<PAGE>   1
                                    AGREEMENT


                  AGREEMENT made this 17th day of September 1998, by and between
GRAHAM-FIELD HEALTH PRODUCTS, INC., a Delaware corporation (the "Company"; the
Company and its "affiliates" (as hereinafter defined) are collectively referred
to hereinafter as the "Company"), with offices at 400 Rabro Drive East,
Hauppauge, New York 11788, ANDREW A. GIORDANO who resides at 1811 South 24th
Street, Arlington, Virginia 22202-1534 (the "Consultant"), and The Giordano
Group, Ltd. (the "Giordano Group").

                              W I T N E S S E T H:

                  WHEREAS, the Consultant was formerly employed as the President
and Chief Operating Officer of the Company pursuant to an employment agreement
dated as of April 17, 1998 (the "Employment Agreement");

                  WHEREAS, the Consultant and the Company entered into an
agreement dated as of February 2, 1998, relating to certain termination benefits
in the event of a change of control of the Company (the "Change of Control
Agreement");

                  WHEREAS, a dispute arose in connection with the termination of
employment of the Consultant under the terms and provisions of the Employment
Agreement;

                  WHEREAS, the parties desire to resolve such dispute upon
the terms and conditions contained herein;

                  WHEREAS, the Company and the Giordano Group desire that the
Giordano Group provide certain consulting services to the Company upon the terms
and conditions contained herein;

                  WHEREAS, all consulting services provided by the Giordano
Group will be provided exclusively by the Consultant;

                  WHEREAS, the term "affiliate" shall have the meaning ascribed
to such term in Rule 405 of the Securities Act of 1933, as amended, and shall
include, but not be limited to, the Company and each of its direct and indirect
subsidiaries.

                  NOW, THEREFORE, in consideration of the premises and mutual
covenants herein set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, it is hereby agreed as
follows:

                  1. AGREEMENT TO TERMINATE. The Consultant and the Company
hereby confirm and agree that the Consultant's former positions as President and
Chief Operating Officer of the Company, and all former directorships with the
Company were hereby terminated as of June 12, 1998 (the "Termination Date").



<PAGE>   2



                  2. TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL AGREEMENT.
The Company and the Consultant hereby confirm and agree that the Employment
Agreement and the Change of Control Agreement were terminated effective as of
the Termination Date, and the Consultant shall not be entitled to receive any
payments or benefits payable under the Employment Agreement and the Change of
Control Agreement.

                  3. STOCK OPTIONS. All stock options granted to the Consultant
prior to the date hereof pursuant to the Corporation's Incentive Program, as
amended (the "Incentive Program"), will expire in accordance with their terms as
set forth on Exhibit I attached hereto without any modification to the terms and
provisions of the related stock option agreements (the "Stock Option
Agreements").

                  4. TERM OF CONSULTANCY. Subject to the terms and provisions
contained herein, the Giordano Group hereby agrees to provide consulting
services (the "Consultancy") to the Company as provided herein for a period of
four (4) years (the "Term") commencing on September 17, 1998 (the "Effective
Date"), unless terminated earlier pursuant to Section 7 of this Agreement. All
consulting services provided by the Giordano Group will be provided exclusively
by the Consultant.

                  5. COMPENSATION.  For all services rendered by the Consultant
hereunder, the Giordano Group shall receive the following:

                           (a) During the Term, the Company shall pay a
                  consulting fee of $75,000 per year (each, a "Consulting Fee"
                  and, collectively, the "Consulting Fees"), with the first
                  payment of $75,000 (the "Initial Payment") to be paid upon
                  execution of the Agreement. Thereafter, on each of the three
                  (3) anniversary dates following the Effective Date, the
                  Giordano Group will be paid a Consulting Fee of $75,000.

                           (b) During the Term, the Company shall reimburse the
                  Giordano Group against receipts for reasonable business
                  expenses incurred by him in connection with the Consultancy,
                  subject to the submission of reasonable documentation in
                  accordance with the Company's standard practice to
                  substantiate expenses.

                  6. DUTIES. During the Term, the Giordano Group shall cause the
Consultant to act as a consultant to the Company's Corporate Governance
Committee. The Giordano Group will cause the Consultant to provide such
consulting services as reasonably requested by the Chief Executive Officer or
President of the Company from time to time upon reasonable prior notice;
provided, however, in no event shall the Consultant be required to spend more
than ten (10) calendar days (the "Consulting Days") per month during the Term
for the performance of the duties and assignments

<PAGE>   3

as described herein. As used herein, a Consulting Day shall be defined as seven
(7) hours. If the Consultant spends more than ten (10) Consulting Days in any
month during the Term in connection with the performance of the duties and
assignments as described herein, the additional time in excess of the ten (10)
Consulting Days per month shall be billed to the Company at the rate of $175 per
hour. Any unused Consulting Days in any month during the Term shall be forfeited
by the Company. Any consulting performed at any location other than the
Consultant's residence shall include reasonable travel time to and from each
location. Any time spent in connection with any litigation relating to the
Company, which time is spent at the request of the Company, shall be treated as
time provided pursuant to Section 6 of this Agreement and deemed part of a
Consulting Day. Consulting services shall be performed either at the
Consultant's offices in Arlington, Virginia, the Company's corporate offices, or
such other facilities as mutually agreed upon between the parties. Such duties
and assignments shall include, but not be limited to, assisting in the
monitoring of the Company's cost reduction and profit improvement programs,
reviewing and commenting on the Company's MIS systems, accounting and internal
controls, and business strategies and strategic direction of the Company.

                  7.       TERMINATION OF CONSULTANCY.

                           (a)      The Consultancy hereunder may be terminated
                  under the following circumstances:

                                    (i) In the event of the death of or
                           adjudicated incompetency or adjudicated insanity of
                           the Consultant during the Term, the Consultancy and
                           all benefits and fees payable hereunder shall
                           terminate on the date of death or adjudication of
                           incompetency or adjudicated insanity of the
                           Consultant.

                                    (ii) The Company may terminate the
                           Consultancy at any time for Cause. For purposes of
                           this Agreement, the term "Cause" shall mean: (A)
                           gross negligence of the Consultant or the Giordano
                           Group in the performance of its duties, (B) willful
                           neglect of the duties of the Giordano Group or the
                           Consultant which continues after written notice to
                           the Giordano Group and the Consultant by the Company,
                           (C) the commission of any felony by the Giordano
                           Group or the Consultant involving violence, drugs,
                           dishonesty or a breach of trust, (D) any
                           misappropriation by the Giordano Group or the
                           Consultant of any property to the Company (whether or
                           not a felony or misdemeanor), or any embezzlement of
                           the Company's property, (E) the material breach by
                           the Giordano Group or the Consultant of any of the
                           terms, provisions and covenants contained in this
                           Agreement which remains
<PAGE>   4

                           uncured ten (10) days after written notice of such
                           breach to the Giordano Group and the Consultant by
                           the Company.

                                    (iii) In the event the Company is sold or
                           merged with and into another company (the "Sale
                           Transaction") during the Term, the Consultancy shall
                           terminate effective as of the closing date of
                           the Sale Transaction.

                           (b) Upon any termination of the Consultancy under
                  Sections 7(a)(i) or 7(a)(ii), the Giordano Group shall be
                  entitled to receive solely all amounts and benefits to be paid
                  or provided by the Company under Section 6 of this Agreement
                  to the date of such termination.

                           (c) Upon any termination of the Consultancy under
                  Section 7(a)(iii), the Giordano Group shall be paid the
                  balance of the Consulting Fees under the Term, discounted at a
                  rate of six (6) percent per year within 30 days following the
                  closing of the Sale Transaction. For purposes of the preceding
                  sentence, the discounting of the Consulting Fees shall
                  commence from the date each of the Consulting Fees would have
                  been due to the date payment is made.

                  8.       CONSULTANT COVENANTS.

                           8.1 CONFIDENTIAL INFORMATION. Each of the Giordano
Group and the Consultant expressly covenants and agrees that it will not at any
time, 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 (collectively, the "Confidential
Information"), in connection with any activity or business, whether for its own
account or otherwise (except solely the business of the Company, if and to the
extent that the Giordano Group or the Consultant is then a consultant with the
Company) and will not divulge such Confidential Information to any person, firm,
corporation or other entity whatsoever. In the event the Consultant or the
Giordano Group is requested pursuant to, or required by, applicable law or
regulation or regulatory authority or by legal process to disclose any of the
Confidential Information, the Consultant or the Giordano Group, as the case may
be, hereby agrees to provide the Company with prompt written notice of such
request or requirement in order to enable the Company to seek an appropriate
protective order or other remedy, to consult with the Company with respect to
taking steps to resist or narrow the scope of such request or legal process, or
to waive compliance, in whole or in part, with the terms of this Agreement. If
in the absence of a protective order the Consultant or the Giordano Group, as
the case may be, is compelled to disclose Confidential

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Information, the Consultant or the Giordano Group, as the case may be, may make
such disclosure hereunder, provided that the Consultant or the Giordano Group,
as the case may be, gives the Company written notice of the information to be
disclosed as far in advance of its disclosure as is practicable. In any such
event, the Consultant or the Giordano Group, as the case may be, will use its
reasonable efforts to ensure that all Confidential Information that is so
disclosed will be accorded confidential treatment. Any information which becomes
known to the public without breach by the Consultant or the Giordano Group, as
the case may be, of any of the terms hereof or of Consultant's or the Giordano
Group's common law duties shall not be deemed to be Confidential Information.

                  8.2 OWNERSHIP BY COMPANY. Each of the Giordano Group and the
Consultant acknowledges and agrees that all of its work product created,
produced or conceived in response to specific projects assigned to it by the
Company in writing shall be deemed work for hire and shall be deemed owned
exclusively by the Company. Without limiting the generality of the foregoing,
each of the Giordano Group and the Consultant 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. Each of the Giordano Group and the Consultant agrees to
execute and deliver all documents required by the Company to document or perfect
the Company's proprietary rights in and to such work product.

                  8.3 REMEDIES. In the event of the breach by the Giordano Group
or the Consultant of any of the terms and conditions of Section 8 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, including, without limiting
the generality of the foregoing, any proceedings to obtain provable damages for
any breach of this Agreement, to enforce the specific performance thereof by the
Giordano Group and/or the Consultant, as the case may be, or to obtain an
injunction against the commission, threatened commission or continuance of any
such breach or threatened breach without the necessity of proving actual damages
or that damages would be inadequate or of posting a bond. In any such action, if
the Company is successful, in whole or in part, the Giordano Group and/or the
Consultant, as the case may be, shall further, as an element of the Company's
damages, be liable for the reasonable attorney's fees and expenses of the
Company in the prosecution of such action or proceeding.

                  8.4 COVENANTS NON-EXCLUSIVE. Each of the Giordano Group, the
Consultant and the Company acknowledges and agrees that the covenants contained
in this Section 8 shall not be deemed exclusive of any common law rights of such
parties in connection with the relationships contemplated hereby; and that each
of the Company, the Giordano Group and the Consultant shall have any and all
rights as may be provided by law in connection with the relationships
contemplated hereby.
<PAGE>   6

                  9.       NON-DISPARAGEMENT; PUBLICITY.

                           Neither the Consultant, the Giordano Group, nor the
Company will at any time make any oral or written statement concerning the other
to any person, company or agency which is disparaging or damaging to the
personal or professional reputation of the Consultant or the Giordano Group, on
the one hand, or the Company and/or any of its subsidiaries or affiliates (and
their respective directors and officers), on the other, provided that the
foregoing will not restrict any statement or revelation required by applicable
law, regulation or judicial process (after advising and consulting with the
other party about its intention to make, and the proposed content of such
disclosure).

                  10.      RELEASES.

                  10.1 For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the Giordano Group and the
Consultant, to the extent permitted by applicable law, each of the Giordano
Group and the Consultant knowingly, voluntarily and unconditionally hereby
forever waives, releases and discharges, and covenants never to sue on, any and
all claims, liabilities, causes of actions, judgments, orders, assessments,
penalties, fines, expenses and costs (including without limitation attorneys'
fees) and/or suits of any kind arising out of any actions, events or
circumstances occurring before the date of this Agreement ("Claims") which the
Consultant or the Giordano Group has, ever had or may have, or which the
Consultant's heirs, executors, administrators and assigns, or any of them
hereafter can, shall or may have, against the Company and/or any of its
subsidiaries, shareholders, officers, directors, agents, affiliates, employee
benefit plan fiduciaries, trustees and administrators, and employees, past or
present, and their respective heirs, successors and assigns (collectively, the
"Releasees"), including, without limitation, any Claims arising in whole or in
part from any services provided by the Giordano Group, the Consultant's
employment with the Company and/or any of its subsidiaries or affiliates under
the Employment Agreement, the Change of Control Agreement, the Stock Option
Agreements or the termination of the Consultant's employment with the Company or
the manner of such termination; provided, however, that this Section 10 shall
not apply to any of the obligations of the Company specifically provided for in
or pursuant to this Agreement. This Agreement is intended as a full and final
settlement and compromise of each, every and all Claims of every kind and
nature, whether known or unknown, which have been or could be asserted against
any of the Releasees, including, without limitation:

         (a)      any Claims arising out of any employment agreement or other
                  contract (including, without limitation, the Employment
                  Agreement, the Change of Control Agreement or the Stock Option
                  Agreements), side-letter, resolution, promise or understanding
                  of any kind, whether written or oral or express or implied;
                  and
<PAGE>   7
         (b)      any Claims arising under any federal, state or local civil
                  rights, human rights, anti-discrimination, labor, employment,
                  contract or tort law, rule, regulation, order or decision,
                  including, without limitation, the Family and Medical Leave
                  Act, the Employee Retirement Income Security Act of 1974, the
                  Americans with Disabilities Act of 1990, 42 U.S.C.
                  Sections 12101 et seq., and Title VII of the Civil
                  Rights Act of 1964, 42 U.S.C. Sections 2000 et seq.,
                  and as each of these laws have been or will be amended.

                  10.2 For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the Company, to the extent
permitted by applicable law, the Company on behalf of itself and its
subsidiaries and affiliates knowingly, voluntarily and unconditionally hereby
forever waives, releases and discharges, and covenants never to sue on, any and
all Claims arising out of any actions, events or circumstances occurring before
the date of this Agreement which the Company, its subsidiaries or affiliates
has, ever had or may have, including, without limitation, any Claims arising in
whole or in part from the Giordano Group's services to the Company, the
Consultant's employment with, or acting as a director of, the Company and/or any
of its subsidiaries or affiliates or the termination of the Consultant's
employment with the Company or the manner of said termination; provided,
however, that this Section 10.2 shall not apply to any of the obligations of the
Giordano Group and the Consultant specifically provided for in or pursuant to
this Agreement. This Agreement is intended as a full and final settlement and
compromise of each, every and all Claims of every kind and nature, whether known
or unknown, which have been or could be asserted against the Giordano Group and
the Consultant and his respective heirs, successors and assigns.

                  10.3 Each of the Giordano Group and the Consultant
acknowledges that the Consultant and the Giordano Group have carefully read and
fully understands all of the terms of this Agreement, including without
limitation the releases contained herein. Each of the Giordano Group and the
Consultant further acknowledges that the Consultant and the Giordano Group have
entered into this Agreement willingly, freely, without duress or coercion and
after having had explained to it by counsel of its choice, its rights under all
laws referred to in this Agreement and the terms and consequences of this
Agreement. The Consultant also acknowledges that he has been given the
opportunity to take at least twenty-one (21) days to consider and accept or
reject this Agreement and has chosen to execute, deliver and agree to this
Agreement as of the date of this Agreement. The Consultant agrees that the
Consultant has been given a fair, reasonable and sufficient time to fully
consider all of the terms of this Agreement. The Consultant may revoke the
portion of this Agreement that relates to the release of any claim the
Consultant may have under the Age Discrimination in Employment Act of 1967
(including, without limitation, the Older Workers Benefit Protection Act) at any
time within seven (7) days after the date of execution of this Agreement by
notifying the Company of such revocation in writing.

<PAGE>   8

Notwithstanding the foregoing, no such revocation shall affect or alter any
other term or provision of this Agreement or any other release granted
hereunder, all of which shall survive any such revocation in accordance with
their terms.

                  10.4 Except as specifically provided for in or pursuant to
this Agreement, the Giordano Group and the Consultant shall not be entitled to
any compensation, remuneration or other payments from the Company and/or the
Company's subsidiaries or affiliates and the Company (and its subsidiaries and
affiliates) shall have no further obligations to the Giordano Group and the
Consultant, including without limitation under any contract, plan, agreement,
understanding or resolution. Without limiting the foregoing, except as expressly
provided for in or pursuant to this Agreement, the Giordano Group and the
Consultant shall have no further rights and shall be entitled to no further
benefits under the Employment Agreement or the Change of Control Agreement,
which the Giordano Group and the Consultant agrees are superseded in all
respects by this Agreement and shall be of no further force or effect on and as
of the date hereof.

                  11.      LITIGATION COOPERATION.

                  The Consultant hereby agrees to cooperate with the Company in
all reasonable respects with all litigations and other actions relating to the
Company.

                  12.      GENERAL.

                  12.1 APPLICABLE LAW. This Agreement shall, in all respects, be
governed by the laws of the State of New York without giving effect to conflicts
of law principles.

                  12.2 SURVIVAL. In the event the Consultancy is terminated for
any reason (including, but not limited to, the expiration of the Term or the
Sale Transaction), the parties hereto agree that all other terms, provisions,
covenants and agreements contained in this Agreement shall survive any
termination of the Consultancy (including, but not limited to, Sections 8, 9,
10, 11, and 12 of this Agreement).

                  12.3 INDEPENDENT REPRESENTATION. Each of the Giordano Group
and the Consultant acknowledges that it has had the opportunity to seek
independent counsel and tax advice in connection with the execution of this
Agreement, and the Consultant represents and warrants to the Company (a) that it
has sought such counsel and advice as it has deemed appropriate in connection
with the execution hereof and the transactions contemplated hereby; and (b) that
it has not relied on any representation of the Company as to tax matters or as
to the consequences of the execution hereof.

                  12.4 INDEMNIFICATION. The Company hereby agrees to indemnify
and hold the Consultant and the Giordano Group harmless from and against any and
all costs, expenses, liabilities, losses,

<PAGE>   9

damages, fines, penalties, judgments and amounts paid in settlement ("Losses"),
that are incurred or suffered by or brought against or involve the Consultant
and the Giordano Group and which are related to or arise from the Consultant's
and the Giordano Group's services to the Company or services performed at the
request of the Company. Notwithstanding the foregoing, the Company shall not be
required to indemnify the Consultant or the Giordano Group in respect of Losses
arising from the negligence or willful misconduct of the Giordano Group or the
Consultant.

                  12.5 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 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 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 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: Chairman of the Board and
                                            Chief Executive Officer

                           If to the Consultant:

                           Mr. Andrew A. Giordano
                           1811 South 24th Street
                           P.O. Box 2383
                           Arlington, VA   22202-1534

                           If to the Giordano Group:

                           The Giordano Group, Ltd.
                           1811 South 24th Street
                           P.O. Box 2383
                           Arlington, VA   22202-1534

                  Any party may change its address for the purpose of receiving
notices by a written notice given to the other party.
<PAGE>   10

                  12.6 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.

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

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

                  12.9 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.

                  12.10 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.

                  12.11 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.

                  12.12 SET-OFFS AND COUNTERCLAIMS. All payments due to the
Giordano Group under the Consultancy shall be paid without any right of set-off
or counterclaim by the Company, except in the event of any breach by the
Giordano Group or the Consultant of any of the terms, provisions, covenants or
agreements contained in this Agreement.

                  12.13 ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding and agreement of the parties with respect to the subject matter of
this Agreement, and any and all prior agreements, understandings or
representations are hereby terminated and canceled in their entirety.

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
<PAGE>   11



GRAHAM-FIELD HEALTH                             THE GIORDANO GROUP LTD.
 PRODUCTS, INC.


By:  /s/ Paul Bellamy                           By:   /s/ Andrew A. Giordano
   ------------------------------                   ---------------------------
Name:  Paul Bellamy                             Name:   Andrew A. Giordano
      ---------------------------                     -------------------------
Title: President                                Title:  Principal
      ---------------------------                     -------------------------



                                                /s/ Andrew A. Giordano
                                                -------------------------------
                                                ANDREW A. GIORDANO