<PAGE>   1

                              EMPLOYMENT AGREEMENT

            EMPLOYMENT AGREEMENT, made as of April 17, 1998, by and between
GRAHAM-FIELD HEALTH PRODUCTS, INC., a Delaware corporation having its principal
place of business at 400 Rabro Drive East, Hauppauge, New York 11788 (the
"Company"), and RICHARD KOLODNY, residing at 44 Spring Court, Muttontown, New
York 11791 (the "Executive").

                              W I T N E S S E T H:

            WHEREAS, the Company desires to retain the Executive as its Vice
President and General Counsel to advance the business and interests of the
Company on the terms and conditions set forth herein; and

            WHEREAS, the Executive desires to provide his services to the
Company in such capacities, on and subject to the terms and conditions hereof;

            NOW, THEREFORE, the parties hereto hereby agree as follows:

            1. Employment. Subject to all of the terms and conditions hereof,
the Company does hereby employ the Executive, effective as of April 17, 1998
(the "Effective Date") for a term commencing on the date hereof and ending on
the date which is three (3) years after the date hereof (subject to early
termination as

<PAGE>   2

provided herein) (the "Term") as its Vice President and General Counsel, and the
Executive does hereby accept such employment.

            2. Duties of Executive. The Executive shall, during the Term,
perform such executive and administrative duties and functions as may from time
to time be appropriate to and consistent with his position as Vice President and
General Counsel of the Company, subject at all times to the control and
direction of the Board of Directors and Chief Executive Officer of the Company.
The Executive agrees to devote substantially all of his business time to the
business and affairs of the Company. The Executive agrees to perform his duties
hereunder faithfully, diligently and to the best of his abilities and to refrain
from engaging in any other business activity that does, will or could be deemed
to interfere with the performance of his duties hereunder or does, will or could
reasonably be deemed to conflict with the best interests of the Company. The
Executive agrees to accept the payments to be made to him under this Agreement
as full and complete compensation for the services required to be performed by,
and the covenants of, the Executive under this Agreement.

            3. Compensation.

                  3.1 Base Salary. The Company agrees to pay the Executive an
annual base salary at the rate of Two Hundred Thousand Dollars ($200,000) per
annum (the "Base Salary") payable in substantially equal installments every week
or in such other manner as the Company may generally pay its employees. Nothing
contained 


                                      -2-
<PAGE>   3

herein shall be deemed to obligate the Company to increase the Base Salary at
any time.

                  3.2 Bonus Program. In order to provide performance-based
incentive compensation to the Executive, the Executive shall be eligible to
participate in the Company's Incentive Program and bonus program, which are
administered by the Stock Option and Compensation Committee of the Company.

                  3.3 Regular Benefits. The Executive shall be entitled to
participate in any health insurance, accident insurance, hospitalization
insurance, life insurance, pension, or any other similar plan or benefit
afforded by the Company to its executive officers generally, if and to the
extent that the Executive is eligible to participate in accordance with the
provisions of any such insurance, plan or benefit generally.

                  3.4 Automobile Allowance. The Company recognizes that the
Executive will require the use of an automobile for business purposes.
Therefore, the Company will provide the Executive with an automobile allowance
of $500 per month. In addition, the Company will reimburse the Executive for his
costs associated with the operation of the automobile, including gas expenses
for the operation of the automobile.

            4. Reimbursement of Business Expenses. The Company shall reimburse
the Executive for reasonable travel and business expenses incurred on behalf of
the Company, subject to the approval and substantiation requirements and other
procedures from time to 


                                      -3-
<PAGE>   4

time established by the Company. The Executive may reasonably incur such
expenses in the manner permitted by the executive officers of the Company.

            5. Termination and Severance Arrangements.

                  (a) The Executive's employment hereunder may be terminated
under the following circumstances:

                        (i) The Executive may terminate his employment hereunder
at any time on not less than sixty (60) days prior written notice to the
Company.

                        (ii) During the original Term, the Company may terminate
the Executive's employment hereunder without Cause by providing written notice
of termination on not less than three (3) months prior written notice to the
Executive.

                        (iii) In the event of the death of or adjudicated
incompetency of the Executive during the Term, this Agreement and all benefits
payable hereunder shall terminate on the date of death or adjudication of
incompetency of the Executive.

                        (iv) If the Executive, because of illness, injury or
other incapacitating condition, is unable to perform the services required to be
performed by him under this Agreement for a period or periods aggregating more
than forty-five (45) days in any twelve (12) consecutive months or a period of
forty-five (45) consecutive days during any twelve (12) month period, then the
Company, in its sole discretion, may terminate this Agreement by giving notice
thereof to the Executive, and this Agreement and all 


                                      -4-
<PAGE>   5

benefits payable hereunder shall terminate upon the date of such notice.

                        (v) The Company may terminate the Executive's employment
at any time for Cause. For purposes of this Agreement, the term "Cause" shall
mean: (A) gross negligence of the Executive in the performance of his duties,
(B) willful neglect of his duties, (C) the Executive's conviction of any felony,
(D) the Executive's conviction of any misdemeanor involving theft or fraud, (E)
any embezzlement of the Company's or its subsidiaries' property or any
misappropriation of any property material to the Company or any of its
subsidiaries (whether or not a felony or misdemeanor), (F) the willful
engagement by the Executive in conduct which is injurious to the Company or any
of its subsidiaries, (G) the persistent and willful disobedience or material
breach by the Executive of any of the Company's written rules, instructions or
orders, or (H) the Executive's persistent and willful and material breach of the
covenants contained herein.

                  b. Upon any termination of the Executive's employment under
Section 5(a)(i), (iii), (iv) or (v) of this Agreement, the Executive shall be
entitled to receive solely all amounts and benefits to be paid or provided by
the Company under Sections 3.1, 3.3, and 4 to the date of such termination.

                  c. Upon any termination of the Executive's employment under
Section 5(a)(ii) of this Agreement, the Executive shall be entitled to receive
solely all amounts and benefits to be paid or provided by the Company under
Sections 3.1, 3.3, 3.4, and 


                                      -5-
<PAGE>   6

4 to the date of such termination plus (i) a lump sum payment equal to the sum
of the aggregate amount of Base Salary that would have been paid to the
Executive from the date of such termination through the end of the original Term
but for such early termination, and (ii) all amounts and benefits to be paid or
provided by the Company under Sections 3.3, 3.4, and 4 from the date of
termination through the end of the original Term but for such early termination.

            6. Executive Covenants.

                  6.1 Confidential Information. The Executive expressly
covenants and agrees that he will not at any time, whether during or after his
employment by the Company, directly or indirectly, use or permit the use of any
trade secrets, confidential information, or proprietary information (including,
without limitation, customer lists, costing information, technical information,
software techniques, business plans, marketing data, financial information or
similar items) of, or relating to, the Company, or any affiliate of the Company,
in connection with any activity or business, whether for his own account or
otherwise (except solely the business of the Company, if and to the extent that
the Executive is then an employee of the Company) and will not divulge such
trade secrets, confidential information or proprietary information to any
person, firm, corporation or other entity whatsoever. Any information which
becomes known to the public without breach by the Executive of any of the terms
hereof or of 


                                      -6-
<PAGE>   7

Executive's common law duties shall not be deemed to be a trade secret or
confidential or proprietary information of the Company.

                  6.2 Ownership by Company. The Executive acknowledges and
agrees that all of his work product created, produced or conceived in connection
with his association with the Company shall be deemed work for hire and shall be
deemed owned exclusively by the Company. Without limiting the generality of the
foregoing, the Executive agrees that the Company shall have and possess all
proprietary rights, patent rights, copyright rights and trade secret rights as
may exist in such work product or as which are inherent therein or appurtenant
thereto. The Executive agrees to execute and deliver all documents required by
the Company to document or perfect the Company's proprietary rights in and to
the Executive's work product.

                  6.3 Remedies. It is expressly understood and agreed that the
services to be rendered hereunder by the Executive are special, unique, and of
extraordinary character, and in the event of the breach by the Executive of any
of the terms and conditions of this Agreement on his part to be performed
hereunder, or in the event of the breach or threatened breach by the Executive
of the terms and provision of this Section 6 of this Agreement, then the Company
shall be entitled, if it so elects, to institute and prosecute any proceedings
in any court of competent jurisdiction, either in law or equity, for such relief
as it deems appropriate.


                                      -7-
<PAGE>   8

                  6.4 Covenants Non-Exclusive. The Executive acknowledges and
agrees that the covenants contained in this Section 6 shall not be deemed
exclusive of any common law rights of the Company in connection with the
relationships contemplated hereby; and that the Company shall have any and all
rights as may be provided by law in connection with the relationships
contemplated hereby.

            7. General.

                  7.1 Applicable Law and Expenses. This document shall, in all
respects, be governed by the laws of the State of New York. With regard to such
choice of law, the parties acknowledge that substantially all of the
negotiations relating to this Agreement were conducted in New York State and
that this Agreement has been executed by both parties in New York State.

                  7.2 Venue; Process. The parties to this Agreement agree that
jurisdiction and venue shall properly lie in the Supreme Court of the State of
New York, New York County, or in the United States District Court for the
Southern District of New York, with respect to any legal proceedings arising
from this Agreement. Such jurisdiction and venue are merely permissive;
jurisdiction and venue shall also continue to lie in any court where
jurisdiction and venue would otherwise be proper. The parties agree that they
will not object that any action commenced in the foregoing jurisdictions is
commenced in a forum non conveniens. Notwithstanding the foregoing, however,
nothing contained in this Section 7.2 shall be deemed to limit or waive any
right of the 


                                      -8-
<PAGE>   9

parties to remove any dispute to federal court which might otherwise properly be
removed to such court.

                  7.3 Survival. The parties hereto agree that the covenants
contained in Sections 5(b) and 5(c) and in Section 6 hereof shall survive any
termination of employment by the Executive and any termination of this
Agreement.

                  7.4 Independent Representation. The Executive acknowledges
that he has had the opportunity to seek independent counsel and tax advice in
connection with the execution of this Agreement, and the Executive represents
and warrants to the Company (a) that he has sought such counsel and advice as he
has deemed appropriate in connection with the execution hereof and the
transactions contemplated hereby; and (b) that he has not relied on any
representation of the Company as to tax matters or as to the consequences of the
execution hereof.

                  7.5 Notices. Any and all notices required or desired to be
given hereunder by any party shall be in writing and shall be validly given or
made to another party if delivered either personally, by telex, facsimile
transmission, same day delivery service, overnight expedited delivery service,
or if deposited in the United States mail, certified or registered, postage
prepaid, return receipt requested. If notice is served personally, notice shall
be deemed effective upon receipt. If notice is served by telex or by facsimile
transmission, notice shall be deemed effective upon transmission, provided that
such notice is confirmed in writing by the sender within one day after
transmission. If 


                                      -9-
<PAGE>   10

notice is served by same day delivery service or overnight expedited delivery
service, notice shall be deemed effective the day after it is sent, and if
notice is given by United States mail, notice shall be deemed effective five
days after it is sent. In all instances, notice shall be sent to the parties at
the following addresses:

                  If to the Company:

                  Graham-Field Health Products, Inc.

                  400 Rabro Drive East
                  Hauppauge, New York  11788
                  Attention:        Irwin Selinger
                                    Chairman of the Board,
                                    Chief Executive Officer

                  If to the Executive:

                  Richard S. Kolodny, Esq.
                  44 Spring Court
                  Muttontown, New York  11791
                  (516) 677-9117

            Any party may change its address for the purpose of receiving
notices by a written notice given to the other party.

                  7.6 Modifications or Amendments. No amendment, change or
modification of this document shall be valid unless in writing and signed by all
of the parties hereto.

                  7.7 Waiver. No reliance upon or waiver of one or more
provisions of this Agreement shall constitute a waiver of any other provisions
hereof.

                  7.8 Successors and Assigns. All of the terms and provisions
contained herein shall inure to the benefit of and shall be binding upon the
parties hereto and their respective heirs, personal representatives, successors
and assigns. However, no 


                                      -10-
<PAGE>   11

party shall voluntarily assign any rights hereunder, or delegate any duties
hereunder, except upon the prior written consent of the other.

                  7.9 Separate Counterparts. This document may be executed in
one or more separate counterparts, each of which, when so executed, shall be
deemed to be an original. Such counterparts shall, together, constitute and
shall be one and the same instrument.

                  7.10 Headings. The captions appearing at the commencement of
the sections hereof are descriptive only and are for convenience of reference.
Should there be any conflict between any such caption and the section at the
head of which it appears, the substantive provisions of such section and not
such caption shall control and govern in the construction of this document.

                  7.11 Further Assurances. Each of the parties hereto shall
execute and deliver any and all additional papers, documents and other
assurances, and shall do any and all acts and things reasonably necessary in
connection with the performance of their obligations hereunder and to carry out
the intent of the parties hereto.

                  7.12 Entire Agreement. Except for the Agreement dated as of
August 16, 1993 between the Executive and the Company (the "Change in Control
Agreement") relating to payments to be made to the Executive in the event of the
termination of the Executive's employment with the Company within two years
following a Change in Control (as defined therein), this Agreement constitutes
the entire 


                                      -11-
<PAGE>   12

understanding and agreement of the parties with respect to the subject matter of
this Agreement, and any and all prior agreements (other than the Change in
Control Agreement), understandings or representations are hereby terminated and
canceled in their entirety; provided that notwithstanding anything to the
contrary contained in Section 4(e) of the Change in Control Agreement, in the
event that the amount payable under Section 5(c) of this Agreement to the
Executive upon the termination of his employment following a Change in Control
is greater than the amount payable to the Executive under the Change in Control
Agreement as a result of such termination, the Executive shall be entitled to
the amount payable under Section 5(c) of this Agreement in lieu of the amount
payable to the Executive under the Change in Control Agreement.

            IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.

                                    GRAHAM-FIELD HEALTH PRODUCTS, INC.

                                    By:
                                       ---------------------------------
                                       Name:    Irwin Selinger
                                       Title:   Chairman of the Board,
                                                Chief Executive Officer

                                    ------------------------------------
                                    RICHARD S. KOLODNY


                                      -12-