--------------------------------------

                                 Amendment No. 1
                                       to
                                Investor Note of
                     --------------------------------------

     Pursuant to Section 7.8 of the Investor Note,  dated  __________  ___, 2002
("Investor  Note")  delivered by ("Maker") to Aearo  Corporation  ("Lender") and
Section 4.5 of the Executive  Security  Purchase  Agreement by and between Maker
and Lender, the Investor Note is amended as follows:

     1. Section 1.4 of the Investor Note is hereby amended to read as follows:

     1.4  Scheduled  Payment  Term.  The Maker shall be required to repay to the
Lender the entire principal  amount hereof  outstanding on the date set forth on
Schedule 1 hereto under "Final Maturity".

     2. Section 2 of the Investor Note is hereby amended to read as follows:

     SECTION 2.  Interest.  Interest  will accrue on the  outstanding  principal
amount of this  Investor  Note at the rate per annum  set  forth on  Schedule  1
hereto under  "Interest  Rate",  and shall be payable as set forth on Schedule 1
hereto under "Interest Payments".

     3. Schedule 1 to the Investor Note is amended to read as provided below.

- ------------------ -------------------- -------------- -----------------------
                    Interest Rate and
 Principal Amount   Interest Payments    Installments      Final Maturity
                        Schedule
- ------------------ -------------------- -------------- -----------------------
  $                 2.73% per annum          None       Due on the earliest
                    payable on date of                  date to occur of:
                    Final Maturity                      (i) acceleration
                                                        under Section 1.1;
                                                        (ii) Termination of
                                                        Employment under
                                                        Section 3.1; or
                                                        (iii) Event of
                                                        Default under Section 6.

- ----------------------- ------------------------ ----------------------- -------

     4. The Investor Note, and the Pledge and Security  Agreement  between Maker
and Lender related thereto, shall otherwise remain in full force and effect.

     IN WITNESS  WHEREOF,  Maker and a duly  authorized  officer of Lender  have
executed this Amendment effective  ___________ ___, 2002, in order to reduce the
interest  rate,  and to defer the time for payment of  principal  and  interest,
under the Investor Note.

         "MAKER"                                "LENDER"
                                           AEARO CORPORATION


__________________________________  By: _____________________________
        (Printed Name)                  Jeffrey S. Kulka
                                        Vice President, Chief Financial Officer