NORTEL NETWORKS LTD
S-3, 2000-12-15
TELEPHONE COMMUNICATIONS (NO RADIOTELEPHONE)
Previous: LONG BEACH SECURITIES CORP, 8-K, 2000-12-15
Next: NORTEL NETWORKS LTD, S-3, EX-1.1, 2000-12-15



<PAGE>   1
   AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 15, 2000
                                              REGISTRATION NO.  333-
================================================================================
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    --------
                                    FORM S-3
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933

                                    --------

<TABLE>
<S>                                                         <C>
                 NORTEL NETWORKS LIMITED                                NORTEL NETWORKS CAPITAL CORPORATION
(Exact name of Registrant as specified in its charter)      (Exact name of Registrant as specified in its charter)

                          CANADA                                                     DELAWARE
             (State or other jurisdiction of                              (State or other jurisdiction of
              incorporation or organization)                              incorporation or organization)

                       62-12-62580                                                  62-16-29620
                     (I.R.S. Employer                                            (I.R.S. Employer
                  Identification Number)                                      Identification Number)

                8200 DIXIE ROAD, SUITE 100                                     NORTEL NETWORKS PLAZA
                BRAMPTON, ONTARIO, CANADA                               NASHVILLE, TENNESSEE, UNITED STATES
                         L6T 5P6                                                    37228-1397
                      (905) 863-0000                                              (615) 432-4000
    (Address, including zip code, and telephone number,         (Address, including zip code, and telephone number,
       of Registrant's principal executive offices)               including area code, of Registrant's principal
                                                                     executive including area code, offices)
</TABLE>

                              CT CORPORATION SYSTEM
                   111 EIGHTH AVENUE, NEW YORK, NEW YORK 10011
                                 (212) 590-9100

           (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)

                                   COPIES TO:

<TABLE>
<S>                                    <C>                            <C>
        BARRY M. FOX, ESQ.                  DEBORAH J. NOBLE                DAVID J. GOLDSCHMIDT, ESQ.
        CRAIG B. BROD, ESQ.                CORPORATE SECRETARY         SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
CLEARY, GOTTLIEB, STEEN & HAMILTON       NORTEL NETWORKS LIMITED                 Four Times Square
         One Liberty Plaza             8200 Dixie Road, Suite 100               New York, New York
        New York, New York                 Brampton, Ontario,                           10036
               10006                         Canada L6T 5P6
</TABLE>
                   ------------------------------------------

         APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: At
such time (from time to time) after the effective date of this Registration
Statement as agreed upon by the registrants and any underwriters or agents in
light of market conditions.

         If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]

         If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, please check the following box. [X]

         If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [ ]

         If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering: [ ]

         If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box: [ ]

                         CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===========================================================================================================================
  TITLE OF EACH CLASS OF SECURITIES                        AMOUNT TO BE          PROPOSED          PROPOSED      AMOUNT OF
           TO BE REGISTERED                                REGISTERED (1)        MAXIMUM           MAXIMUM     REGISTRATION
                                                                              OFFERING PRICE      AGGREGATE         FEE
                                                                                 PER UNIT          OFFERING
                                                                                                    PRICE
---------------------------------------------------------------------------------------------------------------------------
<S>                                                        <C>                    <C>                <C>         <C>
DEBT SECURITIES AND WARRANTS TO
   PURCHASE DEBT SECURITIES.......................          1,800,000,000          n.a.               n.a.        $475,200
GUARANTEES RELATING TO THE DEBT
   SECURITIES.....................................                (2)              n.a.               n.a.          (2)
---------------------------------------------------------------------------------------------------------------------------
</TABLE>

In United States dollars or the equivalent thereof in foreign or composite
currencies.



<PAGE>   2


1.       Plus such additional principal amount as may be necessary such that if
         Debt Securities are issued with an original issue discount, the
         aggregate offering price of all Debt Securities and Warrants to
         purchase Debt Securities being registered hereby will equal
         $1,800,000,000.
2.       No separate consideration will be received for the Guarantees.

         Pursuant to the provisions of Rule 429 under the Securities Act of
1933, the Prospectus contained in this Registration Statement insofar as it
relates to the $500,000,000 principal amount of Debt Securities and Warrants to
purchase Debt Securities which may only be issued by Nortel Networks Limited,
and insofar as it relates to $200,000,000 of Debt Securities and Warrants to
purchase Debt Securities which may be issued by either of the registrants, also
relates to the registrants' Registration Statement No. 333-1720 on Form S-3. An
aggregate of $700,000,000 of Debt Securities and Warrants to purchase Debt
Securities are being carried forward from such earlier Registration Statement
and an aggregate filing fee of $238,146 associated with such securities was
previously paid with or carried forward to such earlier Registration Statement.
In the event any previously registered Debt Securities or Warrants to purchase
Debt Securities are offered prior to the effective date of this Registration
Statement, they will not be included in any prospectus hereunder.

                             ---------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.


<PAGE>   3

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

                SUBJECT TO COMPLETION- DATED DECEMBER 15, 2000

PROSPECTUS

                             [NORTEL NETWORKS LOGO]


            NORTEL NETWORKS                        NORTEL NETWORKS
                LIMITED                          CAPITAL CORPORATION

          Debt Securities and               Guaranteed Debt Securities and
 Warrants to purchase Debt Securities            Warrants to purchase
                                              Guaranteed Debt Securities

                                 $2,500,000,000

         Nortel Networks Limited, which we sometimes refer to as NNL, may offer
the following securities for sale through this prospectus:

         -        senior debt securities; and
         -        warrants to purchase senior debt securities.

         Nortel Networks Capital Corporation, which we sometimes refer to as
NNCC, may offer the following securities for sale through this prospectus:

         -        senior debt securities guaranteed by Nortel Networks Limited;
                  and
         -        warrants to purchase senior debt securities guaranteed by
                  Nortel Networks Limited.

         We will receive an aggregate amount of up to $2,500,000,000 from the
sales of these securities. We will provide the specific terms of the securities
we offer in one or more supplements to this prospectus. You should read this
prospectus and any prospectus supplements carefully before you invest.

         We may offer these securities directly or to or through underwriters or
dealers, and also to other purchasers or through agents. The names of any
underwriters or agents will be included in a supplement to this prospectus.

                              -------------------

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION NOR ANY OTHER REGULATORY BODY HAS APPROVED OR DISAPPROVED OF THESE
SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

                              -------------------


                      The date of this prospectus is , 2000



<PAGE>   4

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                      PAGE
<S>                                                                    <C>
ABOUT THIS PROSPECTUS...................................................2

ENFORCEMENT OF CERTAIN CIVIL LIABILITIES................................2

NORTEL NETWORKS LIMITED.................................................3

NORTEL NETWORKS CAPITAL CORPORATION.....................................4

WHERE YOU CAN FIND MORE INFORMATION.....................................5

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.........................6

RISK FACTORS/FORWARD-LOOKING STATEMENTS.................................7

RATIO OF EARNINGS TO FIXED CHARGES......................................8

USE OF PROCEEDS.........................................................9

LEGAL OWNERSHIP OF SECURITIES..........................................10

DESCRIPTION OF DEBT SECURITIES.........................................13

DESCRIPTION OF WARRANTS................................................23

CANADIAN FEDERAL INCOME TAX CONSIDERATIONS.............................25

PLAN OF DISTRIBUTION...................................................27

VALIDITY OF THE SECURITIES.............................................28

EXPERTS................................................................28
</TABLE>


                     --------------------------------------

         We are not making an offer of these securities in any state where the
offer is not permitted. The securities described in this prospectus will not be
offered or sold to a resident of Canada in contravention of the securities laws
of Canada or any province or territory thereof.


                                       1

<PAGE>   5


                              ABOUT THIS PROSPECTUS

         This prospectus is part of a registration statement that we filed with
the Securities and Exchange Commission using a "shelf" registration process.
Under this shelf process, we may sell any combination of the debt securities and
warrants described in this prospectus in one or more offerings up to an
aggregate offering price of $2,500,000,000.

         This prospectus provides you with a general description of the debt
securities and warrants we may offer. Each time we sell debt securities or
warrants, we will provide one or more prospectus supplements, attached to the
front of this prospectus, that will contain specific information about the terms
of that offering. Those terms may vary from the terms described in this
prospectus. As a result, the summary descriptions of the debt securities and
warrants in this prospectus are subject to, and qualified by reference to, the
descriptions of the particular terms of any securities contained in any related
prospectus supplements. The prospectus supplements may also add, update or
change other information contained in this prospectus. Before you invest in a
particular issue of debt securities or warrants, you should read both this
prospectus and any related prospectus supplements carefully, together with the
additional information described under the heading "Where You Can Find More
Information".

         Unless otherwise specified, all references in this prospectus to "$" or
"dollars" are to United States dollars.

         As used in this prospectus, unless the context requires otherwise,
"we", "us" or "our" means (1) Nortel Networks Limited in its capacity as issuer
of debt securities or warrants or (2) NNCC in its capacity as issuer of debt
securities or warrants, including Nortel Networks Limited in its capacity as
guarantor of debt securities issued by NNCC, as the case may be.

                    ENFORCEMENT OF CERTAIN CIVIL LIABILITIES


         A substantial portion of NNL's assets is located in Canada and a
majority of its directors and officers, and the experts with respect to NNL
named herein, are residents of Canada. As a result, it may be difficult to
effect service within the United States of America upon NNL or upon such
directors, officers and experts. Execution by United States courts of any
judgment obtained against NNL or any such person in United States courts would
be limited to the assets of NNL or such person in the United States. Nicholas J.
DeRoma, Chief Legal Officer of NNL, has advised that there is doubt as to the
enforceability in Canada of United States judgments or of liabilities in
original actions in Canadian courts predicated solely upon the civil liability
provisions of the federal securities laws of the United States.



                                       2
<PAGE>   6



                             NORTEL NETWORKS LIMITED

GENERAL

         Nortel Networks Limited is a leading global supplier of networking
solutions and services that support voice, data and video transmission over
wireless and wireline technologies. We are focused on building the
infrastructure service enabling solutions and applications for the new,
high-performance Internet. Our business consists of the design, development,
assembly, manufacture, marketing, sale, financing, installation, servicing and
support of networking solutions and services for service provider and carrier
customers and enterprise customers. Our solutions and services are used by
customers to support the Internet and other public and private voice, data and
video networks.

         NNL is a corporation organized under the Canada Business Corporations
Act. Our principal executive offices are located at 8200 Dixie Road, Suite 100,
Brampton, Ontario L6T 5P6, Canada, telephone (905) 863-0000.

PLAN OF ARRANGEMENT AND RELATIONSHIP OF NNL TO NORTEL NETWORKS CORPORATION

         Effective May 1, 2000, NNL, then known as Nortel Networks Corporation,
participated in a court-approved plan of arrangement under Canadian law. As a
result of the arrangement, NNL and its subsidiaries became direct and indirect
subsidiaries, respectively, of a newly formed Canadian corporation. This new
corporation assumed the name "Nortel Networks Corporation."

         Nortel Networks Corporation owns 100% of our common shares. Our
preferred shares and debt securities that were outstanding immediately prior to
the arrangement remained outstanding following the arrangement and continue to
be obligations of NNL.

         The consolidated assets and liabilities of NNL and its subsidiaries
immediately after the arrangement were unchanged as a result of the arrangement,
and all of the business and operations conducted by NNL and its subsidiaries
prior to the effective date of the arrangement have continued to be conducted by
NNL and its subsidiaries immediately after the effective date of the
arrangement. Since the arrangement became effective, however, Nortel Networks
Corporation has completed a number of acquisitions involving the issuance of
shares of Nortel Networks Corporation as the consideration pursuant to which the
acquired companies have become direct subsidiaries of Nortel Networks
Corporation. Although these acquired companies are being and will continue to be
operated together with NNL and its subsidiaries as a single integrated business,
they are not subsidiaries of NNL. As a result, these acquired companies are not
reflected in NNL's consolidated financial statements. Nortel Networks
Corporation has informed NNL that it expects to make additional stock-based
acquisitions in the future pursuant to which the acquired companies will become
direct subsidiaries of Nortel Networks Corporation and will not be subsidiaries
of NNL.

         To the extent described above, NNL's statements of financial condition
and results of operations differ and will continue to differ from those of
Nortel Networks Corporation for periods since May 1, 2000. Accordingly, in
deciding whether to purchase any securities offered by this prospectus, you
should not rely on the financial statements of or on other information with
respect to Nortel Networks Corporation contained in its reports filed with the
Securities and Exchange Commission or in any other source for periods since May
1, 2000.



                                       3


<PAGE>   7



                       NORTEL NETWORKS CAPITAL CORPORATION

         NNCC is an indirect, wholly owned subsidiary of NNL. NNCC has no
independent operations other than acting as a finance company for subsidiaries
and affiliates of NNL. NNCC does not, and will not, file separate reports with
the Securities and Exchange Commission.

         NNCC is incorporated under the laws of the state of Delaware. Its
principal executive offices are located at Nortel Networks Plaza, 200 Athens
Way, Nashville, Tennessee 37228-1397, telephone (615) 432-4000.

         Nortel Networks Inc., a Delaware corporation which is a direct, wholly
owned subsidiary of NNL and which owns all of the outstanding common stock of
NNCC, has agreed to cause NNCC to have and to maintain a net worth of at least
$1.00 pursuant to a support agreement between Nortel Networks Inc. and NNCC.
This support agreement does not constitute a guarantee by Nortel Networks Inc.
to any person of the payment of any indebtedness, liability or obligation of
NNCC, including any debt securities or warrants to purchase debt securities
offered by this prospectus.



                                       4


<PAGE>   8



                       WHERE YOU CAN FIND MORE INFORMATION

         NNL files annual, quarterly and special reports and other information
with the Securities and Exchange Commission. You may read and copy any of the
information on file with the Commission at the Commission's following locations:

<TABLE>
<S>                          <C>                          <C>
Public Reference Room        New York Regional Office     Chicago Regional Office
450 Fifth Street, N.W.       7 World Trade Center         Citicorp Center
Room 1024                    Suite 1300                   500 West Madison Street
Washington, D.C.  20549      New York, N.Y. 10048         Chicago, IL. 60661-2511
</TABLE>

         Please call the Commission at 1-800-SEC-0330 for further information on
the public reference rooms. In addition, the Commission maintains an Internet
site at http://www.sec.gov that contains reports, proxy and information
statements, and other information regarding issuers that file electronically
with the Commission. NNL began filing documents with the Commission
electronically in November 2000; prior to that date, NNL's filings were made in
paper format.



                                       5


<PAGE>   9


                 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

         The Commission allows NNL to incorporate by reference information
contained in documents filed with it, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be part of this prospectus. This
prospectus incorporates by reference the documents set forth below that have
previously been filed with the Commission. These documents contain important
information about NNL and its financial performance.

<TABLE>
<CAPTION>
FILINGS OF NNL
(COMMISSION FILE NO. 000-30758)                         PERIOD/DATE
-------------------------------                         -----------
<S>                                                     <C>
Registration Statement on Form 10.....................  Dated May 1, 2000.
    The Form 10 incorporates the following filings of
    Nortel Networks Corporation (Commission File No.
    001-07260) which filings are also directly
    incorporated by reference in this prospectus:
       Annual Report on Form 10-K, as amended by Form
       10-K/A.........................................  Year ended December 31, 1999.
       Quarterly Report on Form 10-Q..................  Quarterly period ended March 31, 2000.
       Current Reports on Form 8-K....................  Dated January 6, 2000, January 26, 2000, January 26, 2000,
                                                        February 14, 2000, February 25, 2000 (Form
                                                        8-K/A), March 15, 2000, March 21, 2000, April
                                                        20, 2000, April 26, 2000 and May 1, 2000.

Quarterly Reports of NNL on Form 10-Q.................  Quarterly periods ended  March 31, 2000, June 30, 2000 and
                                                        September 30, 2000.

Current Reports of NNL on Form 8-K....................  Dated August 7, 2000, August 18, 2000 (Form 8-K/A) and
                                                        October 18, 2000.
</TABLE>

<TABLE>
<CAPTION>
FILINGS OF BAY NETWORKS, INC.
(COMMISSION FILE NO. 0-19366)                           PERIOD
-----------------------------                           ------
<S>                                                     <C>
Annual Report on Form 10-K
(financial statements only)...........................  Year ended June 30, 1997.
Quarterly Reports on Form 10-Q
(financial statements only)...........................  Quarterly periods ended September 30, 1997, December 31,
                                                        1997 and March 31, 1998.
</TABLE>

         In addition, until we sell all of the securities covered by this
prospectus or otherwise terminate the offering of the securities, we also
incorporate by reference in this prospectus all documents that are filed with
the Commission by NNL in the future pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act, including annual reports on Form 10-K, quarterly
reports on Form 10-Q and current reports on Form 8-K. The information contained
in these future filings will automatically update and supersede the information
contained in this prospectus or incorporated by reference to any previously
filed document.

         You may request copies of the documents incorporated by reference in
this prospectus, at no cost, by writing or telephoning us at Corporate
Secretary, Nortel Networks Limited, 8200 Dixie Road, Suite 100, Brampton,
Ontario L6T 5P6, Canada, telephone (905) 863-0000.

         You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone to provide you with different information. You should not assume that the
information incorporated by reference or provided in this prospectus or any
prospectus supplement is accurate as of any date other than the date on the
front of the relevant document.


                                       6

<PAGE>   10


                     RISK FACTORS/FORWARD-LOOKING STATEMENTS

         Certain information included in this prospectus and the documents that
are incorporated in it by reference is forward-looking and is subject to
important risks and uncertainties. Statements containing words such as "could,"
"expects," "may," "anticipates," "believes," "intends," "estimates," "plans" and
similar expressions constitute forward-looking statements with respect to us,
including statements that are based on current expectations, estimates,
forecasts and projections about the markets in which we operate and management's
beliefs and assumptions regarding these markets. We disclaim any intention or
obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.

         Forward-looking information and statements are subject to important
risks, uncertainties and assumptions which are difficult to predict. The results
or events predicted in these forward-looking statements may differ materially
from actual results or events. Some of the factors which could cause results or
events to differ from current expectations include, among other things:

         -        the ability of NNL to make acquisitions and/or integrate the
                  operations and technologies of acquired businesses in an
                  effective manner;

         -        the uncertainty of demand for Internet protocol-optimized
                  networking solutions;

         -        the dependence on new product development;

         -        the impact of rapid technological and market change;

         -        the impact of year 2000;

         -        the impact of price and product competition;

         -        international growth and global economic conditions,
                  particularly in emerging markets and including interest rate
                  and currency exchange rate fluctuations;

         -        fluctuations in operating results, general industry and market
                  conditions and growth rates;

         -        the impact of consolidation in the telecommunications
                  industry;

         -        the uncertainties of the Internet;

         -        the ability of NNL to recruit and retain qualified employees;

         -        the impact of increased provision of customer financing on us;
                  and

         -        the ability of NNL to obtain timely and adequate component
                  parts from internal and outside suppliers.

         For further information regarding these factors, see "Forward-looking
Statements" in Item 2 -- Management's Discussion and Analysis of Financial
Condition and Results of Operations in NNL's Quarterly Report on Form 10-Q for
the period ended September 30, 2000, which is incorporated herein by reference,
as well as the analogous sections of our future Annual Reports on Form 10-K and
Quarterly Reports on Form 10-Q, which will be incorporated by reference herein
when filed.

         As a result of these factors, we cannot assure you that any of the
events or results anticipated by forward-looking statements included or
incorporated by reference in this prospectus will occur or, if they do, what
impact they will have on our business, results of operations and financial
condition.



                                       7

<PAGE>   11


                       RATIO OF EARNINGS TO FIXED CHARGES


         The following table sets forth NNL's consolidated ratios of earnings to
fixed charges computed under U.S. GAAP for the periods indicated below. Earnings
for this purpose consist of consolidated pre-tax earnings or losses from
continuing operations before adjustments for minority interests in consolidated
subsidiaries or income or loss from equity investees, plus:

         -        fixed charges;

         -        amortization of capitalized interest;

         -        distributed income of equity investees; and

         -        NNL's share of pre-tax losses of equity investees for which
                  charges arising from guarantees are included in fixed charges;

         less:

         -        interest capitalized;

         -        preference security dividend requirements of consolidated
                  subsidiaries; and

         -        the minority interest in pre-tax income of subsidiaries that
                  have not incurred fixed charges.

Fixed charges for this purpose consist of:

         -        interest expensed and capitalized;

         -        amortized premiums, discounts and capitalized expenses
                  related to indebtedness;

         -        one-third of rental expenses on operating leases, deemed to be
                  representative of interest expenses; and

         -        preference security dividend requirements of consolidated
                  subsidiaries.

<TABLE>
<CAPTION>
          Year ended December 31,
          -----------------------                  Nine months ended
  1995      1996     1997     1998     1999       September 30, 2000
  ----      ----     ----     ----     ----       ------------------
<S>         <C>      <C>       <C>     <C>                <C>
  3.58      4.43     5.68      (1)     1.45               (1)
</TABLE>


(1)      Earnings were inadequate to cover fixed charges for the year ended
         December 31, 1998 and for the nine months ended September 30, 2000 by
         approximately $770 million and $279 million, respectively.


                                       8


<PAGE>   12



                                 USE OF PROCEEDS

Except as otherwise provided in an accompanying prospectus supplement:

-        the net proceeds from the sale of debt securities and warrants
         described in this prospectus issued by NNL will be added to NNL's
         general funds and used for its general corporate purposes; and

-        the net proceeds from the sale of debt securities and warrants
         described in this prospectus issued by NNCC and guaranteed by NNL will
         be advanced to, or otherwise invested in, other subsidiaries or
         affiliates of NNL in the United States and used for general corporate
         purposes.




                                       9


<PAGE>   13


                          LEGAL OWNERSHIP OF SECURITIES

"STREET NAME" AND OTHER INDIRECT HOLDERS

         We generally will not recognize investors who hold securities in
accounts at banks or brokers as legal holders of those securities. This is
called holding in "street name." Instead, we recognize only the bank or broker
or the financial institution the bank or broker uses to hold the securities.
These intermediary banks, brokers and other financial institutions pass along
principal, interest and other payments on the debt securities or warrants,
either because they agree to do so in their customer agreements or because they
are legally required to do so. If you hold debt securities or warrants in street
name, you should check with your own institution to find out:

         -        how it handles payments and notices with respect to
                  securities;

         -        whether it imposes fees or charges;

         -        how it would handle voting if ever required;

         -        how and when you should notify it to exercise on your behalf
                  any rights or options that may exist under the securities;

         -        whether and how you can instruct it to send you securities
                  registered in your own name so you can be a direct holder as
                  described below; and

         -        how it would pursue rights under the debt securities or
                  warrants if there were a default or other event triggering the
                  need for holders to act to protect their interests.

DIRECT HOLDERS

         Our obligations, as well as the obligations of the trustee, any warrant
agent and any third parties employed by us, the trustee or any warrant agent,
run only to persons who are registered as holders of securities. As noted above,
we do not have obligations to you if you hold in street name or through other
indirect means, either because you choose to hold debt securities or warrants in
that manner or because the securities are issued in the form of global
securities as described below. For example, once we make payment to the
registered holder, we have no further responsibility for the payment even if
that holder is legally required to pass the payment along to you as a street
name customer but does not do so.

GLOBAL SECURITIES

         A global security is a special type of indirectly held security. If we
choose to issue securities in the form of global securities, the ultimate
beneficial owners can only be indirect holders. We do this by requiring that the
global security be registered in the name of a financial institution we select
and by requiring that the securities included in the global security not be
transferred to the name of any other direct holder except in the special
situations described below. The financial institution that acts as the sole
direct holder of the global security is called the depositary. Any person
wishing to own a debt security or warrant must do so indirectly by virtue of an
account with a broker, bank or other financial institution that in turn has an
account with the depositary. The prospectus supplement will indicate whether
your series of securities will be issued only as global securities.

         As an indirect holder, your rights relating to a global security will
be governed by the account rules of your financial institution and of the
depositary, as well as general laws relating to securities



                                       10

<PAGE>   14


transfers. We will not recognize you as a holder of debt securities or warrants
and instead deal only with the depositary that holds the global security.

         You should be aware that if securities are issued only in the form of
global securities:

         -        you cannot have securities registered in your own name;

         -        you cannot receive physical certificates for your interest in
                  the securities;

         -        you will be a street name holder and must look to your own
                  bank or broker for payments on the securities and protection
                  of your legal rights relating to the securities;

         -        you may not be able to sell interests in the securities to
                  some insurance companies and other institutions that are
                  required by law to own securities in the form of physical
                  certificates;

         -        the depositary's policies will govern payments, transfers,
                  exchanges and other matters relating to your interest in the
                  global security. We, the trustee and any warrant agent have no
                  responsibility for any aspect of the depositary's actions or
                  for its records of ownership interests in the global security.
                  We, the trustee and any warrant agent also do not supervise
                  the depositary in any way; and

         -        the depositary will require that interests in a global
                  security be purchased or sold within its system using same-day
                  funds for settlement.

         In a few special situations described later, the global security will
terminate and interests in it will be exchanged for physical certificates
representing securities. After that exchange, the choice of whether to hold
securities directly or in street name will be up to you. You must consult your
bank or broker to find out how to have your interests in securities transferred
to your name, so that you will be a direct holder.

         Unless we specify otherwise in the prospectus supplement, the special
situations for termination of a global security are:

         -        when the depositary notifies us that it is unwilling or no
                  longer qualified to continue as depositary and we do not or
                  cannot appoint a successor depositary within 90 days; or

         -        when we notify the trustee that we wish to terminate the
                  global security.

         The prospectus supplement may also list additional situations for
terminating a global security that would apply only to the particular series of
securities covered by the prospectus supplement. When a global security
terminates, the depositary (and not us, the trustee or any warrant agent) is
responsible for deciding the names of the institutions that will be the initial
direct holders.

THE TERM "HOLDER" AS USED IN THIS PROSPECTUS AND ELSEWHERE

         In the descriptions of the debt securities and warrants included in
this prospectus and any prospectus supplement, when we refer to the "holder" of
a given debt security or warrant as being entitled to certain rights or
payments, or being permitted to take certain actions, we are in all cases
referring to the actual legal holder of the security.



                                       11

<PAGE>   15


         While you will be the holder if you hold a certificated security
registered in your name, more often than not the holder will actually be either
the broker, bank or other financial institution where you have your street name
account, or, in the case of a global security, the depositary. This means that
if you are an indirect holder, you will need to coordinate with the institution
through which you hold your interest in a security in order to determine how the
provisions involving holders described in this prospectus and any prospectus
supplement will actually apply to you. For example, if the security in which you
hold a beneficial interest in street name can be repaid at the option of the
holder, you cannot redeem it yourself by following the procedures described in
the prospectus supplement. Instead, you would need to cause the institution
through which you hold your interest to take those actions on your behalf. Your
institution may have procedures and deadlines different from or additional to
those described in the prospectus supplement relating to that security.



                                       12

<PAGE>   16




                         DESCRIPTION OF DEBT SECURITIES

         We describe in this section the general terms that will apply to any
debt securities that may be offered by NNL or NNCC pursuant to this prospectus.
At the time that we offer debt securities, we will describe in the related
prospectus supplement (1) the specific terms of the offered debt securities and
(2) the extent to which the general terms described in this section apply to
those debt securities.

GENERAL

         As required by U.S. federal securities law for all notes and bonds of
companies that are publicly offered in the United States, the debt securities
offered pursuant to this prospectus are governed by a document called an
indenture. The indenture is a contract dated as of December 15, 2000, among NNL,
as issuer and guarantor, NNCC, as issuer, and Citibank, N. A., which acts as
trustee. The indenture is an exhibit to the registration statement of which this
prospectus is a part. You should read the indenture for a more complete
understanding of the provisions we describe. Please see "Where You Can Find More
Information" for information on how to obtain a copy of the indenture.

         In the discussion that follows, we summarize particular provisions of
the indenture. This discussion is not complete, and is qualified by reference to
all the provisions of the indenture, including definitions of terms used in the
indenture. For example, in this section we use defined terms that have been
given special meaning in the indenture. We describe the meaning for only the
more important terms. We also include references in parentheses to certain
sections of the indenture. Whenever we refer to particular sections or defined
terms of the indenture in this prospectus or in the prospectus supplement, those
sections or defined terms are incorporated by reference here or in the
prospectus supplement.

         Debt securities offered through this prospectus, together with any
warrants offered separately or together with debt securities, will be limited to
an aggregate initial public offering price of $2,500,000,000 or the equivalent
in one or more foreign currencies or composite currencies. Of this aggregate
amount, $500,000,000 may be issued only by NNL and $2,000,000,000 may be issued
by either NNL or NNCC. The indenture provides that debt securities in an
unlimited amount may be issued thereunder from time to time in one or more
series. Not all debt securities of any one series need be issued at the same
time and, unless otherwise provided, any series may be reopened for issuances of
additional debt securities of that series. (Section 301)

         Under the indenture, NNL may issue debt securities directly, or may
guarantee debt securities issued by NNCC. The debt securities issued by NNL and
any guarantees will be direct, unconditional, unsecured and unsubordinated
obligations of NNL and will rank equally and ratably without preference among
themselves and at least equally with other senior unsecured obligations of NNL,
except to the extent prescribed by law.

         Debt securities issued by NNCC will be direct, unconditional, unsecured
obligations of NNCC and will rank equally and ratably without preference among
themselves and at least equally with all other unsecured obligations of NNCC,
except to the extent prescribed by law. NNCC's obligations under debt securities
it issues pursuant to the indenture will be fully and unconditionally guaranteed
by NNL, as more fully described below under "--Guarantees".

         The particular terms of each issue of debt securities, as well as any
modifications or additions to the general terms of the indenture which may be
applicable in the case of that issue of debt securities, will be described in
the related prospectus supplement. This description will include, where
applicable:



                                       13

<PAGE>   17




               -whether the debt securities are issued by NNL or are issued by
                NNCC and guaranteed by NNL;

               -the designation, aggregate principal amount and denominations of
                the debt securities;

               -the price, expressed as a percentage of the aggregate principal
                amount, at which the debt securities will be issued;

               -the date or dates on which the debt securities will mature;

               -the currency or currencies in which the debt securities are
                being sold and in which payments in respect of the debt
                securities will be made, whether the holder of any of the debt
                securities may elect the currency in which payments are to be
                made and, if so, the manner of such election;

               -the rate or rates, which may be fixed or variable, per annum at
                which the debt securities will bear interest, if any;

               -the date from which interest on the debt securities will accrue,
                the date or dates on which interest will be payable and the date
                on which payment of interest will commence;

               -the terms and conditions on which NNL or NNCC may, at its
                option, redeem the debt securities in whole or in part;

               -the terms and conditions on which NNL or NNCC may be obligated
                to redeem, repay or purchase the debt securities pursuant to any
                sinking fund or analogous provision or at the option of a holder
                thereof;

               -any special provisions for the payment of additional interest
                with respect to the debt securities;

               -whether the debt securities are to be issued in whole or in part
                in the form of one or more global securities and, if so, the
                identity of the depositary;

               -if a temporary global security is to be issued with respect to
                the debt securities, provisions relating to payment of interest
                prior to the issuance of individual debt securities, and
                provisions relating to the exchange of interests in the
                temporary global security for interests in individual debt
                securities;

               -any additional restrictive covenants included for the benefit of
                holders of the debt securities;

               -any additional events of default provided with respect to the
                debt securities;

               -the terms of any warrants offered together with the debt
                securities;

               -any exchange on which debt securities of a series will be
                listed;

               -material United States and Canadian tax consequences of owning
                the debt securities; and



                                       14


<PAGE>   18




         -        any other material terms and conditions of the debt securities
                  not inconsistent with the provisions of the indenture.
                  (Section 301)

         If any series of debt securities are sold for, are payable in or are
denominated in one or more foreign currencies, currency units or composite
currencies, the related prospectus supplement will also describe any
restrictions, elections, tax consequences, specific terms and other information
with respect to that series of debt securities that are applicable as a result.
(Section 301)

         We may issue debt securities as original issue discount securities to
be offered and sold at a substantial discount below their stated principal
amounts. We will describe in the related prospectus supplement any United States
and Canadian federal income tax consequences and other special considerations
that may apply to any such original issue discount securities. (Section 101)

         Except as described herein or in any relevant prospectus supplement,
the indenture does not contain any covenants or other provisions designed to
protect holders of the debt securities against a reduction in the
creditworthiness of NNL in the event of a highly leveraged transaction or that
would prohibit other transactions that might adversely affect holders of the
debt securities.

GUARANTEES

         Debt securities issued by NNCC will be unconditionally and irrevocably
guaranteed by NNL. If, for any reason, NNCC does not make any required payment
in respect of any guaranteed debt securities when due, whether on the normal due
date, on acceleration, redemption or otherwise, NNL will cause the payment to be
made to or to the order of the trustee. The guarantees will be direct,
unconditional, unsecured and unsubordinated obligations of NNL and will rank
equally and ratably without preference among themselves and at least equally
with other senior unsecured obligations of NNL, except to the extent prescribed
by law. The holder of a guaranteed debt security will be entitled to payment
under the relevant guarantee without taking any action whatsoever against NNCC.
(Section 203)

FORM, DENOMINATION, REGISTRATION AND TRANSFER

         We will issue debt securities only in registered form. We may issue
debt securities of a series in whole or in part in the form of one or more
global securities. (Section 202)

         Unless otherwise specified in the related prospectus supplement, we
will issue debt securities denominated in U.S. dollars in integral multiples of
$1,000. We will specify the denomination of any series of debt securities
denominated in a foreign or composite currency in the related prospectus
supplement. If applicable, we will issue one or more global securities in a
denomination or aggregate denominations equal to the aggregate principal amount
of the outstanding debt securities of the series to be represented by such
global security or securities.

         The trustee acts as our agent for registering debt securities in the
names of holders and recording transfers of debt securities, although we may
appoint another entity to perform this function. The entity performing this
function is called the "security registrar."

         You may transfer or exchange debt securities at the office of the
security registrar. You will not be required to pay any service charge for any
registration of transfer or exchange of debt securities, but you may be required
to pay for any tax or other governmental charge associated with the transfer or
exchange. You may have your debt securities, other than a global security,
exchanged for more debt securities of smaller permitted denominations or for
fewer debt securities of larger permitted



                                       15

<PAGE>   19


denominations. The transfer or exchange of a debt security will only be made if
the security registrar is satisfied with your proof of ownership. (Sections 302
and 305)

GLOBAL DEBT SECURITIES

         We may issue the debt securities of a series in whole or in part in the
form of one or more global securities that will be deposited with, or on behalf
of, a depositary identified in the related prospectus supplement. Global
securities will only be issued in registered form and in either temporary or
definitive form. Unless a global security is exchanged in whole or in part for
debt securities in definitive form, a global security generally may be
transferred only as a whole and only to the depositary or to a nominee of the
depositary or to a successor depositary or its nominee. (Sections 303 and 305)

         A general description of global securities arrangements is set forth
above under "Legal Ownership of Securities--Global Securities." The specific
terms of the depositary arrangement with respect to any debt securities of a
series issued in global form will be described in the prospectus supplement
related to such series. We expect that the following provisions will apply to
all depositary arrangements:

         Upon the issuance of a global security, the depositary or its nominee
will credit, on its book-entry registration and transfer system, the respective
principal amounts of the individual debt securities represented by the global
security to the accounts of institutions that have accounts with the depositary.
These institutions are called "participants". The participant accounts to be
credited will be designated by the underwriters or agents for such debt
securities or, if the debt securities are offered and sold directly by NNL or
NNCC, by the relevant issuer. Ownership of beneficial interests in a global
security will be limited to participants or persons that may hold interests
through participants. Ownership of beneficial interests in a global security
will be shown on, and the transfer of that interest will be effected only
through, records maintained by the depositary or its nominee, or by participants
or persons that hold through participants.

         Upon receipt of any payment in respect of a global security, the
depositary or its nominee will immediately credit participants' accounts with
amounts proportionate to their respective beneficial interests in the principal
amount of the global security as shown in the records of the depositary or its
nominee. Payments by participants to owners of beneficial interests in a global
security held through participants will be governed by standing instructions and
customary practices and will be the responsibility of those participants.

PAYMENT AND PAYING AGENTS

         Unless otherwise indicated in the applicable prospectus supplement,
payment of principal of (and premium, if any) on debt securities will be made in
the designated currency against surrender of the debt securities at the
corporate trust office of the trustee in New York City. Unless otherwise
indicated in the applicable prospectus supplement, payment of any installment of
interest on debt securities will be made to the person in whose name the debt
security is registered at the close of business on the regular record date for
such interest. Unless otherwise indicated in the applicable prospectus
supplement, payments of interest will be made at our option at the corporate
trust office of the trustee in New York City, by a wire transfer or by a check
in the designated currency mailed to each holder at the holder's registered
address. (Sections 307 and 1001)

         We may appoint one or more paying agents to effect payments in respect
of debt securities. We will identify any paying agent for a series of debt
securities in the applicable prospectus supplement. We may terminate the
appointment of any paying agent at any time, except that we will maintain at
least one



                                       16


<PAGE>   20


paying agent in New York City for payments with respect to debt securities of
any series payable in U.S. dollars. (Sections 101 and 1002)

         All moneys paid to a paying agent in respect of any debt security that
remain unclaimed at the end of two years after the relevant amounts shall have
become due and payable will be repaid to NNL or NNCC. Holders of these debt
securities will thereafter look only to NNL or NNCC, as the case may be, for
payment of these amounts. (Section 1003)

NEGATIVE PLEDGE

         We have covenanted in the indenture that neither NNL, nor NNL's
restricted subsidiaries, including NNCC, will:

         -        issue, assume or guarantee any funded debt, that is secured by
                  a lien upon any property of NNL or any of its restricted
                  subsidiaries, whether now owned or hereafter acquired; or

         -        grant any mortgage or other lien upon any property of NNL or
                  any of its restricted subsidiaries, whether now owned or
                  hereafter acquired, to secure any funded debt;

unless any outstanding debt securities are concurrently secured equally and
ratably with such funded debt. (Section 1004) Under the indenture,

         -        "funded debt" means any indebtedness for borrowed money,
                  whether of NNL or of a third person. For greater certainty,
                  proceeds received in respect of any factoring, securitization
                  or similar transaction will not be considered borrowed money.
                  (Section 101)

         -        "restricted subsidiaries" means Nortel Networks Inc., a
                  Delaware corporation which is a direct, wholly owned
                  subsidiary of NNL and owns all of the outstanding common stock
                  of NNCC and, if and for as long as NNCC has outstanding debt
                  securities under the indenture, NNCC. (Section 101)

         The indenture contains exceptions to the foregoing covenant to permit:

         -        liens existing on property at the time of the acquisition of
                  that property by NNL or the relevant restricted subsidiary;

         -        liens on property that are incurred after the date of issuance
                  of the relevant debt securities to secure or provide for the
                  payment of the purchase price of the property or the cost of
                  construction or improvement thereon;

         -        liens on property of a corporation existing at the time that
                  corporation is merged or amalgamated with NNL or any
                  restricted subsidiary, or at the time the properties of the
                  corporation are sold, leased or otherwise transferred to NNL
                  or any restricted subsidiary substantially as an entirety;

         -        liens securing intercompany indebtedness among NNL and its
                  restricted subsidiaries;

         -        specified liens in connection with public obligations;



                                       17

<PAGE>   21




         -        any lien created by or resulting from litigation or other
                  proceeding against, or upon property of, NNL or any restricted
                  subsidiary, or any lien for workmen's compensation awards or
                  similar awards, so long as the finality of such judgment or
                  award is being contested and execution thereon is stayed or
                  such lien relates to a final unappealable judgment which is
                  satisfied within 30 days of such judgment or any lien incurred
                  by NNL or any restricted subsidiary for the purpose of
                  obtaining a stay or discharge in the course of any litigation
                  or other proceeding; and

         -        any extension, renewal or replacement in whole or in part of
                  any lien existing at the date of the indenture or referred to
                  in the above exceptions, so long as the total amount of
                  secured indebtedness does not increase, and the property
                  securing the indebtedness is not expanded, as a result of the
                  extension, renewal or replacement.

Each of the exceptions described above is a "permitted lien".

         In addition, NNL and its restricted subsidiaries may issue, assume or
guarantee funded debt secured by a mortgage or other lien upon any of their
property that would otherwise be subject to the foregoing restrictions, and may
carry out any other transactions that would otherwise be subject to the
foregoing restrictions, so long as the aggregate amount of all funded debt would
not, after giving effect to the relevant transaction, exceed 15% of NNL's
consolidated net tangible assets. (Section 1004) Under the indenture:

         -        "consolidated net tangible assets" means NNL's consolidated
                  total assets after deducting therefrom (1) all current
                  liabilities and (2) all goodwill, tradenames, trademarks,
                  patents, unamortized debt discount and expense and other like
                  intangible assets, all as shown in the then most recent
                  consolidated balance sheet of NNL and its subsidiaries
                  prepared in accordance with United States generally accepted
                  accounting principles applied on a consistent basis contained
                  in (x) NNL's most recent annual and quarterly reports on Form
                  10-K or Form 10-Q, as applicable, as filed with the Commission
                  or (y) if NNL is no longer subject to reporting requirements
                  under the Exchange Act, NNL's most recent annual or quarterly
                  financial statements certified by its Chief Financial Officer.
                  (Section 101)

EVENTS OF DEFAULT

         Each of the following events will constitute an "event of default"
under the indenture with respect to the debt securities of a particular series:

         -        default in payment of principal of, and premium, if any, on,
                  any debt security of the series when due;

         -        default in payment of interest on any debt security of the
                  series when due and payable and the continuance of that
                  default for 30 days;

         -        default in the deposit of any sinking fund payment on any debt
                  security of the series when due;

         -        default by NNL or, if applicable, NNCC in performing or
                  observing any of their respective covenants, agreements or
                  other obligations in the indenture for 90 days after written
                  notice by the holders of not less than 25% in principal amount
                  of the outstanding debt securities of the series;



                                       18

<PAGE>   22




         -        certain events of bankruptcy, insolvency or reorganization of
                  NNL or, if applicable, NNCC;

         -        a default by NNL or, if applicable, NNCC in respect of any
                  single obligation in respect of indebtedness for borrowed
                  money that exceeds on its face $100,000,000 in principal
                  amount which results in the acceleration of the due date of
                  that indebtedness, and this acceleration is not rescinded or
                  annulled within 10 days after notice meeting the specific
                  requirements of the indenture has been given; and

         -        any other event of default set forth in the applicable
                  prospectus supplement with respect to a particular series of
                  debt securities. (Section 501)

         An event of default with respect to a particular series of debt
securities will not necessarily constitute an event of default with respect to
any other series of debt securities. We are required to file with the trustee
annual officers' certificates as to the absence of specified defaults under the
indenture. (Section 1005)

         If an event of default with respect to a series of debt securities
occurs and is continuing, either the trustee or the holders of not less than 25%
in principal amount of the then-outstanding debt securities of the relevant
series may declare the principal of, and premium, if any, on, all debt
securities of the series to be due and payable, together with accrued interest.
(Section 501) The indenture provides that in certain cases, the holders of a
majority in principal amount of the then-outstanding debt securities of a series
may on behalf of the holders of all debt securities of that series waive any
past default or event of default and rescind and annul any such declaration and
its consequences. (Sections 502 and 503)

         The trustee may require indemnification from the holders of debt
securities of a series before proceeding to exercise any right or power under
the indenture at the request of those holders. (Sections 601 and 606) The
holders of a majority in principal amount of the then-outstanding debt
securities of any series may:

         -        direct the time, method and place of conducting any proceeding
                  for any remedy available to the trustee or exercising any
                  trust or power conferred on it with respect to the debt
                  securities of that series, and

         -        take any other action authorized to be taken under the
                  indenture or under applicable law. However, the trustee may
                  refuse to follow any direction that conflicts with law or the
                  indenture or is unduly prejudicial to the rights of other
                  holders. (Section 506)

         No holder will be entitled to pursue any remedy with respect to the
indenture unless the trustee fails to act for 60 days after it is given:

         -        notice of default by that holder,

         -        a request to enforce the indenture by the holders of not less
                  than 25% in aggregate principal amount of all of the
                  then-outstanding debt securities issued under the indenture
                  (treated as a single class), and

         -        an indemnity to the trustee, satisfactory to the trustee, and
                  during this 60-day period the holders of a majority in
                  principal amount of all of the then-outstanding debt
                  securities issued under the indenture (treated as a single
                  class) do not give a direction to the trustee that is
                  inconsistent with the enforcement request. (Section 507) These
                  provisions will



                                       19

<PAGE>   23


                  not prevent any holder of debt securities from enforcing
                  payment of the principal of (and premium, if any) and interest
                  on the debt securities at the relevant due dates. (Section
                  508)

         If an event of default with respect to a series of debt securities
occurs and is continuing, the trustee will mail to the holders of those debt
securities a notice of the event of default within 90 days after it occurs.
However, except in the case of a default in any payment in respect of a series
of debt securities, the trustee shall be protected in withholding notice of an
event of default if it determines in good faith that this is in the interests of
the holders of the relevant debt securities. (Section 605)

MODIFICATION OF THE INDENTURE

         The indenture provides that we and the trustee may modify the indenture
without the consent of holders to make certain changes which do not adversely
affect the interest of the holders, including:

         -        the succession of another corporation to NNL or NNCC and the
                  assumption of the debt securities by the successor;

         -        to add convenants to any or all debt securities or surrender
                  any right or power of NNL or NNCC;

         -        to add additional events of default to any or all debt
                  securities;

         -        to change or eliminate any restrictions on the payment of
                  principal of (or premium, if any, on) debt securities;

         -        to change or eliminate any provision of the indenture,
                  provided that any such modification shall only become
                  effective when there are no debt securities outstanding which
                  were issued prior to such modification;

         -        to establish the form or terms of debt securities of any
                  series;

         -        the acceptance of a successor trustee or to facilitate the
                  administration of the trust under more than one trustee;

         -        to secure or guarantee the debt securities;

         -        to add an additional guarantor in respect of the debt
                  securities;

         -        to permit or facilitate defeasance or discharge of any or all
                  debt securities, provided that such modification shall not
                  adversely affect the interests of holders of any debt
                  securities in any material respect; or

         -        to cure any ambiguity or correct or supplement any defective
                  or inconsistent provisions, provided that any changes will not
                  adversely affect the interests of holders of debt securities
                  in any material respect. (Section 901)

         The indenture provides that, in general, we and the trustee may modify
the indenture or the rights of the holders of any debt securities so long as we
obtain the consent of the holders of not less than a majority in principal
amount of the then-outstanding debt securities affected by the modification. The


                                       20


<PAGE>   24


indenture also provides, however, that we may not effect any modification
without the consent of each affected holder if that modification would:

         -        change the maturity of any debt security, or reduce the
                  principal amount or any premium payable on redemption thereof,
                  or reduce the rate or change the time of payment of interest
                  thereon, or change any place of payment or change the currency
                  in which a debt security is payable or affect the right of any
                  holder to institute suit for the enforcement of payment in
                  accordance with the foregoing;

         -        reduce the percentage in principal amount of outstanding debt
                  securities the consent of whose holders is required for
                  approval of any proposed modification to the indenture or for
                  waivers of certain covenants or defaults under the indenture,
                  or reduce the requirements for quorum or voting; or

         -        in the case of guaranteed debt securities, change the terms
                  and conditions of the obligations of NNL in respect of
                  payments under the guarantee. (Section 902)

         The indenture contains provisions for convening meetings of the holders
of debt securities of a series. (Section 1401) A meeting may be called at any
time by the trustee, or upon the request of NNL or NNCC, as the case may be, or
the holders of at least 10 percent in principal amount of the outstanding debt
securities of the series. (Section 1402) Except as described in the preceding
paragraph and as otherwise provided in the indenture, any resolution presented
at a meeting or adjourned meeting at which a quorum is present may be adopted by
the affirmative vote of the holders of a majority in principal amount of the
outstanding debt securities of that series.

         Any resolution passed or decision taken at any meeting of holders of
debt securities of any series duly held in accordance with the indenture will be
binding on all holders of debt securities of that series whether or not present
or represented at the meeting. The quorum at any meeting of the holders of debt
securities of a series called to adopt a resolution, and at any reconvened
meeting, will be persons holding or representing a majority in principal amount
of the outstanding debt securities of a series. (Section 1404)

DEFEASANCE

         The indenture contains provisions that permit us, or either of our
restricted subsidiaries, subject to satisfaction of specified conditions, to
omit to comply with the covenants described above under "--Negative Pledge" with
respect to debt securities of any series. This is known as covenant
"defeasance". If we satisfy the conditions for covenant defeasance, then any
failure on our part to comply with the terms of the negative pledge covenant
described above will not be an event of default under the indenture with respect
to the relevant debt securities. The conditions we must satisfy are as follows:

         -        we must irrevocably deposit with the trustee as specific
                  security pledged for the due payment and ultimate satisfaction
                  of our obligations in respect of the debt securities of the
                  series affected, funds in the currency in which the debt
                  securities are payable and/or, subject to specified
                  conditions, obligations of the government that issued the
                  currency in which the debt securities are payable in an amount
                  sufficient to pay (1) the principal of, and premium, if any,
                  and interest on the outstanding debt securities of the
                  particular series on their stated maturity and (2) any
                  mandatory prepayments on the day on which those prepayments
                  are due and payable;


                                       21

<PAGE>   25




         -        we must deliver to the trustee opinions of counsel to the
                  effect that holders of the debt securities affected will not
                  recognize income, gain or loss for United States or Canadian
                  federal income tax purposes as a result of the deposit of
                  funds and defeasance of our obligations and will be subject to
                  United States and Canadian federal income tax as if the
                  deposit and defeasance had not occurred;

         -        the deposit of funds must not result in a breach or violation
                  of, or constitute a default under, the indenture or any other
                  material agreement or instrument to which we are a party or by
                  which we are bound;

         -        on the date of the deposit of funds, there must not have
                  occurred and be continuing an event of default with respect to
                  the debt securities affected or an event that, with notice or
                  lapse of time, would become an event of default;

         -        if the debt securities affected are listed on the New York
                  Stock Exchange, we must deliver to the trustee an opinion of
                  counsel to the effect that the deposit of funds and defeasance
                  of our obligations will not cause the debt securities to be
                  delisted;

         -        we must deliver to the trustee an opinion of counsel stating
                  that all conditions precedent to the defeasance under the
                  indenture have been complied with; and

         -        the deposit of funds must not cause the trustee to have a
                  conflicting interest, within the meaning of the indenture and
                  the Trust Indenture Act of 1939. (Section 1302)

         In addition, satisfaction of the conditions described above, other than
the last condition relating to conflict of interest of the trustee, may permit
us to omit to comply with all of our obligations, covenants and agreements under
the indenture with respect to a series of debt securities. The relevant
prospectus supplement will indicate whether this is the case with respect to any
series of debt securities, and will describe any additional conditions or
related provisions. (Section 1301)

AMALGAMATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

         Each of NNL and NNCC, as issuer or guarantor, as the case may be, has
covenanted in the indenture that it will not amalgamate or merge with any other
corporation or enter into any reorganization or arrangement or effect any
conveyance, transfer or lease of all or substantially all of our and our
subsidiaries' assets, taken as a whole, unless specified conditions are
satisfied. These conditions are as follows:

         -        either (1) it is the surviving corporation or one of the
                  continuing corporations or (2) the successor corporation (or
                  the person that leases or that acquires by conveyance or
                  transfer all or substantially all of it and its subsidiaries'
                  assets, taken as a whole) expressly assumes, by supplemental
                  indenture, its obligations under the indenture; and

         -        NNL, NNCC, as the case may be, or the successor corporation
                  are not immediately after the transaction in default under the
                  indenture or the debt securities. (Section 801)

CONCERNING THE TRUSTEE

         Citibank, N. A. is the trustee under the indenture.  An affiliate of
the trustee maintains normal banking relations, including the maintenance of
depository accounts, with NNL and our affiliates.



                                       22

<PAGE>   26


                             DESCRIPTION OF WARRANTS

         We describe in this section the general terms that will apply to any
warrants for the purchase of debt securities that may be offered by NNL or NNCC
pursuant to this prospectus. At the time that we offer warrants, we will
describe in the related prospectus supplement (1) the specific terms of the
offered warrants and (2) the extent to which the general terms described in this
section apply to those warrants.

         Warrants may be offered separately or together with debt securities. We
will issue warrants under warrant agreements to be entered into between NNL or
NNCC and one or more banks or trust companies acting as warrant agent. The
prospectus supplement will include details of the warrant agreements covering
the warrants being offered. The warrant agent will act solely as the agent of
NNL or NNCC and will not assume a relationship of agency with any holders of
warrant certificates or beneficial owners of warrants. A form of warrant
agreement, including a form of warrant certificate representing the warrants, is
an exhibit to the registration statement of which this prospectus is a part.
Please see "Where You Can Find More Information" for information on how to
obtain a copy of the form of warrant agreement.

         In the discussion that follows, we summarize particular provisions of
the warrant agreements. This discussion is not complete, and is qualified by
reference to all the provisions of the warrant agreements, including the
definition of terms used in the warrant agreements. For example, in this
section, we use defined terms that have been given special meaning in the
warrant agreements. We also include references in parenthesis to certain
sections of the warrant agreements. Whenever we refer to particular sections of
or defined terms in the warrant agreements in this prospectus or in the
prospectus supplement, those sections or defined terms are incorporated by
reference here or in the prospectus supplement.

GENERAL

         The particular terms of each issue of warrants will be described in the
related prospectus supplement. This description will include, where applicable:

         -        whether warrants are offered by NNL or are offered by NNCC;

         -        the price at which the warrants will be offered;

         -        the currency or currencies in which the warrants are being
                  offered;

         -        the designation, aggregate principal amount, currency or
                  currencies, denominations and terms of the series of debt
                  securities that may be purchased upon exercise of the
                  warrants;

         -        the designation and terms of any related debt securities with
                  which the warrants are being offered, if any, and the number
                  of the warrants being offered with each debt security;

         -        the date or dates, if any, on or after which the warrants and
                  the related debt securities will be transferable separately;

         -        the principal amount of debt securities that may be purchased
                  upon exercise of each warrant and the price at which and
                  currency or currencies in which that principal amount of debt
                  securities may be purchased upon exercise of each warrant;



                                       23

<PAGE>   27




         -        the date on which the right to exercise the warrants will
                  commence and the date on which the right will expire;

         -        material United States and Canadian tax consequences of owning
                  the warrants; and

         -        any other material terms or conditions of the warrants.

         We will only issue warrants in registered form. You may transfer or
exchange warrants at the office of the warrant agent. You will not be required
to pay any service charge for any registration, transfer or exchange of
warrants, but you may be required to pay any tax or other governmental charge
associated with the transfer or exchange permitted. You may have your warrants,
other than a global security, exchanged for more warrants of smaller permitted
denominations or for fewer warrants of larger permitted denominations. The
transfer or exchange of a warrant will only be made if the warrant agent is
satisfied with your proof of ownership. (Sections 1.02 and 4.01)

         Before the exercise of warrants, you will not be entitled to any of the
rights of holders of the debt securities that may be purchased upon the exercise
of the warrants. For example, you will not be entitled to payments of principal
of, or premium, if any, or interest, if any on, the debt securities, or to
enforce any of the covenants in the indenture. (Section 3.01)

EXERCISE OF WARRANTS

         The relevant prospectus supplement will set forth information about the
exercise of warrants. Each warrant will entitle you to purchase the principal
amount of debt securities at the exercise price set forth in, or calculable as
set forth in, the prospectus supplement. You may exercise warrants at the
corporate trust office of the warrant agent or at another office indicated in
the prospectus supplement. You may exercise warrants within the time period
specified in the prospectus supplement. After such time, unexercised warrants
will become void. (Sections 2.02 and 2.03)

         To exercise warrants, you will be required to surrender to the warrant
agent the related warrant certificate and pay in full the exercise price for
debt securities to be subscribed for upon such exercise. NNL or NNCC will issue
and deliver the applicable debt securities to you, and will issue a new warrant
certificate for any warrants not exercised. (Section 2.03)



                                       24

<PAGE>   28




                   CANADIAN FEDERAL INCOME TAX CONSIDERATIONS

         Ogilvy Renault, Canadian counsel to NNL and NNCC, have advised that the
following is a summary of the principal Canadian federal income tax
considerations under the Income Tax Act (Canada) and the Income Tax Regulations
(which we refer to in this section as the "Act" and the "Regulations",
respectively) in effect at the date hereof generally applicable to a holder of
debt securities and warrants who:

         -        acquires debt securities and warrants in an offering
                  contemplated by this prospectus;

         -        deals at arm's length with NNL and NNCC for purposes of the
                  Act;

         -        is neither resident nor deemed to be resident in Canada for
                  purposes of the Act and the Regulations at any time; and

         -        does not use or hold and is not deemed to use or hold the debt
                  securities or the warrants in connection with a trade or
                  business that the holder carries on, or is deemed to carry on,
                  in Canada at any time.

Special rules which are not discussed in this summary may apply to a
non-resident holder that is an insurer carrying on business in Canada and
elsewhere. This summary is based on the current provisions of the Act and the
Regulations, all specific proposals to amend the Act and Regulations publicly
announced by or on behalf of the Minister of Finance (Canada) prior to the date
hereof (which we refer to in this section as the "Proposals") and Ogilvy
Renault's understanding of the current published administrative practices and
policies of the Canada Customs and Revenue Agency. This summary assumes that the
Act and the Regulations will be amended in accordance with the Proposals as so
announced although no assurance of that can be given.

         The following is a general summary only with respect to the securities
described in this prospectus as debt securities and warrants because the
attributes of debt securities and warrants which may be offered by a prospectus
supplement have not been determined and are not described in this prospectus. It
does not purport to be a complete analysis or listing of all potential tax
consequences under the Act, the Regulations and the Proposals of holding debt
securities and warrants. This summary does not take into account or anticipate,
and is not a summary of, tax considerations under the Act, the Regulations and
the Proposals applicable to or arising from particular attributes of debt
securities and warrants, is not intended nor should it be construed to be legal
or tax advice to any particular holder of debt securities or warrants, and does
not deal with Canadian provincial or territorial tax considerations or tax
considerations under the legislation of countries other than Canada. This
summary assumes that all relevant facts and circumstances are, and will continue
to be, as described in this prospectus, and does not take into account or
anticipate any other facts or circumstances. Also, except as specifically
stated, this summary does not take into account or anticipate any changes in
law, whether by legislative, regulatory, judicial or administrative action.
Accordingly, you should consult your own tax advisor with respect to your
particular circumstances.

         Canadian federal income tax considerations applicable to the particular
debt securities and warrants will be described in the related prospectus
supplement. The following general comments will be superseded by any summary of
the principal Canadian federal income tax considerations in the relevant
prospectus supplement.



                                       25

<PAGE>   29


WITHHOLDING TAX

         Any amount paid or credited, or deemed to be paid or credited, as, on
account or in lieu of payment of, or in satisfaction of interest on debt
securities issued by NNL under the indenture to non-residents of Canada (other
than certain persons carrying on business in Canada, to the extent provided in
the Act and the Regulations) generally will be subject to a 25% non-resident
withholding tax. The rate of such tax may be reduced through the application of
international tax treaties or conventions to which Canada is a party, usually to
a rate of 10% or 15%. If you are a resident of the United States for purposes of
the Canada -- United States Income Tax Convention (1980), the rate of this
withholding tax will generally be reduced to 10% under that tax convention.

         The interest (other than certain interest described in the Act) payable
by a corporation resident in Canada to non-residents of Canada who deal at arm's
length with the corporation on an obligation issued by the corporation after
June 23, 1975 is exempt from such withholding tax if under the terms of the
obligation or any related agreement the corporation may not under any
circumstances be obliged to pay more than 25% of the principal amount of the
obligation (or the aggregate principal amount of a number of obligations,
identical in all respects but for their separate principal amounts, that
comprise a single debt issue of obligations) within five years from the date of
its issue except:

         -        in the event of a failure or default under such terms or
                  agreement;

         -        if the terms of the obligation or such agreement become
                  unlawful or are changed by virtue of legislation or by a
                  court, statutory board or commission; or

         -        if such a non-resident person exercises a right under the
                  terms of the obligation or such agreement to convert the
                  obligation into, or exchange the obligation for, a "prescribed
                  security" under the Act and the Regulations for this purpose.

         Assuming that NNCC is and continues to be a non-resident of Canada
which does not carry on business in Canada for purposes of the Act, payments on
the guaranteed debt securities issued by NNCC will not be subject to Canadian
non-resident withholding tax. However, if NNL pays amounts in accordance with
the guarantees of those debt securities in satisfaction of any amounts that may
reasonably be regarded as being or being attributable to interest payable under
those guaranteed debt securities, such amounts may be subject to non-resident
withholding tax at the rate of 25% or such lower rate as may be provided for
under the terms of an applicable tax treaty or convention.

OTHER INCOME TAX

         No other taxes on income or capital gains generally will be payable in
respect of the debt securities or the interest or premium, if any, thereon, or
the warrants, by a holder to whom this summary applies.


                                       26


<PAGE>   30


                              PLAN OF DISTRIBUTION

         We may sell the securities described in this prospectus through agents,
underwriters or dealers, or directly to a limited number of institutional
purchasers or to a single purchaser.

         The accompanying prospectus supplement will identify or describe:

         -        any underwriters, dealers or agents;

         -        their compensation;

         -        the net proceeds to us;

         -        the purchase price of the securities;

         -        the initial public offering price of the securities; and

         -        any exchange on which the securities are listed.

         We may designate agents to solicit purchases for the period of their
appointment to sell securities on a continuing basis. Unless otherwise indicated
in the related prospectus supplement, any such agent will be acting on a
reasonable best efforts basis for the period of its appointment.

         If we use underwriters for a sale of securities, the securities will be
acquired by the underwriters for their own account. The underwriters may resell
the securities in one or more transactions, including negotiated transactions at
a fixed public offering price or at varying prices determined at the time of
sale. Unless otherwise indicated in the related prospectus supplement, the
obligations of the underwriters to purchase the securities will be subject to
various conditions and the underwriters will be obligated to purchase all the
securities of the series offered if any of the securities of that series are
purchased. Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.

         Underwriters and agents may from time to time purchase and sell the
securities described in this prospectus and the relevant prospectus supplement
in the secondary market, but are not obligated to do so. No assurance can be
given that there will be a secondary market for the securities or liquidity in
the secondary market if one develops. From time to time, underwriters and agents
may make a market in the securities.

         We may also sell securities directly to one or more purchasers without
using underwriters or agents.

         Underwriters, dealers and agents that participate in the distribution
of the securities may be "underwriters" as defined in the Securities Act of
1933, as amended, and any discounts or commissions they receive from us and any
profit on their resale of the securities may be treated as underwriting
discounts and commissions under the Securities Act. We may have agreements with
the underwriters, dealers and agents to indemnify them against certain civil
liabilities, including liabilities under the Securities Act, or to contribute to
payments they may be required to make in respect thereof. Underwriters dealers
and agents may engage in transactions with or perform services for us or our
subsidiaries and affiliates in the ordinary course of their businesses.

         The securities described in this prospectus will not be offered or sold
to a resident of Canada in contravention of the securities laws of Canada or any
province or territory thereof.



                                       27

<PAGE>   31


                           VALIDITY OF THE SECURITIES

         The validity of the securities described in this prospectus will be
passed upon for NNL by Nicholas J. DeRoma, Chief Legal Officer of NNL, and for
NNCC by Roger A. Schecter, Secretary of NNCC, and for any underwriters or
agents, as the case may be, by Skadden, Arps, Slate, Meagher & Flom LLP, New
York, New York. As of December 13, 2000, Nicholas J. DeRoma beneficially owned
85,123 common shares of Nortel Networks Corporation, which is the parent
corporation of NNL directly and of NNCC indirectly. As of December 13, 2000,
Roger A. Schecter beneficially owned 3,274 common shares of Nortel Networks
Corporation.

                                     EXPERTS

         The consolidated financial statements as of December 31, 1999 and 1998
and for each of the three years in the period ended December 31, 1999 and the
related financial statement schedules incorporated in this prospectus by
reference from Nortel Networks Corporation's Annual Report on Form 10-K, as
amended by Form 10-K/A, for the year ended December 31, 1999 have been audited
by Deloitte & Touche LLP, independent auditors, as stated in their report dated
February 1, 2000, except as to Note 24(a) which is as of March 2, 2000, which
are incorporated herein by reference, and have been so incorporated in reliance
upon the report of such firm given upon their authority as experts in accounting
and auditing.

         The consolidated financial statements as of December 31, 1999 and 1998
and for each of the three years in the period ended December 31, 1999 and the
related financial statement schedules incorporated in this prospectus by
reference from NNL's Current Report on Form 8-K dated August 7, 2000, as amended
by Form 8-K/A dated August 18, 2000, have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report dated February 1, 2000, except
as to Note 23 (with the exception of (c)(viii) and (ix)) which is as of July 28,
2000, which are incorporated herein by reference, and have been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.

         The consolidated financial statements of Bay Networks, Inc. as of June
30, 1997 and 1996, and for each of the three years in the period ended June 30,
1997, appearing in the Bay Networks, Inc. Annual Report on Form 10-K for the
year ended June 30, 1997 have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and incorporated
herein by reference, and have been so incorporated in reliance upon the report
of such firm given upon their authority as experts in accounting and auditing.



                                       28


<PAGE>   32


                                    PART II.

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

         The following table sets forth the expenses incurred in connection with
the sale of the securities being registered. All amounts are estimates except
the registration fee to be paid to the Securities and Exchange Commission ("SEC"
or the "Commission"):

<TABLE>
<S>                                                                            <C>
         Filing fees - SEC registration fee......................              $   475,200
         Legal Fees and Expenses.................................                  200,000
         Accounting Fees.........................................                   60,000
         Fees and expenses of Trustee and Warrant Agents
         (including counsel fees)................................                   25,000
         Printing Fees...........................................                   50,000
         Rating Agency Fees......................................                   75,000
         Miscellaneous...........................................                   50,000
                                                                               -----------
             Total ..............................................              $   935,200
                                                                               ===========
</TABLE>



ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

         The Canada Business Corporations Act (the "Act") provides generally
that a corporation may indemnify a director or officer against all costs,
charges and expenses of any civil, criminal or administrative action or
proceeding to which he or she is made a party by reason of being a director or
officer, where the director or officer acted honestly and in good faith with a
view to the best interests of the corporation and, in the case of a criminal or
administrative action enforced by monetary penalty, the director or officer had
reasonable grounds for believing that the conduct was lawful. Where an officer
or director was substantially successful on the merits in his or her defense of
such action or proceeding, such officer or director is entitled to
indemnification from the corporation for such costs, charges and expenses which
were reasonably incurred.

         By-law No. 1 of Nortel Networks Limited ("NNL"), approved by its Board
of Directors on February 26, 1998, and by its shareholders on April 23, 1998,
implements the indemnification provisions of the Act and reads as follows:

         SECTION  9.2 INDEMNITY

         Subject to the limitations contained in the Act, the corporation shall
         indemnify a director or officer, a former director or officer, or a
         person who acts or acted at the corporation's request as a director or
         officer of a body corporate of which the corporation is or was a
         shareholder or creditor, or a person who undertakes or has undertaken
         any liability on behalf of the corporation or any such body corporate,
         and his or her heirs and legal representatives, against all costs,
         charges and expenses, including an amount paid to settle an action or
         satisfy a judgment, reasonably incurred by that person in respect of
         any civil, criminal or administrative action or proceeding to which
         such person is made a party by reason of being or having been a
         director or officer of the corporation or such body corporate, if:

                  (a)      such person acted honestly and in good faith with a
                           view to the best interests of the corporation; and

                  (b)      in the case of a criminal or administrative action or
                           proceeding that is enforced by a monetary penalty,
                           such person had reasonable grounds for believing that
                           his or her conduct was lawful.



                                      II-1

<PAGE>   33




         The corporation shall indemnify any person referred to above who
         fulfills the conditions contained in (a) and (b) above and who has been
         substantially successful on the merits in the defense of any civil,
         criminal or administrative action or proceeding to which such person is
         made a party by reason of his or her being or having been a director or
         officer of the corporation or body corporate, against all costs,
         charges and expenses reasonably incurred by such person in connection
         with the defense of such action or proceeding.

         The corporation may also indemnify such persons in such other
         circumstances as the Act or other applicable law permits or requires.
         Nothing in this by-law shall limit the right of any person entitled to
         indemnity to claim indemnity apart from the provisions of this by-law.
         The corporation is hereby authorized to execute agreements evidencing
         its indemnity in favor of the foregoing persons to the full extent
         permitted by law.

         SECTION  9.3 INSURANCE

         To the extent permitted by the Act and other applicable law, the
         corporation may purchase and maintain insurance for the benefit of any
         person referred to in Section 9.2 against such liability as the board
         of directors may determine.

         The Act provides specifically for the purchase of insurance by a
corporation for the benefit of its directors and officers against liability
incurred as such. NNL's directors and officers are covered by a group liability
insurance policy.

         Section 145 of the Delaware General Corporation Law empowers a Delaware
corporation to indemnify any persons who are, or are threatened to be made,
parties to any threatened, pending or completed legal action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of such corporation), by reason of the fact that
such person was an officer or director of such corporation, or is or was serving
at the request of such corporation as a director, officer, employee or agent of
another corporation or enterprise. The indemnity may include expenses (including
attorney's fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceedings, provided that such officer or director acted in good faith and in a
manner he reasonably believed to be in or not opposed to the corporation's best
interests, and, for criminal proceedings, had no reasonable cause to believe his
conduct was illegal. A Delaware corporation may indemnify officers and directors
in an action by or in the right of the corporation under the same conditions,
except that no indemnification is permitted without judicial approval if the
officer or director is adjudged to be liable to the corporation in the
performance of his or her duty. Where an officer or director is successful on
the merits or otherwise in the defense of any action referred to above, the
corporation must indemnify him or her against the expenses which such officer or
director actually and reasonably incurred.

         The By-laws of Nortel Networks Capital Corporation ("NNCC") provide for
indemnification of its officers and directors to the full extent permitted by
Section 145 of the Delaware General Corporation Law. In addition, NNCC's
officers and directors are covered by a group directors and officers liability
insurance policy.

         The forms of Terms and Underwriting Agreements filed as Exhibits 1.1
and 1.2 to this Registration Statement and the forms of Agency Agreements filed
as Exhibits 1.3 and 1.4 to this Registration Statement provide that the
underwriters or agents, as the case may be, will indemnify the directors and
officers of NNL and NNCC, as the case may be, in certain circumstances.

ITEM 16. EXHIBITS

         The following exhibits are filed as part of this Registration
Statement:

<TABLE>
<S>      <C>
1.1      Form of Nortel Networks Limited Terms and Underwriting Agreement.

1.2      Form of Nortel Networks Capital Corporation Terms and Underwriting
         Agreement.

1.3      Form of Nortel Networks Limited Agency Agreement.
</TABLE>


                                      II-2
<PAGE>   34

<TABLE>
<S>      <C>

1.4      Form of Nortel Networks Capital Corporation Agency Agreement.

4.1      Indenture, dated as of December 15, 2000, among Nortel Networks
         Limited, Nortel Networks Capital Corporation and Citibank, N. A., as
         Trustee, including form of the debt security and the guarantee.

4.2      Forms of Warrant Agreements.

5.1      Opinion of Nicholas J. DeRoma, Chief Legal Officer of Nortel Networks
         Limited, as to the legality of the debt securities, warrants and
         guarantees issued by Nortel Networks Limited registered hereunder.

5.2      Opinion of Roger A. Schecter, Secretary of Nortel Networks Capital
         Corporation, as to the legality of the debt securities and warrants
         issued by Nortel Networks Capital Corporation registered hereunder.

8.1      Opinion of Ogilvy Renault as to Canadian tax matters.

12.1     Computation of ratio of earnings to fixed charges of Nortel Networks
         Limited.

23.4     Consent of Deloitte & Touche LLP.

23.5     Consent of Ernst & Young LLP.

24.1     Powers of Attorney for certain directors and officers of Nortel
         Networks Limited.

24.2     Powers of Attorney for certain directors and officers of Nortel
         Networks Capital Corporation.

25.1     Form T-1 Statement of Eligibility and Qualification under the Trust
         Indenture Act of 1939 of Citibank, N. A.
</TABLE>

ITEM 17. UNDERTAKINGS

         The undersigned registrants hereby undertake:

         (1) to file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:

                  (a)      to include any prospectus required by Section
                           10(a)(3) of the Securities Act,

                  (b)      to reflect in the Prospectus any facts or events
                           arising after the effective date of the Registration
                           Statement (or the most recent post-effective
                           amendment thereof) which, individually or in the
                           aggregate, represent a fundamental change in the
                           information set forth in this Registration Statement.
                           Notwithstanding the foregoing, any increase or
                           decrease in volume of securities offered (if the
                           total dollar value of securities offered would not
                           exceed that which was registered) and any deviation
                           from the low or high end of the estimated maximum
                           offering range may be reflected in the form of
                           prospectus filed with the Commission pursuant to Rule
                           424(b) if, in the aggregate, the changes in volume
                           and price represent no more than a 20 percent change
                           in the maximum aggregate offering price set forth in
                           the "Calculation of Registration Fee" table in the
                           effective Registration Statement, and



                                      II-3

<PAGE>   35


                  (c)      to include any material information with respect to
                           the plan of distribution not previously disclosed in
                           this Registration Statement or any material change to
                           such information in this Registration Statement;

provided, however, that paragraphs (1)(a) and (1)(b) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by one of the registrants pursuant to Section 13 or Sections 15(d) of
the Exchange Act that are incorporated by reference in the Registration
Statement;

         (2) that, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof;

         (3) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering;

         (4) that, for purposes of determining any liability under the
Securities Act, each filing of the registrants' annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by
reference in this Registration Statement (and, where applicable, each filing of
an employee benefit plan's annual report pursuant to Section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement)
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof; and

         (5) insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of a registrant pursuant to the foregoing provisions, or otherwise, such
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification of such
liabilities (other than the payment by a registrant of expenses incurred or paid
by a director, officer or controlling person of a registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, such
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.




                                      II-4


<PAGE>   36


                                   SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, the
undersigned registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3, reasonably believes
that the security rating requirement contained in Transaction Requirement B.2.
of Form S-3 will be met by the time of the sale of the securities registered
hereunder and has caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Brampton, Province
of Ontario, Canada on the 15th day of December, 2000.

                                       NORTEL NETWORKS LIMITED


                                       By  /s/ John A. Roth
                                           -------------------------------------
                                           (JOHN A. ROTH, President and
                                           Chief Executive Officer)


          Pursuant to the requirements of the Securities Act of 1933, the
undersigned registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3, reasonably believes
that the security rating requirement contained in Transaction Requirement B.2.
of Form S-3 will be met by the time of the sale of the securities registered
hereunder and has caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Brampton, Province
of Ontario, Canada on the 15th day of December, 2000.

                                       NORTEL NETWORKS CAPITAL CORPORATION


                                       By  /s/ William R. Kerr
                                           -------------------------------------
                                           (WILLIAM R. KERR, President)







<PAGE>   37


         Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities indicated on the 15th day of December, 2000.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
                Signature                            Title
--------------------------------------------------------------------------------
<S>                                      <C>
                             NORTEL NETWORKS LIMITED

       PRINCIPAL EXECUTIVE OFFICER

            /s/ John A. Roth
    ---------------------------------    President and Chief Executive Officer,
               (JOHN A. ROTH)                         and a Director


       PRINCIPAL FINANCIAL OFFICER


            /s/ Frank A. Dunn
    ---------------------------------    Chief Financial Officer, and a Director
              (FRANK A. DUNN)


       PRINCIPAL ACCOUNTING OFFICER

          /s/ Douglas C. Beatty
    ---------------------------------                 Controller
          (DOUGLAS C. BEATTY)


       AUTHORIZED REPRESENTATIVE
         IN THE UNITED STATES:

  NORTEL NETWORKS INC.


    By     /s/ Roger A. Schecter
      -------------------------------
       Name:  ROGER A. SCHECTER
       Title: Secretary
</TABLE>





<PAGE>   38


                                   DIRECTORS:




      J.J. BLANCHARD*
---------------------------------       --------------------------------------
     (J.J. BLANCHARD)                             (R.A. INGRAM)


        R.E. BROWN*                                 G. SAUCIER*
---------------------------------       --------------------------------------
       (R.E. BROWN)                                (G. SAUCIER)


      F.C. CARLUCCI*                               S.H. SMITH*
---------------------------------       --------------------------------------
      (F.C. CARLUCCI)                             (S.H. SMITH)


       L.Y. FORTIER*                               L.R. WILSON*
---------------------------------       --------------------------------------
      (L.Y. FORTIER)                              (L.R. WILSON)


                                          *By       /s/ Deborah J. Noble
                                             -----------------------------------
                                                    (DEBORAH J. NOBLE,
                                                   as Attorney-in-fact)




<PAGE>   39


         Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities indicated on the 15th day of December, 2000.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
                Signature                            Title
--------------------------------------------------------------------------------
<S>                                      <C>
                       NORTEL NETWORKS CAPITAL CORPORATION

DIRECTORS AND OFFICERS:

     PRINCIPAL EXECUTIVE OFFICER

  /s/ William R. Kerr
--------------------------------------                 President
          (WILLIAM R. KERR)                          and a Director


   PRINCIPAL FINANCIAL OFFICER AND
    PRINCIPAL ACCOUNTING OFFICER

  /s/ Mary M. Cross
--------------------------------------   Vice-President, Finance, and Treasurer,
           (MARY M. CROSS)                           and a Director
</TABLE>


<PAGE>   40


                                  EXHIBIT INDEX


<TABLE>
<CAPTION>
EXHIBIT
 NUMBER                           DESCRIPTION
-------  -----------------------------------------------------------------
<S>      <C>
1.1      Form of Nortel Networks Limited Terms and Underwriting Agreement.

1.2      Form of Nortel Networks Capital Corporation Terms and Underwriting
         Agreement.

1.3      Form of Nortel Networks Limited Agency Agreement.

1.4      Form of Nortel Networks Capital Corporation Agency Agreement.

4.1      Indenture, dated as of December 15, 2000 among Nortel Networks Limited,
         Nortel Networks Capital Corporation and Citibank, N. A., as Trustee,
         including form of the debt security and the guarantee.

4.2      Forms of Warrant Agreements.

5.1      Opinion of Nicholas J. DeRoma, Chief Legal Officer of Nortel Networks
         Limited, as to the legality of the debt securities, warrants and
         guarantees issued by Nortel Networks Limited registered hereunder.

5.2      Opinion of Roger A. Schecter, Secretary of Nortel Networks Capital
         Corporation, as to the legality of the debt securities and warrants
         issued by Nortel Networks Capital Corporation registered hereunder.

8.1      Opinion of Ogilvy Renault as to Canadian tax matters.

12.1     Computation of ratio of earnings to fixed charges of Nortel Networks
         Limited.

23.1     Consent of Nicholas J. DeRoma, Chief Legal Officer of Nortel Networks
         Limited (included in the opinion filed as Exhibit 5.1).

23.2     Consent of Roger A. Schecter, Secretary of Nortel Networks Capital
         Corporation (included in the opinion filed as Exhibit 5.2).

23.3     Consent of Ogilvy Renault (included in the opinion filed as Exhibit
         8.1).

23.4     Consent of Deloitte & Touche LLP.


23.5     Consent of Ernst & Young LLP.

24.1     Powers of Attorney for certain directors and officers of Nortel
         Networks Limited.

24.2     Powers of Attorney for certain directors and officers of Nortel
         Networks Capital Corporation.

25.1     Form T-1 Statement of Eligibility and Qualification under the Trust
         Indenture Act of 1939 of Citibank, N. A.
</TABLE>




© 2022 IncJournal is not affiliated with or endorsed by the U.S. Securities and Exchange Commission