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                                                                     Exhibit 2.5





                             [PFEIFFER VACUUM-LOGO]




                       TERMS AND CONDITIONS OF BOND ISSUE





                      6% Convertible Bond Issue, 2002/2007





                                      from

                          Pfeiffer Vacuum Technology AG

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                                    CONTENTS

                                     OF THE

                       TERMS AND CONDITIONS OF BOND ISSUE




Section   1   Form and Par Value, Escrowing and Collective Deposit
Section   2   Interest
Section   3   Conversion Beneficiaries, Transferability
Section   4   Redemption
Section   5   Termination by Issuer
Section   6   Payments
Section   7   Conversion Right, Conversion Periods
Section   8   Conversion Price
Section   9   Conversion Price Adjustment
Section  10   Conversion Procedure
Section  11   Liability
Section  12   Announcements
Section  13   Place of Fulfillment and Court of Venue; Applicable Law
Section  14   Severability Clause





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                       TERMS AND CONDITIONS OF BOND ISSUE

                      6 % CONVERTIBLE BOND ISSUE, 2002/2007

                       FROM PFEIFFER VACUUM TECHNOLOGY AG


                                    SECTION 1
              FORM AND PAR VALUE, ESCROWING AND COLLECTIVE DEPOSIT

(1)    The Convertible Bond Issue from Pfeiffer Vacuum Technology AG ("Issuer")
       having a total par value of EUR 588,800.00 (five hundred eighty-eight
       thousand and eight hundred Euros only) shall be classified into 4,600
       equally entitled bearer convertible bonds having a par value of EUR
       128.00 each and numbered 4401 through 9000 ("Convertible Bonds").

(2)    The Convertible Bonds and the corresponding interest entitlements shall
       be held in escrow in a bearer multiple convertible bond certificate
       throughout the entire term of the bond issue. The multiple convertible
       bond certificate shall be kept on deposit at Clearstream Banking AG, of
       Frankfurt am Main, where it shall be held in safekeeping for the holders
       of the convertible bonds ("Bond Creditors"). There shall be no
       entitlement to delivery of individual certificates for the entire term of
       the Convertible Bond Issue.



                                    SECTION 2
                                    INTEREST

(1)    The Convertible Bonds shall bear interest at the rate of 6 % per annum
       beginning on July 07, 2002. The first interest payment for the period
       from July 07, 2002, through December 31, 2003, shall be due and payable
       on December 31, 2003. Thereafter, interest shall be due and payable
       retroactively on the last day of December of the years 2004 through 2006.
       The interest payment for the period from January 1, 2007 through December
       10, 2007, shall be due and payable on December 31, 2007.

(2)    Interest on the Convertible Bonds shall cease to accrue at the close of
       the day preceding the day on which said Convertible Bonds are due to be
       redeemed, even if said day should be a Sunday or legal holiday, unless
       Issuer shall fail to make available in a timely manner the funds required
       therefor. In said case, interest shall not cease to accrue until such
       time as the Convertible Bonds are redeemed.

(3)    Should the Conversion Right (Section 7) be exercised, interest on the
       converted Convertible Bonds shall cease to accrue at the day on which
       said conversion right was exercised.

(4)    Should it be necessary to calculate interest for a period of less than
       one year, said calculation shall be based upon a 360-day year consisting
       of twelve 30-day months.


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                                    SECTION 3
                    CONVERSION BENEFICIARIES, TRANSFERABILITY

The Conversion Right shall be available exclusively to the following categories
of persons:

(1)    Employees of Pfeiffer Vacuum AG and its subsidiaries and members of the
       executive management of subsidiaries who have acquired the Convertible
       Bonds and whose employment with a company of the Pfeiffer Vacuum Group
       has not been terminated, furthermore any natural person or juristic
       person, when the Management Board of the Company concurs.

(2)    Retirees of a company of the Pfeiffer Vacuum Group, as well as employees
       who have been granted an occupational or other disability pension during
       their employment within the Pfeiffer Vacuum Group. Should a company or an
       operation cease to be a member of the Pfeiffer Vacuum Group, said
       retirees and/or former employees who have been granted an occupational or
       other disability pension shall also be eligible if said retirement and/or
       the granting of said occupational or other disability pension occurs
       prior to the company or operation leaving the Pfeiffer Vacuum Group.

(3)    Should employment be terminated through notice thereof (by either party)
       or through an employment annulment agreement, Issuer shall be entitled to
       terminate the Convertible Bonds. Any right of conversion which may have
       already been established under the Terms and Conditions of Bond Issue
       shall then become null and void. The time at which the notice of
       termination is received by the respective recipient of said notice, or
       the time at which the annulment agreement is signed in the absence of
       prior notice of termination, shall be definitive.

(4)    The transfer of the  Convertible  Bonds requires the previous  consent of
       the Management Board.


                                    SECTION 4
                                   REDEMPTION

Should the Convertible Bonds not have been previously redeemed or converted,
Issuer shall redeem the Convertible Bonds at their par value on December 10,
2007.


                                    SECTION 5
                              TERMINATION BY ISSUER

(1)    Issuer  shall be  entitled  to  terminate  the  Convertible  Bonds in the
       following cases:

       (a)    In the event the  bondholder's  employment  with a company  of the
              Pfeiffer  Vacuum Group is  terminated,  irregardless  of the legal
              grounds  therefor,   with  the  exception  of  direct  entry  into
              retirement  or the grant of an  occupational  or other  disability
              pension;

       (b)    In the event of the death of the Bond  Creditor,  if the heirs are
              not natural persons; or


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       (c)    In the event an operation is divested  from or a company with whom
              the bondholder is employed leaves the Pfeiffer Vacuum Group.

(2)    In the case of Section 5, Points 1 a and 1 b, hereof, Issuer shall be
       entitled to terminate the bondholder's entire bond holdings at the time
       of termination.

       In the case of Section 5, Point 1 c, hereof, Issuer shall be entitled to
       immediately terminate that portion of the Convertible Bonds for which the
       prerequisites for exercise of the Conversion Right had not been satisfied
       at the time the company left the Pfeiffer Vacuum Group. Issuer shall not
       be entitled to terminate the other portion of the Convertible Bonds for
       which the prerequisites for exercise of the Conversion Right had been
       satisfied at said time until after the first Annual Shareholders' Meeting
       of Issuer subsequent to said company's leaving the Pfeiffer Vacuum Group,
       with a term of notice of three months being required therefor. In the
       case of Section 5, Point 1 c, hereof, Issuer shall not be entitled to
       terminate bonds held by employees who were already in retirement at the
       time the operation was divested or the company left the Pfeiffer Vacuum
       Group.

(3)    Termination pursuant to Paragraph 1, hereof, shall be made in the form of
       a written declaration to the Bond Creditors, or to the heirs of the Bond
       Creditor in the event of the death of said Bond Creditor. Termination
       made to one of multiple heirs shall be sufficient.

(4)    The conversion  right vested by the  Convertible  Bonds shall become null
       and void upon said termination.

(5)    Upon  said  termination  the  Company  in due  course  will  buy back the
       Convertible Bonds to the par value.


                                    SECTION 6
                                    PAYMENTS

Upon becoming due and payable, Issuer shall make payment for capital and
interest free of charge for the Bond Creditors in freely convertible and
available legal currency of the Federal Republic of Germany to Landesbank
Rheinlandpfalz in its role as Payment Office. Said Payment Office shall remit
said payable amounts to Clearstream Banking AG, of Frankfurt am Main, for
disbursement to the Bond Creditors.


                                    SECTION 7
                      CONVERSION RIGHT, CONVERSION PERIODS

(1)    Subject to the provisions set forth in these Terms and Conditions of Bond
       Issue and to payment of a Shareholder Contribution as set forth in
       Section 8, hereof, the Convertible Bonds shall be able to be converted to
       shares of stock of Issuer, with each EUR 128.00 Convertible Bond being
       converted to 50 no-par shares of bearer stock. Only Convertible Bonds
       having a par value of EUR 128.00 or any larger value divisible by 128
       shall be eligible for conversion.

(2)    Said Conversion Right shall be secured by conditional capital resolved by
       the Annual Shareholders' Meeting of Issuer on June 6, 2000.


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(3)    The shares of stock stemming from exercise of Conversion Rights shall
       participate in earnings from the beginning of the fiscal year in which
       said shares of stock were created through exercise of the Conversion
       Rights.

(4)    The Conversion Right shall be able to exercised earlyest in the first
       scheduled limitation in time after the regular Annual Shareholders'
       Meeting of Issuer in 2004 up to 30 %, earlyest in the scheduled
       limitation in time after the regular Annual Shareholders' meeting of
       Issuer in 2005 up to 60 %, and earlyest in the scheduled limitation in
       time after the regular Annual Shareholders' meeting of Issuer in 2006 up
       to 100 % (authorized conversion amount). The final point in time at which
       conversion shall be valid pursuant to Section 10, hereof, shall be
       December 09, 2007. Conversion declarations received at the Conversion
       Office subsequently to this point in time shall be null and void.

Following the respective Waiting Period, exercise of the Conversion Right
through said conversion shall only be permissible within the following exercise
phases and on those days on which securities are traded on the stock exchange in
Frankfurt am Main ("Conversion Days"):

       a)     On the fourth and the subsequent fourteen days on which commercial
              banks in Frankfurt am Main are open for  business  ("Bank  Working
              Days")  following  each regular  Annual  Shareholders'  Meeting of
              Issuer in the years 2004 through 2007;

       b)     On the  fourth  and the  subsequent  fourteen  Bank  Working  Days
              following  publication of Issuer's  Quarterly Report for the third
              quarter of each of fiscal years 2004 through 2007;

       c)     On December  09,  2007,  and on the  fourteen  Bank  Working  Days
              preceding said day.

       Should conversion days fall within a period of time ("Waiting Period")
       beginning on the day on which Issuer publishes in the German Federal
       Gazette an offer to its Shareholders to acquire shares of stock or bonds
       vested with conversion or option rights and ending on the day, inclusive
       in both cases, on which Issuer's subscribable shares of stock are first
       listed "ex rights" on the Neuer Markt at the Frankfurt am Main Securities
       Exchange, said conversion days shall be moved to a corresponding number
       of Bank Working Days directly subsequent to the end of the Waiting
       Period. This rule is not applicable for the time period explained in item
       c),


                                    SECTION 8
                                CONVERSION PRICE

Should the Convertible Bonds be exchanged for shares of stock, the Conversion
Price shall comprise the par value of a Convertible Bond, in the amount of EUR
128.00, plus a Shareholder Contribution. Said Shareholder Contribution shall
amount to 110 percent of the arithmetic average of the official closing prices
of Pfeiffer Vacuum stock on the Frankfurt Securities Exchange over the course of
the last 10 trading days preceding the resolution by the Management Board to
issue the Convertible Bonds, less EUR 2.56. The contribution is determined to
EUR 40.30.


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                                    SECTION 9
                           CONVERSION PRICE ADJUSTMENT

(1)    Should Issuer increase its share capital through the issuance of new
       shares of stock and grant a direct or indirect right of subscription to
       its Shareholders or issue bonds vested with stock option or conversion
       rights or exercise other capital measures set forth below on or before
       December 09, 2007, said Conversion Price or Conversion Ratio shall be
       adjusted pursuant to the following paragraphs.

(2)    In the case of an increase of capital against contributions or the
       issuance of bonds vested with option or conversion rights, the Conversion
       Price shall be reduced by an amount corresponding to the average trading
       price of the subscription right granted to the shareholders on all
       subscription rights trading days on the Frankfurt Securities Exchange.

       Said reduced Conversion Price shall go into effect on the 1st trading day
       on the Frankfurt Securities Exchange following the last day of the
       subscription period. The Conversion Price shall not be reduced if a
       subscription right having a value corresponding to the subscription right
       of the Shareholders is also granted to the Bond Creditors.

(3)    In the case of an increase of capital from corporate funds, the existing
       conditional capital securing the Conversion Right shall increase in the
       same ratio as the capital stock (Section 218, German Stock Corporation
       Act). Should the capital stock be increased without the issuance of new
       shares of stock pursuant to Section 207, Sub-Paragraph 2, Sentence 2,
       German Stock Corporation Act, said increase of capital from corporate
       funds shall have no effect on the legal position of the holders of
       subscription rights. If, on the other hand, new shares of stock are
       issued, upon exercise of their Conversion Right the Bond Creditors shall
       receive as many additional shares of stock as if they had already
       exercised their Conversion Right at the time of said increase of capital
       from corporate funds.

       Fractional shares created as a result of an increase of capital from
       corporate funds shall not be issued upon exercise of the Conversion
       Right, but shall be sold at the best possible price for the account of
       the Bond Creditor. The proceeds therefrom shall be made available to the
       Bond Creditor upon issuance of the shares of stock.

(4)    In the case of a reduction of capital, neither the Conversion Price nor
       the Conversion Ratio shall be adjusted to the extent that said reduction
       of capital does not result in any change in the number of shares in
       circulation or the reduction of capital does not involve a redemption of
       capital or the acquisition of treasury shares against valuable
       consideration. In the case of a reduction of capital resulting from the
       combining of shares of stock without redemption of capital or acquisition
       of treasury shares against valuable consideration and in the case of an
       increase in the number of shares of stock in circulation without any
       change in capital (stock split), the number of shares of stock that may
       be acquired at the subscription price per subscription right shall be
       reduced or increased, respectively, in the ratio of the reduction of
       capital or stock split.

(5)    In the case of other occurrences having an effect comparable to the
       above-cited cases of adjustment, the Conversion Price or the Conversion
       Ratio shall be able to be adjusted by Landesbank Rheinlandpfalz pursuant
       to Section 317, Sub-Paragraph 1, German Civil Code.

(6)    Pfeiffer Vacuum AG shall be obligated to immediately announce, pursuant
       to Section 12, hereof, both the adjustment as well as the effective date
       of said adjustment.


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                                   SECTION 10
                              CONVERSION PROCEDURE

(1)    To exercise the Conversion Right, the Bond Creditor shall submit a
       written declaration ("Conversion Declaration") to Landesbank
       Rheinlandpfalz as the Conversion Office, using forms available from said
       Conversion Office, and shall pay the Shareholder Contribution pursuant to
       Section 8, hereof. The prerequisite for the validity of the Conversion
       Declaration shall be that the form contain confirmation by the Company
       regarding the number of Conversion Rights exercised and that the
       Conversion Declaration be received within the proper term and that the
       Shareholder Contribution be paid to the Conversion Office in freely
       convertible and available legal currency of the Federal Republic of
       Germany, and that the Convertible Bonds be conveyed to the Conversion
       Office. Each Conversion Declaration shall become valid two working days
       subsequent to satisfaction of all conversion prerequisites. The final
       date for submittal of the Conversion Declaration shall be December 09,
       2007.

(2)    Conversion Declarations and Shareholder Contributions received outside
       the Conversion Days pursuant to Section 7 of these Terms and Conditions
       shall be deemed to have been submitted and/or effected and received on
       the next subsequent day on which exercise of the Conversion Right shall
       be permissible. The shares of stock issued on the basis of exercise of
       the Conversion Right shall be credited to the custody account of the Bond
       Creditor indicated in the Conversion Declaration immediately upon the
       Conversion Declaration becoming effective.

(3)    The regulations governing insider trading shall be observed in connection
       with any sale of shares of stock acquired as a result of exercise of the
       Conversion Right.


                                   SECTION 11
                                    LIABILITY

(1)    The Payment and Conversion Office shall only be liable for issuing, not
       issuing or receiving declarations, performing or failing to perform acts
       on behalf of Issuer to the extent that said Payment and Conversion Office
       has failed to exercise the due care and diligence of a prudent operator.

(2)    The Payment and Conversion Office shall not be subject to the
       restrictions set forth in Section 181, German Civil Code.


                                   SECTION 12
                                  ANNOUNCEMENTS

Notification of announcements relating to the Convertible Bonds shall be sent to
the Bond Creditors at the address last known to Issuer.


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                                   SECTION 13
                    PLACE OF FULFILLMENT AND COURT OF VENUE;
                                 APPLICABLE LAW

(1)    The form and content of the Convertible Bonds, as well as the rights and
       obligations of the parties arising from these Terms and Conditions of
       Bond Issue shall be construed in every regard under the laws of the
       Federal Republic of Germany.

(2)    The place of fulfillment shall be Frankfurt am Main.

(3)    The non-exclusive court of venue for any and all disputes in law arising
       from the matters governed by these Terms and Conditions of Bond Issue
       shall be Frankfurt am Main.


                                   SECTION 14
                               SEVERABILITY CLAUSE

Should any individual provision or any part of any provision set forth in these
Terms and Conditions of Bond Issue be or become void, illegal or unenforceable,
the validity of the remaining provisions hereof shall in no way be affected
thereby. Any gap which may be created by the inoperativeness or unenforceability
of any provision or provisions of these Terms and Conditions of Bond Issue shall
be filled analogously through supplementary construction of the Agreement, with
due consideration being given to the interests of the involved parties. The same
shall also apply with respect to any existing gaps in these Terms and
Conditions.



Asslar, June 18, 2002

PFEIFFER VACUUM TECHNOLOGY AG









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