<PAGE>

                                                                    EXHIBIT 10.1

================================================================================




                                CREDIT AGREEMENT


                                  dated as of

                               September 13, 1999

                                     among

                               NMT MEDICAL, INC.,
                                NMT HEART, INC.,
                             NMT INVESTMENTS CORP.,
                    NMT NEUROSCIENCES (INTERNATIONAL), INC.,
                         NMT NEUROSCIENCES (US), INC.,
                         NMT NEUROSCIENCES (IP), INC.,
                  NMT NEUROSCIENCES INNOVASIVE SYSTEMS, INC.,
                                  as Borrowers

                                      and

                         BROWN BROTHERS HARRIMAN & CO.,
                                   as Lender




================================================================================
<PAGE>

                              TABLE OF CONTENTS
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ARTICLE I      Definitions.....................................................................................  1
     SECTION 1.01.  Defined Terms..............................................................................  1
     SECTION 1.02.  Terms Generally............................................................................  9
     SECTION 1.03.  Accounting Terms; GAAP..................................................................... 10

ARTICLE II     The Credit...................................................................................... 10
     SECTION 2.01.  Commitment................................................................................. 10
     SECTION 2.02.  Note....................................................................................... 10
     SECTION 2.03.  Requests for Revolving Borrowings.......................................................... 10
     SECTION 2.04.  Letters of Credit.......................................................................... 11
     SECTION 2.05.  Funding of Borrowings...................................................................... 13
     SECTION 2.06.  Termination and Reduction of Commitment.................................................... 13
     SECTION 2.07.  Repayment of Loans; Evidence of Debt....................................................... 14
     SECTION 2.08.  Prepayment of Loans........................................................................ 14
     SECTION 2.09.  Fees....................................................................................... 14
     SECTION 2.10.  Interest................................................................................... 15
     SECTION 2.11.  Increased Costs............................................................................ 15
     SECTION 2.12.  Taxes...................................................................................... 16
     SECTION 2.13.  Payments Generally......................................................................... 17
     SECTION 2.14.  Senior Status of Obligations............................................................... 17

ARTICLE III    Representations and Warranties.................................................................. 17
     SECTION 3.01.  Organization; Powers....................................................................... 17
     SECTION 3.02.  Authorization; Enforceability.............................................................. 17
     SECTION 3.03.  Governmental Approvals; No Conflicts....................................................... 18
     SECTION 3.04.  Financial Condition; No Material Adverse Change............................................ 18
     SECTION 3.05.  Properties................................................................................. 18
     SECTION 3.06.  Litigation and Environmental Matters....................................................... 19
     SECTION 3.07.  Compliance with Laws and Agreements........................................................ 19
     SECTION 3.08.  Investment and Holding Company Status...................................................... 19
     SECTION 3.09.  Taxes...................................................................................... 19
     SECTION 3.10.  ERISA...................................................................................... 20
     SECTION 3.11.  Disclosure................................................................................. 20
     SECTION 3.12.  Year 2000.................................................................................. 20

ARTICLE IV     Conditions...................................................................................... 21
     SECTION 4.01.  Effective Date............................................................................. 21
     SECTION 4.02.  Each Credit Event.......................................................................... 22
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                                      (i)
<PAGE>

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ARTICLE V      Affirmative Covenants........................................................................... 22
     SECTION 5.01.  Financial Statements and Other Information................................................. 22
     SECTION 5.02.  Notices of Material Events................................................................. 24
     SECTION 5.03.  Existence; Conduct of Business............................................................. 24
     SECTION 5.04.  Payment of Obligations..................................................................... 24
     SECTION 5.05.  Maintenance of Properties; Insurance....................................................... 25
     SECTION 5.06.  Books and Records; Inspection Rights....................................................... 25
     SECTION 5.07.  Compliance with Laws....................................................................... 25
     SECTION 5.08.  Use of Proceeds and Letters of Credit...................................................... 25
     SECTION 5.09.  Receipt of Proceeds from French Credit Agreement........................................... 25
     SECTION 5.10.  Grant of Mortgage on Real Property......................................................... 25
     SECTION 5.11.  Subsidiary Guarantees...................................................................... 25

ARTICLE VI     Negative Covenants.............................................................................. 26
     SECTION 6.01.  Indebtedness............................................................................... 26
     SECTION 6.02.  Liens...................................................................................... 27
     SECTION 6.03.  Fundamental Changes........................................................................ 28
     SECTION 6.04.  Investments, Loans, Advances, Guarantees and Acquisitions.................................. 28
     SECTION 6.05.  Hedging Agreements......................................................................... 29
     SECTION 6.06.  Restricted Payments........................................................................ 29
     SECTION 6.07.  Transactions with Affiliates............................................................... 30
     SECTION 6.08.  Restrictive Agreements..................................................................... 30
     SECTION 6.09.  Financial Covenants........................................................................ 30

ARTICLE VII    Events of Default............................................................................... 32

ARTICLE VIII   Miscellaneous................................................................................... 34
     SECTION 8.01.  Notices.................................................................................... 34
     SECTION 8.02.  Waivers; Amendments........................................................................ 35
     SECTION 8.03.  Expenses; Indemnity; Damage Waiver......................................................... 35
     SECTION 8.04.  Successors and Assigns..................................................................... 36
     SECTION 8.05.  Survival; Nature of Obligations............................................................ 36
     SECTION 8.06.  Counterparts; Integration; Effectiveness................................................... 37
     SECTION 8.07.  Severability............................................................................... 37
     SECTION 8.08.  Right of Setoff............................................................................ 37
     SECTION 8.09.  Governing Law; Jurisdiction; Consent to Service of Process................................. 38
     SECTION 8.10.  WAIVER OF JURY TRIAL....................................................................... 38
     SECTION 8.11.  Headings................................................................................... 39
     SECTION 8.12.  Confidentiality............................................................................ 39
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                                     (ii)
<PAGE>

SCHEDULES:
---------

Schedule 3.05 -- Patents and Patent Applications
Schedule 3.06 -- Disclosed Matters
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Existing Liens
Schedule 6.04 -- Existing Investments
Schedule 6.08 -- Existing Investments
Schedule 6.09(a) -- Net Funded Indebtedness and Adjusted Operating Cash Flow
                    Definitions
Schedule 6.09(b) -- Fixed Charge Coverage Definition


EXHIBITS:
--------

Exhibit A -- Form of Note
Exhibit B -- Form of Opinion of Borrowers' Counsel



                                     (iii)
<PAGE>

     CREDIT AGREEMENT dated as of September 13, 1999, among NMT Medical, Inc., a
Delaware corporation, NMT Heart, Inc., a Delaware corporation, NMT Investments
Corp., a Massachusetts corporation, NMT NeuroSciences (International), Inc., a
Delaware corporation, NMT NeuroSciences (US), Inc., a Delaware corporation, NMT
NeuroSciences (IP), Inc., a Delaware corporation, and NMT Neurosciences
Innovasive Systems, Inc., a Florida corporation, as Borrowers, and Brown
Brothers Harriman & Co., as Lender.

     The parties hereto agree as follows:


                                   ARTICLE I

                                  Definitions
                                  -----------

      SECTION 1.01.  Defined Terms.  As used in this Agreement, the following
                     -------------
terms have the meanings specified below:

          "Affiliate" means, with respect to a specified Person, another Person
           ---------
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.

          "Alternate Base Rate" means, for any day, a rate per annum equal to
           -------------------
the greater of (a) the Base Rate in effect on such day, or (b) the Federal Funds
Effective Rate in effect on such day plus  1/2 of 1%.  Any change in the
Alternate Base Rate due to a change in the Base Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Base Rate or the Federal Funds Effective Rate, respectively.

          "Availability Period" means the period from and including the
           -------------------
Effective Date to but excluding the earlier of the Maturity Date and the date of
termination of the Commitment.

          "Barclays Debt" means the outstanding Indebtedness of Spembly Medical
           -------------
Ltd. to Barclays Bank plc in the principal amount as of the date hereof of
approximately (Pounds)180,000 pursuant to that certain Barclays Treasury Loan
Facility, dated as of April 15, 1996, by and between Spembly Medical Ltd. and
Barclays Bank plc.

          "Base Rate" means the rate of interest per annum publicly announced
           ---------
from time to time by Brown Brothers Harriman & Co. as its prime rate in effect
at its principal office in Boston, Massachusetts; each change in the Prime Rate
shall be effective from and including the date such change is publicly announced
as being effective.

          "Board" means the Board of Governors of the Federal Reserve System of
           -----
the United States of America.
<PAGE>

          "Borrowers" means NMT Medical, Inc., a Delaware corporation, NMT
           ---------
Heart, Inc., a Delaware corporation, NMT Investments Corp., a Massachusetts
corporation, NMT NeuroSciences (International), Inc., a Delaware corporation,
NMT NeuroSciences (US), Inc., a Delaware corporation, NMT NeuroSciences (IP),
Inc., a Delaware corporation, and NMT Neurosciences Innovasive Systems, Inc., a
Florida corporation.

          "Borrowing" means each Revolving Loan hereunder.
           ---------

          "Borrowing Request" means a request by any Borrower for a Revolving
           -----------------
Loan in accordance with Section 2.03.

          "Business Day" means any day that is not a Saturday, Sunday or other
           ------------
day on which commercial banks in New York, New York or Boston, Massachusetts are
authorized or required by law to remain closed.

          "Capital Lease Obligations" of any Person means the obligations of
           -------------------------
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.

          "Change in Control" means (a) the acquisition of ownership, directly
           -----------------
or indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof), of shares
representing more than 25% of the aggregate ordinary voting power represented by
the issued and outstanding capital stock of NMT Medical, Inc.; (b) occupation of
a majority of the seats (other than vacant seats) on the board of directors of
NMT Medical, Inc. by Persons who were neither (i) nominated by the board of
directors of NMT Medical, Inc. nor (ii) appointed by directors so nominated; or
(c) the acquisition of direct or indirect Control of NMT Medical, Inc. by any
Person or group.

          "Change in Law" means (a) the adoption of any law, rule or regulation
           -------------
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by the Lender (or, for
purposes of Section 2.11(b), by any lending office of the Lender) with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.

          "Code" means the Internal Revenue Code of 1986, as amended from time
           ----
to time.

          "Commitment" means the commitment of the Lender to make Revolving
           ----------
Loans and to issue Letters of Credit hereunder.  The initial amount of the
Lender's Commitment is $5,000,000.

                                       2
<PAGE>

          "Control" means the possession, directly or indirectly, of the power
           -------
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
 -----------       ----------

          "Default" means any event or condition which constitutes an Event of
           -------
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.

          "Disclosed Matters" means the actions, suits and proceedings and the
           -----------------
environmental matters disclosed in Schedule 3.06.

          "dollars" or "$" refers to lawful money of the United States of
           -------      -
America.

          "Domestic Subsidiary" means each Subsidiary that is incorporated or
           -------------------
organized in the United States or any state or territory thereof.

          "Effective Date" means the date on which the conditions specified in
           --------------
Section 4.01 are satisfied (or waived in accordance with Section 8.02).

          "Environmental Laws" means all laws, rules, regulations, codes,
           ------------------
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material.

          "Environmental Liability" means any liability, contingent or otherwise
           -----------------------
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of any Borrower or Subsidiary directly or indirectly
resulting from or based upon (a) violation of any Environmental Law, (b) the
generation, use, handling, transportation, storage, treatment or disposal of any
Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.

          "ERISA" means the Employee Retirement Income Security Act of 1974, as
           -----
amended from time to time.

          "ERISA Affiliate" means any trade or business (whether or not
           ---------------
incorporated) that, together with any Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.

          "ERISA Event" means (a) any "reportable event", as defined in Section
           -----------
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30-day notice period is waived); (b) the existence
with respect to any Plan of an "accumulated funding deficiency" (as

                                       3
<PAGE>

defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by any Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by any Borrower or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f)
the incurrence by any Borrower or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by any Borrower or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from any Borrower or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.

          "Event of Default" has the meaning assigned to such term in Article
           ----------------
VII.

          "Excluded Taxes" means, with respect to the Lender or any other
           --------------
recipient of any payment to be made by or on account of any obligation of any
Borrower hereunder, (a) income or franchise taxes imposed on (or measured by)
its net income by the United States of America, or by the jurisdiction under the
laws of which such recipient is organized or in which its principal office is
located or applicable lending office is located, and (b) any branch profits
taxes imposed by the United States of America or any similar tax imposed by any
other jurisdiction in which any Borrower is located.

          "Federal Funds Effective Rate" means, for any day, the weighted
           ----------------------------
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Lender from three Federal funds brokers of
recognized standing selected by it.

          "Financial Officer" of any Borrower means the chief financial officer,
           -----------------
principal accounting officer, treasurer or controller of such Borrower.

          "French Credit Agreement"  means that certain credit agreement, dated
           -----------------------
as of the date hereof, by and among NMT NeuroSciences Implants (France) SA, a
French limited liability company, and NMT NeuroSciences Instruments (France)
SARL, a French limited liability company, as Borrowers, and Brown Brothers
Harriman & Co., as Lender.

          "GAAP" means generally accepted accounting principles in the United
           ----
States of America.

          "Governmental Authority" means the government of the United States of
           ----------------------
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority,

                                       4
<PAGE>

instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government.

          "Guarantee" of or by any Person (the "guarantor") means any
           ---------                            ---------
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
                   ---------------
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided that the term Guarantee shall not include
                            --------
endorsements for collection or deposit in the ordinary course of business.

          "Hazardous Materials"  means all explosive or radioactive substances
           -------------------
or wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.

          "Hedging Agreement" means any interest rate protection agreement,
           -----------------
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.

          "Indebtedness" of any Person means, without duplication, (a) all
           ------------
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (j) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances.  The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.

                                       5
<PAGE>

          "Indemnified Taxes" means Taxes other than Excluded Taxes.
           -----------------

          "Interest Payment Date" means the last day of each month, and the day
           ---------------------
that the Loans are required to be repaid.

          "LC Disbursement" means a payment made by the Lender pursuant to a
           ---------------
Letter of Credit.

          "LC Exposure" means, at any time, the sum of (a) the aggregate undrawn
           -----------
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf
of the Borrowers at such time.

          "Lender" means Brown Brothers Harriman & Co., and any successors and
           ------
assigns thereof.

          "Letter of Credit" means any letter of credit issued pursuant to this
           ----------------
Agreement.

          "Lien" means, with respect to any asset, (a) any mortgage, deed of
           ----
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.

          "Loans" means all loans made by the Lender to any Borrower pursuant to
           -----
this Agreement.

          "Material Adverse Effect" means a material adverse effect on (a) the
           -----------------------
business, assets, operations, prospects or condition, financial or otherwise, of
the Borrowers and the Subsidiaries taken as a whole, (b) the ability of the
respective borrowers to perform any of their respective obligations under this
Agreement or the French Credit Agreement or (c) a material portion of the rights
of or benefits available to the Lender under this Agreement or the French Credit
Agreement (other than as a result of any action taken or failed to be taken by
the Lender).

          "Material Indebtedness" means Indebtedness (other than the Loans and
           ---------------------
Letters of Credit), or obligations in respect of one or more Hedging Agreements,
of any one or more of the Borrowers or the Subsidiaries in an aggregate
principal amount exceeding $100,000.  For purposes of determining Material
Indebtedness, the "principal amount" of the obligations of any Borrower or
Subsidiary in respect of any Hedging Agreement at any time shall be the maximum
aggregate amount (giving effect to any netting agreements) that such Borrower or
Subsidiary would be required to pay if such Hedging Agreement were terminated at
such time.

          "Maturity Date" means September 13, 2002.
           -------------

                                       6
<PAGE>

          "Multiemployer Plan" means a multiemployer plan as defined in Section
           ------------------
4001(a)(3) of ERISA.

          "Other Taxes" means any and all present or future stamp or documentary
           -----------
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement (but expressly excluding
Excluded Taxes).

          "PBGC" means the Pension Benefit Guaranty Corporation referred to and
           ----
defined in ERISA and any successor entity performing similar functions.

          "Permitted Encumbrances" means:
           ----------------------

          (a) Liens imposed by law for taxes that are not yet due or are being
     contested in compliance with Section 5.04;

          (b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
     and other like Liens imposed by law, arising in the ordinary course of
     business and securing obligations that are not overdue by more than 30 days
     or are being contested in compliance with Section 5.04;

          (c) pledges and deposits made in the ordinary course of business in
     compliance with workers' compensation, unemployment insurance and other
     social security laws or regulations;

          (d) deposits to secure the performance of bids, trade contracts,
     leases, statutory obligations, surety and appeal bonds, performance bonds
     and other obligations of a like nature, in each case in the ordinary course
     of business;

          (e) judgment liens in respect of judgments that do not constitute an
     Event of Default under clause (k) of Article VII; and

          (f) easements, zoning restrictions, rights-of-way and similar
     encumbrances on real property imposed by law or arising in the ordinary
     course of business that do not materially detract from the value of the
     affected property or interfere with the ordinary conduct of business of any
     Borrower or Subsidiary;

provided that the term "Permitted Encumbrances" shall not include any Lien
--------
securing Indebtedness.

          "Permitted Investments" means:
           ---------------------

          (a) direct obligations of, or obligations the principal of and
     interest on which are unconditionally guaranteed by, the United States of
     America (or by any agency thereof to the extent

                                       7
<PAGE>

     such obligations are backed by the full faith and credit of the United
     States of America), in each case maturing within one year from the date of
     acquisition thereof;

          (b) investments in commercial paper maturing within 270 days from the
     date of acquisition thereof and having, at such date of acquisition, the
     highest credit rating obtainable from Standard & Poor's or from Moody's
     Investors Services, Inc.;

          (c) investments in certificates of deposit, banker's acceptances and
     time deposits maturing within 180 days from the date of acquisition thereof
     issued or guaranteed by or placed with, and money market deposit accounts
     issued or offered by, any office of Brown Brothers Harriman & Co. or any
     domestic office of any commercial bank organized under the laws of the
     United States of America or any State thereof which has a combined capital
     and surplus and undivided profits of not less than $500,000,000;

          (d) fully collateralized repurchase agreements with a term of not more
     than 30 days for securities described in clause (a) above and entered into
     with a financial institution satisfying the criteria described in clause
     (c) above; and

          (e) short term investment funds or instruments sponsored or managed by
     the Lender or selected as a short term investment by the Lender in its
     capacity as money manager for any Borrower or Subsidiary.

          "Person" means any natural person, corporation, limited liability
           ------
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.

          "Plan"  means any employee pension benefit plan (other than a
           ----
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which any Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.

          "Related Parties" means, with respect to any specified Person, such
           ---------------
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.

          "Restricted Payment" means any dividend or other distribution (whether
           ------------------
in cash, securities or other property) with respect to any shares of any class
of capital stock of NMT Medical, Inc. or any Subsidiary, or any payment (whether
in cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such shares of capital stock of NMT Medical,
Inc. or any option, warrant or other right to acquire any such shares of capital
stock of NMT Medical, Inc.

          "Revolving Loan" means a Loan made pursuant to Section 2.03.
           --------------

                                       8
<PAGE>

          "subsidiary" means, with respect to any Person (the "parent") at any
           ----------                                          ------
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.

          "Subsidiary" means any subsidiary of NMT Medical, Inc.
           ----------

          "Taxes" means any and all present or future taxes, levies, imposts,
           -----
duties, deductions, charges or withholdings imposed by any Governmental
Authority.

          "Transactions" means the execution, delivery and performance by the
           ------------
Borrowers of this Agreement, and the security documents and pledge agreements
referred to in Article IV hereof, the borrowing of Loans, the use of the
proceeds thereof and the issuance of Letters of Credit hereunder.

          "U.K. Lease" means the lease of Spembly Medical Ltd. for the premises
           ----------
located at Newbury Road, Andover, Hampshire SP104DR, United Kingdom.

          "Whitney Agreement" means the Subordinated Note and Common Stock
           -----------------
Purchase Agreement dated as of July 8, 1998, as amended, by and among NMT
Medical, Inc. (f/k/a Nitinol Medical Technologies, Inc.), Whitney Subordinated
Debt Fund, L.P. and J.H. Whitney & Co.

          "Whitney Notes" means the 10.101% Subordinated Promissory Notes due
           -------------
September 30, 2003 issued by NMT Medical, Inc. in the original principal amount
of $20,000,000.

          "Withdrawal Liability" means liability to a Multiemployer Plan as a
           --------------------
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.

      SECTION 1.02.  Terms Generally.  The definitions of terms herein shall
                     ---------------
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors

                                       9
<PAGE>

and assigns, (c) the words "herein", "hereof" and "hereunder", and words of
similar import, shall be construed to refer to this Agreement in its entirety
and not to any particular provision hereof, (d) all references herein to
Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e)
the words "asset" and "property" shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.

      SECTION 1.03.  Accounting Terms; GAAP.  Except as otherwise expressly
                     ----------------------
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
                                                                   --------
that, if the Borrowers notify the Lender that the Borrowers request an amendment
to any provision hereof to eliminate the effect of any change occurring after
the date hereof in GAAP or in the application thereof on the operation of such
provision (or the Lender notifies the Borrowers that it requests an amendment to
any provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
herewith.


                                  ARTICLE II

                                  The Credit
                                  ----------

      SECTION 2.01.  Commitment.  Subject to the terms and conditions set forth
                     ----------
herein, the Lender agrees to make Revolving Loans to the Borrowers from time to
time during the Availability Period in an aggregate principal amount that will
not result in the aggregate amount of all outstanding Revolving Loans plus the
LC Exposure exceeding the Commitment. Within the foregoing limit and subject to
the terms and conditions set forth herein, the Borrowers may borrow, prepay and
reborrow Revolving Loans.

      SECTION 2.02.  Note.  The obligations of the Borrowers hereunder with
                     ----
respect to all Revolving Loans shall be evidenced by a Note in the form of
Exhibit A hereto made by each of the Borrowers.

      SECTION 2.03.  Requests for Revolving Borrowings.  To request a Revolving
                     ---------------------------------
Borrowing, the Borrowers shall notify the Lender of such request by telephone
not later than 11:00 a.m., Boston time, one Business Day before the date of the
proposed Borrowing; provided that any such notice of a Borrowing to finance the
                    --------
reimbursement of an LC Disbursement as contemplated by Section 2.04(d) may be
given not later than 10:00 a.m., Boston time, on the date of the proposed
Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall
be confirmed promptly by hand delivery or telecopy to the Lender of a written
Borrowing Request in a form approved by the Lender and signed by the Borrowers.

                                       10
<PAGE>

      SECTION 2.04.  Letters of Credit.
                     -----------------

          (a) General.  Subject to the terms and conditions set forth herein,
              -------
the Borrowers may request the issuance of Letters of Credit for their own
account, in a form reasonably acceptable to the Lender, at any time and from
time to time during the Availability Period.  In the event of any inconsistency
between the terms and conditions of this Agreement and the terms and conditions
of any form of letter of credit application or other agreement submitted by the
Borrowers to, or entered into by the Borrowers with, the Lender relating to any
Letter of Credit, the terms and conditions of this Agreement shall control.

          (b) Notice of Issuance, Amendment, Renewal, Extension; Certain
              ----------------------------------------------------------
Conditions.  To request the issuance of a Letter of Credit (or the amendment,
----------
renewal or extension of an outstanding Letter of Credit), the Borrowers shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Lender) to the Lender
(reasonably in advance of the requested date of issuance, amendment, renewal or
extension) a notice requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or extended, and
specifying the date of issuance, amendment, renewal or extension (which shall be
a Business Day), the date on which such Letter of Credit is to expire (which
shall comply with paragraph (c) of this Section), the amount of such Letter of
Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit.  If requested by the Lender, the Borrowers also shall submit a letter
of credit application on the Lender's standard form in connection with any
request for a Letter of Credit.  A Letter of Credit shall be issued, amended,
renewed or extended only if (and upon issuance, amendment, renewal or extension
of each Letter of Credit the Borrowers shall be deemed to represent and warrant
that), after giving effect to such issuance, amendment, renewal or extension (i)
the LC Exposure shall not exceed $500,000 and (ii) the sum of the total
Revolving Loans and LC Exposure shall not exceed the total Commitment.

          (c) Expiration Date.  Each Letter of Credit shall expire at or prior
              ---------------
to the close of business on the earlier of (i) the date one year after the date
of the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the date
that is five Business Days prior to the Maturity Date; provided, however, that
                                                       --------  -------
if requested by the Borrowers a Letter of Credit shall automatically be renewed
and extended for an additional year (but not beyond the date specified in clause
(ii) above) unless the Lender notifies the Borrowers of its refusal to so renew
and extend such Letter of Credit within 30 days prior to the date such Letter of
Credit would otherwise expire.

          (d) Reimbursement.  If the Lender shall make any LC Disbursement in
              -------------
respect of a Letter of Credit, the Borrowers shall reimburse such LC
Disbursement by paying to the Lender an amount equal to such LC Disbursement not
later than 12:00 noon, Boston time, on the date that such LC Disbursement is
made, if any Borrower shall have received notice of such LC Disbursement prior
to 10:00 a.m., Boston time, on such date, or, if such notice has not been
received by the Borrowers prior to such time on such date, then not later than
12:00 noon, Boston time, on the Business Day immediately following the day that
any Borrower receives such notice; provided that the Borrowers may, subject to
                                   --------
the conditions to borrowing set forth herein, request in accordance with Section
2.03 that such payment be financed with

                                       11
<PAGE>

a Revolving Loan in an equivalent amount and, to the extent so financed, the
Borrowers' obligation to make such payment shall be discharged and replaced by
the resulting Borrowing.

          (e) Obligations Absolute.  The Borrowers' obligation to reimburse LC
              --------------------
Disbursements as provided in paragraph (d) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Lender under a Letter of Credit
against presentation of a draft or other document that does not comply with the
terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrowers' obligations hereunder.
Neither the Lender nor any of its Related Parties shall have any liability or
responsibility by reason of or in connection with the issuance or transfer of
any Letter of Credit or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission
or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from
causes beyond the control of the Lender; provided that the foregoing shall not
                                         --------
be construed to excuse the Lender from liability to the Borrowers to the extent
of any direct damages (as opposed to consequential damages, claims in respect of
which are hereby waived by the Borrowers to the fullest extent permitted by
applicable law) suffered by the Borrowers that are caused by the Lender's
failure to exercise care when determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof.  The parties
hereto expressly agree that, in the absence of gross negligence or willful
misconduct on the part of the Lender, the Lender shall be deemed to have
exercised care in each such determination.  In furtherance of the foregoing and
without limiting the generality thereof, the parties agree that, with respect to
documents presented which appear on their face to be in substantial compliance
with the terms of a Letter of Credit, the Lender may, in its sole discretion,
either accept and make payment upon such documents without responsibility for
further investigation, regardless of any notice or information to the contrary,
or refuse to accept and make payment upon such documents if such documents are
not in strict compliance with the terms of such Letter of Credit.

          (f) Disbursement Procedures.  The Lender shall, promptly following its
              -----------------------
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit.  The Lender shall promptly notify the
Borrowers by telephone (confirmed by telecopy) of such demand for payment and
whether the Lender has made or will make an LC Disbursement thereunder; provided
                                                                        --------
that any failure to give or delay in giving such notice shall not relieve the
Borrowers of their obligation to reimburse the Lender with respect to any such
LC Disbursement.

          (g) Interim Interest.  If the Lender shall make any LC Disbursement,
              ----------------
then, unless the Borrowers shall reimburse such LC Disbursement in full on the
date such LC Disbursement is made, the

                                       12
<PAGE>

unpaid amount thereof shall bear interest, for each day from and including the
date such LC Disbursement is made to but excluding the date that the Borrowers
reimburse such LC Disbursement, at the rate provided for in Section 2.10(b).
Interest accrued pursuant to this paragraph shall be for the account of the
Lender.

          (h) Cash Collateralization.  If any Event of Default shall occur and
              ----------------------
be continuing, on the Business Day that the Borrowers receive notice from the
Lender demanding the deposit of cash collateral pursuant to this paragraph, the
Borrowers shall deposit in an account with the Lender, an amount in cash equal
to the LC Exposure as of such date plus any accrued and unpaid interest and fees
thereon; provided that the obligation to deposit such cash collateral shall
         --------
become effective immediately, and such deposit shall become immediately due and
payable, without demand or other notice of any kind, upon the occurrence of any
Event of Default with respect to any Borrower described in clause (h) or (i) of
Article VII.  Such deposit shall be held by the Lender as collateral for the
payment and performance of the obligations of the Borrowers under this
Agreement.  The Lender shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account.  All such deposits shall be
invested, at the option of the Borrowers, in certificates of deposit issued by
the Lender or in a Lender sponsored money market fund.  Interest or profits, if
any, on such investments shall accumulate in such account.  Moneys in such
account shall be applied by and paid to the Lender as reimbursement for LC
Disbursements for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of
the Borrowers for the LC Exposure at such time or, if the maturity of the Loans
has been accelerated, be applied to satisfy any other obligations of the
Borrowers under this Agreement.  If the Borrowers are required to provide an
amount of cash collateral hereunder as a result of the occurrence of an Event of
Default, such amount (to the extent not applied as aforesaid) shall be returned
to the Borrowers within three Business Days after all Events of Default have
been cured or waived.

      SECTION 2.05.  Funding of Borrowings.  The Lender will make Loans
                     ---------------------
available to the Borrowers by promptly crediting the amounts so received, in
like funds, to an account of any Borrower maintained with the Lender in Boston
and designated by the Borrowers in the applicable Borrowing Request; provided
                                                                     --------
that Revolving Loans made to finance the reimbursement of an LC Disbursement as
provided in Section 2.04(d) shall be remitted to the Lender.

      SECTION 2.06.  Termination and Reduction of Commitment.
                     ---------------------------------------

          (a) Unless previously terminated, the Commitment shall terminate on
the Maturity Date.

          (b) The Borrowers may at any time terminate, or from time to time
reduce, the Commitment; provided that (i) each reduction of the Commitment shall
                        --------
be in an amount that is an integral multiple of $100,000 and not less than
$1,000,000 and (ii) the Borrowers shall not terminate or reduce the Commitment
if, after giving effect to any concurrent prepayment of the Loans in accordance
with Section 2.08, the sum of the outstanding amount of all Loans plus the LC
Exposure would exceed the Commitment.

                                       13
<PAGE>

          (c) The Borrowers shall notify the Lender of any election to terminate
or reduce the Commitment under paragraph (b) of this Section at least three
Business Days prior to the effective date of such termination or reduction,
specifying such election and the effective date thereof.  Each notice delivered
by the Borrowers pursuant to this Section shall be irrevocable.

      SECTION 2.07.  Repayment of Loans; Evidence of Debt.
                     ------------------------------------

          (a) The Borrowers hereby unconditionally promise to pay to the Lender
the then unpaid principal amount of each Revolving Loan on the Maturity Date.

          (b) The Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrowers to the Lender
resulting from each Loan made by the Lender, including the amounts of principal
and interest payable and paid to the Lender from time to time hereunder.

          (c) The entries made in the accounts maintained pursuant to paragraph
(b) of this Section shall be prima facie evidence of the existence and amounts
                             ----- -----
of the obligations recorded therein; provided that the failure of the Lender to
                                     --------
maintain such accounts or any error therein shall not in any manner affect the
obligation of the Borrowers to repay the Loans in accordance with the terms of
this Agreement.

      SECTION 2.08.  Prepayment of Loans.  The Borrowers shall have the right at
                     -------------------
any time and from time to time to prepay without penalty any Borrowing in whole
or in part.

      SECTION 2.09.  Fees.
                     ----

          (a) The Borrowers agree to pay to the Lender a nonusage fee, which
shall accrue at the rate of 0.375% per annum on the average daily amount of any
unused portion of the Commitment during the period from and including the date
hereof to but excluding the date on which such Commitment terminates.  Accrued
nonusage fees shall be payable in arrears on the last day of March, June,
September and December of each year and on the date on which the Commitment
terminates, commencing on the first such date to occur after the date hereof.
As used herein, usage of the Lender's Commitment includes Revolving Loans and LC
Exposure.  All nonusage fees shall be computed on the basis of a year of 360
days and shall be payable for the actual number of days elapsed.

          (b) The Borrowers agree to pay to the Lender a fee with respect to all
outstanding Letters of Credit, which shall accrue at the rate of 1.5% per annum
on the average daily amount of the Lender's LC Exposure (excluding any portion
thereof attributable to unreimbursed LC Disbursements), as well as the Lender's
standard fees with respect to the issuance, amendment, renewal or extension of
any Letter of Credit or processing of drawings thereunder.  Such fees shall be
payable in advance upon the issuance of any Letter of Credit.  All such fees
shall be computed on the basis of a year of 360 days and shall be payable for
the actual number of days elapsed.

                                       14
<PAGE>

          (c) The Borrowers agree to pay to the Lender a closing fee as set
forth in the letter from it to NMT Medical, Inc. dated June 18, 1999.

      SECTION 2.10.  Interest.
                     --------

          (a) All Loans shall bear interest at the Alternate Base Rate.

          (b) Notwithstanding the foregoing, if any principal of or interest on
any Loan or any fee or other amount payable by the Borrowers hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to the Alternate Base Rate plus 4%.

          (c) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and upon termination of the Commitment;
provided that interest accrued pursuant to paragraph (b) of this Section shall
--------
be payable on demand.

          (d) All interest hereunder shall be computed on the basis of a year of
360 days, and shall be payable for the actual number of days elapsed.  The
applicable Alternate Base Rate shall be determined by the Lender, and such
determination shall be conclusive absent manifest error.

      SECTION 2.11.  Increased Costs.
                     ---------------

          (a)  If any Change in Law shall:

               (i)   impose, modify or deem applicable any reserve, special
     deposit or similar requirement against assets of, deposits with or for the
     account of, or credit extended by, the Lender; or

               (ii)  impose on the Lender any other condition affecting this
     Agreement or any Loans made by the Lender or any Letter of Credit issued
     hereunder;

and the result of any of the foregoing shall be to increase the cost to the
Lender of making or maintaining any Loan (or of maintaining its obligation to
make any such Loan) or to increase the cost to the Lender of issuing or
maintaining any Letter of Credit or to reduce the amount of any sum received or
receivable by the Lender hereunder (whether of principal, interest or
otherwise), then the Borrowers will pay to the Lender such additional amount or
amounts as will compensate the Lender for such additional costs incurred or
reduction suffered.

          (b) If the Lender determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on the
Lender's capital as a consequence of this Agreement or the Loans made by the
Lender, or the Letters of Credit issued by the Lender, to a level below that
which the Lender could have achieved but for such Change in Law (taking into
consideration

                                       15
<PAGE>

the Lender's policies with respect to capital adequacy), then from time to time
the Borrowers will pay to the Lender such additional amount or amounts as will
compensate the Lender for any such reduction suffered.

          (c) A certificate of the Lender setting forth in reasonable detail the
basis for any such additional payment and the amount or amounts necessary to
compensate the Lender as specified in paragraph (a) or (b) of this Section shall
be delivered to the Borrowers and shall be conclusive absent manifest error.
The Borrowers shall pay the Lender the amount shown as due on any such
certificate within 10 days after receipt thereof.

          (d) Failure or delay on the part of the Lender to demand compensation
pursuant to this Section shall not constitute a waiver of the Lender's right to
demand such compensation; provided that any such demand shall be made within 90
                          --------
days of the event or condition giving rise to the demand on which it is based.

      SECTION 2.12.  Taxes.
                     -----

          (a) Any and all payments by or on account of any obligation of the
Borrowers hereunder shall be made free and clear of and without deduction for
any Indemnified Taxes or Other Taxes; provided that if the Borrowers shall be
                                      --------
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section), the Lender receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrowers shall make
such deductions and (iii) the Borrowers shall pay the full amount deducted to
the relevant Governmental Authority in accordance with applicable law.  In
addition, the Borrowers shall pay all Other Taxes to the relevant Governmental
Authority in accordance with applicable law.

          (b) The Borrowers shall indemnify the Lender within 10 days after
written demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes paid by the Lender on or with respect to any payment by or on account of
any obligation of the Borrowers hereunder (including Indemnified Taxes or Other
Taxes imposed or asserted on or attributable to amounts payable under this
Section) and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority.  A certificate as to the amount of such payment or liability
delivered to the Borrowers by the Lender shall be conclusive absent manifest
error.

          (c) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrowers to a Governmental Authority, the Borrowers shall
deliver to the Lender the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Lender.

                                       16
<PAGE>

      SECTION 2.13.  Payments Generally.
                     ------------------

          (a) The Borrowers shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements, or of amounts payable under Section 2.11 or 2.12, or otherwise)
prior to 2:00 p.m., Boston time, on the date when due, in immediately available
funds, without set-off or counterclaim.  Any amounts received after such time on
any date shall be deemed to have been received on the next succeeding Business
Day for purposes of calculating interest thereon.  All such payments shall be
made to the Lender at its offices in Boston, Massachusetts, except that payments
pursuant to Sections 2.11, 2.12 and 8.03 shall be made directly to the Persons
entitled thereto. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension.  All payments
hereunder shall be made in dollars.

          (b) If at any time insufficient funds are received by and available to
the Lender to pay fully all amounts of principal, unreimbursed LC Disbursements,
and interest and fees then due hereunder, such funds shall be applied (i) first,
towards payment of interest and fees then due hereunder, and (ii) second,
towards payment of principal and unreimbursed LC Disbursements then due
hereunder.

      SECTION 2.14.  Senior Status of Obligations.  All rights of the Lender
                     ----------------------------
with respect to the payment and performance of all obligations of the Borrowers
hereunder of every kind and description, whether now existing or hereafter
arising, shall be senior to all rights of the holders of the Whitney Notes, and
such rights of the Lender shall not be subordinated in right of payment to any
other Indebtedness of any Borrower or Subsidiary.


                                  ARTICLE III

                        Representations and Warranties
                        ------------------------------

     The Borrowers represent and warrant to the Lender that (provided that, for
                                                             --------
purposes of the Borrowers making the following representations and warranties as
of the date hereof only, the term "Subsidiary" shall in no event include Image
Technology Corp.):

      SECTION 3.01  Organization; Powers.  Each of the Borrowers and the
                    --------------------
Subsidiaries is duly organized, validly existing and in good standing (where
applicable) under the laws of the jurisdiction of its organization, has all
requisite power and authority to carry on its business as now conducted and,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, is qualified to
do business in, and is in good standing in, every jurisdiction where such
qualification is required.

      SECTION 3.02.  Authorization; Enforceability.  The Transactions to be
                     -----------------------------
entered into by the respective Borrowers are within each of the respective
Borrower's corporate powers and have been duly

                                       17
<PAGE>

authorized by all necessary corporate and, if required, stockholder action. This
Agreement has been duly executed and delivered by each Borrower and constitutes
a legal, valid and binding obligation of each Borrower, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law.

      SECTION 3.03  Governmental Approvals; No Conflicts.  The Transactions (a)
                    ------------------------------------
do not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except such as have been obtained
or made and are in full force and effect, (b) will not violate any applicable
law or regulation or the charter, by-laws or other organizational documents of
any Borrower or Subsidiary or any order of any Governmental Authority, (c) will
not violate or result in a default under any indenture, agreement or other
instrument binding upon any Borrower or Subsidiary or its assets, or give rise
to a right thereunder to require any payment to be made by any Borrower or
Subsidiary, and (d) will not result in the creation or imposition of any Lien on
any asset of any Borrower or Subsidiary.

      SECTION 3.04.  Financial Condition; No Material Adverse Change.
                     -----------------------------------------------

          (a) The Borrowers have heretofore furnished to the Lender the
consolidated balance sheet and statements of income, stockholders equity and
cash flows of NMT Medical, Inc. and its Subsidiaries (i) as of and for each of
the last three fiscal years ended December 31, 1998, reported on by Arthur
Andersen LLP, independent public accountants, and (ii) as of and for the fiscal
quarter and the portion of the fiscal year ended June 30, 1999, certified by its
chief financial officer.  Such financial statements present fairly, in all
material respects, the financial position and results of operations and cash
flows of NMT Medical, Inc. and its Subsidiaries as of such dates and for such
periods in accordance with GAAP, subject to year-end audit adjustments and the
absence of footnotes in the case of the statements referred to in clause (ii)
above.

          (b) Since December 31, 1998, there has been no material adverse change
in the business, assets, operations, prospects or condition, financial or
otherwise, of NMT Medical, Inc. and its Subsidiaries taken as a whole.

      SECTION 3.05.  Properties.
                     ----------

          (a) Each of the Borrowers and the Subsidiaries has good title to, or
valid leasehold interests in, all its real and personal property material to its
business, except for minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes.

          (b) Each of the Borrowers and the Subsidiaries owns, or is licensed to
use, all trademarks, tradenames, copyrights, patents and other intellectual
property material to its business, and the use thereof by the Borrowers and the
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected

                                       18
<PAGE>

to result in a Material Adverse Effect. Attached hereto as Schedule 3.05 is a
complete and accurate list of all of the patents and patent applications owned
by the Borrowers as of the date hereof.

      SECTION 3.06.  Litigation and Environmental Matters.
                     ------------------------------------

          (a) There are no actions, suits or proceedings by or before any
arbitrator or Governmental Authority pending against or, to the knowledge of the
Borrowers, threatened against or affecting any Borrower or Subsidiary (i) as to
which there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters) or (ii) that involve this Agreement or the Transactions.

          (b) Except for the Disclosed Matters and except with respect to any
other matters that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, no Borrower or Subsidiary (i)
has failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental Law,
(ii) has become subject to any Environmental Liability, (iii) has received
notice of any claim with respect to any Environmental Liability or (iv) knows of
any basis for any Environmental Liability.

          (c) Since the date of this Agreement, there has been no change in the
status of the Disclosed Matters that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of, a Material Adverse
Effect.

      SECTION 3.07.  Compliance with Laws and Agreements.  Each of the Borrowers
                     -----------------------------------
and the Subsidiaries is in compliance with all laws, regulations and orders of
any Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. No Default has occurred and is
continuing.

      SECTION 3.08.  Investment and Holding Company Status.  No Borrower or
                     -------------------------------------
Subsidiary is (a) an "investment company" as defined in, or subject to
regulation under, the Investment Company Act of 1940 or (b) a "holding company"
as defined in, or subject to regulation under, the Public Utility Holding
Company Act of 1935.

      SECTION 3.09.  Taxes.  Each of the Borrowers and the Subsidiaries has
                     -----
timely filed or caused to be filed all Tax returns and reports required to have
been filed and has paid or caused to be paid all Taxes required to have been
paid by it, except (a) Taxes that are being contested in good faith by
appropriate proceedings and for which such Borrower or Subsidiary, as the case
may be, has set aside on its books adequate reserves or (b) to the extent that
the failure to do so could not reasonably be expected to result in a Material
Adverse Effect.

                                       19
<PAGE>

      SECTION 3.10  ERISA.  No ERISA Event has occurred or is reasonably
                    -----
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $10,000 the fair market value of the assets of such Plan, and the present
value of all accumulated benefit obligations of all underfunded Plans (based on
the assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed by more than $25,000 the fair market value of
the assets of all such underfunded Plans.

      SECTION 3.11  Disclosure.  The Borrowers have disclosed to the Lender all
                    ----------
agreements, instruments and corporate or other restrictions to which any of them
or any Subsidiary is subject, and all other matters known to them, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.  None of the reports, financial statements,
certificates or other information (other than any such information provided in
draft or preliminary form) furnished by or on behalf of the Borrowers to the
Lender in connection with the negotiation of this Agreement or delivered
hereunder (as modified or supplemented by other information so furnished)
contains any material misstatement of fact or, when taken together, omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided that,
                                                                 --------
with respect to projected financial information or other information provided in
estimated form, the Borrowers represent only that such information was prepared
in good faith based upon assumptions believed to be reasonable at the time.

      SECTION 3.12.  Year 2000.  Any reprogramming required to permit the proper
                     ---------
functioning, in and following the year 2000, of (i) the Borrowers' and the
Subsidiaries' computer systems and (ii) equipment containing embedded microchips
(including systems and equipment supplied by others or with which any of the
Borrower's or Subsidiary's systems interface) and the testing of all such
systems and equipment, as so reprogrammed, will be completed by December 1999.
The cost to the Borrowers and the Subsidiaries of such reprogramming and testing
and of the reasonably foreseeable consequences of year 2000 to the Borrowers and
the Subsidiaries (including, without limitation, reprogramming errors and the
failure of others' systems or equipment) will not result in a Default or a
Material Adverse Effect.  Except for such of the reprogramming referred to in
the preceding sentence as may be necessary, the computer and management
information systems of the Borrowers and the Subsidiaries are and, with ordinary
course upgrading and maintenance, will continue for the term of this Agreement
to be, sufficient to permit the Borrowers and the Subsidiaries to conduct their
respective businesses without Material Adverse Effect.

                                       20
<PAGE>

                                  ARTICLE IV

                                  Conditions
                                  ----------

      SECTION 4.01.  Effective Date.  The obligations of the Lender to make
                     --------------
Loans and issue Letters of Credit hereunder shall not become effective until the
date on which (x) each of the following conditions is satisfied (or waived in
accordance with Section 8.02) and (y) each of the conditions set forth in
Section 4.01 of the French Credit Agreement is satisfied (or waived in
accordance with the terms thereof):

          (a) The Lender (or its counsel) shall have received from each party
     hereto either (i) a counterpart of this Agreement signed on behalf of such
     party or (ii) written evidence satisfactory to the Lender (which may
     include telecopy transmission of a signed signature page of this Agreement)
     that such party has signed a counterpart of this Agreement.

          (b) The Lender shall have received a favorable written opinion
     (addressed to the Lender and dated the Effective Date) of Hale and Dorr
     LLP, counsel for the Borrowers, substantially in the form of Exhibit B, and
     covering such other matters relating to the Borrowers, this Agreement or
     the Transactions as the Lender shall reasonably request.  The Borrowers
     hereby request such counsel to deliver such opinion.

          (c) The Lender shall have received such documents and certificates as
     it or its counsel may reasonably request relating to the organization,
     existence and good standing of the Borrowers, the authorization of the
     Transactions and any other legal matters relating to the Borrowers and the
     Subsidiaries, this Agreement or the Transactions, all in form and substance
     satisfactory to the Lender and its counsel.

          (d) The Lender shall have received a certificate, dated the Effective
     Date and signed by the President, a Vice President or a Financial Officer
     of each of the Borrowers, confirming compliance with the conditions set
     forth in paragraphs (a) and (b) of Section 4.02.

          (e) The Lender shall have received security documents in form and
     substance satisfactory to it from each of the Borrowers granting to the
     Lender a first priority Lien on all of their assets (subject to Liens
     permitted hereunder), other than any owned real property.

          (f) The Lender shall have received pledge agreements (together with
     the pledged stock certificates and related stock powers executed in blank)
     in form and substance satisfactory to it pursuant to which the Lender shall
     receive a first priority Lien on all outstanding shares or interests of the
     Subsidiaries held by the Borrowers; provided that the pledge by any
                                         --------
     Borrower of any voting stock or interests in any Subsidiary that is not a
     Domestic Subsidiary shall be limited to sixty-five percent (65%) of such
     voting stock or interests.

                                       21
<PAGE>

          (g) The Lender shall have received all fees and other amounts due and
     payable on or prior to the Effective Date, including, to the extent
     invoiced, reimbursement or payment of all out-of-pocket expenses required
     to be reimbursed or paid by the Borrowers hereunder.

          (h) The Whitney Agreement and the Whitney Notes shall have been
     amended in form and substance satisfactory to the Lender and all collateral
     securing the Whitney Notes shall have been released and terminated;

     provided that, pursuant to a collateral agency agreement in form and
     --------
     substance satisfactory to the Lender, the security interests in certain
     foreign patents as in effect on the date hereof shall be maintained solely
     on behalf of the Lender.

          (i) All of the collateral securing the Barclays Debt shall have been
     released and terminated, other than the U.K. Lease.

      SECTION 4.02.  Each Credit Event.  The obligation of the Lender to make a
                     -----------------
Loan on the occasion of any Borrowing or to issue, amend, renew or extend any
Letter of Credit is subject to the satisfaction of the following conditions:

          (a) The representations and warranties of the Borrowers set forth in
     this Agreement shall be true and correct on and as of the date of such
     Borrowing or the date of issuance, amendment, renewal or extension of such
     Letter of Credit, as applicable.

          (b) At the time of and immediately after giving effect to such
     Borrowing or the issuance, amendment, renewal or extension of such Letter
     of Credit, as applicable, no Default shall have occurred and be continuing.

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrowers on the date thereof as to the matters specified in paragraphs (a) and
(b) of this Section.


                                   ARTICLE V

                             Affirmative Covenants
                             ---------------------

     Until the Commitment has expired or been terminated and the principal of
and interest on each Loan and all fees payable hereunder shall have been paid in
full and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, the Borrowers covenant and agree with
the Lender that:

      SECTION 5.01.  Financial Statements and Other Information. The Borrowers
                     ------------------------------------------
will furnish to the Lender:

                                       22
<PAGE>

          (a) within 90 days after the end of each fiscal year of NMT Medical,
     Inc., its audited consolidated balance sheet and related statements of
     operations, stockholders' equity and cash flows as of the end of and for
     such year, setting forth in each case in comparative form the figures for
     the previous fiscal year, all reported on by Arthur Andersen LLP or other
     independent public accountants of recognized national standing (without a
     "going concern" or like qualification or exception and without any
     qualification or exception as to the scope of such audit) to the effect
     that such consolidated financial statements present fairly in all material
     respects the financial condition and results of operations of NMT Medical,
     Inc. and its consolidated Subsidiaries on a consolidated basis in
     accordance with GAAP consistently applied;

          (b) within 45 days after the end of each of the first three fiscal
     quarters of each fiscal year of NMT Medical, Inc., its consolidated balance
     sheet and related statements of operations, stockholders' equity and cash
     flows as of the end of and for such fiscal quarter and the then elapsed
     portion of the fiscal year, setting forth in each case in comparative form
     the figures for the corresponding period or periods of (or, in the case of
     the balance sheet, as of the end of) the previous fiscal year, all
     certified by one of its Financial Officers as presenting fairly in all
     material respects the financial condition and results of operations of NMT
     Medical, Inc. and its consolidated Subsidiaries on a consolidated basis in
     accordance with GAAP consistently applied, subject to normal year-end audit
     adjustments and the absence of footnotes;

          (c) concurrently with any delivery of financial statements under
     clause (a) or (b) above, a certificate of a Financial Officer of the
     Borrowers (i) certifying as to whether a Default has occurred and, if a
     Default has occurred, specifying the details thereof and any action taken
     or proposed to be taken with respect thereto, (ii) setting forth reasonably
     detailed calculations demonstrating compliance with Section 6.09 and (iii)
     stating whether any change in GAAP or in the application thereof has
     occurred since the date of the audited financial statements referred to in
     Section 3.04 and, if any such change has occurred, specifying the effect of
     such change on the financial statements accompanying such certificate;

          (d) concurrently with any delivery of financial statements under
     clause (a) above, a certificate of the accounting firm that reported on
     such financial statements stating whether they obtained knowledge during
     the course of their examination of such financial statements of any Default
     (which certificate may be limited to the extent required by accounting
     rules or guidelines);

          (e) promptly after the same become publicly available, copies of all
     periodic and other reports, proxy statements and other materials filed by
     NMT Medical, Inc. with the Securities and Exchange Commission, or any
     Governmental Authority succeeding to any or all of the functions of said
     Commission, or with any national securities exchange, or distributed by NMT
     Medical, Inc. to its shareholders generally, as the case may be; and

                                       23
<PAGE>

          (f) promptly following any request therefor, such other information
     regarding the operations, business affairs and financial condition of the
     Borrowers and the Subsidiaries, or compliance with the terms of this
     Agreement, as the Lender may reasonably request.

      SECTION 5.02.  Notices of Material Events.  The Borrowers will furnish to
                     --------------------------
the Lender prompt written notice of the following:

          (a) the occurrence of any Default hereunder, including, without
     limitation, as a result of any Default under the French Credit Agreement;

          (b) the filing or commencement of any action, suit or proceeding by or
     before any arbitrator or Governmental Authority against or affecting any
     Borrower or Subsidiary or any Affiliate thereof that, if adversely
     determined, could reasonably be expected to result in a Material Adverse
     Effect;

          (c) the occurrence of any ERISA Event that, alone or together with any
     other ERISA Events that have occurred, could reasonably be expected to
     result in liability of any Borrower or Subsidiary in an aggregate amount
     exceeding $25,000; and

          (d) any other development that results in, or could reasonably be
     expected to result in, a Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrowers setting forth
the details of the event or development requiring such notice and any action
taken or proposed to be taken with respect thereto.

      SECTION 5.03.  Existence; Conduct of Business.  Each of the Borrowers
                     ------------------------------
will, and will cause each of the Subsidiaries to, do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of its business; provided that the foregoing shall not prohibit
                                --------
any merger, consolidation, liquidation or dissolution permitted under Section
6.03.

      SECTION 5.04.  Payment of Obligations.  Each of the Borrowers will, and
                     ----------------------
will cause each of the Subsidiaries to, pay its obligations, including Tax
liabilities, that, if not paid, could result in a Material Adverse Effect before
the same shall become delinquent or in default, except where (a) the validity or
amount thereof is being contested in good faith by appropriate proceedings, (b)
such Borrower or Subsidiary, as the case may be, has set aside on its books
adequate reserves with respect thereto in accordance with GAAP and any other
applicable standards for any Subsidiary that is not a Domestic Subsidiary and
(c) the failure to make payment pending such contest could not reasonably be
expected to result in a Material Adverse Effect.

                                       24
<PAGE>

      SECTION 5.05.  Maintenance of Properties; Insurance.  Each of the
                     ------------------------------------
Borrowers will (a) keep and maintain all property material to the conduct of its
business in good working order and condition, ordinary wear and tear excepted,
and (b) maintain, with financially sound and reputable insurance companies,
insurance in such amounts and against such risks as are customarily maintained
by companies engaged in the same or similar businesses operating in the same or
similar locations.

      SECTION 5.06.  Books and Records; Inspection Rights.  Each of the
                     ------------------------------------
Borrowers will, and will cause each of the Subsidiaries to, keep proper books of
record and account in which full, true and correct entries are made of all
dealings and transactions in relation to its business and activities. Each of
the Borrowers will, and will cause each of the Subsidiaries to, permit any
representatives designated by the Lender, upon reasonable prior notice, to visit
and inspect its properties, to examine and make extracts from its books and
records, and to discuss its affairs, finances and condition with its officers
and independent accountants, all at such reasonable times and as often as
reasonably requested.

      SECTION 5.07  Compliance with Laws.  Each of the Borrowers will, and will
                    --------------------
cause each of the Subsidiaries to, comply with all laws, rules, regulations and
orders of any Governmental Authority applicable to it or its property, except
where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.

      SECTION 5.08.  Use of Proceeds and Letters of Credit.  The proceeds of the
                     -------------------------------------
Loans will be used only for the prepayment and retirement of $3,000,000 of the
Whitney Notes and the balance for general corporate purposes. No part of the
proceeds of any Loan will be used, whether directly or indirectly, for any
purpose that entails a violation of any of the Regulations of the Board,
including Regulations U and X. Letters of Credit will be issued only for the
payment of suppliers and for other purposes satisfactory to the Lender.

      SECTION 5.09.  Receipt of Proceeds from French Credit Agreement.  The
                     ------------------------------------------------
proceeds of the loans made by the Lender under the French Credit Agreement to
the Subsidiaries parties thereto, which are received by any Borrower, directly
or indirectly, as dividends, payment of existing indebtedness or otherwise, will
be used only toward the prepayment and retirement of the Whitney Notes.

     SECTION 5.10.  Grant of Mortgage on Real Property.  At any time upon the
                    ----------------------------------
request of the Lender, the Borrowers will (within 10 days following such
request) grant to the Lender a first priority mortgage (subject to such
customary zoning, easement, tax and other interests and encumbrances which do
not in the aggregate materially decrease the value of or restrict the
marketability of such property) on any and all real property now owned or
hereafter acquired by any Borrower. In connection therewith, the Borrowers will
also provide (within 60 days following such request) to the Lender customary
title insurance, surveys, zoning documents and other closing documents.

      SECTION 5.11.  Subsidiary Guarantees.  At any time upon the request of the
                     ---------------------
Lender, the Borrowers will, within a reasonable period after such request, cause
any Subsidiary that is not a Domestic Subsidiary to execute a guarantee, in form
and substance satisfactory to the Lender, pursuant to which such

                                       25
<PAGE>

Subsidiary shall guarantee the payment and performance by the Borrowers of their
obligations hereunder; provided that such guarantee shall be limited in amount
                       --------
and otherwise in a form which does not create any adverse U.S. tax consequences
to the Borrowers in the reasonable judgment of the Borrowers' tax advisors.


                                  ARTICLE VI

                              Negative Covenants
                              ------------------

     Until the Commitment has expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full and
all Letters of Credit have expired or terminated and all LC Disbursements shall
have been reimbursed, the Borrowers covenant and agree with the Lender that:

      SECTION 6.01  Indebtedness.  The Borrowers will not, and will not permit
                    ------------
any Subsidiary to, create, incur, assume or permit to exist any Indebtedness,
except:

          (a) Indebtedness created hereunder;

          (b) Indebtedness existing on the date hereof and set forth in Schedule
     6.01 and, except as set forth in clauses (f) and (g) of this Section 6.01,
     extensions, renewals and replacements of any such Indebtedness that do not
     increase the outstanding principal amount thereof;

          (c) Indebtedness of any Borrower to any Borrower or Subsidiary;

          (d) Guarantees existing on the date hereof and set forth in Schedule
     6.01, and extensions, renewals and replacements of such Guarantees that do
     not increase the outstanding amount so guaranteed, and any Guarantee of the
     Whitney Notes by any Subsidiary executed after the date hereof; provided
                                                                     --------
     that (i) such Guarantee shall be in form and substance satisfactory to the
     Lender, (ii) such Guarantee shall be subordinate and junior to the
     Indebtedness created hereunder and under the French Credit Agreement (and
     any Guarantee thereof by any Borrower or Subsidiary) and (ii) such
     Subsidiary shall have guaranteed the Indebtedness created hereunder and, to
     the extent permitted by applicable law, under the French Credit Agreement;

          (e) Indebtedness incurred to finance the acquisition, construction or
     improvement of any fixed or capital assets, including Capital Lease
     Obligations and any Indebtedness assumed in connection with the acquisition
     of any such assets or secured by a Lien on any such assets prior to the
     acquisition thereof, and extensions, renewals and replacements of any such
     Indebtedness that do not increase the outstanding principal amount thereof;
     provided that (i) such Indebtedness is incurred prior to or within 90 days
     --------
     after such acquisition or the completion of such construction or
     improvement and (ii) the aggregate principal amount of Indebtedness
     permitted by this clause (e) shall not exceed $300,000 at any time
     outstanding;

                                       26
<PAGE>

          (f) the Barclays Debt, but no extensions, renewals or replacements
     thereof;

          (g) the Whitney Notes, but no extensions, renewals or replacements
     thereof; and provided that the Borrowers may not prepay the Whitney Notes
                  --------
     in whole or in part (other than on the Effective Date in the principal
     amount of up to $14,000,000 and in accordance with the terms hereof and of
     that certain Guarantee, dated as of the date hereof, made by the Borrowers
     with respect to the indebtedness of certain Subsidiaries under the French
     Credit Agreement) without the prior written consent of the Lender;

          (h) Indebtedness in an aggregate principal amount of up to $1,200,000
     to be extended after the date hereof to NMT NeuroSciences Implants (France)
     SA by CIC Lyonnaise De Banque upon such terms and conditions as shall be
     approved by the Lender, which approval shall not be unreasonably withheld,
     and solely for the lease of computer equipment, but no extensions, renewals
     or replacements thereof; and

          (i)  Indebtedness created under the French Credit Agreement and any
     Guarantee   of such Indebtedness by any Borrower or Subsidiary, and
     extensions, renewals and replacements of such Indebtedness and Guarantees.

      SECTION 6.02.  Liens.  The Borrowers will not, and will not permit any
                     -----
Subsidiary to, create, incur, assume or permit to exist any Lien on any property
or asset now owned or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof,
except:

          (a)  Permitted Encumbrances;

          (b) any Lien on any property or asset of any Borrower or Subsidiary
     existing on the date hereof and set forth in Schedule 6.02; provided that
                                                                 --------
     (i) such Lien shall not apply to any other property or asset of any
     Borrower or Subsidiary and (ii) such Lien shall secure only those
     obligations which it secures on the date hereof and, except as otherwise
     set forth herein, extensions, renewals and replacements thereof that do not
     increase the outstanding principal amount thereof;

          (c) Liens on fixed or capital assets acquired, constructed or improved
     by any Borrower or Subsidiary; provided that (i) such security interests
                                    --------
     secure Indebtedness permitted by clause (e) of Section 6.01, (ii) such
     security interests and the Indebtedness secured thereby are incurred prior
     to or within 90 days after such acquisition or the completion of such
     construction or improvement, (iii) the Indebtedness secured thereby does
     not exceed 90% of the cost of acquiring, constructing or improving such
     fixed or capital assets and (iv) such security interests shall not apply to
     any other property or assets of any Borrower or Subsidiary;

          (d) Liens on any fixed assets (other than real property) owned or
     acquired after the date hereof by NMT NeuroSciences Implants (France) SA;
     provided that (i) such security interests
     --------

                                       27
<PAGE>

     secure only the Indebtedness permitted by clause (h) of Section 6.01 and
     (ii) such security interests shall not apply to any other property or
     assets of any Borrower or Subsidiary; and

          (e) Liens in favor of the Lender securing the Indebtedness hereunder
     and the Indebtedness permitted by clause (i) of Section 6.01.

      SECTION 6.03. Fundamental Changes.
                    -------------------

          (a) The Borrowers will not, and will not permit any Subsidiary to,
merge into or consolidate with any other Person, or permit any other Person to
merge into or consolidate with it, or sell, transfer, lease or otherwise dispose
of (in one transaction or in a series of transactions) all or substantially all
of its assets, or all or substantially all of the stock of any of its
subsidiaries (in each case, whether now owned or hereafter acquired), or
liquidate or dissolve, except that, if at the time thereof and immediately after
giving effect thereto no Default shall have occurred and be continuing, (i) any
Borrower may merge into any other Borrower, (ii) any Borrower or Subsidiary may
sell, transfer, lease or otherwise dispose of its assets to any Borrower, (iii)
any Borrower (other than NMT Medical, Inc.) may merge with any other Person in
connection with an acquisition permitted by Section 6.04 as long as such
Borrower is the surviving corporation, (iv) any Person in connection with an
acquisition permitted under Section 6.04 or any Subsidiary may merge into any
Borrower as long as such Borrower is the surviving corporation and (v) any
Borrower (other than NMT Medical, Inc.) or any Subsidiary may liquidate or
dissolve if such Borrower or Subsidiary determines in good faith that such
liquidation or dissolution is in the best interests of its stockholders and is
not disadvantageous to the Lender.  No Borrower shall, or shall permit any
Subsidiary to, create, form or acquire any subsidiary without the prior written
consent of the Lender; provided that any Borrower may create, form or acquire a
                       --------
Domestic Subsidiary if such Borrower notifies the Lender in writing at least 30
days in advance thereof and, effective on the date it is created, formed or
acquired, such Domestic Subsidiary becomes a Borrower hereunder, it guarantees
the Indebtedness created under the French Credit Agreement, it grants the Lender
a perfected first priority Lien in all of its assets, and all of its capital
stock is pledged on a perfected first priority basis to the Lender.

          (b) The Borrowers will not, and will not permit any Subsidiary to,
engage to any material extent in any business other than businesses of the
general type conducted by the Borrowers and the Subsidiaries on the date of
execution of this Agreement and businesses reasonably related thereto.

      SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions.
                    ---------------------------------------------------------
The Borrowers will not, and will not permit any Subsidiary to, purchase, hold or
acquire any capital stock, evidences of indebtedness or other securities
(including any option, warrant or other right to acquire any of the foregoing)
of, make or permit to exist any loans or advances to, Guarantee any obligations
of, or make or permit to exist any investment or any other interest in, any
other Person, or purchase or otherwise acquire (in one transaction or a series
of transactions) any assets of any other Person constituting a business unit,
except:

          (a)  Permitted Investments;

                                       28
<PAGE>

          (b)  investments by any Borrower or Subsidiary existing on the date
hereof   in the capital stock of its subsidiaries;

          (c) loans or advances made by any Borrower or Subsidiary to any
     Borrower or, with notice as promptly as practicable to the Lender, to any
     borrower under the French Credit Agreement;

          (d) Guarantees constituting Indebtedness permitted by Section 6.01;

          (e)  acquisitions by any Borrower as long as (i) the acquired assets
     are used for,   or the acquired Person is engaged in, businesses of the
     type conducted by the Borrowers on the date hereof or businesses reasonably
     related thereto, (ii) if such acquisition involves the formation or
     acquisition by any Borrower of any Person that becomes a Subsidiary as a
     result of or in connection with such acquisition, then such Subsidiary must
     be a wholly-owned Domestic Subsidiary and it must, prior to or
     simultaneously with such acquisition, execute and deliver to the Lender (A)
     documentation causing it to become a Borrower hereunder, (B) a guarantee of
     the Indebtedness created under the French Credit Agreement, (C) security
     documents giving the Lender a first priority perfected Lien in all of its
     assets, and (D) documentation giving to the Lender perfected first priority
     pledge of all of its outstanding capital stock, in each case in form and
     substance satisfactory to the Lender and its counsel, (iii) immediately
     before and immediately after such acquisition, no Default will occur or
     exist and (iv) the Borrowers give the Lender written notice thereof at
     least 20 days in advance of such acquisition;

          (f)  investments by any Borrower or Subsidiary existing on the date
     hereof and set forth in Schedule 6.04; provided that the amount of any
                                            --------
     such investment made by such Borrower or Subsidiary shall not increase
     after the date hereof; and

          (g)  investments by any Borrower in Image Technology Corp. after the
     date   hereof in a maximum aggregate amount which, when added to the amount
     by which trade payables paid by any Borrower on behalf of Image Technology
     Corp. exceeds trade receivables of Image Technology Corp. collected by any
     Borrower, does not at any time exceed $200,000.

      SECTION 6.05. Hedging Agreements.  The Borrowers will not, and will not
                    ------------------
permit any Subsidiary to, enter into any Hedging Agreement, other than Hedging
Agreements entered into in the ordinary course of business to hedge or mitigate
risks to which the Borrowers or the Subsidiaries are exposed in the conduct of
their business or the management of their liabilities.

      SECTION 6.06. Restricted Payments.  The Borrowers will not, and will not
                    -------------------
permit any Subsidiary to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, except (a) any Borrower may declare and pay
dividends with respect to its capital stock payable solely in additional shares
of its common stock, and (b) Subsidiaries may declare and pay dividends ratably
with respect to their capital stock to any Borrower or Subsidiary.

                                       29
<PAGE>

      SECTION 6.07. Transactions with Affiliates.  The Borrowers will not sell,
                    ----------------------------
lease or otherwise transfer any property or assets to, or purchase, lease or
otherwise acquire any property or assets from, or otherwise engage in any other
transactions with, any of their Affiliates, except (a) in the ordinary course of
business at prices and on terms and conditions not less favorable to the
Borrowers or the Subsidiaries than could be obtained on an arm's-length basis
from unrelated third parties, and (b) any other transaction permitted by this
Agreement.

      SECTION 6.08. Restrictive Agreements.  The Borrowers will not, and will
                    ----------------------
not permit any Subsidiary to, directly or indirectly, enter into, incur or
permit to exist any agreement or other arrangement that prohibits, restricts or
imposes any condition upon (a) the ability of any Borrower or Subsidiary to
create, incur or permit to exist any Lien upon any of its property or assets, or
(b) the ability of any Subsidiary to pay dividends or other distributions with
respect to any shares of its capital stock or to make or repay loans or advances
to any Borrower or to Guarantee Indebtedness of any Borrower or any Subsidiary;
provided that (i) the foregoing shall not apply to restrictions and conditions
--------
imposed by law or by this Agreement, (ii) the foregoing shall not apply to
restrictions and conditions existing on the date hereof identified on Schedule
6.08 (but shall apply to any extension or renewal of, or any amendment or
modification expanding the scope of, any such restriction or condition), (iii)
the foregoing shall not apply to customary restrictions and conditions contained
in agreements relating to the sale of a Subsidiary pending such sale, provided
such restrictions and conditions apply only to the Subsidiary that is to be sold
and such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not
apply to restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness and (v) clause
(a) of the foregoing shall not apply to customary provisions in leases and other
contracts restricting the assignment thereof.

      SECTION 6.09. Financial Covenants.
                    -------------------

          (a) Total Leverage Test.  The Borrowers shall not permit the ratio of
              -------------------
consolidated Net Funded Indebtedness of NMT Medical, Inc. and its consolidated
Subsidiaries as of the last day of any calendar quarter ending on the date or
during any of the periods set forth below to consolidated Adjusted Operating
Cash Flow of NMT Medical, Inc. and its consolidated Subsidiaries for the twelve
(12) month period ending on the last day of such calendar quarter to be greater
than the ratio set forth below for such period:

<TABLE>
<CAPTION>

               Date or Period                    Ratio
               --------------                    -----
<S>                                             <C>
            September 30, 1999                  4.0:1.00
            December 31, 1999                   3.0:1.00
            January 1, 2000 and thereafter      2.5:1.00
</TABLE>

     "Net Funded Indebtedness" and "Adjusted Operating Cash Flow" will be
      -----------------------       ----------------------------
calculated as illustrated on Schedule 6.09(a).

                                       30
<PAGE>

          (b) Fixed Charge Coverage.  The Borrowers shall not permit
              ---------------------
consolidated Fixed Charge Coverage of NMT Medical, Inc. and its consolidated
Subsidiaries for any twelve (12) month period ending on the last day of a
calendar quarter to be less than 1.50 to 1.00.

     "Fixed Charge Coverage" will be calculated as illustrated on Schedule
      ---------------------
6.09(b).

          (c) Current Ratio.  The Borrowers shall not permit the ratio of
              -------------
consolidated Current Assets of NMT Medical, Inc. and its consolidated
Subsidiaries to consolidated Current Liabilities of NMT Medical, Inc. and its
consolidated Subsidiaries as of the last day of any calendar quarter to be less
than 1.25 to 1.00.

     As used herein, the following terms shall have the following meanings:

     "Current Assets" shall mean, at any date, the aggregate of the current
      --------------
assets of NMT Medical, Inc. and its consolidated Subsidiaries determined on a
consolidated basis as of such date, as determined in accordance with GAAP.

     "Current Liabilities" shall mean, at any date, the aggregate of the current
      -------------------
liabilities of  NMT Medical, Inc. and its consolidated Subsidiaries determined
on a consolidated basis as of such date, as determined in accordance with GAAP;

provided that at all times all outstanding Loans hereunder and under the French
--------
Credit Agreement shall be deemed to be Current Liabilities.

          (d) Tangible Net Worth.  The Borrowers shall not permit Consolidated
              ------------------
Tangible Net Worth of NMT Medical, Inc. and its consolidated Subsidiaries as of
the last day of any calendar quarter during any of the periods set forth below
to be less than the amount set forth below for such period:

<TABLE>
<CAPTION>

                          Period                                Amount
                          ------                                ------
<S>                                                           <C>
   September 30, 1999 to and including December 30, 1999      $16,250,000
   December 31, 1999 to and including December 30, 2000       $17,750,000
   December 31, 2000 to and including December 30, 2001       $21,000,000
   December 31, 2001 and thereafter                           $25,000,000
</TABLE>

As used herein, the term "Consolidated Tangible Net Worth" means (a) the total
                          -------------------------------
assets of NMT Medical, Inc. and its consolidated Subsidiaries on a consolidated
basis as determined in accordance with GAAP, minus (b) the total liabilities of
                                             -----
NMT Medical, Inc. and its consolidated Subsidiaries on a consolidated basis as
determined in accordance with GAAP, minus (c) the total book value of all assets
                                    -----
of NMT Medical, Inc. and its consolidated Subsidiaries properly classified as
intangible assets in accordance with GAAP, including such items as good will,
the purchase price of acquired assets in excess of the fair market value
thereof, trademarks, trade names, service marks, brand names, copyrights,
patents and licenses, and rights with respect to the foregoing, minus (d) all
                                                                -----
amounts representing any write-up in the book value of any assets of NMT
Medical, Inc. and its consolidated Subsidiaries resulting from a revaluation
thereof

                                       31
<PAGE>

subsequent to the date hereof, minus (e) to the extent otherwise includable in
                               -----
the computation of Consolidated Tangible Net Worth, any subscriptions
receivable, minus (f) all amounts representing any ownership interest in Image
            -----
Technology Corp.; provided, however, that in calculating Consolidated Tangible
                  --------  -------
Net Worth no effect shall be given to any foreign currency translations.


                                  ARTICLE VII

                               Events of Default
                               -----------------

          If any of the following events ("Events of Default") shall occur:
                                           -----------------

          (a) the Borrowers shall fail to pay any principal of any Loan or any
     reimbursement obligation in respect of any LC Disbursement when and as the
     same shall become due and payable, whether at the due date thereof or at a
     date fixed for prepayment thereof or otherwise;

          (b) the Borrowers shall fail to pay any interest on any Loan or any
     fee or any other amount (other than an amount referred to in clause (a) of
     this Article) payable under this Agreement, when and as the same shall
     become due and payable, and such failure shall continue unremedied for a
     period of three Business Days;

          (c) any representation or warranty made or deemed made by or on behalf
     of any Borrower or, if applicable, Subsidiary in or in connection with this
     Agreement or any amendment or modification hereof or waiver hereunder, or
     in any report, certificate, financial statement or other document furnished
     pursuant to or in connection with this Agreement or any amendment or
     modification hereof or waiver hereunder, shall prove to have been incorrect
     in any material respect when made or deemed made;

          (d) any Borrower shall fail to observe or perform any covenant,
     condition or agreement contained in Section 5.02, 5.03 (with respect to
     such Borrower's existence), 5.08, 5.09, 5.10 or 5.11 or in Article VI;

          (e) any Borrower shall fail to observe or perform any covenant,
     condition or agreement contained in this Agreement (other than those
     specified in clause (a), (b) or (d) of this Article), and such failure
     shall continue unremedied for a period of 30 days after notice thereof from
     the Lender to the Borrowers;

          (f) any Borrower or Subsidiary shall fail to make any payment (whether
     of principal or interest and regardless of amount) in respect of any
     Material Indebtedness, when and as the same shall become due and payable
     (unless such payment is disputed in good faith and with a reasonable basis
     and the holder of such Material Indebtedness is not exercising any rights
     to enforce such payment);

                                       32
<PAGE>

          (g) any event or condition occurs that results in the acceleration of
     the maturity of or any default or event of default occurring or being
     declared with respect to any Material Indebtedness;

          (h) an involuntary proceeding shall be commenced or an involuntary
     petition shall be filed seeking (i) liquidation, reorganization or other
     relief in respect of any Borrower or Subsidiary or its debts, or of a
     substantial part of its assets, under any  Federal, state or foreign
     bankruptcy, insolvency, receivership or similar law now or hereafter in
     effect or (ii) the appointment of a receiver, trustee, custodian,
     sequestrator, conservator or similar official for any Borrower or
     Subsidiary or for a substantial part of its assets, and, in any such case,
     such proceeding or petition shall continue undismissed for 60 days or an
     order or decree approving or ordering any of the foregoing shall be
     entered;

          (i) any Borrower or Subsidiary shall (i) voluntarily commence any
     proceeding or file any petition seeking liquidation, reorganization or
     other relief under any Federal, state or foreign bankruptcy, insolvency,
     receivership or similar law now or hereafter in effect, (ii) consent to the
     institution of, or fail to contest in a timely and appropriate manner, any
     proceeding or petition described in clause (h) of this Article, (iii) apply
     for or consent to the appointment of a receiver, trustee, custodian,
     sequestrator, conservator or similar official for such Borrower or
     Subsidiary or for a substantial part of its assets, (iv) file an answer
     admitting the material allegations of a petition filed against it in any
     such proceeding, (v) make a general assignment for the benefit of creditors
     or (vi) take any action for the purpose of effecting any of the foregoing;

          (j) any Borrower or Subsidiary shall become unable, admit in writing
     its inability or fail generally to pay its debts as they become due;

          (k) one or more judgments for the payment of money in an aggregate
     amount in excess of $100,000 shall be rendered against any Borrower or
     Subsidiary and the same shall remain undischarged for a period of 30
     consecutive days during which execution shall not be effectively stayed, or
     any action shall be legally taken by a judgment creditor to attach or levy
     upon any assets of any Borrower or Subsidiary to enforce any such judgment
     and such attachment shall not be dissolved within 60 days thereafter;

          (l) an ERISA Event shall have occurred that, in the opinion of the
     Lender, when taken together with all other ERISA Events that have occurred,
     could reasonably be expected to result in liability of any Borrower or
     Subsidiary in an aggregate amount exceeding (i) $25,000 in any year or (ii)
     $100,000 for all periods;

          (m)  a Change in Control shall occur;

          (n) any security document executed and delivered in connection
     herewith shall cease to be in full force and effect, or shall cease to give
     the Lender the Liens, rights, powers and

                                       33
<PAGE>

     privileges purported to be created thereby, superior and prior to the
     rights of all third Persons and subject to no other Liens (except in each
     case to the extent expressly permitted herein or in such security
     document);

          (o) any Borrower shall fail to observe or perform any covenant,
     condition or agreement contained in any security document executed and
     delivered in connection herewith beyond applicable notice and cure periods;
     or

          (p) an Event of Default (as defined therein) shall have occurred under
     the French Credit Agreement;

then, and in every such event (other than an event with respect to any Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Lender may, by notice to the
Borrowers, take either or both of the following actions, at the same or
different times:  (i) terminate the Commitment, and thereupon the Commitment
shall terminate immediately, and (ii) declare the Loans then outstanding to be
due and payable in whole (or in part, in which case any principal not so
declared to be due and payable may thereafter be declared to be due and
payable), and thereupon the principal of the Loans so declared to be due and
payable, together with accrued interest thereon and all fees and other
obligations of the Borrowers accrued hereunder, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrowers; and in case of any event with
respect to any Borrower described in clause (h) or (i) of this Article, the
Commitment shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and other
obligations of the Borrowers accrued hereunder, shall automatically become due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrowers.


                                 ARTICLE VIII

                                 Miscellaneous
                                 -------------

      SECTION 8.01. Notices.  Except in the case of notices and other
                    -------
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:

          (a) if to any Borrower, to it at 27 Wormwood Street, Boston,
     Massachusetts 02210-1625, Attention of Chief Financial Officer (Telecopy
     No. 617-737-0924), with a copy to Hale and Dorr LLP, 60 State Street,
     Boston, Massachusetts 02109, Attention of Steven D. Singer, Esq. (Telecopy
     No. 617-526-5000); and

                                       34
<PAGE>

          (b) if to the Lender, to Brown Brothers Harriman & Co., 40 Water
     Street, Boston, Massachusetts 02109-3661, Attention of Victoria W. Evans,
     Assistant Manager (Telecopy No. 617-772-1138), with a copy to Goodwin,
     Procter & Hoar LLP, Exchange Place, Boston, Massachusetts 02109-2881,
     Attention of Raymond C. Zemlin, P.C. (Telecopy No. 617-523-1231);

Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto.  All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.

      SECTION 8.02  Waivers; Amendments.
                    -------------------

          (a) No failure or delay by the Lender in exercising any right or power
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power.  The rights and remedies of
the Lender hereunder are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of this
Agreement or consent to any departure by any Borrower therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. Without limiting the generality of
the foregoing, the making of a Loan or issuance of a Letter of Credit shall not
be construed as a waiver of any Default, regardless of whether the Lender may
have had notice or knowledge of such Default at the time.

          (b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Lender and the Borrowers.

      SECTION 8.03. Expenses; Indemnity; Damage Waiver.
                    ----------------------------------

          (a) The Borrowers shall pay (i) all reasonable out-of-pocket expenses
incurred by the Lender, including the reasonable fees, charges and disbursements
of counsel for the Lender, in connection with the preparation and administration
of this Agreement or any amendments, modifications or waivers of the provisions
hereof (whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the Lender
in connection with the issuance, amendment, renewal or extension of any Letter
of Credit or any demand for payment thereunder and (iii) all out-of-pocket
expenses incurred by the Lender, including the fees, charges and disbursements
of any counsel for the Lender, in connection with the enforcement or protection
of its rights in connection with this Agreement, including its rights under this
Section, or in connection with the Loans made or Letters of Credit issued
hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of
Credit.

                                       35
<PAGE>

          (b) The Borrowers shall indemnify the Lender, and each Related Party
of the Lender (each such Person being called an "Indemnitee") against, and hold
                                                 ----------
each Indemnitee harmless from, any and all losses, claims, damages, liabilities
and related expenses, including the fees, charges and disbursements of any
counsel for any Indemnitee, incurred by or asserted against any Indemnitee
arising out of, in connection with, or as a result of (i) the execution or
delivery of this Agreement or any agreement or instrument contemplated hereby,
the performance by the parties hereto of their respective obligations hereunder
or the consummation of the Transactions or any other transactions contemplated
hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom
(including any refusal by the Lender to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (iii) any actual
or alleged presence or release of Hazardous Materials on or from any property
owned or operated by any Borrower or Subsidiary, or any Environmental Liability
related in any way to any Borrower or Subsidiary, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
                                                         --------
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or wilful misconduct of such Indemnitee.

          (c) To the extent permitted by applicable law, no Borrower shall
assert, and each Borrower hereby waives, any claim against any Indemnitee, on
any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement or any agreement or instrument
contemplated hereby, the Transactions, any Loan or Letter of Credit or the use
of the proceeds thereof.

          (d) All amounts due under this Section shall be payable not later than
five Business Days after written demand therefor.

      SECTION 8.04. Successors and Assigns.  The provisions of this Agreement
                    ----------------------
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that no Borrower may
assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of the Lender (and any attempted assignment or
transfer by the Borrower without such consent shall be null and void). Nothing
in this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby and, to the extent expressly contemplated hereby, the Related
Parties of the Lender) any legal or equitable right, remedy or claim under or by
reason of this Agreement.

      SECTION 8.05. Survival; Nature of Obligations.  All covenants, agreements,
                    -------------------------------
representations and warranties made by any Borrower herein and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement shall be joint and several obligations of all of the Borrowers,
and shall be considered to have been relied upon by the other parties hereto and
shall survive the execution and delivery of this Agreement and the making of any
Loans and issuance of any Letters of Credit, regardless

                                       36
<PAGE>

of any investigation made by any such other party or on its behalf and
notwithstanding that the Lender may have had notice or knowledge of any Default
or incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable
under this Agreement is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Commitment has not expired or terminated. The
provisions of Sections 2.11, 2.12 and 8.03 shall survive and remain in full
force and effect regardless of the consummation of the transactions contemplated
hereby, the repayment of the Loans, the expiration or termination of the Letters
of Credit and the Commitment or the termination of this Agreement or any
provision hereof.

      SECTION 8.06. Counterparts; Integration; Effectiveness.  This Agreement
                    ----------------------------------------
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract.  This Agreement, the other
documents contemplated hereby and any separate letter agreements with respect to
fees payable to the Lender constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Lender and when the Lender
shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.  Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.

      SECTION 8.07. Severability.  Any provision of this Agreement held to be
                    ------------
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

      SECTION 8.08. Right of Setoff.  If an Event of Default shall have occurred
                    ---------------
and be continuing, the Lender and each of its Affiliates is hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations at any time owing
by the Lender or such Affiliate to or for the credit or the account of any
Borrower against any of and all the obligations of the Borrowers now or
hereafter existing under this Agreement, irrespective of whether or not the
Lender shall have made any demand under this Agreement and although such
obligations may be unmatured. The rights of the Lender under this Section are in
addition to other rights and remedies (including other rights of setoff) which
it may have.

                                       37
<PAGE>

      SECTION 8.09. Governing Law; Jurisdiction; Consent to Service of Process.
                    ----------------------------------------------------------

          (a) This Agreement shall be construed in accordance with and governed
by the law of the Commonwealth of Massachusetts.

          (b) Each of the Borrowers hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
Superior Court of the Commonwealth of Massachusetts sitting in Suffolk County
and of the United States District Court for the District of Massachusetts, and
any appellate court from any thereof, in any action or proceeding arising out of
or relating to this Agreement, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such Commonwealth of Massachusetts or, to the extent permitted
by law, such Federal court.  Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.  Nothing in this Agreement shall affect any right that the
Lender may otherwise have to bring any action or proceeding relating to this
Agreement against any Borrower or its properties in the courts of any
jurisdiction.

          (c) Each of the Borrowers hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement in any court
referred to in paragraph (b) of this Section.  Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

          (d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 8.01.  Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.

      SECTION 8.10. WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO
                    --------------------
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

                                       38
<PAGE>

      SECTION 8.11. Headings.  Article and Section headings and the Table of
                    --------
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

      SECTION 8.12. Confidentiality.  The Lender agrees to maintain the
                    ---------------
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates' directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this Agreement,
(e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or the enforcement of rights
hereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section, to any assignee of or participant in, or any
prospective assignee of or participant in, any of its rights or obligations
under this Agreement, (g) with the consent of the Borrowers or (h) to the extent
such Information (i) becomes publicly available other than as a result of a
breach of this Section or (ii) becomes available to the Lender on a
nonconfidential basis from a source other than any Borrower. For the purposes of
this Section, "Information" means all information received from the Borrowers or
               -----------
any Subsidiary relating to the Borrowers and the Subsidiaries or their
businesses, other than any such information that is available to the Lender on a
nonconfidential basis prior to disclosure by the Borrowers or such Subsidiary;
provided that, in the case of information received from the Borrowers or any
--------
Subsidiary after the date hereof, such information is clearly identified at the
time of delivery as confidential.  Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.

                  [Remainder of Page Intentionally Left Blank]

                                       39
<PAGE>

   IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
 executed by their respective authorized officers as of the day and year first
                                 above written.


                                 NMT MEDICAL, INC.


                                 By: /s/ Thomas M. Tully
                                    ---------------------------
                                    Name: Thomas M. Tully
                                    Title: President


                                 NMT HEART, INC.


                                 By: /s/ Thomas M. Tully
                                    ---------------------------
                                    Name: Thomas M. Tully
                                    Title: President


                                 NMT INVESTMENTS CORP.


                                 By: /s/ Thomas M. Tully
                                    ---------------------------
                                    Name: Thomas M. Tully
                                    Title: President


                                 NMT NEUROSCIENCES
                                 (INTERNATIONAL), INC.


                                 By: /s/ Thomas M. Tully
                                    ---------------------------
                                    Name: Thomas M. Tully
                                    Title: President


                                 NMT NEUROSCIENCES (US), INC.


                                 By: /s/ Thomas M. Tully
                                    ---------------------------
                                    Name: Thomas M. Tully
                                    Title: President

                                       40
<PAGE>

                                 NMT NEUROSCIENCES (IP), INC.


                                 By: /s/ Thomas M. Tully
                                    ---------------------------
                                    Name: Thomas M. Tully
                                    Title: President


                                 NMT NEUROSCIENCES
                                 INNOVASIVE SYSTEMS, INC.


                                 By: /s/ Thomas M. Tully
                                    ---------------------------
                                    Name: Thomas M. Tully
                                    Title: President


                                 BROWN BROTHERS HARRIMAN & CO.


                                 By: /s/ A. Heaton Robertson
                                    -------------------------------
                                    Name: A. Heaton Robertson
                                    Title: Partner

                                       41