYING AGENCY AGREEMENT
                           [U.S. ISSUER AND GUARANTOR]

         This Agreement, dated as of, November 9, 2000, is by and among
Telecomunicaciones de Puerto Rico, Inc. (the "Issuer"), Puerto Rico Telephone
Company and Celulares Telef6nica, Inc. (each a "Guarantor" and collectively the
"Guarantors") and The Chase Manhattan Bank ("Chase").

1.       APPOINTMENT AND ACCEPTANCE

         The Issuer and the Guarantors hereby request that Chase act as the
Issuer's issuing and paying agent in connection with the issuance and payment of
certain short-term promissory notes of the Issuer (the "Notes"), as further
described herein, and Chase agrees to act as such agent upon the terms and
conditions contained in this Agreement.

2.       COMMERCIAL PAPER PROGRAMS

         The Issuer may establish one or more commercial paper programs under
this Agreement by delivering to Chase a completed program schedule (the "Program
Schedule") with respect to such program. Chase has given the Issuer a copy of
the current form of Program Schedule, and the Issuer shall complete and return
its first Program Schedule to Chase prior to or simultaneously with the
execution of this Agreement. In the event that any of the information provided
in, or attached to, a Program Schedule shall change, the Issuer shall promptly
inform Chase of such change in writing.

3.       NOTES

         All Notes issued by the Issuer under this Agreement shall be short-term
promissory notes, guaranteed by the Guarantors, exempt from the registration
requirements of the Securities Act of 1933, as amended, and from the
registration requirements of applicable state securities laws. The Notes may be
placed by dealers (the "Dealers") pursuant to Section 4 hereof. Notes shall be
issued in either certificated or book-entry form.

4.        AUTHORIZED REPRESENTATIVES

         The Issuer shall deliver to Chase a certified copy of duly adopted
corporate resolutions from its Board of Directors (or other governing body)
authorizing the issuance of Notes under each program established pursuant to
this Agreement and a certificate of incumbency, with specimen signatures
attached, of those officers, employees and agents of the Issuer authorized to
take certain actions with respect to the Notes as provided in this Agreement.
The Guarantors shall deliver to Chase a certified copy of duly adopted corporate
resolutions from each of their Board of Directors (or other governing body)
authorizing it's the guaranty of the Notes and a certificate of incumbency, with
specimen signatures attached, of those officers, employees and agents of the
Guarantors authorized to execute this Agreement and take certain actions with

                                       1
<PAGE>   2

respect to the Notes as provided in this Agreement. Each person named on any
certificate of incumbency of the Issuer or the Guarantors is hereinafter
referred to as an "Authorized Representative". Until Chase receives any
subsequent incumbency certificates, Chase shall be entitled to rely on the last
incumbency certificate delivered to it by the Issuer or the Guarantors for the
purpose of determining such party's Authorized Representatives. The Issuer and
each Guarantor represents and warrants that each of its Authorized
Representatives may appoint other officers, employees and agents (the
"Delegates"), including without limitation any Dealers, to issue instructions to
Chase under this Agreement, and take other actions on its behalf hereunder,
provided that notice of the appointment of each Delegate is delivered to Chase
in writing. Each such appointment shall remain in effect unless and until
revoked by the Issuer or the Guarantors in a written notice to Chase.

5.       CERTIFICATED NOTES

         If and when the Issuer intends to issue certificated notes
("Certificated Notes"), the Issuer and Chase shall agree upon the form of such
Notes. Thereafter, the Issuer shall from time to time deliver to Chase adequate
supplies of Certificated Notes which will be in bearer form, serially numbered,
and shall be executed by the manual or facsimile signature of an Authorized
Representative of each of the Issuer and each of the Guarantors. Chase will
acknowledge receipt of any supply of Certificated Notes received from the
Issuer, noting any exceptions to the shipping manifest or transmittal letter (if
any), and will hold the Certificated Notes in safekeeping for the Issuer in
accordance with Chase's customary practices. Chase shall not have any liability
to the Issuer or the Guarantors to determine by whom or by what means a
facsimile signature may have been affixed on Certificated Notes, or to determine
whether any facsimile or manual signature is genuine, if such facsimile or
manual signature resembles the specimen signature attached to the certificate of
incumbency with respect to such Authorized Representative. Any Certificated Note
bearing the manual or facsimile signature of a person who is an Authorized
Representative on the date such signature was affixed shall bind the Issuer and
the Guarantors after completion thereof by Chase, notwithstanding that such
person shall have ceased to hold his or her office on the date such Note is
countersigned or delivered by Chase.

6.       BOOK-ENTRY NOTES

         The Issuer's Book-entry notes ("Book-Entry Notes") shall not be issued
in physical form, but their aggregate face amount shall be represented by a
master note (the "Master Note") in the form of Exhibit A hereto executed by the
Issuer and each of the Guarantors pursuant to the book-entry commercial paper
program of The Depository Trust Company ("DTC"). Chase shall maintain the Master
Note in safekeeping, in accordance with its customary practices, on behalf of
Cede & Co., the registered owner thereof and nominee of DTC. As long as Cede &
Co. is the registered owner of the Master Note, the beneficial ownership
interest therein shall be shown on, and the transfer of ownership thereof shall
be effected through, entries on the books maintained by DTC and the books of its
direct and indirect participants. The Master Note and the Book-entry Notes shall
be subject to DTC's rules and procedures, as amended from time to time. Chase
shall not be liable or responsible for sending transaction statements of any
kind to DTC's participants or the beneficial owners of the Book-entry Notes, or
for maintaining, supervising or reviewing the records of DTC or its participants
with respect to such Notes. In connection with DTC's program, the Issuer and the
Guarantors understand that as one of the conditions of their participation
therein, it shall be necessary for the Issuer, each Guarantor and Chase to enter
into a Letter of Representations, in the form of Exhibit B hereto, and for DTC
to receive and accept

                                       2
<PAGE>   3

such Letter of Representation. In accordance with DTC's program, Chase shall
obtain from the CUSIP Service Bureau a written list of CUSIP numbers for the
Book-entry Notes, and Chase shall deliver such list to DTC. The CUSIP Service
Bureau shall bill the Issuer directly for the fee or fees payable for the list
of CUSIP numbers for the Book-entry Notes.

7.       ISSUANCE INSTRUCTIONS TO CHASE; PURCHASE PAYMENTS

         The Issuer and the Guarantors understand that all instructions under
this Agreement are to be directed to Chase's Commercial Paper Department. Chase
shall provide the Issuer and the Guarantors, or, if applicable, the Issuer's
Dealers, with access to Chase's Money Market Issuance System or other electronic
means (collectively, the "System") in order that Chase may receive electronic
instructions for the issuance of Notes. Electronic instructions must be
transmitted in accordance with the procedures furnished by Chase to the
Guarantors, the Issuer or its Dealers in connection with the System. These
transmissions shall be the equivalent to the giving of a duly authorized written
and signed instruction which Chase may act upon without liability. In the event
that the System is inoperable at any time, an Authorized Representative or a
Delegate may deliver written, telephone or facsimile instructions to Chase,
which instructions shall be verified in accordance with any security procedures
agreed upon by the parties. Chase shall incur no liability to the Issuer or the
Guarantors in acting upon instructions believed by Chase in good faith to have
?.been given by an Authorized Representative or a Delegate. In the event that a
discrepancy exists between a telephonic instruction and a written confirmation,
the telephonic instruction will be deemed the controlling and proper
instruction. Chase may electronically record any conversations made pursuant to
this Agreement, and the Issuer and each of the Guarantors hereby consent to such
recordings. All issuance instructions regarding the Notes must be received by
1:00 p.m. New York time in order for the Notes to be issued or delivered on the
same day.

         (a) Issuance and Purchase of Book-entry Notes. Upon receipt of issuance
instructions with respect to Book-entry Notes, Chase shall transmit such
instructions to DTC and direct DTC to cause appropriate entries of the
Book-entry Notes to be made in accordance with DTC's applicable rules,
regulations and procedures for book-entry commercial paper programs. Chase shall
assign CUSIP numbers to the Book-entry Notes to identify the aggregate principal
amount of outstanding Book-entry Notes in DTC's system, together with the
aggregate unpaid interest (if any) on such Notes. Promptly following DTC's
established settlement time on each issuance date, Chase shall access DTC's
system to verify whether settlement has occurred with respect to the Book-entry
Notes. Prior to the close of business on such business day, Chase shall deposit
immediately available funds in the amount of the proceeds due the Issuer (if
any) to the Issuer's account at Chase and designated in the applicable Program
Schedule (the "Account"), provided that Chase has received DTC's confirmation
that the Book-entry Notes have settled in accordance with DTC's applicable
rules, regulations and procedures. Chase shall have no liability to the Issuer
or the Guarantors whatsoever if any DTC participant purchasing a Book-entry Note
fails to settle or delays in settling its balance with DTC or if DTC fails to
perform in any respect.

         (b) Issuance and Purchase of Certificated Notes. Upon receipt of
issuance instructions with respect to Certificated Notes, Chase shall: {a)
complete each Certificated Note as to principal amount, date of issue, maturity
date, place

                                       3
<PAGE>   4

of payment, and rate or amount of interest {if such Note is interest bearing) in
accordance with such instructions; {b) countersign each Certificated Note; and
{c) deliver each Certificated Note in accordance with such instructions.
Whenever Chase is instructed to deliver any Certificated Note by mail, Chase
shall strike from the Certificated Note the word "Bearer," insert as payee the
name of the person so designated by the Issuer or the Guarantors and effect
delivery by mail to such payee or to such other person as is specified in such
instructions to receive the Certificated Note. The Issuer and each of the
Guarantors understand that, in accordance with the custom prevailing in the
commercial paper market, delivery of Certificated Notes shall be made before the
actual receipt of payment for such Notes in immediately available funds, even if
Chase is instructed to deliver a Certificated Note against payment. Therefore,
once Chase has delivered a Certificated Note to the designated recipient, the
Issuer and the Guarantors shall bear the risk that such recipient may fail to
remit payment of such Note or return such Note to Chase. Delivery of
Certificated Notes shall be subject to the rules of the New York Clearing House
in effect at the time of such delivery. Funds received in payment of
Certificated Notes shall be credited to the Account.

8.       USE OF SALES PROCEEDS IN ADVANCE OF PAYMENT

         Chase is not obligated to credit the Issuer's Account unless and until
payment of the purchase price of each Note is received by Chase. From time to
time, Chase, in its sole discretion, may permit the Issuer to have use of funds
payable with respect to the Notes prior to Chase's receipt of the sales proceeds
of such Notes. If Chase makes a deposit, payment or transfer of funds on behalf
of the Issuer before Chase receives payment for any Notes, such deposit, payment
or transfer of funds shall represent an advance by Chase to the Issuer to be
repaid promptly, and in any event on the same day as it is made, from the
proceeds of the sale of the Notes, or by the Issuer or the Guarantors if such
proceeds are not received by Chase.

9.       PAYMENT OF MATURED NOTES

         On any day when a Note matures or is prepaid, the Issuer shall
transmit, or cause to be transmitted, to the Account, prior to 2:30 p.m. New
York time on the same day, an amount of immediately available funds sufficient
to pay the aggregate principal amount of such Note and any applicable interest
due. Chase shall pay the interest (if any) and principal on a Book-entry Note to
DTC in immediately available funds, which payment shall be by net settlement of
Chase's account at DTC. Chase shall pay Certificated Notes upon presentment.
Chase may without liability to the Issuer or the Guarantors refuse to pay any
Note that would result in an overdraft to the Account.

10.      OVERDRAFTS

         (a) Intra-day overdrafts with respect to each Account shall be subject
to Chase's policies as in effect from time to time.

         (b) An overdraft will exist in an Account if Chase, in its sole
discretion, (i) permits an advance to be made pursuant to Section 8,
notwithstanding the provisions of Section 8, and such advance is not repaid in
full on the same day as it is made, or (ii) pays a Note pursuant to Section 9 in
excess of the available

                                       4
<PAGE>   5

collected balance in such Account. Overdrafts shall be subject to Chase's
established banking practices, including, without limitation, the imposition of
interest, funds usage charges and administrative fees. The Issuer shall repay
any such overdraft, fees and charges no later than the next business day,
together with interest on the overdraft at the rate established by Chase for the
Account, computed from and including the date of the overdraft to the date of
repayment.

11.      NO PRIOR COURSE OF DEALING

         No prior action or course of dealing on the part of Chase with respect
to advances of the purchase price or payments of matured Notes shall give rise
to any claim or cause of action by the Issuer or the Guarantors against Chase in
the event that Chase refuses to payor settle any Notes for which the Issuer or
the Guarantors has not timely provided funds as required by this Agreement.

12.      RETURN OF CERTIFICATED NOTES

         Chase will in due course cancel any Certificated Note presented for
payment and return such Note to the Issuer. Chase shall also cancel and return
to the Issuer any spoiled or voided Certificated Notes. Promptly upon written
request of the Issuer or at the termination of this Agreement, Chase shall
destroy all blank, unissued Certificated Notes in its possession and furnish a
certificate to the Issuer certifying such actions.

13.      INFORMATION FURNISHED BY CHASE

         Upon the reasonable request of the Issuer or the Guarantors, Chase
shall promptly provide the Issuer or the Guarantors with information with
respect to any Note issued and paid hereunder, provided that the Issuer or the
Guarantors deliver such request in writing and, to the extent applicable,
includes the serial number or note number, principal amount, payee, date of
issue, maturity date, amount of interest (if any) and place of payment of such
Note.

14.      REPRESENTATIONS AND WARRANTIES

         (a) The Issuer represents and warrants that: (i) it has the right,
capacity and authority to enter into this Agreement; and (ii) it will comply
with all of its obligations and duties under this Agreement. The Issuer further
represents and agrees that each Note issued and distributed upon its instruction
pursuant to this Agreement shall constitute the Issuer's representation and
warranty to Chase that such Note is a legal, valid and binding obligation of the
Issuer, and that such Note is being issued in a transaction which is exempt from
registration under the Securities Act of 1933, as amended, and any applicable
state securities law.

         (b) Each of the Guarantors represent and warrant that: (i) it has the
right, capacity and authority to enter into this Agreement and to execute and
deliver its guaranty of the Notes; and (ii) it will comply with all of its
obligations and duties under this Agreement. The Guarantors further represent
and agree that their guaranty of each Note issued and distributed pursuant to
this Agreement shall constitute the legal, valid and binding obligation of each
of the Guarantors and shall be exempt from registration under the Securities Act
of 1933, as amended, and any applicable state securities law.

                                       5
<PAGE>   6

15.      DISCLAIMERS

         Neither Chase nor its directors, officers, employees or agents shall be
liable for any act or omission under this Agreement except in the case of gross
negligence or willful misconduct. IN NO EVENT SHALL CHASE BE LIABLE FOR SPECIAL,
INDIRECT OR CONSEQUENTIAL LOSS OR DAMAGE OF ANY KIND WHATSOEVER (INCLUDING BUT
NOT LIMITED TO LOST PROFITS), EVEN IF CHASE HAS BEEN ADVISED OF THE LIKELIHOOD
OF SUCH LOSS OR DAMAGE AND REGARDLESS OF THE FORM OF ACTION. In no event shall
Chase be considered negligent in consequence of complying with DTC's rules,
regulations and procedures. The duties and obligations of Chase, its directors,
officers, employees or agents shall be determined by the express provisions of
this Agreement and they shall not be liable except for the performance of such
duties and obligations as are specifically set forth herein and no implied
covenants shall be read into this Agreement against them. Neither Chase nor its
directors, officers, employees or agents shall be required to ascertain whether
any issuance or sale of any Notes (or any amendment or termination of this
Agreement) has been duly authorized or is in compliance with any other agreement
to which the Issuer or the Guarantors are a party (whether or not Chase is also
a party to such agreement).

16.      INDEMNIFICATION

         The Issuer and the Guarantors jointly and severally agree to indemnify
and hold harmless Chase, its directors, officers, employees and agents from and
against any and all liabilities, claims, losses, damages, penalties, costs and
expenses (including attorneys' fees and disbursements) suffered or incurred by
or asserted or assessed against Chase or any of them arising out of Chase or any
of them acting under this Agreement, except for such liability, claim, loss,
damage, penalty, cost or expense resulting from the gross negligence or willful
misconduct of Chase, its directors. officers, employees or agents. This
indemnity will survive the termination of this Agreement.

17.      OPINION OF COUNSEL

         When delivering each Program Schedule, the Issuer and the Guarantors
shall each deliver to Chase all documents Chase may reasonably request relating
to their corporate existence and authority to enter into this Agreement,
including, without limitation, an opinion of counsel, substantially in the form
of Exhibit C hereto.

18.      NOTICES

         All notices, confirmations and other communications hereunder shall
(except to the extent otherwise expressly provided) be in writing and shall be
sent by first-class mail, postage prepaid, by telecopier or by hand, addressed
as follows, or to such other address as the party receiving such notice shall
have previously specified to the party sending such notice:

                                       6
<PAGE>   7

If to the Issuer:          1500 Franklin D. Roosevelt Avenue, 7th Floor
                           Caparra Heights PR 00968
                           Attention: Aurora M. Casablanca
                           Telephone: (787) 792-2297
                           Facsimile: (787) 792-8640

If to the Guarantors:      1500 Franklin D. Roosevelt Avenue, 7th Floor
                           Caparra Heights PR 00968
                           Attention: Auora M. Casablanca
                           Telephone: (787) 792-2297
                           Facsimile: (787) 792-8640

If to Chase concerning the daily issuance and redemption of Notes:

                           Attention: Commercial Paper Operations
                           55 Water Street, 2nd Floor
                           New York NY 10041-2413
                           Telephone: (212) 638-0448
                           Facsimile: (212) 638-7881

All other:                 Attention: Commercial Paper Service Delivery Unit
                           450 West 33rd Street, 15th Floor
                           New York NY 10001-2697
                           Telephone: (212) 946-3105
                           Facsimile: (212) 946-8181

19.       COMPENSATION

         The Issuer shall pay compensation for services pursuant to this
Agreement in accordance with the pricing schedules furnished by Chase to the
Issuer from time to time and upon such payment terms as the parties shall
determine. The Issuer shall also reimburse Chase for any fees and charges
imposed by DTC with respect to services provided in connection with the
Book-entry Notes.

20.      BENEFIT OF AGREEMENT

         This Agreement is solely for the benefit of the parties hereto and no
other person shall acquire or have any right under or by virtue hereof.

21.      TERMINATION

         This Agreement may be terminated at any time by any party by written
notice to the others, but such termination shall not affect the respective
liabilities of the parties hereunder arising prior to such termination.

                                       7
<PAGE>   8

22.       FORCE MAJEURE

         In no event shall Chase be liable for any failure or delay in the
performance of its obligations hereunder because of circumstances beyond Chase's
control, including, but not limited to, acts of God, flood, war (whether
declared or undeclared), terrorism, fire, riot, strikes or work stoppages for
any reason, embargo, government action, including any laws, ordinances,
regulations or the like which restrict or prohibit the providing of the services
contemplated by this Agreement, inability to obtain material, equipment, or
communications or computer facilities, or the failure of equipment or
interruption of communications or computer facilities, and other causes beyond
Chase's control whether or not of the same class or kind as specifically named
above.

23.       ENTIRE AGREEMENT

         This Agreement, together with the exhibits attached hereto, constitutes
the entire agreement among Chase, the Issuer and the Guarantors with respect to
the subject matter hereof and supersedes in all respects all prior proposals,
negotiations, communications, discussions and agreements among the parties
concerning the subject matter of this Agreement.

24.      WAIVERS AND AMENDMENTS

         No failure or delay on the part of any party in exercising any power or
right under this Agreement shall operate as a waiver, nor does any single or
partial exercise of any power or right preclude any other or further exercise,
or the exercise of any other power or right. No amendment, modification or
waiver of any provision of this Agreement shall be effective unless the same
shall be in writing and signed by each party hereto. Any such amendment,
modification or waiver shall be effective only in the specific instance and for
the purpose for which it is given.

25.      BUSINESS DAY

         Whenever any payment to be made hereunder shall be due on a day which
is not a business day for Chase, then such payment shall be made on Chase's next
succeeding business day.

26.      COUNTERPARTS

         This Agreement may be executed in counterparts, each of which shall be
deemed an original and such counterparts together shall constitute but one
instrument.

27.       HEADINGS

         The headings in this Agreement are for purposes of reference only and
shall not in any way limit or otherwise affect the meaning or interpretation of
any of the terms of this Agreement.

28.      GOVERNING LAW

         This Agreement and the Notes shall be governed by and construed in
accordance with the internal laws of the State of New York, without regard to
the conflict of laws provisions.

                                       8
<PAGE>   9

29.      JURISDICTION AND VENUE

         Each party hereby irrevocably and unconditionally submits to the
jurisdiction of the United States District Court for the Southern District of
New York and any New York State court located in the Borough of Manhattan in New
York City and of any appellate court from any thereof for the purposes of any
legal suit, action or proceeding arising out of or relating to this Agreement (a
"Proceeding"). Each party hereby irrevocably agrees that all claims in respect
of any Proceeding may be heard and determined in such Federal or New York State
court and irrevocably waives, to the fullest extent it may effectively do so,
any objection it may now or hereafter have to the laying of venue of any
Proceeding in any of the aforementioned courts and the defense of an
inconvenient forum to the maintenance of any Proceeding.

30.      WAIVER OF TRIAL BY JURY

         EACH PARTY HEREBY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING
ARISING OUT OF OR RELATING TO ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT.

31.      ACCOUNT CONDITIONS

         Each Account shall be subject to Chase's account conditions, as in
effect from time to time.

32.      GUARANTY PROVISIONS

         In consideration of the services provided by Chase under this
Agreement, the Guarantors, jointly and severally, hereby absolutely,
unconditionally and irrevocably guarantees (as primary obligor and not merely as
surety) the due and punctual payment, when and as the same shall become due and
payable, of each and every obligation of the Issuer hereunder (each of the
foregoing being an "Obligation" and, collectively, the "Obligations") at the
time and place and otherwise in accordance with the terms of this Agreement,
irrespective of (i) the validity, binding effect, legality, enforceability or
modification to, or amendment or waiver of, or compliance with, the Notes or
this Agreement, (ii) whether the Notes or this Agreement shall have been duly
executed by the respective parties thereto, (iii) any change in the existence or
structure of, or the bankruptcy or insolvency of, the Issuer, (iv) the absence
of any action to enforce any Obligation or the Notes or this Agreement or any
collateral security or other guaranty thereof, (v) any extension, renewal,
settlement, compromise, waiver or release in respect of any Obligation, the
Notes or this Agreement, (vi) the existence of any claim, set-off, counterclaim
or other right that the Guarantor may have against the Issuer, the noteholders
or Chase, or (vii) any other circumstance that might otherwise constitute a
legal or equitable discharge or defense of the Guarantors. The Guarantors hereby
agree that upon default in the payment when due of any Obligation they will
forthwith cause the payment of each and every Obligation to be made punctually
to Chase, when and as the same shall become due and payable, and as if such
payment were made by the Issuer. Each Guarantor hereby expressly waives
presentment, demand, protest or notice of any kind whatsoever, as well as any
requirement that the noteholders, or Chase on behalf of the noteholders, file
claims in the event of receivership or bankruptcy of the Issuer, or exhaust any
right to take any action against the Issuer or with respect to any collateral at
any time securing the Obligations or any other guaranty thereof; and the
Guarantors hereby consent to any and all extensions of time of payment of any or
all of the Obligations and to the release of any such collateral or other
guaranty. This guaranty is a guaranty of payment and not of collection merely
and shall be a continuing guaranty and, as such, shall remain operative and in
full force and effect until all Obligations shall have been paid and actually
received in full by the party to whom any such Obligation is due. If at any time
any payment of any Obligation is rescinded or must otherwise be restored or
returned upon the insolvency, bankruptcy, reorganization, dissolution or
liquidation of the Issuer (or the appointment of a trustee, receiver, intervenor
or conservator or similar official for the Issuer or any substantial part of its
assets, the Guarantors' obligations hereunder with respect to such payment shall
be reinstated at such time as though such payment had not been made. The
Guarantors hereby irrevocably agree that they will not be entitled to enforce
any right or remedy arising out of any right of subrogation that it may have or
be entitled to, by operation of law or otherwise, as a result of payments by
each Guarantor hereunder, until all Obligations have been paid and actually
received in full by the party to whom any such Obligation is due.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on their behalf by duly authorized officers as of the day and year
first-above written.

                                       9
<PAGE>   10

THE CHASE MANHATTAN BANK                 TELECOMUNICACIONES DE PUERTO RICO, INC.

By: /s/ Lloyd A. Baggs                   By: /s/ Frank P. Gatto
  --------------------                       -----------------------------------
Name: Lloyd A. Baggs                     Name: Frank P. Gatto
Title: Vice President                    Title: Vice President Finance &
Date: November 10, 2000                           Chief Financial Officer
                                         Date: November 14, 2000

                                         PUERTO RICO TELEPHONE COMPANY

                                         By: /s/ Frank P. Gatto
                                            ------------------------------------
                                         Name: Frank P. Gatto
                                         Title: Vice President Finance & Chief
                                                  Financial Officer
                                         Date: November 14, 2000

                                         CELULARES TELEFONICA

                                         By: /s/ Frank P. Gatto
                                            ------------------------------------
                                         Name: Frank P. Gatto
                                         Title: Vice President Finance & Chief
                                                  Financial Officer
                                         Date: November 14, 2000

<PAGE>   11

EXHIBIT A

MASTER COMMERCIAL PAPER-MASTER NOTE

NOVEMBER 9, 2000

         TELECOMUNICACIONES DE PUERTO RICO. INC. ("Issuer"), for value received,
hereby promises to pay to Cede & Co., as nominee of The Depository Trust
Company, or to registered assigns: (i) the principal amount, together with
unpaid accrued interest thereon, if any, on the maturity date of each obligation
identified on the records of Issuer (the "Underlying Records") as being
evidenced by this Master Note, which Underlying Records are maintained by THE
CHASE MANHATTAN RANK ("Paying Agent"); (ii) interest on the principal amount of
each such obligation that is payable in installments, if any, on the due date of
each installment, as specified on the Underlying Records; and (iii) the
principal amount of each such obligation that is payable in installments, if
any, on the due date of each installment, as specified on the Underlying
Records. Interest shall be calculated at the rate and according to the
calculation convention specified on the Underlying Records. Payments shall be
made by wire transfer to the registered owner from Paying Agent without the
necessity of presentation and surrender of this Master Note.

         REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS MASTER NOTE
SET FORTH ON THE REVERSE HEREOF AND ANNEX I ATTACHED HERETO.

This Master Note is a valid and binding obligation of Issuer.

Not valid Unless Countersigned for Authentication by Paying Agent.

TELECOMUNICACIONES DE
PUERTO RICO. INC.
(Issuer)

THE CHASE MANHATTAN BANK
(Paying Agent)

PUERTO RICO TELEPHONE COMPANY
(Guarantor)

CELULARES TELEFONICA
(Guarantor)

<PAGE>   12

                             ANNEX I TO MASTER NOTE

THIS MASTER NOTE AND THE OBLIGATIONS IDENTIFIED IN THE RECORDS OF THE ISSUER AS
BEING EVIDENCED BY THIS MASTER NOTE (COLLECTIVELY, THE "NOTES") HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
OTHER APPLICABLE SECURITIES LAW, AND OFFERS AND SALES THEREOF MAY BE MADE ONLY
IN COMPLIANCE WITH AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. BY ITS ACCEPTANCE OF A NOTE,
THE PURCHASER WILL BE DEEMED TO REPRESENT THAT IT HAS BEEN AFFORDED AN
OPPORTUNITY TO INVESTIGATE MATTERS RELATING TO THE ISSUER AND THE NOTES, THAT IT
IS NOT ACQUIRING SUCH NOTE WITH A VIEW TO ANY DISTRIBUTION THEREOF AND THAT IT
IS EITHER (A) AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR WITHIN
THE MEANING OF RULE 501(a) UNDER THE ACT AND POSSESSES SUCH KNOWLEDGE AND
EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS THAT IT IS CAPABLE OF EVALUATING
AND BEARING THE ECONOMIC RISK OF AN INVESTMENT IN THE NOTES (AN "INSTITUTIONAL
ACCREDITED INVESTOR") AND THAT EITHER IS PURCHASING NOTES FOR ITS OWN ACCOUNT,
IS A U.S. BANK (AS DEFINED IN SECTION 3(a)(2) OF THE ACT) OR A SAVINGS AND LOAN
ASSOCIATION OR OTHER INSTITUTION (AS DEFINED IN SECTION 3(a)(5)(A) OF THE ACT)
ACTING IN ITS INDIVIDUAL OR FIDUCIARY CAPACITY OR IS A FIDUCIARY OR AGENT (OTHER
THAN A U.S. BANK OR SAVINGS AND LOAN) PURCHASING NOTES FOR ONE OR MORE ACCOUNTS
EACH OF WHICH IS SUCH AN INSTITUTIONAL ACCREDITED INVESTOR (i) WHICH ITSELF
POSSESSES SUCH KNOWLEDGE AND EXPERIENCE OR (ii) WITH RESPECT TO WHICH SUCH
PURCHASER HAS SOLE INVESTMENT DISCRETION; OR (B) A QUALIFIED INSTITUTIONAL BUYER
("QIB") WITHIN THE MEANING OF THE RULE 144A UNDER THE ACT WHICH IS ACQUIRING
NOTES FOR ITS OWN ACCOUNT OR FOR ONE OR MORE ACCOUNTS, EACH OF WHICH IS QIB AND
WITH RESPECT TO EACH OF WHICH THE PURCHASER HAS SOLE INVESTMENT DISCRETION; AND
THE PURCHASER ACKNOWLEDGES THAT IT IS AWARE THAT THE SELLER MAY RELY UPON THE
EXEMPTION FROM THE REGISTRATION PROVISIONS OF SECTION 5 OF THE ACT PROVIDED BY
RULE 144A. BY ITS ACCEPTANCE OF A NOTE, THE PURCHASER THEREOF SHALL ALSO BE
DEEMED TO AGREE THAT ANY RESALE OR OTHER TRANSFER THEREOF WILL BE MADE ONLY (A)
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE ACT, EITHER (1) TO THE
ISSUER OR TO THE SELLER OR ANOTHER PERSON DESIGNATED BY THE ISSUER AS A
PLACEMENT AGENT FOR THE NOTES (COLLECTIVELY, THE "PLACEMENT AGENTS"), NONE OF
WHICH SHALL HAVE ANY OBLIGATION TO ACQUIRE SUCH NOTE, (2) THROUGH A PLACEMENT
AGENT TO AN INSTITUTIONAL ACCREDITED INVESTOR OR A QIB BY A PLACEMENT AGENT, OR
(3) TO A QIB IN A TRANSACTION THAT MEETS THE REQUIREMENTS OF RULE 144A AND (B)
IN THE MINIMUM AMOUNTS OF $250,000.

<PAGE>   13

                            LETTER OF REPRESENTATIONS

          [To be Completed by Issuer, Issuing Agent, and Paying Agent]

TELECOMUNICACIONES DE PUERTO RICO. INC.
[Name of Issuer]

THE CHASE MANHATTAN BANK (1506)
[Name and DTC Participant Number of Issuing Agent]

THE CHASE MANHATTAN BANK (1506)
(Name and DTC Participant Number of Paying Agent]

NOVEMBER 9, 2000
(Date)

Attention: Underwriting Department
The Depository Trust Company
55 Water Street 19th Floor
New York, NY 10041-0099

Re:      TELECOMUNICACIONES DE PUERTO, INC. - 4(2) COMMERCIAL PAPER PROGRAM
         UNCONDITIONALLY GUARANTEED BY PUERTO RICO TELEPHONE COMPANY AND
         CELULARES TELEFONICA, INC.

Ladies and Gentlemen:

         This letter sets forth our understanding with respect to certain
matters relating to the issuance by Issuer from time to time of notes under its
Commercial Paper program described above (the "Securities") have been issued
pursuant to a prospectus supplement, offering circular or other such document
authorizing the issuance of the Securities dated as of November 2000.

         Paying Agent has entered into a Money Market Instrument or Commercial
Paper Certificate Agreement with The Depository Trust Company ("DTC") dated as
of September 10, 1990, pursuant to which Paying Agent shall act as custodian of
a Master Note Certificate evidencing the Securities, when issued. Paying Agent
shall amend Exhibit A to such Certificate Agreement to include the program
described above, prior to issuance of the Securities.

         To induce DTC to accept the Securities as eligible for deposit at DTC
and to act in accordance with its Rules with respect to the Securities, Issuer,
Issuing Agent, and Paying Agent make the following representations to DTC:

         1. The Securities shall be evidenced by a Master Note Certificate in
registered form registered in the name of DTC's nominee, Cede & Co., and such
Master Note Certificate shall represent 100% of the principal amount of the
Securities. The Master Note Certificate shall include the substance of all
material provisions set forth in the DTC model Commercial Paper Master Note,

<PAGE>   14

a copy of which previously has been furnished to Issuing Agent and Paying Agent,
and may include additional provisions as long as they do not conflict with the
material provisions set forth in the DTC model.

         2. Issuer: (a) understands that DTC has no obligation to, and will not,
communicate to its participants ("Participants") or to any person having an
interest in the Securities any information contained in the Master Note
Certificate; and (b) acknowledges that neither DTC's Participants nor any person
having an interest in the Securities shall be deemed to have notice of the
provisions of the Master Note Certificate by virtue of submission of such
Certificate to DTC.

         3. For Securities to be issued at a discount from the face value to be
paid at maturity ("Discount Securities"), Issuer or Issuing Agent has obtained
from the CUSIP Service Bureau a written list of two basic six-character CUSIP
numbers (each of which uniquely identifies Issuer and two years of maturity
dates for the Discount Securities to be issued under its Commercial Paper
program described above). The CUSIP numbers on such list have been reserved for
future assignment to issues of the Discount Securities based on the maturity
year of the Discount Securities and will be perpetually reassignable in
accordance with DTC's Procedures, including DTC's Final Plan for DTC Money
Market Programs and DTC's Issuing/paying Agent General Operating Procedures
for Corporate Commercial Paper (the "Procedures"), a copy of which previously
has been furnished to Issuing Agent and Paying Agent.

         For Securities to be issued at face value with interest to be paid at
maturity only or periodically ("Interest Bearing Securities"), Issuer or Issuing
Agent has obtained from the CUSIP Service Bureau a written list of approximately
900 nine-character numbers (the basic first six characters of which are the same
and uniquely identify Issuer and the Interest Bearing Securities to be issued
under its Commercial Paper program described above). The CUSIP numbers on such
list have been reserved for future assignment to issues of the Interest Bearing
Securities. At any time when fewer than 100 of the CUSIP numbers on such list
remain unassigned, Issuer or Issuing Agent shall promptly obtain from the CUSIP
Service Bureau an additional written list of approximately 900 such numbers.

         4. When Securities are to be issued through DTC, Issuing Agent shall
notify Paying Agent and shall give issuance instructions to DTC in accordance
with the Procedures. The giving of such issuance instructions, which include
delivery instructions, to DTC shall constitute: (a) a representation that the
Securities are issued in accordance with applicable law; and (b) a confirmation
that the Master Note Certificate evidencing such Securities, in the form
described in Paragraph 1, has been issued and authenticated.

         5. Issuer recognizes that DTC does not in any way undertake to, and
shall not have any responsibility to, monitor or ascertain the compliance of any
transactions in the Securities with the following, as amended from time to time:
(a) any exemptions from registration under the Securities Act of 1933; (b) the
Investment Company Act of 1940; (c) the Employee Retirement Income Security Act
of 1974; (d) the Internal Revenue Code of 1986; (e) any rules of any
self-regulatory organizations (as defined under the Securities Exchange Act of
1934); or (0 any other local. state, or federal laws or regulations thereunder .

         6. Notwithstanding anything set forth in any document relating to a
letter of credit facility, neither DTC nor Cede & Co. shall have any obligations
or responsibilities relating to the letter of credit facility, if any, unless
such obligations or responsibilities are expressly set forth herein.

<PAGE>   15

         7. If issuance of Securities through DTC is scheduled to take place one
or more days after Issuing Agent has given issuance instructions to DTC. Issuing
Agent may cancel such issuance by giving a cancellation instruction to DTC in
accordance with the Procedures.

         8. At any time that Paying Agent has Securities in its DTC accounts. it
may request withdrawal of such Securities from DTC by giving a withdrawal
instruction to DTC in accordance with the Procedures. Upon DTC's acceptance of
such withdrawal instruction, Paying Agent shall reduce the principal amount of
the Securities evidenced by the Master Note Certificate accordingly.

         9. In the event of any solicitation of consents from or voting by
holders of the Securities. Issuer. Issuing Agent. or Paying Agent shall
establish a record date for such purposes (with no provision for revocation of
consents or votes by subsequent holders) and shall send notice of such record
date to DTC's Reorganization Department. Proxy Unit no fewer than 15 calendar
days in advance of such record date. If sent by telecopy, such notice shall be
directed to (212) 855-5181 or (212) 855-5182. If the party sending the notice
does not receive a telecopy receipt from DTC, such party shall telephone (212)
855-5187 to confirm receipt. Notice to DTC pursuant to this Paragraph. by mail
or by any other means, shall be sent to:

                  Supervisor, Proxy Unit
                  Reorganization Department
                  The Depository Trust Company
                  55 Water Street 50th Floor
                  New York, NY 10041-0099

         10. Paying Agent may override DTC's determination of interest and
principal payment dates, in accordance with the Procedures.

         11. Notice regarding the amount of variable interest and principal
payments on the Securities shall be given to DTC by Paying Agent in accordance
with the Procedures. All notices sent to DTC shall contain the CUSIP number of
the Securities.

         12. All notices sent to DTC shall contain the CUSIP number of
Securities.

         13. Paying Agent shall confirm with DTC daily, by CUSIP number, the
face value of the Securities outstanding, and Paying Agent's corresponding
interest and principal payment obligation, in accordance with the Procedures.

         14. DTC may direct Issuer, Issuing Agent, or Paying Agent to use any
other number or address as the number or address to which notices or payments
may be sent.

         15. Payments on the Securities, including payments in currencies other
than the U.S. Dollar, shall be made by Paying Agent in accordance with the
Procedures.

         16. In the event that Issuer determines that beneficial owners of the
Securities shall be able to obtain certificated Securities, Issuer, Issuing
Agent, or Paying Agent shall notify DTC of the availability of certificates. In
such event, Issuer, Issuing Agent, or Paying Agent shall issue, transfer, and
exchange certificates in appropriate amounts, as required by DTC and others.

<PAGE>   16

         17. Issuer authorizes DTC to provide to Issuing Agent or Paying Agent
listings of DTC Participants' holdings, known as Security Position Listings
("SPLs") with respect to the Securities from time to time at the request of
Issuing Agent or Paying Agent. Issuer authorizes Issuing Agent and Paying Agent
to provide DTC with such signatures, exemplars of signatures, and authorizations
to act as may be deemed necessary by DTC to permit DTC to discharge its
obligations to Participants and appropriate regulatory authorities. DTC charges
a fee for such SPLs. This authorization, unless revoked by Issuer, shall
continue with respect to the Securities while any Securities are on deposit at
DTC, until and unless Issuing Agent and/or Paying Agent shall no longer be
acting. In such event, Issuer shall provide DTC with similar evidence,
satisfactory to DTC, of the authorization of any successor thereto so to act.
Requests for SPLs, if by telecopy, shall be directed to DTC's Reorganization
Department, Proxy Unit at (212) 855-5181 or (212) 855-5182. Receipt of such
requests shall be confirmed by telephoning (212) 855-5202. Such SPL requests, by
mail or by any other means, shall be directed to the address indicated in
Paragraph 9.

         18. DTC may discontinue providing its services as securities depository
with respect to the Securities at any time by giving reasonable notice to
Issuer, Issuing Agent, or Paying Agent (at which time DTC will confirm with
Issuer, Issuing Agent, or Paying Agent the aggregate amount of Securities
outstanding by CUSIP number). Under such circumstances, at DTC's request Issuer,
Issuing Agent, and Paying Agent shall cooperate fully with DTC by taking
appropriate action to make available one or more separate certificates
evidencing Securities to any Participant having Securities credited to its DTC
accounts.

         19. Nothing herein shall be deemed to require Issuing Agent or Paying
Agent to advance funds on behalf of Issuer.

         20. This Letter of Representations may be executed in any number of
counterparts, each of which, when so executed shall be deemed to be an original,
but all such counterparts together shall constitute but one and the same
instrument.

         21. This Letter of Representations shall be governed by, and construed
in accordance with, the laws of the State of New York, without giving effect to
principles of conflicts of law.

         22. The sender of each notice delivered to DTC pursuant to this Letter
of Representations is responsible for confirming that such notice was properly
received by DTC.

         23. Issuer and Agents shall comply with the applicable requirements
stated in DTC's Operational Arrangements, as they may be amended from time to
time. DTC's Operational Arrangements are posted on DTC's website at
"www.DTC.org."

         24. The following riders, attached hereto. are hereby incorporated into
this Letter of Representations: NONE.

<PAGE>   17

Note:

Schedule A contains statements that DTC believes accurately describe DTC, the
method of effecting book-entry transfer of securities distributed through DTC,
and certain related matters.

Very truly yours,

TELECOMUNICACIONES DE PUERTO RICO, INC.
(Issuer)

THE CHASE MANHATTAN BANK
     (Issuing Agent)

THE CHASE MANHATTAN BANK
     (Paying Agent)

Received and Accepted:
THE DEPOSITORY
TRUST COMPANY                       PUERTO RICO TELEPHONE COMPANY
                                            (Guarantor)

                                    CELULARES TELEFONICA, INC.
                                           (Guarantor)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00022-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00022-of-00352.parquet"}]]