AMENDMENT NUMBER 3 TO
                      TRANSFER AND ADMINISTRATION AGREEMENT


         AMENDMENT  NUMBER 3 TO  TRANSFER  AND  ADMINISTRATION  AGREEMENT  (this
"Amendment"),  dated  as  of  December  23,  1996  between  PERFORMANCE  FUNDING
CORPORATION,  a Delaware  corporation,  as  transferor  (in such  capacity,  the
"Transferor"), UNION ACCEPTANCE CORPORATION, an Indiana
corporation,  in its  individual  capacity  and as  collection  agent  (in  such
capacity,  the  "Collection  Agent"),  and  ENTERPRISE  FUNDING  CORPORATION,  a
Delaware   corporation  (the  "Company")  amending  that  certain  Transfer  and
Administration  Agreement dated as of July 24, 1995, as amended by Amendment No.
1 dated as of September 8, 1995,  and  Amendment  No. 2 dated as of May 10, 1996
(the "Transfer and Administration Agreement").

         WHEREAS,  the  Transferor  and the Company  have agreed to make certain
amendments to the Transfer and Administration Agreement.

         NOW, THEREFORE, the parties hereby agree as follows:

         SECTION  1.  Defined  Terms.  As used in this  Amendment  and except as
otherwise  provided  in this  Section 1,  capitalized  terms shall have the same
meanings assigned thereto in the Transfer and Administration Agreement:

         (a) Section 1.1 of the Transfer and Administration  Agreement is hereby
amended  by  the  addition  of  the  following  definition  in  the  appropriate
alphabetic location:

                  "Acquisition  Subsidiary" shall mean a wholly owned subsidiary
         of UAC which has entered  into (i)  agreements  with dealers in certain
         states for the  origination  or  purchase of  Receivables,  and (ii) an
         agreement  with PAC  pursuant  to which PAC  acquires  all  Receivables
         originated or purchased by such Acquisition Subsidiary.

         (b) The  definition  of  "Eligible  Receivables"  is hereby  amended by
deleting  paragraph  (i)  therefrom  and  replacing it with the  following  text
(solely for convenience of reference, the revised language in this definition is
italicized):

                  "(i) (A) which  shall have been  either (x)  originated  by or
         through a factory  authorized  dealer  located in the United States and
         which,  together  with the Contract  related  thereto,  shall have been
         validly  assigned by such dealer to an  Acquisition  Subsidiary  or PAC
         pursuant  to the terms of such  Contract,  for the  retail  sale of the
         related Financed Vehicle in the ordinary course of its business,  shall
         have been validly  assigned to PAC if such Receivable had been assigned
         by such a dealer to an Acquisition Subsidiary,  shall have been validly
         assigned to UAC if such  Receivable  had been assigned by such a dealer
         to UFSB,  shall have been fully and  properly  executed  by the parties
         thereto, and shall have been

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         advanced directly to or for the benefit of the Obligor for the purchase
         of the re lated Financed  Vehicle,  or (y) originated by an Acquisition
         Subsidiary or PUAC, for the retail sale of the related Financed Vehicle
         in the  ordinary  course  of its  business,  shall  have  been  validly
         assigned  to  PAC  if  such   Receivable  had  been  originated  by  an
         Acquisition Subsidiary,  shall have been fully and properly executed by
         the parties  thereto,  and shall have been advanced  directly to or for
         the  benefit of the Obligor  for the  purchase of the related  Financed
         Vehicle,  (B) shall have been sold by UAC to the Transferor pursuant to
         the Sale and Pur chase  Agreement and to which the  Transferor has good
         title  thereto,  free and  clear  of all  Adverse  Claims,  and (C) the
         Contract  related to which  shall  contain  customary  and  enforceable
         provisions  such that the rights  and  remedies  of the holder  thereof
         shall be adequate for the  realization  against the  collateral  of the
         benefits of the security provided thereby;

         SECTION  2.  Limited   Scope.   This   amendment  is  specific  to  the
circumstances  described above and does not imply any future amendment or waiver
of  rights   allocated  to  the  Company,   the  Transferor,   Union  Acceptance
Corporation,  the Collection Agent, the  Administrative  Agent or the Collateral
Agent under the Transfer and Administration Agreement.

         SECTION 3. Consent to Amendment of Sale and Purchase Agreement. Without
implying  any  amendment  or future  waiver of rights by the  Company  under the
Transfer  and  Administration  Agreement,  the  Company  hereby  consents to the
execution and delivery by the Transferor of the Second Amendment and Restatement
of Sale and Purchase Agreement dated as of December 23, 1996.

         SECTION 4. Governing Law.  THIS AMENDMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.

         SECTION 5. Severability;  Counterparts.  This Amendment may be executed
in any  number of  counterparts  and by  different  parties  hereto in  separate
counterparts,  each of which when so executed  shall be deemed to be an original
and all of  which  when  taken  together  shall  constitute  one  and  the  same
instrument.   Any  provisions  of  this   Amendment   which  are  prohibited  or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability  without  invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render  unenforceable such provision in any
other jurisdiction.

         SECTION 6. Ratification. Except as expressly affected by the provisions
hereof,  the Transfer and  Administration  Agreement as amended  shall remain in
full force and effect in accordance with its terms and ratified and confirmed by
the parties hereto. On and after the date hereof, each reference in the Transfer
and Administration Agreement to "this

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Agreement",  "hereunder",  "herein" or words of like import  shall mean and be a
reference  to the  Transfer  and  Administration  Agreement  as  amended by this
Amendment.

              (THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

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         IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment Number 3 as of the date first written above.

                                           ENTERPRISE FUNDING CORPORATION,
                                                    as Company



                                   By:  /s/ K. Carter Harris
                                        ----------------------------------------
                                                    Name: K. Carter Harris
                                                    Title: Vice President


                                           PERFORMANCE FUNDING CORPORATION
                                                    as Transferor



                                   By:  /s/ Melanie S. Otto
                                        ----------------------------------------
                                                    Name: Melanie S. Otto
                                                    Title: Assistant Secretary



                                           UNION ACCEPTANCE CORPORATION
                                                    As Collection Agent



                                   By:  /s/ Maureen A. Schoch
                                        ----------------------------------------
                                                    Name: Maureen A. Schoch
                                                    Title: Vice President












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