<PAGE>
 
                                                                   EXHIBIT 10.47

                                Amendment No. 3
                                       to
                              Amended and Restated
                            Asset Purchase Agreement
                                      and
                                Amendment No. 1
                                       to
                        Transitional Services Agreement
                                    between
                               Memry Corporation
                                      and
                              Raychem Corporation

                                        
          This AMENDMENT NO. 3 to Amended and Restated Asset Purchase Agreement
and AMENDMENT NO. 1 to Transitional Services Agreement (this "Amendment"), is
made and executed this 19th day of February and effective as of the 20th day of
December, 1996, by and between Memry Corporation, a Delaware corporation (the
"Buyer"), and Raychem Corporation, a Delaware corporation (the "Seller").  The
Buyer and the Seller are referred to collectively herein as the "Parties."

                                    RECITAL

          Buyer and Seller have entered into an Amended and Restated Asset
Purchase Agreement, dated as of May 10, 1996, as amended by Amendment No. 1
thereto, dated as of June 28, 1996 and by Amendment No. 2 thereto, dated as of
August 11, 1996 (said agreement, as so amended, the "Purchase Agreement") and a
Transitional Services Agreement dated as of June 28, 1996 (the "Transitional
Services Agreement").  It is the desire of the Parties to amend certain
provisions of the Purchase Agreement and Transitional Services Agreement as set
forth herein.

          ACCORDINGLY, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows:

     1.   PURCHASE AGREEMENT

          (a) All capitalized terms used in this Section 1 but not otherwise
defined herein shall have the meanings ascribed thereto in the Purchase
Agreement.

          (b) The section of the Disclosure Schedule to the Purchase Agreement
titled "Patents and Patent Applications" is hereby amended by substituting for
such section the document attached as Exhibit 1 hereto.
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          (c) Section 2.(f) of the Purchase Agreement is hereby amended by
substituting the following therefor:

          "(f)  Inventory Adjustment.  Not later than June 30, 1997, Buyer shall
          pay to Seller the amount of $150,000 as an adjustment for excess
          inventory."

          (d) Except as specifically set forth in this Section, the terms of the
Purchase Agreement and the exhibits and schedules thereto shall remain
unmodified and in full force and effect.  The parties hereby acknowledge and
agree that nothing herein shall be deemed to constitute a waiver of any or all
of either party's rights under the Purchase Agreement, whether such rights arise
pursuant to contract, common law, or otherwise.

     2.   TRANSITIONAL SERVICES AGREEMENT

          (a) All capitalized terms used in this Section 2 but not otherwise
defined herein shall have the meanings ascribed thereto in the Transitional
Services Agreement.

          (b) Section 1 of the Transitional Services Agreement is hereby amended
by renaming Section 1.3 thereto as Section 1.3(a), by adding a new Section
1.3(b) to provide, in its entirety, as set forth below, and by amending and
restating Section 1.4 thereto to provide, in its entirety, as set forth below:

               "1.3(b)    From and after December 20, 1996 and until not later
          than the earlier of (i) the date the Training Personnel (as defined
          below) complete training of Memry personnel (as determined by Memry in
          its reasonable discretion); and (ii) January 24, 1997, Raychem shall
          provide to Memry the services of the employees listed on Exhibit 3
                                                                   ---------
          ("Training Personnel") at Raychem's total cost of the employees'
          services, for the purpose of allowing such Training Personnel to train
          Memry personnel in performing tasks heretofore performed by the
          Training Personnel.  Memry shall provide all travel and temporary
          living expenses in connection with services provided by the Training
          Personnel after December 20, 1996.  Memry shall supervise all Training
          Personnel provided pursuant to this subsection.  Notwithstanding
          anything to the contrary in this Section 1.3(b), Raychem shall have
          the authority for necessary disciplinary action relating to such
          Training Personnel in accordance with Raychem human resource policies.
          Raychem shall have the responsibility for any federal, state and local
          employment related taxes or expenses, including federal and state
          withholding and unemployment insurance.

               1.4  Raychem is not obligated to replace any Personnel or
          Training Personnel provided pursuant to Section 1.3 who

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          voluntarily or involuntarily terminate their employment with Raychem
          or become unavailable due to disability or medical leave.  Raychem
          shall not transfer any Personnel or Training Personnel provided
          pursuant to Section 1.3 to other positions at Raychem while they are
          providing services pursuant to this Agreement without prior agreement
          with Memry."

          (c) Section 2.3 of the Transitional Services Agreement is hereby
amended by substituting the following therefor:

          "2.3  Term.  This Agreement shall expire on the earlier to occur of
                ----                                                         
          (i) January 24, 1997 or (ii) a date mutually agreed by the parties."

          (d) The Transitional Services Agreement is hereby amended by adding
                                                                             
Exhibit 3 hereto as Exhibit 3 thereto.
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          (e) Except as specifically set forth in this Section, the terms of the
Transitional Services Agreement and the exhibits and schedules thereto shall
remain unmodified and in full force and effect.  The parties hereby acknowledge
and agree that nothing herein shall be deemed to constitute a waiver of any or
all of either party's rights under the Transitional Services Agreement, whether
such rights arise pursuant to contract, common law, or otherwise.

     3.   To evidence Buyer's obligation pursuant to Section 2.(f) of the
Purchase Agreement, Buyer shall issue to Seller a promissory note in
substantially the form attached as Exhibit 2 hereto.
                                   ---------        

     4.   This Amendment shall be governed by and construed according to the
laws of the State of California, excluding the choice of laws rules thereof.

     5.   This Amendment may be executed in counterparts, each of which shall be
deemed an original, but which together shall constitute one and the same
instrument.

          IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.

RAYCHEM CORPORATION                             MEMRY CORPORATION



By:  /s/ John McGraw                            By:   /s/ James G. Binch
     -----------------------------------        -------------------------------
     John McGraw                                James G. Binch
     Vice President                             President

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                                   EXHIBIT 1
                                   ---------


                        PATENTS AND PATENT APPLICATIONS
                        -------------------------------




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                                   EXHIBIT 2
                                   ---------

                                PROMISSORY NOTE




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                                   EXHIBIT 3
                                   ---------

                               TRAINING PERSONNEL





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