**Exhibit 10.65****Consulting Agreement**     THIS AGREEMENT (“Agreement”) is made as of the 16th day of May, 2007 (“EffectiveDate”), by and between Cyberonics, Inc. (“Company”), a Delaware corporation, with a principal placeof business at 100 Cyberonics Blvd., Houston, Texas 77058, and BK Consulting (“Consultant”), a soleproprietorship with offices at 2006 Orchard Country, Houston, Texas 77062.     1. Services. Consultant shall provide technology development services for theCompany, including, but not limited to, participating in product development and improvementprojects, advising the Company in connection with its intellectual property strategy, assisting theCompany with the development of strategic relationships with key clinical researchers and otherselected entities, and providing such other services as may be agreed between Consultant and theCompany (collectively, the “Services”). In providing the Services, Consultant shall report to theCompany’s Chief Executive Officer or his designee (the “Coordinator”).     2. Compensation.          (a) Fees. In exchange for the performance by Consultant of the Services, the Companyshall pay Consultant at the rate of $60,000 per annum, payable monthly in arrears. The Companyshall pay Consultant’s compensation in accordance with the Company’s standard payroll policies foran independent contractor and in accordance with any applicable law or regulation of anygovernmental body. Consultant agrees to submit a properly completed IRS Form W-9.          (b) Reimbursed Expenses. The Company will reimburse Consultant for reasonable andnecessary expenses, including travel expenses, incurred in the actual performance of the Services,provided that the Coordinator has authorized such expenses in advance of the expenditure andprovided that Consultant submits legible copies of receipts for authorized expenses.     3. Confidential Information. Consultant acknowledges that in connection with thisAgreement and the Services provided by Consultant, Consultant may acquire and make use of certainconfidential information of the Company, including, but not limited to, management reports,financial statements, internal memoranda, reports, patient information, strategic businessplans, product development plans, engineering data, pre-clinical and clinical data, clinicalstrategy, regulatory strategy, intellectual property strategy and other materials or records of aproprietary nature (“Confidential Information”). In order to protect the Confidential Information,Consultant agrees not to use such Confidential Information except in connection with the provisionof the Services and not to divulge the Confidential Information to any third party, unless Companyconsents in writing to such use or divulgence or disclosure is required by law. Consultant shallcomply with the applicable federal and state laws and regulations governing the confidentiality ofall patient medical records and peer review information, including the Privacy Regulations underthe Health Insurance Portability and Accountability Act (“HIPAA”). In the event Consultantreceives a request or demand from a third party for the disclosure of Confidential Information,Consultant shall promptly (within three (3) business days after receipt of such request or demand)provide written notice to the Company of such request or demand, including a copy of any writtendocument of such request or demand. On termination of this Agreement, Consultant shall not take orretain, without prior written authorization from Company, any patient records or information orConfidential Information of any kind. The foregoing restrictions on use and disclosure ofConfidential Information will not apply to the extent of information: (i) known to Consultantprior to receipt from Company, (ii) of public knowledge without breach of Consultant’s obligationsunder this Agreement, (iii) rightfully acquired by Consultant from a third party withoutrestriction on disclosure or use, (iv) disclosed by Company to a third party without restriction ondisclosure or use, or (v) as to which and to the extent to which Consultant has received expresswritten
 

 
consent from an authorized officer of Company to disclose or use. Without limiting otherpossible remedies for the breach of this covenant, the parties agree that injunctive or otherequitable relief shall be available to enforce this covenant, such relief to be without thenecessity of posting a bond, cash or otherwise.     4. Invention. Consultant agrees that all inventions, designs, improvements, anddiscoveries, including, but not limited to, all patents, copyrights, trade secrets, know-how, andother intellectual property interests, which relate to nerve stimulation and which are made byConsultant in connection with the Services or using the Company’s facilities, solely or jointlywith others, will be the exclusive property of the Company. Consultant agrees to disclose fullyand promptly to the Company in writing all such inventions, designs, improvements, and discoveries,and Consultant agrees to assign and hereby does assign to the Company all intellectual propertyrights related to such inventions, designs, improvements, and discoveries. Consultant agrees toassist the Company, at the expense of the Company, in obtaining patents and other registrations ofintellectual property rights in the United States and in all foreign countries on all inventions,designs, improvements, and discoveries deemed patentable or otherwise protectable by the Company,and agrees to execute all documents and do all things necessary to obtain such intellectualproperty protection, to vest the Company with full and exclusive titles to such intellectualproperty rights, and to protect the rights against infringement by others.     5. Representations and Warranties of Consultant.          (a) Fraud and Abuse and Related Sanctions. Consultant represents and warrants that hehas not been: (i) sanctioned within the meaning of Social Security Act Section 1128A or anyamendments thereof; (ii) convicted of violating the federal Stark law, federal false claims act,federal anti-kickback statute, federal HIPAA provisions, federal civil money penalties statute, orsimilar state laws; or (iii) debarred, excluded, or suspended from participation in any federal orstate health care program.          (b) Filing of Complaint by Enforcement Agency. Consultant represents and warrantsthat he has not had a complaint filed against him by any enforcement agency, which complaintalleges either felony criminal acts of a violent nature or any crime relating to the practice ofmedicine.          (c) Compliance with Company Policies and Standards. Consultant shall comply withall applicable bylaws, rules, and regulations of the Company, and the policies and procedures ofthe Company, as are in effect from time-to-time. Consultant shall work cooperatively with thepersonnel of the Company.          (d) No Other Restrictive Arrangement. Consultant is not subject to, or a party to,any employment agreement, non-competition covenant, non-disclosure agreement, or other agreement,covenant, understanding, or restriction that would prohibit Consultant from executing thisAgreement and performing fully the duties and responsibilities hereunder.          (e) Disclosure. Consultant shall within three (3) calendar days notify the Company inthe event any representation or warranty by Consultant set forth in this Agreement shall no longerbe true, correct, or complete.     6. Incurring Financial Obligation; Expenses. Consultant may not incur any financialobligation on behalf of the Company without the prior written approval of the Company. Consultantshall be responsible for all expenses incurred in providing Services under this Agreement, unlesssuch expenses are approved in advance by the Coordinator.     7. Term. The term of this Agreement is for one (1) year beginning on the EffectiveDate (“Term”), after which this Agreement shall renew automatically for successive one-year Terms.Consulting Agreement, BK Consulting — Page 2
 

 
     8. Termination.          (a) Termination by Mutual Consent. This Agreement may be terminated at any time bymutual written agreement of the parties.          (b) Optional Termination. This Agreement may be terminated by either of the partieswithout cause by giving the other party thirty (30) calendar days’ prior written notice.          (c) Termination by Company. The Company may terminate this Agreement, effectiveimmediately upon written notice to Consultant, in the event of:               (i) the charging or conviction of Consultant of any crime involving fraud, moralturpitude, or immoral conduct;               (ii) the charging or conviction of Consultant of either felony criminal acts of aviolent nature or any crime relating to the practice of medicine by any enforcement agency;               (iii) (1) any imposition of sanctions against Consultant within the meaning ofSocialSecurity Act Section 1128A or any amendments thereof; (2) conviction of Consultant forviolating the federal Stark law, federal false claims act, federal anti-kickback statute,federal Health Insurance and Portability Act provisions, federal civil money penaltiesstatute, or similar state laws; or (3) any debarment, exclusion, or suspension of Consultantfrom participation in any federal or state health care program;               (iv) the death or permanent disability of Consultant; or               (v) Consultant’s inability at any time to perform the substantial functions ofaconsultant with or without reasonable accommodation for a continuous period of sixty (60)calendar days, in which case the Company shall have the right to terminate this Agreementupon ten (10) calendar days prior written notice to Consultant.     9. Post-Termination Obligations. On termination, the Company’s sole obligation toConsultant will be to pay any then-outstanding unpaid fee for Services actually performed hereunderand to reimburse Consultant for then-outstanding reimbursable expenses. Consultant herebyexpressly agrees that termination of this Agreement prior to the end of the Term will not void,invalidate, or otherwise affect Consultant’s obligations under Section 3 (*Confidential Information*)or the assignment of Consultant’s interests as set forth in Section 5 (*Invention*). Consultantexpressly agrees that the terms of Sections 4 and 5 will survive termination of this Agreement.     10. Non-Assignment. This Agreement is personal to Consultant and cannot be assignedby Consultant or otherwise transferred to any other person or party without the Company’s priorwritten consent. Any assignment without such consent will be cause for immediate terminationof this Agreement by the Company. Any other attempts to transfer will be void. Consultant furtheragrees not to subcontract services under this Agreement, in whole or in part, without the Company’sprior written consent. Consultant’s obligations under this Agreement are binding onConsultant’s heirs, legal representatives, administrators, and executors.     11. Independent Contractor. Consultant’s relationship with the Company hereundershall be that of an independent contractor. It is expressly acknowledged and stipulated byConsultant and the Company that Consultant shall not, for any purpose whatsoever, be considered anemployee, representative,Consulting Agreement, BK Consulting — Page 3
 

 
or agent of the Company. Nothing in this Agreement is intended or shall be construed tocreate an employer/employee relationship, a joint venture relationship, or a lease orlandlord/tenant relationship, or to allow the Company to exercise control or direction over themanner or method in which Consultant performs the Services. Consultant understands and agreesthat: (a) Consultant will not be treated as an employee of the Company for federal tax purposes;(b) the Company will not withhold on behalf of Consultant pursuant to this Agreement any sums forincome tax, unemployment insurance, social security, or any other withholding pursuant to any law,or make available to Consultant any of the benefits afforded to employees of the Company; and (c)all of such payments, withholdings, and benefits, if any, are the sole responsibility ofConsultant. Consultant shall not enter into any Agreements or incur any obligations on theCompany’s behalf or purport to commit the Company in any other manner, without its prior writtenconsent.     12. Entire Agreement. This Agreement constitutes the entire agreement andunderstanding between the parties in respect of the subject matter hereof, and supersedes all prioragreements, understandings and communications between them, whether oral or written, pertaining tothat subject matter. No modification of or addition to this Agreement will be effective unlessmade in writing signed by Consultant and a duly authorized officer of the Company.     13. Governing Law. This Agreement shall be construed and governed according to thelaws of the State of Texas, without giving effect to its conflict of laws provisions.     14. Notice. Notices or communications to be given under this Agreement shall beprovided to the appropriate party in writing either by personal delivery, overnight deliveryservice, confirmed telefacsimile, or registered or certified mail, postage prepaid, to theaddresses first set forth above or to such other addresses and to such other persons as eitherparty may from time to time designate by notice given as herein provided. Such notices orcommunications shall be deemed to have been given upon receipt if by personal delivery, three (3)business days after deposit in the United States mail if sent by first class, registered, orcertified mail, postage prepaid, one (1) business day after delivery if by an overnight deliveryservice, or upon transmission confirmation if by telefacsimile.     **INWITNESS WHEREOF,** the undersigned, intending to be legally bound hereby, have caused thisAgreement to be executed as of the date and year first above written.             Cyberonics, Inc.     BK Consulting             By: /s/ Daniel J. Moore Daniel J. Moore   By: /s/ Reese S. Terry, Jr. Reese S. Terry, Jr.    Chief Executive Officer     Principal  Consulting Agreement, BK Consulting — Page 4