Document:

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                                                                     EXHIBIT 4.1

                              FORBEARANCE AGREEMENT

                  This Forbearance Agreement (this "Forbearance Agreement") is
entered into as of December 8, 2001 in connection with that certain Fourth
Amended and Restated Credit Agreement dated as of June 8, 2001, as amended by a
First Amendment thereto dated September 27, 2001 and as further amended by a
Second Amendment dated November 14, 2001 (as amended, the "Credit Agreement"),
among Oxford Automotive, Inc., a Michigan corporation (the "Company"), Oxford
Automotive Canada, Ltd. (the "Borrowing Subsidiary" and together with the
Company, the "Borrowers"), the Lenders (as defined below) party hereto, Citicorp
USA, Inc., as agent for the Lenders and the Issuers (in such capacity, the
"Administrative Agent") and as collateral agent for the Secured Parties (as
defined therein), Comerica Bank, in its capacity as syndication agent for the
Lenders and the Issuers and Credit Suisse First Boston, in its capacity as
documentation agent for the Lenders and the Issuers. Unless otherwise defined
herein, capitalized terms used herein shall have the meanings ascribed to such
terms in the Credit Agreement.

                             PRELIMINARY STATEMENTS

                  A. Pursuant to the Credit Agreement, the Lenders have made
certain loans and other extensions of credit available to the Borrowers and the
Borrowers have granted to the Collateral Agent, for the benefit of the Secured
Parties, liens on, and security interests in, substantially all of their assets
as security for the Obligations.

                  B. The outstanding principal amount of the Loans and Letter of
Credit Obligations owing to the Lenders as of December 7, 2001 is
$170,166,895.41.

                  C. The Company has failed (i) to comply with the covenants
contained in Section 6.1(a), 6.1(b) and 6.1(d) of the Credit Agreement
pertaining to the Leverage Ratio (the "Leverage Covenant"), the Interest
Coverage Ratio (the "Interest Coverage Covenant") and minimum EBITDA
requirements (the "Minimum EBITDA Covenant"), respectively, for the Fiscal
Quarter ended September 30, 2001, (ii) to comply with the covenant contained in
Section 3 of the Second Amendment that requires the Company to put in place a
deposit account control agreement with respect to each deposit account
maintained by the Company or any Subsidiary thereof and (iii) to comply with the
covenant set forth in Section 3(c) of the Second Amendment that requires that
the Company satisfy certain requirements set forth on Annex II thereto; each of
the foregoing constitutes an Event of Default under Article VII of the Credit
Agreement, in addition, in connection with the foregoing Events of Default, a
further Event of Default has occurred under Section 7.1(e) (Cross Default) in
connection with the default by the Company under the Mexican Facility Documents
caused by the foregoing Events of Default (such Events of Defaults are
collectively referred to herein as the "Existing Events of Default"). Each
Existing Event of Default has occurred and is continuing.

                  D. The Borrowers have requested that the Lenders agree and,
subject to the terms and conditions of this Forbearance Agreement, the Lenders
have agreed, to forbear from exercising the remedies provided for under the
Credit Agreement for the Forbearance Period, other than the Lenders' right to
issue the Blockage Notice (as defined below).

                  E. Exercising their intercreditor rights pursuant to the terms
of the Senior Subordinated Note Indenture, the Lenders have issued a notice (the
"Blockage Notice") to the Trustee of the Senior Subordinated Notes thereby
blocking the Company's payment of an interest

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payment due to the holders of its Senior Subordinated Notes on December 15, 2001
(the "December Interest Payment").

                  F. As a consequence of the issuance of the Blockage Notice,
the Company will not make the December Interest Payment thereby causing an Event
of Default under (a) Section 7.1 (c) of the Credit Agreement which provides for
an Event of Default if the Company fails to comply with any negative covenant
set forth in Article VI, including, but not limited to, Section 6.14 (a) of the
Credit Agreement which prohibits the Company from breaching or permitting a
default to exist under any Leases, material contracts and other material
agreements, or take or fail to take any action thereunder, if to do so would
have a Material Adverse Effect and (b) Section 7.1(e) which provides for an
Event of Default if the Company or any of their Restricted Subsidiaries fail to
pay when due any Indebtedness aggregating in excess of $5,000,000 (such Events
of Defaults are collectively referred to herein as the "Anticipated Events of
Default".

                  G. As a result of the occurrence and continuation of the
Existing Events of Default and, following the occurrence thereof, the occurrence
and continuation of the Anticipated Events of Default, pursuant to the Credit
Agreement, the Lenders are entitled, among other things, to enforce their rights
and remedies against the Borrowers, the Guarantors and the Collateral,
including, without limitation, the right to terminate the Commitments,
accelerate and immediately demand payment in full of all Obligations and
foreclose on the Collateral.

                  NOW, THEREFORE, in consideration of the foregoing and the
agreements, promises and covenants set forth below, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

         SECTION 1. DEFINITIONS. The following terms shall have the following
meanings:

                  "Anticipated Events of Default" shall have the meaning
specified in the Preliminary Statements.

                  "Existing Events of Default" shall have the meaning specified
in the Preliminary Statements.

                  "Forbearance Default" shall have the meaning set forth in
Section 4 hereof.

                  "Forbearance Period" shall mean the period commencing on the
date hereof and ending on the earliest to occur of (i) the date of the
termination of the Forbearance Period pursuant to Section 3 hereof, (ii) the
date on which all of the Obligations have been paid in full and the Credit
Agreement terminated, (iii) the Forbearance Termination Date, (iv) the effective
date of an amendment to the Credit Agreement in form and substance satisfactory
to the Requisite Lenders and (v) the termination of the Forbearance Agreement
dated on or about the date hereof and entered into by and between the Company,
the Mexican Trust, Bank of Montreal, as Funding Agent for the Mexican Lenders,
the Mexican Lenders and the Class I Certificateholders (as defined in the
Mexican Facility Documents).

                  "Forbearance Termination Date" shall mean 11:59 p.m. on
January 14, 2002.

                  "Permitted Intercompany Loan" shall mean (i) Investments in
Oxford Automotriz de Mexico S.A. de C.V. in an aggregate amount not to exceed
$1,000,000 and (ii) Investments in the Borrowing Subsidiary in an aggregate
amount not to exceed $2,500,000; provided, that (x) in each case such Investment
shall be made as an intercompany loan from the

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Company to the relevant Subsidiary and shall documented by an intercompany note
in form and substance satisfactory to the Administrative Agent, and (y) each
such intercompany note shall be pledged as security for the Obligations of the
Company and delivered to the Collateral Agent pursuant to the terms of the
Pledge and Security Agreement prior to the making of the intercompany loan by
the Company.

         SECTION 2. ACKNOWLEDGMENT. The Borrowers hereby acknowledge that (a)
the aggregate outstanding principal amount of all Loans and Letter of Credit
Obligations is equal to $170,166,895.41 as December 7, 2001, (b) the Existing
Events of Default have occurred and are continuing under the terms of the Credit
Agreement, (c) the Loans shall now bear interest at the rate provided for in
Section 2.11(c) of the Credit Agreement, (d) no Loans shall be converted to, or
continued as, Eurocurrency Rate Loans and (e) absent the effectiveness of this
Forbearance Agreement and subject to Article VII of the Credit Agreement, the
Lenders would have no Commitments under the Credit Agreement and would have the
right to immediately enforce payment of all Obligations and, in connection
therewith, to immediately enforce their security interests in, and liens on, the
Collateral.

         SECTION 3. FORBEARANCE.

                  (a) During the Forbearance Period, provided that no
Forbearance Default occurs, the Lenders will not exercise their rights under
Section 7.2 of the Credit Agreement or under any other Loan Document with
respect to the Existing Events of Default or the Anticipated Events of Default,
to terminate the Commitments, declare the Loans or other amounts and Obligations
to be due and payable or to exercise any remedies provided for by the Collateral
Documents; provided, however, that notwithstanding the foregoing, the Lenders
reserve their right to send a Blockage Notice to any Blocked Account Bank at any
time during the Forbearance Period or thereafter.

                  (b) Upon the occurrence of any Forbearance Default, the
Administrative Agent and the Lenders shall be entitled to terminate the
Forbearance Period and to exercise all of their rights and remedies under
Section 7.2 of the Credit Agreement or any other Loan Document, including, but
not limited to, their rights under Section 7.2 of the Credit Agreement or under
any other Loan Document with respect to the Existing Events of Default or the
Anticipated Events of Default to terminate the Commitments, declare the Loans or
other amounts and Obligations to be due and payable or to exercise any remedies
provided for by the Collateral Documents.

         SECTION 4. FORBEARANCE DEFAULTS. The occurrence of any one of the
following events or conditions shall be deemed a "Forbearance Default":

                  (a) The Borrowers shall fail to observe or perform any term,
covenant, or agreement binding on it contained in this Forbearance Agreement, or
any agreement, instrument, or document executed in connection herewith;

                  (b) Any Loan Party shall make any Investment in any Foreign
Subsidiary or any Unrestricted Subsidiary other than a Permitted Intercompany
Loan;

                  (c) The Borrowers shall fail to deliver to the Administrative
Agent a Blocked Account Letter or Control Account Letter executed by the Company
and each financial institution with which a Loan Party maintains a deposit
account, a Securities Account or a Commodities Account, a Blocked Account Letter
(with respect to each deposit account) in each case substantially in the form of
Annex I to the Second Amendment (with such changes as may be

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agreed to by the Collateral Agent) or a Control Account Letter (with respect to
each Securities Account and Commodities Account), no later than December 14,
2001 or such later date as consented to by the Administrative Agent;

                  (d) The Company shall not have complied with those items
listed on Annex II to the Second Amendment prior to December 14, 2001, or such
later date as consented to by the Administrative Agent;

                  (e) The Lenders shall have determined that there has occurred
any condition or event which has or might have a (i) Material Adverse Effect or
(iii) material and adverse change, from and after the date hereof, in the value
of the Collateral;

                  (f) Any Loan Party or any other Person shall bring any action
in any judicial, administrative or other proceeding against any Lender or the
Administrative Agent (i) disputing the validity or enforceability of any Loan
Document or this Forbearance Agreement or any Loan Party's obligations
thereunder, or the validity, priority, enforceability or extent of the
Collateral Agent's liens and security interests in or against any item of
Collateral, (ii) disputing the existence or amount of the outstanding
Obligations as acknowledged in this Forbearance Agreement, or (iii) alleging or
otherwise asserting any of the claims released by the Borrowers pursuant to
Section 7 below;

                  (g) Any holder or holders of any Indebtedness of the Company
or any of its Subsidiaries in excess of $1,000,000, takes any action or gives
notice to any Loan Party, the Administrative Agent or any Lender that such
Person intends to take any action (including acceleration of such Indebtedness),
to pursue any remedy available with respect to the indebtedness owed to such
Person other than the litigation brought by Credit Lyonnais Chicago Branch
against the Company and the Administrative Agent currently pending in the United
States District Court, Southern District of New York;

                  (h) The Company or any Subsidiary pays to Oxford Investment
Group, Inc. any base management fee, any investment banking fee or any other
fee;

                  (i) The Company shall not have engaged a restructuring advisor
acceptable to the Administrative Agent, or shall not have delivered to the
Lenders a copy of the engagement letter providing for the Company's engagement
of such restructuring advisor, executed by the Company and such restructuring
advisor prior to December 14, 2001 or such later date as consented to by the
Administrative Agent; or

                  (j) The occurrence of any Event of Default under the Credit
Agreement (without giving effect to any of the grace period provided for in
Section 7.1 of the Credit Agreement) that is not an Existing Event of Default or
an Anticipated Event of Default.

                    The occurrence of any Forbearance Default shall constitute
an Event of Default under the Credit Agreement and the other Loan Documents.

         SECTION 5. PROHIBITION ON REVOLVING CREDIT OUTSTANDINGS AND SWING
LOANS. From the Forbearance Effective Date until such time as there is no
Default or Event of Default continuing, no Lender, no Swing Loan Lender, no
Issuer and no Canadian Lender shall be obligated to make any Revolving Loan,
make any Swing Loan, issue any Letter of Credit or accept any Banker's
Acceptance, respectively, to any Borrower.

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         SECTION 6. THIRD PARTY AGREEMENTS. Each Loan Party agrees that in the
event any Loan Party enters into an similar type of agreement with any creditor
of such Loan Party other than the Administrative Agent or the Lenders under the
Credit Agreement on terms that are more favorable to such third party creditor
than the terms provided for herein in favor of the Lenders, then, upon receipt
of notice from the Administrative Agent, and without any further action, this
Forbearance Agreement shall be amended to include such favorable terms, in form
and substance appropriate to the Facilities, except where such amendment shall
cause such Loan Party to be in violation of any Requirement of Law or where the
Requisite Lenders shall agree not to make such amendment to this Forbearance
Agreement.

         SECTION 7. RELEASES. In further consideration of the Lenders' execution
of this Forbearance Amendment, each Loan Party hereby releases the
Administrative Agent, each Lender and each Issuer and their respective
affiliates, officers, employees, directors, agents and attorneys (collectively,
the "Releasees") from any and all claims, demands, liabilities,
responsibilities, disputes, causes of action (whether at law or equity) and
obligations of every nature whatsoever, whether liquidated or unliquidated,
known or unknown, matured or unmatured, fixed or contingent that such Loan Party
may have against Releasees which arise from or relate to the Obligations, any
Collateral, any Loan Document, any documents, agreements, dealings or other
matters in connection with any of the Loan Documents, and any third parties
liable in whole or in part for the Obligations, in each case to the extent
arising (x) on or prior to the date hereof or (y) out of, or relating to,
actions, dealings or matters occurring on or prior to the date hereof
(including, without limitation, any actions or inactions which Releasees may
have taken prior to the date hereof).

         SECTION 8. REPRESENTATIONS AND WARRANTIES.

                  (a) Each Loan Parties expressly reaffirms that each of the
representations and warranties set forth in Article IV of the Credit Agreement
and in each other Loan Document made by such Loan Party, except with respect to
Existing Events of Default or Anticipated Events of Default, continues to be
accurate and complete, and hereby remakes and incorporates herein by reference
each such representation and warranty as though made on the date of the
execution of this Forbearance Agreement.

                  (b) Where the context permits, each representation and
warranty set forth in Article IV of the Credit Agreement shall be deemed to
apply to the transactions contemplated by this Forbearance Agreement.

                  (c) In addition, each Loan Party represents and warrants to
the Lenders and the Administrative Agent as follows:

                  (i) No Loan Party has assigned, conveyed or otherwise
         transferred, either directly or indirectly, in whole or in part, any of
         the claims purported to be released pursuant to Section 7 above.

                  (ii) Neither this Forbearance Agreement nor any other document
         or statement furnished by or on behalf of any Loan Party to the
         Administrative Agent or any Lender hereunder or in connection herewith
         contained, contains or will contain any material misstatement of fact
         or omitted, omits or will omit to state any material fact necessary to
         make the statements therein, in the light of the circumstances under
         which they were, are or will be made, not misleading; provided that to
         the extent any such document or statement was based upon or constitutes
         a forecast or projection, the

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         Company represents only that it acted in good faith and utilized
         reasonable assumptions and due care in the preparation of such document
         or statement.

                  (d) Each Loan Party's representations and warranties contained
in this Forbearance Agreement shall survive the execution, delivery and
acceptance of this Forbearance Agreement by the parties hereto.

         SECTION 9. STATUS OF LOAN DOCUMENTS; NO NOVATION.

                  (a) Notwithstanding any other provision hereof, the execution,
delivery and effectiveness of this Forbearance Agreement shall not operate as a
waiver of any right, power or remedy of any Lender, any Issuer, the
Administrative Agent or the Collateral Agent under the Credit Agreement or any
of the Loan Documents, nor constitute a waiver of any provision of the Credit
Agreement or any of the Loan Documents including, but not limited to, with
respect to any Existing Event of Default or Anticipated Event of Default, other
than with respect to the Lenders' agreement to forbear as set forth in Section
3.

                  (b) Except as otherwise expressly provided in this Forbearance
Agreement, and both during and following the termination or expiration of the
Forbearance Period, the Credit Agreement, the other Loan Documents and each Loan
Party's Obligations thereunder shall remain in full force and effect, and shall
not be waived, modified, superseded or otherwise affected by this Forbearance
Agreement.

                  (c) This Forbearance Agreement is not a novation nor is it to
be construed as a release, waiver or modification of any of the terms,
conditions, representations, warranties, covenants, rights or remedies set forth
in the Credit Agreement, or any of the other Loan Documents, except as
specifically set forth herein. Except as expressly provided herein, the Lenders
reserve all rights, claims and remedies that they have or may have against the
Loan Parties.

         SECTION 10. TERM OF AGREEMENT. This Forbearance Agreement shall become
effective as provided herein, and shall remain in effect for the duration of the
Forbearance Period.

         SECTION 11. ACKNOWLEDGMENT OF VALIDITY AND ENFORCEABILITY OF LOAN
DOCUMENTS. Each Loan Party expressly acknowledges and agrees that the Credit
Agreement and the Loan Documents to which it is a party are valid and
enforceable by the Lenders against such Loan Party and each Loan Party expressly
reaffirms each of its Secured Obligations under the Credit Agreement and/or each
of the Loan Documents to which it is a party. Each Loan Party further expressly
acknowledges and agrees that the Administrative Agent has, for the benefit of
the Administrative Agent and the Lenders, a valid, duly perfected and fully
enforceable security interest in and lien against each item of Collateral. Each
Loan Party agrees that it shall not dispute the validity or enforceability of
the Credit Agreement or any of the Loan Documents or any of its Secured
Obligations thereunder, or the validity, priority, enforceability or extent of
the Administrative Agent's security interest in or lien against any item of
Collateral, in any judicial, administrative or other proceeding, either during
or following the termination or expiration of the Forbearance Period.

         SECTION 12. CONDITIONS PRECEDENT. This Forbearance Agreement shall
become effective as of 12:00 AM on December 8, 2001 (the "Forbearance Effective
Date") on the date when the Administrative Agent shall have received all of the
following, all of which shall be in

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form and substance satisfactory to the Administrative Agent, in sufficient
executed copies for each of the Lenders:

                  (a) The Administrative Agent shall have received copies of
this Forbearance Agreement executed and delivered by the Lenders constituting
the Requisite Lenders, the Loan Parties and acknowledged and agreed to by the
Guarantors;

                  (b) The Administrative Agent shall have received from the
Borrowers a certificate of the chief executive officer of the Company to the
effect that (a) each of the representations and warranties contained in this
Forbearance Agreement are true and correct as of the Effective Date, (b) each of
the representations and warranties made by the Borrowers or any Subsidiary
Guarantor in or pursuant to the Credit Agreement and the other Loan Documents to
which the Borrowers or any of the Subsidiary Guarantors is a party or by which
the Borrowers, or any of the Subsidiary Guarantor is bound, is true and correct
in all material respects, other than with respect to any Existing Event of
Default or Anticipated Event of Default, on and as of the Forbearance Effective
Date (other than representations and warranties in any such Loan Document which
expressly speak as of a different date) and (c) no Forbearance Event of Default
shall have occurred and be continuing on the Forbearance Effective Date;

                  (c) The Borrowers shall have paid a fee to the Lenders in an
amount equal to 0.20% of the aggregate amount of the Facilities and other
amounts due and payable pursuant to the fee letter entered into with the
Administrative Agent dated as of the date hereof; and

                  (d) The Borrowers shall have paid to Ernst & Young Corporate
Finance LLC and to Weil, Gotshal & Manges, LLP, all amounts due and owing
thereto as of November 30, 2001, in addition, the Borrowers shall have paid a
deposit fee equal to $150,000 to each of Ernst & Young Corporate Finance LLC and
Weil, Gotshal & Manges, LLP which deposits shall be maintained at such levels
from and after the Forbearance Effective Date.

         SECTION 13. COSTS AND EXPENSES. The Borrowers agree to pay on demand in
accordance with the terms of Section 9.3 of the Credit Agreement all costs and
expenses of the Administrative Agent in connection with the preparation,
reproduction, execution and delivery of this Forbearance Agreement and all other
Loan Documents entered into in connection herewith, including the reasonable
fees, expenses and disbursements of Weil, Gotshal & Manges LLP, counsel for the
Administrative Agent and Ernst & Young Corporate Finance LLC, advisors to the
Administrative Agent.

         SECTION 14. AMENDMENTS. No amendment or modification of any provision
of this Forbearance Agreement shall be effective without the written agreement
of the Requisite Lenders, the Administrative Agent and the Borrowers, and no
termination or waiver of any provision of this Forbearance Agreement, or consent
to any departure by the Borrowers therefrom, shall in any event be effective
without the written concurrence of the Lenders and the Administrative Agent. Any
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given. No notice to or demand upon the
Borrowers in any case shall entitle the Borrowers to any other or further notice
or demand in similar or other circumstances.

         SECTION 15. NO WAIVER. The Lenders' failure, at any time or times
hereafter, to require strict performance by the Borrowers of any provision or
term of this Forbearance Agreement shall not waive, affect or diminish any right
of the Lenders thereafter to demand strict

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compliance and performance therewith. Any suspension or waiver by the Lenders of
a Forbearance Default or of an Event of Default shall not, except as may be
expressly set forth herein, suspend, waive or affect any other Forbearance
Default or any Event of Default, whether the same is prior or subsequent thereto
and whether of the same or of a different kind or character. None of the
undertakings, agreements, warranties, covenants and representations of the
Borrowers contained in this Forbearance Agreement, the Credit Agreement or in
any of the other Loan Documents, and no Forbearance Default or Event of Default
shall be deemed to have been suspended or waived by the Lenders unless such
suspension or waiver is (a) in writing and signed by the Lenders, and (b)
delivered to the Borrowers.

         SECTION 16. LIMITATION ON RELATIONSHIP BETWEEN PARTIES. The
relationship of the Lenders on the one hand, and the Borrowers, on the other
hand, has been and shall continue to be, at all times, that of creditor and
debtor. Nothing contained in this Forbearance Agreement, any instrument,
document or agreement delivered in connection therewith or in the Credit
Agreement or any of the other Loan Documents shall be deemed or construed to
create a fiduciary relationship between the parties.

         SECTION 17. GOVERNING LAW; JURISDICTION; SERVICE OF PROCESS; ETC.

                  (a) This Forbearance Agreement shall be interpreted, and the
rights and liabilities of the parties determined, in accordance with the
internal law of the State of New York.

                  (b) Except as provided below, the Administrative Agent, the
Lenders, and each Loan Party each agree that all disputes among or between them
arising out of, connected with, related to, or incidental to the relationship
established among or between them in connection with this Forbearance Agreement,
and whether arising in contract, tort, equity, or otherwise, shall be resolved
only by state or Federal courts located in New York County, New York, but the
Administrative Agent, the Lenders and each Loan Party each acknowledge that any
appeals from those courts may have to be heard by a court located outside of New
York County, New York. Each Loan Party waives in all disputes any objection that
it may have to the location of the court considering the dispute. Each Loan
Party agrees that the Administrative Agent and the Lenders shall have the right
to proceed against each Loan Party and its property in a court in any location
to enable the Administrative Agent and the Lenders to enforce a judgment or
other court order entered in favor of the Administrative Agent or any Lender.
Each Loan Party agrees that it will not assert any permissive counterclaims in
any proceeding brought by the Administrative Agent or any Lender to enforce a
judgment or other court order in favor of the Administrative Agent or any
Lender. Each Loan Party waives any objection that it may have to the location of
the court in which the Administrative Agent or any Lender has commenced a
proceeding described in this paragraph.

         SECTION 18. WAIVER OF JURY TRIAL. EACH OF THE ADMINISTRATIVE AGENT, THE
SYNDICATION AGENT, THE DOCUMENTATION AGENT, THE LENDERS, THE ISSUERS AND THE
LOAN PARTIES IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.

         SECTION 19. WAIVER OF BOND. The Loan Parties waive the posting of any
bond otherwise required of the Administrative Agent or any Lender in connection
with any judicial process or proceeding to enforce any judgment or other court
order entered in favor of the Administrative Agent or any Lender or to enforce
by specific performance, temporary restraining order, preliminary or permanent
injunction, or this Forbearance Agreement.

                                       8
<PAGE>

         SECTION 20. TITLES. The Section titles contained in this Forbearance
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.

         SECTION 21. EXECUTION IN COUNTERPARTS. This Forbearance Agreement may
be executed and delivered in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed and delivered
shall be deemed an original and all of which taken together shall constitute one
and the same original agreement.

         SECTION 22. NOTICES. All communications and notices to the
Administrative Agent hereunder shall be given as provided in the Credit
Agreement.

         SECTION 23. SEVERABILITY. If any term or provision set forth in this
Forbearance Agreement shall be invalid or unenforceable, the remainder of this
Forbearance Agreement, or the application of such terms or provisions to persons
or circumstances, other than those to which it is held unenforceable, shall not
in any way be affected or impaired thereby.

         SECTION 24. NO ASSIGNMENT. This Forbearance Agreement shall not be
assignable by the Borrowers without the written consent of the Lenders. The
Lenders may assign to one or more Persons all or any part of, or any
participation interest in, the Lenders' rights and benefits hereunder.

         SECTION 25. SUCCESSORS. The terms of this Forbearance Agreement shall
be binding upon, and shall inure to the benefit of, the parties hereto and their
respective successors or permitted assigns and no other Person shall have any
right, benefit or interest under or because of the existence of this Forbearance
Agreement.

                  [REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]

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IN WITNESS WHEREOF, this Forbearance Agreement has been duly executed as of the
date first written above.

                                    Borrowers:

                                    Oxford Automotive, Inc.

                                    By:   /s/ Aurelian Bukatko
                                        ----------------------------------
                                          Name:  Aurelian Bukatko
                                          Title:  Vice President and CFO

                                    Oxford Automotive Canada Ltd.

                                    By:   /s/ Aurelian Bukatko
                                        ----------------------------------
                                          Name:  Aurelian Bukatko
                                          Title:  Vice President and CFO

                                    Subsidiary Guarantors:

                                    Lobdell Emery Corporation
                                    Lewis Emery Capital Corporation
                                    Parallel Group International, Inc.
                                    Laserweld International, L.L.C.
                                    Concept Management Corporation
                                    Creative Fabrication Corporation
                                    Winchester Fabrication Corporation
                                    OASP, Inc.
                                    OASP II, Inc.
                                    RPI Holdings, Inc.
                                    RPI, Inc.
                                    Prudenville Manufacturing Inc.
                                    Oxford Suspension, Inc.
                                    Howell Industries, Inc.
                                    CE Technologies, Inc.
                                    Tool And Engineering Company
                                    976459 Ontario Limited

                                    By:   /s/ Aurelian Bukatko
                                        ----------------------------------
                                          Name:  Aurelian Bukatko
                                          Title:  Vice President and CFO

                     SIGNATURE PAGE TO FORBEARANCE AGREEMENT

<PAGE>

                                    Administrative Agent and Collateral Agent:

                                    Citicorp USA, Inc.

                                    By: /s/ Gregory Frenzel
                                       ----------------------------
                                       Name: Gregory Frenzel
                                       Title: Senior Vice President

                                    Issuer:

                                    Citibank, N.A.

                                    By: /s/ Gregory Frenzel
                                       ----------------------------
                                       Name: Gregory Frenzel
                                       Title: Senior Vice President

                                    Lenders:

                                    Bank of Montreal

                                    By:
                                       ----------------------------
                                       Name:
                                       Title:

                                    The Bank of New York

                                    By: /s/ Joshua Feldman
                                       ----------------------------
                                       Name: Joshua Feldman
                                       Title: Vice President

                                    The Bank of Nova Scotia

                                    By:
                                       ----------------------------
                                       Name:
                                       Title:

                                    Bankers Trust Company

                                    By: /s/ Mary Jo Jolley
                                       ----------------------------
                                       Name: Mary Jo Jolley
                                       Title: Assistant Vice President

                     SIGNATURE PAGE TO FORBEARANCE AGREEMENT
<PAGE>

                                    Deutsche Bank AG, Canada Branch

                                    By: /s/ Karyn Curram
                                       ----------------------------
                                       Name: Karyn Curram
                                       Title: Credit Product Manager

                                    By: /s/ Jens Lohmueller
                                       ----------------------------
                                       Name: Jens Lohmueller
                                       Title: Vice President

                                    Citicorp USA, Inc.

                                    By: /s/ Gregory Frenzel
                                       ----------------------------
                                       Name: Gregory Frenzel
                                       Title: Senior Vice President

                                    Citibank Canada

                                    By:
                                       ----------------------------
                                       Name:
                                       Title:

                                    Comerica Bank

                                    By:
                                       ----------------------------
                                       Name:
                                       Title:

                                    Credit Suisse First Boston

                                    By: /s/ Carol Flatin
                                       ----------------------------
                                       Name: Carol Flatin
                                       Title: Director

                                    By: /s/ Didier Siffer
                                       ----------------------------
                                       Name: Didier Siffer
                                       Title: Vice President

                     SIGNATURE PAGE TO FORBEARANCE AGREEMENT

<PAGE>

                                    Credit Suisse First Boston Canada

                                    By:
                                       ----------------------------
                                       Name:
                                       Title:

                                    By:
                                       ----------------------------
                                       Name:
                                       Title:

                                    Fifth Third Bank, N.A.
                                    (formerly, Fifth Third Bank, Northwestern
                                    Ohio, N.A.)

                                    By: /s/ Dirk Van Heyst
                                       ----------------------------
                                       Name: Dirk Van Heyst
                                       Title: Senior Vice President

                                    The JP Morgan Chase Bank

                                    By: /s/ Anna Marie Fallon
                                       ----------------------------
                                       Name: Anna Marie Fallon
                                       Title: Vice President

                                    The JP Morgan Chase Bank, Toronto Branch

                                    By: /s/ Anna Marie Fallon
                                       ----------------------------
                                       Name: Anna Marie Fallon
                                       Title: Vice President

                                    National Bank of Canada

                                    By: /s/ Jack Jankovic
                                       ----------------------------
                                       Name: Jack Jankovic
                                       Title: Vice President

                                    By: /s/ Lucy Blumer
                                       ----------------------------
                                       Name: Lucy Blumer
                                       Title: Assistant Vice President

                     SIGNATURE PAGE TO FORBEARANCE AGREEMENT<PAGE>

                                                                     EXHIBIT 4.3

                                CYBERONICS, INC.

                        1991 EMPLOYEE STOCK PURCHASE PLAN
                               (SECOND AMENDMENT)

     The following constitute the provisions of the 1991 Employee Stock Purchase
Plan of Cyberonics, Inc., as amended November 29, 2001.

1. Purpose. The purpose of the Plan is to provide employees of the Company and
its Designated Subsidiaries with an opportunity to purchase Common Stock of the
Company through accumulated payroll deductions. It is the intention of the
Company to have the Plan qualify as an "Employee Stock Purchase Plan" under
Section 423 of the Internal Revenue Code of 1986, as amended. The provisions of
the Plan, accordingly, shall be construed so as to extend and limit
participation in a manner consistent with the requirements of that section of
the Code.

2. Definitions.

         (a) "Board" shall mean the Board of Directors of the Company.

         (b) "Code" shall mean the Internal Revenue Code of 1986, as amended.

         (c) "Common Stock" shall mean the Common Stock of the Company.

         (d) "Company" shall mean Cyberonics, Inc., a Delaware corporation.

         (e) "Compensation" shall mean all base straight time gross earnings,
overtime, shift premium and commissions, but shall exclude incentive
compensation, incentive payments, bonuses and other compensation.

         (f) "Designated Subsidiaries" shall mean the Subsidiaries which have
been designated by the Board from time in its sole discretion as eligible to
participate in the Plan.

         (g) "Employee" shall mean any individual who is an employee of the
Company or a Designated Subsidiary for purposes of tax withholding under the
Code whose customary employment with the Company or any Designated Subsidiary is
for at least twenty (20) hours per week and for more than five (5) months in any
calendar year. For purposes of the Plan, the employment relationship shall be
treated as continuing intact while the individual is on sick leave or other
leave of absence approved by the Company or a Designated Subsidiary. Where the
period of leave exceeds 90 days and the individual's right to reemployment is
not guaranteed either by statute or by contract, the employment relationship
will be deemed to have terminated on the 91st day of such leave.

         (h) "Enrollment Date" shall mean the first day of each Offering Period.

         (i) "Exercise Date" shall mean the last day of each Offering Period.

         (j) "Fair Market Value" shall mean, as of any date, the value of Common
Stock determined as follows:

                      (1)If the Common Stock is listed on any established stock
                  exchange or a national market system, including without
                  limitation the National Market System of the National
                  Association of Securities Dealers, Inc. Automated Quotation
                  ("NASDAQ") System, its Fair Market Value shall be the closing
                  sale price for the Common Stock (or the mean of the closing
                  bid and asked prices, if no sales were reported), as quoted on
                  such exchange (or the exchange with the greatest volume of
                  trading in Common Stock) or system on the date of such
                  determination, as reported in the Wall Street Journal or such
                  other source as the Board deems reliable, or

                      (2)If the Common stock is quoted on the NASDAQ system (but
                  not on the National Market System thereof) or is regularly
                  quoted by a recognized securities dealer but selling prices
                  are not
<PAGE>

                  reported, its Fair Market Value shall be the mean of the
                  closing bid and asked prices for the Common Stock on the date
                  of such determination, as reported in the Wall Street Journal
                  or such other sources as the Board deems reliable, or

                      (3)In the absence of an established market for the Common
                  Stock, the Fair Market Value thereof shall be determined in
                  good faith by the Board.

         (k) "Offering Period" shall mean a period of approximately six (6)
months, commencing (i) on the first Trading Day on or after December 1 and
terminating on the last Trading Day in the period ending the following May 30 or
(ii) on or after June 1 and terminating on the last Trading Day in the period
ending the following November 30, during which an option granted pursuant to the
Plan may be exercised.

         (l) "Plan" shall mean this Employee Stock Purchase Plan.

         (m) "Purchase Price" shall mean an amount equal to 85% of the Fair
Market Value of a share of Common Stock on the Enrollment Date or on the
Exercise Date, whichever is lower.

         (n) "Reserves" shall mean the number of shares of Common Stock covered
by each option under the Plan which has not yet been exercised and the number of
shares of Common Stock which have been authorized for issuance under the Plan
but not yet placed under option.

         (o) "Subsidiary" shall mean a corporation, domestic or foreign, of
which not less than 50% of the voting share are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary.

         (p) "Trading Day" shall mean a day on which national stock exchanges
and the National Association of Securities Dealers Automated Quotation (NASDAQ)
System are open for trading.

3. Eligibility.

                (a) Any Employee who, on a given Enrollment Date, shall be
         employed by the Company or a Designated Subsidiary and shall have been
         an Employee for the 90-day period preceding such Enrollment Date shall
         be eligible to participate in the Plan for such Offering Period.

                (b) Any provisions of the Plan to the contrary notwithstanding,
         no Employee shall be granted an option under the Plan (i) to the
         extent, immediately after the grant, such Employee (or any other person
         whose stock would be attributed to such Employee pursuant to Section
         424(d) of the Code) would own capital stock of the Company and/or hold
         outstanding options to purchase such stock possessing five percent (5%)
         or more of the total combined voting power or value of all classes of
         the capital stock of the Company or of any Subsidiary, or (ii) to the
         extent his or her rights to purchase stock under all employee stock
         purchase plans of the Company and its Subsidiaries accrue at a rate
         which exceeds Twenty-Five Thousand Dollars ($25,000) worth of stock
         (determined at the Fair Market Value of the shares at the time such
         option is granted) for each calendar year in which such option is
         outstanding at any time.

4. Offering Periods.The Plan shall be implemented by consecutive Offering
Periods with a new Offering Period commencing on the first Trading Day on or
after June 1 and December 1 each year, or on such other date as the Board shall
determine, and continuing thereafter until terminated in accordance with Section
19 hereof. The Board shall have the power to change the duration of Offering
Periods (including the commencement dates thereof) with respect to future
offerings without shareholder approval if such change is announced at least
fifteen (15) days prior to the scheduled beginning of the first Offering Period
to be affected thereafter.

5. Participation.

                (a) An eligible Employee may become a participant in the Plan by
         completing a subscription agreement authorizing payroll deductions in
         the form of Exhibit A to this Plan and filing it with the Company's or
         Designated Subsidiary's payroll office at least five (5) business days
         prior to the applicable Enrollment Date,

                                       2
<PAGE>

         unless a later time for filing the subscription agreement is set by the
         Board for all eligible Employees with respect to a given Offering
         Period.

                (b) Payroll deductions for a participant shall commence on the
         first payroll following the Enrollment Date and shall end on the last
         payroll in the Offering Period to which such authorization is
         applicable, unless sooner terminated by the participant as provided in
         Section 10 hereof.

6. Payroll Deductions

                (a) At the time a participant files his or her subscription
         agreement, he or she shall elect to have payroll deductions made on
         each pay day during the Offering Period in an amount, expressed in
         whole percentages, of the Compensation which he or she receives on each
         pay day during the Offering Period not exceeding fifteen percent (15%),
         and the aggregate of such payroll deductions during the Offering Period
         shall not exceed fifteen percent (15%) of the participant's
         Compensation during said Offering Period.

                (b) All payroll deductions made for a participant shall be
         credited to his or her account under the Plan. A participant may not
         make any additional payments in such account.

                (c) A participant may discontinue his or her participation in
         the Plan as provided in Section 10 hereof, or may increase (but not
         above 15% of Compensation) or decrease the rate of his or her payroll
         deductions during the Offering Period by completing or filing with the
         Company or Designated Subsidiary a new subscription agreement
         authorizing a change in payroll deduction rate. The Board may, in its
         discretion, limit the number of participation rate changes during any
         Offering Period. The change in rate shall be effective with the first
         full payroll period following five (5) business days after the
         Company's or Designated Subsidiary's receipt of the new subscription
         agreement unless the Company or Designated Subsidiary elects to process
         a given change in participation more quickly. A participant's
         subscription agreement shall remain in effect for successive Offering
         Periods unless terminated as provided in Section 10 hereof.

                (d) Notwithstanding the foregoing, to the extent necessary to
         comply with Section 423(b)(8) of the Code and Section 3(b) hereof, a
         participant's payroll deductions may be decreased to 0% at such time
         during any Offering Period which is scheduled to end during the current
         calendar year (the "Current Offering Period") that the aggregate of all
         payroll deductions which were previously used to purchase stock under
         the Plan in a prior Offering Period which ended during that calendar
         year plus all payroll deductions accumulated with respect to the
         Current Offering Period equal $21,250. Payroll deductions shall
         recommence at the rate provided in such participant's subscription
         agreement at the beginning of the first Offering Period which is
         scheduled to end in the following calendar year, unless terminated by
         the participant as provided in Section 10 hereof.

                (e) At the time the option is exercised, in whole or in part, or
         at the time some or all of the Company's Common Stock issued under the
         Plan is disposed of, the participant must make adequate provision for
         the Company's or Designated Subsidiary's federal, state, or other tax
         withholding obligations, if any, which arise upon the exercise of the
         option or the disposition of the Common Stock. At any time, the Company
         or Designated Subsidiary may, but will not be obligated to, withhold
         from the participant's compensation the amount necessary for the
         Company or Designated Subsidiary to meet applicable withholding
         obligations, including any withholding required to make available to
         the Company or Designated Subsidiary any tax deductions or benefits
         attributable to a sale or early disposition of Common Stock by the
         Employee.

7. Grant of Option. On the Enrollment Date of each Offering Period, each
eligible Employee participating in such Offering Period shall be granted an
option to purchase on the Exercise Date of such Offering Period (at the
applicable Purchase Price) up to a number of shares of the Company's Common
Stock determined by dividing such Employee's payroll deductions accumulated
prior to such Exercise Date and retained in the participant's account as of the
Exercise Date by the applicable Purchase Price; provided that in no event shall
an Employee be permitted to purchase during each Offering Period more than a
number of Shares determined by dividing $12,500 by the Fair Market Value of a
share of the Company's Common Stock on the Enrollment Date, and provided further
that such purchase shall be subject to the limitations set forth in Sections
3(b) and 12 hereof. Exercise of the option shall occur as provided in Section 12
hereof, and shall expire on the last day of the Offering Period.

                                       3
<PAGE>

8. Exercise of Option. Unless a participant withdraws from the Plan as provided
in Section 10 hereof, his or her option for the purchase of shares will be
exercised automatically on the Exercise Date, and the maximum number of full
shares subject to option shall be purchased for such participant at the
applicable Purchase Price with the accumulated payroll deductions in his or her
account. No fractional shares will be purchased; any payroll deductions
accumulated payroll deductions in a participant's account which are not
sufficient to purchase a full share shall be retained in the participant as
provided in Section 10 hereof. Any other monies left over in a participant's
account after the Exercise Date shall be returned to the participant. During a
participant's lifetime, a participant's option to purchase shares hereunder is
exercisable only by him or her.

9. Deliver. As promptly as practicable after each Exercise Date on which a
purchase of shares occurs, the Company shall arrange the delivery to each
participant, as appropriate, of a certificate representing the shares purchased
upon exercise of his or her option.

10. Withdrawal: Termination of Employment.

                (a) A participant may withdraw all but not less than all the
         payroll deductions credited to his or her account and not yet used to
         exercise his or her option under the Plan at any time by giving written
         notice to the Company in the form of Exhibit B to this Plan. All of the
         participant's payroll deductions credited to his or her account will be
         paid to such participant promptly after receipt of notice of withdrawal
         and such participant's option for the Offering Period will be
         automatically terminated, and no further payroll deductions for the
         purchase of shares will be made during the Offering Period. If a
         participant withdraws from an Offering Period, payroll deductions will
         not resume at the beginning of the succeeding Offering Period unless
         the participant delivers to the Company a new subscription agreement.

                (b) Upon a participant's ceasing to be an Employee (as defined
         in Section 2(g) hereof), for any reason, including by virtue of him or
         her having failed to remain an Employee of the Company or a Designated
         Subsidiary for at least twenty (20) hours per week during an Offering
         Period in which the Employee is a participant, he or she will be deemed
         to have elected to withdraw from the Plan and the payroll deductions
         credited to such participant's account during the Offering Period but
         not yet used to exercise the option will be returned to such
         participant or, in the case of his or her death, to the person or
         persons entitled thereto under Section 14 hereof, and such
         participant's option will be automatically terminated.

                (c) A participant's withdrawal from an Offering Period will not
         have any effect upon his or her eligibility to participate in any
         similar plan which may hereafter be adopted by the Company or in
         succeeding Offering Periods which commence after the termination of the
         Offering Period from which the participant withdraws.

11. Interest. No interest shall accrue or be payable on the payroll deductions
of a participant in the Plan.

12. Stock.

                (a) The maximum number of shares of the Company's Common Stock
         which shall be made available for sale under the Plan shall be 950,000
         shares, subject to adjustment upon changes in capitalization of the
         Company as provided in Section 18 hereof. If on a given Exercise Date
         the Number of shares with respect to which options are to be exercised
         exceeds the number of shares then available under the Plan, the Company
         shall make a pro rata allocation of the shares remaining available for
         purchase in as uniform a manner as shall be practicable and as it shall
         determine to be equitable.

                (b) The participant will have no interest or voting right in
         shares covered by his option until such option has been exercised.

                (c) Shares to be delivered to a participant under the Plan will
         be registered in the name of the participant or in the name of the
         participant and his or her spouse.

13. Administration.

                                       4
<PAGE>

                (a) Administrative Body. The Plan shall be administered by the
         Board or a committee of members of the Board appointed by the Board.
         The Board or its committee shall have full and exclusive discretionary
         authority to construe, interpret and apply the terms of the Plan, to
         determine eligibility and to adjudicate all disputed claims filed under
         the Plan. Every finding, decision and determination made by the Board
         or its committee shall, to the full extent permitted by law, be final
         and binding upon all parties. Members of the Board who are eligible
         Employees are permitted to participate in the Plan, provided that:

                      (1) Members of the Board who are eligible to participate
                  in the Plan may not vote on any matter affecting the
                  administration of the Plan or the grant of any option pursuant
                  to the Plan.

                      (2) If a Committee is established to administer the Plan,
                  no member of the Board who is eligible to participate in the
                  Plan may be a member of the Committee.

                (b) Rule 16b-3 Limitations. Not withstanding the provisions of
         Subsection (a) of this Section 13, in the event that Rule 16b-3
         promulgated under the Securities Exchange Act of 1934, as amended (the
         "Exchange Act"), or any successor provision ("Rule 16b-3") provides
         specific requirements for the administrators of plans of this type, the
         Plan shall be only administered by such a body and in such a manner as
         shall comply with the applicable requirements of Rule 16b-3.

14. Designation of Beneficiary.

                (a) A participant may file a written designation of a
         beneficiary who is to receive any shares and cash, if any, from the
         participant's account under the Plan in the event of such participant's
         death subsequent to an Exercise Date on which the option is exercised
         but prior to delivery to such participant of such shares and cash. In
         addition, a participant may file a written designation of a beneficiary
         who is to receive any cash from the participant's account under the
         Plan in the event of such participant's death prior to exercise of the
         option. If a participant is married and the designated beneficiary is
         not the spouse, spousal consent shall be required for such designation
         to be effective.

                (b) Such designation of beneficiary may be changed by the
         participant at any time by written notice. In the event of the death of
         a participant and in the absence of a beneficiary validly designated
         under the Plan who is living at the time of such participant's death,
         the Company shall deliver such shares and/or cash to the executor or
         administrator of the estate of the participant, or if no such executor
         or administrator has been appointed (to the knowledge of the Company),
         the Company, in its discretion, may deliver such shares and/or cash to
         the spouse or to any one or more dependents or relatives of the
         participant, or if no spouse, dependent or relative is know to the
         Company, then to such other person as the Company may designate.

15. Transferability. Neither payroll deductions credited to a participant's
account nor any rights with regard to the exercise of an option or to receive
shares under the Plan may be assigned, transferred, pledged or otherwise
disposed of in any way (other than by will, the laws of descent and distribution
or as provided in Section 14 hereof) by the participant. Any such attempt at
assignment transfer, pledge or other disposition shall be without effect, except
that the Company may treat such act as an election to withdraw funds from an
Offering Period in accordance with Section 10 hereof.

16. Use of Funds. All payroll deductions received or held by the Company under
the Plan may be used by the Company for any corporate purpose, and the Company
shall not be obligated to segregate such payroll deductions.

17. Reports. Individual accounts will be maintained for each participant in the
Plan. Statements of account will be given to participating Employees at least
annually, which statements will set forth the amounts of payroll deductions, the
Purchase Price, the number of Shares purchased and the remaining cash balance,
if any.

18. Adjustments Upon Changes in Capitalization.

                (a) Changes in Capitalization. Subject to any required action by
         the shareholders of the Company, the Reserves as well as the price per
         share of Common Stock covered by each option under the Plan which has

                                       5
<PAGE>

         not yet been exercised shall be proportionately adjusted for any
         increase or decrease in the number of issued shares of Common Stock
         resulting from a stock split, reverse stock split, stock dividend,
         combination or reclassification of the Common Stock, or any other
         increase or decrease in the number of shares of Common Stock effected
         without receipt of consideration by the Company; provided, however,
         that conversion of any convertible securities of the Company shall not
         be deemed to have been "effected without receipt of consideration".
         Such adjustment shall be made by the Board, whose determination in that
         respect shall be final, binding and conclusive. Except as expressly
         provided herein, no issuance by the Company of shares of stock of any
         class, or securities convertible into shares of stock of any class,
         shall affect, and no adjustment by reason thereof shall be made with
         respect to, the number or price of shares of Common Stock subject to an
         option.

                (b) Dissolution or Liquidation. In the event of the proposed
         dissolution or liquidation of the Company, the Offering Period will
         terminate immediately prior to the consummation of such proposed
         action, unless otherwise provided by the Board.

                (c) Merger or Asset Sale. In the event of a proposed sale of all
         or substantially all of the assets of the Company, or the merger of the
         Company with or into another corporation, each option under the Plan
         shall be assumed or an equivalent option shall be substituted by such
         successor corporation or a parent or subsidiary of such successor
         corporation, unless the Board determines, in the exercise of its sole
         discretion and in lieu of such assumption or substitution, to shorten
         the Offering Period then in progress by setting a new Exercise Date
         (the "New Exercise Date") or to cancel each outstanding right to
         purchase and refund all sums collected from participants during the
         Offering Period the in progress. If the Board shortens the Offering
         Period then in progress in lieu of assumption or substitution in the
         event of a merger or sale of assets, the Board shall notify each
         participant in writing, at least ten (10) business days prior to the
         New Exercise Date, that the Exercise Date for his option has been
         changed to the New Exercise Date and that his option will be exercised
         automatically on the New Exercise Date, unless prior to such date he
         has withdrawn from the Offering Period as provided in Section 10
         hereof. For purposes of this paragraph, an option granted under the
         Plan shall be deemed to be assumed if, following the sale of assets or
         merger, the option confers the right to purchase, for each share of
         option stock subject to the option immediately prior to the sale of
         assets or merger, the consideration (whether stock, cash or other
         securities or property) received in the sale of assets or merger by
         holders of Common Stock for each share of Common Stock held on the
         effective date of the transaction (and if such holders were offered a
         choice of consideration, the type of consideration chosen by the
         holders of a majority of the outstanding shares of Common Stock);
         provided, however, that if such consideration received in the sale of
         assets or merger was not solely common stock of the successor
         corporation or its parent (as defined in Section 424(e) of the Code),
         the Board may, with the consent of the successor corporation and the
         participant, provide for the consideration to be received upon exercise
         of the option to be solely common stock of the successor corporation or
         its parent equal in the fair market value to the per share
         consideration received by holders of Common Stock and the sale of
         assets or merger.

                  The Board may, if it so determines in the exercise of its sole
         discretion, also make provision for adjusting the Reserves, as well as
         the price per share of Common Stock covered by each outstanding option,
         in the event the Company effects one or more reorganization,
         recapitalizations, rights offerings or other increases or reductions of
         shares of its outstanding Common Stock, and in the event of the Company
         being consolidated with or merged into any other corporation.

19. Amendment or Termination.

                (a) The Board of Directors of the Company may at any time and
         for any reason terminate or amend the Plan. Except as provided in
         Section 18 hereof, no such termination can affect options previously
         granted, provided that an Offering Period may be terminated by the
         Board of Directors on any Exercise Date if the Board determines that
         the termination of the Plan is in the best interests of the Company and
         its shareholders. Except as provided in Section 18 hereof, no amendment
         may make any change in any option theretofore granted which adversely
         affects the rights of any participant. To the extent necessary to
         comply with Section 423 of the Code (or any successor rule or provision
         or any other applicable law or regulation), the Company shall obtain
         shareholder approval in such a manner and to such a degree as required.

                                       6
<PAGE>

                (b) Without shareholder consent and without regard to whether
         any participant rights may be considered to have been "adversely
         affected," the Board (or its committee) shall be entitled to change the
         Offering Periods, limit the frequency and/or number of changes in the
         amount withheld during an Offering Period, establish the exchange ratio
         applicable to amounts withheld in a currency other than U.S. dollars,
         permit payroll withholding in excess of the amount designated by a
         participant in order to adjust for delays or mistakes in the Company's
         processing of properly completed withhold elections, establish
         reasonable waiting and adjustment periods and/or accounting and
         crediting procedures to ensure that amounts applied toward the purchase
         of Common Stock for each participant properly correspond with amounts
         withheld from the participant's Compensation, and establish such other
         limitations or procedures as the Board (or its committee) determines in
         its sole discretion advisable which are consistent with the Plan.

20. Notices. All notices or other communications by a participant to the Company
under or in connection with the Plan shall be deemed to have been duly given
when received in the form specified by the Company at the location, or by the
person, designated by the Company for the receipt thereof.

21. Conditions Upon Issuance of Shares. Shares shall not be issued with respect
to an option unless the exercise of such option and the issuance and delivery of
such shares pursuant thereto shall comply with all applicable provisions of law,
domestic or foreign, including, without limitation, the Securities Act of 1933,
as amended, the Securities Exchange Act of 1934, as amended, the rules and
regulations promulgated thereunder, and the requirements of any stock exchange
upon which the shares may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such compliance.

         As a condition to the exercise of an option, the Company may require
the person exercising such option to represent and warrant at the time of any
such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned applicable provisions of law.

22. Term of Plan. The Plan shall become effective upon the earlier to occur of
its adoption by the Board of Directors or its approval by the shareholders of
the Company. It shall continue in effect for a term of ten (10) years from the
later of (i) the effective date or (ii) the date of any amendment, unless sooner
terminated under Section 19 hereof.

23. Additional Restrictions of Rule 16b-3. The terms and conditions of options
granted hereunder to, and the purchase of shares by, persons subject to Section
16 of the Exchange Act shall comply with the applicable provisions of Rule
16b-3. This Plan shall be deemed to contain, and such options shall contain, and
the shares issued upon exercise thereof shall be subject to, such additional
conditions and restrictions as may be required by rule 16b-3 to qualify for the
maximum exemption from Section 16 of the Exchange Act with respect to Plan
transactions.

Adopted by the:

Board of Directors: December 10, 1991
Stockholders: January 7, 1992

First Amendment adopted by the:

Board of Directors: April 8, 1998
Stockholders: May 28, 1998

Second Amendment adopted by the:

Board of Directors: September 4, 2001
Stockholders: November 29, 2001

                                       7
<PAGE>

                                    EXHIBIT A

                                CYBERONICS, INC.
                        1991 EMPLOYEE STOCK PURCHASE PLAN
                             SUBSCRIPTION AGREEMENT

______ Original Application                    Enrollment Date: ____________
______ Change in Payroll Deduction Rate
______ Change of Beneficiary(ies)

1.   _______________ hereby elects to participate in the Cyberonics, Inc. 1991
          Employee Stock Purchase Plan (the "Employee Stock Purchase Plan") and
          subscribes to purchase shares of the Company's Common Stock in
          accordance with this Subscription Agreement and the Employee Stock
          Purchase Plan.

2.   I hereby authorize payroll deductions from each paycheck in the amount of
          ____% of my Compensation on each payday (not to exceed 15%) during the
          Offering Period in accordance with the Employee Stock Purchase Plan.
          (Please note that no fractional percentages are permitted.)

3.   I understand that said payroll deductions shall be accumulated for the
          purchase of shares of Common Stock at the applicable Purchase Price
          determined in accordance with the Employee Stock Purchase Plan. I
          understand that if I do not withdraw from an Offering Period, any
          accumulated payroll deductions will be used to automatically exercise
          my option.

4.   I have received a copy of the complete "Cyberonics, Inc. 1991 Employee
          Stock Purchase Plan." I understand that my participation in the
          Employee Stock Purchase Plan is in all respects subject to the terms
          of the Plan. I understand that the grant of the option by the Company
          under this Subscription Agreement is subject to obtaining shareholder
          approval of the Employee Stock Purchase Plan.

5.   Shares purchased for me under the Employee Stock Purchase Plan should be
          issued in the name(s) of (Employee or Employee and Spouse Only):
     _________________________________.

6.   I understand that if I dispose of any shares received by me pursuant to the
          Plan within 2 years after the Enrollment Date (the first day of the
          Offering Period during which I purchased such shares), I will be
          treated for federal income tax purposes as having received ordinary
          income at the time of such disposition in an amount equal to the
          excess of the fair market value of the shares at the time such shares
          were delivered to me over the price which I paid for the shares.

     I HEREBY AGREE TO NOTIFY THE COMPANY IN WRITING WITHIN 30 DAYS AFTER THE
          DATE OF ANY DISPOSITION OF MY SHARES AND I WILL MAKE ADEQUATE
          PROVISION FOR FEDERAL, STATE OR OTHER TAX WITHHOLDING OBLIGATIONS, IF
          ANY, WHICH ARISE UPON THE DISPOSITION OF THE COMMON STOCK. The Company
          may, but will not be obligated to, withhold from my compensation the
          amount necessary to meet any applicable withholding obligation
          including any withholding necessary to make available to the Company
          any tax deductions or benefits attributable to make available to the
          Company any tax deductions or benefits attributable to sale or early
          disposition of Common Stock by me. If I dispose of such shares at any
          time after the expiration of the 2-year holding period, I understand
          that I will be treated for federal income tax purposes as having
          received income only at the time of such disposition, and that such
          income will be taxed as ordinary income only to the extent of an
          amount equal to the lesser of (1) the excess of the fair market value
          of the shares at the time of such disposition over the purchase price
          which I paid for the shares, or (2) 15% of the fair market value of
          the shares on the first day of the Offering Period. The remainder of
          the gain, if any, recognized on such disposition will be taxed as
          capital gain.

7.   I hereby agree to be bound by the terms of the Employee Stock Purchase
          Plan. The effectiveness of this Subscription Agreement is dependent
          upon my eligibility to participate in the Employee Stock Purchase
          Plan.

                                      A-1
<PAGE>

8.   In the event of my death, I hereby designate the following as my
          beneficiary(ies) to receive all payments and shares due me under the
          Employee Stock Purchase Plan.

NAME: (Please print)
                    ------------------------------------------------
                    (First)            (Middle)            (Last)

--------------------                   ----------------------
Relationship

                                       ----------------------
                                       (Address)

NAME: (Please print)
                    ------------------------------------------------
                    (First)            (Middle)            (Last)

--------------------                   ----------------------
Relationship

                                       ----------------------
                                       (Address)

Employee's Social
Security Number
                                       ----------------------

Employee's Address:
                                       ----------------------

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

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

I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.

Dated:
      -------------             ---------------------------
                                Signature of Employee

                                ---------------------------
                                Spouse's Signature (If beneficiary other
                                than spouse)

                                      A-2
<PAGE>

                                    EXHIBIT B

                                CYBERONICS, INC.
                        1991 EMPLOYEE STOCK PURCHASE PLAN
                              NOTICE OF WITHDRAWAL

     The undersigned participant in the Offering Period of the Cyberonics, Inc.
1991 Employee Stock Purchase Plan which began on _______________, 2001 (the
"Enrollment Date") hereby notifies the Company that he or she hereby withdraws
from the Offering Period. He or she hereby directs the Company to pay to the
undersigned as promptly as practicable all the payroll deductions credited to
his or her account with respect to such Offering Period. The undersigned
understands and agrees that his or her option for such Offering Period will be
automatically terminated. The undersigned understands further that no further
payroll deductions will be made for the purchase of shares in the current
Offering Period and the undersigned shall be eligible to participate in
succeeding Offering Periods only by delivering to the Company a new Subscription
Agreement.

                                           Name and Address of Participant

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

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

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

                                           Signature

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

                                           Date:
                                                -----------------

                                      B-1

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