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                     INTERNATIONAL DISTRIBUTORSHIP AGREEMENT

                                 by and between

                       GRAHAM-FIELD HEALTH PRODUCTS, INC.

                                       and

                                     THUASNE
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                                TABLE OF CONTENTS

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                                                                            Page
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                                    ARTICLE I

                                   DEFINITIONS
   1.1     Affiliates ..................................................       1
   1.2     Agreement ...................................................       1
   1.3     Confidential Information ....................................       1
   1.4     Cost ........................................................       2
   1.5     Customer ....................................................       2
   1.6     Distributed Products ........................................       2
   1.7     Graham-Field Products .......................................       2
   1.8     Gross Profit ................................................       2
   1.9     Import Supplier .............................................       2
   1.10    Manufactured Products .......................................       2
   1.11    Minimum Annual Purchases ....................................       3
   1.12    Products ....................................................       3
   1.13    Purchaser ...................................................       3
   1.14    Seller ......................................................       3
   1.15    Thuasne Products ............................................       3
   1.16    Territories .................................................       3

                                   ARTICLE II

                              APPOINTMENT AND SCOPE

   2.1     Appointment .................................................       3
   2.2     Exclusivity .................................................       3
   2.3     Distribution Outside Territory ..............................       4
   2.4     Agents and Subdistributors ..................................       4
   2.5     Independent Purchaser Status ................................       4
   2.6     Operations and Expenses .....................................       4
   2.7     Appointment of Product Manager for Thuasne
           Products ....................................................       5
   2.8     Advertising Costs for Thuasne Products ......................       5

                                   ARTICLE III

                  TERMS AND CONDITIONS OF SALE FOR MANUFACTURED
                          PRODUCTS AND THUASNE PRODUCTS

   3.1     Firm Purchase Orders for Manufactured Products and
           Thuasne Products ............................................       5
   3.2     Prices ......................................................       6
   3.3     Payment .....................................................       6
   3.4     Risk of Loss ................................................       6
   3.5     Warranty ....................................................       7
   3.6     No Other Warranties .........................................       8
   3.7     Claims Procedures ...........................................       8
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<S>        <C>                                                             <C>

                                   ARTICLE IV

            TERMS AND CONDITIONS OF SALE OF THE DISTRIBUTED PRODUCTS

   4.1     Firm Purchase Orders for the Distributed Products ..........        8
   4.2     Prices .....................................................        9
   4.3     Payment ....................................................        9
   4.4     Risk of Loss ...............................................        9
   4.5     Warranty ...................................................        9
   4.6     No Warranties ..............................................        9
   4.7     Claims Procedures ..........................................       10

                                    ARTICLE V

                          OBLIGATIONS OF THE PURCHASER

   5.1     Sales Promotion ............................................       10
   5.2     Maintenance of Inventory ...................................       11
   5.3     Facilities and Personnel ...................................       11
   5.4     Promotional Materials; Trade Shows .........................       11
   5.5     Minimum Annual Purchases ...................................       12
   5.6     Aftermarket Support ........................................       13
   5.7     Import and Export Licenses, Exchange Controls, and
           Other Governmental Approvals, Compliance ...................       14
   5.8     Local Law ..................................................       14
   5.9     Health, Safety, and Environmental Standards;
           Labeling ...................................................       14
   5.10    Alteration .................................................       15
   5.11    Indemnification ............................................       15
   5.12    Insurance ..................................................       15

                                   ARTICLE VI

                            OBLIGATIONS OF THE SELLER

   6.1     Sales Support ..............................................       15
   6.2     Advertising Programs .......................................       15
   6.3     Notification of Changes ....................................       16
   6.4     Assistance .................................................       16
   6.5     Regulatory Agencies and Governmental Approvals .............       16

                                   ARTICLE VII

                                      AUDIT


                                  ARTICLE VIII

                               PATENT INFRINGEMENT
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<S>        <C>                                                             <C>
                                   ARTICLE IX

                     CONFIDENTIALITY AND PROPRIETARY RIGHTS

   9.1     Confidential Information ...................................       18
   9.2     Use of Confidential Information ............................       18
   9.3     Trademarks, Internet Domain Names and Trade Names ..........       18
   9.4     Protection of Proprietary Rights ...........................       19

                                    ARTICLE X

                              TERM AND TERMINATION

  10.1     Term .......................................................       19
  10.2     Termination ................................................       19
  10.3     Rights of Parties on Termination ...........................       20
  10.4     Orders After Termination ...................................       21
  10.5     Limitation of Remedies .....................................       21

                                   ARTICLE XI

                     RESOLUTION BY NEGOTIATION; ARBITRATION

  11.1     Resolution by Negotiation ..................................       21
  11.2     Settlement by Arbitration ..................................       22

                                   ARTICLE XII

                                  FORCE MAJEURE

  12.1     Force Majeure Conditions and Allocation ....................       22
  12.2     Purchaser's Obligations ....................................       22
  12.3     Notification and Remedy ....................................       22

                                  ARTICLE XIII

                                  SEVERABILITY

  13.1     Compliance with EC Regulation ..............................       23
  13.2     Remedy .....................................................       23

                                   ARTICLE XIV

                               GENERAL PROVISIONS

  14.1     Entire Agreement ...........................................       23
  14.2     Notices ....................................................       23
  14.3     Nonassignment ..............................................       24
  14.4     Language ...................................................       24
  14.5     Applicable Law .............................................       24
  14.6     Waiver .....................................................       24
  14.7     Headings ...................................................       25
  14.8     Counterparts ...............................................       25
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<TABLE>
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                              LIST OF EXHIBITS
                              ----------------
<S>                    <C>    <C>
      Exhibit A         -     Distributed Products
      Exhibit B         -     Manufactured Products
      Exhibit C         -     Thuasne Products
      Exhibit D         -     Countries
      Exhibit E         -     Standard Warranty Policy


      Annex I           -     Graham-Field Accounts
</TABLE>
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            THIS AGREEMENT is made as of this ____ day of September, 1997, by
and among Graham-Field Health Products, Inc. ("Graham-Field"), a Delaware
corporation, and Thuasne, a _________ corporation.

                                    RECITALS

            WHEREAS, Graham-Field is engaged in the business of manufacturing
and assembling certain products (the "Manufactured Products"), and marketing and
selling certain distributed products (the "Distributed Products");

            WHEREAS, the Manufactured Products and the Distributed
Products are collectively referred to hereinafter as the "Graham-
Field Products";

            WHEREAS, Thuasne is engaged in the business of manufacturing,
marketing, and selling certain products (the "Thuasne Products");

            WHEREAS, Graham-Field desires to market and distribute the Thuasne
Products, and Thuasne desires to market the Graham-Field Products, on an
exclusive basis in the respective Territories (as hereinafter defined);

            WHEREAS, Graham-Field desires to appoint Thuasne as the exclusive
distributor of the Graham-Field Products, and Thuasne desires to appoint
Graham-Field as the exclusive distributor of the Thuasne Products in the
respective Territories;

            NOW, THEREFORE, in consideration of their mutual covenants and
agreements contained herein, and the mutual benefits to be derived herefrom, the
parties, intending to be legally bound, hereby covenant and agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

            1.1 AFFILIATES. The term "Affiliates" shall have the meaning
ascribed to such term in Rule 405 of the Securities Act of 1933, as amended.

            1.2 AGREEMENT. The term "Agreement" when used herein means this
document and any annex, exhibit, attachment, schedule, addendum, or modification
hereto, unless the context otherwise indicates.

            1.3 CONFIDENTIAL INFORMATION. The term "Confidential Information"
when used herein means all communications or data, including, but not limited
to, all know-how, designs, drawings, hardware, software, specifications,
catalogs, data sheets, sales and technical bulletins, lists and information
pertaining to
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customers and sources of supply, cost, pricing and marketing information,
service manuals, mechanical diagrams, any translations, compilations or other
derivative materials, and all other information, whether or not reduced to
writing, relating to the design, manufacture, use, service and marketing of the
Products, as well as technical information and data, inventories, strategies,
trade secrets and any other information relating to Graham-Field or Thuasne or
to their respective Affiliates, as the case may be, that may be divulged to or
learned by Graham-Field or Thuasne, as the case may be, in the course of its
performance of this Agreement and that is not generally known in the trade.

            1.4 COST. The term "Cost" means the "fully-burdened" manufacturing
cost of the Manufactured Products, as determined in accordance with U.S.
generally accepted accounting principles; with respect to the Distributed
Products, Graham-Field's "fully-landed" cost of the Distributed Products
(excluding freight, transportation and other similar charges related to the
purchase of such products which are shipped directly from Import Suppliers);
and, with respect to the Thuasne Products, Thuasne's "fully-landed" or
"fully-burdened" manufacturing cost, as the case may be, of Thuasne's Products,
as determined in accordance with U.S. generally accepted accounting principles.
Notwithstanding anything to the contrary contained herein, Graham-Field shall
use its best efforts to attempt to reduce the Cost of the Graham-Field Products
during the term of this Agreement; provided, however, the failure by
Graham-Field to reduce the Cost of the Graham-Field Products shall not
constitute a breach of the terms and provisions of this Agreement.

            1.5 CUSTOMER. The term "Customer(s)" when used herein means any
customer of Thuasne or Graham-Field, as the case may be.

            1.6 DISTRIBUTED PRODUCTS. The term "Distributed Products" includes
only those products identified on Exhibit A attached hereto, as supplemented or
modified from time to time by the parties.

            1.7 GRAHAM-FIELD PRODUCTS. The term "Graham-Field Products" means
collectively only the Manufactured Products and the Distributed Products of
Graham-Field.

            1.8 GROSS PROFIT. The term "Gross Profit" shall mean the excess of
the price paid by Thuasne to purchase the Graham-Field Products over the Cost of
the Graham-Field Products.

            1.9 IMPORT SUPPLIER. The term "Import Supplier" shall have the
meaning ascribed to it in Section 4.1 of this Agreement.

            1.10 MANUFACTURED PRODUCTS. The term "Manufactured Products"
includes only those products identified on Exhibit B


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attached hereto, as supplemented or modified from time to time by the parties.

            1.11 MINIMUM ANNUAL PURCHASES. The term "Minimum Annual Purchases"
has the meaning ascribed to it in Section 5.5 of this Agreement.

            1.12 PRODUCTS. The term "Products" when used herein means the
Graham-Field Products with respect to which Thuasne is acting as the exclusive
distributor and the Thuasne Products with respect to which Graham-Field is
acting as the exclusive distributor, as provided herein.

            1.13 PURCHASER. The term "Purchaser" shall mean either Graham-Field
or Thuasne in their respective roles as exclusive distributor of the other
party's products as provided herein.

            1.14 SELLER. The term "Seller" shall mean either Graham-Field or
Thuasne in their respective roles as supplier of its Products, as defined in
this Agreement, to the other party.

            1.15 THUASNE PRODUCTS. The term "Thuasne Products" means
collectively only those products identified on Exhibit C attached hereto, as
supplemented or modified from time to time by the parties.

            1.16 TERRITORIES. The term the "Territories" when used herein means
the United States of America (including territories and possessions) and Canada
with respect to the exclusive distribution by Graham-Field of the Thuasne
Products and Eastern Europe, Western Europe and the countries set forth on
Exhibit D with respect to the exclusive distribution by Thuasne of the
Graham-Field Products.

                                   ARTICLE II

                              APPOINTMENT AND SCOPE

            2.1 APPOINTMENT. Graham-Field hereby appoints Thuasne as the
exclusive independent distributor of the Graham-Field Products, and Thuasne
hereby appoints Graham-Field as the exclusive independent distributor of the
Thuasne Products, in the respective Territories. The parties hereby accept their
appointment and agree to diligently devote their best efforts to the performance
of such duties.

            2.2 EXCLUSIVITY. For purposes of Section 2.1 hereof, the term
"exclusive" means that as long as each party is in full compliance with its
obligations hereunder, (a) each party shall not appoint any other agent,
representative or distributor for the promotion or sale of its Products in the
respective Territories and shall further refrain from selling the Products


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in the respective Territories directly other than through the other party, and
(b) the parties shall not represent, lease or sell in the respective Territories
any products comparable to, competitive with, equivalent to, intended to be used
with or that are part of, the Products, and shall further refrain from
purchasing any such Products from any other entity or person for sale, lease or
representation in the respective Territories. The parties shall not be
responsible for transgression of the other's exclusive rights hereunder by third
parties not controlled by the parties.

            2.3 DISTRIBUTION OUTSIDE TERRITORY. Neither party nor any of its
Affiliates (collectively, the "Affiliates") shall offer, sell, distribute,
market or otherwise introduce the other party's Products into territories
outside the respective applicable Territories, and each party shall use such
efforts as it considers commercially reasonable to ensure that no Products of
the other party are offered, sold, distributed, marketed or otherwise introduced
outside the respective applicable Territories of each party as provided herein.

            2.4 AGENTS AND SUBDISTRIBUTORS. The parties have authority to
appoint any subagent, subdistributor, or other similar person to promote the
sale of the Products in the respective Territories or to otherwise perform any
of their obligations hereunder.

            2.5 INDEPENDENT PURCHASER STATUS. The parties are to be independent
purchasers and sellers respectively of the Products. The parties shall not be
considered agents or legal representatives of the other for any purpose, and
none of the Affiliates shall be, or be considered, an agent or employee of the
other party. The Affiliates are not being granted and shall not exercise the
right or authority or assume or create any obligation or responsibility,
including without limitation contractual obligations and obligations based on
warranties or guarantees, on behalf of or in the name of the other party.

            2.6 OPERATIONS AND EXPENSES. Each party under this Agreement will
have sole control and management of its operations. Except as otherwise provided
herein, each party shall be responsible for, and shall hold the other harmless
from and against, all of its own expenses and employees. Subject to the terms
and conditions contained in this Agreement, each party shall provide, at its own
expense, such office space and facilities, and hire and train such personnel, as
may be required to carry out its obligations under this Agreement. The parties
agree that they shall incur no expense chargeable to the other, except as may be
specifically authorized in advance in writing in each case by the other.


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            2.7 APPOINTMENT OF PRODUCT MANAGER FOR THUASNE PRODUCTS. The parties
shall mutually appoint and hire within thirty (30) days of the date hereof a
Product Manager to be employed on the books and records of Graham-Field as a
Product Manager primarily responsible for Graham-Field's sale, marketing and
distribution of the Thuasne Products in the applicable Territory. The
responsibilities of the Product Manager will be mutually developed between the
parties. Notwithstanding the foregoing, all costs associated with the employment
by Graham-Field of the Product Manager, including, but not limited to, all
salary, perquisites, benefits, medical and insurance and other benefits
(collectively, the "Compensation Benefits") shall be shared equally between the
parties; provided, however, all costs, expenses and Compensation Benefits
associated with the (i) training of the Product Manager with respect to the
Thuasne Products and (ii) travel to and from France and all living expenses of
the Product Manager in France during such training, shall be borne solely and
exclusively by Thuasne.

            2.8 ADVERTISING COSTS FOR THUASNE PRODUCTS. All costs and expenses
associated with advertising, promotional, catalogs and other marketing materials
related to the Thuasne Products shall be shared equally between the parties;
provided, however, in no event shall such costs and expenses exceed $25,000
(U.S. dollars) on an annual basis.

                                   ARTICLE III

                  TERMS AND CONDITIONS OF SALE FOR MANUFACTURED
                          PRODUCTS AND THUASNE PRODUCTS

            3.1 FIRM PURCHASE ORDERS FOR MANUFACTURED PRODUCTS AND THUASNE
PRODUCTS. All orders for the Manufactured Products and Thuasne Products shall be
evidenced by the parties' firm purchase orders and shall be subject to all of
the provisions set forth in this Article III and in the parties' then current
terms and conditions of sale. Simultaneously with the signing of this Agreement,
Thuasne shall deliver to Graham-Field firm orders for the purchase of
Manufactured Products, and Graham-Field shall deliver to Thuasne firm orders for
the purchase of the Thuasne Products, during the first two (2) calendar months
of the term of this Agreement (with requested ship dates of not less than
forty-five (45) days after the other's receipt of the orders) and an estimate of
the purchase requirements for the Manufactured Products and Thuasne Products
during the following three (3) calendar months of the term of this Agreement. On
or prior to the last business day of the first and each following calendar month
of the term of this Agreement, the parties will place firm orders for the
purchase of the Manufactured Products and Thuasne Products during the next
calendar month of the term of this Agreement (with requested ship dates of not
less than forty-five (45) days after the other's receipt of orders) and provide
an


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estimate of purchase requirements for the Manufactured Products and Thuasne
Products for the next three (3) calendar months of the term of this Agreement.
By placing each order hereunder, the party confirms its agreement with and
acceptance of all such terms and conditions. The time period for delivery of any
order of Manufactured Products and Thuasne Products shall be in accordance with
the delivery schedule agreed upon at the time of the party's acceptance of such
order. No order for the Manufactured Products and Thuasne Products shall be
binding on a party unless, and until, accepted by that party. Acceptance shall
be evidenced in writing, signed by duly authorized personnel of the party.

            3.2 PRICES. Thuasne shall purchase the Graham-Field Products
identified on Exhibit B for a purchase price (F.O.B. shipping point) equal to
one hundred ten percent (110%) of Cost, and with respect to the Graham-Field
Products marketed under the names "LaBac" or "Cain & Able" (or any derivations
thereof) for a purchase price (F.O.B. shipping point) equal to one hundred
twenty percent (120%) of Cost. Graham-Field shall purchase the Thuasne Products
for a purchase price (F.O.B. Shipping point) equal to one hundred ten percent
(110%) of Cost. All prices and amounts payable under this Section 3.2 and under
any other section of this Agreement are expressed and shall be payable in U.S.
dollars. The Purchaser shall bear and pay for all export and shipping charges
including, but not limited to, export packing and packaging charges, freight,
shipping costs, warehousing, demurrage, lighterage, insurance, consular fees,
and customs duties.

            3.3 PAYMENT. Unless otherwise agreed to by the parties in writing,
the payment for the purchase price of the Products shall be by wire transfer of
immediately available funds within forty-five (45) days after delivery F.O.B.
shipping point, or by an irrevocable documentary letter of credit issued in
favor of the Seller, the terms and conditions of which shall be as agreed upon
by the parties, confirmed by a major commercial bank with a worldwide reputation
reasonably acceptable to the parties, payable upon presentation of required
documentation at sight, forty five (45) days after delivery F.O.B. shipping
point. Notwithstanding the foregoing payment terms, payment for the purchase
price of the Products may be made within one hundred and five (105) days after
delivery F.O.B. shipping point, provided interest on the outstanding unpaid
balance of the purchase price is paid to the Seller at the rate of one (1)
percent per thirty (30) day period commencing on the forty-fifth (45th) day
following delivery F.O.B. shipping point; provided, however, in no event shall
such payment be made later than one hundred and five (105) days following
delivery F.O.B. shipping point.

            3.4 RISK OF LOSS. Risk of loss of or damage to the Products shall
pass to the Purchaser when such products are


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delivered F.O.B. shipping point, and the Purchaser shall arrange insurance
accordingly. At the request and expense and on behalf of the Purchaser, the
Seller shall undertake to deliver or cause to be delivered the Products F.O.B.
shipping point to an appropriate port of exit in the U.S. or in France, as the
case may be, in accordance with the Purchaser's written instructions. The
Seller's actions in that regard shall be for and on behalf of the Purchaser and
at no time after delivery of the Products F.O.B. shipping point as provided
above shall the risk of loss thereof and/or damage thereto be vested in the
Seller. However, at the express written request, direction and cost of the
Purchaser, the Seller shall cause to be provided an all-risks
warehouse-to-warehouse policy of marine insurance, or such other insurance as is
appropriate to cover loss of or damage to the Products in transit.

            At its own expense, the Purchaser shall cooperate fully with the
Seller in effecting the shipment from the port of exit of the Products to be
delivered pursuant to this Agreement. The Seller shall use its best efforts to
provide the Purchaser with all necessary documents and information reasonably
requested by the Purchaser in connection with its performance under this
Section.

            3.5 WARRANTY. The Products delivered by the Seller to the Purchaser
pursuant to this Agreement shall be warranted by the Seller to be free from
defect in materials and workmanship in accordance with the Seller's standard
warranty terms in effect at the time of shipment. A copy of each Seller's
standard warranty terms in effect for the Products as of the date of this
Agreement is attached hereto as Exhibit E. The Seller shall provide the
Purchaser with copies of any changes or modifications thereto during the life of
this Agreement. Any claim for breach of warranty must be submitted within the
specified warranty period. During said warranty period, the Seller shall, at the
Seller's option, either replace or authorize repair of any of the Products (or
parts of such Products), that are found to be defective. Any dispute that arises
regarding the nature or existence of a defect shall be settled through the use
of a third party inspection service that is mutually agreeable to the parties.
The Purchaser shall promptly return or dispose of defective Products or parts as
the Seller shall direct. In no event shall the Seller's liability for breach of
warranty exceed the replacement cost of any defective product or part.

            The Purchaser may not extend the Seller's warranty to Customers in
connection with the sale of the Products. The Purchaser shall not in any way
alter the Products (nor the parts or components thereof) without the prior
written authorization of the Seller, nor extend any warranty nor make any
representation regarding the Products other than those contained in the Seller's
then current warranty. Any warranty given by the Purchaser with


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<PAGE>   13
respect to the Products that have been altered without prior written
authorization or any such additional warranty or representation shall not be
binding on the Seller. Claims by the Purchaser in regard to any defect in the
Products shall be made pursuant to claim procedures set forth in Section 3.7.

            3.6 NO OTHER WARRANTIES. THE FOREGOING WARRANTIES ARE EXCLUSIVE AND
IN LIEU OF ALL OTHER EXPRESS AND IMPLIED WARRANTIES WHATSOEVER, INCLUDING BUT
NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR PARTICULAR
PURPOSE. UNDER NO CIRCUMSTANCES SHALL THE SELLER BE SUBJECT TO ANY
CONSEQUENTIAL, INCIDENTAL, INDIRECT, OR CONTINGENT DAMAGES WHATSOEVER WITH
RESPECT TO CLAIMS MADE HEREUNDER OR BY ANY PURCHASER OR USER OF THE PRODUCTS.

            3.7 CLAIMS PROCEDURES. Any claim against the Seller for shortages in
or damages to the Products shipped to the Purchaser shall be made in accordance
with the Seller's damaged cargo procedures and other written instructions
conveyed to the Purchaser by the Seller from time to time. Any other claims
against the Seller arising out of the Products sold to the Purchaser shall be
made within thirty (30) calendar days after the Purchaser first knows or has
reason to know of such claim. All such claims shall be submitted to the Seller
in writing and shall set forth in sufficient detail for the Seller to ascertain
the basis and amount of such claim against the Seller. Failure by the Purchaser
to provide proper documentation to support an insurance claim resulting in total
or partial denial of coverage shall render the Purchaser liable to the Seller
for amounts unpaid. Any dispute that arises regarding the nature or existence of
any shortage or damage shall be settled through the use of a third party
inspection service that is mutually agreeable to the parties.


                                   ARTICLE IV

            TERMS AND CONDITIONS OF SALE OF THE DISTRIBUTED PRODUCTS

            4.1 FIRM PURCHASE ORDERS FOR THE DISTRIBUTED PRODUCTS. Graham-Field
shall provide Thuasne with access to Graham-Field's suppliers of the Distributed
Products (the "Import Suppliers"), and Graham-Field will use its best efforts to
enable Thuasne to purchase the Distributed Products directly from the Import
Suppliers; provided, however, in the event Thuasne is unable for any reason to
purchase such Distributed Products from the Import Suppliers, Graham-Field will
purchase such products on behalf of Thuasne and directly supply such products to
Thuasne. All orders for the Distributed Products shall be evidenced by firm
purchase orders, which shall be placed directly with the Import Suppliers or
Graham-Field, as the case may be. The time period for delivery of any order of
the Distributed Products shall be in


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<PAGE>   14
accordance with the delivery schedule agreed upon between the Import Supplier
and Thuasne or between Graham-Field and Thuasne, as the case may be.

            4.2 PRICES. Thuasne shall purchase the Distributed Products for a
purchase price equal to Graham-Field's Cost of the Distributed Products. Thuasne
shall bear and pay for all export and shipping charges including, but not
limited to, export packing and packaging charges, freight, shipping costs,
warehousing, demurrage, lighterage, insurance, consular fees, and customs
duties.

            4.3 PAYMENT. Unless otherwise agreed to by the Import Supplier and
Thuasne, the payment for the purchase of the Distributed Products shall be upon
the terms and conditions as provided by the Import Supplier to Graham-Field, as
modified from time to time, or upon the terms and conditions as provided in
Section 3.3 in the event Graham-Field directly supplies the Imported Products to
Thuasne. Simultaneously with payment by Thuasne of the purchase price for the
Distributed Products (whether to Graham-Field or Import Suppliers), Thuasne
shall pay Graham-Field an administrative fee in an amount equal to the product
of (i) four (4) percent and (ii) the Cost of the Distributed Products.

            4.4 RISK OF LOSS. Risk of loss of or damage to the Distributed
Products shall pass to Thuasne upon terms and conditions mutually agreed upon
between Thuasne and the Import Supplier, or upon the terms and conditions as
provided in Section 3.4 in the event Graham-Field directly supplies the Imported
Products to Thuasne. At its own expense, Thuasne shall cooperate fully with the
Import Supplier or Graham-Field, as the case may be, in effecting the shipment
of the Distributed Products to be delivered to Thuasne.

            4.5 WARRANTY. All Distributed Products delivered to Thuasne pursuant
to this Agreement shall be warranted solely and exclusively by the Import
Supplier to be free from defect in materials and workmanship in accordance with
the Import Supplier's standard warranty terms in effect at the time of shipment.
Any claim for breach of warranty must be submitted solely and exclusively to the
Import Supplier within the specified warranty period, with a copy of such claim
to Graham-Field. Thuasne agrees that Graham-Field shall have no liability with
respect to any dispute that arises regarding the nature or existence of any
defect relating to the Distributed Products. Graham-Field shall use reasonable
efforts to cause the Import Suppliers to provide Thuasne with the same warranty
conditions as those granted to Graham-Field by such Import Suppliers.

            4.6 NO WARRANTIES. GRAHAM-FIELD PROVIDES NO WARRANTIES, EXPRESS OR
IMPLIED, WHATSOEVER, INCLUDING BUT NOT


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LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR PARTICULAR
PURPOSE, FOR THE DISTRIBUTED PRODUCTS. UNDER NO CIRCUMSTANCES SHALL GRAHAM-FIELD
BE SUBJECT TO ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, OR CONTINGENT DAMAGES
WHATSOEVER WITH RESPECT TO CLAIMS MADE HEREUNDER OR BY ANY PURCHASER OR USER OF
THE DISTRIBUTED PRODUCTS.

            4.7 CLAIMS PROCEDURES. Any claim for shortages in or damages to the
Distributed Products shall be made solely and exclusively with the Import
Supplier. Any dispute that arises regarding the nature or existence of any
shortage or damage relating to the Distributed Products shall be settled upon
and terms and conditions to be mutually agreed upon between Thuasne and the
Import Supplier.


                                    ARTICLE V

                          OBLIGATIONS OF THE PURCHASER

            5.1 SALES PROMOTION. The Purchaser shall diligently devote its best
efforts to distribute, sell, market, promote, service, support and maintain the
Products within the respective Territories and shall develop the largest
possible market for the sale of the Products in the respective Territories,
entirely at its own expense. For that purpose, the Purchaser hereby undertakes
to conduct the following activities:

            A. Marketing Analysis: The Purchaser shall, on each June 30th and
      January 1st during the term of this Agreement, provide the Seller with a
      written analysis of the business and marketing conditions within the
      respective Territory with respect to the sale of the Products in the
      respective Territories. The Purchaser's analysis shall include information
      on all pertinent market conditions and developments as well as an
      assessment of the Purchaser's position relative to the Purchaser's
      competitors.

            B. Marketing Reporting Requirements: The Purchaser shall submit to
      the Seller a marketing plan and shall also furnish sales forecasts to the
      Seller on each June 30th and January 1st during the term of this
      Agreement. The Purchaser shall also submit written reports to the Seller
      summarizing the Purchaser's activities relative to marketing, service and
      general product support for the Products in such form, and containing such
      information with respect thereto, as the Seller may reasonably request
      from time to time. The first such report shall be submitted to the Seller
      six (6) months after the date of this Agreement and periodically
      thereafter as the Seller may reasonably request from time to time.


                                       10
<PAGE>   16
            5.2 MAINTENANCE OF INVENTORY. Within ninety (90) days following the
date of this Agreement and continuing thereafter until the termination hereof,
the Purchaser shall maintain an adequate stock of the Products for resale within
the respective Territories as agreed upon between the Purchaser and the Seller
from time to time, along with an adequate stock of spare parts as will permit
the Purchaser to provide proper maintenance and service for the Products in the
respective Territories as provided in Section 5.6 hereof.

            5.3 FACILITIES AND PERSONNEL. The Purchaser shall maintain, at its
own expense, such office space and facilities as may be required to carry out
its obligations under this Agreement. The Purchaser represents that it will
continue to have at all times throughout the term of this Agreement, an adequate
number of trained and competent sales and service personnel to fully perform its
obligations hereunder. The Seller may, in its discretion, provide at its own
expense sales and/or service training courses to assist employees of the
Purchaser in their sale and/or service of the Products. If the Seller provides
such training courses, the Purchaser shall require its personnel performing
functions covered by any training course to attend said courses. All costs or
expenses incurred by the Purchaser in attending or participating in such
training courses shall be for the account of the Purchaser. The Seller shall not
be liable to reimburse the Purchaser or its employees for transportation or any
other expenses incurred in attending such training courses.

            5.4 PROMOTIONAL MATERIALS; TRADE SHOWS. The Purchaser shall maintain
an adequate inventory of the Seller's current sales material and samples and
shall use such materials and samples in an efficient and effective manner so as
to promote the sale and maintain the image and goodwill of the Products in the
respective Territories. The Purchaser shall not use any advertising or
promotional materials to promote the other party's Products that have not been
provided by the Seller unless the Purchaser shall have first obtained from the
Seller its prior written approval of such materials. The Seller shall, at its
sole cost and expense, prepare translations of the Seller's sales literature
into the languages utilized in the respective Territories and submit such
translation to the Purchaser for its prior approval. The Purchaser shall, at its
sole cost and expense, attend such trade shows in its respective Territory as to
diligently develop the largest possible market for the sale of the other party's
Products; provided, however, to the extent Graham-Field has, prior to the
execution of this Agreement, prepaid the costs of future trade shows in the
territory pursuant to which Thuasne will market the Graham-Field Products as
provided herein, Thuasne shall be required to reimburse Graham-Field for all
prepaid costs of Graham-Field associated with such trade shows.


                                       11
<PAGE>   17
            5.5   MINIMUM ANNUAL PURCHASES.

            A. During each calendar year of the term of this Agreement
commencing on January 1, 1998, Thuasne shall be required to purchase the
following minimum quantities of Graham-Field Products (the "Minimum Annual
Purchases") as set forth below:

<TABLE>
<CAPTION>
                                                            MINIMUM ANNUAL
                                                              PURCHASES
                  CALENDAR YEAR                             (U.S. DOLLARS)
                  -------------                             --------------
<S>                                                         <C>
      January 1, 1998 - December 31, 1998                   $ 2,600,000*
      January 1, 1999 - December 31, 1999                   $ 7,000,000
      January 1, 2000 - December 31, 2000                   $ 8,400,000
      January 1, 2001 - December 31, 2001                   $10,080,000
      January 1, 2002 - December 31, 2002                   $12,096,000
</TABLE>

            i. Notwithstanding the foregoing, if Thuasne's actual purchases (the
"Actual Purchases") during any calendar year of the term of this Agreement
ending after December 31, 1998 exceed the Minimum Annual Purchases for such
year, the Minimum Annual Purchases for the immediately succeeding calendar year
(an "Initial Adjusted Year") shall be adjusted to equal the product of (a) one
hundred twenty (120) percent and (b) the Actual Purchases during such preceding
calendar year, and the Minimum Annual Purchases for each succeeding calendar
year following an Initial Adjusted Year shall be adjusted to equal the greater
of (i) one hundred twenty (120) percent of the Minimum Annual Purchases (as
adjusted as provided herein for an Initial Adjusted Year) for the most recently
ended calendar year or (ii) one hundred twenty (120%) percent of the Actual
Purchases for the most recently ended calendar year. For example, if in the
calendar year ending December 31, 1999, the Actual Purchases are eight million
dollars ($8,000,000) (in excess of the Minimum Annual Purchases for the calendar
year ending December 31, 1999), then the Minimum Annual Purchases for the
calendar years ending December 31, 2000, 2001, and 2002 would be $9,600,000
(1.20 x $8,000,000), $11,520,000 (1.20 x $9,600,000), and $13,824,000 (1.20 x
$11,520,000), respectively.

            ii. In the event Thuasne purchases less than ninety (90) percent of
the Minimum Annual Purchases, as modified as provided herein, in any calendar
year during the term of this Agreement, Graham-Field may, at its sole and
exclusive option,

--------

*     The Minimum Annual Purchases for the calendar year ending December 31,
      1998 shall include the Graham-Field accounts set forth on Annex I attached
      hereto, which shall be transferred to Thuasne as of the date hereof,
      subject to the terms and conditions of this Agreement.


                                       12
<PAGE>   18
(a) modify Thuasne's appointment to a non-exclusive arrangement or (b) terminate
this Agreement effective immediately upon notice to Thuasne pursuant to Section
10.2E.

            iii. In the event Thuasne purchases ninety (90) percent or more of
the Minimum Annual Purchases in any calendar year, as adjusted as provided
herein, but less than one hundred (100) percent of such Minimum Annual
Purchases, Thuasne shall be required to pay Graham-Field within thirty (30) days
following such calendar year an amount equal to the product of (a) ten (10)
percent and (b) the difference between (x) the Minimum Annual Purchases for such
year, as modified as provided herein, and (y) Actual Purchases for such year.

            B. Within three (3) months of the date hereof, the parties shall use
their reasonable efforts to establish minimum annual purchase requirements
pursuant to which Graham-Field shall be required to purchase certain minimum
quantities of Thuasne Products during each calendar year of the term of this
Agreement.

            5.6 AFTERMARKET SUPPORT. Subject to the provisions of this Agreement
the Purchaser shall provide full and complete service incident to the sale of
the Products in the respective Territories, including (i) maintaining offices in
the respective Territories with telex or telefax facilities that shall be
staffed by the necessary managerial, secretarial, and technical personnel and
shall otherwise be suitable for the receipt, repair, and return of defective
Products; (ii) hiring and retaining skilled technical personnel with adequate
experience in the maintenance and repair of the Products and, when requested by
the Seller, sending a representative of such technical personnel, at the
Purchaser's sole expense, to the Seller's facilities for any required training
or development, (iii) purchasing from the Seller and maintaining an adequate
supply of spare and replacement parts for the Products as provided in Section
5.2 hereof, (iv) purchasing and maintaining any special tools or machinery
necessary for the repair of the Products, and (v) administering and processing
warranty claims. The Purchaser will perform warranty repair services on the
Products sold in the respective Territories in accordance with the Seller's
standard service and repair price policies from time to time prescribed. The
Purchaser shall be responsible for all warranty repair services, and will
indemnify and hold the Seller harmless from and against all claims, losses,
expenses, and liabilities relating to or arising out of the rendering of such
services. The Purchaser may charge back the cost thereof to the Seller in
accordance with the Seller's warranty policies, and the Seller will pay the
Purchaser the amount of such chargeback within thirty (30) days following the
date of issuance of the Purchaser's invoices therefor.


                                       13
<PAGE>   19
            5.7 IMPORT AND EXPORT LICENSES, EXCHANGE CONTROLS, AND OTHER
GOVERNMENTAL APPROVALS, COMPLIANCE. The Purchaser shall, at its expense, obtain
and maintain any and all import and export licenses and governmental approvals
that may be necessary to permit the sale by the Seller and the purchase by the
Purchaser of the Products hereunder, comply with all registration requirements
in the respective Territories, obtain such approvals from the banking and other
governmental authorities of the respective Territories as may be necessary to
guarantee payment of all amounts due hereunder to the Seller in U.S. Dollars,
and comply with any and all governmental laws, regulations, and orders that may
be applicable to the Purchaser by reason of its execution of this Agreement
including any requirement to be registered as the Seller's exclusive distributor
with any governmental authority, and including any and all laws, regulations, or
orders that govern or affect the Products, including the ordering, export,
shipment, import, sale (including government procurement), delivery, or
redelivery of the Products in the respective Territories. The Purchaser shall
furnish the Seller with such documentation as the Seller may request to confirm
the Purchaser's compliance with this Section 5.7 and agrees that it shall not
engage in any course of conduct that, in the Seller's reasonable belief, would
cause the Seller to be in violation of the laws, regulations or orders of any
jurisdiction. Notwithstanding the foregoing, the Seller shall be solely
responsible for (i) the application and registration of all Intellectual
Property and (ii) the recordal of this Agreement, the License Agreement, and the
Purchaser as an authorized user of the Intellectual Property and (iii) the
deposit of any intellectual property registration with Customs authorities, both
in the respective Territories and outside the respective Territories. Purchaser
shall not undertake any of the foregoing without the prior written consent of
the Seller.

            5.8 LOCAL LAW. The Purchaser shall notify the Seller of the
existence and content of any mandatory provision of law in the respective
Territories or any other applicable law that conflicts with any provision of
this Agreement at the time of its execution or thereafter.

            5.9 HEALTH, SAFETY, AND ENVIRONMENTAL STANDARDS; LABELING. The
Purchaser agrees to advise the Seller fully with respect to all health, safety,
environmental, and other standards, specifications, and other requirements
imposed by law, regulation, or order in the respective Territories and
applicable to the Products. The Purchaser shall also advise the Seller of all
instructions, warnings, and labels applicable to the Products that are necessary
or desirable under laws, regulations, or industry standards or practices in the
respective Territories. The Seller shall be entitled to increase the prices
charged to the Purchaser immediately by the amount of any increase in the Cost
attributable to compliance with any such safety standards,


                                       14
<PAGE>   20
specifications, labels or other requirements.

            5.10 ALTERATION. The Purchaser agrees not to alter or modify the
Products, trademark packaging, manuals, promotional and advertising materials,
in whole or in part, whether to comply with applicable local standards or
otherwise, without first obtaining the express written consent to and approval
of each such alteration or modification from the Seller.

            5.11 INDEMNIFICATION. The Purchaser agrees to indemnify and hold the
Seller, its officers, directors, employees, successors, and assigns harmless
from and against all losses, damages, or expenses of whatever form or nature,
including attorneys' fees and other costs of legal defense, whether direct or
indirect, that they, or any of them, may sustain or incur as a result of any
acts or omissions of the Purchaser or any of its directors, officers, employees,
or agents, including, but not limited to, (i) breach of any of the provisions of
this Agreement, (ii) negligence or other tortious conduct, (iii) representations
or statements not specifically authorized by the Seller herein or otherwise in
writing, or (iv) violation by the Purchaser (or any of its directors, officers,
employees or agents) of any applicable law, regulation or order.

            5.12 INSURANCE. The Purchaser shall maintain in effect during the
term hereof and for a period of no less than five (5) years thereafter
appropriate liability insurance policies with an internationally recognized
carrier providing coverage of not less than U.S. five (5) million dollars. Such
policies shall include the Seller as an additional named insured, provide for a
waiver of subrogation rights against the Seller, contain no cross-liability
exclusion, and require the Seller to receive not less than sixty (60) days'
notice of any modification or termination of coverage.

                                   ARTICLE VI

                            OBLIGATIONS OF THE SELLER

            6.1 SALES SUPPORT. The Seller shall, at its sole cost and expense,
provide the Purchaser with sales and marketing information applicable to the
Products and shall furnish such catalogs, specifications, promotional
literature, and other materials pertaining to the Products as are available from
time to time.

            6.2 ADVERTISING PROGRAMS. The Purchaser shall be entitled to
participate in such advertising programs, allowances, and other arrangements as
the Seller makes generally available to its distributors during the term hereof.


                                       15
<PAGE>   21
            6.3 NOTIFICATION OF CHANGES. With three (3) months prior notice, the
Seller shall notify the Purchaser of any changes in or affecting the Products or
prices, terms and conditions of sale, sales policies, projected delivery dates,
schedule changes, and other matters that the Seller determines may affect the
business of the Purchaser.

            6.4 ASSISTANCE. The Seller shall provide the Purchaser with
reasonable access to and assistance of its technical, sales, and service
personnel as the Seller deems appropriate. Such assistance shall be without
charge to the Purchaser except as may be otherwise mutually agreed.

            6.5 REGULATORY AGENCIES AND GOVERNMENTAL APPROVALS. The Seller shall
prepare and submit all documents required by applicable regulatory agencies for
approval to market the Products in the respective Territories. Purchaser shall
cooperate fully with Seller and such regulatory agencies in the effort to obtain
approval to market the Products, including without limitation providing such
information and other cooperation as may be required or necessary for such
approvals. The parties recognize that approval may be delayed or postponed by a
regulatory agency through no fault of the parties, and it is agreed that any
such delay or postponement shall not constitute a default under this Agreement.

            Graham-Field, at its sole cost and expense, will use commercially
reasonable efforts to obtain such certification (by a recognized certification
organization) and be in compliance with all "CE" marking requirements on or
before June 30, 1998, as reasonably necessary to enable Thuasne to market the
Products in its respective Territory. Thuasne shall provide such support and
assistance requested by Graham-Field as Thuasne is able, including consulting
services by Thuasne's employees with prior experience in obtaining such
certifications at no cost or charge to Graham-Field. Once any such certification
is obtained, Graham-Field shall maintain such certification throughout the term
of this Agreement.

            The Seller and/or Purchaser, as the case may be, shall advise the
other from time to time of the status of regulatory review of any submitted
documents by either party in connection with such party's fulfilling its
obligations to obtain regulatory approvals, as provided herein, and any
consequential revision of any expected approval date.

            Each party shall obtain and maintain in full force and effect all
appropriate regulatory filings, authorizations, approvals and consents and shall
maintain all documents and records relating to its responsibilities with respect
to the Products. Each party shall promptly forward to the other party all
notices of adverse findings with respect to Products that it


                                       16
<PAGE>   22
receives, and shall cooperate fully with the other party in investigating each
such incident.

                                   ARTICLE VII

                                      AUDIT

            During the term of this Agreement, the Seller and the Purchaser
hereby agree to maintain separate books and records relating to the transactions
contemplated by this Agreement, and that each party shall have the right once a
year and upon ninety (90) days' prior written notice to inspect the books and
records of the other party as such books and records solely relate to the
transactions contemplated by this Agreement. All information relating to the
cost of the Products will be kept confidential to the parties.


                                  ARTICLE VIII

                               PATENT INFRINGEMENT

            The Seller makes no warranty or representation that the sale and/or
customary use of the Products will not infringe enforceable letters patent
issued to other persons or valid trade secrets, proprietary information,
trademark, copyright or patent rights of other persons, but the Seller is
unaware of any claim or threat of any claim that the sale and/or customary use
of the Products would so infringe such rights of any other person. Provided that
the Purchaser (i) uses the Products in accordance with the terms of this
Agreement and (ii) notifies the Seller immediately in writing of any claim or
threatened claim by any third party that the Purchaser's or its Customer's use
of any of the Products infringes the rights of such third party and (iii) gives
the Seller sole authority to defend or settle such claim and provides all
necessary assistance and information with respect thereto, the Seller shall
indemnify and hold the Purchaser harmless from and against any and all damages
arising out of such claim awarded against the Purchaser by a court of competent
jurisdiction by a final order that is not subject to further appeal. The Seller
shall not be responsible for any settlement or compromise made without its
consent. The Seller shall have no liability to the Purchaser under any provision
of this Section if any infringement or claim thereof is based upon the use of
any Products in connection or combination with any product not supplied by the
Seller or upon a modification or alteration of such Products by the Purchaser or
its Customer. If the sale and/or use of the Products pursuant to this Agreement
becomes (or in the opinion of the Seller is likely to become) the subject of an
infringement claim, the Seller may, at its option, (i) secure a right to sell
pursuant to this Agreement, (ii) make modifications that would render the sale
or use hereunder non-


                                       17
<PAGE>   23
infringing, or (iii) remove the infringing product from the Products covered by
this Agreement upon notice to the Purchaser. In no event shall the Seller be
liable hereunder for any indirect or consequential damages of any nature
whatsoever, including without limitation for lost profits.

                                   ARTICLE IX

                     CONFIDENTIALITY AND PROPRIETARY RIGHTS

            9.1 CONFIDENTIAL INFORMATION. The Purchaser acknowledges that the
Confidential Information comprises valuable trade secrets and is proprietary to
the Seller. The Purchaser shall hold in strict confidence the Confidential
Information and shall not disclose the same to any other person, firm, or
corporation. The foregoing obligation shall not extend to information that is or
must be divulged according to statutory, regulatory or other governmental
requirements.

            9.2 USE OF CONFIDENTIAL INFORMATION. The Purchaser shall not use for
any purpose other than implementation of this Agreement any portion of the
Confidential Information or any patent, trademark, copyright or other
Intellectual Property right of the Seller nor copy or imitate any of the
Seller's designs of any of the Products. Acknowledging that the damages
sustainable by the Seller as a consequence of any breach of the Purchaser's
obligations under this Section 9.2 may be difficult to measure in monetary
terms, the Purchaser hereby agrees that the Seller shall be entitled (i) to have
the continuation of any such breach permanently enjoined and (ii) to an award of
exemplary damages in an appropriate amount determined by arbitration as provided
in Section 11.2.

            9.3 TRADEMARKS, INTERNET DOMAIN NAMES AND TRADE NAMES. All Products
sold by the Purchaser shall bear the Seller's trademarks and trade names as
indicated on Exhibit H hereto. Such trademarks, trade names and internet domain
names shall be affixed to the Products and the packaging, labels, displays and
sales and promotional literature associated therewith by the Seller, and the
Purchaser shall not remove, alter or deface such trademarks, trade names and
internet domain names. Any and all use of such trademarks and trade names shall
inure solely to the benefit of the Seller. The Seller agrees that the Purchaser
may affix to the Products the Purchaser's trade names, at the sole cost of the
Purchaser. The Purchaser shall not directly or indirectly use or register any of
the Seller's trademarks, trade names or internet domain names or any part
thereof, or any mark or name confusingly similar thereto, as part of its
corporate or business name or in any other manner, except that (i) the Purchaser
may identify itself as an authorized distributor of the Seller and (ii) the
Purchaser may use the Seller's trademarks, trade names and internet domain names
relating to the Products


                                       18
<PAGE>   24
for display purposes in connection with the solicitation of orders for the
Products from Customers in the Territory and in any other manner previously
approved by the Seller in writing. In addition, the Purchaser shall not
register, record or deposit any of the Seller's trademarks, trade names or
internet domain names or any mark or name similar thereto.

            9.4 PROTECTION OF PROPRIETARY RIGHTS. The Purchaser agrees to
cooperate with and assist the Seller, at the Seller's request and expense, in
the protection of trademarks, trade names, trade dress, internet domain names,
patents, and copyrights owned by or licensed to the Seller and shall inform the
Seller immediately of any infringements or other improper action with respect
thereto, or of any related claims or allegations, that shall come to the
attention of the Purchaser.

                                    ARTICLE X

                              TERM AND TERMINATION

            10.1 TERM. Unless terminated as provided in Section 10.2 below or by
mutual written consent, the term of this Agreement shall commence on the date
hereof and shall continue in full force and effect for an initial term expiring
on December 31, 2002 and thereafter shall be automatically renewed for
successive one-year terms unless terminated by either party by written notice to
the other at least six (6) months prior to the expiration of the initial or any
renewal term hereof.

            10.2 TERMINATION. This Agreement may be terminated prior to
expiration of the initial or any renewal term hereof by written notice to the
other party as follows:

            A. By either party, in the event the other party should fail to
      perform any of its material obligations hereunder and should fail to
      remedy such nonperformance within thirty (30) calendar days after
      receiving written demand therefor, unless such party is diligently
      pursuing the cure for such failure within such applicable time period;

            B. By either party, effective immediately, if the other party should
      become the subject of any voluntary or involuntary bankruptcy,
      receivership, or other insolvency proceedings or make an assignment or
      other arrangement for the benefit of its creditors, or if such other party
      should be nationalized or have any of its material assets expropriated;

            C. By the Seller, effective immediately, if the Purchaser should
      attempt to sell, assign, delegate, or transfer any of its rights and
      obligations under this


                                       19
<PAGE>   25
      Agreement without having obtained the Seller's prior written consent
      thereto (other than pursuant to the terms and provisions of Section 2.4);

            D. By Graham-Field, effective immediately pursuant to Section 5.5;

            E. By the Seller, effective immediately, if the Purchaser knowingly
      makes any false or untrue statements or representations to the Seller
      herein or in the performance of its obligations hereunder; and

            F. By either party in accordance with the terms contained in Section
      12.3.

            G. By the Seller, in the event that Purchaser breaches any of its
      obligations hereunder with respect to the Confidential Information or the
      Seller's rights in and to the Intellectual Property.

            10.3 RIGHTS OF PARTIES ON TERMINATION. The following provisions
shall apply on the termination or expiration of this Agreement.

            A. The Purchaser shall return to the Seller and immediately cease
      all use of Confidential Information previously furnished by the Seller and
      then in the Purchaser's possession or, if the Seller so requests, dispose
      of such Confidential Information and provide the Seller with written
      confirmation thereof. The Purchaser shall take such action as is necessary
      to terminate the Purchaser's registration as the Seller's sales
      representative with any governmental authority.

            B. All indebtedness of the Purchaser to the Seller shall become
      immediately due and payable without further notice or demand, which is
      hereby expressly waived, and the Seller shall be entitled to reimbursement
      for any reasonable attorneys' fees that it may incur in collecting or
      enforcing payment of such obligations.

            C. In the event of the nonrenewal or cancellation of this Agreement
      by the Seller, the Seller will, at its sole and exclusive option, either
      (i) repurchase from the Purchaser, at the net prices paid by the Purchaser
      any or all inventory of the Products originally purchased by the Purchaser
      from the Seller and remaining unsold by the Purchaser which are new,
      salable and in unopened, undamaged cartons or (ii) permit the Purchaser to
      sell the remaining unsold inventory of Seller.


                                       20
<PAGE>   26
            D. The Purchaser shall not be entitled to any payments in the nature
      of termination indemnities upon the nonrenewal or cancellation of this
      Agreement for any reason whatsoever, except as provided in Section 10.5
      below. The Purchaser hereby expressly waives any special, additional, or
      statutory compensation or claim for damages, indemnities, or penalties to
      which it may be entitled under the laws of the Territory or any
      subdivision thereof, as a result of the nonrenewal or cancellation of this
      Agreement, with or without cause.

            E. The obligations of the Purchaser under Sections 5.12 and 5.13 and
      Article VIII and IX shall survive the nonrenewal or cancellation of this
      Agreement for any reason. The nonrenewal or cancellation of this Agreement
      shall be without prejudice to the rights and obligations of the parties
      which have accrued up to and including the date of termination.

            10.4 ORDERS AFTER TERMINATION. On and after the effective date of
any nonrenewal or cancellation of this Agreement or the appointment granted
herein, the Seller shall be obligated to deliver and the Purchaser shall be
obligated to accept, only such quantities of the Products as may be needed to
fulfill the Purchaser's orders outstanding at the effective date of termination.

            10.5 LIMITATION OF REMEDIES. Under no circumstances shall either
party be liable to the other party by reason of termination or non-renewal of
this Agreement for compensation, reimbursement, or damages for:

            A. Loss of prospective compensation; or

            B. Goodwill or loss thereof.

            Notwithstanding the foregoing, pursuant to the terms and provisions
contained in Article XI, either party may seek recovery of reasonable
expenditures incurred in reliance on this Agreement by reason of termination or
non-renewal of this Agreement.

                                   ARTICLE XI

                     RESOLUTION BY NEGOTIATION; ARBITRATION

            11.1 RESOLUTION BY NEGOTIATION. Except in the event of any
litigation or proceeding commenced by any third party against either party in
which the other party is an indispensable party or potential third party
defendant, and except for enforcement of any interim or preliminary remedy (to
the extent such remedy is sought before an arbitration panel is duly appointed
and


                                       21
<PAGE>   27
convened), any dispute or controversy between the parties involving the
interpretation, construction or application of any terms, covenants or
conditions of this Agreement, or transactions under it, or any claim arising out
of or relating to this Agreement, or transactions under it, shall, upon the
request of one party served on the other, be submitted for resolution by senior
executives designated by each party, who shall attempt to resolve such dispute
or controversy in good faith and, in the event such resolution is not achieved
within fifteen (15) U.S. working days of such request, shall be submitted to
arbitration in accordance with provisions of Section 11.2.

            11.2 SETTLEMENT BY ARBITRATION. This Agreement, all transactions
contemplated and executed hereunder and any legal relations between the parties
relating to this Agreement shall be finally settled under the Rules of
Conciliation and Arbitration of the International Chamber of Commerce by one or
more arbitrators appointed in accordance with the said Rules. The place of
arbitration shall be Paris. The language to be used in the arbitration
proceedings shall be the English language.

                                   ARTICLE XII

                                  FORCE MAJEURE

            12.1 FORCE MAJEURE CONDITIONS AND ALLOCATION. Neither party shall be
liable for failure to perform any obligation under this Agreement if the failure
is caused by war, insurrection, riot, fire, explosion, flood, strike, lock-out,
injunction, inability to obtain fuel, power, raw materials, labor, containers or
transportation, accident, malfunction of machinery or apparatus, national
defense requirements, acts or regulations of national or local governments,
denial of export or import licenses, or act of God, or any other cause beyond
the control of the Parties. If, because of any such cause, the Seller is unable
to supply the total demand for its Products, the Seller may, in its sole
discretion, allocate its available supply among itself and all of its customers,
including those not under contract.

            12.2 PURCHASER'S OBLIGATIONS. Notwithstanding the foregoing, the
occurrence of a force majeure condition described in Section 12.1 above shall
not relieve the Purchaser in any manner whatsoever from its obligations to pay
to the Seller any amounts then due and owing to the Seller pursuant to the terms
of this Agreement.

            12.3 NOTIFICATION AND REMEDY. The party claiming relief pursuant to
Section 12.1 shall promptly notify the other party in writing of the facts
indicating the existence of force majeure conditions and the relief claimed. The
parties agree to use their best efforts to overcome such conditions. Section
12.1 shall not relieve any party of its obligations to perform its


                                       22
<PAGE>   28
part of this Agreement at such time and to such extent as maybe possible
subsequent to the occurrence of the conditions described in Section 12.1 and
within reasonable time thereafter. Should such conditions continue unabated,
despite the parties' best efforts to overcome them from three (3) months from
the date of notice given pursuant hereto, then the party receiving such notice
shall have the option to terminate this Agreement without liability to the other
party for the consequences of such termination.

                                  ARTICLE XIII

                                  SEVERABILITY

            13.1 COMPLIANCE WITH EC REGULATION. This Agreement has been drafted
to comply with EC Regulation 1983/83. If any portion of this Agreement is found
to infringe Article 85(1) of the Treaty Establishing the European Economic
Community, then such portion shall be severed from those remaining provisions
such that the benefit of the block exemptions shall continue to apply.

            13.2 REMEDY. Without prejudice to Section 13.1, if any portion of
this Agreement including the Exhibits hereto and made a part hereof, is held to
violate, or to be invalid or unenforceable under, the laws of any government or
subdivision thereof, the portion declared to be in violation of or invalid or
enforceable under any such law shall be treated as being of no force or effect,
and this Agreement shall be construed as though such portion had not been
inserted herein, and the remainder of this Agreement shall remain in full force
and effect to the fullest extent legally permitted.

                                   ARTICLE XIV

                               GENERAL PROVISIONS

            14.1 ENTIRE AGREEMENT. This Agreement, including the Exhibits
hereto, represents the entire agreement between the parties on the subject
matter hereof and supersedes all prior discussions, agreements, and
understandings of every kind and nature between them. No modification of this
Agreement will be effective unless in writing and signed by both parties.

            14.2 NOTICES. All notices, communications, demands, and payments
under this Agreement shall be in English and shall be made in writing by hand
delivery, telefax, courier, cable, registered airmail or by any other means of
delivery which enables the sending party to verify receipt thereof. Such notice
shall conclusively be presumed to be given or made: (i) at the time it is
personally given or made in the case of personal delivery or transmission by
telefax (with receipt confirmed);


                                       23
<PAGE>   29
(ii) at the time of receipt of the addressee's answerback on the sender's
machine in the case of transmission by telex; or (iii) ten (10) days after
mailing sufficient postage or cost prepaid in the case of registered airmail,
delivery by courier or cable. All notices sent by means other than those made by
hand delivery or registered airmail shall be promptly confirmed by registered
airmail. Any notices shall be addressed as follows:

If to Graham-Field: Graham-Field Health Products, Inc.
                    400 Rabro Drive East
                    Hauppauge, NY  11788
                    Attention:        Mr. Irwin Selinger, Chairman
                                      of the Board and Chief
                                      Executive Officer
                    Telecopier No.: (516) 582-5608

If to Thuasne:      Thuasne
                    6, rue des Marronniers
                    BP 243-92307 Levallois-Perret Cedex
                    France
                    Attention:        Elisabeth Ducottet, President
                                      and Chief Executive Officer
                    Telecopier No.:  011-33-1-47-59-0473

or to such other person or address as either party may, by like notice, specify
to the other.

            14.3 NONASSIGNMENT. This Agreement shall be binding on and inure to
the benefit of the successors and assigns of the parties; provided, however,
neither party shall sell, assign, delegate, or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of the other
party, which shall not be unreasonably withheld.

            14.4 LANGUAGE. The English language version of this Agreement shall
govern and control any translations of the Agreement into any other language.

            14.5 APPLICABLE LAW. This Agreement, all transactions contemplated
and executed hereunder and the legal relations between the parties shall be
construed and interpreted in accordance with and shall be governed by French
law. The parties expressly exclude the applicability of the United Nations
Convention for the International sale of Goods.

            14.6 WAIVER. Each party agrees that the failure of any party at any
time to require performance by the other party of any of the provisions herein
shall not operate as a waiver of such party to request strict performance of the
same or like provisions, or any other provisions hereof, at a later time.


                                       24
<PAGE>   30
            14.7 HEADINGS. Any headings used herein are for convenience in
reference only and are not a part of this Agreement, nor shall they in any way
affect the interpretation hereof.

            14.8 COUNTERPARTS. This Agreement may be executed in any number of
separate counterparts, each of which shall be deemed to be an original but which
together shall constitute one and the same instrument.


                                       25
<PAGE>   31
            IN WITNESS WHEREOF, Graham-Field and Thuasne have caused this
instrument to be executed by their duly authorized representatives, as of
September __, 1997.

                                    GRAHAM-FIELD HEALTH PRODUCTS, INC.



                                    By:_______________________________________
                                        Name:
                                        Title:


                                    THUASNE



                                    By:_______________________________________
                                       Name:
                                       Title:


                                       26
<PAGE>   32
                                    EXHIBIT A
                              DISTRIBUTED PRODUCTS

            As used herein, the term "Distributed Products" shall include
products imported by Graham-Field, which are (i) fully-manufactured and
assembled into a finished product, designed, and controlled by an Import
Supplier (other than an Affiliate of Graham-Field) and (ii) marketed under the
names "Temco," "Labtron," "John Bunn," "Cain & Able," "Everest & Jennings" and
any derivations thereof; provided, however, all wheelchair products and
accessories manufactured and/or assembled by an Import Supplier (including, but
not limited to P.T. Dharma Polimetal or any of its Affiliates) under the
"Everest & Jennings" name or any derivation thereof shall constitute
"Manufactured Products".
<PAGE>   33
                                    EXHIBIT B
                              MANUFACTURED PRODUCTS

            As used herein, the term "Manufactured Products" shall include
products (i) (x) manufactured and/or assembled by Graham-Field or any of its
Affiliates and (y) marketed under the names "Temco," "Labtron," "LaBac," "John
Bunn," "Cain & Able" and any derivations thereof, and (ii) all wheelchair
products and accessories manufactured under the name "Everest & Jennings" and
any derivations thereof by (x) Graham-Field or any of its Affiliates, or (y) any
Import Supplier (including, but not limited to, P.T. Dharma Polimetal or any of
its Affiliates).
<PAGE>   34
                                    EXHIBIT C

                                THUASNE PRODUCTS

[To be provided]


                                        2
<PAGE>   35
                                    EXHIBIT D

                                    COUNTRIES


Morocco
Tunisia
Algeria
Tania
Male
Niger
Tchad (Chad)
Senegal
Gambie
Guinee-Bissau
Guinee
Burkina Faso
Cote D'Ivoire
Guinea Equat
Cameroun
Congo
Gabon
Republique Centrailicaine
Zaire
Rwanda
Djibouti
Seychelles
Comores
Madagascar
Reunion
Libya
Egypt
<PAGE>   36
                                    EXHIBIT E

                            STANDARD WARRANTY POLICY


[To be provided]
<PAGE>   37
                                     ANNEX I

                              GRAHAM-FIELD ACCOUNTS


                                        2