<PAGE>   1
                                                                  Exhibit 10.4.7



               SEVENTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT

         This Amendment, dated as of November 7, 2000, is made by and among
SHELDAHL, INC., a Minnesota corporation (the "Borrower"), WELLS FARGO BANK
MINNESOTA, NATIONAL ASSOCIATION f/k/a Norwest Bank Minnesota, National
Association, a national banking association ("Wells Fargo"; in its separate
capacity as administrative agent for the Lenders, the "Agent"), and each of the
financial institutions appearing on the signature pages hereof.

                                    Recitals

         The Borrower, the Agent and the Lenders are parties to a Credit and
Security Agreement dated as of June 19, 1998, as amended by a First Amendment to
Credit and Security Agreement dated as of November 25, 1998, a Second Amendment
to Credit and Security Agreement dated as of March 31, 1999, a Third Amendment
to Credit and Security Agreement dated as of April 5, 1999, a Fourth Amendment
to Credit and Security Agreement dated as of November 9, 1999, a Fifth Amendment
to Credit and Security Agreement dated as of June 16, 2000, and a Sixth
Amendment to Credit and Security Agreement dated as of June 27, 2000 (as so
amended, the "Credit Agreement"). Capitalized terms used in these recitals have
the meanings given to them in the Credit Agreement unless otherwise specified.

         The Borrower has requested that the Lenders and the Agent consent to
certain transactions and that certain amendments be made to the Credit
Agreement. The Agent and the Lenders are willing to grant the Borrower's
requests pursuant to the terms and conditions set forth herein.

         Accordingly, in consideration of the premises and of the mutual
covenants and agreements herein contained, it is agreed as follows:

         1. Defined Terms. Capitalized terms used in this Amendment which are
defined in the Credit Agreement shall have the same meanings as defined therein,
unless otherwise defined herein. In addition, Section 1.1 is amended by adding
or amending the following definitions:

         "`Acquisition Agreement' means that certain Agreement and Plan of
Merger by and among the Borrower, Holdings, Merger Sub and the selling
shareholders of Holdings."

         "`Ampersand' means Ampersand IV Limited Partnership."

         "`Ampersand Companion' means Ampersand IV Companion Fund Limited
Partnership."




<PAGE>   2


         "`Change in Control' means the occurrence of any of the following:

                           (i) the sale, lease, transfer, conveyance or other
                  disposition (other than by way of merger or consolidation), in
                  one or a series of related transactions, of all or
                  substantially all of the assets of the Borrower and its
                  Subsidiaries, taken as a whole, to any "person" or "group" (as
                  such terms are used in Section 13(d)(3) and Section 14(d)(2)
                  of the Securities Exchange Act of 1934, as amended (the
                  "Exchange Act"), other than Morgenthaler and its affiliates,
                  Ampersand and its affiliates, Ampersand Companion and its
                  affiliates or Molex Incorporated and its affiliates
                  (collectively, the "Permitted Holders");

                           (ii) the adoption of a plan relating to the
                  liquidation or dissolution of the Borrower;

                           (iii) any person or group (as defined above), other
                  than the Permitted Holders, becomes the "beneficial owner" of
                  35% or more of the voting power of the voting stock of the
                  Borrower; or

                           (iv) during any consecutive two-year period,
                  individuals, who at the beginning of such period constituted
                  the board of directors of the Borrower (together with any new
                  directors whose election by the board of directors or whose
                  nomination for election by the stockholders of the Borrower
                  was approved by a vote of a majority of the directors then
                  still in office who were either directors at the beginning of
                  such period or whose election or nomination for election was
                  previously so approved) cease for any reason to constitute a
                  majority of the board of directors then in office. For so long
                  as a majority of the outstanding shares of the Borrower's
                  Series G preferred stock is held by persons who together hold
                  a majority of the outstanding Morgenthaler Notes, there shall
                  be excluded from such determination those directors elected by
                  the holders of the Borrower's Series G preferred stock. In
                  addition, any change in the identity of a person occupying a
                  board seat resulting from the loss by the holders of the
                  Series G preferred stock of the right to elect one or more
                  directors shall not be considered in applying clause (iv)
                  above."

         "`Holdings' means International Flex Holdings, Inc., a Delaware
corporation."

         "`Liquidity Reserve' means:

                           (i) $1,500,000 before the event in clause (ii) is
                  satisfied (if ever);

                           (ii) $-0- beginning on the date the Acquisition
                  Agreement is executed and delivered; and


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<PAGE>   3


                           (iii) $1,500,000 from and after the occurrence of an
                  Event of Default, unless the Required Lenders otherwise
                  consent.

         "`Merger' has the meaning given in Paragraph 2(a)(i) of the Seventh
Amendment."

         "`Merger Sub' means IFT West Acquisition Company, a Delaware
corporation and a wholly owned Subsidiary of the Borrower.

         "`Morgenthaler' means Morgenthaler Venture Partners V, L.P."

         "`Morgenthaler Notes' has the meaning given in Paragraph 2(a)(iv) of
the Seventh Amendment."

         "`Series G Agreement' has the meaning given in Paragraph 2(a)(iii) of
the Seventh Amendment.

         "`Series G Issuance' has the meaning given in Paragraph 2(a)(iii) of
the Seventh Amendment.

         "`Seventh Amendment' means that certain Seventh Amendment to Credit and
Security Agreement by and among the Borrower, the Lenders and the Agent."

         2. Consent to Transaction.

                  (a) The Borrower has requested that the Lenders and the Agent
         consent to:

                           (i) the merger of Holdings and Merger Sub with
                  Holdings being the survivor, pursuant to the Acquisition
                  Agreement (the "Merger");

                           (ii) the issuance by the Borrower of approximately
                  7.5 million shares of its common stock in connection with the
                  Merger;

                           (iii) the issuance by the Borrower of approximately
                  11,630 shares of its Series G preferred stock and
                  approximately 4,798,958 of its common stock for $25,000,000
                  pursuant to pursuant to a Stock Purchase Agreement (the
                  "Series G Agreement") by and among the Borrower, Ampersand,
                  Ampersand Companion and Morgenthaler (the "Series G
                  Issuance"); and

                           (iv) the issuance by the Borrower of up to
                  $15,000,000 of promissory notes (the "Morgenthaler Notes") and
                  warrants to purchase up to approximately 2.3 million shares of
                  its common stock, pursuant to a Subordinated Notes and Warrant
                  Purchase Agreement (the "Note Purchase Agreement") by and
                  among, the Borrower, Morgenthaler, Ampersand and Ampersand
                  Companion;


                                      -3-

<PAGE>   4


                  (b) The Lenders and the Agent hereby consent to the events
         described in Subparagraph (a) on the following conditions:

                           (i) Unless the Agent and the Required Lenders
                  otherwise consent, the documents finally executed and
                  delivered by the Borrower and its Subsidiaries in connection
                  with the transactions described in Subparagraph (a) shall not
                  be materially different from the drafts of such documents
                  delivered to the Agent before the date of this Amendment. The
                  Agent shall receive copies of all fully executed documents
                  promptly after their execution and delivery.

                           (ii) Not later than simultaneously with the
                  occurrence of the Merger, Holdings and each of its
                  Subsidiaries shall execute and deliver to the Agent for the
                  benefit of the Lenders, an unlimited guaranty of the
                  Obligations, a security agreement granting the Agent a
                  security interest over all of its personal property assets and
                  such financing statements as the Agent may reasonably request
                  to perfect such security interest.

                           (iii) The Agent and any other secured creditors of
                  Holdings or its Subsidiaries shall enter into intercreditor
                  agreements satisfactory to the Agent.

                           (iv) Unless the Agent and the Required Lenders
                  otherwise so consent in advance and in writing, the
                  Morgenthaler Notes shall at all times be unsecured.

                           (v) Not later than simultaneously with the first
                  issuance of any Morgenthaler Notes, the holders of such notes
                  (the "Holders") and the Agent shall execute and deliver a
                  subordination agreement pursuant to which, among other things,
                  the Holders agree:

                                    (A) that the Morgenthaler Notes shall at all
                           times remain unsecured;

                                    (B) that any financial covenants imposed by
                           the Holders on the Borrower shall be no more
                           restrictive than those imposed by the Credit
                           Agreement;

                                    (C) that the Holders will notify the Agent
                           of the occurrence of any Event of Default (as defined
                           in the Note Purchase Agreement) not later than
                           simultaneously with notice given to the Borrower;

                                    (D) that the Holders will notify the Agent
                           of their intent to exercise any rights or remedies
                           under the Note Purchase Agreement at least ten (10)
                           days before any such exercise;

                                    (E) that upon receipt of notice from the
                           Agent, the Holders will not exercise any right or
                           remedy they may otherwise be able to exercise for a
                           period of 180 days including any right to accelerate,
                           provided that only one such notice may be delivered
                           in any period of 365 days;


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<PAGE>   5


                                    (F) that, except as provided in clause (E),
                           if the Lenders accelerate the Obligations, the
                           Holders may accelerate the Morgenthaler Notes;

                                    (G) that the Holders shall have the ability
                           to vote their interests in a bankruptcy of the
                           Borrower;

                                    (H) that the Holders shall not be obligated
                           to pay over to the Lenders any amounts received on
                           account of the Morgenthaler Notes in a bankruptcy of
                           the Borrower; and

                                    (I) that such subordination agreement shall
                           run in favor of the Agent, the Lenders and any other
                           lender or group of lenders providing a senior secured
                           credit facility to the Borrower.

         3. Financial Covenants. Sections 6.18 through 6.12 and 7.12 of the
Credit Agreement are amended to read as follows:

                  "Section 6.18 Minimum Cash Flow Available for Debt Service.
         The Borrower will achieve Cash Flow Available for Debt Service,
         determined as at the end of each fiscal quarter, at not less than the
         amount set forth opposite such quarter:


         Fiscal Quarter Ending on             Minimum Cash Flow
                or about                  Available for Debt Service
         -------------------------        --------------------------
            November 30, 2000                       $716,000
            February 28, 2001                     $3,513,000
               May 31, 2001                       $8,174,000
             August 31, 2001                     $11,558,000


                  "Section 6.19 Minimum Debt Service Coverage Ratio. The
         Borrower will maintain its Debt Service Coverage Ratio, determined as
         at the end of each quarter, at not less than the ratio set forth
         opposite such quarter:


         Fiscal Quarter Ending on             Minimum Debt Service
                or about                         Coverage Ratio
         ------------------------             --------------------
            November 30, 2000                     0.23 to 1.00
            February 28, 2001                     0.58 to 1.00
               May 31, 2001                       0.91 to 1.00
             August 31, 2001                      0.99 to 1.00


                  "Section 6.20 Minimum Pre-tax Net Income. The Borrower will
         achieve Pre-tax Net Income, determined as of the end of the fiscal
         quarter described below, of not less than the amount set forth opposite
         such fiscal quarter:


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<PAGE>   6


         Fiscal Quarter Ending on             Minimum Pre-tax Net
                or about                             Income
         ------------------------             -------------------
            November 30, 2000                     $(2,938,000)
            February 28, 2001                     $(4,014,000)
               May 31, 2001                       $(2,669,000)
             August 31, 2001                      $(1,122,000)


                   "Section 6.21 Minimum Net Worth. The Borrower will maintain
         its Net Worth, determined as at the end of the fiscal quarter described
         below, of not less than the amount set forth opposite such fiscal
         quarter:


         Fiscal Quarter Ending on              Minimum Net Worth
                or about
         ------------------------              -----------------
             November 30, 2000                    $52,000,000
             February 28, 2001                    $52,000,000
                May 31, 2001                      $54,000,000
              August 31, 2001                     $55,000,000


         The determination of Borrower's Net Worth will not consider the expense
         associated with accruing for preferred dividends, nor the payment of
         preferred dividends in common stock."

                  "Section 7.12 Capital Expenditures. The Borrower will not, and
         will not permit any Subsidiary to, expend or contract to expend, in the
         aggregate, for Capital Expenditures during the fiscal quarters
         described below, amounts in excess of the amount set forth opposite
         such quarter in the table below. This limitation will not apply to the
         conversion of any existing operating leases to capital leases."


         Fiscal Quarter Ending on               Maximum Capital
                or about                         Expenditures
         ------------------------               ---------------
             November 30, 2000                     $2,000,000
             February 28, 2001                     $4,000,000
                May 31, 2001                       $7,000,000
              August 31, 2001                     $12,000,000


         4. Events of Default. Subsection 8.1(p) is amended by replacing the
final period with "; or" and inserting the following new subsections (q), (r),
(s) and (t):

                  "(q) A Change in Control shall occur;


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<PAGE>   7



                  "(r) If the Merger occurs, the Agent, the Lenders and the
         Borrower shall fail within sixty (60) days following the Merger, to
         execute and deliver an amendment to this Agreement pursuant to which
         they establish new financial covenants for the period from the date
         thereof until the Maturity Date;

                  "(s) If the Acquisition Agreement is executed and delivered,
         (i) the Merger fails to occur, or the Borrower fails to receive the
         proceeds of the Series G Issuance, by February 25, 2001, or (ii) the
         Acquisition Agreement shall be terminated for any reason, or (iii) the
         Merger fails to occur, or the Borrower has not received the proceeds of
         the Series G Issuance, by January 5, 2001 and the Borrower fails to
         receive on or before such date at least $5,000,000 of cash proceeds
         from the sale of equity or Debt subordinated to the Obligations in a
         manner satisfactory to the Agent and the Lenders in their sole
         discretion; or

                  "(t) The Acquisition Agreement is not executed and delivered
         or the Borrower fails to receive by December 1, 2000, $5,000,000 of
         cash proceeds from the sale of equity or Debt subordinated to the
         Obligations in a manner satisfactory to the Agent and the Lenders in
         their sole discretion."

         5. New Compliance Certificate. Exhibit F to the Credit Agreement is
hereby amended in its entirety and replaced with Exhibit A to this Amendment.

         6. No Other Changes. Except as explicitly amended by this Amendment,
all of the terms and conditions of the Credit Agreement shall remain in full
force and effect and shall apply to any advance or letter of credit thereunder.

         7. Defaults. The following Events of Default exist (the "Existing
Defaults"):

<TABLE>
<CAPTION>
---------------------------------------- -------------------------------------- --------------------------------------
           SECTION/COVENANT                     REQUIRED AS OF 9/1/2000                 ACTUAL AS OF 9/1/2000
---------------------------------------- -------------------------------------- --------------------------------------
<S>                                      <C>                                    <C>
ss.6.18 Minimum Cash Flow Available for        Not less than $13,765,000                        $9,472,000
Debt Service
---------------------------------------- -------------------------------------- --------------------------------------
ss.6.19 Minimum Debt Service Coverage          Not less than 1.00 to 1.00                     0.76 to 1.00
Ratio
---------------------------------------- -------------------------------------- --------------------------------------
ss.6.20 Pre-Tax Net Income                     Not less than $(8,014,000)                     $(12,926,000)
---------------------------------------- -------------------------------------- --------------------------------------
ss.6.21 Minimum Net Worth                      Not less than $59,682,000                       $56,559,000
---------------------------------------- -------------------------------------- --------------------------------------
</TABLE>

In addition, the Borrower's auditors will be issuing a going concern
qualification in connection with the Borrower's audited financial statements as
of and for the fiscal year ending September 1, 2000, which is a breach of
Section 6.1(a) which requires an unqualified opinion. On the terms and subject
to the conditions of this Amendment, the Lenders and the


                                      -7-

<PAGE>   8


Banks hereby waive the Existing Defaults. This waiver shall be effective only in
this specific instance and for the specific purpose for which it is given, and
this waiver shall not entitle the Borrower to any other or further waiver in any
similar or other circumstances.

         8. Fees.

                  (a) DEFAULT WAIVER FEE. In consideration of the waiver of the
         Existing Defaults, the Borrower shall pay the Agent, for the ratable
         benefit of the Lenders, a fully earned, non-refundable fee of $200,000,
         due and payable upon the execution and delivery of this Amendment by
         the parties hereto.

                  (b) CONSENT FEE. In consideration of the consent granted in
         Paragraph 2(b) above, the Borrower shall pay the Agent, for the ratable
         benefit of the Lenders, a fee of $100,000, due and payable upon the
         execution and delivery of this Amendment by the parties hereto. Such
         fee shall be deemed to be fully earned, non-refundable upon payment. If
         Wells Fargo Bank Minnesota, National Association or any of its
         affiliates is the agent and lead lender for a new credit facility that
         closes and funds on or before March 31, 2001 and the proceeds thereof
         are used to refinance the Obligations, any fees otherwise owed in
         connection with the origination of such credit facility shall be
         reduced by the lesser of $100,000 or the amount of such fees.

                  (c) BREAK UP FEE. In consideration of the risk incurred by the
         Lenders if the transactions described Paragraph 2(a) above do not
         occur, the Borrower shall pay the Agent for the ratable benefit of the
         Lenders a fully earned, non-refundable fee of $200,000, due and payable
         upon the earliest of:

                           (i) the date the Acquisition Agreement is terminated
                  for any reason, or

                           (ii) February 25, 2001, if the Merger and the other
                  transactions described in Paragraph 2(a) are not consummated
                  by such date.

         9. Conditions Precedent. This Amendment shall be effective when the
Agent shall have received an executed original hereof and shall have collected
the Default Waiver Fee described in Paragraph 8(a).

         10. Representations and Warranties. The Borrower hereby represents and
warrants to the Lenders as follows:

                  (a) The Borrower has all requisite power and authority to
         execute this Amendment and to perform all of its obligations hereunder,
         and this Amendment has been duly executed and delivered by the Borrower
         and constitutes the legal, valid and binding obligation of the
         Borrower, enforceable in accordance with its terms.

                  (b) The execution, delivery and performance by the Borrower of
         this Amendment have been duly authorized by all necessary corporate
         action and do not


                                      -8-

<PAGE>   9


         (i) require any authorization, consent or approval by any governmental
         department, commission, board, bureau, agency or instrumentality,
         domestic or foreign, (ii) violate any provision of any law, rule or
         regulation or of any order, writ, injunction or decree presently in
         effect, having applicability to the Borrower, or the articles of
         incorporation or by-laws of the Borrower, or (iii) result in a breach
         of or constitute a default under any indenture or loan or credit
         agreement or any other agreement, lease or instrument to which the
         Borrower is a party or by which it or its properties may be bound or
         affected.

                  (c) All of the representations and warranties contained in
         Article V of the Credit Agreement are correct on and as of the date
         hereof as though made on and as of such date, except to the extent that
         such representations and warranties relate solely to an earlier date.

         11. References. All references in the Credit Agreement to "this
Agreement" shall be deemed to refer to the Credit Agreement as amended hereby;
and any and all references in the Security Documents to the Credit Agreement
shall be deemed to refer to the Credit Agreement as amended hereby.

         12. No Other Waiver. Except as set forth in Section 7, the execution of
this Amendment and acceptance of any documents related hereto shall not be
deemed to be a waiver of any Default or Event of Default under the Credit
Agreement or breach, default or event of default under any Security Document or
other document held by the Lenders, whether or not known to the Lenders and
whether or not existing on the date of this Amendment.

         13. Release. The Borrower hereby absolutely and unconditionally
releases and forever discharges the Lenders, and any and all participants,
parent corporations, subsidiary corporations, affiliated corporations, insurers,
indemnitors, successors and assigns thereof, together with all of the present
and former directors, officers, agents and employees of any of the foregoing,
from any and all claims, demands or causes of action of any kind, nature or
description, whether arising in law or equity or upon contract or tort or under
any state or federal law or otherwise, which the Borrower has had, now has or
has made claim to have against any such person for or by reason of any act,
omission, matter, cause or thing whatsoever arising from the beginning of time
to and including the date of this Amendment, whether such claims, demands and
causes of action are matured or unmatured or known or unknown.

         14. Costs and Expenses. The Borrower hereby reaffirms its agreement
under the Credit Agreement to pay or reimburse the Lenders on demand for all
costs and expenses incurred by the Lenders in connection with the Credit
Agreement, the Security Documents and all other documents contemplated thereby,
including without limitation all reasonable fees and disbursements of legal
counsel. Without limiting the generality of the foregoing, the Borrower
specifically agrees to pay all fees and disbursements of counsel to


                                      -9-

<PAGE>   10


the Lenders for the services performed by such counsel in connection with the
preparation of this Amendment and the documents and instruments incidental
hereto. The Borrower hereby agrees that the Lenders may, at any time or from
time to time in its sole discretion and without further authorization by the
Borrower, make a loan to the Borrower under the Credit Agreement, or apply the
proceeds of any loan, for the purpose of paying any such fees, disbursements,
costs and expenses, including without limitation the fees owed under Paragraph
8.

         15. Miscellaneous. This Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original and all of which counterparts, taken together, shall constitute one and
the same instrument.

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

       WELLS FARGO BANK MINNESOTA,                      SHELDAHL, INC.
     NATIONAL ASSOCIATION, as Agent


By                                         By
  -----------------------------------        -----------------------------------
  Perry T. Larson                            Jill Burchill
  Its Vice President                         Its Chief Financial Officer



    WELLS FARGO BANK MINNESOTA,                 THE CIT GROUP/EQUIPMENT
      NATIONAL ASSOCIATION                           FINANCING, INC.


By                                         By
  -----------------------------------        -----------------------------------
  Perry T. Larson                            Danny Nichols
  Its Vice President                         Its Assistant Vice President


                                      -10-


<PAGE>   11



                                                Exhibit A to Fourth Amendment to
                                                   Credit and Security Agreement


                             COMPLIANCE CERTIFICATE

TO:     Perry T. Larson
        Wells Fargo Bank Minnesota, National Association

DATE:
        ----------------------- , --------

SUBJECT: Financial Statements

Dear Mr. Larson:

         I am the duly qualified and acting Chief Financial Officer of Sheldahl,
Inc. (the "Borrower") and I am familiar with the financial statements and
financial affairs of the Borrower. I am authorized to execute this Compliance
Certificate on behalf of the Borrower.

         Pursuant to Section 6.1 of the Credit and Security Agreement dated as
of June 19, 1998, by and among the Borrower, Wells Fargo Bank Minnesota,
National Association, as agent ("Wells Fargo"; herein in such capacity, together
with any party which may become the successor Agent under such Credit and
Security Agreement, the "Agent"), and each of the financial institutions which
are now or may hereafter become parties to such Credit and Security Agreement,
as amended to date and as the same may be further amended, supplemented or
restated from time to time, the "Credit Agreement"), enclosed are an unaudited
balance sheet and statements of income and retained earnings of the Borrower, as
of ___________, ____ (the "Reporting Date"), and for the year-to-date period
ending on the Reporting Date. All terms used in this Compliance Certificate
shall have the meanings given in the Credit Agreement.

         The balance sheet and statements of income and retained earnings fairly
present the financial condition of the Borrower as of the date thereof. They
have been prepared in accordance with GAAP.

         I hereby certify to the Lenders as follows:

         [ ]      The undersigned does not have knowledge of the occurrence of a
                  Default or Event of Default under the Credit Agreement.

         [ ]      The undersigned has knowledge of the occurrence of a Default
                  or Event of Default under the Credit Agreement and attached
                  hereto is a statement of the facts with respect to thereto.


<PAGE>   12


         I further certify to the Lenders as follows:

                  1. Minimum Cash Flow Available for Debt Service. Pursuant to
         Section 6.18, as of the Reporting Date, the Borrower's Cash Flow
         Available for Debt Service was $_____________, which [ ] satisfies [ ]
         does not satisfy the requirement that such amount be no less than
         $_____________________ as set forth in the table below:


            Fiscal Quarter Ending on              Minimum Cash Flow
                   or about                   Available for Debt Service
            ------------------------          --------------------------
               November 30, 2000                        $716,000
               February 28, 2001                      $3,513,000
                  May 31, 2001                        $8,174,000
                August 31, 2001                      $11,558,000


                  2. Minimum Debt Service Coverage Ratio. Pursuant to Section
         6.19 of the Credit Agreement, as of the Reporting Date, the Borrower's
         Debt Service Coverage Ratio was _____ to 1.00 which [ ] satisfies [ ]
         does not satisfy the requirement that such ratio be no less than ______
         to 1.00 on the Reporting Date as set forth in table below:


            Fiscal Quarter Ending on             Minimum Debt Service
                    or about                        Coverage Ratio
            ------------------------             --------------------
               November 30, 2000                     0.23 to 1.00
               February 28, 2001                     0.58 to 1.00
                  May 31, 2001                       0.91 to 1.00
                August 31, 2001                      0.99 to 1.00


                  3. Minimum Pre-tax Net Income. Pursuant to Section 6.20 of the
         Credit Agreement, the Borrower's Pre-tax Net Income as of the Reporting
         Date, was $____________, which [ ] satisfies [ ] does not satisfy the
         requirement that such amount be not less than $_____________ during
         such period as set forth in table below:


            Fiscal Quarter Ending on              Minimum Pre-tax Net
                    or about                            Income
            ------------------------              -------------------
               November 30, 2000                     $(2,938,000)
               February 28, 2001                     $(4,014,000)
                  May 31, 2001                       $(2,669,000)
                August 31, 2001                      $(1,122,000)


                                      -12-

<PAGE>   13


                  4. Minimum Net Worth. Pursuant to Section 6.21 of the Credit
         Agreement, as of the Reporting Date, the Borrower's Net Worth was
         $____________, which [ ] satisfies [ ] does not satisfy the requirement
         that the Borrower's Book Net Worth be not less than $_________________
         on the Reporting Date as set forth in table below:


            Fiscal Quarter Ending on             Minimum Net Worth
                  or about
            ------------------------             -----------------
               November 30, 2000                    $52,000,000
               February 28, 2001                    $52,000,000
                  May 31, 2001                      $54,000,000
                August 31, 2001                     $55,000,000


                  5. Capital Expenditures. Pursuant to Section 7.12 of the
         Credit Agreement, for the fiscal quarter ending on the Reporting Date,
         the Borrower and its Subsidiaries have expended or contracted to expend
         for Capital Expenditures, $__________________ in the aggregate,
         excluding the conversion of any existing operating leases to capital
         leases, which [ ] satisfies [ ] does not satisfy the requirement that
         such expenditures not exceed in the aggregate the amount set forth
         below for such fiscal quarter:


            Fiscal Quarter Ending on               Maximum Capital
                   or about                          Expenditures
            ------------------------               ---------------
               November 30, 2000                      $2,000,000
               February 28, 2001                      $4,000,000
                 May 31, 2001                         $7,000,000
               August 31, 2001                       $12,000,000


Attached hereto are all relevant facts in reasonable detail to evidence, and the
computations of the financial covenants referred to above. These computations
were made in accordance with GAAP.


                                      -13-

<PAGE>   14


                                       SHELDAHL, INC.

                                       By
                                         ---------------------------------------
                                         Jill Burchill
                                         Its Chief Financial Officer


                                      -14-