PROMISSORY NOTE
                                 (Interim Loan)

$150,000.00                                                 April 8, 1998
                                                            San Jose, California

         FOR VALUE  RECEIVED,  the  undersigned  promises to pay to Bell Sports,
Inc., a California corporation  ("Payee"),  the principal sum of One Hundred and
Fifty Thousand Dollars.  No interest shall accrue or be payable on the principal
balance  provided that the principal  balance is timely paid in accordance  with
the following terms.

         Interest will be imputed at the rate of six percent (6%) per annum, and
shall be added to the W-2 of the undersigned employee.  The undersigned employee
will pay all taxes on interest so imputed.

         The balance of the note is payable as follows:

                  (1) Fifty  percent  (50%) of any bonus (if any) awarded to the
undersigned  by Payee after the date hereof  shall be applied by Payee to reduce
the balance hereof;

                  (2) The entire  principal  balance  hereof is due and  payable
upon the earlier of the following: (a) the termination,  for whatever reason, of
the undersigned as an employee of the Payee;  (b) the dissolution or liquidation
of the Payee; or (c) the third  anniversary of this promissory note as reflected
by the date at the top hereof.

         In the event that the note is not paid strictly in accordance  with all
of the above terms, then and thereafter the principal balance will bear interest
at the maximum legal rate until paid in full.

         This Note is  secured by a  Collateral  Pledge  Agreement  of even date
herewith,  the terms of which are  incorporated  herein by reference.  This Note
shall for all purposes be governed by and construed in accordance  with the laws
of the State of California.

         IN WITNESS WHEREOF, the undersigned have caused this Promissory Note to
be executed as of the day and year first above written.

                                             /s/ Bill Bracy
                                             -----------------------------------
                                             Bill Bracy

         I join the act and deed of  Employee,  my  husband/wife,  and  agree to
joint and several liability of all obligations hereinabove imposed.

                                             /s/ Chris Bracy
                                             -----------------------------------
                                             Chris Bracy
<PAGE>
                           COLLATERAL PLEDGE AGREEMENT



         THIS COLLATERAL PLEDGE AGREEMENT  ("Agreement") is made this 8th day of
April,  1998,  by and among BILL BRACY,  a resident  of the State of  California
("Pledgor") and BELL SPORTS, INC., a California corporation (BELL).

         1.       Pledge.

                  As security for Pledgor's  promissory note ("Note") to BELL of
even date  herewith,  which Note  evidences the  indebtedness  of the Pledgor to
BELL,  Pledgor hereby  pledges,  mortgages,  hypothecates,  assigns,  transfers,
delivers,  sets over and confirms unto BELL,  its  successors  and assigns,  the
following property, to wit:

         Any and all options to purchase shares or equity  investment in BELL or
         any of its affiliates,  however  received or whenever  granted,  either
         registered to or exercisable by the Pledgor, together with all proceeds
         thereof,  additions  thereto  and  substitutions  therefor,   including
         without  limitation  any  other  securities,  cash or other  properties
         distributed with respect to the foregoing  options to purchase stock or
         equity investment other securities  subject to this Agreement,  whether
         as a result  of  merger,  consolidation,  dissolution,  reorganization,
         recapitalization,   interest  payment,  stock  split,  stock  dividend,
         reclassification  or redemption or any other change declared or made in
         the capital structure of BELL, or otherwise,

as  collateral  security  for  the  payment  in  full  when  due of any  and all
obligations  and  indebtedness of Pledgor to BELL,  whether direct,  indirect or
contingent,  whether  now  existing  or  hereafter  incurred  and whether or not
otherwise secured (hereinafter  collectively  referred to as the "Obligations"),
including, without limitation, all obligations and indebtedness of Pledgor under
the Note and any extensions,  amendments and renewals thereto. In the event of a
conflict or  inconsistency  between the terms  hereof and the terms of the Note,
the terms of the Note  shall  control.  Pledgor  warrants  and  represents  that
Pledgor  has the  right to  pledge,  mortgage,  hypothecate,  assign,  transfer,
deliver, set over and confirm unto BELL all of the foregoing options to purchase
shares or equity investment free of any encumbrance subject
<PAGE>
only to the terms of any plan or plans by or pursuant  to which such  options or
investment were issued or awarded.

         Pledgor  hereby agrees  promptly to pledge and deposit  hereunder  with
BELL any stock, securities, or other property with respect to any of the options
or  securities  represented  thereby,  whether taken in  substitution  for or in
addition to the above  described  property.  Such stock,  other  securities  and
property shall stand pledged and assigned for the Obligations in the same manner
as the property  described in the first  paragraph  hereof.  All of the property
described  in this  Section 1 and in the first and second  paragraphs  hereof is
hereinafter called the "Pledged Property."

         2.       Voting Power,  Dividends,  Etc.

                  (a)  Unless  and  until an Event of  Default  (as  hereinafter
defined) or an event which, with the passage of time or giving of notice or both
would constitute an Event of the Default,  has occurred,  the Pledgor shall have
the right to  exercise  all voting,  consensual  and other  powers of  ownership
pertaining to the Pledged Property, and the Pledgor shall be entitled to receive
and retain any  dividends  on the  Pledged  Property  paid in cash out of earned
surplus on BELL to the extent such  dividends are  reasonable in amount and paid
in the ordinary  course of business.  To the extent not so permitted,  such sums
shall be applied to the amount owing under the Note.

                  (b) Pledgor hereby irrevocably  appoints the President of BELL
as Pledgor's  proxy holder with respect to the Pledged  Property with full power
and  authority to vote such Pledged  Property and  otherwise act with respect to
such Pledged  Property on behalf of Pledgor,  provided  that this proxy shall be
operative only upon an Event of Default.  This Proxy shall be irrevocable for so
long as any of the Obligations remain in existence, and shall be coupled with an
interest.  If any Event of Default shall have occurred,  then whether or not any
holder of the Note,  or the  Obligations,  exercises  any  available  options to
declare  the note or the  Obligations  due and  payable or seeks or pursues  any
other relief or remedy  available to such holder under this Pledge  Agreement or
the Obligations:

                           (i)  The   President  of  BELL,  or  his  nominee  or
nominees,  shall  forthwith,  without  further action on the part of any person,
have the sole and  exclusive  right to exercise the proxy  granted above and all
voting,  consensual  and other  powers of  ownership  pertaining  to the Pledged
Property and shall  exercise  such powers in such manner as such person,  in his
sole  reasonable  discretion,  shall  determine to be necessary,  appropriate or
advisable, and, if BELL shall so request in writing, the
<PAGE>
Pledgor agrees to execute and deliver to BELL such other and additional  powers,
authorizations,  proxies,  dividends  and  such  other  documents  as  BELL  may
reasonably request to secure to BELL the rights, powers and authorities intended
to be conferred upon BELL by this Subsection (b); and

                           (ii) All  dividends  and other  distributions  on the
Pledged  Property shall be deposited in a sinking fund to be established for the
benefit of BELL, and, if BELL shall so request in writing, the Pledgor agrees to
execute and deliver to BELL appropriate  additional  dividend,  distribution and
other orders and documents to that end.

         3.       Sale of Pledged Property After an Event of Default.

         If any Event of Default shall have occurred,  then, unless the Note and
the  Obligations  shall  have been paid in full at or before the time BELL gives
Pledgor the notice  provided  for in  Subsection  (a) of this Section 3 or at or
before the time the suit provided for in Subsection (b) of this Sections 3 shall
be  begun,   BELL  may,  in  its  sole   discretion,   without  further  demand,
advertisement or notice,  except as expressly  provided for in Subsection (a) of
this  section  3, (i)  apply the cash,  if any,  then held by him as  collateral
hereunder,  for the purposes and in the manner provided in Section 4 hereof, and
(ii) if there shall be no such cash or the cash so applied shall be insufficient
to make in full all payments  provided in Subsections  (a) and (b) of Sections 4
hereof:

                  (a) Sell the Pledged Property,  or any part thereof, in one or
more  sales,  at public or private  sale,  conducted  by any officer or agent or
auctioneer or attorney for, BELL, at BELL's place of business or elsewhere,  for
cash, upon credit or future delivery, and at such price or prices as BELL shall,
in its sole discretion,  determine,  and BELL may be the purchaser of any or all
of the Pledged  Property so sold and shall hold the same  thereafter  in its own
right,  free from any claims of Pledgor or any right of  redemption  of Pledgor.
Upon any such sale BELL shall have the right to deliver,  assign and transfer to
the Purchaser  thereof the Pledged  Property so sold. Each purchaser  (including
BELL) at any such  sale  shall  hold the  Pledged  Property  so sold  including,
without limitation,  any equity or right of redemption of the Pledgor, which the
Pledgor hereby specifically waives, to the extent he may lawfully do so, and all
rights of redemption,  stay or appraisal which he has or may have under any rule
of law of statute now existing or hereafter adopted. BELL shall give the Pledgor
at least five (5) days' written  notice,  in case of public or private sale. Any
such public sale shall be held at such time or times  within  ordinary  business
hours as BELL shall fix in the notice of such sale. At any such sale the Pledged
Property may be sold in one lot as an entity or in separate parcels.  BELL shall
not be obligated to make any sale
<PAGE>
pursuant to any notice.  BELL may,  without notice or  publication,  adjourn any
public or private sale from time to time by  announcement  at the time and place
fixed for such sale, or any adjournment thereof, and any such sale my be made at
any time or place to which the same may be so adjourned  without  further notice
or publication.  In case of any sale of all or any part of the Pledged  Property
for credit or for future delivery,  the Pledged Property so sold may be retained
by BELL until the selling price is paid by the purchaser thereof, but BELL shall
not incur any liability in case of the failure of such  purchaser to take up and
pay for the Pledged  Property  so sold,  and in case of any such  failure,  such
Pledged Property may again be sold under and pursuant to the provisions  hereof;
or

                  (b)  Proceed  by a  suit  or  suits  at law  or in  equity  to
foreclose  upon this  Agreement  and sell the Pledged  Property,  or any portion
thereof,  under  a  judgment  or  decree  of a  court  of  courts  of  competent
jurisdiction.

         The President of BELL, as attorney-in-fact pursuant to section 5 hereof
may, in the name and stead of the  Pledgor,  make and  execute all  conveyances,
assignments  and  transfers of the Pledged  Property sold pursuant to Subsection
(a) or (b) of this Section 3. The Pledgor shall, if so requested by BELL, ratify
and confirm any sale or sales by  executing  and  delivering  to BELL or to such
purchaser or  purchasers  all such  instruments  as may, in the sole judgment of
BELL, be advisable.

         4.       Application of Proceeds.

         If an  Event  of  Default  exists,  the  proceeds  of any  sale,  or of
collection, of all or any part of the Pledged Property shall be applied by BELL,
without any marshaling of assets, in the following order:

                  (a) first,  to the payment of all of the costs and expenses of
such sale, including,  without limitation,  reasonable  compensation to BELL and
its  agents,   attorneys  and  counsel,   and  all  other  reasonable  expenses,
liabilities and advances made or incurred by BELL in connection therewith; and

                  (b) second, to the payment of the principal of and premium, if
any, and interest on the Note, and all obligations of the Pledgor under the Note
and this Agreement and then to pay any other Obligations; and

                  (c) finally, to the payment to the Pledgor,  his successors or
assigns,  or  their  respective  heirs,  executors  or  administrators,   or  to
whomsoever  may be  lawfully  entitled  to  receive  the  same or as a court  of
competent jurisdiction may direct, or any surplus remaining from such
<PAGE>
proceeds after payments of the character  referred to in Subsections (a) and (b)
of this Section 4 shall have been made.

         5.       President of BELL Appointed Attorney-in-Fact;  Indemnity.

         Upon an Event of Default,  the President of BELL,  his  successors  and
assigns, is hereby appointed attorney-in-fact,  with full power of substitution,
of the  Pledgor for the purpose of  carrying  out the  provisions  of the Pledge
Agreement  and  taking  any  action and  executing  any  instruments  which such
attorney-in-fact  may deem  necessary or advisable  to  accomplish  the purposes
hereof, which appointment as attorney-in-fact is irrevocable and coupled with an
interest.  The Pledgor will  indemnify  and save  harmless  such person from and
against any  liability or damage  which he may incur,  in good faith and without
gross  negligence,  in the exercise and  performance of any of its or his powers
and duties specifically set forth herein.

         6.       No Waiver.

         No failure on the part of BELL to exercise, and no delay on the part of
BELL in  exercising,  any right,  power or remedy  hereunder  shall operate as a
waiver thereof;  nor shall any single or partial  exercise by BELL of any right,
power or remedy hereunder  preclude any other or further right, power or remedy.
The  remedies  herein  provided  are  cumulative  and are not  exclusive  of any
remedies provided by law or equity.

         7.       Termination of Pledge.

         When  all  of  the  Obligations,  including,  without  limitation,  the
indebtedness evidenced or secured by the Note or this Agreement, shall have been
paid in full,  this Agreement  shall  terminate.  BELL shall  forthwith  assign,
transfer and deliver to the Pledgor or his  assignees,  without  representation,
warranty or recourse, against appropriate receipts, all the Pledged Property, if
any, then held by him in pledge hereunder.

         8.       Representations and Warranties.

         The Pledgor  hereby  represents  and  warrants  that,  when the Pledged
Property is pledged hereunder:

                  (a)  Ownership of Pledged  Property.  Pledgor is the legal and
equitable  owner of the Pledged  Property free and clear of all liens,  charges,
encumbrances and security  interests of every kind and nature,  other that those
created hereunder.
<PAGE>
                  (b)  Authority  to  Pledge.   Pledgor  has  taken  all  action
necessary to make this Pledge and all obligations  hereunder  fully  enforceable
against Pledgor.

                  (c) Continuous Security Interest.  Pledgor hereby agrees that,
until payment of principal,  interest,  and all other sums owing pursuant to the
Note in accordance  with the terms thereof and performance in full of all of the
Obligations and the covenants,  conditions and agreements to Pledgor  hereunder,
all rights,  powers and remedies  granted to BELL  hereunder  shall  continue to
exist and may be exercised by BELL.

                  (d) Right to Transfer.  Pledgor hereby represents and warrants
that on the date of this  Agreement he has the absolute  right and  authority to
enter  into this  Agreement  and  thereby to create in favor of BELL a valid and
binding security interest in the Pledged Property, subject to no liens, charges,
encumbrances or rights of others.

                  (e) No Transfer,  Further  Encumbering,  Etc.  Pledgor  hereby
agrees not to  directly  or  indirectly  assign,  transfer  or convey or further
encumber the Pledged  Property or any part thereof or interest  therein  without
the prior written consent of BELL.

         9.       Governing Law.

         This  Agreement  shall in all respects be construed and  interpreted in
accordance  with and governed by the laws of the State of California  applicable
to  agreements  made and to be performed  entirely in  California  by California
residents.

         10.      Successor and Assigns.

         This  Agreement  shall be binding  upon and inure to the benefit of the
respective  successors  and assign of the Pledgor and BELL,  and any  subsequent
holder of the Note or the Obligations.

         11.      Additional Instruments and Assurance.

         The Pledgor hereby agrees, at his own expense,  to execute and deliver,
from time to time, any and all further or other instruments, and to perform such
acts,  as BELL may  reasonably  request for  purposes of this  Agreement  and to
secure to BELL,  and to all  persons  who may from time to time be the holder of
the  Note or the  Obligations,  the  benefits  of all  rights,  authorities  and
remedies conferred upon BELL by the terms of this Agreement.
<PAGE>
         12.      Notices.

         All notices and other communications provided for hereunder shall be in
writing  (including  telegraphic  communication)  and mailed or  telegraphed  or
delivered,  if to the  Pledgor,  at his  address  at ___________________________
____________________________________________________ or if to BELL,  at 6350 San
Ignacio, San Jose, CA 95119 ATTN: Chief Financial Officer, or, as to each party,
at such other address as shall be  designated by such party in a written  notice
to the other party,  complying  with the foregoing  terms.  All such notices and
communications shall, when mailed or telegraphed, be effective when deposited in
the United  States Mail,  postage  prepaid,  certified,  registered  or express,
return  receipt  requested,  or delivered to the telegraph  company or overnight
courier, charges prepaid, respectively, addressed as aforesaid.

         13.      Severability.

         In case any one or more of the provisions of this  Agreement  shall for
any reason be held to be invalid,  illegal or unenforceable in any respect, such
invalidity,  illegality or unenforceability shall not affect any other provision
hereof,  but this  Agreement  shall be construed as if such invalid,  illegal or
unenforceable provision had not been included.

         14.      Events of Default.

         The  Pledgor  shall  be  in  default  under  this  Agreement  upon  the
occurrence of any one of the following  events (herein  referred to as an "Event
of Default"):

                  (a)  Default  by  the  Pledgor  in  the  due   observance   or
performance  of any  covenant  or  agreement  contained  herein or breach by the
Pledgor of any representation or warranty herein contained; or

                  (b) any default by Pledgor in the payment or performance  when
due of any of the Obligations, including, without limitation, the payment of the
principal of, or interest on, any  indebtedness of Pledgor to BELL, as set forth
in the Note; or

                  (c)  the   occurrence  of  any  event  of  default  under  the
provisions of the Note, and any other instrument, document or agreement securing
the indebtedness evidenced by the Note.

         15.      Heading.
<PAGE>
         The headings of the Sections of this  Agreement  have been inserted for
convenience  of reference  only and shall in no way affect the  construction  or
interpretation of this Agreement.

         IN WITNESS  WHEREOF,  the parties  have  entered  into this  Collateral
Pledge Agreement as of the date first above written.

                                        PLEDGOR:


                                        /s/ Bill Bracy
                                        ------------------------------------
                                        Bill Bracy

                                        BELL SPORTS, INC.



                                        By /s/ Linda Bounds
                                           ---------------------------------
                                           Linda Bounds
                                           Chief Financial Officer