To:      Laurus Master Fund, Ltd.
         c/o Ironshore Corporate Services, Ltd.
         P.O. Box 1234 G.T
         Queensgate House
         South Church Street
         Grand Cayman, Cayman Islands

Date: April 2, 2004

To Whom It May Concern:

1. To secure the payment of all  Obligations  (as  hereafter  defined),  Synergy
Brands,  Inc.,  a  Delaware  corporation  (the  "Company")  each  of  the  other
undersigned  parties  (other than Laurus Master Fund,  Ltd  "Laurus"))  and each
other entity that is required to enter into this Master Security Agreement (each
an  "Assignor",  collectively,  the  "Assignors")  hereby  assigns and grants to
Laurus a continuing security interest in all of the following property now owned
or at any time hereafter acquired by any Assignor,  or in which any Assignor now
have or at any time in the future may acquire any right,  title or interest (the
"Collateral"): all accounts, inventory, equipment, goods, documents, instruments
(including,  without  limitation,  promissory notes),  contract rights,  general
intangibles (including,  without limitation, payment intangibles and an absolute
right to license on terms no less  favorable  than those current in effect among
our affiliates,  but not own intellectual  property),  chattel paper, supporting
obligations,  investment property  (including,  without  limitation,  all equity
interests  owned  by any  Assignor),  letter-of-credit  rights,  trademarks  and
tradestyles  in which any Assignor now have or hereafter  may acquire any right,
title or  interest,  all  proceeds  and  products  thereof  (including,  without
limitation,   proceeds  of  insurance)   and  all   additions,   accessions  and
substitutions thereto or therefore.  In the event any Assignor wishes to finance
the acquisition of any hereafter  acquired  equipment and/or inventory , in each
case, in the ordinary  course of business and have obtained a commitment  from a
financing  source to finance such equipment or inventory from an unrelated third
party,  Laurus agrees to, upon the request of the respective  Assignor,  release
its  security  interest on such  hereafter  acquired  equipment  or inventory so
financed by such third  party  financing  source.  Except as  otherwise  defined
herein,  all capitalized  terms used herein shall have the meaning provided such
terms in the Securities Purchase Agreement referred to below.

2. The term  "Obligations"  as used  herein  shall mean and  include  all debts,
liabilities and obligations  owing by each Assignor to Laurus arising under, out
of, or in connection with: (i) that certain Securities  Purchase Agreement dated
as of the date hereof by and  between  the  Company and Laurus (the  "Securities
Purchase Agreement"), (ii) that certain Secured Convertible Note dated as of the
date hereof made by the Company in favor of Laurus (the "Term Note"), (iii) that
certain  Warrant  dated as of the date  hereof  made by the  Company in favor of
Laurus (the "Warrant"),  (iv) that certain  Subsidiary  Guaranty dated as of the
date  hereof  made by certain  Subsidiaries  of the  Company,  (the  "Subsidiary
Guaranty"),  (v) that certain Registration Rights Agreement dated as of the date
hereof  by and  between  the  Company  and  Laurus  (the "  Registration  Rights
Agreement"),  (vi) this Master  Security  Agreement,  (vii) that  certain  Stock
Pledge  Agreement  dated as of the date hereof among the Company and Laurus (the
"Stock Pledge Agreement"),  (viii) that certain Escrow Agreement dated as of the
date hereof among the Company,  Laurus and the escrow agent  referred to therein
(the  "Escrow  Agreement"),  and (ix) that  certain  Intercompany  Subordination
Agreement dated as of the date hereof among the Company, certain Subsidiaries of
the  Company  and  Laurus  (the  "Intercompany  Subordination  Agreement")  (the
Securities  Purchase  Agreement,  the Term Note, the Warrant,  the  Registration
Rights Agreement,  the Subsidiary Guaranty, this Master Security Agreement,  the
Stock Pledge Agreement, the Escrow Agreement and the Intercompany  Subordination
Agreement, as each may be amended, modified,  restated or supplemented from time
to time, are  collectively  referred to as the  "Documents"),  and in connection
with any  documents,  instruments  or  agreements  relating  to or  executed  in
connection  with the  Documents  or any  documents,  instruments  or  agreements
referred to therein or otherwise, and in connection with any other indebtedness,
obligations or  liabilities  of any Assignor to Laurus,  whether now existing or
hereafter arising, direct or indirect,  liquidated or unliquidated,  absolute or
contingent,  due or not due and whether  under,  pursuant to or  evidenced  by a
note, agreement,  guaranty,  instrument or otherwise, in each case, irrespective
of the genuineness,  validity, regularity or enforceability of such Obligations,
or of any  instrument  evidencing  any of the  Obligations  or of any collateral
therefor or of the existence or extent of such  collateral,  and irrespective of
the allowability,  allowance or disallowance of any or all of the Obligations in
any case  commenced by or against any  Assignor  under Title 11,  United  States
Code,  including,  without  limitation,  obligations  or  indebtedness  of  each
Assignor for  post-petition  interest,  fees,  costs and charges that would have
accrued or been added to the Obligations but for the commencement of such case.

<PAGE>

3. Each Assignor hereby jointly and severally represents, warrants and covenants
to Laurus that:

(a) it is a corporation,  partnership or limited liability company,  as the case
may be, validly  existing,  in good standing and organized  under the respective
laws of its  jurisdiction  of  organization,  as set forh on Schedule A and each
Assignor  will  provide  Laurus  thirty (30) days' prior  written  notice of any
change in any of its respective jurisdiction of organization;

(b)  its  legal  name  is  as  set  forth  in  its  respective   Certificate  of
Incorporation  or other  organizational  document  (as  applicable)  as  amended
through  the date hereof on Schedule A and it will  provide  Laurus  thirty (30)
days' prior written notice of any change in any of its legal names;

(c) its organizational  identification number (if applicable) is as set forth on
Schedule A hereto and it will  provide  Laurus  thirty (30) days' prior  written
notice of any change in any of its organizational identification numbers;

(d) it is the  lawful  owner of the  respective  Collateral  and it has the sole
right to grant a  security  interest  therein  and will  defend  the  Collateral
against all claims and demands of all persons and entities;

(e) it will keep its respective  Collateral  free and clear of all  attachments,
levies,  taxes,  liens,  security  interests and  encumbrances of every kind and
nature ("Encumbrances"),  except (i) Encumbrances securing the Obligations, (ii)
Encumbrances  securing  indebtedness  of any Assignor owed to IIG Capital LLC or
any of its affiliates  under  agreements  currently in place on the date hereof,
and (iii) to the extent said Encumbrance does not secure  indebtedness in excess
of $100,000 and such  Encumbrance  is removed or otherwise  released  within ten
(10) days of the creation thereof;

(f) it will, at its and the other  Assignors  joint and several cost and expense
keep the  Collateral in good state of repair  (ordinary  wear and tear excepted)
and will not waste or destroy the same or any part thereof  other than  ordinary
course  discarding  of items  no  longer  used or  useful  in its or such  other
Assignors' business;

(g) it will not without Laurus' prior written consent, sell, exchange,  lease or
otherwise dispose of the Collateral, whether by sale, lease or otherwise, except
for the sale of inventory and collections of accounts receivable in the ordinary
course of business and for the disposition or transfer in the ordinary course of
business during any fiscal year of obsolete and worn-out  equipment or equipment
no longer necessary for its ongoing needs, having an aggregate fair market value
of not more than $25,000 and only to the extent that:

     (i) the proceeds of any such  disposition  are used to acquire  replacement
     Collateral which is subject to Laurus' security interest hereunder,  or are
     used to repay  Obligations or to pay general  corporate  expenses (it being
     understood  that  such  replacement  Collateral  may also be  subject  to a
     security interest in favor of IIG Capital LLC); and

     (ii)  following the  occurrence  of an Event of Default which  continues to
     exist  the  proceeds  of which  are  remitted  to Laurus to be held as cash
     collateral for the Obligations;

(h) it will insure or cause the Collateral to be insured with Laurus' name as an
additional insured against loss or damage by fire, theft,  burglary,  pilferage,
loss in transit and such other  hazards as Laurus  shall  specify in amounts and
under  policies by insurers as is customary in the case of companies  engaged in
businesses  similar to the Company's  business and all premiums thereon shall be
paid by such  Assignor  and copies of the policies  delivered to Laurus.  If any
such  Assignor  fails to do so,  Laurus may procure such  insurance and the cost
thereof shall be promptly  reimbursed by the  Assignors,  jointly and severally,
and shall constitute Obligations;

     (i) it will at all reasonable times allow Laurus or Laurus' representatives
     free access to and the right of inspection of the Collateral;

<PAGE>

(j) such  Assignor  (jointly  and  severally  with each other  Assignor)  hereby
indemnifies and saves Laurus harmless from all loss,  costs,  damage,  liability
and/or expense, including reasonable attorneys' fees, that Laurus may sustain or
incur to enforce  payment,  performance or fulfillment of any of the Obligations
and/or  in  the  enforcement  of  this  Master  Security  Agreement  or  in  the
prosecution or defense of any action or proceeding  either against Laurus or any
Assignor  concerning any matter growing out of or in connection with this Master
Security  Agreement,  and/or any of the Obligations and/or any of the Collateral
except  to the  extent  caused  by  Laurus'  own  gross  negligence  or  willful
misconduct  (as determined by a court of competent  jurisdiction  in a final and
nonappealable decision).

4. The occurrence of any of the following  events or conditions shall constitute
an "Event of Default":

(a)  Breach of any  covenant,  warranty,  representation  or  statement  made or
furnished  to Laurus by any Assignor or on any  Assignor's  benefit was false or
misleading  in any material  respect when made or  furnished,  and if subject to
cure, shall not be cured for a period of fifteen (15) days;

(b) the loss, theft, substantial damage, destruction,  sale or encumbrance to or
of any of the  Collateral  or the  making of any  levy,  seizure  or  attachment
thereof or thereon except to the extent:

     (i) such loss is covered by  insurance  proceeds  which are used to replace
     the item or repay Laurus; or

     (ii) said levy,  seizure or  attachment  does not  secure  indebtedness  in
     excess of  $100,000  and such  levy,  seizure  or  attachment  has not been
     removed or otherwise  released  within ten (10) days of the creation or the
     assertion thereof;

(b) any Assignor shall become insolvent, cease operations,  dissolve,  terminate
our  business  existence,  make 0 an  assignment  for the benefit of  creditors,
suffer the appointment of a receiver, trustee, liquidator or custodian of all or
any part of Assignors' property;

(c) any proceedings under any bankruptcy or insolvency law shall be commenced by
or against any  Assignor  and if  commenced  against any  Assignor  shall not be
dismissed within thirty (30) days;

(d) the Company shall repudiate, purport to revoke or fail to perform any or all
of its obligations  under the Note (after passage of applicable cure period,  if
any) in any material respect; or

(e) an  Event of  Default  shall  have  occurred  under  and as  defined  in the
Securities Purchase Agreement or in any other Document .

5. Upon the  occurrence  of any  Event of  Default  and at any time  thereafter,
Laurus may declare all Obligations  immediately due and payable and Laurus shall
have the remedies of a secured party provided in the Uniform  Commercial Code as
in effect in the State of New York,  this  Agreement and other  applicable  law.
Upon the occurrence of any Event of Default and at any time  thereafter,  Laurus
will have the right to take  possession of the  Collateral  and to maintain such
possession  on our premises or to remove the  Collateral  or any part thereof to
such other  premises as Laurus may desire.  Upon  Laurus'  request,  each of the
Assignors  shall  assemble or cause the  Collateral  to be assembled and make it
available to Laurus at a place  designated  by Laurus.  If any  notification  of
intended disposition of any Collateral is required by law, such notification, if
mailed,  shall be deemed  properly and  reasonably  given if mailed at least ten
(10) days before such  disposition,  postage prepaid,  addressed to any Assignor
either at such  Assignor's  address shown herein or at any address  appearing on
Laurus' records for such Assignor. Any proceeds of any disposition of any of the
Collateral  shall be  applied  by  Laurus  to the  payment  of all  expenses  in
connection with the sale of the Collateral, including reasonable attorneys' fees
and other  legal  expenses  and  disbursements  and the  reasonable  expense  of
retaking, holding, preparing for sale, selling, and the like, and any balance of
such proceeds may be applied by Laurus toward the payment of the  Obligations in
such order of application as Laurus may elect, and each Assignor shall be liable
for any deficiency.


<PAGE>

6. If any Assignor  defaults in the  performance  or  fulfillment  of any of the
terms,  conditions,  promises,  covenants,  provisions  or  warranties  on  such
Assignor's  part to be performed  or fulfilled  under or pursuant to this Master
Security  Agreement,  Laurus  may,  at its option  without  waiving its right to
enforce this Master Security Agreement according to its terms, immediately or at
any time  thereafter and without notice to any Assignor,  perform or fulfill the
same or cause the  performance or  fulfillment  of the same for each  Assignor's
joint and several  account  and at each  Assignor's  joint and several  cost and
expense, and the cost and expense thereof (including reasonable attorneys' fees)
shall be added to the  Obligations  and shall be payable on demand with interest
thereon at the highest rate permitted by law.

7. Each Assignor  appoints  Laurus,  any of Laurus'  officers,  employees or any
other person or entity whom Laurus may designate as our attorney,  with power to
execute  such  documents  in  each  of our  behalf  and to  supply  any  omitted
information and correct patent errors in any documents  executed by any Assignor
or, in the event that such  Assignor  does not act in a prompt  manner,  on such
Assignor's  behalf;  to  file  financing  statements  against  us  covering  the
Collateral;  to sign our name on  public  records;  and to do all  other  things
Laurus deems necessary as allowed under applicable law, to carry out this Master
Security  Agreement.  Each Assignor hereby ratifies and approves all acts of the
attorney  and  neither  Laurus nor the  attorney  will be liable for any acts of
commission or omission,  nor for any error of judgment or mistake of fact or law
other than gross  negligence or willful  misconduct (as determined by a court of
competent jurisdiction in a final and non-appealable decision). This power being
coupled with an interest,  is  irrevocable  so long as any  Obligations  remains
unpaid.

8. No delay or failure on Laurus'  part in  exercising  any right,  privilege or
option  hereunder  shall  operate  as a waiver  of such or of any  other  right,
privilege,  remedy or option,  and no waiver  whatever  shall be valid unless in
writing,  signed by Laurus and then only to the extent therein set forth, and no
waiver by Laurus of any default  shall  operate as a waiver of any other default
or of  the  same  default  on a  future  occasion.  Laurus'  books  and  records
containing  entries  with  respect to the  Obligations  shall be  admissible  in
evidence in any action or proceeding. Laurus shall have the right to enforce any
one or more of the remedies  available to Laurus,  successively,  alternately or
concurrently.  Each Assignor  agrees to join with Laurus in executing  financing
statements or other instruments to the extent required by the Uniform Commercial
Code in form  satisfactory  to Laurus and in executing  such other  documents or
instruments  as may be required or deemed  necessary  by Laurus for  purposes of
affecting or continuing Laurus' security interest in the Collateral.

<PAGE>

9.  This  Master  Security  Agreement  shall be  governed  by and  construed  in
accordance  with the laws of the  State of New  York and  cannot  be  terminated
orally. All of the rights, remedies,  options, privileges and elections given to
Laurus  hereunder shall inure to the benefit of Laurus'  successors and assigns.
The term "Laurus" as herein used shall include Laurus, any parent of Laurus, any
of Laurus'  subsidiaries and any co-subsidiaries of Laurus' parent,  whether now
existing or  hereafter  created or acquired,  and all of the terms,  conditions,
promises, covenants,  provisions and warranties of this Agreement shall inure to
the benefit of the foregoing and shall bind the representatives,  successors and
assigns of each  Assignor and each of the  foregoing.  Laurus and each  Assignor
hereby (a) waive any and all right to trial by jury in  litigation  relating  to
this  Agreement  and the  transactions  contemplated  hereby,  (b) submit to the
nonexclusive  jurisdiction of any New York State court sitting in the borough of
Manhattan,  the city of New York and (c)  waive  any  objection  Laurus  or each
Assignor may have as to the bringing or maintaining of such action with any such
court.

10. All  notices  from Laurus to any  Assignor  shall be  sufficiently  given if
mailed or delivered to such Assignor's address set forth below.

                                               Very truly yours,
                                               SYNERGY BRANDS, INC.

                                               By:
                                               Name:
                                               Title:
                                               Address

                                               PHS GROUP, INC.

                                               By:
                                               Name:
                                               Title:
                                               Address:

                                               GRAN RESERVE CORPORATION

                                               By:
                                               Name:
                                               Title:
                                               Address:

                                               ACKNOWLEDGED:
                                               LAURUS MASTER FUND, LTD.

                                               By:
                                               Name:
                                               Title:

<PAGE>

                                   SCHEDULE A

                                    Assignor
                          Jurisdiction of Organization
                       Organization Identification Number

                              Synergy Brands, Inc.
                                    Delaware
                                   22-2993066

                                 PHS Group, Inc.
                                  Pennsylvania
                                   22-3611766

                            Gran Reserve Corporation
                                     Florida
                                   27-0026581