SETTLEMENT AGREEMENT

     SETTLEMENT  AGREEMENT  ("AGREEMENT")  dated as of January 14, 1998, between
RICHARD W. SIGMAN ("SIGMAN") and IMPERIAL WORLD, INC.  ("IMPERIAL  WORLD"),  IWI
HOLDING LIMITED  ("IWI"),  RHINE HOLDINGS  LIMITED ("RHINE  HOLDINGS") and RHINE
JEWELLERY LIMITED ("RHINE JEWELLERY") (collectively "the COMPANIES").

     WHEREAS,  SIGMAN  has  been  employed  by  IMPERIAL  WORLD  a  wholly-owned
subsidiary  of IWI , since  January  1, 1995,  under the terms of an  employment
contract which is effective until December 31, 1998; and

     WHEREAS,  SIGMAN has simultaneously been employed by RHINE HOLDINGS LIMITED
since  January  1,  1995,  under the terms of an  employment  contract  which is
effective until December 31, 1998; and

     WHEREAS, SIGMAN desires to resign from his offices, including that of chief
financial officer, and full-time employment with the COMPANIES;

     WHEREAS,  the  COMPANIES  agree to accept  and  thereafter  honor  SIGMAN's
resignation; and

     WHEREAS,  SIGMAN and the COMPANIES  desire to effectuate a final settlement
and  compromise  of all matters that are or could be in  controversy,  and which
directly  or  indirectly   relate  to  or  arise  out  of  SIGMAN's   employment
relationship with the COMPANIES;

     NOW,  THEREFORE,  in  consideration  of the mutual  covenants  and promises
herein contained, SIGMAN and the COMPANIES agree as follows:

<PAGE>

1.   Resignation.  Immediately  upon the COMPANIES'  execution of this Agreement
     and tender of the funds  required by paragraph  3.a.,  below,  SIGMAN shall
     tender his  resignation  from office in a form  acceptable to the COMPANIES
     and attached  hereto as Exhibit A.  SIGMAN's  resignation  from  employment
     shall be effective at 5:00 p.m. Central  Standard Time,  February 27, 1998,
     unless terminated sooner by mutual agreement of the parties.

2.   Duties. During the remainder of January and in February 1998, SIGMAN agrees
     to assist in the  closing  of the books for IWI,  IMPERIAL  WORLD and their
     subsidiaries,  for the  fiscal  year 1997 and to  provide  such  advice and
     counsel as may be  reasonably  requested  by Bruce  Anderson  or such other
     person as he may designate.

3.   Compensation.   As  consideration  for  his  resignation  from  office  and
     agreement to continue in the employ of IWI and IMPERIAL WORLD, SIGMAN shall
     receive the following:

     a.   Coincident with the execution of this  Agreement,  the COMPANIES shall
          pay to SIGMAN as salary  for the period of January  10,  1998  through
          January 31,  1998,  inclusive  the sum of ELEVEN  THOUSAND ONE HUNDRED
          TWENTY-FOUR  and NO/100  DOLLARS  ($11,124.00),  less only  applicable
          withholding  and payroll  taxes.  Said  payment  shall be by cashier's
          check or certified funds. Simultaneously, SIGMAN shall receive the sum
          of  TWENTY-FIVE  THOUSAND and NO/100 DOLLARS  ($25,000.00),  less only
          applicable  withholding  and payroll taxes,  from the funds  currently
          deposited  with the Law Firm of Paul M. Bauch pursuant to the terms of
          the Escrow  Agreement  (the  "Escrow  Agreement"),  a copy of which is
          attached as Exhibit B.

     b.   On  January  30,  1998,  the  COMPANIES  shall pay  SIGMAN  the sum of
          FOURTEEN   THOUSAND  EIGHT  HUNDRED   THIRTY-ONE  and  08/100  DOLLARS
          ($14,831.08),  less only applicable  withholding and payroll taxes, as
          salary for the month of February  1998.  Said payment shall be made by
          cashier's check or certified funds.

                                     2 of 9
<PAGE>

     c.   On February 27,  1998,  SIGMAN  shall  receive a final  payment of ONE
          HUNDRED   THOUSAND  and  NO/100   ($100,000),   less  only  applicable
          withholding and payroll taxes, from the funds currently deposited with
          the Law Firm of Paul M. Bauch pursuant to the Escrow Agreement.

     d.   In  addition  to the above,  SIGMAN  shall  continue  to  receive  his
          automobile  allowance  of SIX HUNDRED and NO/100  ($600.00)  per month
          during the months of January and February 1998.

The COMPANIES  agree and  acknowledge  that  termination of SIGMAN's  employment
hereunder,  other than for a material breach as determined by James Pierpont and
Joseph Benjamin,  prior to the end of business February 27, 1998, will in no way
affect SIGMAN's right to the above described compensation payments.

4.   Indemnification. The COMPANIES shall indemnify SIGMAN and hold him harmless
     against any and all damages,  expenses and attorney's  fees relating to any
     Claim  (as  hereinafter  defined).  As  used  herein,   "Claim"  means  any
     threatened,  pending or completed  action,  suit,  proceeding,  alternative
     dispute  resolution  mechanism,  inquiry,  hearing or  investigation  by or
     concerning the COMPANIES,  any of their subsidiaries or affiliates,  or any
     other officer, director, employee or agent, including SIGMAN. SIGMAN agrees
     to  cooperate  and  testify,  if  required,  in  litigation  involving  the
     COMPANIES, as he may be reasonably requested, and IWI will pay SIGMAN a per
     diem rate equal to the  greater of $250 or 20% of his then  current  weekly
     salary for each day, or part  thereof,  he spends in  connection  with such
     litigation.  In  addition,  IWI will  reimburse  SIGMAN for his  reasonable
     out-of-pocket  and travel  expenses,  including  economy class air fare and
     lodging. SIGMAN acknowledges that the per diem rate will not apply to those
     days he may be  required  to appear at trial if he  remains  an  individual
     named defendant in the presently pending litigation.

                                     3 of 9
<PAGE>

5.   Health Insurance. IWI shall provide SIGMAN with continued health and dental
     insurance for family coverage at no cost to SIGMAN through August 31, 1998,
     or until  such time as SIGMAN  shall be covered  by  another  such  policy,
     whichever is first to occur. In addition,  IWI shall make continued  health
     and dental insurance available to SIGMAN under COBRA after August 31, 1998,
     should SIGMAN not be covered by another policy at that time.

6.   Waiver  of  Claims.  SIGMAN  and the  COMPANIES  agree  that they each have
     certain know monetary claims against each other.  The parties agree that as
     a result of this Agreement, all such claims are hereby waived and released,
     including  claims  by  SIGMAN  for  accrued  vacation  pay  due  him at the
     execution of this Agreement.

7.   Companies To Provide  References And Refrain From  Disparaging  Remarks.The
     COMPANIES  agree that they will provide  SIGMAN with  favorable  references
     should they be asked to do so and they  further  agree the neither they nor
     any of their directors, officers, employees or agents will disparage SIGMAN
     or any of his  services  to the  COMPANIES  at any  time  or in any  manner
     whatsoever. SIGMAN agrees that he will not disparage the COMPANIES or their
     employees.  Should any party to this  Agreement or any of their  directors,
     officers,  employees or agents breach this  obligation,  the  non-breaching
     party may commence appropriate  litigations to recover damages,  actual and
     punitive,  caused by any and all such remarks or  comments,  in the Circuit
     Court of Cook County,  Illinois or the United States District Court for the
     Northern District of Illinois,  which ever is appropriate,  and the parties
     agree that they will not contest such court's jurisdiction and by execution
     of this Agreement do consent to said jurisdiction.

                                     4 of 9
<PAGE>

8.   Release of  Companies.  SIGMAN,  individually,  and on behalf of his heirs,
     assignees and legal representatives, hereby releases and forever discharges
     the COMPANIES and their directors,  officers,  employees, and agents, past,
     present  and  future,   and  their  respective   successors  and  assignees
     (hereinafter collectively referred to as the "Releases"),  from any and all
     known or  unknown  actions,  causes  of  action,  claims,  damages,  suits,
     obligations,  agreements,  attorney's fees or any other  liabilities of any
     kind  whatsoever  which  have or could be  asserted  against  the  Releases
     arising out of or related to his  employment  with and/or  separation  from
     employment  with the COMPANIES  and/or any of the other Releases and/or any
     other occurrence up to and including the date of this Agreement,  including
     all claims of discrimination of any kind under state, federal or local law,
     including  but not  limited to claims of age  discrimination  under the AGE
     DISCRIMINATION  IN EMPLOYMENT  ACT of 1967,  as amended,  but excluding any
     claims which by law SIGMAN cannot waive.

                                     5 of 9
<PAGE>

9.   Release of SIGMAN.  The COMPANIES  hereby  irrevocably  waive,  release and
     discharge  SIGMAN  from any and all  actions,  causes  of  action,  claims,
     damages,  suits,   obligations,   agreements,   attorney's  fees  or  other
     liabilities,  known or unknown, pending or threatened,  which the COMPANIES
     now  have,  own,  or hold,  or claim to have,  own,  or hold,  or which the
     COMPANIES at any time  heretofore  had,  owned, or held, or claimed to have
     had, owned, or held, as of the date of this Agreement.

10.  Right  To  Consult  Attorney.SIGMAN  acknowledges  that  he has  been  give
     twenty-two  (22) days to consider this  Agreement  thoroughly,  that he has
     been encouraged to consult with his personal  attorneys  before signing the
     Agreement,  and that he did so consult with his personal attorney before he
     signed the Agreement.

11.  Right of Revocation.  SIGMAN  understands that he may revoke this Agreement
     within seven (7) days after its signing,  that any revocation  must be made
     in writing and submitted  within such seven-day  period to the President of
     IMPERIAL WORLD, INC., and that if he does so revoke this Agreement, he will
     be required to reimburse the COMPANIES the funds  advanced to him under the
     provisions of paragraph 2 above.

                                     6 of 9
<PAGE>

12.  Acknowledgment  Of  Release.SIGMAN  AND THE COMPANIES  AGREE AND UNDERSTAND
     THAT THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

13.  Severability.  The  parties  hereto  acknowledge  and  agree  that  if  any
     provision  of this  Agreement  is  found,  held  or  deemed  by a court  of
     competent  jurisdiction  to be void,  unlawful or  unenforceable  under any
     applicable  statute or  controlling  law, the  remainder of this  Agreement
     shall remain in full force and effect.

14.  Governing Law. This Agreement  shall be governed by the law of the State of
     Illinois.

15.  Notices.  All  notices or  communications  hereunder  shall be in  writing,
     addressed as follows:

                  To the COMPANIES:
                  IWI Holding Limited
                  1010 Executive Court
                  Westmont, Illinois 60559

                  with a copy to:

                  Andrew J. Boling, Esq.
                  Baker & McKenzie
                  One Prudential Plaza
                  130 East Randolph Drive
                  Chicago, Illinois 60601

                  To SIGMAN:

                  Mr. Richard W. Sigman
                  15050 Normandy Woods Lane
                  Winfield, Illinois 60190

                  with a copy to:

                  Alan L. Fulkerson, Esq.
                  Riordan & Larson
                  208 S. LaSalle St., Suite 650
                  Chicago, Illinois 60604

                                     7 of 9
<PAGE>

16.  Entire  Agreement.  This  Agreement  represents  the  complete  and  entire
     agreement  between SIGMAN and the COMPANIES,  and there are no conflicting,
     additional,  or supplementary  oral terms or conditions between the parties
     with  respect  thereto.   Further,  this  Agreement  supersedes  all  prior
     agreements,  oral or  written,  including,  but  not  limited  to  SIGMAN's
     employment  agreements  with  Imperial  World  and  Rhine  Holdings.   This
     Agreement may be amended at any time by mutual written  agreement signed by
     the parties.

17.  Counterparts.  This Agreement may be executed in two or more  counterparts,
     each of which shall be deemed an original but all of which  together  shall
     constitute one and the same instrument.

     IN WITNESS WHEREOF  SIGMAN,  the COMPANIES have caused this Agreement to be
executed as of the day and year first above written.

                                            /s/  Richard W. Sigman
                                           ------------------------------
                                             RICHARD W. SIGMAN



                                           IMPERIAL WORLD, INC.


                                           By:/s/ Bruce Anderson
                                              ------------------------
                                           Its President & CEO
                                              ------------------------
                                     8 of 9
<PAGE>



                                           IWI HOLDING LIMITED


                                           By: /s/  Bruce Anderson
                                              -------------------------
                                           Its President & CEO
                                              -------------------------


                                           RHINE HOLDINGS LIMITED

                                           By: /s/
                                              -------------------------
                                           Its
                                              -------------------------

                                           RHINE JEWELLERY LIMITED


                                           By: /s/
                                              ------------------------
                                           Its
                                              ------------------------
                                     9 of 9