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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): August 13, 2001
Sheldahl, Inc.
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(Exact name of Registrant as specified in its charter)
Minnesota 0-45 41-0758073
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(State or other jurisdiction (Commission (I.R.S. Employer of
incorporation) File Number) Identification No.)
1150 Sheldahl Road
Northfield, Minnesota 55057
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (507) 663-8000
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Items 1, 2, 3, 4, 6, 8 and 9 are not included.
ITEM 5. OTHER EVENTS
On August 13, 2001, the Company entered into a Subordinated Notes and
Warrant Purchase Agreement (the "Debt Agreement") with Morganthaler Venture
Partners V, L.P. ("Morganthaler") and Molex Incorporated ("Molex") pursuant to
which the Morganthaler and Molex extended $3,000,000 in financing to the Company
(the "Loan"), on the terms described below.
Subordinated Notes and Warrant Purchase Agreement.
Under the terms of the Debt Agreement, Morganthaler and Molex (the
"Purchasers") each purchased $1,500,000 of 12% Senior Subordinated Notes (the
"Notes") ("the "Debt Investment"). In connection with the Notes, each Purchaser
was issued 351,000 Warrants for the Purchase of the Company's Common Stock
("Warrants") at an exercise price of $.01 per share of common stock issuable.
The Warrants expire on August 13, 2008.
Under the terms of the Debt Agreement, interest on the Notes compounds
quarterly at the rate of 12% per annum. The Notes are not secured by assets of
the Company and its subsidiaries. The Notes are subordinate to the obligations
of the Company to Wells Fargo Bank Minnesota, N.A. ("Wells Fargo").
The Notes (and all accrued interest) are due and payable August 13,
2006, upon certain issuances of capital stock or upon the sale of assets by the
Company. Proceeds from the issuance of capital stock or sale of assets must
first be applied to both the Credit and Security Agreement by and among the
Company and Wells Fargo, as agent for other senior lenders (the "Credit
Agreement") and the $5,000,000 of indebtedness of the Subordinated Secured Notes
Purchase Agreement of May 23, 2001.
Additionally, the Purchasers may require redemption of the Notes on
September 1, 2001, September 30, 2001, November 1, 2001 and January 2, 2002 or
at such time as the Company refinances the Credit Agreement. However, the
earlier the Purchaser require redemption, the larger the percentage of Warrants
that are forfeited. Moreover, the Purchasers may require redemption of the Notes
only in proportion to that percentage of the Warrants which remain unexercised.
The Debt Agreement, and Form of Note and Form of Warrant issuable
thereunder, are incorporated herein by reference to Exhibits hereto. The
foregoing description of the Debt Agreement and the Notes does not purport to be
complete and is qualified in its entirety by reference to such Exhibits.
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Bank Amendment
In connection with the consummation of the Debt Investment, Wells Fargo
Bank Minnesota, N.A. and the Company executed the Tenth Amendment to the Credit
Agreement. The Tenth Amendment to Credit Agreement establishes new covenants
based on minimum EBITDA, requires agreement on new financial covenants prior to
August 31, 2001, establishes as an event of default the failure of the Company
to enter into a definitive agreement for the sale of its Material Business and
consents to the Debt Investment.
7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(C) Exhibits
Exhibit 4.1. Subordinated Notes and Warrant Purchase Agreement dated August
13, 2001 among Sheldahl, Inc. and the entities listed on
Schedule I thereto.
Exhibit 4.2. Form of Note to Subordinated Notes and Warrant Purchase
Agreement.
Exhibit 4.3. Form of Warrant to Subordinated Notes and Warrant Purchase
Agreement.
Exhibit 4.4. Tenth Amendment to Credit and Security Agreement dated August
13, 2001 between the Company and Wells Fargo Bank Minnesota
N. A., as Agent.
Exhibit 99.0. Press release of August 13, 2001.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SHELDAHL, INC.
By: /s/ Peter Duff
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Peter Duff, Vice President -- Finance
Dated: August 20, 2001
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