THIRD AMENDMENT TO MUTUAL WAIVER AGREEMENT

Exhibit 2.5

THIRD AMENDMENT

TO

MUTUAL WAIVER AGREEMENT

THIS THIRD AMENDMENT TO MUTUAL WAIVER AGREEMENT ( the “Third Amendment”) is made as of September 27, 2008 by and among Shenzhen SANS Material Testing Co., Ltd., Shenzhen SANS Measurement Technique Co., Ltd., Shanghai SANS Testing Machine Co., Ltd., collectively as one party, and MTS Systems (China) Co., Ltd. as the other party, and shall be effective on the same date.

RECITALS

A.             The parties entered into that certain Mutual Waiver Agreement dated July 31, 2008 (the “ Waiver Agreement ”), as amended by that certain Amendment to Mutual Waiver Agreement dated August 29, 2008 (the “ Amendment ”) and that certain Second Amendment to Mutual Waiver Agreement dated September 26, 2008 (the “ Second Amendment ”), pursuant to which the parties agreed to mutual extension of time and/or waiver with regard to the APA;

B.             The parties now wish to further amend the Waiver Agreement to further clarify the intent of the parties.

C.             The parties hereby acknowledge and agree that MTS Systems (Shanghai) Co., Ltd. has changed its name to MTS Systems (China) Co., Ltd. with the new business license issued and therefore MTS Systems (China) Co., Ltd. has the full authority to execute and bind itself to this Third Amendment on behalf of itself.

NOW, THEREFORE, in consideration of the foregoing and the mutual promises herein contained, the parties agree as follows:

AGREEMENT

1.              Fifty Percent Payment .  Subject to the Purchaser’s obligation to pay fifty percent (50%) of the Purchase Price ($20,900,000) within three months after July 31, 2008 as amended in Section 5 of the Second Amendment, the first paragraph of Section 5(b) shall be amended as follows:

“on November 3, 2008, or within