Document:

<PAGE>
                                                                   EXHIBIT 10.25

                 PLAN OF REORGANIZATION AND AGREEMENT OF MERGER

      PLAN OF REORGANIZATION AND AGREEMENT OF MERGER, dated as of MAY 1, 2002,
between PUERTO RICO TELEPHONE COMPANY, INC., a corporation organized under the
laws of the Commonwealth of Puerto Rico ("PRTC" or the "Surviving Corporation")
and VERIZON WIRELESS PUERTO RICO, INC. (VW), (formerly Celulares Telefonica,
Inc.) a corporation organized under the laws of the Commonwealth of Puerto Rico
("VW"or the "Merged Corporation") (PRTC and VW are hereinafter collectively
referred to as the "Constituent Corporations").

                                    RECITALS

      WHEREAS, the Boards of Directors of PRTC and VW deem it advisable and in
the best interest of their respective Corporations to consummate, and have
approved, the merger of the Merged Corporation, with and into the Surviving
Corporation (the "Merger") and other transactions contemplated hereby, upon the
terms and subject to the conditions set forth herein.

      WHEREAS, PRTC is a corporation duly organized and existing under the laws
of the Commonwealth of Puerto Rico, having been incorporated on September 11,
1998 under Registration Number 102,198 and having an authorized capital stock
consisting of 10,000,000 shares of common stock par value $0.01 each, of which
585,746 shares are issued and outstanding.

      WHEREAS, VW is a corporation duly organized and existing under the laws of
the Commonwealth of Puerto Rico, having been incorporated on January 9, 1998
under Registration Number 99,282, and having an authorized capital stock
consisting of 10,000,000 shares of common stock with a par value of $0.01 per
share, of which 411,000 shares are issued and outstanding.

      WHEREAS, the parties hereto intend that for Puerto Rico income tax
purposes, the Merger shall constitute a tax free reorganization within the
meaning of Section 1112(g)(1)(A) of the Puerto Rico Internal Revenue Code of
1994, as amended (the "PRIRC").

      WHEREAS, the laws of the Commonwealth of Puerto Rico permit such a merger,
and the Constituent Corporations (as defined in Section 1) desire to merge under
and pursuant to the provisions of Article 10.01 of the Puerto Rico General
Corporation Law of 1995 (the "Law").

      NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:

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      1. The Merger. Upon the terms and subject to the conditions hereof, as of
the Effective Date (as defined in Section 3), VW shall be merged with and into
PRTC, with PRTC continuing as the surviving corporation, and the separate
existence of VW shall cease.

      2. Certificate of Merger. If this Agreement is duly adopted in compliance
with the legal requirements for the Merger, as provided in Section 8 hereof, and
is not terminated pursuant to Section 11(b) hereof, a Certificate of Merger,
substantially in the form of Exhibit A, attached hereto and made a part hereof,
executed in accordance with Article 10.01 of the Law shall be filed with the
Secretary of State of the Commonwealth of Puerto Rico.

      3. Effective Date of the Merger. Upon the filing of the Certificate of
Merger with the Secretary of State of Puerto Rico, the Merger shall become
effective at 12:01 a.m., on May 1, 2002 (the "Effective Date").

      4. Certificate of Incorporation; By-Laws. (a) On the Effective Date, the
Certificate of Incorporation of PRTC shall remain as the Certificate of
Incorporation of the Surviving Corporation.

            (b) On the Effective Date, the By-laws of PRTC shall remain as the
By-laws of the Surviving Corporation.

      5. Directors and Officers of the Surviving Corporation.

            (a) On the Effective Date, the Directors of PRTC shall remain as the
directors of the Surviving Corporation and shall serve in such capacity until
their successors shall have been duly elected and qualified.

            (b) On the Effective Date, the Officers of PRTC shall remain as the
Officers of the Surviving Corporation and shall serve in such capacity until
their successors shall have been duly elected and qualified.

      6. Shares of Constituent Corporation; Recapitalization; Conversion. As of
the Effective Date:

            (a) PRTC Stock. By virtue of the Merger and without any action on
the part of the Stockholder of PRTC, each share of common stock, par value $0.01
each, of PRTC, as the Surviving Corporation, which was issued and outstanding on
the Effective Date, shall remain and continue to be the issued and outstanding
common stock PRTC after the Effective Date.

            (b) Stock of the Merged Corporation. By virtue of the Merger, and
without any action on the part of the Stockholder of VW, each share of common
stock, par value $0.01 each, of VW, as the Merged Corporation, which was issued
and outstanding on the Effective Date, shall cease to exist and shall be
canceled.

      7. Transfer Books. At the close of business on the business day
immediately preceding the Effective Date, the stock transfer books or records of
the Constituent Corporations

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shall be closed, and no transfer or assignment of any shares of them shall
thereafter be registered on the transfer books.

      8. Legal Requirements to Merger. Subject to the terms and provisions of
this Plan of Reorganization and Agreement of Merger, the Parties will take, or
cause to be taken, all reasonable actions necessary to comply promptly with all
legal requirements which may be imposed on them with respect to Merger and will
promptly cooperate with and furnish information to each other in connection with
any such requirements imposed upon any of them in connection with the Merger.
Each of the Parties will take all reasonable actions necessary to obtain (and
will cooperate with each other in obtaining) any consent, authorization, order
or approval of, or any exemption by, any governmental entity or other public or
private third party, required to be obtained or made by it in connection with
the Merger or the taking of any action contemplated by this Plan of
Reorganization and Agreement of Merger.

      9. Further Assurances. After the Effective Date, the Parties will take all
appropriate action and execute all documents, instruments or conveyances which
may be reasonably necessary to carry out the provisions hereof, including,
without limitation, vesting in the Surviving Corporation its right, title and
interest in and to the properties and assets of the Merged Corporation acquired
by operation of law through the Merger by the Surviving Corporation.

      10. Effect of Merger. On the Effective Date of the Merger:

            (a) The Surviving Corporation shall possess all of the privileges,
powers and franchises of a public as well as of a private nature, and shall be
subject to all the restrictions, disabilities, obligations and duties of each of
the Merged Corporation, except as otherwise herein provided or by law;

            (b) The Surviving Corporation shall be vested with all property, be
it real, personal, or mixed, and all debts due to the Merged Corporation on
whatever account as well as all other things in action or belonging to the
Merged Corporation; and

            (c) All property, rights, privileges, powers and franchises of the
Merged Corporation shall be thereafter effectually the property of the Surviving
Corporation as they originally were of the Merged Corporation, but all rights of
creditors and all liens upon any property of any of the Merged Corporation shall
be preserved unimpaired, and all debts, liabilities, obligations, and duties of
the Merged Corporation shall thenceforth attach to, and may be enforced against
the Surviving Corporation to the same extent as if such debts, liabilities,
obligations and duties had been incurred or contracted by it.

      11. Amendment and Termination. (a) At any time prior to the filing of the
Certificate of Merger with the Secretary of State of the Commonwealth of Puerto
Rico, this Plan of Reorganization and Agreement of Merger may be amended by an
agreement in writing by the Board of Directors of the Constituent Corporations
to the extent permitted by law notwithstanding approval of this Plan of
Reorganization and Agreement of Merger by the Stockholders of the Constituent
Corporations; provided, however, that no such amendment shall, if agreed to
after approval by the Stockholders of any Constituent Corporation, (i) alter or
change

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any term of the Certificate of Incorporation of the Surviving Corporation, or
(ii) alter or change any of the terms and conditions of this Plan of Agreement
of Merger if such alteration or change would adversely affect the Stockholders
of the Constituent Corporations.

            (b) Termination. At any time prior to the filing of the Certificate
of Merger with the Secretary of State of the Commonwealth of Puerto Rico, this
Agreement may be terminated and abandoned by the Board of Directors of the
Constituent Corporations, notwithstanding approval of the Plan of Reorganization
and Agreement of Merger by Stockholders of them. In the event of a termination,
all further obligation of the parties under this Plan of Reorganization and
Agreement of Merger shall terminate without further liability of any party.

      12. Business Purpose. The Constituent Corporations have entered into this
Plan and Agreement of Merger for the purpose of (i) integrating the operations
of the Constituent Corporations which were originally integrated in PRTC and
subsequently segregated on September 1, 1998 in order to comply with an order of
separation issued by the Federal Communications Commission on October 1997, to
protect wireline ratepayers and enhance competition but which allows the merger
of the Constituent Corporations into a single entity on or after January 1,
2002; (2) maximizing the tax benefits of having the wireline and wireless
operations of the Constituent Corporations within one tax entity and (iii)
simplifying the overall corporate structure and reduce accounting, auditing and
other administrative costs. The parties hereto intend that for Puerto Rico
income tax purposes, the Merger constitutes a reorganization within the meaning
of Section 1112(g)(1)(A) of the PRIRC.

      13. Miscellaneous.

            (a) Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given when delivered personally, by facsimile
(which is confirmed) or mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):

                  (i)   if to PRTC, to:

                        1515 F. D. Roosevelt Avenue
                        Guaynabo, Puerto Rico 00968.

                        Or at its mailing address:

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

                        Attention: Legal Department

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                  (ii)  if to VW, to:

                        1515 F. D. Roosevelt Avenue
                        Guaynabo, Puerto Rico 00968.

                        Or at its mailing address:
                        P. O. Box 360998
                        San Juan, Puerto Rico 00936-0998

                        Attention: Legal Department

            (b) Headings. When a reference is made in this Plan of
Reorganization and Agreement of Merger to a Section, such reference shall be to
a Section of this Plan of Reorganization and Agreement of Merger unless
otherwise indicated. The headings contained in this Plan Reorganization and
Agreement of Merger are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Plan of Reorganization and Agreement
of Merger.

            (c) Entire Agreement; No Third Party Beneficiaries; Rights of
Ownership. This Plan of Reorganization and Agreement of Merger (including the
documents, exhibits and instruments referred to herein) (i) constitutes the
entire agreement and supersedes all prior agreements, and understandings and
communications, both written and oral, among the parties with respect to the
subject matter hereof, and (ii) is not intended to confer upon any person other
than the parties hereto any rights or remedies hereunder.

            (d) Governing Law. This Plan of Reorganization and Agreement of
Merger shall be governed and construed in accordance with the laws of the
Commonwealth of Puerto Rico, without regard to any applicable principles of
conflicts of law.

            (e) Assignment. Neither this Plan of Reorganization and Agreement of
Merger nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other party. Subject to the preceding
sentence, this Plan of Reorganization and Agreement of Merger will be binding
upon, inure to the benefit of and be enforceable by the parties and their
respective successors and assigns.

            (f) Severability. If any term or other provision of this Plan of
Reorganization and Agreement of Merger is invalid, illegal or incapable of being
enforced by reason of any rule of law or public policy, all other conditions and
provisions of this Plan of Reorganization and Agreement of Merger shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any adverse
manner to either party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Plan of Reorganization and Agreement of
Merger so as to effect the original intent of the parties as closely as possible
in an acceptable manner to the end that the

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transactions contemplated hereby are fulfilled to the extent possible, and in
any case such term or provision shall be deemed amended to the extent necessary
to make it no longer invalid, illegal or unenforceable.

            (g) Counterparts. This Plan of Reorganization and Agreement of
Merger may be executed in multiple counterparts, each of which shall be deemed
an original and all of which taken together shall constitute one and the same
document.

      THE ABOVE PLAN AND AGREEMENT OF MERGER, having been adopted and approved
by a majority of the Board of Directors of each constituent corporate party
thereto, in accordance with the provisions of Section 10.01 of the General
Corporation Law of 1995, the President and the Secretary of each constituent
corporate party thereto do now hereby execute the said Plan of Reorganization
and Agreement of Merger under the corporate seals of their respective
Constituent Corporation, by authority of the Directors as the respective act,
deed and agreement of each of said Constituent Corporation, all as of the date
first above written.

(CORPORATE SEAL)              PUERTO RICO TELEPHONE COMPANY, INC.

<TABLE>
<S>                                  <C>
                                     By:        /s/ Jon E. Slater
                                        ---------------------------------
                                                  Jon E. Slater
                                                     President

ATTEST:

                                     By:        /s/ Iraida Latoni
                                        ---------------------------------
                                               Iraida Latoni, Esq.
                                                    Secretary
</TABLE>

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(CORPORATE SEAL)              VERIZON WIRELESS PUERTO RICO, INC.

                                     By:        /s/ Jon E. Slater
                                        ---------------------------------
                                                  Jon E. Slater
                                                    President

ATTEST:

                                     By:        /s/ Iraida Latoni
                                        ---------------------------------
                                               Iraida Latoni, Esq.
                                                   Secretary

                                                                               7<PAGE>
                                                                   EXHIBIT 10.26

                                U.S. $90,000,000

                           REVOLVING CREDIT AGREEMENT

                            Dated as of May 16, 2002

                                     Among

                    TELECOMUNICACIONES DE PUERTO RICO, INC.

                                  as Borrower,

                      PUERTO RICO TELEPHONE COMPANY, INC.

                               As the Guarantor,

                          BANCO POPULAR DE PUERTO RICO

                                   as Lender,

                                      and

                          BANCO POPULAR DE PUERTO RICO

                            as Administrative Agent

                                                                               8
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                                                                               9
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<TABLE>
<CAPTION>
                            TABLE OF CONTENTS                                PAGE #
<S>                                                                          <C>
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS..................................   12
   SECTION 1.01 CERTAIN DEFINED TERMS.......................................   12
   SECTION 1.02 COMPUTATION OF TIME PERIODS.................................   23
   SECTION 1.03 ACCOUNTING TERMS............................................   23

ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES................................   23
   SECTION 2.01 THE REVOLVING CREDIT ADVANCES...............................   23
   SECTION 2.02 MAKING THE REVOLVING CREDIT ADVANCES........................   24
   SECTION 2.03 FACILITY FEE................................................   25
   SECTION 2.04 TERMINATION OR REDUCTION OF THE COMMITMENTS.................   25
   SECTION 2.05 REPAYMENT OF REVOLVING CREDIT ADVANCES......................   25
   SECTION 2.06 INTEREST....................................................   25
   SECTION 2.07 INTEREST RATE DETERMINATION.................................   26
   SECTION 2.08 OPTIONAL CONVERSION OF REVOLVING CREDIT ADVANCES............   27
   SECTION 2.09 PREPAYMENTS OF ADVANCES.....................................   27
   SECTION 2.10 INCREASED COSTS.............................................   28
   SECTION 2.11 ILLEGALITY..................................................   29
   SECTION 2.12 PAYMENTS AND COMPUTATIONS...................................   29
   SECTION 2.13 TAXES.......................................................   30
   SECTION 2.14 SHARING OF PAYMENTS, ETC....................................   32
   SECTION 2.15 USE OF PROCEEDS.............................................   32

ARTICLE III CONDITIONS TO EFFECTIVENESS AND LENDING.........................   33
   SECTION 3.01 CONDITIONS PRECEDENT TO EFFECTIVENESS OF SECTION 2.01.......   33
   SECTION 3.02 CONDITIONS PRECEDENT TO EACH REVOLVING CREDIT BORROWING.....   34
   SECTION 3.03 DETERMINATIONS UNDER SECTION 3.01...........................   34

ARTICLE IV REPRESENTATIONS AND WARRANTIES...................................   35
   SECTION 4.01 REPRESENTATIONS AND WARRANTIES OF THE BORROWER..............   35

ARTICLE V COVENANTS OF THE LOAN PARTIES.....................................   37
   SECTION 5.01 AFFIRMATIVE COVENANTS.......................................   37
   SECTION 5.02 NEGATIVE COVENANTS..........................................   41
   SECTION 5.03 FINANCIAL COVENANTS.........................................   43

ARTICLE VI EVENTS OF DEFAULT................................................   44
   SECTION 6.01 EVENTS OF DEFAULT...........................................   44

ARTICLE VII GUARANTY........................................................   46
   SECTION 7.01 GUARANTY; LIMITATION OF LIABILITY...........................   46
   SECTION 7.02 GUARANTY ABSOLUTE...........................................   47
   SECTION 7.03 WAIVER......................................................   48
   SECTION 7.04 CONTINUING GUARANTY; ASSIGNMENTS............................   49
   SECTION 7.05 SUBROGATION.................................................   50
</TABLE>

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<TABLE>
<S>                                                                            <C>
ARTICLE VIII THE ADMINISTRATIVE AGENT.......................................   50
   SECTION 8.01 APPOINTMENT, POWERS AND IMMUNITIES..........................   50
   SECTION 8.02 RELIANCE BY ADMINISTRATIVE AGENT............................   51
   SECTION 8.03 DEFAULTS....................................................   51
   SECTION 8.04 RIGHTS AS A LENDER..........................................   51
   SECTION 8.05 INDEMNIFICATION.............................................   52
   SECTION 8.06 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS......   52
   SECTION 8.07 FAILURE TO ACT..............................................   52
   SECTION 8.08 RESIGNATION OR REMOVAL OF ADMINISTRATIVE AGENT..............   53

ARTICLE IX MISCELLANEOUS....................................................   53
   SECTION 9.01 AMENDMENTS, ETC.............................................   53
   SECTION 9.02 NOTICES, ETC................................................   54
   SECTION 9.03 NO WAIVER; REMEDIES.........................................   56
   SECTION 9.04 COSTS AND EXPENSES..........................................   56
   SECTION 9.05 RIGHT OF SET-OFF............................................   57
   SECTION 9.06 BINDING EFFECT..............................................   57
   SECTION 9.07 ASSIGNMENTS AND PARTICIPATIONS..............................   58
   SECTION 9.08 NONDISCLOSURE...............................................   60
   SECTION 9.09 GOVERNING LAW...............................................   61
   SECTION 9.10 JURISDICTION, ETC...........................................   61
   SECTION 9.11 WAIVER OF JURY TRIAL........................................   62
   SECTION 9.12 EXECUTION IN COUNTERPARTS...................................   62
   SECTION 9.13 EXHIBITS AND SCHEDULES INCORPORATED.........................   62
</TABLE>

                                                                              11
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                           REVOLVING CREDIT AGREEMENT

                            Dated as of May 16, 2002

      TELECOMUNICACIONES DE PUERTO RICO, INC., a Puerto Rico corporation (the
"Borrower"), and PUERTO RICO TELEPHONE COMPANY, INC., a Puerto Rico corporation
("PRTC" or the "Guarantor"), the banks, financial institutions and other
institutional lenders listed on the signature pages hereof (the "Lenders"), and
Banco Popular de Puerto Rico ("BPPR" or "Lender"), as administrative agent for
the Lenders (in such capacity, the "Administrative Agent"), agree as follows:

                                   ARTICLE I

                        DEFINITIONS AND ACCOUNTING TERMS

      SECTION 1.01 Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):

            "Additional Bank Indebtedness" means, collectively, the BBVA
      Indebtedness, the Citibank Indebtedness, and additional unsecured loans or
      other unsecured extensions of credit to the Borrower by banks and other
      financial institutions.

            "Administrative Agent's Account" means the account of the
      Administrative Agent maintained by the Administrative Agent at Banco
      Popular with its office at 209 Munoz Rivera Avenue, Account No. 1970,
      Attention: Corporate Banking.

            "Advance" means a Revolving Credit Advance.

            "Affiliate" means, as to any Person, any other Person that, directly
      or indirectly, controls, is controlled by or is under common control with
      such Person or is a director or officer of such Person. For purposes of
      this definition, the term "control" (including the terms "controlling",
      "controlled by" and "under common control with") of a Person means the
      possession, direct or indirect, of the power to vote 10% or more of the
      Voting Stock of such Person or to direct or cause the direction of the
      management and policies of such Person, whether through the ownership of
      Voting Stock, by contract or otherwise.

            "Applicable Lending Office" means, with respect to each Lender, such
      Lender's LIBOR Lending Office.

            "Applicable Margin" means 0.30% per annum, for any Interest Period.

            "Assignment and Acceptance" means an assignment and acceptance
      entered into by a Lender and an Eligible Assignee, and accepted by the
      Administrative Agent, in substantially the form of Exhibit C hereto.

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            "Base Rate" means, for any day, the simple average of the rates of
      interest announced publicly on such day in the Wall Street Journal by the
      principal commercial banks in New York, New York as their prime commercial
      lending rate, which for purposes hereof is not intended to be the lowest
      or best rate of interest charged by any Lender to a customer, with each
      change in such rate to be effective for purposes hereof on the day in
      which any such change is announced as herein provided, whether or not such
      change is notified to the Borrower by the Administrative Agent. The Base
      Rate will be computed on the basis of a 360 day year for the actual number
      of days elapsed occurring in the period for which such interest is
      payable.

            "Base Rate Advance" means a Revolving Credit Advance that bears
      interest based upon the Base Rate as provided in Section 2.06(a)(i).

            "Bonds" means the following series of senior notes issued by the
      Borrower: (a) $300,000,000 of 6.15% Senior Notes due 2002; (b)
      $400,000,000 of 6.65% Senior Notes due 2006; and (c) $300,000,000 of 6.80%
      Senior Notes due 2009; provided, that after May 15, 2002, the term "Bonds"
      shall mean only the $400,000,000 of 6.65% Senior Notes due 2006, and the
      $300,000,000 of 6.80% Senior Notes due 2009.

            "Borrower" has the meaning specified in the recital of parties.

            "Borrower's Account" means the account of the Borrower maintained by
      the Borrower at Banco Popular de Puerto Rico with its office at Popular
      Center, Account No. 030-303664.

            "Borrowing" means a Revolving Credit Borrowing.

            "Business Day" means a day of the year on which banks are not
      required or authorized by law or executive order to close in New York City
      or San Juan, Puerto Rico, provided that, if the applicable Business Day
      relates to any LIBOR Rate Advances, "Business Day" means a day of the year
      on which banks are not required or authorized by law or executive order to
      close in New York City or San Juan, Puerto Rico and on which dealings are
      carried on in the London interbank market.

            "BBVA Indebtedness" means that certain two year term loan facility
      in a principal amount of $50,000,000, extended to the Borrower pursuant to
      that certain Term Credit Agreement dated as of May 16, 2002, among the
      Borrower, the Guarantor, Banco Bilbao Vizcaya Argentaria Puerto Rico, as
      administrative agent, and the Lenders party thereto, for working capital
      and other general corporate purposes of the Borrower.

            "Citibank Indebtedness" means those certain revolving credit
      facilities in a maximum aggregate principal amount of up to $500,000,000
      extended to the Borrower pursuant to that certain Five-Year Credit
      Agreement dated as of March 2, 1999 among the Borrower, Citibank, N.A., as
      administrative agent, the Lenders party thereto, Bank of America National
      Trust and Savings Association, as syndication agent, and The Chase
      Manhattan Bank and Morgan Guaranty Trust Company of New York, as
      documentation agents, for working capital and other general corporate
      purposes of the Borrower.

                                                                              13
<PAGE>
            "Commercial Paper Program" means the commercial paper program of the
      Borrower established pursuant to the Issuing and Paying Agent Agreement
      with the Chase Manhattan Bank (now known as JP Morgan Chase), whereby the
      Borrower may issue at any one time up to $500,000,000 principal amount of
      short term notes having maturities of up to one year.

            "Commercial Paper Program Guaranty" means that certain Joint and
      Several Guaranty by Puerto Rico Telephone Company, Inc., and Celulares
      Telefonica, Inc. in favor of the Holders of Notes Issued by
      Telecomunicaciones de Puerto Rico, Inc. Under a Certain Commercial Paper
      Program dated November 9, 2000, whereby the Guarantor guarantees the
      payment of principal and interest due by the Borrower under the notes
      issued pursuant to the Commercial Paper Program.

            "Commitment" has the meaning specified in Section 2.01.

            "Consolidated" refers to the consolidation of accounts in accordance
      with GAAP.

            "Consolidated Assets" means, for any period, the total assets of the
      Borrower and its Subsidiaries as shown on the audited Consolidated balance
      sheet or unaudited Consolidated balance sheet, as the case may be, as of
      the end of the most recent fiscal quarter preceding such period.

            "Controlling Interest" means: (a) ownership of at least 35% plus one
      share of the Voting Stock of the Borrower; and (b) the ability to appoint
      a majority of the Board of Directors of the Borrower.

            "Convert", "Conversion" and "Converted" each refers to a conversion
      of Revolving Credit Advances of one Type into Revolving Credit Advances of
      the other Type pursuant to Section 2.07 or 2.08.

            "Debt" of any Person means, without duplication: (a) all
      indebtedness of such Person for borrowed money; (b) all obligations of
      such Person for the deferred purchase price of property or services (other
      than trade payables incurred in the ordinary course of such Person's
      business for which collection proceedings have not been commenced,
      provided that trade payables for which collection proceedings have
      commenced shall not be included in the term "Debt" so long as the payment
      of such trade payables is being contested in good faith and by proper
      proceedings and for which appropriate reserves are being maintained); (c)
      all obligations of such Person evidenced by notes, bonds, debentures or
      other similar instruments; (d) all obligations of such Person created or
      arising under any conditional sale or other similar title retention
      agreement with respect to Property acquired by such Person (even though
      the rights and remedies of the seller or lender under such agreement in
      the event of default are limited to repossession or sale of such
      Property); (e) all obligations of such Person as lessee under leases that
      have been, in accordance with GAAP, recorded as capital leases; (f) all
      obligations of such Person in respect of acceptances, letters of credit or
      similar extensions of credit; (g) all net obligations of such Person in
      respect of Hedge Agreements; (h) all Debt of others

                                                                              14
<PAGE>
      referred to in clauses (a) through (g) above or clause (i) below
      guaranteed directly, or indirectly through a Subsidiary, by such Person,
      or in effect guaranteed directly, or indirectly through a Subsidiary, by
      such Person through a written agreement either: (1) to pay or purchase
      such Debt or to advance or supply funds for the payment or purchase of
      such Debt; or (2) to purchase, sell or lease (as lessee or lessor)
      Property, or to purchase or sell services, primarily for the purpose of
      enabling the debtor to make payment of such Debt or to assure the holder
      of such Debt against loss and: (i) all Debt referred to in clauses (a)
      through (h) above secured by (or for which the holder of such Debt has an
      existing right, contingent or otherwise, to be secured by) any Lien on
      Property (including, without limitation, accounts and contract rights)
      owned by such Person, even though such Person has not assumed or become
      liable for the payment of such Debt.

            "Debt to EBITDA Ratio" of any Person at any date means the ratio of:
      (a) Debt of the types that, in accordance with GAAP, would be classified
      as indebtedness on a Consolidated balance sheet of such Person on such
      date to (b) EBITDA for the period of four fiscal quarters of such Person
      ended on or immediately prior to such date, provided that for purposes of
      clause (a) of this definition, Debt shall not include: (1) the obligations
      specified in clause (g) of the definition thereof set forth above; or (2)
      with respect to the Borrower, any obligations which may be assumed by the
      Borrower for guaranties of any indebtedness of the Borrower's employee
      stock ownership plan up to an aggregate principal amount of $26,100,000.

            "Default" means any Event of Default or any event that would
      constitute an Event of Default but for the requirement that notice be
      given or time elapse or both.

            "Disclosed Litigation" has the meaning specified in Section 3.01(b).

            "EBITDA" means the sum, determined on a Consolidated basis, of the
      Borrower's: (a) net income (or net loss); (b) interest expense; (c) income
      tax expense; (d) depreciation expense; (e) amortization expense; and (f)
      non-cash severance charges in an aggregate amount not to exceed
      $40,000,000 in calendar year 2002.

            "EBITDA to Interest Ratio" of any Person on any date means the ratio
      of: (a) EBITDA for the period of four fiscal quarters of such Person ended
      on or immediately prior to such date to (b) interest payable on, and
      amortization of debt discount in respect of, all Debt of such Person for
      the period of four fiscal quarters of such Person ended on or immediately
      prior to such date, provided that for purposes of clause (b) of this
      definition, Debt shall not include the obligations specified in clause (g)
      of the definition thereof set forth above.

            "Effective Date" has the meaning specified in Section 3.01.

            "Eligible Assignee" means: (a) a Lender; (b) an Affiliate of a
      Lender that is a financial institution and is majority-owned by such
      Lender or such Lender's holding company; (c) a commercial bank organized
      under the laws of the Commonwealth of Puerto Rico, the United States, or
      any State thereof, and having total assets in excess of $3,000,000,000;
      (d) a savings and loan association or savings bank organized under the

                                                                              15
<PAGE>
      laws of the United States, or any State thereof, and having total assets
      in excess of $3,000,000,000; or (e) any other Person approved by the
      Administrative Agent and the Borrower, such approval not to be
      unreasonably withheld; provided, however, that neither the Borrower nor
      any Affiliate of the Borrower shall qualify as an Eligible Assignee.

            "Environmental Action" means any action, suit, demand, demand
      letter, claim, notice of non-compliance or violation, notice of liability
      or potential liability, investigation, proceeding, consent order or
      consent agreement relating in any way to any Environmental Law,
      Environmental Permit or Hazardous Materials or arising from alleged injury
      or threat of injury to health, safety or the environment, including,
      without limitation: (a) by any governmental or regulatory authority for
      enforcement, cleanup, removal, response, remedial or other actions or
      damages; and (b) by any governmental or regulatory authority or any third
      party for damages, contribution, indemnification, cost recovery,
      compensation or injunctive relief.

            "Environmental Law" means any federal, state, local or foreign
      statute, law, ordinance, rule, regulation, code, order, judgment, decree
      or judicial or agency interpretation, policy or guidance relating to
      pollution or protection of the environment, health, safety or natural
      resources, including, without limitation, those relating to the use,
      handling, transportation, treatment, storage, disposal, release or
      discharge of Hazardous Materials.

            "Environmental Permit" means any permit, approval, identification
      number, license or other authorization required under any Environmental
      Law.

            "ERISA" means the Employee Retirement Income Security Act of 1974,
      as amended from time to time, and the regulations promulgated and rulings
      issued thereunder.

            "ERISA Affiliate" means any Person that for purposes of Title IV of
      ERISA is a member of the Loan Parties' controlled group, or under common
      control with the Borrower, within the meaning of Section 414 of the
      Internal Revenue Code.

            "ERISA Event" means: (a) the occurrence of a reportable event,
      within the meaning of Section 4043 of ERISA, with respect to any Plan
      unless the 30-day notice requirement with respect to such event has been
      waived by the PBGC; (b) the application for a minimum funding waiver with
      respect to a Plan; (c) the provision by the administrator of any Plan of a
      notice of intent to terminate such Plan pursuant to Section 4041(a)(2) of
      ERISA (including any such notice with respect to a plan amendment referred
      to in Section 4041(e) of ERISA); (d) the cessation of operations at a
      facility of any of the Loan Parties or any ERISA Affiliate in the
      circumstances described in Section 4062(e) of ERISA; (e) the withdrawal by
      any of the Loan Parties or any ERISA Affiliate from a Multiple Employer
      Plan during a plan year for which it was a substantial employer, as
      defined in Section 4001(a)(2) of ERISA; (f) the imposition of a lien under
      Section 302(f) of ERISA with respect to any Plan; (g) the adoption of an
      amendment to a Plan requiring the provision of security to such Plan
      pursuant to Section 307 of ERISA;

                                                                              16
<PAGE>
      or (h) the institution by the PBGC of proceedings to terminate a Plan
      pursuant to Section 4042 of ERISA, or the occurrence of any event or
      condition described in Section 4042 of ERISA that is reasonably expected
      to result in the termination of, or the appointment of a trustee to
      administer, a Plan.

            "Eurocurrency Liabilities" has the meaning assigned to that term in
      Regulation D of the Board of Governors of the Federal Reserve System, as
      in effect from time to time.

            "Eurodollar Rate Reserve Percentage" for any Interest Period for all
      LIBOR Rate Advances comprising part of the same Borrowing means the
      reserve percentage applicable two Business Days before the first day of
      such Interest Period under regulations issued from time to time by the
      Board of Governors of the Federal Reserve System (or any successor) for
      determining the maximum reserve requirement (including, without
      limitation, any emergency, supplemental or other marginal reserve
      requirement) for a member bank of the Federal Reserve System in New York
      City with respect to liabilities or assets consisting of or including
      Eurocurrency Liabilities (or with respect to any other category of
      liabilities that includes deposits by reference to which the interest rate
      on LIBOR Rate Advances is determined) having a term equal to such Interest
      Period.

            "Events of Default" has the meaning specified in Section 6.01.

            "Federal Funds Rate" means, for any period, a fluctuating interest
      rate per annum equal for each day during such period to the weighted
      average of the rates on overnight Federal funds transactions with members
      of the Federal Reserve System arranged by Federal funds brokers, as
      published for such day (or, if such day is not a Business Day, for the
      next preceding Business Day) by the Federal Reserve Bank of New York, or,
      if such rate is not so published for any day that is a Business Day, the
      average of the quotations for such day on such transactions received by
      the Administrative Agent from three Federal funds brokers of recognized
      standing selected by it.

            "GAAP" means: (a) in the case of the preparation of all financial
      reporting requirements, generally accepted accounting principles in the
      United States, as in effect from time to time; and (b) in the case of the
      calculation, certification and compliance with all financial tests and
      covenants, generally accepted accounting principles in the United States,
      as in effect on the date of the financial statements delivered to each
      Lender in accordance with Section 4.01(e), in each case applied on a
      consistent basis both as to classification of items and amounts.

            "GITI" means GTE International Telecommunications Incorporated, a
      Delaware corporation.

            "GTE Holdings (Puerto Rico)" shall mean GTE Holdings (Puerto Rico)
      LLC, a limited liability company organized under the laws of the State of
      Delaware.

            "Guaranteed Obligations" has the meaning specified in Section 7.01.

            "Guarantor" has the meaning specified in the recital of parties to
      this Agreement.

                                                                              17
<PAGE>
            "Guaranty" has the meaning specified in Section 7.01.

            "Hazardous Materials" means: (a) petroleum and petroleum products,
      byproducts or breakdown products, radioactive materials,
      asbestos-containing materials, polychlorinated biphenyls and radon gas;
      and (b) any other chemicals, materials or substances designated,
      classified or regulated as hazardous or toxic or as a pollutant or
      contaminant under any Environmental Law.

            "Hedge Agreements" means interest rate swap, cap or collar
      agreements, interest rate future or option contracts, currency swap
      agreements, currency future or option contracts and other similar
      agreements.

            "Interest Period" means, for each LIBOR Rate Advance comprising part
      of the same Revolving Credit Borrowing, the period commencing on the date
      of such LIBOR Rate Advance or the date of the Conversion of any Base Rate
      Advance into such LIBOR Rate Advance and ending on the last day of the
      period selected by the Borrower pursuant to the provisions below and,
      thereafter, with respect to such LIBOR Rate Advances, each subsequent
      period commencing on the last day of the immediately preceding Interest
      Period and ending on the last day of the period selected by the Borrower
      pursuant to the provisions below. The duration of each such Interest
      Period shall be one week or one, two, three or six months, as the Borrower
      may, upon notice received by the Administrative Agent not later than 11:00
      A.M. (Atlantic Standard Time) on the third Business Day prior to the first
      day of such Interest Period, select; provided, however, that:

                  (i) the Borrower may not select any Interest Period that ends
            after the Termination Date;

                  (ii) Interest Periods commencing on the same date for LIBOR
            Rate Advances comprising part of the same Revolving Credit Borrowing
            shall be of the same duration;

                  (iii) whenever the last day of any Interest Period would
            otherwise occur on a day other than a Business Day, the last day of
            such Interest Period shall be extended to occur on the next
            succeeding Business Day, provided, however, that, if such extension
            would cause the last day of such Interest Period to occur in the
            next following calendar month, the last day of such Interest Period
            shall occur on the next preceding Business Day; and

                  (iv) whenever the first day of any Interest Period occurs on a
            day of an initial calendar month for which there is no numerically
            corresponding day in the calendar month that succeeds such initial
            calendar month by the number of months equal to the number of months
            in such Interest Period, such Interest Period shall end on the last
            Business Day of such succeeding calendar month.

            "Internal Revenue Code" means the Internal Revenue Code of 1986, as
      amended from time to time, and the regulations promulgated and rulings
      issued thereunder.

                                                                              18
<PAGE>
            "LIBOR Lending Office" means, with respect to any Lender, the office
      of such Lender specified as its "LIBOR Lending Office" opposite its name
      on Schedule I hereto or such other office of such Lender as such Lender
      may from time to time specify to the Borrower and the Administrative
      Agent.

            "LIBOR Rate" means, with respect to any LIBOR Rate Advance for any
      Interest Period, the rate appearing on Page 3750 of the Telerate Service
      (or on any successor or substitute page of such Service, or any successor
      to or substitute for such Service, providing rate quotations comparable to
      those currently provided on such page of such Service, as determined by
      the Administrative Agent from time to time for purposes of providing
      quotations of interest rates applicable to dollar deposits in the London
      interbank market) at approximately 11:00 A.M., Atlantic Standard Time, on
      the Business Day that such Interest Period commences, as the rate for
      dollar deposits with a maturity comparable to such Interest Period. In the
      event that such rate is not available at such time for any reason, then
      the "LIBOR Rate" with respect to such LIBOR Rate Advance for such Interest
      Period shall be the average of the rates (rounded upward to the nearest
      whole multiple of 1/16 of 1%) per annum at which dollar deposits
      approximately equal in principal amount to the aggregate principal amount
      of such Advance and for a maturity comparable to such Interest Period are
      quoted to the Administrative Agent by at least three (3) major
      international commercial banks in immediately available funds in the
      London interbank market at approximately 11:00 A.M., Atlantic Standard
      Time, on the Business Day that such Interest Period commences.

            "LIBOR Rate Advance" means a Revolving Credit Advance that bears
      interest based upon the LIBOR Rate as provided in Section 2.06(a)(ii).

            "Lenders" means BPPR and each Person that shall become a party
      hereto pursuant to Section 9.07.

            "Lien" means any lien, security interest or other charge or
      encumbrance of any kind.

            "Loan Party" means each of the Borrower and the Guarantor.

            "Material Adverse Change" means any material adverse change in the
      business, condition (financial or otherwise), operations, performance,
      properties or prospects of any Loan Party or any Loan Party and its
      Subsidiaries taken as a whole.

            "Material Adverse Effect" means a material adverse effect on: (a)
      the ability of any Loan Party to conduct its business on substantially the
      same basis as conducted on the Effective Date; (b) the rights and remedies
      of the Administrative Agent or any Lender under any Loan Document; or (c)
      the ability of any Loan Party to service its Debt obligations on a timely
      basis.

            "Merger Agreement" means the Plan of Reorganization and Agreement of
      Merger dated May 1, 2002, between PRTC and Verizon Wireless Puerto Rico,
      Inc. (formerly

                                                                              19
<PAGE>
      Celulares Telefonica, Inc.) ("VW"), pursuant to which VW was merged with
      and into PRTC, with PRTC as the surviving corporation.

            "Merger Documents" means, collectively, the Merger Agreement and all
      other agreements, instruments and documents relating to the Merger, all of
      which are listed in Schedule 1.01(a) hereto.

            "Moody's" means Moody's Investors Service, Inc.

            "Multiemployer Plan" means a multiemployer plan, as defined in
      Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA
      Affiliate is making or accruing an obligation to make contributions, or
      has within any of the preceding five plan years made or accrued an
      obligation to make contributions.

            "Multiple Employer Plan" means a single employer plan, as defined in
      Section 4001(a)(15) of ERISA, that: (a) is maintained for employees of any
      Loan Party or any ERISA Affiliate and at least one Person other than such
      Loan Party and the ERISA Affiliates; or (b) was so maintained and in
      respect of which any Loan Party or any ERISA Affiliate could have
      liability under Section 4064 or 4069 of ERISA in the event such plan has
      been or were to be terminated.

            "Note" means a Revolving Credit Note.

            "Notice of Revolving Credit Borrowing" has the meaning specified in
      Section 2.02(a).

            "Other Taxes" has the meaning specified in Section 2.13(b).

            "PBGC" means the Pension Benefit Guaranty Corporation (or any
      successor).

            "Permitted Liens" means, with respect to any Person: (a) Liens for
      taxes, assessments and governmental charges and levies to the extent not
      required to be paid under Section 5.01(b) hereof; (b) pledges or deposits
      to secure obligations under workers' compensation laws or similar
      legislation; (c) pledges or deposits to secure performance in connection
      with bids, tenders, contracts (other than contracts for the payment of
      money) or leases to which such Person is a party; (d) deposits to secure
      public or statutory obligations of such Person; (e) materialmen's,
      mechanics', carriers', workers', repairmen's or other like Liens in the
      ordinary course of business, or deposits to obtain the release of such
      Liens to the extent such Liens, in the aggregate, would not have a
      Material Adverse Effect; (f) deposits to secure surety and appeal bonds to
      which such Person is a party; (g) other pledges or deposits for similar
      purposes in the ordinary course of business; (h) Liens created by or
      resulting from any litigation or legal proceeding which at the time is
      currently being contested in good faith by appropriate proceedings; (i)
      leases made, or existing on Property acquired, in the ordinary course of
      business; (j) landlord's Liens under leases to which such Person is a
      party; (k) zoning restrictions, easements, licenses, and restrictions on
      the use of real Property or minor irregularities in title thereto, which
      do not materially impair the use of such Property in the operation of the
      business of such Person or the value of such Property for the purpose of
      such

                                                                              20
<PAGE>
      business; and (l) bankers' liens, rights of set-off or analogous rights
      granted or arising by operation of law to any deposits held by or other
      indebtedness owing by any lender or any affiliate thereof to or for the
      credit or account of such person.

            "Permitted Receivables Financing" means any financing pursuant to
      which the Borrower or any Subsidiary of the Borrower may sell, convey, or
      otherwise transfer to a Receivables Subsidiary or any other Person (in the
      case of transfer by a Receivables Subsidiary), or grant a security
      interest in, any accounts receivable (and related assets) of the Borrower
      or such Subsidiary, provided that such financing shall be on customary
      market terms and shall non-recourse to the Borrower and its Subsidiaries
      (other than the Receivables Subsidiary) except to a limited extent
      customary for such transactions. The grant of a security interest in any
      accounts receivable of the Borrower or any Subsidiary of the Borrower
      (other than a Receivables Subsidiary) to secure Debt under any credit
      facility shall not be deemed a Permitted Receivables Financing.

            "Person" means an individual, partnership, corporation (including a
      business trust), joint stock company, trust, unincorporated association,
      joint venture, limited liability company or other entity, or a government
      or any political subdivision or agency thereof.

            "Plan" means a Single Employer Plan or a Multiple Employer Plan.

            "PR-GCL" means the Puerto Rico General Corporations Law of 1995, as
      amended.

            "Property" means with respect to any Person, any right or interest
      in or to property of any kind whatsoever, whether real, personal
      (including, without limitation, cash) or mixed and whether tangible or
      intangible of such Person.

            "Purchase" means the acquisition by GITI, directly or indirectly, of
      the Controlling Interest.

            "Quarterly Date" means the last Business Day of March, June,
      September and December of each year.

            "Receivables Subsidiary" means a bankruptcy-remote, special-purpose
      wholly owned Subsidiary formed in connection with a Permitted Receivables
      Financing.

            "Required Lenders" means as at any time, Lenders having at least 66%
      of the sum of: (a) the aggregate unused amount, if any, of the Commitments
      as at such time plus (b) the aggregate outstanding principal amount of the
      Revolving Credit Advances at such time.

            "Revolving Credit Advance" means an advance by a Lender to the
      Borrower as part of a Revolving Credit Borrowing and refers to a Base Rate
      Advance or a LIBOR Rate Advance.

            "Revolving Credit Borrowing" means a borrowing consisting of
      simultaneous Revolving Credit Advances made by each of the Lenders
      pursuant to Section 2.01.

                                                                              21
<PAGE>
            "Revolving Credit Note" means a promissory note of the Borrower
      payable to the order of any Lender, in substantially the form of Exhibit A
      hereto, evidencing the aggregate indebtedness of the Borrower to such
      Lender resulting from the Revolving Credit Advances made by such Lender.

            "S&P" means Standard & Poor's Ratings Group, a division of The
      McGraw-Hill Companies, Inc.

            "Shareholders Agreement" means the Shareholders Agreement as defined
      in the Stock Purchase Agreement, as amended from time to time.

            "Significant Subsidiary" means, at any time, with respect to the
      Borrower, any Subsidiary, other than a Receivables Subsidiary, the assets
      of which, in the aggregate, exceed 5% of the Consolidated Assets,
      determined in accordance with GAAP.

            "Single Employer Plan" means a single employer plan, as defined in
      Section 4001(a)(15) of ERISA, that: (a) is maintained for employees of the
      Borrower or any ERISA Affiliate and no Person other than the Loan Parties
      and the ERISA Affiliates; or (b) was so maintained and in respect of which
      any Loan Party or any ERISA Affiliate could have liability under Section
      4069 of ERISA in the event such plan has been or were to be terminated.

            "Solvent" and "Solvency" mean, with respect to any Person on a
      particular date, that on such date: (a) the fair value of the Property of
      such Person is greater than the total amount of liabilities, including,
      without limitation, contingent liabilities, of such Person; (b) the
      present fair salable value of the assets of such Person is not less than
      the amount that will be required to pay the probable liability of such
      Person on its Debts as they become absolute and matured; (c) such Person
      does not intend to, and does not believe that it will, incur Debts or
      liabilities beyond such Person's ability to pay such Debts and liabilities
      as they mature; and (d) such Person is not engaged in business or a
      transaction, and is not about to engage in business or a transaction, for
      which such Person's Property would constitute an unreasonably small
      capital. The amount of contingent liabilities at any time shall be
      computed as the amount that, in the light of all the facts and
      circumstances existing at such time, represents the amount that can
      reasonably be expected to become an actual or matured liability after
      taking into account any indemnification pursuant to the terms of the Stock
      Purchase Agreement and any other agreements entered into in connection
      therewith.

            "Stock Purchase Agreement" means the Amended and Restated Stock
      Purchase Agreement dated as of May 27, 1998, as amended and restated as of
      July 21, 1998 and as further amended from time to time on or before the
      Effective Date, among Puerto Rico Telephone Authority, Puerto Rico
      Telephone Company, GTE Holdings (Puerto Rico) and GITI.

            "Subsidiary" of any Person means any corporation, partnership, joint
      venture, limited liability company, trust or estate of which (or in which)
      more than 50% of: (a) the issued and outstanding capital stock having
      ordinary voting power to elect a majority of

                                                                              22
<PAGE>
      the Board of Directors of such corporation (irrespective of whether at the
      time capital stock of any other class or classes of such corporation shall
      or might have voting power upon the occurrence of any contingency); (b)
      the interest in the capital or profits of such limited liability company,
      partnership or joint venture; or (c) the beneficial interest in such trust
      or estate, is at the time directly or indirectly owned or controlled by
      such Person, by such Person and one or more of its other Subsidiaries or
      by one or more of such Person's other Subsidiaries.

            "Taxes" has the meaning specified in Section 2.13(a).

            "Termination Date" means the earlier of June 30, 2003, and the date
      of termination in whole of the Commitments pursuant to Section 2.04 or
      6.01.

            "Type" means, as to any Revolving Credit Advance, whether such
      Advance is a Base Rate Advance or a LIBOR Rate Advance, each of which
      shall constitute a Type of Advance under this Agreement.

            "Verizon" means Verizon Communications Inc., a Delaware corporation,
      or its successor.

            "Voting Stock" means capital stock issued by a corporation, or
      equivalent interests in any other Person, the holders of which are
      ordinarily, in the absence of contingencies, entitled to vote for the
      election of directors (or persons performing similar functions) of such
      Person, even if the right so to vote has been suspended by the happening
      of such a contingency.

      SECTION 1.02 Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding".

      SECTION 1.03 Accounting Terms. All terms of an accounting or financial
nature not specifically defined herein shall be construed in accordance with
GAAP.

                                   ARTICLE II

                       AMOUNTS AND TERMS OF THE ADVANCES

      SECTION 2.01 The Revolving Credit Advances. Each Lender severally agrees,
on the terms and conditions hereinafter set forth, to make Revolving Credit
Advances to the Borrower from time to time on any Business Day during the period
from the Effective Date until the Termination Date in an aggregate amount not to
exceed at any time outstanding the amount set forth opposite such Lender's name
on the signature pages hereof or, if such Lender has entered into any Assignment
and Acceptance, set forth for such Lender in the Register maintained by the
Administrative Agent pursuant to Section 9.07(d), as such amount may be SECTION
2.01 reduced pursuant to Section 2.04 (such Lender's "Commitment"). Each
Revolving Credit Borrowing shall be in an aggregate amount of $1,000,000 or an
integral multiple of $1,000,000 in excess thereof and shall consist of Revolving
Credit Advances of the same Type made on the same day by the Lenders ratably
according to their respective Commitments. Within the limits

                                                                              23
<PAGE>
of this Section 2.01, the Borrower may borrow under this Section 2.01, prepay
pursuant to Section 2.09, reborrow under this Section 2.01 and may Convert
Borrowings of one Type into Borrowings of another Type as provided for in
Section 2.08.

      SECTION 2.02 Making the Revolving Credit Advances. (a) Each Revolving
Credit Borrowing shall be made on notice, given not later than 11:00 A.M.
(Atlantic Standard Time) on the Business Day of the proposed Revolving Credit
Borrowing by the Borrower to the Administrative Agent, which shall give to each
Lender prompt notice thereof by telecopier or telex. Each such notice of a
Revolving Credit Borrowing (a "Notice of Revolving Credit Borrowing") shall be
by telephone, confirmed immediately in writing, or telecopier or telex in
substantially the form of Exhibit B hereto, specifying therein the requested:
(i) date of such Revolving Credit Borrowing; (ii) Type of Advances comprising
such Revolving Credit Borrowing; (iii) aggregate amount of such Revolving Credit
Borrowing; and (iv) in the case of a Revolving Credit Borrowing consisting of
LIBOR Rate Advances, initial Interest Period for each such Revolving Credit
Advance. Each Lender shall, before 2:00 PM (Atlantic Standard Time) on the date
of such Revolving Credit Borrowing, make available for the account of its
Applicable Lending Office to the Administrative Agent at the Administrative
Agent's Account, in same day funds, such Lender's ratable portion of such
Revolving Credit Borrowing. After the Administrative Agent's receipt of such
funds and upon fulfillment of the applicable conditions set forth in Article
III, the Administrative Agent will make such funds available to the Borrower at
the Borrower's Account.

            (b) Anything in subsection (a) above to the contrary
      notwithstanding, the Borrower may not select LIBOR Rate Advances for any
      Revolving Credit Borrowing if the aggregate obligation of the Lenders to
      make LIBOR Rate Advances shall then be suspended pursuant to Section 2.07
      or 2.11.

            (c) Each Notice of Revolving Credit Borrowing shall be irrevocable
      and binding on the Borrower. In the case of any Revolving Credit Borrowing
      consisting of LIBOR Rate Advances, the Borrower shall indemnify each
      Lender against any loss, cost or expense incurred by such Lender as a
      result of any failure to fulfill on or before the date specified in such
      Notice of Revolving Credit Borrowing for such Revolving Credit Borrowing
      the applicable conditions set forth in Article III, including, without
      limitation, any loss (excluding loss of anticipated profits), cost or
      expense incurred by reason of the liquidation or reemployment of deposits
      or other funds acquired by such Lender to fund the Revolving Credit
      Advance to be made by such Lender as part of such Revolving Credit
      Borrowing when such Revolving Credit Advance, as a result of such failure,
      is not made on such date.

            (d) Unless the Administrative Agent shall have received notice from
      a Lender prior to the time of any Revolving Credit Borrowing that such
      Lender will not make available to the Administrative Agent such Lender's
      ratable portion of such Revolving Credit Borrowing, the Administrative
      Agent may assume that such Lender has made such portion available to the
      Administrative Agent on the date of such Revolving Credit Borrowing in
      accordance with subsection (a) of this Section 2.02 and the Administrative
      Agent may, in reliance upon such assumption, make available to the
      Borrower on such date a corresponding amount. If and to the extent that
      such Lender shall not have so

                                                                              24
<PAGE>
      made such ratable portion available to the Administrative Agent, such
      Lender and the Borrower severally agree to repay to the Administrative
      Agent forthwith on demand such corresponding amount together with interest
      thereon, for each day from the date such amount is made available to the
      Borrower until the date such amount is repaid to the Administrative Agent,
      at: (i) in the case of the Borrower, the interest rate applicable at the
      time to Revolving Credit Advances comprising such Revolving Credit
      Borrowing; and (ii) in the case of such Lender, the Federal Funds Rate. If
      such Lender shall repay to the Administrative Agent such corresponding
      amount, such amount so repaid shall constitute such Lender's Revolving
      Credit Advance as part of such Revolving Credit Borrowing for purposes of
      this Agreement and the Borrower shall be relieved of its obligations to
      repay such amount under this Section 2.02(d).

            (e) The failure of any Lender to make the Revolving Credit Advance
      to be made by it as part of any Revolving Credit Borrowing shall not
      relieve any other Lender of its obligation hereunder to make its Revolving
      Credit Advance on the date of such Revolving Credit Borrowing, but no
      Lender shall be responsible for the failure of any other Lender to make
      the Revolving Credit Advance to be made by such other Lender on the date
      of any Revolving Credit Borrowing.

      SECTION 2.03 Facility Fee. The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a facility fee on the
aggregate amount of such Lender's Commitment from the Effective Date until the
Termination Date at a rate per annum equal to 0.125%, payable quarterly in
arrears on the last day of each March, June, September and December during the
term hereof, commencing on the June 30, 2002, and on the Termination Date.

      SECTION 2.04 Termination or Reduction of the Commitments. (a) The Borrower
shall have the right, upon at least three Business Days' notice to the
Administrative Agent, to terminate in whole or reduce ratably in part the unused
portions of the respective Commitments of the Lenders, provided that each
partial reduction shall be in the aggregate amount of $10,000,000 or an integral
multiple of $1,000,000 in excess thereof.

            (b) The aggregate amount of the Commitments shall be automatically
      reduced to zero on the Termination Date.

            (c) The Commitments once terminated or reduced may not be
      reinstated.

      SECTION 2.05 Repayment of Revolving Credit Advances. The Borrower shall
repay to the Administrative Agent for the ratable account of the Lenders on the
Termination Date the aggregate principal amount of the Revolving Credit Advances
then outstanding.

      SECTION 2.06 Interest. (a) Scheduled Interest. The Borrower shall pay
interest on the unpaid principal amount of each Revolving Credit Advance owing
to each Lender from the date of such Advance until such principal amount shall
be paid in full, at the following rates per annum:

                  (i) Base Rate Advances. During such periods as such Revolving
            Credit Advance is a Base Rate Advance, a rate per annum equal at all
            times to the

                                                                              25
<PAGE>
            Base Rate in effect from time to time, payable in arrears on each
            Quarterly Date, and on the date such Base Rate Advance shall be
            Converted or paid in full.

                  (ii) LIBOR Rate Advances: During such periods as such
            Revolving Credit Advance is a LIBOR Rate Advance, a rate per annum
            equal at all times during each Interest Period for such Revolving
            Credit Advance to the sum of: (x) the LIBOR Rate for such Interest
            Period for such Revolving Credit Advance, plus (y) the Applicable
            Margin, payable in arrears on the last day of such Interest Period
            and, if such Interest Period has a duration of more than three
            months, on each day that occurs during such Interest Period every
            three months from the first day of such Interest Period and on the
            date such LIBOR Rate Advance shall be Converted or paid in full.

            (b) Default Interest. Upon the occurrence and during the continuance
      of an Event of Default under Section 6.01(a), the Borrower shall pay
      interest on: (i) the unpaid principal amount of each Revolving Credit
      Advance owing to each Lender, payable in arrears on the dates referred to
      in clause (a)(i) or (a)(ii) above, at a rate per annum equal at all times
      to 2% per annum above the rate per annum required to be paid on such
      Revolving Credit Advance pursuant to clause (a)(i) or (a)(ii) above; and
      (ii) to the fullest extent permitted by law, the amount of any interest,
      fee or other amount payable hereunder that is not paid when due, from the
      date such amount shall be due until such amount shall be paid in full,
      payable in arrears on the date such amount shall be paid in full and on
      demand, at a rate per annum equal at all times to 2% per annum above the
      rate per annum required to be paid on Revolving Credit Advances pursuant
      to clause (a)(i) above.

      SECTION 2.07 Interest Rate Determination. (a) The Administrative Agent
shall give prompt notice to the Borrower and the Lenders of the applicable
interest rate determined by the Administrative Agent for purposes of Section
2.06(a)(i) or (ii).

            (b) If, with respect to any LIBOR Rate Advances, the Required
      Lenders notify the Administrative Agent that the LIBOR Rate for any
      Interest Period for such Advances will not adequately reflect the cost to
      such Required Lenders of making, funding or maintaining their respective
      LIBOR Rate Advances for such Interest Period, the Administrative Agent
      shall forthwith so notify the Borrower and the Lenders, whereupon: (i)
      each LIBOR Rate Advance will automatically, on the last day of the then
      existing Interest Period therefor, Convert into a Base Rate Advance; and
      (ii) the obligation of the Lenders to make, or to Convert Revolving Credit
      Advances into, LIBOR Rate Advances shall be suspended until the
      Administrative Agent shall notify the Borrower and the Lenders that the
      circumstances causing such suspension no longer exist.

                  (c) If the Borrower shall fail to select the duration of any
      Interest Period for any LIBOR Rate Advances in accordance with the
      provisions contained in the definition of "Interest Period" in Section
      1.01, the Administrative Agent will forthwith so notify the Borrower and
      the Lenders and such Advances will automatically, on the last day of the
      then existing Interest Period therefor, Convert into Base Rate Advances.

                                                                              26
<PAGE>
            (d) On the date on which the aggregate unpaid principal amount of
      LIBOR Rate Advances comprising any Borrowing shall be reduced, by payment
      or prepayment or otherwise, to less than $1,000,000, such Advances shall
      automatically Convert into Base Rate Advances.

            (e) Upon the occurrence and during the continuance of any Event of
      Default under Section 6.01: (i) each LIBOR Rate Advance will
      automatically, on the last day of the then existing Interest Period
      therefor, Convert into a Base Rate Advance; and (ii) the obligation of the
      Lenders to make, continue or to Convert Advances into, LIBOR Rate Advances
      shall be suspended.

            (f) If on any date the Administrative Agent is unable to determine
      the LIBOR Rate for any LIBOR Rate Advances to be made on such date:

                  (i) the Administrative Agent shall forthwith notify the
            Borrower and the Lenders that the interest rate cannot be determined
            for such LIBOR Rate Advances,

                  (ii) with respect to LIBOR Rate Advances, each such Advance
            will automatically, on the last day of the then existing Interest
            Period therefor, Convert into a Base Rate Advance (or if such
            Advance is then a Base Rate Advance, will Continue as a Base Rate
            Advance), and

                  (iii) the obligation of the Lenders to make LIBOR Rate
            Advances or to Convert Revolving Credit Advances into LIBOR Rate
            Advances shall be suspended until the Administrative Agent shall
            notify the Borrower and the Lenders that the circumstances causing
            such suspension no longer exist.

      SECTION 2.08 Optional Conversion of Revolving Credit Advances. The
Borrower may on any Business Day, upon notice given to the Administrative Agent
not later than 11:00 A.M. (Atlantic Standard Time) on the third Business Day
prior to the date of the proposed Conversion and subject to the provisions of
Sections 2.08 and 2.12, Convert all Revolving Credit Advances of one Type
comprising the same Borrowing into Revolving Credit Advances of the other Type;
provided, however, that any Conversion of LIBOR Rate Advances into Base Rate
Advances shall be made only on the last day of an Interest Period for such LIBOR
Rate Advances and any Conversion of Base Rate Advances into LIBOR Rate Advances
shall be in an amount not less than $1,000,000. Each such notice of a Conversion
shall, within the restrictions specified above, specify: (i) the date of such
Conversion; (ii) the Revolving Credit SECTION 2.08 Advances to be Converted; and
(iii) if such Conversion is into LIBOR Rate Advances, the duration of the
initial Interest Period for each such Advance. Each notice of Conversion shall
be irrevocable and binding on the Borrower.

      SECTION 2.09 Prepayments of Advances. The Borrower may, upon at least two
Business Days' notice to the Administrative Agent stating the proposed date and
aggregate principal amount of the prepayment, and if such notice is given the
Borrower shall, prepay the outstanding principal amount of the Revolving Credit
Advances comprising part of the same Borrowing in whole or ratably in part,
together with accrued interest to the date of such

                                                                              27
<PAGE>
prepayment on the principal amount prepaid; provided, however, that: (x) each
partial prepayment shall be in an aggregate principal amount of $1,000,000 or an
integral multiple of $1,000,000 in excess thereof, and the Borrower shall be
obligated to reimburse the Lenders in respect thereof pursuant to Section
9.04(c).

      SECTION 2.10 Increased Costs. (a) If, due to either: (i) the introduction
of or any change in or in the interpretation of any law or regulation; or (ii)
the compliance with any written guideline or request from any central bank or
other governmental authority (whether or not having the force of law), there
shall be any increase in the cost to any Lender of agreeing to make or making,
funding or maintaining LIBOR Rate Advances (excluding for purposes of this
Section 2.10 any such increased costs resulting from: (i) Taxes or Other Taxes
(as to which Section 2.13 shall govern); and (ii) changes in the basis of
taxation of overall net income or overall gross income by the United States or
by the foreign jurisdiction or state under the laws of which such Lender is
organized or has its Applicable Lending Office or any political subdivision
thereof), then the Borrower shall from time to time, upon demand by such Lender
(with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender additional amounts
sufficient to compensate such Lender for such increased cost (whether or not
such increased costs arise prior to the receipt of written notification from
such central bank or other governmental authority); provided that the Borrower
shall not be required to pay any such increased costs to the extent such
increased costs accrued prior to the date that is six months prior to such
notice. A certificate as to the amount of such increased cost, submitted to the
Borrower and the Administrative Agent by such Lender, shall be conclusive and
binding for all purposes, absent error in the calculation of such amount.

            (b) If any Lender determines that compliance with any law or
      regulation or any written guideline or request from any central bank or
      other governmental authority (whether or not having the force of law)
      affects or would affect the amount of capital required or expected to be
      maintained by such Lender or any corporation controlling such Lender
      (excluding any reserves included in the computation of the LIBOR Rate) and
      that the amount of such capital is increased by or based upon the
      existence of such Lender's commitment to lend hereunder and other
      commitments of this type, then, upon demand by such Lender (with a copy of
      such demand to the Administrative Agent), the Borrower shall pay to the
      Administrative Agent for the account of such Lender, from time to time as
      specified by such Lender, additional amounts sufficient to compensate such
      Lender or such corporation (whether or not such amounts arise prior to the
      receipt of written notification from such central bank or other
      governmental authority) in the light of such circumstances, to the extent
      that such Lender reasonably determines such increase in capital to be
      allocable (in the proportion that such Lender's Commitment hereunder bears
      to all of such Lender's commitments of this type) to the existence of such
      Lender's commitment to lend hereunder; provided that the Borrower shall
      not be required to compensate such Lender to the extent such amounts arose
      prior to the date that is six months prior to such notice. A certificate
      as to such amounts submitted to the Borrower and the Administrative Agent
      by such Lender shall be conclusive and binding for all purposes, absent
      error in the calculation of such amounts.

            (c) Any Lender claiming any additional amounts payable pursuant to
      this Section 2.10 agrees to use reasonable efforts (consistent with its
      internal policy and legal

                                                                              28
<PAGE>
      and regulatory restrictions) to minimize such additional amounts and to
      change, to the extent such Lender has at such time additional lending
      offices in existence, the jurisdiction of its Applicable Lending Office if
      the making of such a change would avoid the need for, or reduce the amount
      of, any additional amounts that may thereafter accrue and would not, in
      the reasonable judgment of such Lender, be otherwise notably
      disadvantageous to such Lender. The Borrower shall reimburse such Lender
      for such Lender's reasonable expenses incurred in connection with such
      change or in considering such a change in an amount not to exceed the
      Borrower's pro rata share of such expenses based on such Lender's
      Commitment and Advances and the total lending commitments and loans of
      such Lender to its similarly situated customers.

      SECTION 2.11 Illegality. Notwithstanding any other provision of this
Agreement, if any Lender shall notify the Administrative Agent that the
introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or any central bank or other governmental
authority having relevant jurisdiction asserts that it is unlawful, for any
Lender or its Applicable Office to perform its obligations hereunder to make
LIBOR Rate Advances or to fund or maintain LIBOR Rate Advances hereunder: (i)
each LIBOR Rate Advance made by such Lender will automatically, upon such
demand, Convert into a Base Rate Advance, as the case may be; and (ii) the
obligation of such Lender to make LIBOR Rate Advances or to Convert Revolving
Credit Advances into LIBOR Rate Advances shall be suspended until the
Administrative Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist.

      SECTION 2.12 Payments and Computations. (a) The Borrower shall make each
payment hereunder and under the Notes not later than 11:00 A.M. (Atlantic
Standard Time) on the day when due in U.S. dollars to the Administrative Agent
at the Administrative Agent's Account in same day funds. The Administrative
Agent will promptly thereafter cause to be distributed like funds relating to
the payment of principal or interest or facility fees ratably (other than
amounts payable pursuant to Section 2.11 or 9.04(c)) to the Lenders for the
account of their respective Applicable Lending Offices, and like funds relating
to the payment of any other amount payable to any Lender to such Lender for the
account of its Applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement.

            (b) All computations of interest based on the Base Rate, LIBOR Rate
      and of facility fees shall be made by the Administrative Agent on the
      basis of a year of 360 days, in each case for the actual number of days
      (including the first day but excluding the last day) occurring in the
      period for which such interest or facility fees are payable. Each
      determination by the Administrative Agent of an interest rate hereunder
      shall be conclusive and binding for all purposes, absent error in the
      calculation of such interest rate.

            (c) Whenever any payment hereunder or under the Notes shall be
      stated to be due on a day other than a Business Day, such payment shall be
      made on the next succeeding Business Day, and such extension of time shall
      in such case be included in the computation of payment of interest or
      facility fee, as the case may be; provided, however, that, if such
      extension would cause payment of interest on

                                                                              29
<PAGE>
      or principal of LIBOR Rate Advances to be made in the next following
      calendar month, such payment shall be made on the next preceding Business
      Day.

            (d) Unless the Administrative Agent shall have received notice from
      the Borrower prior to the time on which any payment is due to the Lenders
      hereunder that the Borrower will not make such payment in full, the
      Administrative Agent may assume that the Borrower has made such payment in
      full to the Administrative Agent on such date and the Administrative Agent
      may, in reliance upon such assumption, cause to be distributed to each
      Lender on such due date an amount equal to the amount then due such
      Lender. If and to the extent the Borrower shall not have so made such
      payment in full to the Administrative Agent, each Lender shall repay to
      the Administrative Agent forthwith on demand such amount distributed to
      such Lender together with interest thereon, for each day from the date
      such amount is distributed to such Lender until the date such Lender
      repays such amount to the Administrative Agent, at the Federal Funds Rate.

      SECTION 2.13 Taxes. (a) Subject to subsections (e) and (f) below, any and
all payments by the Borrower hereunder or under the Notes shall be made, in
accordance with Section 2.12, free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto excluding, in the case of
each Lender and the Administrative Agent, taxes imposed on its overall net
income, and franchise taxes imposed on it in lieu of net income taxes (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities in respect of payments hereunder or under the Notes being
hereinafter referred to as "Taxes"). Subject to subsections (e) and (f) below,
if the Borrower shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder or under any Note to any Lender or the
Administrative Agent: (i) the sum payable shall be increased as may be necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.13) such Lender or the
Administrative Agent (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made; (ii) the Borrower shall
make such deductions; and (iii) the Borrower shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
applicable law. Within 30 days after the date of any payment of Taxes, the
Borrower shall furnish to the Administrative Agent, at its address referred to
in Section 9.02, the original or a certified copy of a receipt evidencing
payment thereof.

            (b) In addition, the Borrower agrees to pay any stamp or documentary
      taxes or any other excise or property taxes, charges or similar levies
      that arise from any payment made hereunder or under the Notes or from the
      execution, delivery or registration of, performing under, or otherwise
      with respect to, this Agreement or the Notes as a result of the
      introduction of or any change in or in the interpretation of any law or
      regulation after the Effective Date (hereinafter referred to as "Other
      Taxes").

            (c) Subject to subsections (d), (e) and (f) below, the Borrower
      shall indemnify each Lender and the Administrative Agent for the full
      amount of Taxes or Other Taxes (to the extent not previously paid under
      subsection (a) or (b) above) imposed on or paid by such Lender or the
      Administrative Agent (as the case may be) and any liability

                                                                              30
<PAGE>
      (including penalties, interest and expenses but excluding any taxes
      imposed by any jurisdiction on amounts payable under this Section 2.13)
      arising therefrom or with respect thereto. This indemnification shall be
      made within 30 days from the date such Lender or the Administrative Agent
      (as the case may be) makes written demand therefor.

            (d) Notwithstanding anything else contained in this Section 2.13,
      the Borrower shall only be required to pay additional sums with respect to
      Taxes, to a Lender (or the Administrative Agent, as the case may be)
      pursuant to subsection (a), (b) or (c) above if the obligation to pay such
      Taxes results from such Lender being subject to any Taxes as a result of:
      (i) any amendment to the laws (or any regulations thereunder), or any
      amendment to, or change in, an interpretation or application of any such
      laws or regulations by any legislative body, court, governmental agency or
      regulatory authority adopted or enacted after the date hereof (or in the
      case of an entity that becomes a Lender after the date hereof, the date
      such entity becomes a Lender); (ii) an amendment, modification or
      revocation of any existing applicable tax treaty ratified, enacted or
      amended after the date hereof (or in the case of an entity that becomes a
      Lender after the date hereof, the date such entity becomes a Lender); or
      (iii) the ratification of a new tax treaty ratified after the date hereof
      (or in the case of an entity that becomes a Lender after the date hereof,
      the date such entity becomes a Lender).

            (e) In the event that the Borrower makes an additional payment under
      Section 2.13(a) or 2.13(c) for the account of any Lender and such Lender,
      in its sole opinion, determines that it has finally and irrevocably
      received or been granted a credit against, or relief or remission from, or
      repayment of, any tax paid or payable by it in respect of or calculated
      with reference to the deduction or withholding giving rise to such
      additional payment, such Lender shall, to the extent that it determines
      that it can do so without prejudice to the retention of the amount of such
      credit, relief, remission or repayment, pay to the Borrower such amount as
      such Lender shall, in its sole opinion, have determined is attributable to
      such deduction or withholding and will leave such Lender (after such
      payment) in no worse position than it would have been had the Borrower not
      been required to make such deduction or withholding. Nothing contained
      herein shall: (i) interfere with the right of a Lender to arrange its tax
      affairs in whatever manner it thinks fit; or (ii) oblige any Lender to
      claim any tax credit or to disclose any information relating to its tax
      affairs or any computations in respect thereof; or (iii) require any
      Lender to take or refrain from taking any action that would prejudice its
      ability to benefit from any other credits, reliefs, remissions or
      repayments to which it may be entitled. Each Lender and the Administrative
      Agent shall reasonably cooperate with the Borrower at the Borrower's
      written request and sole expense, in contesting any Taxes or Other Taxes
      the Borrower would bear pursuant to this Section 2.13, provided, however,
      that: (i) no tax return of such Lender or the Administrative Agent is or
      would be held open as a result of such contest; (ii) neither such Lender
      nor the Administrative Agent is required to reopen a tax year that has
      already closed; and (iii) such Lender and the Administrative Agent shall,
      in the sole opinion of such Lender and the Administrative Agent,
      respectively, have determined that such contest will leave such Lender and
      the Administrative Agent, respectively, in no worse position than it would
      have been in had it not contested such Taxes or Other Taxes. Nothing
      contained herein shall interfere with the right of a Lender or the
      Administrative Agent to arrange its tax affairs in whatever manner it
      thinks fit, if in

                                                                              31
<PAGE>
      the sole judgment of such Lender or the Administrative Agent, such contest
      would be disadvantageous to such Lender or the Administrative Agent. In
      pursuing a contest in the Lender's or the Administrative Agent's name,
      such Lender or the Administrative Agent will be represented by counsel of
      such Lender's or the Administrative Agent's choice, and will defend
      against, settle or otherwise control the contest and will not relinquish
      control or decision making over the contest.

            (f) Any Lender claiming any additional amounts payable pursuant to
      this Section 2.13 agrees to use reasonable efforts (consistent with its
      internal policy and legal and regulatory restrictions) to minimize such
      additional amounts and to change, to the extent such Lender has at such
      time additional lending offices in existence, its Applicable Lending
      Office, if the making of such a change would avoid the need for, or reduce
      the amount of, any additional amounts that may thereafter accrue and would
      not, in the reasonable judgment of such Lender, be otherwise notably
      disadvantageous to such Lender. The Borrower shall reimburse such Lender
      for such Lender's reasonable expenses incurred in connection with such
      change or in considering such a change in an amount not to exceed the
      Borrower's pro rata share of such expenses based on such Lender's
      Commitment and Advances to the Borrower and the total lending commitments
      and loans of such Lender to its similarly situated customers.

      SECTION 2.14 Sharing of Payments, Etc. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Revolving Credit Advances owing to it
(other than pursuant to Section 2.10, 2.13, 9.01(b), 9.04(c) or 9.07) in excess
of its ratable share of payments on account of the Revolving Credit Advances
obtained by all the Lenders, such Lender shall forthwith purchase from the other
Lenders such participations in the Revolving Credit Advances owing to them as
shall be necessary to cause such purchasing Lender to share the excess payment
ratably with each of them; provided, however, that if all or any portion of such
excess payment is thereafter recovered from such purchasing Lender, such
purchase from each Lender shall be rescinded and such Lender shall repay to the
purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Lender's ratable share (according to the proportion
of: (i) the amount of such Lender's required repayment to (ii) the total amount
so recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
The Borrower agrees that any Lender so purchasing a participation from another
Lender by delivering payment pursuant to this Section 2.14 may, to the fullest
extent permitted by law, exercise all its rights of payment (including the right
of set-off) with respect to such participation as fully as if such Lender were
the direct creditor of the Borrower in the amount of such participation.

      SECTION 2.15 Use of Proceeds. The proceeds of the Advances shall be
available (and the Borrower agrees that it shall use such proceeds) solely for
working capital and general corporate purposes of the Borrower and its
Subsidiaries, including the payment of the principal of and interest on the
Borrower's $300,000,000 of 6.15% Senior Notes due 2002 on May 15, 2002; provided
that such proceeds shall not be used for the purpose of purchasing or carrying
margin stock (within the meaning of Regulation U issued by the Board of
Governors of the Federal Reserve System).

                                                                              32
<PAGE>
                                  ARTICLE III

                     CONDITIONS TO EFFECTIVENESS AND LENDING

      SECTION 3.01 Conditions Precedent to Effectiveness of Section 2.01.
Section 2.01 of this Agreement shall become effective on and as of the first
date (the "Effective Date") on which the following conditions precedent have
been satisfied:

            (a) There shall have occurred no Material Adverse Change since
      December 31, 2001.

            (b) There shall exist no action, suit, investigation, litigation or
      proceeding affecting any of the Loan Parties or any of their respective
      Subsidiaries pending or threatened before any court, governmental agency
      or arbitrator that: (i) could be reasonably likely to have a Material
      Adverse Effect other than the matters described on Schedule 3.01(b) hereto
      (the "Disclosed Litigation"); or (ii) is initiated by any Person other
      than a Lender in its capacity as a Lender that purports to affect the
      legality, validity or enforceability of this Agreement or any Note or the
      consummation of the transactions contemplated hereby, and there shall have
      been no material adverse change in the status, or financial effect on any
      Loan Party, of the Disclosed Litigation from that described on Schedule
      3.01(b) hereto.

            (c) All governmental and third party consents and approvals
      necessary in connection with the execution, delivery and performance of
      this Agreement and the Notes shall have been obtained (without the
      imposition of any conditions that could reasonably be expected to
      materially adversely affect the ability of any Loan Party to perform its
      obligations hereunder) and shall remain in effect, and no law or
      regulation shall be applicable that restrains, prevents or imposes adverse
      conditions upon the transactions contemplated hereby that could reasonably
      be expected to materially adversely affect the ability of any Loan Party
      to perform its obligations hereunder.

            (d) The Borrower shall have notified each Lender and the
      Administrative Agent in writing of the proposed Effective Date.

            (e) The Borrower shall have paid all invoiced fees and expenses of
      the Administrative Agent and the Lenders (including the invoiced fees and
      expenses of Martinez Odell & Calabria, counsel to the Administrative
      Agent).

            (f) On the Effective Date, the following statements shall be true
      and the Administrative Agent shall have received for the account of each
      Lender a certificate signed by a duly authorized officer of the Borrower,
      dated the Effective Date, stating that:

                  (i) The representations and warranties contained in Section
            4.01 are correct on and as of the Effective Date, and

                  (ii) No event has occurred and is continuing that constitutes
            a Default.

                                                                              33
<PAGE>
            (g) The Administrative Agent shall have received on or before the
      Effective Date the following, each dated such day, in form and substance
      satisfactory to the Administrative Agent and (except for the Revolving
      Credit Notes) in sufficient copies for each Lender:

                  (i) The Revolving Credit Notes to the order of the Lenders,
            respectively.

                  (ii) Certified copies of the resolutions of the Board of
            Directors of each Loan Party approving the transactions contemplated
            by this Agreement and the Notes and of all documents evidencing
            other necessary corporate action and governmental approvals, if any,
            with respect to this Agreement and such Notes.

                  (iii) A certificate of the Secretary or an Assistant Secretary
            of each Loan Party certifying the names and true signatures of the
            officers of each Loan Party authorized to sign this Agreement and
            the Notes and the other documents to be delivered hereunder.

                  (iv) A certificate, in substantially the form of Exhibit C
            hereto, attesting to the Solvency of each Loan Party after giving
            effect to the Borrowings contemplated hereunder, from the chief
            financial officer of each such Loan Party.

                  (v) A favorable opinion of Jose E. Arroyo, Esq., Vice
            President and General Counsel for the Loan Parties, substantially in
            the form of Exhibit D hereto.

      SECTION 3.02 Conditions Precedent to Each Revolving Credit Borrowing. The
obligation of each Lender to make a Revolving Credit Advance on the occasion of
each Revolving Credit Borrowing shall be subject to the conditions precedent
that the Effective Date shall have occurred and on the date of such Revolving
Credit Borrowing the following statements shall be true (and each of the giving
of the applicable Notice of Revolving Credit Borrowing and the acceptance by the
Borrower of the proceeds of such Revolving Credit Borrowing shall constitute a
representation and warranty by the Borrower that on the date of such Borrowing
such statements are true):

            (a) the representations and warranties contained in Section 4.01 are
      correct in all material respects on and as of the date of such Revolving
      Credit Borrowing, before and after giving effect to such Revolving Credit
      Borrowing and to the application of the proceeds therefrom, as though made
      on and as of such date, and

            (b) no event has occurred and is continuing, or would result from
      such Revolving Credit Borrowing or from the application of the proceeds
      therefrom, that constitutes a Default.

      SECTION 3.03 Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the

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<PAGE>
Lenders unless an officer of the Administrative Agent responsible for the
transactions contemplated by this Agreement shall have received notice from such
Lender prior to the date that the Borrower, by notice to the Lenders, designates
as the proposed Effective Date, specifying its objection thereto. The
Administrative Agent shall promptly notify the Lenders of the occurrence of the
Effective Date.

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

      SECTION 4.01 Representations and Warranties of the Borrower. The Borrower
represents and warrants as follows:

            (a) Each Loan Party is a corporation duly organized, validly
      existing and in good standing under the laws of the jurisdiction of its
      incorporation; (ii) has all requisite corporate or other power, and has
      all material governmental licenses, authorizations, consents and approvals
      necessary to own its assets and carry on its business as now being or as
      proposed to be conducted; and (iii) is qualified to do business and is in
      good standing in all jurisdictions in which the nature of the business
      conducted by it makes such qualification necessary and where failure so to
      qualify could (either individually or in the aggregate) have a Material
      Adverse Effect.

            (b) The execution, delivery and performance by each Loan Party of
      this Agreement and the Notes executed by it and the consummation of the
      transactions contemplated hereby, are within such Loan Party's corporate
      powers, have been duly authorized by all necessary corporate action, and
      do not contravene: (i) such Loan Party's charter or by-laws (or other
      equivalent organizational documents); or (ii) any law or any material
      contractual restriction binding on or affecting such Loan Party or, to the
      knowledge of the chief financial officer of the Borrower, any other
      contract the breach of which would limit the ability of any Loan Party to
      perform its obligations under this Agreement or the Notes; and (ii) will
      not result in the creation or imposition of any Lien upon any Property of
      the Borrower or any of its Subsidiaries pursuant to the terms of any
      agreement or instrument.

            (c) No authorization or approval or other action by, and no notice
      to or filing with, any governmental authority or regulatory body or any
      other third party is required for the due execution, delivery and
      performance by any Loan Party of this Agreement or the Notes.

            (d) This Agreement has been, and each of the Notes when delivered
      hereunder will have been, duly executed and delivered by the Borrower.
      This Agreement has been duly executed and delivered by the Guarantor.
      Assuming that this Agreement has been duly executed by the Administrative
      Agent and each of the Lenders, this Agreement is, and each of the Notes
      when delivered hereunder will be, the legal, valid and binding obligation
      of the Borrower enforceable against the Borrower in accordance with their
      respective terms. Assuming that this Agreement has been duly executed by
      the Administrative Agent and each of the Lenders, this Agreement is the
      legal, valid and

                                                                              35
<PAGE>
      binding obligation of the Guarantor enforceable against the Guarantor in
      accordance with its terms.

            (e) The Consolidated balance sheet of the Borrower and its
      Subsidiaries as at December 31, 2001, and the related Consolidated
      statements of income and cash flows of the Borrower and its Subsidiaries
      for the fiscal year then ended, accompanied by an opinion of Deloitte &
      Touche LLP, independent public accountants, copies of which have been
      furnished to each Lender, fairly present the Consolidated financial
      condition of the Borrower and its Subsidiaries as at such date and the
      Consolidated results of the operations of the Borrower and its
      Subsidiaries for the periods ended on such date, all in accordance with
      generally accepted accounting principles consistently applied.

            (f) There is no pending or (to the knowledge of any Loan Party)
      threatened action or proceeding, including, without limitation, any
      Environmental Action, affecting any Loan Party or any of its Subsidiaries
      before any court, governmental agency or arbitrator that is initiated by
      any Person other than a Lender in its capacity as a Lender that purports
      to affect the legality, validity or enforceability of this Agreement or
      any Note.

            (g) Neither the Borrower nor any of its Subsidiaries is an
      Investment Company, as such term is defined in the Investment Company Act
      of 1940, as amended.

            (h) No Loan Party is engaged in the business of extending credit for
      the purpose of purchasing or carrying margin stock (within the meaning of
      Regulation U issued by the Board of Governors of the Federal Reserve
      System), and no proceeds of any Advance will be used to purchase or carry
      any margin stock or to extend credit to others for the purpose of
      purchasing or carrying any margin stock.

            (i) Each of the Loan Parties has obtained all environmental, health
      and safety permits, licenses and other authorizations required under all
      Environmental Laws to carry on its business as now being or as proposed to
      be conducted, except to the extent failure to have any such permit,
      license or authorization would not (either individually or in the
      aggregate) have a Material Adverse Effect. Each of such permits, licenses
      and authorizations is in full force and effect and each of the Borrower
      and its Subsidiaries is in compliance with the terms and conditions
      thereof, and is also in compliance with all other limitations,
      restrictions, conditions, standards, prohibitions, requirements,
      obligations, schedules and timetables contained in any applicable
      Environmental Law or in any regulation, code, plan, order, decree,
      judgment, injunction, notice or demand letter issued, entered, promulgated
      or approved thereunder, except to the extent failure to comply therewith
      would not (either individually or in the aggregate) have a Material
      Adverse Effect.

            (j) With respect to the Merger:

                  (i) The Merger Documents, including all transactions
            contemplated thereby, have been duly approved by all necessary
            corporate action of PRTC and VW in accordance with applicable law
            and the charter or by-laws (or other

                                                                              36
<PAGE>
            equivalent organizational documents) of PRTC and VW. No
            authorization or approval or other action by, and no notice to or
            filing with, any governmental authority or regulatory body
            (including the Federal Communications Commission) or any other third
            party (other than the filing of the certificate of merger with the
            Department of State of the Commonwealth of Puerto Rico) was required
            for the due execution, delivery and performance by PRTC and VW, or
            for the validity, of any Merger Document. Each of the Merger
            Documents constitutes a legal, valid and binding obligation of PRTC
            and VW, enforceable against PRTC and VW in accordance with their
            respective terms. The Merger Documents listed in Schedule 1.01(a)
            hereto constitute all of the agreements entered into among the
            parties thereto in connection with the Merger and constitute and
            contain all of the documents executed to effectuate the Merger and
            all of the agreements among the parties thereto in connection with
            the Merger, and there shall be no other document or agreement of any
            kind related to the Merger other than the Merger Documents; and

                  (ii) The certificate of merger executed and delivered under
            the Merger Agreement was filed with the Department of State of the
            Commonwealth of Puerto Rico in accordance with the GCL, and the
            Merger became effective, on May 2, 2002. As a result of the Merger,
            the separate corporate existence of VW ceased, and VW merged with
            and into PRTC and the Merger shall have with respect to PRTC and VW,
            all of the effects set forth in Section 10.01 of the GCL, including,
            without limitation, the assumption by PRTC of all of the liabilities
            and obligations of VW.

            (k) Pari Passu Status. (i) The obligations of the Loan Parties
      hereunder and under the Notes, and the obligations of the Loan Parties
      under the Additional Bank Indebtedness and the notes issued under the
      Commercial Paper Program are of equal priority (pari passu); and (ii)
      except for any rights to set-off in favor of the agent(s) or the lenders
      under Section 9.05 of the Five-Year Credit Agreement (as described in the
      definition of Citibank Indebtedness), no Lien over any Property of the
      Loan Parties has been granted in favor of the lenders party to such
      agreement, as security for the obligations of the Borrower and its
      Subsidiaries under the Additional Bank Indebtedness and the notes issued
      under the Commercial Paper Program.

            (l) No Agency Relationship. The Borrower understands and agrees that
      neither the Administrative Agent nor any Lender is the agent or
      representative of the Borrower, and this Agreement shall not be construed
      to make the Administrative Agent or any such Lender liable to any third
      parties for any obligations of the Borrower or any of its Subsidiaries in
      connection with the operation and administration of their respective
      businesses.

                                   ARTICLE V

                          COVENANTS OF THE LOAN PARTIES

      SECTION 5.01 Affirmative Covenants. So long as any Advance shall remain
unpaid or any Lender shall have any Commitment hereunder, each Loan Party will:

                                                                              37
<PAGE>
            (a) Compliance with Laws, Etc. Comply, and cause each of its
      Subsidiaries to comply, in all material respects, with all applicable
      laws, rules, regulations and orders, such compliance to include, without
      limitation, compliance with ERISA and Environmental Laws, except where the
      failure to so comply would not have a Material Adverse Effect.

            (b) Payment of Taxes, Etc. Pay and discharge, and cause each of its
      Subsidiaries to pay and discharge, before the same shall become
      delinquent: (i) all taxes, assessments and governmental charges or levies
      imposed upon it or upon its Property; and (ii) all lawful claims that, if
      unpaid, might by law become a Lien upon its Property; provided, however,
      that neither any Loan Party nor any of its Subsidiaries shall be required
      to pay or discharge any such tax, assessment, charge or claim that is
      being contested in good faith and by proper proceedings and as to which
      appropriate reserves are being maintained, unless and until any Lien
      resulting therefrom attaches to its Property and becomes enforceable
      against its other creditors and the aggregate of such Liens would have a
      Material Adverse Effect.

            (c) Maintenance of Insurance. Maintain, and cause each of its
      Subsidiaries to maintain, insurance with responsible and reputable
      insurance companies or associations in such amounts and covering such
      risks as is usually carried by companies engaged in similar businesses and
      owning similar properties in the same general areas in which such Loan
      Party or such Subsidiary operates; provided, however, that such Loan Party
      and its Subsidiaries may self-insure to the extent consistent with prudent
      business practice.

            (d) Preservation of Corporate Existence, Etc. Preserve and maintain,
      and cause each of its Subsidiaries to preserve and maintain, its corporate
      existence, rights (charter and statutory), licenses and franchises;
      provided, however, that each Loan Party and its Subsidiaries may
      consummate any transaction permitted under Section 5.02(b) and provided
      further that neither any Loan Party nor any of its Subsidiaries shall be
      required to preserve any license, right or franchise if the senior
      management of such Loan Party or of such Subsidiary shall determine that
      the preservation thereof is no longer desirable in the conduct of the
      business of such Loan Party or such Subsidiary, as the case may be, and
      that the loss thereof is not disadvantageous in any material respect to
      such Loan Party or such Subsidiary.

            (e) Visitation Rights. During normal business hours and upon
      reasonable notice from time to time, permit the Administrative Agent or
      any of the Lenders or any agents or representatives thereof, to examine
      and make copies of and abstracts from the records and books of account of
      (excluding any confidential information), and visit the properties of,
      such Loan Party and any of its Subsidiaries, and to discuss the affairs,
      finances and accounts of such Loan Party and any of its Subsidiaries with
      the appropriate representatives of such Loan Party and together with the
      appropriate representatives of such Loan Party's independent certified
      public accountants.

            (f) Keeping of Books. Keep, and cause each of its Subsidiaries to
      keep, proper books of record and account, in which full and correct
      entries shall be made of all financial transactions and the assets and
      business of such Loan Party and each such

                                                                              38
<PAGE>
      Subsidiary in accordance with generally accepted accounting principles in
      effect from time to time.

            (g) Maintenance of Properties, Etc. Maintain and preserve, and cause
      each of its Subsidiaries to maintain and preserve, its material Properties
      that are used or useful in the conduct of its business in good working
      order and condition, ordinary wear and tear excepted.

            (h) Transactions with Affiliates. Conduct, and cause each of its
      Subsidiaries to conduct, all transactions otherwise permitted under this
      Agreement with any of their Affiliates, other than another Loan Party: (i)
      on terms that are fair and reasonable and no less favorable to such Loan
      Party or such Subsidiary than it would obtain in a comparable arm's-length
      transaction with a Person not an Affiliate except where the failure to do
      so, in the aggregate, would not have a Material Adverse Effect; (ii) as
      required by the Federal Communications Commission's rules and regulations
      for transactions among affiliates; or (iii) as contemplated by the
      Management Agreement and the Technology Transfer Agreement (each such
      agreement as defined in the Stock Purchase Agreement).

            (i) Reporting Requirements. Furnish to the Lenders:

                  (i) as soon as available and in any event within 60 days after
            the end of each of the first three quarters of each fiscal year of
            the Borrower, the Consolidated balance sheet of the Borrower and its
            Subsidiaries as of the end of such quarter and the Consolidated
            statements of income and cash flows of the Borrower and its
            Subsidiaries for the period commencing at the end of the previous
            fiscal year and ending with the end of such quarter, duly certified
            (subject to year-end audit adjustments) by the chief financial
            officer, treasurer or controller of the Borrower as having been
            prepared in accordance with generally accepted accounting principles
            and certificates of the chief financial officer, treasurer or
            controller of the Borrower as to compliance with the terms of this
            Agreement and setting forth in reasonable detail the calculations
            necessary to demonstrate compliance with Section 5.03, provided that
            in the event of any change in GAAP used in the preparation of such
            financial statements, the Borrower shall also provide, if necessary
            for the determination of compliance with Section 5.03, a statement
            of reconciliation showing the calculations used for purposes of
            Section 5.03;

                  (ii) as soon as available and in any event within 120 days
            after the end of each fiscal year of the Borrower, a copy of the
            annual audited report for such year for the Borrower and its
            Subsidiaries, containing the Consolidated balance sheet of the
            Borrower and its Subsidiaries as of the end of such fiscal year and
            the Consolidated statements of income and cash flows of the Borrower
            and its Subsidiaries for such fiscal year, in each case accompanied
            by an opinion acceptable to the Administrative Agent by Ernst &
            Young LLP or other independent public accountants of nationally
            recognized standing, provided that in the event of any change in
            GAAP used in the preparation of such financial statements, the
            Borrower shall also provide, if necessary for the determination of

                                                                              39
<PAGE>
            compliance with Section 5.03, a statement of reconciliation showing
            the calculations used for purposes of Section 5.03;

                  (iii) as soon as possible and in any event within five
            Business Days after the occurrence of each Default continuing on the
            date of such statement, a statement of the chief financial officer,
            treasurer or controller of the Borrower setting forth details of
            such Default and the action that the Borrower has taken and proposes
            to take with respect thereto;

                  (iv) promptly after the sending or filing thereof, copies of
            any quarterly and annual reports and proxy solicitations that any
            Loan Party sends to any of its securityholders, and copies of any
            reports on Form 8-K that such Loan Party files with the Securities
            and Exchange Commission (other than reports on Form 8-K filed solely
            for the purpose of incorporating exhibits into a registration
            statement previously filed with the Securities and Exchange
            Commission);

                  (v) prompt notice of all actions and proceedings before any
            court, governmental agency or arbitrator affecting any Loan Party or
            any of its Subsidiaries of the type described in Section 3.01(b);

                  (vi) promptly after the closing thereof, copies of the closing
            documents for each credit facility or financing constituting
            Additional Bank Indebtedness under this Agreement; and

                  (vii) such other information respecting any Loan Party or any
            of its Subsidiaries as any Lender through the Administrative Agent
            may from time to time reasonably request.

            (j) Further Assurances. The Borrower will execute, acknowledge where
      appropriate, and deliver, and cause to be executed, acknowledged where
      appropriate, and delivered, from time to time, promptly at the request of
      the Administrative Agent or any of the Lenders, all such instruments and
      documents as in the reasonable opinion of the Administrative Agent or such
      Lender are necessary to carry out the intent and purpose of this Agreement
      and the Notes.

            (k) Performance of Agreements. The Borrower will take all action and
      do all things which it is authorized by law or contract to take and to do
      in order to perform and observe and to cause the Loan Parties to perform
      and observe, all covenants and agreements on its or their part to be
      performed and observed under this Agreement and the Notes.

            (l) Pari Passu Status. So long as any Commitments are available, or
      any amounts under the Notes are outstanding hereunder, the obligations of
      the Loan Parties hereunder and under the Notes shall remain of equal
      priority (pari passu) with the obligations of the Loan Parties under the
      Additional Bank Indebtedness and the notes issued under the Commercial
      Paper Program. Should the Borrower grant to any creditor under Additional
      Bank Indebtedness, financial debt covenants different to those included in
      Section 5.03 hereof that would result in such creditor obtaining the
      benefit of

                                                                              40
<PAGE>
      substantially stricter terms against the Borrower over those set forth in
      this Agreement, the Borrower agrees to amend this Agreement as necessary
      to grant the Administrative Agent and the Lenders the same terms granted
      to such other creditors.

            (m) Certain Obligations Respecting Subsidiaries. The Borrower will
      take such action, and will cause each of its Significant Subsidiaries and
      any Significant Subsidiary formed with the intent of merging with or into
      a Person that will be a Significant Subsidiary subject to this provision
      to take such action, from time to time as shall be necessary to ensure
      that all Significant Subsidiaries of the Borrower are party to, as Loan
      Parties, the Guaranty provided in Article VII hereof. Without limiting the
      generality of the foregoing, in the event that the Borrower or any of its
      Significant Subsidiaries shall form or acquire any new Significant
      Subsidiary, the Borrower or the respective Significant Subsidiary will
      cause such new Significant Subsidiary to: (i) become a party hereto and to
      the Guaranty pursuant to a written instrument in form and substance
      satisfactory to the Agent; and (ii) deliver such proof of corporate
      action, incumbency of officers, opinions of counsel and other documents
      relating to the foregoing as is consistent with those delivered by each
      Loan Party pursuant to Section 3.01 hereof, or as any Lender or the
      Administrative Agent shall have reasonably requested.

      SECTION 5.02 Negative Covenants. So long as any Advance shall remain
unpaid or any Lender shall have any Commitment hereunder, the Borrower will not:

            (a) Liens, Etc. Create or suffer to exist, or permit any of its
      Subsidiaries to create or suffer to exist, any Lien on or with respect to
      any of its properties, whether now owned or hereafter acquired, or assign
      for security purposes (but not in connection with a bona fide sale
      thereof), or permit any of its Subsidiaries to assign for security
      purposes (but not in connection with a bona fide sale thereof), any right
      to receive income; provided that nothing in this Section 5.02 shall be
      construed to prevent or restrict the following:

                  (i) Permitted Liens,

                  (ii) purchase money Liens upon or in any real Property or
            equipment acquired or held by the Borrower or any of its
            Subsidiaries in the ordinary course of business to secure the
            purchase price of such Property or equipment or to secure Debt
            incurred solely for the purpose of financing the acquisition of such
            Property or equipment, or Liens existing on such Property or
            equipment at the time of its acquisition or conditional sales or
            other similar title retention agreements with respect to Property
            hereafter acquired or extensions, renewals or replacements of any of
            the foregoing for the same or a lesser amount, provided, however,
            that no such Lien shall extend to or cover any Properties of any
            character other than the real Property or equipment being acquired,
            and no such extension, renewal or replacement shall extend to or
            cover any properties not theretofore subject to the Lien being
            extended, renewed or replaced,

                                                                              41
<PAGE>
                  (iii) the Liens existing on the Effective Date and described
            on Schedule 5.02(a) hereto and other undisclosed Liens existing on
            the Effective Date securing obligations in aggregate amount not to
            exceed $10,000,000,

                  (iv) Liens on Property of a Person existing at the time such
            Person is merged into or consolidated with the Borrower or any of
            its Subsidiaries; provided that any such Liens that were created
            during the period immediately prior to such merger, consolidation or
            acquisition were created in the ordinary course of business of such
            Person and the Debt secured by such Liens does not exceed the fair
            market value of the assets (including intangible assets) of such
            Person so merged into or consolidated with the Borrower or any of
            its Subsidiaries,

                  (v) the replacement, extension or renewal of any Lien
            permitted by clauses (iii) and (iv) above upon or in the same
            Property theretofore subject thereto or the replacement, extension
            or renewal (without increase in the amount or extension of the final
            maturity date) of the Debt secured thereby,

                  18 12 (vi) Liens not otherwise permitted pursuant to clauses
            (i) through (v) above securing obligations not to exceed at any one
            time the amount of $10,000,000; and

                  (vii) Liens on Property of a Receivables Subsidiary created in
            connection with a Permitted Receivables Financing.

            (b) Mergers, Etc. Merge or consolidate with or into, or convey,
      transfer, lease or otherwise dispose of (whether in one transaction or in
      a series of transactions) all or substantially all of its assets (whether
      now owned or hereafter acquired) to, any Person, or permit any of its
      Subsidiaries to do so, except that: (i) any Subsidiary of the Borrower may
      merge or consolidate with or into, or dispose of its Property or assets
      to, any other Subsidiary of the Borrower; (ii) any Subsidiary of the
      Borrower may merge into or dispose of assets to the Borrower; and (iii)
      the Borrower may merge with any Subsidiary of Verizon so long as the
      surviving corporation assumes to the reasonable satisfaction of the
      Administrative Agent all obligations of the Borrower hereunder and under
      the Notes, and the Guarantor confirms in writing its guarantee obligations
      hereunder upon the occurrence of and following such merger, and provided,
      in each case, that no Default shall have occurred and be continuing at the
      time of such proposed transaction or would result therefrom.

            (c) Accounting Changes. Make or permit, or permit any of its
      Subsidiaries to make or permit, any change in accounting policies or
      reporting practices, except: (i) as required or permitted by generally
      accepted accounting principles; or (ii) where the effect of such change,
      together with all other changes in accounting policies or reporting
      practices made pursuant to this clause (ii) since the Effective Date, is
      immaterial to the Borrower and its Subsidiaries taken as a whole.

                                                                              42
<PAGE>
            (d) Subsidiary Debt. Permit any of its Subsidiaries to create or
      suffer to exist, any Debt other than:

                  (i) Debt owed to the Borrower or to a wholly owned Subsidiary
            of the Borrower (it being understood that such Debt includes any
            Debt incurred: (A) in connection with the Purchase; and (B) under
            any contribution agreement entered into by and between the Guarantor
            in connection with the Purchase, the Bonds and any of the Subsidiary
            Existing Debt),

                  (ii) Debt which may be incurred in connection with the
            Subsidiaries' guarantee of the Bonds or any refunding or
            refinancing, in whole or in part, of the Bonds;

                  (iii) Debt which may be borrowed and outstanding from time to
            time under the credit agreements existing on and as of the Effective
            Date and described on Schedule 5.02(d) hereto (the "Subsidiary
            Existing Debt"), and any Debt extending the maturity of, or
            refunding or refinancing, in whole or in part, the Subsidiary
            Existing Debt, provided that the principal amount of such Subsidiary
            Existing Debt shall not be increased above the principal amount
            thereof outstanding immediately prior to such extension, refunding
            or refinancing, and the direct and contingent obligors therefor
            shall not be changed, as a result of or in connection with such
            extension, refunding or refinancing,

                  (iv) unsecured Debt incurred in the ordinary course of
            business aggregating for the Guarantor not more than $150,000,000 at
            any one time outstanding,

                  (v) Debt in respect of operating leases,

                  (vi) endorsement of negotiable instruments for deposit or
            collection or similar transactions in the ordinary course of
            business, and

                  (vii) Debt incurred by a Receivables Subsidiary created in
            connection with a Permitted Receivables Financing.

                  (viii) Debt which may be incurred in connection with the
            Guarantor's guarantee of the notes issued under the Commercial Paper
            Program pursuant to the Commercial Paper Program Guaranty.

      SECTION 5.03 Financial Covenants. So long as any Advance shall remain
unpaid or any Lender shall have any Commitment hereunder, the Borrower will:

            (a) Debt to EBITDA Ratio. Maintain a Debt to EBITDA Ratio, as at the
      end of each fiscal quarter of the Borrower, of not more than 4.00:1.00.

            (b) EBITDA to Interest Ratio. Maintain an EBITDA to Interest Ratio,
      as at the end of each fiscal quarter of the Borrower, of not less than
      3.25:1.00.

                                                                              43
<PAGE>
                                   ARTICLE VI

                                EVENTS OF DEFAULT

      SECTION 6.01 Events of Default. If any of the following events ("Events of
Default") shall occur and be continuing:

            (a) The Borrower shall fail to pay any principal of any Advance when
      the same becomes due and payable; or the Borrower shall fail to pay any
      interest on any Advance within five Business Days after the same becomes
      due and payable; or any fees or other amounts payable under this Agreement
      or any Note are not paid within five Business Days after the same becomes
      due and payable; or

            (b) Any representation or warranty made or deemed made by the
      Borrower herein or by the Borrower (or any of its officers) in connection
      with this Agreement shall prove to have been incorrect in any material
      respect when made or deemed made; or

            (c) Any Loan Party shall fail to perform or observe any term,
      covenant or agreement contained in Section 5.01(d), (e), (h), (i)(iii) or
      (i)(v), 5.02 or 5.03; (ii) any Loan Party shall fail to perform or observe
      any term, covenant or agreement contained in Section 5.01(i) (other than
      clauses (iii); and (v) thereof) if such failure shall remain unremedied
      for five Business Days after written notice thereof shall have been given
      to such Loan Party by the Administrative Agent or any Lender; or (iii) any
      Loan Party shall fail to perform or observe any other term, covenant or
      agreement contained in this Agreement on its part to be performed or
      observed if such failure shall remain unremedied for 30 days after written
      notice thereof shall have been given to such Loan Party by the
      Administrative Agent or any Lender; or

            (d) Article VII is breached by the Guarantor or shall cease to be in
      full force and effect or the Guarantor shall so state in writing; or

            (e) The Borrower or any of its Subsidiaries shall fail to pay any
      principal of or premium or interest on any Debt that is outstanding in a
      principal or, in the case of Hedge Agreements net amount of at least
      $20,000,000 in the aggregate (but excluding Debt outstanding hereunder) of
      the Borrower or such Subsidiary (as the case may be) (the "Requisite
      Amount"), when the same becomes due and payable (whether by scheduled
      maturity, required prepayment, acceleration, demand or otherwise), and
      such failure shall continue after the later of five Business Days and the
      applicable grace period, if any, specified in the agreement or instrument
      relating to such Debt; or any such Debt aggregating the Requisite Amount
      shall be declared due and payable in accordance with its terms or any
      other event shall occur or condition shall exist under any agreement or
      instrument relating to any such Debt aggregating the Requisite Amount and
      shall continue after the applicable grace period, if any, specified in
      such agreement or instrument, if the effect of such event or condition is
      to accelerate the maturity of such Debt; or any such Debt aggregating the
      Requisite Amount shall be required to be prepaid or redeemed (other than
      by a regularly scheduled required prepayment or redemption), purchased or
      defeased in accordance with its terms, or any offer to prepay, redeem,

                                                                              44
<PAGE>
      purchase or defease such Debt shall be required to be made in accordance
      with its terms, in each case prior to the stated maturity thereof where
      the cause of such prepayment, redemption, purchase or defeasance or offer
      therefor is the occurrence of an event or condition that is premised on a
      material adverse deterioration of the financial condition, results of
      operation or properties of the Borrower or any of its Subsidiaries,
      provided that with respect to Debt aggregating the Requisite Amount of the
      types described in clauses (h); or (i) of the definition of "Debt" and to
      the extent such Debt relates to the obligations of any Person other than
      the Borrower or any of its Subsidiaries, no Event of Default shall occur
      so long as the payment of such Debt is being contested in good faith and
      by proper proceedings and as to which appropriate reserves are being
      maintained; or any event shall occur or condition shall exist under any
      agreement or instrument relating to any Debt that is outstanding in a
      principal or in the case of Hedge Agreements net amount of at least
      $40,000,000 and shall continue after the applicable grace period, if any,
      specified in such agreement or instrument, if the effect of such event or
      condition is to accelerate, or permit the acceleration of, the maturity of
      such Debt; or

            (f) The Borrower or any of its Subsidiaries shall generally not pay
      their respective Debts as such debts become due, or shall admit in writing
      its inability to pay its debts generally, or shall make a general
      assignment for the benefit of creditors; or any proceeding shall be
      instituted by or against the Borrower or its Subsidiaries seeking to
      adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
      reorganization, arrangement, adjustment, protection, relief, or
      composition of it or its debts under any law relating to bankruptcy,
      insolvency or reorganization or relief of debtors, or seeking the entry of
      an order for relief or the appointment of a receiver, trustee, custodian
      or other similar official for it or for any substantial part of its
      Property and, in the case of any such proceeding instituted against it
      (but not instituted by it), either such proceeding shall remain
      undismissed or unstayed for a period of 60 days, or any of the actions
      sought in such proceeding (including, without limitation, the entry of an
      order for relief against, or the appointment of a receiver, trustee,
      custodian or other similar official for, it or for any substantial part of
      its Property) shall occur; or the Borrower or its Subsidiaries shall take
      any corporate action to authorize any of the actions set forth in this
      subsection (f) under any law relating to bankruptcy, insolvency or
      reorganization or relief of debtors; or

            (g) Any judgment or order for the payment of money in excess of
      $30,000,000 shall be rendered against the Borrower or its Subsidiaries and
      enforcement proceedings shall have been commenced by any creditor upon
      such judgment or order for which a stay of enforcement of such judgment or
      order, by reason of a pending appeal or otherwise, shall not be in effect;
      provided, however, that any such judgment or order shall not be an Event
      of Default under this Section 6.01(g) if and for so long as: (i): (A) the
      amount of such judgment or order is covered by a valid and binding policy
      of insurance between the defendant and the insurer or insurers covering
      payment thereof; (B) such insurer shall be rated, or, if more than one
      insurer, at least 90% of such insurers as measured by the amount of risk
      insured, shall be rated, at least "A-" by A.M. Best Company or its
      successor or its successors; and (C) such insurer(s) has been notified of,
      and has not disputed the claim made for payment of, the amount of such
      judgment or order; or (ii): (A) the amount of such judgment or order is
      covered by a valid and binding indemnification agreement between the
      defendant and an indemnitor; (B) such

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<PAGE>
      indemnitor shall have a rating for any class of its non-credit enhanced
      long-term senior unsecured debt of not lower than BBB+ by S&P or Baa3 by
      Moody's; and (C) such indemnitor has been notified of, and has not
      disputed the claim made for payment of, the amount of such judgment or
      order; or

            (h) After the Effective Date, GITI or any entity controlling GITI
      shall cease for any reason to maintain, directly or indirectly, the
      Controlling Interest; or (ii) any Person or two or more Persons acting in
      concert shall have acquired beneficial ownership (within the meaning of
      Rule 13d-3 of the Securities and Exchange Commission under the Securities
      Exchange Act of 1934), directly or indirectly, of Voting Stock of GITI or
      other Person holding the Controlling Interest (or other securities
      convertible into such Voting Stock) representing more of the combined
      voting power of all Voting Stock of GITI or such other Person than that
      owned by Verizon or its Subsidiaries; or (iii) Verizon or its Subsidiaries
      shall fail to have the ability to appoint a majority of the Board of
      Directors of GITI or other Person holding the Controlling Interest or the
      business and affairs of GITI or such other Person shall not be managed by
      or under the direction of such Board of Directors; or (iv) the Borrower
      shall for any reason cease to own 100% of the Voting Stock of the
      Guarantor; or

            (i) Any Loan Party or its ERISA Affiliates shall incur, or shall be
      reasonably likely to incur, liability that would have a Material Adverse
      Effect as a result of one or more of the following: (i) the occurrence of
      any ERISA Event; (ii) the partial or complete withdrawal of such Loan
      Party or its ERISA Affiliates from a Multiemployer Plan; or (iii) the
      reorganization or termination of a Multiemployer Plan;

then, and in any such event, the Administrative Agent: (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrower,
declare the obligation of each Lender to make Advances to be terminated,
whereupon the same shall forthwith terminate; and (ii) shall at the request, or
may with the consent, of the Required Lenders, by notice to the Borrower,
declare the Notes, all interest thereon and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the Notes, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrower; provided, however, that in the
event of an actual or deemed entry of an order for relief with respect to the
Borrower under the Federal Bankruptcy Code: (A) the obligation of each Lender to
make Advances shall automatically be terminated; and (B) the Notes, all such
interest and all such amounts shall automatically become and be due and payable,
without presentment, demand, protest or any notice of any kind, all of which are
hereby expressly waived by the Borrower.

                                  ARTICLE VII

                                    GUARANTY

      SECTION 7.01 Guaranty; Limitation of Liability. (a) The Guarantor hereby
unconditionally and irrevocably, jointly and severally ("in solidum") with the
Borrower, guarantees the punctual payment when due, whether at stated maturity,
by acceleration or otherwise, of all obligations of each other Loan Party now or
hereafter existing under this

                                                                              46
<PAGE>
Agreement or any Note, whether for principal, interest, fees, expenses or
otherwise (such obligations, to the extent not paid by such Loan Party or
specifically waived in accordance with Section 9.01, being the "Guaranteed
Obligations"), and agrees to pay any and all expenses (including reasonable
counsel fees and expenses) incurred by the Administrative Agent or the Lenders
in enforcing any rights under this Article VII ("this Guaranty"). Without
limiting the generality of the foregoing, the Guarantor's liability shall extend
to all amounts that constitute part of the Guaranteed Obligations and would be
owed by any Loan Party to the Administrative Agent or any Lender under this
Agreement or any Note but for the fact that they are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving such Loan Party.

            (b) (i) The Guarantor and, by its acceptance of this Guaranty,
            the Administrative Agent and each other Lender, hereby confirms that
            it is the intention of all such parties that this Guaranty not
            constitute a fraudulent transfer or fraudulent conveyance for
            purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act,
            the Uniform Fraudulent Transfer Act or any similar Federal, state or
            Commonwealth of Puerto Rico law to the extent applicable to this
            Guaranty. To effectuate the foregoing intention, the Administrative
            Agent, each other Lender and the Guarantor hereby irrevocably agrees
            that, notwithstanding the fact that this is a joint and several
            Guaranty, the obligations of the Guarantor under this Guaranty shall
            not exceed the greater of: (A) the benefit realized by the Guarantor
            from the proceeds of the Advances made from time to time by the
            Borrower to the Guarantor; and (B) the maximum amount that will,
            after giving effect to such maximum amount and all other probable
            contingent and fixed liabilities of the Guarantor that are relevant
            under applicable law, and result in the obligations of the Guarantor
            under this Guaranty not constituting a fraudulent transfer or
            fraudulent conveyance. For purposes hereof, "Bankruptcy Law" means
            Title 11, United States Code, or any similar Federal, state or
            Commonwealth of Puerto Rico law for the relief of debtors.

                  (ii) This is a guaranty of payment and not of collection, and
            is the primary obligation of the Guarantor; and the Administrative
            Agent or any Lender may, subject to the terms and conditions hereof,
            enforce this Guaranty against the Guarantor without any prior
            enforcement of the Guaranteed Obligations against the Borrower,
            and/or without any prior enforcement of any other collateral
            security held by the Administrative Agent or the Lenders as security
            for the payment and performance of the Borrower's obligations to the
            Administrative Agent and/or the Lenders.

      SECTION 7.02 Guaranty Absolute. The Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of
this Agreement and the Notes, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Administrative Agent or the Lenders with respect thereto. The
obligations of the Guarantor under this Guaranty are independent of the
Guaranteed Obligations, and a separate action or actions may be brought and
prosecuted against the Guarantor to enforce this Guaranty, irrespective of
whether any action is brought against the Borrower or whether the Borrower is
joined in any such action or actions. The liability of the

                                                                              47
<PAGE>
Guarantor under this Guaranty shall be irrevocable, absolute and unconditional
irrespective of, and, to the maximum extent permitted by law, the Guarantor
hereby irrevocably waives, any defenses it may now or hereafter have in any way
relating to, any or all of the following:

            (a) any lack of validity or enforceability of this Agreement, the
      Notes or any agreement or instrument relating hereto;

            (b) any change in the time, manner or place of payment of, or in any
      other term of, all or any of the Guaranteed Obligations, or any other
      amendment or waiver of or any consent to departure from this Agreement or
      any Note, including, without limitation, any increase in the Guaranteed
      Obligations resulting from the extension of additional credit to the
      Borrower or otherwise;

            (c) any taking, exchange, release or non-perfection of any
      collateral, or any taking, release or amendment or waiver of or consent to
      departure from any other guaranty, for all or any of the Guaranteed
      Obligations;

            (d) any change, restructuring or termination of the corporate
      structure or existence of the Borrower; or

            (e) any other circumstance (including, without limitation, any
      statute of limitations) or any existence of or reliance on any
      representation by the Administrative Agent or any Lender that might
      otherwise constitute a defense available to, or a discharge of, the
      Guarantor, the Borrower or any other guarantor or surety other than
      payment when due.

      This Guaranty shall continue to be effective or be reinstated, as the case
may be, if at any time any payment of any of the Guaranteed Obligations is
rescinded or must otherwise be returned by the Administrative Agent or any
Lender upon the insolvency, bankruptcy or reorganization of the Borrower or the
Guarantor or otherwise, all as though such payment had not been made.

      SECTION 7.03 Waiver. (a) The Guarantor hereby waives the right to require
application (excusion de bienes) in respect of the Property of the Borrower,
promptness, diligence, notice of acceptance and any other notice with respect to
any of the Guaranteed Obligations and this Guaranty and any requirement that the
Administrative Agent or any Lender exhaust any right or take any action against
the Borrower or any other Person or any collateral. The Guarantor acknowledges
that it will receive direct and indirect benefits from the financing
arrangements contemplated herein and that the waiver set forth in this Section
7.03 is knowingly made in contemplation of such benefits. The Guarantor hereby
waives any right to revoke this Guaranty, and acknowledges that this Guaranty is
continuing in nature and applies to all Guaranteed Obligations, whether existing
now or in the future.

            (b) So far as the Guarantor is concerned, the Lenders or the
      Administrative Agent for the benefit of the Lenders, may, at any time and
      from time to time, without the consent of or notice to the Guarantor, and
      without impairing or releasing any of the obligations of the Guarantor
      hereunder, upon or without any terms or conditions and in whole or in
      part:

                                                                              48
<PAGE>
                  (i) exercise or refrain from exercising any rights against the
            Borrower or others (including, without limitation, any other
            guarantor of payment of the Guaranteed Obligations) or otherwise act
            or refrain from acting, whether under the Credit Agreement or under
            rights and remedies that the Lenders may now or hereafter have under
            any collateral given thereunder or henceforth; and when making any
            demand hereunder against the Guarantor, the Lenders or the
            Administrative Agent for the benefit of the Lenders, may, but shall
            be under no obligation to, make a similar demand on any other
            guarantor of payment of the Guaranteed Obligations, and any failure
            by the Lenders or the Administrative Agent to make any such demand
            or to collect any payments from any other guarantor or any release
            of another guarantor of payment of the Guaranteed Obligations shall
            not relieve the Guarantor of their obligations and liabilities
            hereunder, and shall not release, impair or affect the rights and
            remedies, express or implied, or as a matter of law, of the Lenders
            against the Guarantor (for the purposes hereof, "demand" shall
            include the commencement and continuation of any legal proceedings);

                  (ii) settle or compromise any of the Guaranteed Obligations,
            any security therefor or any liability (including any of those
            hereunder) incurred directly or indirectly in respect thereof or
            hereof, and subordinate the payment of all or any part thereof to
            the payment of any liability (whether due or not) of the Borrower to
            creditors of the Borrower other than the Lenders;

                  (iii) apply any sums by whomsoever paid or howsoever realized
            to any liability or liabilities of the Borrower hereunder to the
            Administrative Agent and/or the Lenders, regardless of what
            liability or liabilities of the Borrower remain unpaid; and

                  (iv) amend or otherwise modify, consent to or waive any breach
            of, or any act, omission or Default under, this Agreement and the
            Notes or any other agreements, instruments or documents referred to
            therein or executed and delivered pursuant thereto or in connection
            therewith, and this Guaranty shall apply to the Guaranteed
            Obligations as set forth in each of such documents as so amended and
            modified. Any such action taken by the Administrative Agent or the
            Lenders shall not impair or release any of the obligations of the
            Guarantor hereunder.

      SECTION 7.04 Continuing Guaranty; Assignments. This Guaranty is a
continuing guaranty and shall: (a) remain in full force and effect until the
later of the cash payment in full of the Guaranteed Obligations and all other
amounts payable under this Guaranty and the Termination Date; (b) be binding
upon the Guarantor, its successors and assigns; and (c) inure to the benefit of
and be enforceable by the Lenders, the Administrative Agent and their
successors, transferees and assigns. Without limiting the generality of the
foregoing clause (c), any Lender may assign or otherwise transfer all or any
portion of its rights and obligations hereunder (including, without limitation,
all or any portion of its Commitment, the Advances owing to it and the Note or
Notes held by it) to any other Person, and such other Person shall thereupon

                                                                              49
<PAGE>
become vested with all the benefits in respect thereof granted to such Lender
herein or otherwise, in each case as provided in Section 9.07.

      SECTION 7.05 Subrogation. The Guarantor will not exercise any rights that
it may now or hereafter acquire against the Borrower or any other insider
guarantor that arise from the existence, payment, performance or enforcement of
the Guarantor's obligations under this Guaranty, including, without limitation,
any right of subrogation, reimbursement, exoneration, contribution or
indemnification and any right to participate in any claim or remedy of the
Administrative Agent or any Lender against the Borrower or any other insider
guarantor or any collateral, whether or not such claim, remedy or right arises
in equity or under contract, statute or common law, including, without
limitation, the right to take or receive from the Borrower or any other insider
guarantor, directly or indirectly, in cash or other Property or by set-off or in
any other manner, payment or security solely on account of such claim, remedy or
right, unless and until all of the Guaranteed Obligations and all other amounts
payable under this Guaranty shall have been paid in full in cash and the
Termination Date shall have occurred. If any amount shall be paid to the
Guarantor in violation of the preceding sentence at any time prior to the later
of the payment in full in cash of the Guaranteed Obligations and all other
amounts payable under this Guaranty and the Termination Date, such amount shall
be held in trust for the benefit of the Administrative Agent and the Lenders and
shall forthwith be paid to the Administrative Agent to be credited and applied
to the Guaranteed Obligations and all other amounts payable under this Guaranty,
whether matured or unmatured, in accordance with the terms of this Guaranty, or
to be held as collateral for any Guaranteed Obligations or other amounts payable
under this Guaranty thereafter arising. If: (i) the Guarantor shall make payment
to the Administrative Agent or any Lender of all or any part of the Guaranteed
Obligations; (ii) all of the Guaranteed Obligations and all other amounts
payable under this Guaranty shall be paid in full in cash; and (iii) the
Termination Date shall have occurred, the Administrative Agent and the Lenders
will, at the Guarantor's request and expense, execute and deliver to the
Guarantor appropriate documents, without recourse and without representation or
warranty, necessary to evidence the transfer by subrogation to the Guarantor of
an interest in the Guaranteed Obligations resulting from such payment by the
Guarantor.

                                  ARTICLE VIII

                            THE ADMINISTRATIVE AGENT

      SECTION 8.01 Appointment, Powers and Immunities. Each Lender hereby
irrevocably appoints and authorizes the Administrative Agent to act as its agent
hereunder with such powers as are specifically delegated to the Administrative
Agent by the terms of this Agreement, together with such other powers as are
reasonably incidental thereto. The Administrative Agent (which term as used in
this sentence and in Section 8.05 and the first sentence of Section 8.06 hereof
shall include reference to its affiliates and its own and its affiliates'
officers, directors, employees and agents): (a) shall have no duties or
responsibilities except those expressly set forth in this Agreement , and shall
not by reason of this Agreement be a trustee for any Lender; (b) shall not be
responsible to the Lenders for any recitals, statements, representations or
warranties contained in this Agreement, or in any certificate or other document
referred to or provided for in, or received by any of them under, this Agreement
or any other document executed hereunder, or for the value, validity,
effectiveness, genuineness,

                                                                              50
<PAGE>
enforceability or sufficiency of this Agreement, any Note or any other document
referred to or provided for herein or therein or for any failure by the Borrower
or any other Person to perform any of its obligations hereunder or thereunder;
(c) shall not be required to initiate or conduct any litigation or collection
proceedings hereunder or under any other document executed hereunder; and (d)
shall not be responsible for any action taken or omitted to be taken by it
hereunder or under any other document or instrument referred to or provided for
herein or therein or in connection herewith or therewith, except for its own
gross negligence or willful misconduct. The Administrative Agent may employ
agents and attorneys-in-fact and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it in good faith.
The Administrative Agent may deem and treat the payee of any Note as the holder
thereof for all purposes hereof unless and until a notice of the assignment or
transfer thereof shall have been filed with the Administrative Agent.

      SECTION 8.02 Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely upon any certification, notice or other communication
(including, without limitation, any thereof by telephone, telecopy, telex,
telegram or cable) believed by it to be genuine and correct and to have been
signed or sent by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel, independent accountants and other experts
selected by the Administrative Agent. As to any matters not expressly provided
for by this Agreement or any other documents, the Administrative Agent shall in
all cases be fully protected in acting, or in refraining from acting, hereunder
or thereunder in accordance with instructions given by the Required Lenders or,
if provided herein, in accordance with the instructions given by all of the
Lenders as is required in such circumstance, and such instructions of such
Lenders and any action taken or failure to act pursuant thereto shall be binding
on all of the Lenders.

      SECTION 8.03 Defaults. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of a Default unless the
Administrative Agent has received notice from a Lender or any Loan Party
specifying such Default and stating that such notice is a "Notice of Default".
In the event that the Administrative Agent receives such a notice of the
occurrence of a Default, the Administrative Agent shall give prompt notice
thereof to the Lenders. The Administrative Agent shall (subject to Section 8.07
hereof) take such action with respect to such Default as shall be directed by
the Required Lenders, provided that, unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default as it shall deem advisable in the best interest of the
Lenders except to the extent that this Agreement expressly requires that such
action be taken, or not be taken, only with the consent or upon the
authorization of the Required Lenders, or all of the Lenders.

      SECTION 8.04 Rights as a Lender. With respect to its Commitments and the
Advances made by it, the Administrative Agent (and any successor acting as
Administrative Agent) in its capacity as a Lender hereunder shall have the same
rights and powers hereunder as any other Lender and may exercise the same as
though it were not acting as the Administrative Agent, and the term "Lender" or
"Lenders" shall, unless the context otherwise indicates, include the
Administrative Agent in its individual capacity. Banco Popular (and any
successor acting as Administrative Agent) and its affiliates may (without having
to account therefor to any Lender) accept deposits from, lend money to, make
investments in and generally engage in any kind of

                                                                              51
<PAGE>
banking, trust or other business with the Loan Parties (and any of their
Subsidiaries or Affiliates) as if it were not acting as the Administrative
Agent, and Banco Popular and its affiliates may accept fees and other
consideration from the Loan Parties for services in connection with this
Agreement or otherwise without having to account for the same to the Lenders.

      SECTION 8.05 Indemnification. The Lenders agree to indemnify the
Administrative Agent (to the extent not reimbursed under Section 9.04 hereof,
but without limiting the obligations of the Borrower under said Section 9.04,
ratably in accordance with the aggregate principal amount of the Advances held
by the Lenders (or, if no Loans are at the time outstanding, ratably in
accordance with their respective Commitments), for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever that may be imposed
on, incurred by or asserted against the Administrative Agent (including by any
Lender) arising out of or by reason of any investigation in or in any way
relating to or arising out of this Agreement or any other documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby (including, without limitation, the costs and expenses that the Borrower
is obligated to pay under Section 9.04 hereof, but excluding, unless a Default
has occurred and is continuing, normal administrative costs and expenses
incident to the performance of its agency duties hereunder) or the enforcement
of any of the terms hereof or thereof or of any such other documents, provided
that no Lender shall be liable for any of the foregoing to the extent they arise
from the gross negligence or willful misconduct of the party to be indemnified.

      SECTION 8.06 Non-Reliance on Administrative Agent and Other Lenders. Each
Lender agrees that it has, independently and without reliance on the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Borrower and its Subsidiaries and decision to enter into this Agreement and that
it will, independently and without reliance upon the Administrative Agent or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or under any other documents.
The Administrative Agent shall not be required to keep itself informed as to the
performance or observance by any Loan Party of this Agreement or any of the
other documents or any other document referred to or provided for herein or
therein or to inspect the Properties or books of the Borrower or any of its
Subsidiaries. Except for notices, reports and other documents and information
expressly required to be furnished to the Lenders by the Administrative Agent
hereunder or under the documents, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition or business of the
Borrower or any of its Subsidiaries (or any of their affiliates) that may come
into the possession of the Administrative Agent or any of its Affiliates.

      SECTION 8.07 Failure to Act. Except for action expressly required of the
Administrative Agent hereunder and under the other documents, the Administrative
Agent shall in all cases be fully justified in failing or refusing to act
hereunder and thereunder unless it shall receive further assurances to its
satisfaction from the Lenders of their indemnification obligations under Section
8.05 hereof against any and all liability and expense that may be incurred by it
by reason of taking or continuing to take any such action.

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<PAGE>
      SECTION 8.08 Resignation or Removal of Administrative Agent. Subject to
the appointment and acceptance of a successor Administrative Agent as provided
below, the Administrative Agent may resign at any time by giving notice thereof
to the Lenders and the Borrower, and the Administrative Agent may be removed at
any time with or without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Administrative Agent with the prior consent of the Borrower (which
consent shall not be unreasonably withheld); provided that no such consent of
the Borrower shall be required if an Event of Default has occurred and is
continuing and the Commitments have been terminated and/or the Loans and other
amounts payable by the Loan Parties hereunder have been declared forthwith due
and payable. If no successor Administrative Agent shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent's giving of notice of resignation or the
Required Lenders' removal of the retiring Administrative Agent, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, that shall be a bank with a combined capital and surplus
of at least $500,000,000. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder. After any retiring Administrative Agent's resignation
or removal hereunder as Administrative Agent, the provisions of this Section 8
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Administrative Agent
hereunder.

                                   ARTICLE IX

                                  MISCELLANEOUS

      SECTION 9.01 Amendments, Etc. (a) Any provision of this Agreement may be
amended, modified or supplemented only by an instrument in writing signed by the
Borrower, the Administrative Agent and the Required Lenders, or by the Borrower
and the Administrative Agent acting with the consent of the Required Lenders,
and any provision of this Agreement may be waived by the Required Lenders or by
the Administrative Agent acting with the consent of the Required Lenders;
provided that: (x) no modification, supplement or waiver shall, unless by an
instrument signed by all of the Lenders or by the Administrative Agent acting
with the consent of all of the Lenders: (i) increase, or extend the term of any
of the Commitments, or extend the time or waive any requirement for the
reduction or termination of any of the Commitments; (ii) reduce or terminate,
other than reductions or termination of Commitments made by the Borrower as
permitted in Section 2.02 hereof, the Commitment(s) of any Lender; (iii) extend
the date fixed for the payment of principal of or interest on any Revolving
Credit Advance, or any fee hereunder; (iv) reduce the amount of any such payment
of principal; (v) reduce the rate at which interest is payable thereon or any
fee is payable hereunder; (vi) alter the rights or obligations of the Borrower
to prepay Loans; (vii) alter the terms of this Section 9.01; (viii) modify the
definition of the term "Required Lenders", or modify in any other manner the
number or percentage of the Lenders required to make any determinations or waive
any rights hereunder or to modify any provision hereof; (ix) release the
Guarantor from any of its guarantee obligations under Article VII hereof; or (x)
waive any of the conditions precedent set forth in Article III

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<PAGE>
hereof; and (y) any modification of any of the rights or obligations of the
Administrative Agent shall require the consent of the Administrative Agent.

            (b) Each Lender grants: (x) to the Administrative Agent the right to
      purchase all (but not less than all) of such Lender's Commitments and
      Advances owing to it and the Notes held by it and all of its rights and
      obligations hereunder and under the other documents at a price equal to
      the aggregate amount of outstanding Advances owed to such Lender (together
      with all accrued and unpaid interest and fees owed to such Lender); and
      (y) to the Borrower the right to cause an assignment of all (but not less
      than all) of such Lender's Commitments and Advances owing to it and the
      Notes held by it and all of its rights and obligations hereunder and under
      the other documents to Eligible Assignees, which right may be exercised by
      the Administrative Agent or the Borrower, as the case may be, if such
      Lender refuses to execute any amendment, waiver or consent which requires
      the written consent of all the Lenders and to which Lenders owed at least
      90% of the aggregate unpaid principal amount of Revolving Credit Advances
      or, if no such principal amount is then outstanding, Lenders having at
      least 90% of the Commitments, the Administrative Agent and the Borrower
      have agreed. Each Lender agrees that if the Administrative Agent or the
      Borrower, as the case may be, exercises its option hereunder, it shall
      promptly execute and deliver all agreements and documentation necessary to
      effectuate such assignment as set forth in Section 9.07.

      SECTION 9.02 Notices, Etc. All notices and other communications provided
for hereunder shall be in writing (including telecopier communication) and
mailed, telecopied or delivered by hand or by courier,

            if to the Borrower, at

            Telecomunicaciones de Puerto Rico, Inc.
            1515 Roosevelt Avenue
            12th Floor,
            Guaynabo, Puerto Rico 00968

            or

            P.O. Box 360998
            San Juan, Puerto Rico 00936-0998,
            Attention:  W. Jack Reagan, Vice President
                        Chief Financial Officer
            Facsimile No: (787) 749-9024

                                                                              54
<PAGE>
            with a copy to

            Jose Arroyo
            Vice President and General Counsel
            Telecomunicaciones de Puerto Rico, Inc.
            1515 Roosevelt Avenue
            12th Floor
            Guaynabo, Puerto Rico 00968
            Facsimile No: (787) 782-9545

            if to PRTC, at

            Puerto Rico Telephone Company, Inc.
            1515 Roosevelt Avenue
            12th Floor,
            Guaynabo, Puerto Rico 00968
            or
            P.O. Box 360998
            San Juan, Puerto Rico 00936-0998,
            Attention:  W. Jack Reagan, Vice President
                        Chief Financial Officer
            Facsimile No: (787) 749-9024

            with a copy to

            Jose Arroyo
            Vice President and General Counsel
            Telecomunicaciones de Puerto Rico, Inc.
            1515 Roosevelt Avenue
            12th Floor
            Guaynabo, Puerto Rico 00968
            Facsimile No: (787) 782-9545

if to any Lender, at its Applicable Lending Office specified opposite its name
on Schedule I hereto; and if to the Administrative Agent, at its address at 209
Munoz Rivera Avenue, Hato Rey, Puerto Rico, Attention: Manager - Structured
Finance Division; or, as to any Loan Party or the Administrative Agent, at such
other address as shall be designated by such party in a written notice to the
other parties and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Borrower and the
Administrative Agent. All such notices and communications shall, when mailed or
telecopied, be effective when deposited in the first class mails or, in the case
of international delivery, when deposited with mails or couriers that deliver
within two Business Days or telecopied, provided that notices and communications
to the Administrative Agent pursuant to Article II, III or VIII shall not be
effective until received by the Administrative Agent, and provided, further,
that notices and communications to any Person required to be provided hereunder
within five Business Days shall only be made by hand or via telecopy or courier.
Delivery by telecopier of an executed counterpart of any amendment or

                                                                              55
<PAGE>
waiver of any provision of this Agreement or the Notes or of any Exhibit hereto
to be executed and delivered hereunder shall be effective as delivery of a
manually executed counterpart thereof.

      SECTION 9.03 No Waiver; Remedies. No failure on the part of any Lender or
the Administrative Agent to exercise, and no delay in exercising, any right
hereunder or under any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.

      SECTION 9.04 Costs and Expenses. (a) The Borrower agrees to pay on demand
all reasonable out-of-pocket costs and expenses of the Administrative Agent in
connection with the preparation, execution, delivery, administration,
modification and amendment of this Agreement, the Notes and the other documents
to be delivered hereunder, including, without limitation, the reasonable fees
and expenses of Martinez Odell & Calabria, counsel for the Administrative Agent.
Such expenses shall be paid by the Borrower upon presentation of an itemized
statement of account (after the Borrower has had reasonable time to review such
statement of account) following consummation of the transactions contemplated by
this Agreement. The Borrower further agrees to pay on demand all costs and
expenses of the Administrative Agent and the Lenders, if any (including, without
limitation, reasonable counsel fees and expenses), in connection with the
enforcement (whether through negotiations, legal proceedings or otherwise) of
this Agreement, the Notes and the other documents to be delivered hereunder,
including, without limitation, reasonable fees and expenses of counsel for the
Administrative Agent and each Lender in connection with the enforcement of
rights under this Section 9.04(a).

            (b) The Borrower agrees to indemnify and hold harmless the
      Administrative Agent and each Lender and each of their Affiliates and
      their officers, directors, employees, agents and advisors (each, an
      "Indemnified Party") from and against any and all claims, damages, losses,
      liabilities and expenses (including, without limitation, reasonable fees
      and expenses of counsel) that may be incurred by or asserted or awarded
      against any Indemnified Party, in each case arising out of or in
      connection with or by reason of, or in connection with the preparation for
      a defense of, any investigation, litigation or proceeding arising out of,
      related to or in connection with: (i) the Notes, this Agreement, any of
      the transactions contemplated herein or the actual or proposed use of the
      proceeds of the Advances; or (ii) the actual or alleged presence of
      Hazardous Materials on any Property of the Borrower or any of their
      respective Subsidiaries or any Environmental Action relating in any way to
      the Borrower or any of their respective Subsidiaries, in each case whether
      or not such investigation, litigation or proceeding is brought by any Loan
      Party, its directors, shareholders or creditors or an Indemnified Party or
      any other Person or any Indemnified Party is otherwise a party thereto and
      whether or not the transactions contemplated hereby are consummated,
      except to the extent such claim, damage, loss, liability or expense: (A)
      is found by a court of competent jurisdiction to have resulted from such
      Indemnified Party's gross negligence or willful misconduct; (B) arises
      from disputes among two or more Lenders (but not including any such
      dispute that involves a Lender to the extent such Lender is acting in any
      different capacity (i.e., Administrative Agent or Arranger) under the
      Credit Agreement or the

                                                                              56
<PAGE>
      Notes or to the extent that it involves the Administrative Agent's
      syndication activities); or (C) arises from or relates to a breach by such
      Indemnified Party of its obligations under this Agreement. The Borrower
      also agrees not to assert any claim against the Administrative Agent, any
      Lender, any of their Affiliates, or any of their respective directors,
      officers, employees, attorneys and agents, on any theory of liability, for
      special, indirect, consequential or punitive damages arising out of or
      otherwise relating to the Notes, this Agreement, any of the transactions
      contemplated herein or the actual or proposed use of the proceeds of the
      Advances.

            (c) If any payment of principal of, or Conversion of, any LIBOR Rate
      Advance is made by the Borrower (or pursuant to Section 9.01(b)) to or for
      the account of a Lender other than on the last day of the Interest Period
      for such Advance, as a result of a payment, prepayment or Conversion
      pursuant to this Agreement or acceleration of the maturity of the Notes
      pursuant to Section 6.01, the Borrower shall, upon demand by such Lender
      (with a copy of such demand to the Administrative Agent), pay to the
      Administrative Agent for the account of such Lender any amounts required
      to compensate such Lender for any additional losses, costs or expenses
      that it may reasonably incur as a result of such payment or Conversion,
      including, without limitation, any loss (excluding loss of anticipated
      profits), cost or expense incurred by reason of the liquidation or
      reemployment of deposits or other funds acquired by any Lender to fund or
      maintain such Advance.

            (d) Without prejudice to the survival of any other agreement of the
      Borrower hereunder, the agreements and obligations of the Borrower
      contained in Sections 2.12 and 9.04 shall survive the payment in full of
      principal, interest and all other amounts payable hereunder and under the
      Notes.

      SECTION 9.05 Right of Set-off. Upon: (a) the occurrence and during the
continuance of any Event of Default; and (b) the making of the request or the
granting of the consent specified by Section 6.01 by the Required Lenders to
authorize the Administrative Agent to declare the Notes due and payable pursuant
to the provisions of Section 6.01 and notice to the Borrower as required under
Section 6.01, each Lender and each of its Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Lender or such Affiliate to or for the credit or the account of any Loan Party
against any and all of the obligations of such Loan Party now or hereafter
existing under this Agreement and the Note held by such Lender, whether or not
such Lender shall have made any demand under this Agreement or such Note and
although such obligations may be unmatured. Each Lender agrees promptly to
notify the applicable Loan Party after any such set-off and application,
provided that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of each Lender and its Affiliates under
this Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that such Lender and its Affiliates may
have.

      SECTION 9.06 Binding Effect. This Agreement shall become effective (other
than Section 2.01, which shall only become effective upon satisfaction of the
conditions precedent set forth in Section 3.01) when it shall have been executed
by the Borrower and the Administrative

                                                                              57
<PAGE>
Agent and when the Administrative Agent shall have been notified by each Lender
that such Lender has executed it and thereafter shall be binding upon and inure
to the benefit of the Borrower, the Guarantor, the Administrative Agent and each
Lender and their respective successors and assigns, except that neither the
Borrower nor the Guarantor shall have the right to assign its rights hereunder
or any interest herein without the prior written consent of the Lenders.

      SECTION 9.07 Assignments and Participations. (a) Each Lender may, with the
consent of the Administrative Agent (except as provided in clause (g) below) and
the Borrower (such consent not to be unreasonably withheld) and, if demanded by
the Borrower pursuant to Section 9.01(b) or following a request for a payment to
or on behalf of such Lender under Section 2.10 or Section 2.13 or following a
notice given by such Lender pursuant to Section 2.11, upon at least ten Business
Days' notice to such Lender and the Administrative Agent, will, assign to one or
more Persons all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitment, the
Revolving Credit Advances owing to it and the Revolving Credit Note or Notes
held by it); provided, that the Borrower may make demand with respect to a
Lender that has given notice pursuant to Section 2.11 only if the Borrower makes
such demand of all Lenders similarly situated that have given such notice;
provided, further, that: (i) each such assignment shall be of a constant, and
not a varying, percentage of all rights and obligations under this Agreement and
the Revolving Credit Notes; (ii) except in the case of an assignment to a Person
that, immediately prior to such assignment, was a Lender, or an assignment of
all of a Lender's rights and obligations under this Agreement, the amount of the
Commitment of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $5,000,000 or an
integral multiple of $1,000,000 in excess thereof; (iii) each such assignment
shall be to an Eligible Assignee; (iv) each such assignment made as a result of
a demand by the Borrower shall be arranged by the Borrower after consultation
with the Administrative Agent and shall be either an assignment of all of the
rights and obligations of the assigning Lender under this Agreement or an
assignment of a portion of such rights and obligations made concurrently with
another such assignment or other such assignments that together cover all of the
rights and obligations of the assigning Lender under this Agreement; (v) no
Lender shall be obligated to make any such assignment as a result of a demand by
the Borrower unless and until such Lender shall have received one or more
payments from either the Borrower or one or more Eligible Assignees in an
aggregate amount at least equal to the aggregate outstanding principal amount of
the Advances owing to such Lender, together with accrued interest thereon to the
date of payment of such principal and all other amounts payable to such Lender
under this Agreement; (vi) no Lender shall at any time have more than two (2)
assignees that were not Initial Lenders; and (vii) the parties to each such
assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with any Revolving Credit Notes subject to such assignment and a processing and
recordation fee of $2,500 (which shall be paid by Persons other than the
Borrower unless such assignment is made as a result of a demand by the
Borrower). Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and Acceptance; (x) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder; and (y) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its

                                                                              58
<PAGE>
rights other than rights of indemnification under Section 9.04 or otherwise
relating to a time prior to the effective date of such Assignment and Acceptance
and be released from its obligations under this Agreement (and, in the case of
an Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto).

            (b) By executing and delivering an Assignment and Acceptance, the
      Lender assignor thereunder and the assignee thereunder confirm to and
      agree with each other and the other parties hereto as follows: (i) other
      than as provided in such Assignment and Acceptance, such assigning Lender
      makes no representation or warranty and assumes no responsibility with
      respect to any statements, warranties or representations made in or in
      connection with this Agreement or the execution, legality, validity,
      enforceability, genuineness, sufficiency or value of this Agreement or any
      other instrument or document furnished pursuant hereto; (ii) such
      assigning Lender makes no representation or warranty and assumes no
      responsibility with respect to the financial condition of any Loan Party
      or the performance or observance by any Loan Party of any of its
      obligations under this Agreement or any other instrument or document
      furnished pursuant hereto; (iii) such assignee confirms that it has
      received a copy of this Agreement, together with copies of the financial
      statements referred to in Section 4.01 and such other documents and
      information as it has deemed appropriate to make its own credit analysis
      and decision to enter into such Assignment and Acceptance; (iv) such
      assignee will, independently and without reliance upon the Administrative
      Agent, such assigning Lender or any other Lender and based on such
      documents and information as it shall deem appropriate at the time,
      continue to make its own credit decisions in taking or not taking action
      under this Agreement; (v) such assignee confirms that it is an Eligible
      Assignee; (vi) such assignee appoints and authorizes the Administrative
      Agent to take such action as agent on its behalf and to exercise such
      powers and discretion under this Agreement as are delegated to the
      Administrative Agent by the terms hereof, together with such powers and
      discretion as are reasonably incidental thereto; and (vii) such assignee
      agrees that it will perform in accordance with their terms all of the
      obligations that by the terms of this Agreement are required to be
      performed by it as a Lender.

            (c) Upon its receipt of an Assignment and Acceptance executed by an
      assigning Lender, an assignee representing that it is an Eligible Assignee
      and the Borrower, together with the Revolving Credit Note or Notes subject
      to such assignment, the Administrative Agent shall, if such Assignment and
      Acceptance has been completed and is in substantially the form of Exhibit
      C hereto: (i) accept such Assignment and Acceptance; (ii) record the
      information contained therein in the Register; and (iii) give prompt
      notice thereof to the Borrower. Within five Business Days after its
      receipt of such notice, the Borrower, at its own expense, shall execute
      and deliver to the Administrative Agent in exchange for the surrendered
      Revolving Credit Note a new Note to the order of such Eligible Assignee in
      an amount equal to the Commitment assumed by it pursuant to such
      Assignment and Acceptance and, if the assigning Lender has retained a
      Commitment hereunder a new Revolving Credit Note to the order of the
      assigning Lender in an amount equal to the Commitment retained by it
      hereunder. Such new Revolving Credit Note or Notes shall be in an
      aggregate principal amount equal to the aggregate principal amount of such
      surrendered Revolving Credit Note or Notes, shall be

                                                                              59
<PAGE>
      dated the effective date of such Assignment and Acceptance and shall
      otherwise be in substantially the form of Exhibit A-1 hereto.

            (d) The Administrative Agent shall maintain at its address referred
      to in Section 9.02 a copy of each Assignment and Acceptance delivered to
      and accepted by it and a register for the recordation of the names and
      addresses of the Lenders and the Commitment of, and principal amount of
      the Advances owing to, each Lender from time to time (the "Register"). The
      entries in the Register shall be conclusive and binding for all purposes,
      absent manifest error, and the Borrower, the Administrative Agent and the
      Lenders may treat each Person whose name is recorded in the Register as a
      Lender hereunder for all purposes of this Agreement. The Register shall be
      available for inspection by the Borrower or any Lender at any reasonable
      time and from time to time upon reasonable prior notice.

            (e) Each Lender may sell participations to one or more banks or
      other entities (other than the Borrower or any of its Affiliates) in or to
      all or a portion of its rights and obligations under this Agreement
      (including, without limitation, all or a portion of its Commitment, the
      Advances owing to it and the Notes held by it); provided, however, that:
      (i) such Lender's obligations under this Agreement (including, without
      limitation, its Commitment to the Borrower hereunder) shall remain
      unchanged; (ii) such Lender shall remain solely responsible to the other
      parties hereto for the performance of such obligations; (iii) such Lender
      shall remain the holder of any such Note for all purposes of this
      Agreement; (iv) the Borrower, the Administrative Agent and the other
      Lenders shall continue to deal solely and directly with such Lender in
      connection with such Lender's rights and obligations under this Agreement;
      and (v) no participant under any such participation shall have any right
      to approve any amendment or waiver of any provision of this Agreement or
      any Note, or any consent to any departure by the Borrower therefrom,
      except that a Lender may agree with a participant as to the manner in
      which the Lender shall exercise the Lender's rights to approve any
      amendment, waiver or consent to the extent that such amendment, waiver or
      consent would reduce the principal of, or interest on, the Notes or any
      fees or other amounts payable hereunder, in each case to the extent
      subject to such participation, or postpone any date fixed for any payment
      of principal of, or interest on, the Notes or any fees or other amounts
      payable hereunder, in each case to the extent subject to such
      participation.

            (f) Any Lender may at any time, without the consent of the
      Administrative Agent or the Borrower, create a security interest in all or
      any portion of its rights under this Agreement (including, without
      limitation, the Advances owing to it and the Note or Notes held by it) in
      favor of any Federal Reserve Bank in accordance with Regulation A of the
      Board of Governors of the Federal Reserve System, provided, however, that
      no such assignment shall have the effect of increasing the costs payable
      by the Borrower.

      SECTION 9.08 Nondisclosure. None of the Administrative Agent, any Lender
or any Affiliate thereof shall disclose without the prior consent of the
Borrower (other than to the Administrative Agent, or another Lender or any such
Affiliate, their respective directors, employees, auditors, affiliates or
counsel who shall agree to be bound by the terms of this provision) any
information with respect to the Loan Parties or any Subsidiary thereof contained

                                                                              60
<PAGE>
in financial statements, projections or reports provided to the Administrative
Agent, any Lender or any Affiliate thereof by, or on behalf of, the Loan Parties
or any Subsidiary, provided that the Administrative Agent, any Lender or any
Affiliate thereof may disclose any such information: (a) as has become generally
available to the public in a manner, or through actions, which do not violate
the terms of this Section 9.08; (b) to, or as may be required or appropriate in
any report, statement or testimony submitted to, any municipal, state,
Commonwealth of Puerto Rico, or federal regulatory body having or claiming to
have jurisdiction over the Administrative Agent, any Lender or any Affiliate
thereof or to the Federal Reserve Board or the Federal Deposit Insurance
Corporation or similar organizations (whether in the United States or elsewhere)
or their successors; (c) as may be required or appropriate in response to any
summons or subpoena or in connection with any litigation; (d) in order to comply
with any law, order, regulation or ruling applicable to the Administrative
Agent, any Lender or any Affiliate thereof; and (e) to a prospective co-lender
or participant in the amounts outstanding hereunder or under the Advances,
provided, however, that such prospective co-lender or participant executes an
agreement containing provisions substantially identical to those contained in
this Section 9.08 and which shall by its terms inure to the benefit of the
Borrower and provided, further, that to the extent practicable, the
Administrative Agent, each Lender and their respective Affiliates shall use
reasonable best efforts to provide prior written notice of such disclosure to
the Borrower.

      SECTION 9.09 Governing Law. This Agreement and the Notes shall be governed
by, and construed in accordance with, the laws of the Commonwealth of Puerto
Rico.

      SECTION 9.10 Jurisdiction, Etc. (a) Each of the Loan Parties hereby agrees
that any suit, action or proceeding with respect to this Agreement or the Notes
or any other document executed hereunder to which it is a party or any judgment
entered by any court in respect thereof may be brought in the United States
District Court for the District of Puerto Rico or in the Court of First Instance
of Puerto Rico sitting in San Juan, as the party commencing such suit, action or
proceeding may elect in its sole discretion; and each party hereto hereby
irrevocably submits to the non-exclusive jurisdiction of such court for the
purpose of any such suit, action, proceeding or judgment. Each party hereto
further submits, for the purpose of any such suit, action, proceeding or
judgment brought or rendered against it, to the appropriate courts of the
jurisdiction of its domicile.

            (b) Each of the Loan Parties hereby irrevocably consents to the
      service of process in any suit, action or proceeding in such courts by the
      mailing thereof by the Administrative Agent or any Lender by registered or
      certified mail, postage prepaid, at its address set forth beneath its
      signature hereto. Nothing herein shall in any way be deemed to limit the
      ability of the Administrative Agent or any Lender to serve any such writs,
      process or summonses in any other manner permitted by applicable law or to
      obtain jurisdiction over the Loan Parties in such other jurisdictions, and
      in such manner, as may be permitted by applicable law.

            (c) Each of the Loan Parties hereby irrevocably waives any objection
      that it may now or hereafter have to the laying of the venue of any suit,
      action or proceeding arising out of or relating to this Agreement, the
      Notes or any document executed hereunder brought in any such court and
      hereby further irrevocably waives any claim that

                                                                              61
<PAGE>
      any such suit, action or proceeding brought in any such court has been
      brought in an inconvenient forum.

      SECTION 9.11 Waiver of Jury Trial. Each of the Borrower, the Guarantor,
the Administrative Agent and the Lenders hereby irrevocably waives all right to
trial by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to this Agreement or the
Notes or the actions of the Administrative Agent or any Lender in the
negotiation, administration, performance or enforcement thereof.

      SECTION 9.12 Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of a manually executed counterpart of
this Agreement.

      SECTION 9.13 Exhibits and Schedules Incorporated. The Exhibits and
Schedules annexed hereto are hereby incorporated by reference herein as part of
this Agreement with the same effect as if set forth in the body hereof.

      SECTION 9.14 2001 Revolving Credit Agreement. This Agreement replaces and
supersedes the Revolving Credit Agreement dated as of June 28, 2001 (the "2001
Revolving Credit Agreement"), among the parties hereto. The 2001 Revolving
Credit Agreement and the note issued thereunder are hereby terminated for all
purposes.

                               [Signatures Follow]

                                                                              62
<PAGE>
      IN WITNESS WHEREOF, the parties hereto have caused this Revolving Credit
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.

                                TELECOMUNICACIONES DE PUERTO RICO, INC.,
                                as Borrower

                                By:
                                       ----------------------------------
                                       W. Jack Reagan
                                       Vice President
                                       Chief Financial Officer

                                PUERTO RICO TELEPHONE COMPANY, INC., as
                                Guarantor

                                By:
                                       ----------------------------------
                                       W. Jack Reagan
                                       Vice President
                                       Chief Financial Officer

                                BANCO POPULAR DE PUERTO RICO,
                                as Lender

                                By:
                                       ----------------------------------
                                Name:  Janice Vazquez
                                Title: Assistant Vice President

                                BANCO POPULAR DE PUERTO RICO, as
                                Administrative Agent

                                By:
                                       ----------------------------------
                                Name:  Janice Vazquez
                                Title: Assistant Vice President

                                                                              63
<PAGE>
                                The Lenders

Commitment:  $90,000,000        BANCO POPULAR DE PUERTO RICO

                                By:
                                       ----------------------------------
                                Name:  Janice Vazquez
                                Title: Assistant Vice President

Applicable Lending Office(s):   209 Munoz Rivera Avenue
                                Hato Rey, Puerto Rico
                                Attention: Manager - Corporate Banking Division
                                Telecopier: (787) 754-9112

                                                                              64

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