<PAGE>

                                                                    Exhibit 10.9
================================================================================


                          The Derby Cycle Corporation



                              Warrant to Purchase
                     2,500 Shares of Class C Common Stock



                               Warrant Agreement



                         Dated as of February 15, 2000


================================================================================
<PAGE>

     This WARRANT AGREEMENT (the "Agreement"), dated as of February 15, 2000
among The Derby Cycle Corporation, a Delaware corporation (the "Company"), and
Thayer Equity Partners, III, L.P. ("Thayer") and Perseus Capital, L.L.C.
("Perseus"; and together with Thayer,the "Holders" and each a "Holder").

     WHEREAS, pursuant to a Promissory Note dated as of the date hereof issued
by the Company by which Thayer has loaned the Company $3,500,000;

     WHEREAS, pursuant to a Promissory Note dated as of the date hereof issued
by the Company by which Perseus has loaned the Company $3,500,000;

     WHEREAS, the Company will issue Class C warrants (the "Warrants") to
initially purchase an aggregate of 1,250 shares of Common Stock, par value $0.01
per share (the "Common Stock"), of the Company (the Common Stock issuable on
exercise of the Warrants being referred to herein as the "Warrant Shares"), to
Thayer in connection with, and in consideration for, the Holders' loan of money
to the Company pursuant to the Promissory Notes between the Company and Thayer
and the Company and Perseus (the "Bridge Loans"); and

     WHEREAS, the Company will issue Class C warrants (the "Warrants") to
initially purchase an aggregate of 1,250 shares of Common Stock of the Company
to Perseus in connection with, and in consideration for, the Holders' loan of
money to the Company pursuant to the Bridge Loans.

     NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto agree as follows:

SECTION 1. CERTAIN DEFINITIONS.

     As used in this Agreement, the following terms shall have the following
respective meanings:

     "Affiliate" of any Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person. For purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling," "controlled by" and "under common
control with"), as used with respect to any Person shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of such specified Person, whether through the ownership
of voting securities, by agreement or otherwise; provided that beneficial
ownership of 10% or more of the voting securities of a Person shall be deemed to
be control.

     "Business Day" means any day other than a Legal Holiday.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     "Holder" is defined in the recitals hereto.

     "Nonpublic Warrant Shares" shall mean Warrant Shares that have not been
sold to the public (or pursuant to Rule 144, Rule 144A or Regulation S under the
Securities Act) and bear the legend set forth in Section 6 of the Stockholders
Agreement.
<PAGE>

          "Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof, including any
subdivision or ongoing business of any such entity or substantially all of the
assets of any such entity, subdivision or business.

          "Private Placement and Transfer Restriction Legend" means the legend
set forth in Section 2.2(b) to be placed on all Warrants issued under this
             --------------
Warrant Agreement except where otherwise permitted by the provisions of this
Warrant Agreement.

          "Rule 144" means Rule 144 promulgated under the Securities Act.

          "Rule 144A" means Rule 144A promulgated under the Securities Act.

          "Securities Act" means the Securities Act of 1933, as amended.

          SECTION 2.  ISSUANCE OF WARRANTS; WARRANT CERTIFICATES.

     2.1. Form and Dating.

          The Warrant shall be substantially in the form of Exhibits A-1 and A-2
hereto (the "Warrant Certificates"). The Warrant may have notations, legends or
endorsements required by law, stock exchange rule or usage. The Warrant shall be
dated the date hereof.

          The terms and provisions contained in the Warrants shall constitute,
and are hereby expressly made, a part of this Warrant Agreement. The Company and
the Holders, by their execution and delivery of this Warrant Agreement,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of the Warrant conflicts with the express provisions
of this Warrant Agreement, the provisions of this Warrant Agreement shall govern
and be controlling.

     2.2. Transfer and Exchange.

          (a)  Subject to the transfer conditions referred to in the legends
endorsed on the Warrant, the Warrant and all rights thereunder are transferable
in whole or in part, without charge to the registered holder, upon surrender of
the Warrant with a properly executed Assignment (in the form of Exhibit B
                                                                ---------
hereto) at the principal office of the Company.

          (b)  Legend.

          The following legend shall appear on the face of all the Warrants
issued under this Warrant Agreement unless specifically stated otherwise in the
applicable provisions of this Warrant Agreement.

          "THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 (THE "SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED
OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
OR IN ACCORDANCE WITH AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT (SUBJECT TO THE DELIVERY OF SUCH EVIDENCE, IF ANY,
REQUIRED UNDER THE WARRANT AGREEMENT PURSUANT TO WHICH THIS SECURITY IS ISSUED)
AND IN ACCORDANCE WITH ANY

                                      -2-
<PAGE>

APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
JURISDICTION. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED
THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5
OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER OR ANOTHER EXEMPTION
UNDER THE SECURITIES ACT. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR
THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c)
OUTSIDE THE UNITED STATES TO A FOREIGN PURCHASER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY
OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.

     2.3. Replacement Warrants.

          If a mutilated Warrant is surrendered to the Company and the Company
receives evidence to its satisfaction of the destruction, loss or theft of the
Warrant, the Company shall issue a replacement Warrant. If required by the
Company, an indemnity bond must be supplied by the Holder that is sufficient in
the reasonable judgment of the Company to protect the Company from any loss that
it may suffer if a Warrant is replaced. The Company may charge for its expenses
in replacing a Warrant.

          Every replacement Warrant is an additional warrant of the Company and
shall be entitled to all of the benefits of this Warrant Agreement equally and
proportionately with all other Warrants duly issued hereunder.

SECTION 3.  TERMS OF THE WARRANT; EXERCISE OF THE WARRANT.

          3.1. Subject to the terms of this Agreement, each Warrant holder shall
have the right, which may be exercised during the period commencing the date
hereof and until 5:00 p.m., New York City time on February 15, 2010 (the
"Exercise Period"), to receive from the Company the number of fully paid and
nonassessable Warrant Shares which the holder may at the time be entitled to
receive on exercise of such Warrants and payment of the exercise price (the
"Exercise Price") either by (i) a bank or certified check payable to the Company
in an amount equal to the product of the Exercise Price multiplied by the number
of shares of Warrant Shares being purchased upon such exercise (the "Aggregate
Exercise Price"), (ii) the surrender to the Company of securities of the Company
or its subsidiaries having a Market Value equal to the Aggregate Exercise Price
of the Warrant Shares being purchased upon such exercise (provided that for
purposes of this subparagraph, and notwithstanding the definition of Market
Value set forth below, the Market Value of any note or other debt security or
any preferred stock shall be deemed to be equal to the aggregate outstanding
principal amount or liquidation value thereof plus all accrued and unpaid
interest thereon or accrued and unpaid dividends thereon) or

                                      -3-
<PAGE>

(iii) a written notice to the Company that the Holder is exercising the Warrant
(or a portion thereof) and authorizing the Company to withhold from issuance a
number of Warrant Shares issuable upon such exercise of the Warrant which when
multiplied by the Market Value of the Warrant Shares is equal to the Aggregate
Exercise Price (and such withheld shares shall no longer be issuable under this
Warrant). Each Warrant not exercised prior to 5:00 p.m., New York City time, on
February 10, 2010 (the "Expiration Date") shall become void and all rights
thereunder and all rights in respect thereof under this Agreement shall cease as
of such time. No adjustments as to dividends will be made upon exercise of the
Warrants.

          The "Market Value" per share of Common Stock as of any date shall
equal (i) if Common Stock is primarily traded on a securities exchange, the last
sale price on such securities exchange on the trading day immediately prior to
the date of determination, or if no sale occurred on such day, the mean between
the closing "bid" and "asked" prices on such day, (ii) if the principal market
for Common Stock is in the over-the-counter market, the closing sale price on
the trading day immediately prior to the date of the determination, as published
by the National Association of Securities Dealers Automated Quotation System or
similar organization, or if such price is not so published on such day, the mean
between the closing "bid" and "asked" prices, if available, on such day, which
prices may be obtained from any reputable pricing service, broker or dealer, and
(iii) if neither clause (i) nor clause (ii) is applicable, the fair market value
on the date of determination of Common Stock as determined in good faith by the
Board of Directors of the Company.

          3.2. In order to exercise all or any of the Warrants represented by
the Warrant Certificate, the Holder must surrender for exercise the Warrant
Certificate to the Company together with the form of election to purchase on the
reverse thereof duly filled in and signed, and upon payment to the Company of
the Exercise Price, which is set forth in the form of Warrant Certificate
attached hereto as Exhibit A, as adjusted as herein provided, for the number of
Warrant Shares in respect of which such Warrants are then exercised.

          3.3. Subject to the provisions of Section 4 hereof, upon compliance
with clause (b) above, the Company shall deliver or cause to be delivered with
all reasonable dispatch, to or upon the written order of the Holder and in such
name or names as the Holder may designate, a certificate or certificates for the
number of whole Warrant Shares issuable upon the exercise of such Warrants or
other securities or property to which such holder is entitled hereunder,
together with cash as provided in Section 8 hereof; provided that if any
consolidation, merger or lease or sale of assets is proposed to be effected by
the Company as described in Section 7(l) hereof, or a tender offer or an
exchange offer for shares of Common Stock shall be made, upon such surrender of
Warrants and payment of the Exercise Price as aforesaid, the Company shall, as
soon as possible, but in any event not later than two business days thereafter,
deliver or cause to be delivered the full number of Warrant Shares issuable upon
the exercise of such Warrants in the manner described in this sentence or other
securities or property to which such holder is entitled hereunder, together with
cash as provided in Section 8 hereof. Such certificate or certificates shall be
deemed to have been issued and any Person so designated to be named therein
shall be deemed to have become a holder of record of such Warrant Shares as of
the date of the surrender of such Warrants and payment of the Exercise Price.

          3.4. The Warrants shall be exercisable, at the election of the Holder,
either in full or from time to time in part. If less than all the Warrants
represented by the Warrant Certificate are exercised, the Warrant Certificate
shall be surrendered and a new Warrant Certificate of the same tenor and for the
number of Warrants which were not exercised shall be executed by the Company,
registered

                                      -4-
<PAGE>

in such name or names as may be directed in writing by the Holder, and the
Company shall deliver the new Warrant Certificate to the Person or Persons
entitled to receive the same.

          3.5. All Warrant Certificates surrendered upon exercise of Warrants
shall be canceled by the Company.

          3.6. The Company shall keep copies of this Agreement and any notices
given or received hereunder available for inspection by the Holder during normal
business hours at its office.

SECTION 4.  PAYMENT OF TAXES.

          The Company will pay all documentary stamp taxes attributable to the
initial issuance of Warrant Shares upon the exercise of the Warrant; provided
that the Company shall not be required to pay any tax or taxes which may be
payable in respect of any transfer involved in the issue of any Warrant
Certificates or any certificates for Warrant Shares in a name other than that of
the registered holder of a Warrant Certificate surrendered upon the exercise of
a Warrant, and the Company shall not be required to issue or deliver such
Warrant Certificates unless or until the Person or Persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.

SECTION 5.  RESERVATION OF WARRANT SHARES.

          5.1. The Company will at all times reserve and keep available, free
from preemptive rights, out of the aggregate of its authorized but unissued
Class C Common Stock or its authorized and issued Class C Common Stock held in
its treasury, for the purpose of enabling it to satisfy any obligation to issue
Warrant Shares upon exercise of the Warrant, the maximum number of shares of
Class C Common Stock which may then be deliverable upon the exercise of all
outstanding Warrants.

          5.2. The Company or, if appointed, the transfer agent for the Class C
Common Stock (the "Transfer Agent") and every subsequent transfer agent for any
shares of the Company's capital stock issuable upon the exercise of any of the
rights of purchase aforesaid will be irrevocably authorized and directed at all
times to reserve such number of authorized shares as shall be required for such
purpose. The Company will keep a copy of this Agreement on file with the
Transfer Agent and with every subsequent transfer agent for any shares of the
Company's capital stock issuable upon the exercise of the rights of purchase
represented by the Warrants. The Company will supply such Transfer Agent with
duly executed certificates for such purposes and will provide or otherwise make
available any cash which may be payable as provided in Section 8 hereof. The
Company will furnish such Transfer Agent a copy of all notices of adjustments,
and certificates related thereto, transmitted to each holder pursuant to Section
9 hereof.

          5.3. Before taking any action which would cause an adjustment pursuant
to Section 8 hereof to reduce the Exercise Price below the then par value (if
any) of the Warrant Shares, the Company will take any corporate action which
may, in the opinion of its counsel (which may be counsel employed by the
Company), be necessary in order that the Company may validly and legally issue
fully paid and nonassessable Warrant Shares at the Exercise Price as so
adjusted.

          5.4. The Company covenants that all Warrant Shares which may be issued
upon exercise of Warrants will, upon issue, be fully paid, nonassessable, free
of preemptive rights and free from all taxes, liens, charges and security
interests with respect to the issuance thereof.

                                      -5-
<PAGE>

SECTION 6.  OBTAINING STOCK EXCHANGE LISTINGS.

          The Company will from time to time take all action which may be
necessary so that the Warrant Shares, immediately upon their issuance upon the
exercise of the Warrant, will be listed on the principal securities exchanges,
automated quotation systems or other markets within the United States of
America, if any, on which other shares of Class C Common Stock are then listed,
if any.

SECTION 7.  ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES
            ISSUABLE.

          The Exercise Price and the number of Warrant Shares issuable upon the
exercise of the Warrants are subject to adjustment from time to time upon the
occurrence of the events enumerated in this Section 7. For purposes of this
Section 7, "Class C Common Stock" means shares now or hereafter authorized of
any class of Class C Common Stock of the Company and any other stock of the
Company, however designated, that has the right (subject to any prior rights of
any class or series of preferred stock) to participate in any distribution of
the assets or earnings of the Company without limit as to per share amount.

          7.1.  Adjustment for Change in Capital Stock.

          If the Company (i) pays a dividend or makes a distribution on its
Class C Common Stock in shares of its Class C Common Stock, (ii) subdivides its
outstanding shares of Class C Common Stock into a greater number of shares,
(iii) combines its outstanding shares of Class C Common Stock into a smaller
number of shares, (iv) makes a distribution on its Class C Common Stock in
shares of its capital stock other than Class C Common Stock or (v) issues by
reclassification of its Class C Common Stock any shares of its capital stock,
then the Exercise Price in effect immediately prior to such action shall be
proportionately adjusted so that the holder of any Warrant thereafter exercised
may receive the aggregate number and kind of shares of capital stock of the
Company which he would have owned immediately following such action if such
Warrant had been exercised immediately prior to such action.

          The adjustment shall become effective immediately after the record
date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification.
If, after an adjustment, a holder of a Warrant upon exercise of it may receive
shares of two or more classes of capital stock of the Company, the Company shall
determine, in good faith, the allocation of the adjusted Exercise Price between
the classes of capital stock. After such allocation, the exercise privilege and
the Exercise Price of each class of capital stock shall thereafter be subject to
adjustment on terms comparable to those applicable to Class C Common Stock in
this Section 7. Such adjustment shall be made successively whenever any event
listed above shall occur.

          7.2.  Adjustment for Rights Issue.

          If the Company distributes any rights, options or warrants to all
holders of its Class C Common Stock entitling them for a period expiring within
45 days after the record date mentioned below to purchase shares of Class C
Common Stock at a price per share less than the Fair Value (as defined herein)
per share on that record date, the Exercise Price shall be adjusted in
accordance with the formula:

                                      -6-
<PAGE>

                       O + N x P

                          -------

          E' =  E  x         M

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

                           O + N

where:

          E'  =   the adjusted Exercise Price.

          E   =   the current Exercise Price.

          O   =   the number of shares of Class C Common Stock outstanding on
                  the record date.

          N   =   the number of additional shares of Class C Common Stock issued
                  pursuant to such rights, options or warrants.

          P   =   the aggregate price per share of the additional shares.

          M   =   the Fair Value per share of Class C Common Stock on the record
                  date.

          The adjustment shall be made successively whenever any such rights,
options or warrants are issued and shall become effective immediately after the
record date for the determination of stockholders entitled to receive the
rights, options or warrants. If at the end of the period during which such
rights, options or warrants are exercisable, not all rights, options or warrants
shall have been exercised, the Exercise Price shall be immediately readjusted to
what it would have been if "N" in the above formula had been the number of
shares actually issued.

          7.3.  Adjustment for Other Distributions.

          If the Company distributes to all holders of its Class C Common Stock
any of its assets (including cash), debt securities, preferred stock or any
rights or warrants to purchase debt securities, preferred stock, assets
(including cash) or other securities of the Company, the Exercise Price shall be
adjusted in accordance with the formula:

                        M - F

          E'  =  E  x  ------------

                        M

where:

          E'  =   the adjusted Exercise Price.

          E   =   the current Exercise Price.

          M   =   the Fair Value per share of Class C Common Stock on the record
                  date mentioned below.

          F   =   the fair market value on the record date of the debt
                  securities, preferred stock, assets, securities, rights or
                  warrants to be distributed in respect of

                                      -7-
<PAGE>

                    one share of Class C Common Stock as determined in good
                    faith by the Board of Directors of the Company (the "Board
                    of Directors").

          The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the distribution.

          This subsection 7.3 does not apply to cash dividends or cash
distributions paid out of consolidated current or retained earnings as shown on
the books of the Company prepared in accordance with generally accepted
accounting principles. Also, this subsection 7.3 does not apply to rights,
options or warrants referred to in subsection 7.2 hereof

          7.4.  Adjustment for Class C Common Stock Issue.

          If the Company issues shares of Class C Common Stock for a
consideration per share less than the Fair Value per share on the date the
Company fixes the offering price of such additional shares, the Exercise Price
shall be adjusted in accordance with the formula:

                        P

                      ----

      E'  =  E  x  O  +  M

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

                  A

where:

          E'  =   the adjusted Exercise Price.

          E   =   the then current Exercise Price.

          O   =   the number of shares outstanding immediately prior to the
                  issuance of such additional shares.

          P   =   the aggregate consideration received for the issuance of such
                  additional shares.

          M   =   the Fair Value per share on the date of issuance of such
                  additional shares.

          A   =   the number of shares outstanding immediately after the
                  issuance of such additional shares.

          The adjustment shall be made successively whenever any such issuance
is made, and shall become effective immediately after such issuance.

          This subsection 7.4 does not apply to:

            (1) any of the transactions described in subsections 7.1, 7.2 and
     7.3 of this Section 7,

                                      -8-
<PAGE>

               (2) the exercise of Warrants, or the conversion or exchange of
     other securities convertible or exchangeable for Class C Common Stock the
     issuance of which caused an adjustment to be made under subsection 7.5,

               (3) Class C Common Stock issued to the Company's employees,
     directors or consultants (or any of the foregoing of its subsidiaries)
     under bona fide employee benefit plans adopted by the Board of Directors
     and approved by the holders of Class C Common Stock when required by law,
     if such Class C Common Stock would otherwise be covered by this subsection
     7.4 (but only to the extent that the aggregate number of shares excluded
     hereby and issued after the date of this Warrant Agreement shall not,
     together with the shares of Class C Common Stock underlying the options
     described in the last paragraph of subsection 7.2 hereof, exceed 10% of the
     Class C Common Stock outstanding at the time of the adoption of each such
     plan, exclusive of anti-dilution adjustments thereunder), or

               (4) Class C Common Stock issued to shareholders of any Person
     which merges into the Company, or with a subsidiary of the Company, in
     proportion to their stock holdings of such Person immediately prior to such
     merger, upon such merger, provided that if such Person is an Affiliate of
     the Company, the Board of Directors shall have obtained a fairness opinion
     from a nationally recognized investment banking, appraisal or valuation
     firm, which is not an Affiliate of the Company, stating that the
     consideration received in such merger is fair to the Company from a
     financial point of view.

               7.5.  Adjustment for Convertible Securities Issue.

          If the Company issues any securities convertible into or exchangeable
for Class C Common Stock (other than securities issued in transactions described
in subsections 7.1, 7.2 and 7.3 of this Section 7) for a consideration per share
of Class C Common Stock initially deliverable upon conversion or exchange of
such securities less than the Fair Value per share on the date of issuance of
such securities, the Exercise Price shall be adjusted in accordance with this
formula:

                                         P

                                       -----

                                    O  +  M

                        E' =  E  x  --------

                                    O  +  D

where:

          E'  =   the adjusted Exercise Price.

          E   =   the then current Exercise Price.

          O   =   the number of shares outstanding immediately prior to the
                  issuance of such securities.

          P   =   the aggregate consideration received for the issuance of such
                  securities.

          M   =   the Fair Value per share on the date of issuance of such
                  securities.


                                      -9-
<PAGE>

          D   =   the maximum number of shares deliverable upon conversion or in
                  exchange for such securities at the initial conversion or
                  exchange rate.

          The adjustment shall be made successively whenever any such issuance
          is made, and shall become effective immediately after such issuance.

          If all of the Class C Common Stock deliverable upon conversion or
exchange of such securities have not been issued when such securities are no
longer outstanding, then the Exercise Price shall promptly be readjusted to the
Exercise Price which would then be in effect had the adjustment upon the
issuance of such securities been made on the basis of the actual number of
shares of Class C Common Stock issued upon conversion or exchange of such
securities.

          This subsection 7.5 does not apply to convertible securities issued to
shareholders of any person which merges into the Company, or with a subsidiary
of the Company, in proportion to their stock holdings of such person immediately
prior to such merger, upon such merger, provided that if such person is an
Affiliate of the Company, the Board of Directors shall have obtained a fairness
opinion from a nationally recognized investment banking, appraisal or valuation
firm, which is not an Affiliate of the Company, stating that the consideration
received in such merger is fair to the Company from a financial point of view.

          7.6.  Consideration Received.

          For purposes of any computation respecting consideration received
pursuant to subsections 7.4, and 7.5 of this Section 7, the following shall
apply:

               (1) in the case of the issuance of shares of Class C Common Stock
     for cash, the consideration shall be the amount of such cash, provided that
     in no case shall any deduction be made for any commissions, discounts or
     other expenses incurred by the Company for any underwriting of the issue or
     otherwise in connection therewith;

               (2) in the case of the issuance of shares of Class C Common Stock
     for a consideration in whole or in part other than cash, the consideration
     other than cash shall be deemed to be the fair market value thereof as
     determined in good faith by the Board of Directors (irrespective of the
     accounting treatment thereof), whose determination shall be conclusive, and
     described in a Board resolution which shall be delivered to the Holder;

               (3) in the case of the issuance of securities convertible into or
     exchangeable for shares, the aggregate consideration received therefor
     shall be deemed to be the consideration received by the Company for the
     issuance of such securities plus the additional minimum consideration, if
     any, to be received by the Company upon the conversion or exchange thereof
     (the consideration in each case to be determined in the same manner as
     provided in clauses (1) and (2) of this subsection); and

               (4) in the case of the issuance of shares of Class C Common Stock
     pursuant to rights, options or warrants which rights, options or warrants
     were originally issued together with one or more other securities as part
     of a unit at a price per unit, the consideration shall be deemed to be the
     fair value of such rights, options or warrants at the time of issuance
     thereof as determined in good faith by the Board of Directors whose
     determination shall be conclusive and described in a Board resolution which
     shall be delivered to the Holder plus the additional

                                      -10-
<PAGE>

     minimum consideration, if any, to be received by the Company upon the
     exercise, conversion or exchange thereof (as determined in the same manner
     as provided in clauses (1) and (2) of this subsection).

          7.7.  Fair Value.

          In subsections 7.2, 7.3, 7.4 and 7.5 and Section 7 hereof, the "Fair
Value" per security at any date of determination shall be (1) in connection with
a sale by the Company to a party that is not an Affiliate of the Company in an
arm's-length transaction (a "Non-Affiliate Sale"), the price per security at
which such security is sold and (2) in connection with any sale by the Company
to an Affiliate of the Company, (a) the last price per security at which such
security was sold in a Non-Affiliate Sale within the three-month period
preceding such date of determination or (b) if clause (a) is not applicable, the
fair market value of such security determined in good faith by (i) a majority of
the Board of Directors, including a majority of the Disinterested Directors, and
approved in a Board resolution delivered to the Holder or (ii) a nationally
recognized investment banking, appraisal or valuation firm, which is not an
Affiliate of the Company, in each case, taking into account, among all other
factors deemed relevant by the Board of Directors or such investment banking,
appraisal or valuation firm, the trading price and volume of such security on
any national securities exchange or automated quotation system on which such
security is traded.

          For purposes of this subsection 7.7, "Disinterested Director" means,
in connection with any issuance of securities that gives rise to a determination
of the Fair Value thereof, each member of the Board of Directors who is not an
officer, employee, director or other Affiliate of the party to whom the Company
is proposing to issue the securities giving rise to such determination.

          For purposes of this subsection 7.7, "Affiliate" of any specified
Person means (A) any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such specified
Person and (B) any director, officer or employee of such specified person. For
purposes of this definition "control" (including, with correlative meanings, the
terms "controlling," "controlled by" and "under common control with") as used
with respect to any Person, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of
such Person, whether through the ownership of voting securities, by agreement or
otherwise.

          7.8.  When De Minimis Adjustment May Be Deferred.

          No adjustment in the Exercise Price need be made unless the adjustment
would require an increase or decrease of at least 1% in the Exercise Price. Any
adjustments that are not made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 8 shall be made
to the nearest one-one thousandth of a cent or to the nearest one-one thousandth
of a share, as the case may be, it being understood that no such rounding shall
be made under subsection (p).

          7.9.  When No Adjustment Required.

          No adjustment need be made for a transaction referred to subsections
7.1, 7.2, 7.3, 7.4, 7.5 or 7.6 hereof, if the Holder is to participate (without
being required to exercise its Warrants) in the transaction on a basis and with
notice that the Board of Directors determines to be fair and appropriate in
light of the basis and notice on which holders of Class C Common Stock
participate in the transaction. No adjustment need be made for (i) rights to
purchase Class C Common Stock pursuant to a Company

                                      -11-
<PAGE>

plan for reinvestment of dividends or interest or (ii) a change in the par value
or no par value of the Class C Common Stock. To the extent the Warrants become
convertible into cash, no adjustment need be made thereafter as to the cash.
Interest will not accrue on the cash.

          7.10.  Notice of Adjustment.

          Whenever the Exercise Price is adjusted, the Company shall provide the
notices required by Section 10 hereof.

          7.11.  Notice of Certain Transactions.

          If (i) the Company takes any action that would require an adjustment
in the Exercise Price pursuant to subsection 7.1, 7.2, 7.3, 7.4, 7.5 or 7.6
hereof and if the Company does not arrange for the Holder to participate
pursuant to subsection 7.9 hereof, (ii) the Company takes any action that would
require a supplemental Warrant Agreement pursuant to subsection 7.12 hereof or
(iii) there is a liquidation or dissolution of the Company, then the Company
shall mail to the Holder a notice stating the proposed record date for a
dividend or distribution or the proposed effective date of a subdivision,
combination, reclassification, consolidation, merger, transfer, lease,
liquidation or dissolution. The Company shall mail the notice at least 15 days
before such date. Failure to mail the notice or any defect in it shall not
affect the validity of the transaction.

          7.12.  Reorganization of Company.

          Immediately after the date hereof, if the Company consolidates or
merges with or into, or transfers or leases all or substantially all its assets
to, any person, upon consummation of such transaction the Warrants shall
automatically become exercisable for the kind and amount of securities, cash or
other assets which the holder of a Warrant would have owned immediately after
the consolidation, merger, transfer or lease if the holder had exercised the
Warrant immediately before the effective date of the transaction. Concurrently
with the consummation of such transaction, the corporation formed by or
surviving any such consolidation or merger if other than the Company, or the
person to which such sale or conveyance shall have been made, shall enter into
(i) a supplemental Warrant Agreement so providing and further providing for
adjustments which shall be as nearly equivalent as may be practical to the
adjustments provided for in this subsection 7.12 and (ii) a supplement to the
Registration Rights Agreement providing for the assumption of the Company's
obligations thereunder. The successor Company shall mail to Warrant holders a
notice describing the supplemental Warrant Agreement and Registration Rights
Agreement. If the issuer of securities deliverable upon exercise of Warrants
under the supplemental Warrant Agreement is an Affiliate of the formed,
surviving, transferee or lessee corporation, that issuer shall join in the
supplemental Warrant Agreement and Registration Rights Agreement. If this
subsection 7.12 applies, subsections 7.1, 7.2, 7.3, 7.4, 7.5 and 7.6 hereof do
not apply.

          7.13.  Company Determination Final.

          Any determination that the Company or the Board of Directors must make
pursuant to subsections 7.1, 7.3, 7.4, 7.5, 7.6, 7.7, 7.8 or 7.9 hereof is
conclusive.

                                      -12-
<PAGE>

          7.14.  When Issuance or Payment May Be Deferred.

          In any case in which this Section 7 shall require that an adjustment
in the Exercise Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event (i)
issuing to the Holder exercised after such record date the Warrant Shares and
other capital stock of the Company, if any, issuable upon such exercise over and
above the Warrant Shares and other capital stock of the Company, if any,
issuable upon such exercise on the basis of the Exercise Price and (ii) paying
to Holder any amount in cash in lieu of a fractional share pursuant to Section
10 hereof; provided that the Company shall deliver to Holder a due bill or other
appropriate instrument evidencing Holder's right to receive such additional
Warrant Shares, other capital stock and cash upon the occurrence of the event
requiring such adjustment.

          7.15.  Adjustment in Number of Shares.

          Upon each adjustment of the Exercise Price pursuant to this Section 7
each Warrant outstanding prior to the making of the adjustment in the Exercise
Price shall thereafter evidence the right to receive upon payment of the
adjusted Exercise Price that number of shares of Class C Common Stock
(calculated to the nearest hundredth) obtained from the following formula:

          N' =  N  x  E
                     ---

                      E'

where:

          N'  =   the adjusted number of Warrant Shares issuable upon exercise
                  of a Warrant by payment of the adjusted Exercise Price.

          N   =   the number or Warrant Shares previously issuable upon exercise
                  of a Warrant by payment of the Exercise Price prior to
                  adjustment.

          E'  =   the adjusted Exercise Price.

          E   =   the Exercise Price prior to adjustment.

          7.16.  Form of Warrants.

          Irrespective of any adjustments in the Exercise Price or the number or
kind of shares purchasable upon the exercise of the Warrants, Warrants
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the Warrants initially issuable
pursuant to this Agreement.

SECTION 8.  FRACTIONAL INTERESTS.

          The Company shall not be required to issue fractional Warrant Shares
on the exercise of Warrants. If more than one Warrant shall be presented for
exercise in full at the same time by the same holder, the number of full Warrant
Shares which shall be issuable upon the exercise thereof shall be computed on
the basis of the aggregate number of Warrant Shares purchasable on exercise of
the Warrants so presented. If any fraction of a Warrant Share would, except for
the provisions of this

                                      -13-
<PAGE>

Section 8, be issuable on the exercise of any Warrant (or specified portion
thereof), the Company shall pay an amount in cash equal to the Fair Value per
Warrant Share, as determined on the day immediately preceding the date the
Warrant is presented for exercise, multiplied by such fraction, computed to the
nearest whole U.S. cent.

SECTION 9. NOTICES TO WARRANT HOLDERS.

          9.1 Upon any adjustment of the Exercise Price pursuant to Section 9
hereof, the Company shall promptly thereafter (i) cause to be prepared a
certificate of a firm of independent public accountants of recognized standing
selected by the Board of Directors of the Company (who may be the regular
auditors of the Company) setting forth the Exercise Price after such adjustment
and setting forth in reasonable detail the method of calculation and the facts
upon which such calculations are based and setting forth the number of Warrant
Shares (or portion thereof) issuable after such adjustment in the Exercise
Price, upon exercise of a Warrant and payment of the adjusted Exercise Price,
which certificate shall be conclusive evidence of the correctness of the matters
set forth therein, and (ii) cause to be given to each of the holders of Warrants
at such holder's address as it appears in the records of the Company (unless
otherwise indicated by any such holder) written notice of such adjustments by
first-class mail, postage prepaid. Where appropriate, such notice may be given
in advance and included as a part of the notice required to be mailed under the
other provisions of this Section 9.

          9.2   In case:

          (i)   the Company shall authorize the issuance to all holders of
     shares of Class C Common Stock of rights, options or warrants to subscribe
     for or purchase shares of Class C Common Stock or of any other subscription
     rights or warrants;

          (ii)  the Company shall authorize the distribution to all holders of
     shares of Class C Common Stock of evidences of its indebtedness or assets
     (other than dividends or cash distributions paid out of consolidated
     current or retained earnings as shown on the books of the Company prepared
     in accordance with generally accepted accounting principles or dividends
     payable in shares of Class C Common Stock or distributions referred to in
     subsection 9.1 hereof);

          (iii) of any consolidation or merger to which the Company is a party
     and for which approval of any stockholders of the Company is required, or
     of the conveyance or transfer of the properties and assets of the Company
     substantially as an entirety, or of any reclassification or change of Class
     C Common Stock issuable upon exercise of the Warrants (other than a change
     in par value, or from par value to no par value, or from no par value to
     par value, or as a result of a subdivision or combination), or a tender
     offer or exchange offer for shares of Class C Common Stock;

          (iv)  of the voluntary or involuntary dissolution, liquidation or
     winding up of the Company; or

          (v)  the Company proposes to take any action (other than actions of
     the character described in subsection 7.1 hereof) which would require an
     adjustment of the Exercise Price pursuant to Section 7 hereof;

                                      -14-
<PAGE>

then the Company shall cause to be given to each of the registered holders of
Warrants at such holder's address as it appears in the records of the Company
(unless otherwise indicated by any such holder), at least 20 days (or 10 days in
any case specified in clauses (i) or (ii) above) prior to the applicable record
date hereinafter specified, or promptly in the case of events for which there is
no record date, by first-class mail, postage prepaid, a written notice stating
(x) the date as of which the holders of record of shares of Class C Common Stock
to be entitled to receive any such rights, options, warrants or distribution are
to be determined, (y) the initial expiration date set forth in any tender offer
or exchange offer for shares of Class C Common Stock, or (z) the date on which
any such consolidation, merger, conveyance, transfer, dissolution, liquidation
or winding up is expected to become effective or consummated, and the date as of
which it is expected that holders of record of shares of Class C Common Stock
shall be entitled to exchange such shares for securities or other property, if
any, deliverable upon such reclassification, consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up. The failure to give the notice
required by this Section 9 or any defect therein shall not affect the legality
or validity of any distribution, right, option, warrant, consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding up, or the vote upon
any action.

          9.3.  Nothing contained in this Agreement or in any of the Warrant
Certificates shall be construed as conferring upon the holders of Warrants the
right to vote or to consent or to receive notice as stockholders in respect of
the meetings of stockholders or the election of directors of the Company or any
other matter, or any rights whatsoever as stockholders of the Company.

SECTION 10.  REPORTS

          10.1. The Company agrees with Holder, for so long as any Warrants or
Warrant Shares remain outstanding and during any period in which the Company (i)
is not subject to Section 13 or 15(d) of the Exchange Act, to make available,
upon request of Holder, to such Holder or beneficial owner of Warrants or
Warrant Shares in connection with any sale thereof and any prospective purchaser
of such Warrants or Warrant Shares designated by such Holder or beneficial
owner, the information required by Rule 144(A)(d)(4) under the Securities Act in
order to permit resales of such Warrants or Warrant Shares pursuant to Rule
144A, and (ii) is subject to Section 13 or 15(d) of the Exchange Act, to make
all filings required thereby in a timely manner in order to permit resales of
such Warrants or Warrant Shares pursuant to Rule 144A.

SECTION 11.  NOTICES TO COMPANY.

          Any notice or demand authorized by this Agreement to be given or made
by the registered holder of any Warrant to or on the Company shall be
sufficiently given or made when received if deposited in the mail, first class
or registered, postage prepaid, addressed (until another address is filed in
writing by the Company) as follows:

          The Derby Cycle Corporation
          300 First Stamford Place
          Stamford, CT 06902
          Telecopier No.:
          Attention: Dan Lynch

                                      -15-
<PAGE>

     With a copy to:

          Kirkland & Ellis
          International Financial Centre
          Old Broad Street
          London EC2N 1HQ UK
          Telecopier No.: 44 171 816-8800
          Attention:  M. Gilbey Strub, Esq.

SECTION 12. FURTHER AGREEMENTS.

          12.1.  Public Equity Offering.

          The Company agrees that it shall not undertake any initial Public
Equity Offering of Class C Common Stock of any class other than the class of
Class C Common Stock into which the Warrants are exercisable, unless the Company
provides Holders of the Warrants and Non Public Warrant Shares the ability to
convert their Warrant Shares or to exercise their Warrants for Class C Common
Stock of the same class as is the subject of the initial Public Equity Offering.

          12.2.  Investment Company.

          The Company agrees that it shall not, and shall not permit any of its
subsidiaries, to take any action that would subject it to the requirements of
the Investment Company Act of 1940.

SECTION 13.  SUPPLEMENTS AND AMENDMENTS.

          The Company may from time to time supplement or amend this Agreement
without the approval of any holders of Warrants in order to cure any ambiguity
or to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provision herein, or to make any other
provisions in regard to matters or questions arising hereunder which the Company
may deem necessary or desirable and which shall not in any way adversely affect
the interests of the holders of Warrants. Any amendment or supplement to this
Agreement that has an adverse effect on the interests of the holders of Warrants
shall require the written consent of the holders of Warrants exercisable into a
majority of the Warrant Shares. The consent of each holder of Warrants affected
shall be required for any amendment pursuant to which the Exercise Price would
be increased or the number of Warrant Shares purchasable upon exercise of
Warrants would be decreased (other than pursuant to adjustments provided in this
Agreement) or which would affect any holder of Warrants in a manner different
from any other holder of Warrants.

SECTION 14.  SUCCESSORS.

          All the covenants and provisions of this Agreement by or for the
benefit of the Company or Holder shall bind and inure to the benefit of their
respective successors and assigns hereunder.

                                      -16-
<PAGE>

SECTION 15.  TERMINATION.

          This Agreement shall terminate at 5:00 p.m., New York City time on
February 15, 2010. Notwithstanding the foregoing, this Agreement will terminate
on any earlier date if all Warrants have been exercised.

SECTION 16.  GOVERNING LAW.

          This Agreement and the Warrant Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of New York and for all
purposes shall be construed in accordance with the internal laws of said State.

SECTION 17.  BENEFITS OF THIS AGREEMENT.

          Nothing in this Agreement shall be construed to give to any Person
other than the Company and the registered holders of Warrants any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company and the registered holders
of Warrants.

SECTION 18.  COUNTERPARTS.

          This Agreement may be executed in any number of counterparts and each
of such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.

                           [Signature Page Follows]

                                      -17-
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this Warrant
Agreement to be duly executed, as of the day and year first above written.

                                   The Derby Cycle Corporation


                                   By: ________________________________
                                       Name:
                                       Title:


                                   Thayer Capital Partners, III, L.P.


                                   By: _________________________________
                                       Name:
                                       Title:


                                   Perseus Capital L.L.C.


                                   By: _________________________________
                                       Name:
                                       Title:

                                      -18-
<PAGE>

                                  EXHIBIT A-1

     THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR
IN ACCORDANCE WITH AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (SUBJECT TO THE DELIVERY OF SUCH EVIDENCE, IF ANY, REQUIRED
UNDER THE WARRANT AGREEMENT PURSUANT TO WHICH THIS SECURITY IS ISSUED) AND IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER JURISDICTION. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER
OR ANOTHER EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PURCHASER IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d)
IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B)
THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN
(A) ABOVE.

No. ___________                                    Exercisable for 1250 shares


                   Class C Common Stock Warrant Certificate

                          THE DERBY CYCLE CORPORATION

     This Class C Warrant Certificate certifies that Thayer Capital Partners,
III is the registered holder of Warrants expiring February 15, 2010 (the
"Warrants") to purchase Class C Common Stock, par value $0.01 (the "Class C
Common Stock"), of The Derby Cycle Corporation, a Delaware corporation (the
"Company"). Each Class C Warrant entitles the registered holder upon exercise at
any time from 9:00 a.m. February 15, 2000 (the "Exercise Date") until 5:00 p.m.
New York City Time on February 15, 2010 to receive from the Company 1,250 fully
paid and nonassessable shares of Class C Common Stock (the "Warrant Shares") at
the initial exercise price (the "Exercise Price") of $0.01 per share payable
upon surrender of this Warrant Certificate and payment of the Exercise Price at
the offices of the Company, but only subject to the conditions set forth herein
and in the Warrant Agreement referred to on the reverse hereof. The Exercise
Price and number of Warrant Shares issuable

                                      A-1
<PAGE>

upon exercise of the Class C Warrant are subject to adjustment upon the
occurrence of certain events set forth in the Warrant Agreement.

          No Class C Warrant may be exercised after 5:00 p.m., New York City
Time on February 15, 2010, and to the extent not exercised by such time such
Warrants shall become void.

          Reference is hereby made to the further provisions of this Class C
Warrant Certificate set forth on the reverse hereof and such further provisions
shall for all purposes have the same effect as though fully set forth at this
place.

          This Warrant Certificate shall be governed by and construed in
accordance with the internal laws of the State of New York.

                                      A-2
<PAGE>

          IN WITNESS WHEREOF, The Derby Cycle Corporation has caused this Class
C Warrant Certificate to be signed below.



Dated: February 15, 2000


                                             The Derby Cycle Corporation


                                             By: __________________________
                                                 Name:
                                                 Title:

                                      A-3
<PAGE>

                   [Reverse of Class C Warrant Certificate]

          The Class C Warrants evidenced by this Class C Warrant Certificate are
issued pursuant to an Class C Warrant Agreement dated as of February 15, 2000
(the "Class C Warrant Agreement"), duly executed and delivered by the Company to
Thayer Capital Partners, III, L.P. which Class C Warrant Agreement is hereby
incorporated by reference in and made a part of this instrument and is hereby
referred to for a description of the rights, limitation of rights, obligations,
duties and immunities thereunder of the Company and the holders (the words
"holders" or "holder" meaning the registered holders or registered holder) of
the Class C Warrant. A copy of the Class C Warrant Agreement may be obtained by
the holder hereof upon written request to the Company.

          Class C Warrants may be exercised at any time on or after February 15,
2000 and on or before 5:00 p.m. New York City time on February 15, 2000;
provided that holders shall be able to exercise their Class C Warrants only if a
registration statement relating to the Warrant Shares is then in effect, or the
exercise of such Class C Warrants is exempt from the registration requirements
of the Securities Act of 1933, as amended (the "Securities Act"), and such
securities are qualified for sale or exempt from qualification under the
applicable securities laws of the states in which the various holders of the
Class C Warrants or other persons to whom it is proposed that the Warrant Shares
be issued on exercise of the Class C Warrants reside. In order to exercise all
or any of the Class C Warrants represented by this Warrant Certificate, the
holder must deliver to the Company at its address set forth in Section 12 of the
                                                               ----------
Class C Warrant Agreement this Class C Warrant Certificate and the form of
election to purchase on the reverse hereof duly filled in and signed, and upon
payment to the Company of the Exercise Price, as adjusted as provided in the
Class C Warrant Agreement, for the number of Warrant Shares in respect of which
such Class C Warrants are then exercised. No adjustment shall be made for any
dividends on any Class C Common Stock issuable upon exercise of this Class C
Warrant.

          The Class C Warrant Agreement provides that upon the occurrence of
certain events the Exercise Price set forth on the face hereof may, subject to
certain conditions, be adjusted. If the Exercise Price is adjusted, the Class C
Warrant Agreement provides that the number of shares of Class C Common Stock
issuable upon the exercise of each Class C Warrant shall be adjusted. No
fractions of a share of Class C Common Stock will be issued upon the exercise of
any Class C Warrant, but the Company will pay the cash value thereof determined
as provided in the Class C Warrant Agreement.

          The Class C Warrants and the shares of Class C Common Stock underlying
the Warrants are subject to certain restrictions or transfer and other
restrictions set forth in an Amended and Restated Shareholders' Agreement, dated
February 3, 1999. Copies of the Amended and Restated Shareholders' Agreement may
be obtained by the holder hereof, upon written request to the Company.

          Class C Warrant Certificates, when surrendered at the office of the
Company by the registered holder thereof in person or by legal representative or
attorney duly authorized in writing, may be exchanged, in the manner and subject
to the limitations provided in the Class C Warrant Agreement, but without
payment of any service charge, for another Class C Warrant Certificate or Class
C Warrant Certificates of like tenor evidencing in the aggregate a like number
of Class C Warrants.

          Upon due presentation for registration of transfer of this Class C
Warrant Certificate at the office of the Company a new Class C Warrant
Certificate or Class C Warrant Certificates of like tenor and evidencing in the
aggregate a like number of Class C Warrants shall be issued to the transferee(s)
in exchange for this Class C Warrant Certificate, subject to the limitations
provided in the

                                      A-4
<PAGE>

Class C Warrant Agreement, without charge except for any tax or other
governmental charge imposed in connection therewith.

          The Company may deem and treat the registered holder(s) thereof as the
absolute owner(s) of this Class C Warrant Certificate (notwithstanding any
notation of ownership or other writing hereon made by anyone), for the purpose
of any exercise hereof, of any distribution to the holder(s) hereof, and for all
other purposes, the Company shall not be affected by any notice to the contrary.
Neither the Class C Warrants nor this Class C Warrant Certificate entitles any
holder hereof to any rights of a stockholder of the Company.

                                      A-5
<PAGE>

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR
IN ACCORDANCE WITH AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (SUBJECT TO THE DELIVERY OF SUCH EVIDENCE, IF ANY, REQUIRED
UNDER THE WARRANT AGREEMENT PURSUANT TO WHICH THIS SECURITY IS ISSUED) AND IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER JURISDICTION. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER
OR ANOTHER EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PURCHASER IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d)
IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B)
THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN
(A) ABOVE.

No. ___________                                   Exercisable for 1250 shares

                   Class C Common Stock Warrant Certificate

                          THE DERBY CYCLE CORPORATION

          This Class C Warrant Certificate certifies that Perseus Capital,
L.L.C. is the registered holder of Warrants expiring February 15, 2010 (the
"Warrants") to purchase Class C Common Stock, par value $0.01 (the "Class C
Common Stock"), of The Derby Cycle Corporation, a Delaware corporation (the
"Company"). Each Class C Warrant entitles the registered holder upon exercise at
any time from 9:00 a.m. February 15, 2000 (the "Exercise Date") until 5:00 p.m.
New York City Time on February 15, 2010 to receive from the Company 1250 fully
paid and nonassessable shares of Class C Common Stock (the "Warrant Shares") at
the initial exercise price (the "Exercise Price") of $0.01 per share payable
upon surrender of this Warrant Certificate and payment of the Exercise Price at
the offices of the Company, but only subject to the conditions set forth herein
and in the Warrant Agreement referred to on the reverse hereof. The Exercise
Price and number of Warrant Shares issuable upon exercise of the Class C Warrant
are subject to adjustment upon the occurrence of certain events set forth in the
Warrant Agreement.

                                      A-6
<PAGE>

          No Class C Warrant may be exercised after 5:00 p.m., New York City
Time on February 15, 2010, and to the extent not exercised by such time such
Warrants shall become void.

          Reference is hereby made to the further provisions of this Class C
Warrant Certificate set forth on the reverse hereof and such further provisions
shall for all purposes have the same effect as though fully set forth at this
place.

          This Warrant Certificate shall be governed by and construed in
accordance with the internal laws of the State of New York.

                                      A-7
<PAGE>

          IN WITNESS WHEREOF, The Derby Cycle Corporation has caused this Class
C Warrant Certificate to be signed below.


Dated: February 15, 2000

                                           The Derby Cycle Corporation



                                           By: ______________________________
                                               Name:
                                               Title:

                                      A-8
<PAGE>

                   [Reverse of Class C Warrant Certificate]

          The Class C Warrants evidenced by this Class C Warrant Certificate are
issued pursuant to a Class C Warrant Agreement dated as of February 15, 2000
(the "Class C Warrant Agreement"), duly executed and delivered by the Company to
Perseus Capital, L.L.C. which Class C Warrant Agreement is hereby incorporated
by reference in and made a part of this instrument and is hereby referred to for
a description of the rights, limitation of rights, obligations, duties and
immunities thereunder of the Company and the holders (the words "holders" or
"holder" meaning the registered holders or registered holder) of the Class C
Warrant. A copy of the Class C Warrant Agreement may be obtained by the holder
hereof upon written request to the Company.

          Class C Warrants may be exercised at any time on or after February 15,
2000 and on or before 5:00 p.m. New York City time on February 15, 2010;
provided that holders shall be able to exercise their Class C Warrants only if a
registration statement relating to the Warrant Shares is then in effect, or the
exercise of such Class C Warrants is exempt from the registration requirements
of the Securities Act of 1933, as amended (the "Securities Act"), and such
securities are qualified for sale or exempt from qualification under the
applicable securities laws of the states in which the various holders of the
Class C Warrants or other persons to whom it is proposed that the Warrant Shares
be issued on exercise of the Class C Warrants reside. In order to exercise all
or any of the Class C Warrants represented by this Warrant Certificate, the
holder must deliver to the Company at its address set forth in Section 12 of the
                                                               ----------
Class C Warrant Agreement this Class C Warrant Certificate and the form of
election to purchase on the reverse hereof duly filled in and signed, and upon
payment to the Company of the Exercise Price, as adjusted as provided in the
Class C Warrant Agreement, for the number of Warrant Shares in respect of which
such Class C Warrants are then exercised.  No adjustment shall be made for any
dividends on any Class C Common Stock issuable upon exercise of this Class C
Warrant.

          The Class C Warrant Agreement provides that upon the occurrence of
certain events the Exercise Price set forth on the face hereof may, subject to
certain conditions, be adjusted. If the Exercise Price is adjusted, the Class C
Warrant Agreement provides that the number of shares of Class C Common Stock
issuable upon the exercise of each Class C Warrant shall be adjusted. No
fractions of a share of Class C Common Stock will be issued upon the exercise of
any Class C Warrant, but the Company will pay the cash value thereof determined
as provided in the Class C Warrant Agreement.

          The Class C Warrants and the shares of Class C Common Stock underlying
the Warrants are subject to certain restrictions or transfer and other
restrictions set forth in the Amended and Restated Shareholders' Agreement,
dated February 3, 1999. Copies of the Amended and Restated Shareholders'
Agreement may be obtained by the holder hereof, upon written request to the
Company.

          Class C Warrant Certificates, when surrendered at the office of the
Company by the registered holder thereof in person or by legal representative or
attorney duly authorized in writing, may be exchanged, in the manner and subject
to the limitations provided in the Class C Warrant Agreement, but without
payment of any service charge, for another Class C Warrant Certificate or Class
C Warrant Certificates of like tenor evidencing in the aggregate a like number
of Class C Warrants.

          Upon due presentation for registration of transfer of this Class C
Warrant Certificate at the office of the Company a new Class C Warrant
Certificate or Class C Warrant Certificates of like tenor and evidencing in the
aggregate a like number of Class C Warrants shall be issued to the transferee(s)
in exchange for this Class C Warrant Certificate, subject to the limitations
provided in the

                                      A-9
<PAGE>

Class C Warrant Agreement, without charge except for any tax or other
governmental charge imposed in connection therewith.

          The Company may deem and treat the registered holder(s) thereof as the
absolute owner(s) of this Class C Warrant Certificate (notwithstanding any
notation of ownership or other writing hereon made by anyone), for the purpose
of any exercise hereof, of any distribution to the holder(s) hereof, and for all
other purposes, the Company shall not be affected by any notice to the contrary.
Neither the Class C Warrants nor this Class C Warrant Certificate entitles any
holder hereof to any rights of a stockholder of the Company.

                                     A-10
<PAGE>

                        [Form of Election to Purchase]

               (To Be Executed Upon Exercise Of Class C Warrant)

          The undersigned hereby irrevocably elects to exercise the right,
represented by this Class C Warrant Certificate, to receive _____________ shares
of Class C Common Stock and herewith tenders payment for such shares to the
order of The Derby Cycle Corporation, in the amount of the Aggregate Exercise
Price in accordance with the terms hereof. The undersigned requests that a
certificate for such shares be registered in the name of _______________, whose
address is __________________ and that such shares be delivered to ___________,
whose address is ____________________________. If said number of shares is less
than all of the shares of Class C Common Stock purchasable hereunder, the
undersigned requests that a new Warrant Certificate representing the remaining
balance of such shares be registered in the name of ______________________,
whose address is ____________________, and that such Warrant Certificate be
delivered to whose address is ____________________.



                         ________________________________________
                         Signature

Date:

                                      B-1
<PAGE>

                                   EXHIBIT B

                                  ASSIGNMENT

          FOR VALUE RECEIVED, _________________________ hereby sells, assigns
and transfers all of the rights of the undersigned under the attached Class C
Warrant (Certificate No. W______) with respect to the number of shares of the
Class C Common Stock covered thereby set forth below, unto:


     Names of Assignee             Address             No. of Shares
     -------------------           -------             -------------



Dated:                                   Signature _____________________

                                                   _____________________

                                         Witness   _____________________

                                      B-2