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                                                                     EXHIBIT 2.5

                                   CYRK, INC.

                                          December 20, 2002

Simon Worldwide, Inc.
1888 Century Park East
Suite 222
Los Angeles, CA

Ladies and Gentlemen:

         Based on our recent discussions, this letter will summarize our
agreement regarding Simon Worldwide, Inc.'s ("Simon") obligation to guarantee
Cyrk, Inc.'s ("Cyrk") obligations to Winthrop Resources Corporation and its
affiliates (collectively, "Winthrop") including, without limitation, pursuant to
Cyrk's lease agreement with Winthrop dated November 20, 2001(the "Winthrop
Lease").

         1.       Background. Simon had previously arranged for its lender, City
National Bank, to issue a standby letter of credit of up to $4.2 million in
favor of Winthrop. Winthrop may draw upon this letter of credit if Cyrk defaults
under the Winthrop Lease. Cyrk had previously arranged for its lender, Citizens
Bank, to issue a so-called "back stop" standby letter of credit of up to
$500,000 in favor of City National Bank. This letter of credit is security for
the $4.2 million letter of credit and may be drawn upon by City National Bank if
Winthrop draws upon the $4.2 million letter of credit. Simon also has pledged
$3.7 million in restricted cash to City National Bank as security for the $4.2
million letter of credit.

         Cyrk has represented to Simon that it is suffering substantial
financial difficulties and, if Simon signs this letter, Cyrk will receive a $2.5
million equity infusion.

         2.       Cash Payment Option. For a period commencing as of the date
hereof and ending 120 days from the date hereof, Cyrk shall have the option to
pay Simon $1.5 million in immediately available funds in exchange for Simon's
agreement to apply Simon's $3.7 million of restricted cash as follows: first, to
Cyrk's obligations under the Winthrop Lease; and second, with any remaining
proceeds to be turned over to Cyrk. No portion of Cyrk's $2.3 million
subordinated note shall be reinstated as a result of the consummation of the
transactions contemplated by this letter.

         3.       Simon's Conditions. Simon's agreement in paragraph 2 is
expressly conditioned upon the full satisfaction of the following:

                  (a)      Cyrk's and its subsidiaries' agreement to release
                           Simon and its subsidiaries and their respective
                           directors, officers, employees, consultants, agents,
                           attorneys and affiliates from all claims, demands,

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                           causes of action and liabilities of every kind and
                           nature, known or unknown, suspected or unsuspected,
                           except for Cyrk's right under paragraph 5 of the
                           March 12, 2002 settlement agreement between Simon and
                           Cyrk to share in the recovery by Simon in any
                           malpractice claim, if any, brought against the law
                           firm that advised Simon and Tonkin, Inc. with respect
                           to the Dale Jenkins matter;

                  (b)      Simon shall have no further liability or obligation
                           to Winthrop as a guarantor of Cyrk's obligations to
                           Winthrop or otherwise arising out of the Winthrop
                           Lease;

                  (c)      Cyrk's representations to Simon regarding its
                           business and financial condition, including without
                           limitation the financial information previously
                           provided by Cyrk to Simon, shall be true and correct
                           in all material respects, and, for a period of one
                           month from the effective date of this letter, Simon
                           and its representatives shall be permitted full
                           access, during normal business hours, to Cyrk's
                           employees, accountants, attorneys, books, records and
                           documents in order to confirm the same;

                  (d)      No consent, filing or authorization of any
                           governmental authority or third party (including
                           Cyrk's bank) shall be required for Cyrk to complete
                           the transactions contemplated by this letter, other
                           than any consent, filing or authorization which has
                           been obtained and is in full force and effect;

                  (e)      No consent, filing or authorization of any
                           governmental authority or third party (including
                           Simon's bank) shall be required for Simon to complete
                           the transactions contemplated by this letter, other
                           than any consent, filing or authorization which has
                           been obtained and is in full force and effect;

                  (f)      The $500,000 Citizens Bank letter of credit shall
                           remain in full force and effect until such time as
                           the condition in paragraph 3(b) has been satisfied;
                           and

                  (g)      The execution and delivery by Simon, Cyrk and its
                           subsidiaries of definitive documentation, reasonably
                           satisfactory to Simon and its counsel, evidencing the
                           transactions contemplated by this letter.

         The condition in paragraph 3(b) may be satisfied simultaneously with
Cyrk exercising its payment option under paragraph 2. No waiver of any condition
shall be effective unless it is in a writing signed by Simon.

         4.       Non-Disclosure. Without the prior written approval of Simon,
Cyrk will not disclose or discuss this letter, its existence or its terms and
conditions, to or with any persons

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other than its attorneys, accountants, financial advisors, financing sources and
executives as may be required to know the same in implementing the provisions of
this letter. Without the prior written approval of Cyrk, Simon will not disclose
or discuss this letter, its existence or its terms and conditions, to or with
any persons other than its attorneys, accountants, financial advisors, financing
sources and executives as may be required to know the same in implementing the
provisions of this letter; provided, however, Simon may disclose this letter and
its terms and conditions to the extent required by federal securities law.

         If the foregoing terms and conditions are acceptable, so indicate by
signing and dating both of the enclosed copies of this letter, and then
returning one to the undersigned.

                                   Very truly yours,

                                   CYRK, INC.

                                   By /s/ Robert Siemering
                                     -----------------------------------
                                      Robert Siemering, President

     Agreed to and Accepted:

     SIMON WORLDWIDE, INC.

     By /s/ Terrence J. Wallock
       --------------------------
       Name: Terrence J. Wallock
       Title: Gen. Counsel

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