Exhibit 10.3

                              RENEWAL TERM NOTE II



$3,470,000                                                   September 17, 1998



     For value received, the undersigned, GARGOYLES, INC. ("Borrower"), promises
to pay to the order of U. S. BANK NATIONAL  ASSOCIATION  ("U. S. Bank"),  at its
principal place of business,  1420 Fifth Avenue,  Seattle,  Washington 98101, or
such other place or places as the holder  hereof may  designate in writing,  the
principal  sum  of  Three  Million  Four  Hundred   Seventy   Thousand   Dollars
($3,470,000)  in lawful  immediately  available  money of the  United  States of
America,  in  accordance  with the terms and  conditions  of that certain  first
amended and restated credit  agreement dated as of April 7, 1997, by and between
Borrower and U. S. Bank (together with all  supplements,  exhibits,  amendments,
and  modifications  thereto,  the "Credit  Agreement")  and that  certain  ninth
amendment to first amended and restated  credit  agreement of even date herewith
(the "Ninth  Amendment").  Borrower  also promises to pay interest on the unpaid
principal  balance  hereof,  in like  money in  accordance  with the  terms  and
conditions  and at the rate or rates provided for in the Credit  Agreement.  All
principal, interest, and other charges are due and payable in full on January 4,
1999.

     Borrower and all endorsers,  sureties,  and  guarantors  hereof jointly and
severally waive presentment for payment, demand, notice of nonpayment, notice of
protest,  and protest of this Note, and all other notices in connection with the
delivery,  acceptance,  performance,  default,  dishonor,  or enforcement of the
payment of this Note except such  notices as are  specifically  required by this
Note or by the Credit  Agreement,  and they agree that the  liability of each of
them shall be  unconditional  without regard to the liability of any other party
and shall not be in any manner  affected by any  indulgence,  extension of time,
renewal, waiver, or modification granted or consented to by U. S. Bank. Borrower
and all endorsers,  sureties,  and guarantors  hereof (1) consent to any and all
extensions of time,  renewals,  waivers, or modifications that may be granted by
U. S. Bank with respect to the payment or other  provisions of this Note and the
Credit  Agreement;  (2) consent to the release of any  property now or hereafter
securing this Note with or without  substitution;  and (3) agree that additional
makers,  endorsers,  guarantors,  or sureties may become  parties hereto without
notice to them and without affecting their liability hereunder.

     This Note is the Renewal  Term Note II  referred to in the Ninth  Amendment
and as such is entitled to all of the benefits and obligations  specified in the
Credit Agreement, including but not limited to any Collateral and any conditions
to making  advances  hereunder.  Terms defined in the Credit  Agreement are used
herein with the same  meanings.  Reference is made to the Credit  Agreement  for
provisions for the repayment of this Note and the  acceleration  of the maturity
hereof.


                                   GARGOYLES, INC., a
                                   Washington corporation



                                   By  /s/ Leo Rosenberger 
                                      ---------------------------
                                   Title: CEO and CFO