September 16, 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 AND A SECOND  AMENDMENT DATED SEPTEMBER 4,
     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.  Company  has  informed  Banks  that API has
entered into a definitive  agreement  to sell  substantially  all of its assets.
Company  has also  informed  Banks that PTI and SBI filed  voluntary  chapter 11
bankruptcy petitions on September 15, 1998.

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 September 30, 1998, subject to earlier  termination as provided
below, from further action to collect the Indebtedness:

1.   All  capitalized   terms  not  defined  in  this  third  amendment  ("Third
     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  Third  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  Third
     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 is revised to eliminate any  availability on
     account of any  collateral of PTI and/or SBI. The  overformula  amount (set
     forth  in  clause  (iv) of  paragraph  6 of the  Forbearance  Agreement  is
     increased  from  $42,100,000  to  $44,911,000.  The  Cap  is  increased  to
     $107,387,000.  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.

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 September 30, 1998. The "PTI/SBI Adjustment"
     is $24,000,000 less all payments received from or, on account of PTI and/or
     SBI which reduce the Cap. Company and Guarantors agree that:

<PAGE>

     (a)  from September 14, 1998 forward,  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  approve  the form of the Interim
     Order Authorizing  Postpetition Financing and Providing Adequate Protection
     prepared  for  each of PTI and SBI and  its  execution  by  Agent.  It is a
     default under the Forbearance Agreement:

     (a)  If both  Financing  Orders are not entered 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.

7.   Company and the undersigned  Guarantors  hereby  represent and warrant that
     (a) execution,  delivery and performance of this Third 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 Third 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.

8.   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 THIRD  AMENDMENT,  THE  FORBEARANCE  AGREEMENT,  THE LOAN
     DOCUMENTS OR THE INDEBTEDNESS.

9.   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 THIRD AMENDMENT, WHETHER
     KNOWN OR UNKNOWN,  AGAINST  ANY OR ALL OF AGENT,  BANKS,  THEIR  EMPLOYEES,
     OFFICERS, DIRECTORS, ATTORNEYS, STOCKHOLDERS AND SUCCESSORS AND ASSIGNS.

<PAGE>

Agent and  Banks  reserve  the right to  terminate  their  forbearance  prior to
September 30, 1998 in the event of any new defaults  under the Loan Documents or
a default under the Forbearance Agreement as amended by this Third 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



ACKNOWLEDGED AND AGREED:

JPE, INC.                                      SAC CORPORATION

By:  /s/ Donna L. Bacon                        By:  /s/ Donna L. Bacon
     -------------------------                      -------------------------
Its: President                                 Its: Vice President
Date: 9/16/98                                  Date: 9/16/98


ALLPARTS, INCORPORATED                         INDUSTRIAL & AUTOMOTIVE
                                               FASTENERS, INC.

By:  /s/ Donna L. Bacon                        By:  /s/ Donna L. Bacon
     -------------------------                      -------------------------
Its: Vice President                            Its: Vice President
Date: 9/16/98                                  Date: 9/16/98


DAYTON PARTS, INC.                             BRAKE, AXLE AND TANDEM
                                               COMPANY CANADA INC.

By:  /s/ Donna L. Bacon                        By:  /s/ Donna L. Bacon
     -------------------------                      --------------------------
Its: Vice President                            Its: Vice President
Date: 9/16/98                                  Date: 9/16/98


JPE FINISHING, INC.

By:  /s/ Donna L. Bacon
     -------------------------
Its: Vice President
Date: 9/16/98