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                                                                 EXHIBIT 10.3

                     SECOND AMENDMENT TO ROYALTY AGREEMENT
                            TERMINATION AND RELEASE

THIS  SECOND  AMENDMENT  TO ROYALTY AGREEMENT, TERMINATION  AND  RELEASE  (this
"Amendment")  is made as of this 27th day of July 1999, by and between  SUNGOLD
EYEWEAR, INC., a Washington corporation f/k/a Gargoyles Acquisition Corporation
("Purchaser"), and SUNGOLD ENTERPRISES, LTD., a New York corporation and/or its
assigns ("Seller").

                                    RECITALS

A.    Seller and Purchaser are parties to that certain Royalty Agreement  dated
as of April 10, 1997, as amended by that certain Amendment to Royalty Agreement
dated April 22, 1998 (the "Royalty Agreement").

B.    Seller  and  Purchase desire to further amend the  Royalty  Agreement  in
accordance with the terms of this Amendment.

C.    Capitalized  terms used but not otherwise defined herein shall  have  the
meanings ascribed to them in the Royalty Agreement.


                                   AGREEMENT

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

1.   STIPULATION AS TO AMOUNT OF 1999 ROYALTY PAYMENT.
     ------------------------------------------------
      Section  2(c)  of  the Royalty Agreement is amended to provide  that  the
Royalty  Payment payable to Seller for calendar year 1999 is a sum  certain  of
$614,131.

2.   PAYMENT OF 1999 ROYALTY PAYMENT.
     -------------------------------
      Section  3 of the Royalty Agreement is amended to provide that  the  1999
Royalty  Payment  of $614,131 is payable to Seller on July  27,  1999  by  wire
transfer to an account specified by Seller; PROVIDED, HOWEVER, the such payment
is  subject  to  receipt  by  Purchaser of that  certain  Second  Amendment  to
Employment Agreement, Separation and Release of even date herewith executed  by
Sheldon Goldman.

3.   TERMINATION OF ROYALTY AGREEMENT.
     --------------------------------
      Upon  payment in full of the 1999 Royalty Payment, the Royalty  Agreement
shall terminate and shall be of no further force or effect.

4.   MUTUAL RELEASE OF CLAIMS.
     ------------------------
     By signing this Agreement, and subject to payment by Purchaser and receipt
by  Seller of the 1999 Royalty Payment, Seller and Purchaser each agree not  to
start  any lawsuits, charges, or other legal actions against the other relating
to  the  Royalty Agreement.  In addition, Seller and Purchaser, each for itself
and  for  their  respective agents, representatives,  successors  and  assigns,
waives  any  rights  or  claims  each may have  against  the  other  and  their
respective  affiliated  and related entities, owners,  shareholders,  officers,
directors,  trustees,  heirs,  administrators,  executors,  agents,  employees,
employees'  spouses,  insurers,  either past  or  present,  and  all  of  their
successors, agents or assigns (collectively "Releasees") related to the Royalty
Agreement.  Seller and Purchaser each hereby release the Releasees from any and
all  claims, actions, causes of action, obligations, costs, expenses,  damages,
losses,  debts,  and  demands, including attorneys'  fees  and  costs  actually
incurred  (collectively "Claims") of whatever kind, in law or in equity,  known
or unknown, suspected or unsuspected, related to the Royalty Agreement.

5.   COUNTERPARTS.
     ------------
      This  Amendment may be signed in one or more counterparts each  of  which
shall  be  deemed  an original and together shall be deemed  on  and  the  same
instrument.

IN  WITNESS WHEREOF, the parties hereby have executed this Second Amendment  to
Royalty Agreement as of the date first above written.


SUNGOLD EYEWEAR, INC.,
a Washington corporation


     /s/  Leo Rosenberger
By ________________________________
     Leo Rosenberger, CEO and CFO



SUNGOLD ENTERPRISES, LTD.,
a New York corporation


     /s/ Sheldon Goldman
By ________________________________
     Sheldon Goldman, President