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                                   EXHIBIT 2.3

                  TERMINATION, RELEASE AND SETTLEMENT AGREEMENT

         This Agreement is made this -- day of December, 1999 (the "Effective
Date") by and among Futech Interactive Products, Inc., an Arizona corporation
("Futech"), Fundex Games, Ltd., a Nevada corporation ("Fundex"), Janex
International, Inc., a Colorado corporation ("Janex"), Futech Interactive
Products (Delaware) Inc., a Delaware corporation ("Futech Delaware"), Futech
Toys & Games, Inc., a Nevada corporation ("Futech Nevada"), Vincent W. Goett
("Goett"), Carl E. Voigt, III, and Carl E. Voigt, IV. Futech, Janex, Futech
Delaware, and Futech Nevada are sometimes collectively referred to as the
"Remaining Constituents". Carl E. Voigt, III, and Carl E. Voigt, IV, are
sometimes collectively referred to as the "Fundex Shareholders". Goett is
sometimes referred to as the "Remaining Shareholder".

                                    RECITALS

         A. The parties have entered into a certain Merger Agreement dated as of
June 7, 1999 (the "Merger Agreement"), pursuant to which Futech, DaMert Company,
a California corporation ("DaMert"), Trudy Corporation, a Delaware corporation
("Trudy"), and Janex are to merge with and into Futech Delaware and Fundex is to
merge with an into Futech Nevada (such transactions being referred to as the
"Mergers").

         B. Fundex and the Fundex Shareholders have formally withdrawn as
participants in the Mergers on December 21, 1999 (the "Withdrawal Date") and the
Remaining Constituents have accepted such withdrawal.

         C. As of the Withdrawal Date the parties have orally agreed on their
understanding with respect to the withdrawal of Fundex and the Fundex
Shareholders as participants in the Mergers. The parties now desire to
memorialize such understanding pursuant to this Agreement and to resolve all
other matters or issues with respect to Fundex, Fundex Shareholders and the
Remaining Constituents.

                                     CLAUSES

         In consideration of the foregoing and the mutual covenants and
agreements set forth below, the parties agree as follows:

I.   TERMINATION OF FUNDEX AND FUNDEX SHAREHOLDERS AS PARTIES TO MERGERS

     A.   The parties agree that Fundex and the Fundex Shareholders are hereby
          terminated as parties to the Mergers and the Merger Agreement, and
          that Fundex and the Fundex Shareholders are released from all rights
          and obligations under the Merger Agreement as if they were never
          parties to such Agreement.


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     B.   Other than describing the terms of the License Agreement (defined
          below), the Remaining Constituents will cause all references to Fundex
          and the Fundex Shareholders to be removed from the Merger Agreement
          and from any and all documents filed with the Securities and Exchange
          Commission or any other governmental agency in connection with any
          filings required as a result of the Mergers.

     C.   As soon as practical after the execution of this Agreement, Futech
          will notify the Securities and Exchange Commission that Fundex is no
          longer a party to the Mergers and will provide evidence reasonably
          acceptable to Fundex that the Securities and Exchange Commission has
          been so notified.

II.  RELEASE

     A.   Each of the Remaining Constituents and the Remaining Shareholder
          voluntarily and without qualification waives, releases, covenants not
          to sue, acquits and forever discharges the Fundex Shareholders,
          'Fundex and their officers, directors, shareholders, agents,
          employees, heirs, successors, and assigns (the "Fundex Released
          Parties") from all claims, demands, actions, liabilities, causes of
          action and any other claims for relief, compensation or remuneration
          whatsoever, in law or equity, known or unknown (the "Claims"), which
          any of them now has, or may have had, relating in any manner to the
          Mergers, the Merger Agreement or any other matter involving the
          parties which arose on or prior to the Effective Date, whether or not
          the Remaining Constituents or the Remaining Shareholder has knowledge
          of the same. The parties specifically intend that this Agreement
          constitutes a general release of the Fundex Released Parties from any
          and all claims, notwithstanding any statute, rule of law, or rule of
          judicial construction to the contrary, and that the preceding
          constitutes a material inducement to Fundex and the Fundex
          Shareholders to enter into this Agreement. The Remaining Constituents
          and the Remaining Shareholder agree that this Agreement constitutes a
          complete, general release, settlement and compromise of all Claims
          against the Fundex Released Parties including, but not limited to: (1)
          claims for indemnification, segregation or other obligations arising
          pursuant to the interpretation of any law or otherwise; (2) claims
          that may arise in the future with respect to the claims, events or
          matters already in existence; and (3) unknown claims and/or unlisted
          claims, including any Claims under any statute or common law.

     B.   Each of Fundex and the Fundex Shareholders voluntarily and without
          qualification waives, releases, covenants not to sue, acquits and
          forever discharges the Remaining Shareholder, Remaining Constituents
          and their officers, directors, shareholders, agents, employees, heirs,
          successors and assigns (the "Non-Fundex Released Parties") from all
          Claims, which any of them now has, or may have had, relating in any
          manner to the Mergers, the Merger Agreement or any other matter
          involving the parties which arose on or prior to the Effective Date,
          whether or not Fundex and the Fundex Shareholders have knowledge of
          the same. The parties specifically intend


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          that this Agreement constitutes a general release of the Non-Fundex
          Released Parties from any and all Claims, notwithstanding any statute,
          rule of law, or rule of judicial construction to the contrary, and
          that the preceding constitutes a material inducement to the Remaining
          Constituents and the Remaining Shareholder to enter into this
          Agreement. Fundex and the Fundex Shareholders agree that this
          Agreement constitutes a complete, general release, settlement and
          compromise of all Claims against the Non-Fundex Released Parties
          including, but not limited to: (1) claims for indemnification,
          segregation or other obligations arising pursuant to the
          interpretation of any law or otherwise; (2) claims that may arise in
          the future in respect to the claims, events or matters already in
          existence; and (3) unknown claims and/or unlisted claims, including
          any claims under any statute or common law.

     C.   The releases provided in this Agreement do not release any party with
          respect to Claims arising as a result of a party's failure to comply
          with this Agreement.

     D.   The Remaining Constituents and the Remaining Shareholder hereby
          covenant and agree never to sue Fundex or the Fundex Shareholders on
          the basis of any and all claims of any type arising in any way out of
          the Merger Agreement or the termination of the participation of Fundex
          or the Fundex Shareholders in the Mergers. The Remaining Constituents
          and the Remaining Shareholder covenant to use their best efforts to
          assure DaMert, Trudy, their officers, shareholders, successors and
          assigns never sue Fundex or Fundex's Shareholders on the basis of any
          and all claims of any type arising in anyway out of the Merger
          Agreement or Termination of Fundex's participation in the Mergers.

III. INDEMNIFICATION

     The Remaining Constituents, the Remaining Shareholder their successors and
assigns hereby agree to, jointly and severally, indemnify Fundex and the Fundex
Shareholders and hold Fundex and the Fundex Shareholders harmless from and
against any and all loss, liability, claim, cost, damage and expense whatsoever
(including without limitation any legal and other fees and expenses incurred in
connection with, and any amount paid in settlement of, any claim, action, suit
 .or proceeding) arising out of or in any way connected to the Mergers and the
Merger Agreement, including, without limitation, any filings with the Securities
and Exchange Commission or any governmental authority in connection with the
Mergers or any action or Claim against Fundex or the Fundex Shareholders by any
party to the Merger Agreement, including DaMert, Trudy, their shareholders,
officers, successors and assigns.

IV.  FUTECH LOAN

     Futech has previously loaned to Fundex the sum of Two Hundred Twenty-Five
Thousand Dollars ($225,000) (the "Loan"). In consideration of the Release by
Fundex of the Remaining Constituents and the Remaining Shareholder pursuant to
this Agreement and the other agreements of Fundex pursuant to this Agreement,
and as liquidated damages for any claims which Fundex may have against any of
the Remaining Constituents or Remaining Shareholder, Futech agrees that the


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obligation of Fundex to repay the Loan, including any interest or other charges
accrued on such loan, is hereby forgiven in its entirety. Futech shall return
any executed note evidencing the Loan to Fundex which note will be marked
"Canceled".

V.   CERTAIN INVENTORY

     A.   Fundex is in possession of Wet Pet inventory owned by Futech,, which
          inventory was to be marketed by Fundex. Futech agrees that Fundex will
          be entitled to retain such inventory and hereby assigns, transfers and
          conveys to Fundex free and clear of all liens, claims and
          encumbrances, all right, title and interest in such inventory. As
          consideration for the transfer of all the inventory to Fundex, Fundex
          hereby grants to Futech a credit against future purchases of inventory
          from Fundex by Futech in the amount of $50,000. Futech may use such
          credit against any purchases of inventory from Fundex during the
          twenty four (24) month period beginning on the Effective Date. Any
          unused credit will expire upon the expiration of such twenty four (24)
          month period. Futech will only be entitled to utilize such credit to
          the extent of fifty per. cent (50%) of the purchase price of inventory
          purchased from Fundex with respect to any order, until the entire
          credit is utilized. A price list is attached hereto and incorporated
          herein, Exhibit A.

     B.   Futech agrees to purchase from Castlespring Enterprises Ltd all
          inventory and components related to NASCAR Board Games previously
          marketed by Fundex. Fundex agrees that it will no longer market the
          NASCAR Board Games.

VI.  LICENSE AGREEMENT

     Futech and Fundex have entered into a License Agreement dated June 7, 1999
("License Agreement"). Fundex and Futech agree that as soon as practical after
the execution of this Agreement, the License Agreement shall be amended as
follows:

     A.   All references to the Loan, Merger and Merger Agreement shall be
          deleted.

     B.   Notwithstanding anything in the License Agreement to the contrary,
          provided prior written notice, Futech may assign the License Agreement
          to Janex.

     C.   Pursuant to the provisions of Section (a)(ii) of the License
          Agreement, the rights licensed to Fundex with respect to certain
          Futech Products shall include "Malibu Fun Products" and "Wet Pets
          Products", and the License Agreement shall be modified in all respects
          to evidence the addition of such additional products. For purposes of
          the "Malibu Fun Products" and "Wet Pets Products" Janex is hereby
          added as a party to the license agreement and agrees to and is bound
          by the terms and provisions of such License Agreement.

     D.   Fundex will be granted the option to extend the term of the License
          for an additional one (1) year upon written notice to Futech on or
          before September 30, 2000. Fundex


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          will provide Futech with forecasts for items under the license
          agreement for the following fiscal year no later than September 30 of
          the preceding year. These projections are forecasts and Fundex makes
          no representations and warranties that such forecasts will be
          achieved. Parties agree not to sue Fundex or Fundex Shareholders for
          any reasons with respect to the forecasts.

     A.   Fundex will agree that all products manufactured by or for Fundex
          under the License Agreement will be manufactured by Early Light
          International (Holdings) Ltd. ("Early Light") or such other
          manufacturer approved by Futech, which approval shall not be
          unreasonably withheld. Notwithstanding the foregoing, Fundex is
          presently manufacturing certain of the products and has incurred
          substantial tooling and other costs in connection with such
          manufacturing. In the event that Futech does not consent to the
          manufacturer of the products as currently being manufactured by
          Fundex, then Futech shall be responsible for and shall pay all tooling
          and other costs incurred by Fundex in connection with the manufacturer
          of the products at a facility other than the current facility being
          utilized by Fundex. Any tooling owned by Futech will be forwarded to
          Early Light at Futech's reasonable request.

     B.   Futech shall have the non-exclusive right to market, distribute and
          sell all other products of Fundex (the "Fundex Other Products"),
          including but not limited to marketing on the wholesale distribution
          portion of the Futech/New Futech Internet site. The Fundex Licensed
          Products and the Fundex Other Products are sometimes collectively
          referred to in this Section as the "Fundex Products". Fundex agrees
          that it will not permit any third party the exclusive right to market
          on the Internet the products manufactured by or for Fundex under the
          License Agreement, subject to the rights of Fundex to offer or sell
          said products on its own Web site. At Futech's cost, Fundex will
          provide Futech catalogue artwork and/or photographs on computer media,
          including CD Rom."

     C.   For the Fundex Products which are purchased by Futech, Futech shall
          pay Fundex ninety percent (90%) of the wholesale sales price for such
          products. For Fundex Products sold through the Futech Internet site,
          Fundex shall be compensated by Futech for ordinary and reasonable
          costs for fulfillment and shipping costs associated with the shipment
          to the consumer. All amounts due from Futech to Fundex shall be
          payable within thirty (30) days of Fundex shipping Fundex Products.

     D.   All amounts payable for third party licenses, (i.e., Jellibies) above
          shall be payable directly to Futech (who shall be responsible for all
          payments to the original licensor) on a calendar quarterly basis, by
          the 254 day following the month to which the payments relate. Amounts
          not timely paid shall accrue interest at the rate of eighteen percent
          (18%) per annum from the due date until paid in full. Fundex agrees to
          pay to Futech $15,000 (minimum royalties) on the Jellabies license. To
          the extent the royalties paid to Futech for Jellabies products is less
          than Minimum Royalty during the two year license period, Fundex shall
          pay the difference between the amount paid to Futech and the Minimum
          Royalty within 30 days after the end of the licensing period.


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     E.   Except as provided for above in this Section, the License Agreement
          remains in full force and effect, unmodified, and enforceable pursuant
          to its terms.

     F.   The parties will use reasonable best efforts-to continue jointly
          developing new products to be incorporated into the existing License
          Agreement upon similar terms.

I.   GENERAL

     A.   This Agreement shall be binding upon and inure to the benefit of the
          parties and their respective personal representatives, heirs,
          successors and assigns.

     B.   This Agreement shall be governed by, construed and enforced in
          accordance with the laws of the State of Delaware, without giving
          effect to the conflicts of law and rules thereof.

     C.   ARBITRATION

          (i)  Any controversy or claim between or among the parties hereto,
               including but not limited to those arising out of or relating to
               this Agreement, shall be determined by binding arbitration in
               accordance with the Federal Arbitration Act (or, if not
               applicable, the applicable Delaware law), the rules of practice
               and procedure for the arbitration of commercial disputes of the
               AAA, and the "Special Rules" set forth below. In the event of any
               inconsistency, the Special Rules shall control. Judgment upon any
               arbitration award may be entered in any court having
               jurisdiction. Any party to this Agreement may bring an action,
               including a summary or expedited proceeding, to compel
               arbitration of any controversy or claim to which this Agreement
               applies in any court having jurisdiction over such action.

          (ii) Special Rules. The arbitration shall be conducted in Chicago,
               Illinois, and administered by AAA, who will appoint an
               arbitrator. All arbitration hearings will be commended within
               ninety (90) days of the demand for arbitration. Further, the
               arbitrator shall only, upon a showing of cause, be permitted to
               extend the commencement of such hearing for an additional sixty
               (60) days. Notwithstanding any other term of this Agreement, (a)
               the party seeking and initiating the arbitration shall advance
               funds, as necessary, to institute and conduct the arbitration
               procedure; and (b) following a final determination of the matter
               submitted to arbitration, the non-prevailing party shall bear,
               and shall promptly pay, the cost of the arbitration procedure and
               of the reasonable


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               costs and expenses, including attorneys' fees, of the prevailing
               party.

     D.   This Agreement may be executed by the parties in one or more
          counterparts, and any number of counterparts signed in the aggregate
          by the parties will constitute a single instrument. If the parties
          agree to accept facsimile signatures and counterparts to this
          Agreement facsimile signatures will for all purposes be binding upon
          the parties.

     E.   All press releases regarding this Agreement and the relationship among
          the parties will be reasonably approved by the other party prior to
          issuance.

     F.   Fundex shall promptly file a trademark assignment assigning to Futech
          its rights, if any, to the trademarks "Tracksounds" and "Soundzone".

                             FUTECH INTERACTIVE PRODUCTS, INC.
                             an Arizona Corporation

                             By:  /s/ Vincent Goett
                             Its: __________________


                             FUTECH GAMES, LTD.
                             a Nevada Corporation

                             By: /s/ Carl E. Voigt, Iv
                             Its: __________________


                             JANEX INTERNATIONAL, INC.
                             a Colorado Corporation

                             By:  /s/ Vincent Goett
                             Its: __________________


                             FUTECH INTERACTIVE PRODUCTS (DELAWARE), INC.
                             a Delaware Corporation

                             By:  /s/ Vincent Goett
                             Its: __________________


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                             FUTECH TOYS AND GAMES, INC.
                             a Nevada Corporation

                             By: /s/ Carl E. Voigt, IV
                             Its: __________________



                             /s/ Vincent Goett
                             ---------------------
                             Vincent Goett


                             /s/ Carl E. Voigt, III
                             ---------------------
                             Carl E. Voigt, III


                             /s/ Carl E. Voigt, IV
                             ---------------------
                             Carl E. Voigt, IV