Document:

<PAGE>

                                                                   Exhibit 10.65

                             SETTLEMENT AGREEMENT

     Settlement Agreement between NMT Medical, Inc. ("NMT") and C. Leonard
Gordon ("Gordon") dated as of February 14, 2001.

                                  BACKGROUND
                                  ----------

     1.  NMT employed Gordon as Acting President and Chief Executive Officer
("CEO") commencing April 8, 2000.  Gordon was removed within a month as Acting
President and CEO.

     2.  Gordon has asserted that NMT, by failing to grant him options to
acquire 60,000 shares of NMT common stock and by replacing him as Acting
President and CEO, was in breach of agreements between Gordon and NMT.

     3.  Gordon has previously made demand upon the Board of Directors of NMT
(the "Board"), by means of, inter alia, various draft memoranda addressed to the
Board (the "Memoranda"), to bring suit against certain entities, stating his
intention to bring such suit derivatively if the Board should decline the
demand.  Gordon has withdrawn said demand, but has requested reimbursement from
NMT for the legal fees he expended on behalf of NMT in connection with said
proposed suit, which he represents were exclusively fees paid or owed to the law
firm of Piper Marbury Rudnick & Wolfe LLP.

     4.  The Board has previously agreed to an arbitration of these matters by a
designated lawyer, but each of NMT and Gordon wishes to settle the foregoing
matters now.

     NOW THEREFORE, in consideration of the premises, the agreement hereinafter
set forth and the payment, options and releases set forth in this Settlement
Agreement, the parties hereto hereby agree as follows:

1.  NMT will pay Gordon $100,000 promptly following the execution of this
Settlement Agreement.

2.  NMT will grant Gordon a non-statutory option to purchase all or any part of
60,000 shares of NMT common stock, at the per share exercise price equal to the
closing price of NMT's common stock on the Nasdaq National Market on the close
of business on the date hereof.  Said option shall be evidenced by an option
agreement dated the date hereof  substantially in the form of Exhibit A to this
Settlement Agreement.

3.  In consideration of the foregoing, Gordon does hereby release NMT, its
successors and assigns (collectively, the "Released Parties"), and shall hold
them harmless from and against any and all claims, causes of action, loss, cost
or expense relating to the subject matter set forth in paragraph 2 under
"Background", including but not limited to any legal
<PAGE>

expenses in connection with Gordon's aforesaid employment by NMT as Acting
President and CEO. Gordon does hereby further release the Released Parties, and
shall hold them harmless from and against, any and all claims, loss, cost or
expense relating to any legal or other expenses, including those owed to the law
firm of Piper Marbury Rudnick & Wolfe LLP in connection with the aforesaid
demand for a suit described in paragraph 3 under "Background". Any claims
relating to the events and circumstances set forth in paragraph 2 of
"Background" and any claims relating to the events and circumstances set forth
in paragraph 3 of "Background" are collectively referred to herein as the
"Claims."

4.  Gordon, on behalf of himself individually and as a stockholder of NMT,
hereby covenants not to sue any of the Released Parties, their respective
attorneys, agents and employees, J. H. Whitney & Co. (together with each of its
affiliates), Jeffrey R. Jay, M.D., Jeffrey F. Thompson, Fletcher Spaght, Inc.,
R. John Fletcher, The Children's Hospital Boston, or James E. Lock, M.D. in
connection with or relating to any of the Claims.

NMT Medical, Inc.

By:  /s/ John E. Ahern                         /s/ C. Leonard Gordon
     -----------------                         ---------------------
     John E. Ahern                             C. Leonard Gordon
     President and Chief Executive Officer

                                      -2-
<PAGE>

                                   EXHIBIT A
                               NMT MEDICAL, INC.

                  NON-STATUTORY STOCK OPTION LETTER AGREEMENT

                            1996 STOCK OPTION PLAN

TO:  C. Leonard Gordon

  We are pleased to inform you that you have been granted an option (the
"Option") to purchase 60,000 shares (the "Shares") of the common stock,
$.001 par value per share (the "Common Stock"), of NMT Medical, Inc. (the
"Company"), at an exercise price of $1.25 per share (the "Exercise Price").
The date of grant of the Option is February 14, 2001 (the "Grant Date").
A copy of the Plan is attached, and the provisions thereof, including, without
limitation, those relating to withholding taxes, are incorporated into this
Agreement by reference.

  The terms of the option are as set forth in the Plan and in this Agreement.
The most important of the terms set forth in the Plan are summarized as follows:

  Term.  The term of the option is seven (7) years from Grant Date, unless
sooner terminated.

  Exercise.  During your lifetime only you can exercise the Option. The Plan
also provides for exercise of the Option by the personal representative of your
estate or the beneficiary thereof following your death. You may use the Notice
of Exercise in the form attached to this Agreement when you exercise the Option.

  Payment for Shares.  The Option may be exercised by the delivery of:

     (a)  Cash, personal check (unless at the time of exercise the Plan
Administrator determines otherwise), or bank certified or cashier's checks; or

     (b)  Unless the Plan Administrator in its sole discretion determines
otherwise, a properly executed Notice of Exercise, together with irrevocable
instructions to a broker to promptly deliver to the Company the amount of sale
or loan proceeds to pay the Exercise Pice.

  Termination.  In the event that your relationship with the Company ceases for
any reason other than termination for cause, death, or total disability, and
unless by its terms the Option sooner terminates or expires, the Plan
Administrator hereby waives Section 5.7 of the Plan such that the Option shall
continue to vest and remain exercisable in accordance with the provisions hereof
notwithstanding such cessation.  In the event that your relationship with the
Company ceases by reason of termination for cause, death or total disability,
then the provisions of Section 5.7 and Section 5.8 of the Plan shall govern the
Option.

  Transfer of Option.  The Option is not transferable except by will or by the
applicable laws of descent and distribution or pursuant to a qualified domestic
relations order.
<PAGE>

  Vesting.  During the period of your continuous relationship with the Company
or any subsidiary thereof,  the Option shall be (i) immediately exercisable with
respect to 12,500 shares of Common Stock on the Grant Date and (ii) shall become
exercisable with respect to an additional 1,250 shares Common Stock on the
eighth day of each month thereafter until fully vested.  Notwithstanding the
foregoing, the Option shall become immediately exercisable in the event of a
Change of Control of the Company.  For purposes of this Agreement, a "Change of
Control of the Company" shall be deemed to have occurred only upon (a) any
merger or consolidation of the Company with or into another entity as a result
of which the Common Stock is converted into or exchanged for cash or the right
to receive cash, securities, or other property, (b) any exchange of all or
substantially all shares of the Company for cash, securities or other property
pursuant to a statutory share exchange transaction or (c) any sale of all or
substantially all of the assets of the Company.

  YOU SHOULD CONSULT WITH YOUR TAX ADVISOR CONCERNING THE RAMIFICATIONS TO YOU
OF HOLDING OR EXERCISING YOUR OPTIONS OR HOLDING OR SELLING THE SHARES
UNDERLYING SUCH OPTIONS.

  You understand that, during any period in which the Shares which may be
acquired pursuant to your Option are subject to the provisions of Section 16 of
the Securities Exchange Act of 1934, as amended (and you yourself are also so
subject), in order for your transactions under the Plan to qualify for the
exemption from Section 16(b) provided by Rule 16b-3, a total of six months must
elapse between the grant of the Option and the sale of Shares underlying the
Option.

  Please execute the Acceptance and Acknowledgement set forth below on the
enclosed copy of this Agreement and return it to the undersigned.

  Very truly yours,

  NMT MEDICAL, INC.

  By: /s/ John E. Ahern
      ----------------------------------------------
      Name:  John E. Ahern
      Title:   President and Chief Executive Officer

                                      -2-
<PAGE>

                        ACCEPTANCE AND ACKNOWLEDGEMENT

  I, a resident of the State of New York, accept the stock option described
above granted under the NMT Medical, Inc. 1996 Stock Option Plan (the "Plan"),
and acknowledge receipt of a copy of this Agreement, including a copy of the
Plan. I have read and understand the Plan.

Dated:           February 14, 2001
                 -----------------

Taxpayer I.D. Number:
                      ----------------------

Signature:           /s/ C. Leonard Gordon
                     ---------------------

  By his or her signature below, the spouse of the Optionee, if such Optionee is
legally married as of the date of such Optionee's execution of this Agreement,
acknowledges that he or she has read this Agreement and the Plan and is familiar
with the terms and provisions thereof, and agrees to be bound by all the terms
and conditions of this Agreement and the Plan.

Dated:
                      ----------------------

Spouse's Signature:
                      ----------------------

Printed Name:
                      ----------------------

                                      -3-
<PAGE>

                               NOTICE OF EXERCISE

  The undersigned, pursuant to an incentive Stock Option Letter Agreement (the
"Agreement") between the undersigned and NMT Medical, Inc. (the "Company"),
hereby irrevocably elects to exercise purchase rights represented by the
Agreement, and to purchase thereunder [______] shares (the "Shares") of the
Company's common stock, $.001 par value per share (the "Common Stock"), covered
by the Agreement and herewith makes payment in full therefor.

  The undersigned acknowledges that the number of shares of Common Stock subject
to the Agreement is hereafter reduced by the number of shares of Common Stock
represented by the Shares.

                                  Very truly yours,

                                  ---------------------------------------------
                                  Name:

                                  Social Security No.
                                                      -------------------------

                                  Address:
                                          -------------------------------------

                                  ---------------------------------------------

                                     -4-<PAGE>

                                                                   Exhibit 10.66
                               LICENSE AGREEMENT

     This Agreement is made and entered into as of October, 2000 (the Effective
Date), by and between CHILDREN'S MEDICAL CENTER CORPORATION, a charitable
corporation duly organized and existing under the laws of the Commonwealth of
Massachusetts and having its principal office at 300 Longwood Avenue, Boston,
Massachusetts, 02115, U.S.A. (hereinafter referred to as "CMCC"), and NMT, Inc.
a business corporation organized and existing under the laws of the State of
Delaware and having its principal office at 27 Wormwood Street, Boston, MA 02210
hereinafter referred to as "Licensee").

     WHEREAS, CMCC is the owner of certain Study Data (as that term shall be
defined hereafter) and has the right to grant licenses for the use thereof;
desires to see Study Data utilized in the public interest and is willing to
grant a license thereunder on the terms and conditions described herein;

     WHEREAS, Licensee desires to obtain a limited exclusive license under the
terms and conditions of this Agreement.

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto agree as follows:

                           ARTICLE I.    DEFINITIONS

     For the purposes of this Agreement, the following words and phrases shall
have the meanings set forth below:

A.  "Affiliate" shall mean any company or other legal entity controlling,
controlled by or under common control with Licensee.  For purposes of the
definition of "Affiliate" the term "control" shall mean:  (i) in the case of a
corporate entity, the direct or indirect ownership of at least a majority of the
stock or participating shares entitled to vote for the election of directors of
that entity; (ii) in the case of a partnership, the power customarily held by a
general partner to direct the management and policies of such partnership; or
(iii) in the case of a joint venture, whether in corporate, partnership or other
legal form, a more than nominal economic interest and managerial role.

B.  "License Field" shall mean the preparation and prosecution of applications
to support a Product Marketing Application to the Food and Drug Administration
for Ventricular Septal Defect ("VSD") Closure using the CardioSEAL or STARflex
device.

C.  "Licensee" shall mean Licensee and/or its successor(s) or assignee(s) and/or
its Affiliates.

D.  "Study Data" shall mean data and results of the studies relating to VSD
Closure (including, but not limited to data obtained during the conduct of the
High Risk CardioSEAL study, the Clamshell registry and the STARflex VSD Study)
[FILL IN IRB NUMBERS] conducted under the supervision of Dr. Kathy Jenkins,
between [FILL IN DATES OF STUDY].
<PAGE>

E.  "Sublicensee" shall mean a person or entity unaffiliated with Licensee to
who Licensee has granted an arm's length sublicense under this Agreement.

                             ARTICLE II.    GRANT

     CMCC hereby grants to Licensee a exclusive license to use Study Data solely
in the License Field for Five (5) years from the Effective Date of this
Agreement which shall be the term thereof, unless it shall be sooner terminated
as hereinafter provided.

                         ARTICLE III.    DUE DILIGENCE

     Licensee shall use the Study Data in a diligent manner to seek regulatory
approval for the CardioSEAL and/or STARflex device in the treatment of VSD with
the United States Food and Drug Administration ("FDA").

                            ARTICLE IV.    PAYMENTS

A.    For the provision of the High Risk current and updated CardioSEAL data,
NMT will make four quarterly payments of $25,000 each on January 1, 2001,
April 1, 2001, July 1, 2001, and October 1, 2001.

B.    For provision of the existing Clamshell registry data, NMT will make a
single payment of $25,000 within thirty (30) days of the execution of this
Agreement. If updated information on Clamshell patients is requested by the FDA,
these data will be provided at no additional charge to NMT.

C.    If STARflex data is to be provided to NMT either as part of the initial
application or as a supplement, a payment of $25,000 will be made on January 1,
2002.

        ARTICLE V.    UNIFORM INDEMNIFICATION AND INSURANCE PROVISIONS

A.  Licensee shall indemnify, defend and hold harmless CMCC, its corporate
affiliates, current or future directors, trustees, officers, faculty, medical
and professional staff, employees, students and agents and their respective
successors, heirs and assigns (the "Indemnitees"), against any liability,
damage, loss or expense (including reasonable attorney's fees and expenses of
litigation) incurred by or impose upon the Indemnitees or any one of them in
connection with any claims, suits, actions, demands or judgments arising out of
any theory of product liability (including, but not limited to, actions in the
form of tort, warranty, or strict liability) concerning any product, process or
service made, used or sold pursuant to any right or license granted under this
Agreement.

B.  Licensee's indemnification under Article VIII, Paragraph A above shall not
apply to any liability, damage, loss or expense to the extent that it is
directly attributable to the negligent activities, reckless misconduct or
intentional misconduct of the Indemnitees.

                                       2
<PAGE>

C.  Licensee agrees, at its own expense, to provide attorneys reasonably
acceptable to CMCC to defend against any actions brought or filed against any
party indemnified hereunder with respect to the subject of indemnity contained
herein, whether or not such actions are rightfully brought.

D.  Beginning at the time as any such product, process or service is being
commercially distributed or sold (other than for the purpose of obtaining
regulatory approvals) by Licensee or by a sublicensee, Affiliate or agent of
Licensee, Licensee shall, at its sole cost and expense, procure and maintain
commercial general liability insurance in amounts not less than $2,000,000 per
incident and $2,000,000 annual aggregate and naming the Indemnitees as
additional insureds.  Such commercial general liability insurance shall provide
(i)  product liability coverage and (ii) contractual liability coverage for
Licensee's indemnification under Article VIII, Paragraphs A through C of this
Agreement.  If Licensee elects to self-insure all or part of the limits
described above (including deductibles or retentions which are in excess of
$250,000 annual aggregate), such self-insurance program must be acceptable to
CMCC and the Risk Management Foundation of the Harvard Medical Institutions,
Inc.  The minimum amount of coverage required under this Article VIII, Paragraph
E shall not be construed to create a limited of Licensee's liability with
respect to its indemnification under Article VIII, Paragraphs A through C of
this Agreement.

E.  Licensee shall provided CMCC with written evidence of such insurance upon
request of CMCC.  Licensee shall provide CMCC with written notice at least
fifteen (15) days prior to the cancellation, non-renewal or material change in
such insurance.  If Licensee does not obtain replacement insurance providing
comparable coverage within such fifteen (15) day period, CMCC shall have the
right to terminate this Agreement effective at the end of such fifteen (15) day
period without notice of any additional waiting periods.

F.  Licensee shall maintain such commercial general liability insurance during
(i) the period that any such product or service is being commercially
distributed or sold (other than for the purpose of obtaining regulatory
approvals) by Licensee or by a sublicensee, Affiliate or agent of Licensee and
(ii) a reasonable period after the period referred to above, which in no event
shall be less than fifteen (15) years.

G.  Article VIII, Paragraphs A through F shall survive expiration or termination
of this Agreement.

H.  CMCC MAKES NO WARRANTY, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION,
ANY IMPLIED WARRANTY OF MERCHANTABILITY OR ANY IMPLIED WARRANTY OF FITNESS FOR A
PARTICULAR PURPOSE WITH RESPECT TO ANY PATENT, TRADEMARK, SOFTWARE, TRADE
SECRET, TANGIBLE RESEARCH PROPERTY, INFORMATION OR DATA LICENSED OR OTHERWISE
PROVIDED TO LICENSEE HEREUNDER AND HEREBY DISCLAIMS THE SAME.

                                       3
<PAGE>

                        ARTICLE VI.    NON-USE OF NAMES

     Licensee shall not use the name of Children's Medical Center Corporation
nor the name of any of its corporate affiliates or employees, not any adaptation
thereof, in any advertising, promotional or sales literature without prior
written consent obtained from CMCC in each case, except that Licensee may state
that it is licensed by CMCC under one or more of the patents and/or applications
comprising the Patent Rights, and Licensee may comply with disclosure
requirements of all applicable laws relating to its business, including United
States and state security laws.

                          ARTICLE VII.    ASSIGNMENT

A.  Except as otherwise provided herein, this Agreement is not assignable in
whole or in part, and any attempt to do so shall be void and of no effect.

B.  CMCC may assign this Agreement at any time to any corporate affiliate of
CMCC without the prior consent of Licensee.

C.  Except as provided in Article XI, Paragraph D below, Licensee may assign
this Agreement to another entity only with the prior written consent of CMCC,
which consent shall not be unreasonably withheld or delayed.

D.  Notwithstanding anything herein to the contrary, in the even Licensee merges
with another entity, is acquired by another entity, or sells all or
substantially all of its assets to another entity, Licensee may assign its
rights and obligations hereunder to, in the event of a merger or acquisition,
the surviving entity, and in the event of a sale, the acquiring entity, without
CMCC's consent so long as:  (i) Licensee is not then in breach of this
Agreement; (ii) the proposed assignee has a net worth at least equivalent to the
net worth Licensee had as of the date of this Agreement; (iii) the proposed
assignee has available resources and sufficient scientific, business and other
expertise comparable to Licensee in order to satisfy its obligations hereunder;
(iv) Licensee provides written notice of the assignment to CMCC, together with
documentation sufficient to demonstrate the requirements set forth in
subparagraphs (i) through (iii) above, at least thirty (3) days prior to the
effective date of the assignment; and (v) CMCC receives from the assignee, in
writing, at least thirty (30) days prior to the effective date of the
assignment:  (a) reaffirmation of the terms of this Agreement; (b) an agreement
to be bound by the terms of this Agreement; and (c) an agreement to perform the
obligations of Licensee under this Agreement.

                     ARTICLE VIII.    TERM AND TERMINATION

A.  The term of this Agreement shall be not less than five (5).

B.  CMCC may terminate this Agreement immediately upon the bankruptcy,
insolvency, liquidation, dissolution or cessation of operations of Licensee; or
the filing of

                                       4
<PAGE>

any voluntary petition for bankruptcy, dissolution, liquidation or winding-up of
the affairs of Licensee; or any assignment by Licensee for the benefit of
creditors; or the filing of any involuntary petition for bankruptcy,
dissolution, liquidation or winding-up of the affairs of Licensee which is not
dismissed within ninety (90) days of the date on which it is filed or commenced.

C.  CMCC may terminate this Agreement upon thirty (30) days prior written notice
in the event of Licensee's failure to make to CMCC payments due and payable
hereunder in a timely manner, unless Licensee shall make all such payments to
CMCC within said thirty (30) day period.  Upon the expiration of the thirty (30)
day period, if Licensee shall not have made all such payments to CMCC, the
rights, privileges and licenses granted hereunder shall terminate.

D.  Except as otherwise provided in Paragraph C above, CMCC may terminate this
Agreement upon sixty (60) days prior written notice in the event of Licensee's
breach or default of any material term or condition or warranty contained in
this Agreement, unless Licensee shall cure such breach to CMCC's reasonable
satisfaction within said sixty (60) day period.  Upon the expiration of the
sixty (60) day period, if Licensee shall not have cured said breach to the
reasonable satisfaction of CMCC, the rights, privileges and license granted
hereunder shall terminate.

E.  Licensee shall have the right to terminate this Agreement at any time upon
thirty (30) prior written notice to CMCC if CMCC shall fail to deliver data in a
timely manner.

           ARTICLE X.    PAYMENTS, NOTICES AND OTHER COMMUNICATIONS

A.  All payments, notices, reports and/or other communications made in
accordance with this Agreement, shall be sufficiently made or given on the date
of the mailing if delivered by hand, by facsimile or sent by first class mail
postage prepaid and addressed as follows:

     In the case of CMCC:

          Chief Intellectual Property Officer
          Intellectual Property Office
          Children's Hospital
          300 Longwood Avenue
          Boston, MA 02115

     In the case of Licensee:

          President
          NMT, Inc.
          27 Wormwood Street
          Boston, MA 02210

     or such other address as either party shall notify the other in writing.

                                       5
<PAGE>

                       ARTICLE XI.    GENERAL PROVISIONS

A.  All rights and remedies hereunder will be cumulative and not alternative,
and this Agreement shall be construed and governed by the laws of the
Commonwealth of Massachusetts.

B.  This Agreement may be amended only by written agreement signed by the
parties.

C.  It is expressly agreed by the parties hereto that CMCC and Licensee are
independent contractors and nothing in this Agreement is intended to create an
employer relationship, joint venture, or partnership between the parties.  No
party has the authority to bind the other.

D.  This Agreement constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes all proposals, negotiations
and other communications between the parties, whether written or oral, with
respect to the subject matter hereof.

E.  If any provisions of this Agreement shall be held to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions of this Agreement shall not be impaired thereby.

F.  This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original as against the party whose signature appears thereon
but all of which taken together shall constitute but one and the same
instrument.

G.  The failure of either party to assert a right to which it is entitled or to
insist upon compliance with any term or condition of this Agreement shall not
constitute a waiver of that right or excuse a similar or subsequent failure to
perform any such term or condition by the other party.

H.  Licensee agrees to mark any Licensed Products sold in the United States with
all applicable United States patent numbers.  All Licensed Products shipped to
or sold in other countries shall be marked in such a manner as to conform with
the patent laws and practices of the country of manufacture or sale.

I.  Each party hereto agrees to execute, acknowledge and deliver such further
instruments and do all such further acts as may be necessary or appropriate to
carry out the purposes and intent of this Agreement.

J.  The paragraph headings contained in this Agreement are for references
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.

                                       6
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
last written below.

CHILDREN'S MEDICAL CENTER CORPORATION           LICENSEE

By: /s/ William New                             By: /s/ John E. Ahern
    -----------------------------------------       ---------------------------
Name: William New                               Name: John Ahern
      ---------------------------------------         -------------------------

Title: Vice President Research Administration   Title: President / CEO
       --------------------------------------          ------------------------

Date: 1/11/01                                   Date: 1/5/01
      ---------------------------------------         -------------------------

                                       7

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