Thanks everyone for your valuable input. Quester, I guess what you said was right. I removed all prompts and just put in one prompt at the begining of object creation.

use Net::Telnet;
$telnet = new Net::Telnet ( Timeout=>10,
Errmode=>'die',Input_Log=>'out.txt', Prompt=>'/[\$%#>]/');
[download]

This works!! The default prompt  '/[\$%#>] $/' didn't work because it had the extra $ towards the end of the string.