October 1, 1998

JPE, Inc.
775 Technology Drive
Suite 200
Ann Arbor, Michigan 48108
Attention:   Mr. James J. Fahrner and Ms. Donna L. Bacon

RE:  FORBEARANCE  AGREEMENT  AMONG  COMERICA  BANK,  NBD BANK,  NATIONAL BANK OF
     CANADA,  HARRIS  TRUST  AND  SAVINGS  BANK,  AND  BANK  ONE,  DAYTON,  N.A.
     (COLLECTIVELY,  THE  "BANKS"),  COMERICA  BANK,  AS  AGENT  FOR  THE  BANKS
     ("AGENT"), JPE, INC. ("COMPANY") AND ALLPARTS, INCORPORATED ("API"), DAYTON
     PARTS, INC. ("DPI"), SAC CORPORATION,  STARBOARD INDUSTRIES,  INC. ("SBI"),
     INDUSTRIAL  &  AUTOMOTIVE  FASTENERS,  INC.  ("IAF"),  PLASTIC  TRIM,  INC.
     ("PTI"), BRAKE, AXLE AND TANDEM COMPANY CANADA INC. AND JPE FINISHING, INC.
     (COLLECTIVELY,  "GUARANTORS") DATED AUGUST 10, 1998, AND AMENDED BY A FIRST
     AMENDMENT DATED AUGUST 31, 1998, A SECOND AMENDMENT DATED SEPTEMBER 4, 1998
     AND  A  THIRD  AMENDMENT   DATED  SEPTEMBER  16,  1998  (AS  AMENDED,   THE
     "FORBEARANCE AGREEMENT")

Dear Mr. Fahrner and Ms. Bacon:

Company and Guarantors have requested that Banks extend the forbearance provided
for in the Forbearance Agreement.

Subject to written  acceptance by Company and Guarantors of the following  terms
and conditions,  Agent and Banks are willing to grant certain accommodations and
to forbear until  January 1, 2000,  subject to earlier  termination  as provided
below, from further action to collect the Indebtedness:

1.   All  capitalized  terms  not  defined  in this  fourth  amendment  ("Fourth
     Amendment") to the Forbearance  Agreement shall have the meanings described
     in the Forbearance Agreement and/or the Loan Documents.

2.   Except as modified  by this  Fourth  Amendment,  the  Indebtedness  and the
     financing  arrangements  among Agent,  Banks,  Company and Guarantors shall
     continue to be  governed  by the  covenants,  terms and  conditions  of the
     Forbearance  Agreement  and the Loan  Documents,  which  are  ratified  and
     confirmed.  The liens and  security  interests  granted  to Agent and Banks
     under the Loan  Documents and the  Forbearance  Agreement are also ratified
     and  confirmed  by Company  and the  undersigned  Guarantors.  This  Fourth
     Amendment  shall be binding  upon and shall  inure to the benefit of Agent,
     Banks,  Company  and  the  undersigned  Guarantors,  and  their  respective
     successors and assigns.

3.   Company and the undersigned Guarantors acknowledge that Agent and Banks are
     under no  obligation  to  advance  funds or extend  credit to  Company  and
     Guarantors  under  the  Forbearance  Agreement,   as  amended,  the  Credit
     Agreement or other Loan Documents, or otherwise.

4.   The  advisory  Advance  Formula  was  revised  in the  Third  Amendment  to
     eliminate any  availability on account of any collateral of PTI and/or SBI.
     The fixed asset  reliance  (set forth in clause (iii) of paragraph 6 of the
     Forbearance  Agreement)  net  of  the  fixed  assets  of  PTI  and  SBI  is
     $11,537,000.  After  the  sale of API the  fixed  assets  reliance  will be
     reduced  to  $10,923,000.  The Cap  remains  at  $107,387,000,  subject  to
     reductions as provided in the Forbearance Agreement. The overformula amount
     (set forth in clause (iv) of paragraph 6 of the Forbearance  Agreement) and
     the Cap are  adjusted set forth below.  In addition,  the  aggregate of (i)
     Advances  under the Revolving  Credit and Swing Line and (ii) the Letter of
     Credit  Obligations as of the end of each month must be less than the Month
     End Cap (as set forth below).

<PAGE>

<TABLE>
<CAPTION>
          MONTH-YEAR       OVERFORMULA AMOUNT         CAP (1)          MONTH END CAP
          ----------       ------------------         -------          -------------
        <S>                  <C>                   <C>                   <C>

        October 1998         $46,840,000 (2)       $84,389,000           83,793,000
        November 1998        $42,700,000 (3)       $73,400,000 (4)       72,378,000
        December 1998        $43,700,000           $73,400,000           71,616,000
        January 1999         $45,400,000           $76,000,000           74,993,000
        February 1999        $45,100,000           $76,500,000           75,523,000
        March 1999           $45,400,000           $76,400,000           75,427,000
        April 1999           $45,700,000           $77,100,000           76,114,000
        May 1999             $46,300,000           $78,100,000           77,054,000
        June 1999            $47,100,000           $78,400,000           77,375,000
        July 1999            $47,500,000           $78,300,000           77,320,000
        August 1999          $47,600,000           $78,300,000           76,929,000
        September 1999       $47,500,000           $78,600,000           77,591,000
        October 1999         $47,400,000           $79,000,000           78,036,000
        November 1999        $47,700,000           $79,200,000           78,210,000
        December 1999        $48,200,000           $79,100,000           78,121,000

<FN>
        (1)   Cap is stated net of PTI/SBI Adjustment.
        (2)   Until closing of API sale, then $42,700,000.
        (3)   If the API sale has not closed, then $46,800,000 until the earlier
              of (i) the closing, or (ii) November 15, 1998.
        (4)   If the API sale has not closed, then $84,800,000 until the earlier
              of (i) the closing, or (ii) November 15, 1998.

</FN>
</TABLE>

     To the extent that the Banks  consent to a sale of API for net  proceeds of
     less than $10 million, the Cap and Overformula Amounts will be increased by
     the  amount  of the  difference  provided,  however,  that the  Overformula
     Amount, after the adjustment,  shall never exceed $48,200,000. All payments
     received  from,  or on  account  of, PTI and/or SBI shall be applied to the
     Indebtedness  (to  principal  or  interest  as elected by Banks) and to the
     extent  applied to principal  shall  permanently  reduce the Cap dollar for
     dollar (except for the first $997,000  received after  September 30, 1998).
     As of October 14, 1998, the Cap is $101,602,162  computed  according to the
     foregoing requirements..

5.   Subject to maintaining the sum of availability  under the advisory  Advance
     Formula  (as revised in  paragraph  4 above)  plus the  PTI/SBI  Adjustment
     (defined  below)  equal to or greater  than the  aggregate  of (i) Advances
     under the  Revolving  Credit  and Swing  Line and (ii) the Letter of Credit
     Obligations,  and  provided  there are no  defaults  under the terms of the
     Forbearance  Agreement,  as amended, and no further defaults under the Loan
     Documents,  Banks may,  in their sole  discretion,  continue  to advance to
     Company  under the  Revolving  Credit  Loan,  in  accordance  with the Loan
     Documents, as amended,  through December 31, 1999. The "PTI/SBI Adjustment"
     is $23,452,632 as of September 30, 1998 and is reduced  further by payments
     received  from or, on account of PTI and/or SBI after  September  30,  1998
     which reduce the Cap. Company and Guarantors agree that:

     (a)  the Company shall not borrow for the benefit of PTI and/or SBI; and

     (b)  neither  Company  nor any of the  Guarantors  shall make  intercompany
          transfers of any kind to or for the benefit of PTI and/or SBI.

6.   Company  and  the  undersigned   Guarantors   approved  the  Interim  Order
     Authorizing  Postpetition  Financing and Providing Adequate  Protection for
     each  of PTI  and  SBI  (collectively,  the  "Financing  Orders")  and  its
     execution by Agent.  The Financing Orders were entered as interim orders on
     September 18, 1998. It is a default under the Forbearance Agreement:

     (a)  If either of the  Financing  Orders are not entered as final orders in
          the form  approved by the Agent or if,  after  entry,  one or both are
          modified (unless Agent approves the modifications);

     (b)  If PTI and SBI default under either of the Financing Orders; or

     (c)  If PTI and/or SBI take action adverse to Banks.

<PAGE>

7.   Attached as Exhibit A are projections of the period October 1, 1998 through
     December  31,  1998,  which were  prepared by Company and its  consultants,
     Conway,  MacKenzie  &  Dunleavy.  It is a  default  under  the  Forbearance
     Agreement if the Company's  performance  varies from the  projections  in a
     material, adverse way. Without limitation, it is a default if as of the end
     of any month  cumulative  consolidated  earnings  before interest and taxes
     from October 1, 1998 to date  ("Cumulative  EBIT") (for IAF/DPI only except
     that API earnings in October 1998 are included in the  Cumulative  EBIT) is
     less than the amount shown below:


               Month   Year                        Cumulative EBIT
               -----   ----                        ---------------
        
               October 1998                             506,000
               November 1998                            746,000
               December 1998                            865,000
               January 1999                             888,000
               February 1999                            934,000
               March 1999                             1,009,000
               April 1999                             1,531,000
               May 1999                               2,123,000
               June 1999                              2,577,000
               July 1999                              3,023,000
               August 1999                            3,441,000
               September 1999                         3,829,000
               October 1999                           4,385,000
               November 1999                          4,552,000
               December 1999                          4,804,000
                

     Company  shall  deliver to Agent and Banks within twenty days of each month
     end a report  showing actual  consolidated  EBIT for the previous month and
     Cumulative  EBIT for October 1, 1998 through the end of the previous  month
     and the  variance  from the  projections  based on the  model  used for the
     projections.

8.   Company agrees that if an officer or senior employee leaves Company it will
     not pay a replacement  officer or employee  higher  aggregate  compensation
     that the former officer or employee,  without the consent of the Banks.  In
     addition,  Company  agrees that it will not pay or agree to pay stay pay or
     severance pay or similar benefits to its officers or other senior employees
     in excess of the following amounts:

                 OFFICER                             STAY PAY
                 -------                             --------

               Donna L. Bacon                        $250,000

               James J. Fahrner                      $175,000

               Karen Radtke                          $125,000

     provided, however that:

     (a)  no such Stay Pay shall be earned and any  obligation of Company to pay
          shall be terminated if any of the  following  occur before  January 1,
          2000:  (i) voluntary  termination by such employee other than for Good
          Reason,  as defined ion Exhibit A, (ii)  termination  of such employee
          for  Cause,  as  defined  on  Exhibit  A, or (iii)  the  death of such
          employee;

     (b)  Stay Pay may not be paid until the  earliest  of (i)  January 1, 2000,
          (ii) sale of all of API, DPI, IAF, PTI and SBI, or (iii) determination
          of the Board of Directors  and consent of Banks that such  employee is
          no longer necessary; and

     (c)  The Stay Pay must be borne one half by IAF and DPI and one half by PTI
          SBI. If PTI and SBI do not agree (with  Bankruptcy  Court  approval to
          the  extent  necessary)  to pay one  half of the  Stay  Pay,  then the
          Company's authority to pay Stay Pay is reduced by one half.

<PAGE>

     Company may establish at Agent a separate account ("Reserve  Account") and,
     for each  month  during the six month  period  beginning  October  1998 and
     ending  March  1999 may  deposit  $50,000  ("Authorized  Amount")  into the
     Reserve  Account from funds otherwise  available to Company.  If an officer
     who is authorized Stay Pay leaves Company under  circumstances which do not
     qualify that officer for such Stay Pay then the  Authorized  Amount will be
     reduced accordingly. Company grants to Agent for the benefit of the Banks a
     first priority  security interest in and lien on all funds now or hereafter
     on deposit in the Reserve Account to secure the  Indebtedness.  Company has
     no right to  withdraw,  and  Agent  has no  right  to  apply  any  funds so
     deposited,  except as provided in this  paragraph.  Agent may not apply the
     funds in the Reserve Account up to the Authorized Amount until such time as
     Company has  discharged  its  obligations  for Stay Pay  including  related
     taxes;  Agent may apply the funds  deposited in the Reserve  Account to the
     Indebtedness after the Company's obligations for Stay Pay including related
     taxes,  have been  satisfied.  Company may withdraw funds  deposited in the
     Reserve  Account  up to the  Authorized  Amount  free and clear of  Agent's
     security  interest for the sole purpose of funding its obligations for Stay
     Pay,  including related taxes, and Company agrees to use the funds only for
     that purpose.

9.   It is a default under the  Forbearance  Agreement if the freeze approved by
     the informal  committee of the  unsecured  creditors of IAF is not extended
     through  the  forbearance  period or, if  notwithstanding  the  committee's
     approval of an  extension  of the  freeze,  creditors  who are  material in
     numbers or dollars take action to collect pre-freeze liabilities.

10.  Company  ratifies  and  confirms its  undertakings  under a certain  letter
     agreement  with Agent dated  September 16, 1998; a default by Company under
     that letter agreement is a default under the Forbearance Agreement.

11.  It is a default  under  the  Forbearance  Agreement,  if the  Company:  (a)
     extends the exclusive  Negotiating Period with DGI Investments,  Inc. under
     the Letter of Intent dated October 1, 1998, unless DGI has met the Approval
     Conditions  set forth in Section  4(c)(vi) of the Letter or Intent,  or (b)
     otherwise  restricts  Company's  ability to solicit offers,  enter into any
     agreement or  understanding  in connection  with,  enter into  negotiations
     concerning,  discuss,  consummate or agree to consummate the sale, exchange
     or other disposition of all or any portion of the assets of Company, or any
     sale, exchange or other disposition of all or any portion of Company or its
     Subsidiaries, without the consent of the Banks.

<PAGE>

12.  "Year  2000  Problem"  is  defined as any  significant  risk that  computer
     hardware,  software,  or equipment containing embedded microchips essential
     to the business or  operations  of the Borrower or any of its  Subsidiaries
     will not, in the case of dates or time periods occurring after December 31,
     1999, function at least as efficiently and reliably as in the case of times
     or time periods  occurring before January 1, 2000,  including the making of
     accurate  leap year  calculations.  Company has  conducted a  comprehensive
     review and  assessment  of the  computer  applications  of Company  and its
     Subsidiaries with respect to any defect in computer  software,  data bases,
     hardware,  controls and  peripherals  related to the occurrence of the year
     2000 or the use at any  time of any  date  which  is  before,  on or  after
     December 31, 1999 in connection  therewith.  Based on the foregoing  review
     and assessment,  Company  believes that no such defect could  reasonably be
     expected to have a material  adverse  effect on the  business or  financial
     affairs  of  Company  (or  of  Company  and  its  Subsidiaries  taken  on a
     consolidated  basis).  By January 15,  1999,  Company  will make inquiry of
     their  material   suppliers,   vendors   (including  data  processors)  and
     customers,  with  respect to any defect in computer  software,  data bases,
     hardware,  controls and  peripherals  related to the occurrence of the year
     2000 or the use at any  time of any  date  which  is  before,  on or  after
     December 31, 1999, in connection  therewith.  Promptly after  completion of
     its inquiry,  Company will advise  whether  Company  believes that any such
     defect exists and could  reasonably be expected to have a material  adverse
     effect on the business or  financial  affairs of Company (or of Company and
     its  Subsidiaries  taken on a  consolidated  basis).  Company will take all
     actions  necessary  and  commit  adequate  resources  to  assure  that  its
     computer-based  and other systems (and those of all  Subsidiaries) are able
     to effectively process data, including dates before, on or after January 1,
     2000,  without  experiencing  any Year  2000  Problem  that  could  cause a
     material adverse effect on the business or financial affairs of Company (or
     of Company and its  Subsidiaries  taken on a  consolidated  basis).  At the
     request of Agent,  Company will provide Agent with written  assurances  and
     substantiations  (including, but not limited to, the results of internal or
     external  audited  reports  prepared in the  ordinary  course of  business)
     reasonably  acceptable  to Agent as to the  capability  of Company  and its
     Subsidiaries to conduct its and their businesses and operations  before, on
     and after January 1, 2000, without experiencing a Year 2000 Problem causing
     a material  adverse effect on the business or financial  affairs of Company
     (or of Company and its Subsidiaries taken on a consolidated basis).

13.  Company and the undersigned  Guarantors  hereby  represent and warrant that
     (a) execution, delivery and performance of this Fourth Amendment are not in
     contravention of law or the terms of any agreement by which they are bound,
     and do not  require  the  consent or  approval  of any  governmental  body,
     agency,  or authority,  and this Fourth Amendment will be valid and binding
     in  accordance  with its  terms;  (b) the  continuing  representations  and
     warranties  of Company  and the  undersigned  Guarantors  set forth in Loan
     Documents  are true and  correct on and as of the date hereof with the same
     force  and  effect  as  made on and as of the  date  hereof  other  than as
     previously  specified  in writing  to Agent and Banks;  and (c) no event of
     default,  or  condition  or event  which,  with the giving of notice or the
     running of time,  or both,  would  constitute an event of default under the
     Forbearance Agreement, has occurred and is continuing as of the date hereof
     other than as previously specified in writing to Agent and Banks.

14.  COMPANY, THE UNDERSIGNED GUARANTORS,  AGENT AND BANKS ACKNOWLEDGE AND AGREE
     THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE
     WAIVED.  EACH PARTY,  AFTER  CONSULTING  (OR HAVING HAD THE  OPPORTUNITY TO
     CONSULT) WITH COUNSEL OF THEIR CHOICE,  KNOWINGLY AND VOLUNTARILY,  AND FOR
     THEIR  MUTUAL  BENEFIT  WAIVES  ANY  RIGHT TO TRIAL BY JURY IN THE EVENT OF
     LITIGATION  REGARDING  THE  PERFORMANCE  OR  ENFORCEMENT  OF, OR IN ANY WAY
     RELATED TO, THIS FOURTH  AMENDMENT,  THE  FORBEARANCE  AGREEMENT,  THE LOAN
     DOCUMENTS OR THE INDEBTEDNESS.

<PAGE>

15.  COMPANY AND THE UNDERSIGNED GUARANTORS,  IN EVERY CAPACITY,  INCLUDING, BUT
     NOT LIMITED TO, AS SHAREHOLDERS,  PARTNERS, OFFICERS, DIRECTORS,  INVESTORS
     AND/OR CREDITORS OF COMPANY AND/OR GUARANTORS,  OR ANY ONE OR MORE OF THEM,
     HEREBY  WAIVE,  DISCHARGE  AND  FOREVER  RELEASE  AGENT,  BANKS,  AND THEIR
     EMPLOYEES, OFFICERS, DIRECTORS, ATTORNEYS,  STOCKHOLDERS AND SUCCESSORS AND
     ASSIGNS,  FROM  AND OF ANY AND ALL  CLAIMS,  CAUSES  OF  ACTION,  DEFENSES,
     COUNTERCLAIMS OR OFFSETS AND/OR  ALLEGATIONS  COMPANY AND/OR GUARANTORS MAY
     HAVE, OR MAY HAVE MADE, OR ARE BASED ON FACTS OR CIRCUMSTANCES  ARISING, AT
     ANY  TIME UP  THROUGH  AND  INCLUDING  THE DATE OF THIS  FOURTH  AMENDMENT,
     WHETHER  KNOWN  OR  UNKNOWN,  AGAINST  ANY OR ALL OF  AGENT,  BANKS,  THEIR
     EMPLOYEES, OFFICERS, DIRECTORS, ATTORNEYS,  STOCKHOLDERS AND SUCCESSORS AND
     ASSIGNS.

Agent and  Banks  reserve  the right to  terminate  their  forbearance  prior to
January 1, 2000 in the event of any new defaults  under the Loan  Documents or a
default under the Forbearance Agreement as amended by this Fourth Amendment,  in
the event of further  deterioration  in the  financial  condition  of Company or
Guarantors or further  deterioration in Agent's or Banks'  collateral  position,
and/or in the event Agent or Banks,  for any reason,  believes that the prospect
of payment or performance is impaired.

Very truly yours,

COMERICA BANK, Agent

By:  /s/ Cynthia B. Jones               
     ---------------------------    
     Cynthia B. Jones

Its: Vice President
Special Assets Group
P.O. Box 75000
Detroit, Michigan 48275-3205
(313) 222-3780
(313) 222-5706 Fax


COMERICA BANK                               NBD BANK

By:  /s/ Cynthia B. Jones                   By:  /s/ Robert J. Izzo
     --------------------------                  -------------------------
Its: Vice President                         Its: First Vice President


NATIONAL BANK OF CANADA                     HARRIS TRUST and SAVINGS BANK

By:  /s/ Loriann Curnyn                     By:  /s/ Sandra J. Sanders
     --------------------------                  -------------------------
Its: Vice President                         Its: Sr. Vice President

By:  /s/
     --------------------------
Its: Group Vice President


BANK ONE, DAYTON, N.A.

By:  /s/ Scott E. Roman                 
     --------------------------
Its: Assistant Vice President

<PAGE>


ACKNOWLEDGED AND AGREED:

JPE, INC.                                   INDUSTRIAL & AUTOMOTIVE
                                            FASTENERS, INC.

By:  /s/ James J. Fahrner                   By:  /s/ James J. Fahrner
     --------------------------                  -------------------------
Its: COO and CFO                            Its: President and CFO
Date: 10/22/98                              Date: 10/22/98


ALLPARTS, INCORPORATED                      BRAKE, AXLE AND TANDEM
                                            COMPANY CANADA INC.

By:  /s/ James J. Fahrner                   By:  /s/ James J. Fahrner
     --------------------------                  -------------------------
Its: President and CFO                      Its: Vice President and Treasurer
Date: 10/22/98                              Date: 10/22/98


DAYTON PARTS, INC.                          JPE FINISHING, INC.

By:  /s/ James J. Fahrner                   By:  /s/ James J. Fahrner
     --------------------------                  -------------------------
Its: Vice President and CFO                 Its: President and CFO
Date: 10/22/98                              Date: 10/22/98


SAC CORPORATION

By:  /s/ James J. Fahrner
     --------------------------
Its: President and Treasurer
Date: 10/22/98