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EXHIBIT 10.4    
    

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD OR OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED, IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION
UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

 
 

No.
  STOCK SUBSCRIPTION WARRANT    
    
    To Purchase Series B Preferred Stock of    
    
    NUVASIVE, INC. (the "Company")    
    
    DATE OF INITIAL ISSUANCE: June 27, 2000

    

        THIS CERTIFIES THAT for value received, TBCC FUNDING TRUST II or
its registered assigns (hereinafter called the "Holder") is entitled to purchase from the Company, at any time during the Term of this Warrant, Eighty-One Thousand Eight Hundred Twenty
(81,820) shares of Series B Preferred Stock, $0.001 par value, of the Company (the "Series B Preferred Stock"), at the Warrant Price, payable as provided herein. The exercise of this
Warrant shall be subject to the provisions, limitations and restrictions herein contained, and may be exercised in whole or in part. 

SECTION 1.    Definitions.    

        For
all purposes of this Warrant, the following terms shall have the meanings indicated: 

        Series B Preferred Stock—shall mean and include the Company's authorized Series B
Preferred Stock, $0.001 par value, as constituted at the date hereof. 

        Exchange Act—shall mean the Securities Exchange Act of 1934, as amended from time to time. 

        Securities Act—the Securities Act of 1933, as amended. 

        Term of this Warrant—shall mean the period beginning on the date of initial issuance hereof and
ending on June 27, 2007. 

        Warrant Price—$2.75 per share, subject to adjustment in accordance with Section 5 hereof. 

        Warrants—this Warrant and any other Warrant or Warrants issued in connection with a Commitment
Letter dated April 11, 2000 executed by the Company and Transamerica Business Credit Corporation (the "Commitment Letter") to the original holder of this Warrant, or any transferees from such
original holder or this Holder permitted hereunder. 

        Warrant Shares—shares of Series B Preferred Stock purchased or purchasable by the Holder
of this Warrant upon the exercise hereof. 

SECTION 2.    Exercise of Warrant.    

        2.1    Procedure for Exercise of
Warrant.    To exercise this Warrant in whole or in part (but not as to any fractional share of Series B Preferred Stock), the Holder shall
deliver to the Company at its office referred to in Section 13 hereof at any time and from time to time during the Term of this Warrant: (i) the Notice of Exercise in the form attached
hereto, (ii) cash, certified or official bank check payable to the order of the Company, wire transfer of funds to the Company's account, or evidence of any indebtedness of the Company to the
Holder (or any combination of any of the foregoing) in the amount of the Warrant Price for each share being purchased, and (iii) this Warrant. Notwithstanding any provisions herein to the
contrary, if the Current Market Price (as defined in Section 5) is greater than the Warrant Price (at the date of calculation, as set forth below), in lieu of exercising this Warrant as
hereinabove permitted, the Holder may elect to receive shares of Series B 

 

Preferred
Stock equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the office of the Company referred to in
Section 13 hereof, together with the Notice of Exercise, in which event the Company shall issue to the Holder that number of shares of Series B Preferred Stock computed using the
following formula: 

CS =
WCS × (CMP-WP)

CMP 

	 	 	Where	 	 
	

 	
 	

CS	
 	

equals the number of shares of Series B Preferred Stock to be issued to the Holder
	

 	
 	

WCS	
 	

equals the number of shares of Series B Preferred Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being exercised (at the date of such calculation)
	

 	
 	

CMP	
 	

equals the Current Market Price (at the date of such calculation)
	

 	
 	

WP	
 	

equals the Warrant Price (as adjusted to the date of such calculation)

In
the event of any exercise of the rights represented by this Warrant, a certificate or certificates for the shares of Series B Preferred Stock so purchased, registered in the name of the
Holder or such other name or names as may be designated by the Holder to the extent permitted hereunder, shall be delivered to the Holder hereof within a reasonable time, not exceeding fifteen
(15) days, after the rights represented by this Warrant shall have been so exercised; and, unless this Warrant has expired, a new Warrant representing the number of shares (except a remaining
fractional share), if any, with respect to which this Warrant shall not then have been exercised shall also be issued to the Holder hereof within such time. The person in whose name any certificate
for shares of Series B Preferred Stock is issued upon exercise of this Warrant shall for all purposes be deemed to have become the holder of record of such shares on the date on which the
Warrant was surrendered and payment of the Warrant Price and any applicable taxes was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and
payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on
which the stock transfer books are open. 

        2.2    Transfer Restriction
Legend.    Each certificate for Warrant Shares shall bear a legend substantially similar to the following legend (and any additional legend required by
(i) any applicable state securities laws and (ii) any securities exchange upon which such Warrant Shares may, at the time of such exercise, be listed) unless at the time of exercise such
Warrant Shares shall be registered under the Securities Act: 

"THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION
UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS." 

Any
certificate issued at any time in exchange or substitution for any certificate bearing such legend (except a new certificate issued upon completion of a public distribution under a registration
statement of the securities represented thereby) shall also bear such legend unless, in the opinion of counsel for the holder thereof (which counsel shall be reasonably satisfactory to counsel for the
Company) the securities represented thereby are not, at such time, required by law to bear such legend. 

2

 

SECTION 3.    Covenants as to Series B Preferred Stock.    The Company covenants and agrees that
all shares of Series B Preferred Stock that may be issued upon the exercise of the rights represented by this
Warrant will, upon issuance, pursuant to the terms hereof be validly issued, fully paid and nonassessable, and free from all taxes, liens and charges with respect to the issue thereof. The Company
further covenants and agrees that it will pay when due and payable any and all federal and state taxes which may be payable in respect of the issue of this Warrant or any Series B Preferred
Stock or certificates therefor issuable upon the exercise of this Warrant. The Company further covenants and agrees that the Company will at all times have authorized and reserved, free from
preemptive rights, a sufficient number of shares of Series B Preferred Stock to provide for the exercise of the rights represented by this Warrant. The Company further covenants and agrees that
if any shares of capital stock to be reserved for the purpose of the issuance of shares upon the exercise of this Warrant require registration with or approval of any governmental authority under any
federal or state law before such shares may be validly issued or delivered upon exercise, then the Company will in good faith and as expeditiously as possible endeavor to secure such registration or
approval, as the case may be. If and so long as the Series B Preferred Stock issuable upon the exercise of this Warrant is listed on any national securities exchange, the Company will, if
permitted by the rules of such exchange, list and keep listed on such exchange, upon official notice of issuance, all shares of such Series B Preferred Stock issuable upon exercise of this
Warrant. 

        If,
at any time during the Term of this Warrant, there are any dilutive issuances that result in a conversion price adjustment to the Series B Preferred Stock pursuant to
Article IV, Section B(3)(c) of the Company's Amended and Restated Certificate of Incorporation, as amended (the "Certificate"), the number of shares of Common Stock issuable upon the
conversion of the Series B Preferred Stock issuable upon the exercise of this Warrant shall be adjusted as set forth in Article IV, Section B(3)(c) of the Certificate. The
conversion rate from the Series B Preferred Stock to Common Stock shall initially be on a 1 to 1 basis. 

SECTION 4.    Adjustment of Number of Shares.    Upon each adjustment of the Warrant Price as provided
in Section 5, the Holder shall thereafter be entitled to purchase, at the Warrant Price resulting from such adjustment, the number of shares (calculated to the nearest tenth of a share)
obtained by multiplying the Warrant Price in effect immediately prior to such adjustment by the number of shares purchasable pursuant hereto immediately prior to such adjustment and dividing the
product thereof by the Warrant Price resulting from such adjustment. 

SECTION 5.    Adjustment of Warrant Price.    The Warrant Price shall be subject to adjustment from
time to time as follows: 

        (i)  If,
at any time during the Term of this Warrant, the number of shares of Series B Preferred Stock outstanding is increased by a stock dividend payable in shares
of Series B Preferred Stock or by a subdivision or split-up of shares of Series B Preferred Stock, then, following the record date fixed for the determination of holders of
Series B Preferred Stock entitled to receive such stock dividend, subdivision or split-up, the Warrant Price shall be appropriately decreased so that the number of shares of
Series B Preferred Stock issuable upon the exercise hereof shall be increased in proportion to such increase in outstanding shares. 

        (ii)  If,
at any time during the Term of this Warrant, the number of shares of Series B Preferred Stock outstanding is decreased by a combination of the outstanding
shares of Series B Preferred Stock, then, following the record date for such combination, the Warrant Price shall appropriately increase so that the number of shares of Series B
Preferred Stock issuable upon the exercise hereof shall be decreased in proportion to such decrease in outstanding shares. 

        (iii)  In
case, at any time during the Term of this Warrant, the Company shall declare a cash dividend upon its Series B Preferred Stock payable otherwise than out of
earnings or earned surplus or shall distribute to holders of its Series B Preferred Stock shares of its capital stock (other than Series B 

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Preferred
Stock), stock or other securities of other persons, evidences of indebtedness issued by the Company or other persons, assets (excluding cash dividends and distributions) or options or rights
(excluding options to purchase and rights to subscribe for Series B Preferred Stock or other securities of the Company convertible into or exchangeable for Series B Preferred Stock),
then, in each such case, immediately following the record date fixed for the determination of the holders of Series B Preferred Stock entitled to receive such dividend or distribution, the
Warrant Price in effect thereafter shall be determined by multiplying the Warrant Price in effect immediately prior to such record date by a fraction of which the numerator shall be an amount equal to
the difference of (x) the Current Market Price of one share of Series B Preferred Stock minus (y) the fair market value (as determined by the Board of Directors of the Company,
whose determination shall be conclusive) of the stock, securities, evidences of indebtedness, assets, options or rights so distributed in respect of one share of Series B Preferred Stock, and
of which the denominator shall be such Current Market Price. 

        (iv)  All
calculations under this Section 5 shall be made to the nearest cent or to the nearest one-tenth (1/10) of a share, as the case may
be. 

        (v)  For
the purpose of any computation pursuant to this Section 5, the Current Market Price at any date of one share of Series B Preferred Stock shall be
deemed to be the average of the daily closing prices for the 15 consecutive business days ending on the last business day before the day in question (as adjusted for any stock dividend, split,
combination or reclassification that took effect during such 15 business day period). The closing price for each day shall be the last reported sales price regular way or, in case no such reported
sales took place on such day, the average of the last reported bid and asked prices regular way, in either case on the principal national securities exchange on which the Series B Preferred
Stock is listed or admitted to trading or as reported by Nasdaq (or if the Series B Preferred Stock is not at the time listed or admitted for trading on any such exchange or if prices of the
Series B Preferred Stock are not reported by Nasdaq then such price shall be equal to the average of the last reported bid and asked prices on such day as reported by The National Quotation
Bureau Incorporated or any similar reputable quotation and reporting service, if such quotation is not reported by The National Quotation Bureau Incorporated); provided, however, that if the
Series B Preferred Stock is not traded in such manner that the quotations referred to in this clause (v) are available for the period required hereunder, the Current Market Price shall
be determined in good faith by the Board of Directors of the Company or, if such determination cannot be made, by a nationally recognized independent investment banking firm selected by the Board of
Directors of the Company (or if such
selection cannot be made, by a nationally recognized independent investment banking firm selected by the American Arbitration Association in accordance with its rules). 

        (vi)  Whenever
the Warrant Price shall be adjusted as provided in Section 5, the Company shall prepare a statement showing the facts requiring such adjustment and the
Warrant Price that shall be in effect after such adjustment. The Company shall cause a copy of such statement to be sent by mail, first class postage prepaid, to each Holder of this Warrant at its,
his or her address appearing on the Company's records. Where appropriate, such copy may be given in advance and may be included as part of the notice required to be mailed under the provisions of
subsection (viii) of this Section 5. 

        (vii)  Adjustments
made pursuant to clauses (i), (ii) and (iii) above shall be made on the date such dividend, subdivision, split-up, combination or
distribution, as the case may be, is made, and shall become effective at the opening of business on the business day next following the record date for the determination of stockholders entitled to
such dividend, subdivision, split-up, combination or distribution. 

        (viii)  In
the event the Company shall propose to take any action of the types described in clauses (i), (ii), or (iii) of this Section 5, the Company shall
forward, at the same time and in the same manner, to the Holder of this Warrant such notice, if any, which the Company shall give to the holders of capital stock of the Company. 

4

 

        (ix)  In
any case in which the provisions of this Section 5 shall require that an adjustment shall become effective immediately after a record date for an event, the
Company may defer until the occurrence of such event issuing to the Holder of all or any part of this Warrant which is exercised after such record date and before the occurrence of such event the
additional shares of capital stock issuable upon such exercise by reason of the adjustment required by such event over and above the shares of capital stock issuable upon such exercise before giving
effect to such adjustment exercise; provided, however, that the Company shall deliver to such Holder a due bill or other appropriate instrument evidencing such Holder's right to receive such
additional shares upon the occurrence of the event requiring such adjustment. 

SECTION 6.    Ownership.    

        6.1    Ownership of This Warrant.    The
Company may deem and treat the person in whose name this Warrant is registered as the holder and owner hereof (notwithstanding any notations of ownership or writing hereon made by anyone other than
the Company) for all purposes and shall not be affected by
any notice to the contrary until presentation of this Warrant for registration of transfer as provided in this Section 6. 

        6.2    Transfer and Replacement.    This
Warrant and all rights hereunder are transferable in whole or in part upon the books of the Company by the Holder hereof in person or by duly authorized attorney, and a new Warrant or Warrants, of the
same tenor as this Warrant but registered in the name of the transferee or transferees (and in the name of the Holder, if a partial transfer is effected) shall be made and delivered by the Company
upon surrender of this Warrant duly endorsed, at the office of the Company referred to in Section 13 hereof. Upon receipt by the Company of evidence reasonably satisfactory to it of the loss,
theft or destruction, and, in such case, of indemnity or security reasonably satisfactory to it, and upon surrender of this Warrant if mutilated, the Company will make and deliver a new Warrant of
like tenor, in lieu of this Warrant; provided that if the Holder hereof is an instrumentality of a state or local government or an institutional holder or a nominee for such an instrumentality or
institutional holder an irrevocable agreement of indemnity by such Holder shall be sufficient for all purposes of this Section 6, and no evidence of loss or theft or destruction shall be
necessary. This Warrant shall be promptly cancelled by the Company upon the surrender hereof in connection with any transfer or replacement. Except as otherwise provided above, in the case of the
loss, theft or destruction of a Warrant, the Company shall pay all expenses, taxes and other charges payable in connection with any transfer or replacement of this Warrant, other than stock transfer
taxes (if any) payable in connection with a transfer of this Warrant, which shall be payable by the Holder, with a transfer of this Warrant, which shall be payable by the Holder. Notwithstanding the
foregoing, this Warrant and the rights hereunder may not be transferred by any holder hereof in whole or in part without compliance with all applicable federal and state securities laws. 

SECTION 7.    Mergers, Consolidation, Sales.    In the case of any proposed consolidation or merger of
the Company with another entity, or the proposed sale of all or substantially all of its assets to another person or entity, or any proposed reorganization or reclassification of the capital stock of
the Company, then, as a condition of such consolidation, merger, sale, reorganization or reclassification, lawful and adequate provision shall be made whereby the Holder of this Warrant shall
thereafter have the right to receive upon the basis and upon the terms and conditions specified herein, in lieu of the shares of the Series B Preferred Stock of the Company immediately
theretofore purchasable hereunder, such shares of stock, securities or assets as may (by virtue of such consolidation, merger, sale, reorganization or reclassification) be issued or payable with
respect to or in exchange for the number of shares of such Series B Preferred Stock purchasable hereunder immediately before such consolidation, merger, sale, reorganization or
reclassification. In any such case appropriate provision shall be made with respect to the rights and interests of the Holder of this Warrant to the end that the provisions hereof shall thereafter be
applicable as nearly as may be, in relation to any shares of stock, securities or assets thereafter deliverable upon the exercise of this Warrant. In the case of the conversion of the Series B 

5

 

Preferred
Stock to Common Stock pursuant to Article IV, Section B(3)(a)(ii) of the Certificate, the Holder of this Warrant shall be entitled to receive upon the exercise of this
Warrant that number of shares of Common Stock the Holder would have received upon such conversion if this Warrant had been exercised immediately prior to such conversion, subject to further adjustment
as provided herein. 

SECTION 8.    Notice of Dissolution or Liquidation.    In case of any distribution of the assets of the
Company in dissolution or liquidation (except under circumstances when the foregoing Section 7 shall be applicable), the Company shall give notice thereof to the Holder hereof and shall make no
distribution to shareholders until the expiration of thirty (30) days from the date of mailing of the aforesaid notice and, in any case, the Holder hereof may exercise this Warrant within
thirty (30) days from the date of the giving of such notice, and all rights herein granted not so exercised within such thirty-day period shall thereafter become null and void. 

SECTION 9.    Notice of Extraordinary Dividends.    If the Board of Directors of the Company shall
declare any dividend or other distribution on its Series B Preferred Stock except out of earned surplus or by way of a stock dividend payable in shares of its Series B Preferred Stock,
the Company shall mail notice thereof to the Holder hereof not less than thirty (30) days prior to the record date fixed for determining shareholders entitled to participate in such dividend or
other distribution, and the Holder hereof shall not participate in such dividend or other distribution unless this Warrant is exercised prior to such record date. The provisions of this
Section 9 shall not apply to distributions made in connection with transactions covered by Section 7. 

SECTION 10.    Fractional Shares.    Fractional shares shall not be issued upon the exercise of this
Warrant but in any case where the Holder would, except for the provisions of this Section 10, be entitled under the terms hereof to receive a fractional share upon the complete exercise of this
Warrant, the Company shall, upon the exercise of this Warrant for the largest number of whole shares then called for, pay a sum in cash equal to the excess of the value of such fractional share
(determined in such reasonable manner as may be prescribed in good faith by the Board of Directors of the Company) over the Warrant Price for such fractional share. 

SECTION 11.    Special Arrangements of the Company.    The Company covenants and agrees that during the
Term of this Warrant, unless otherwise approved by the Holder of this Warrant: 

        11.1    Will Reserve Shares.    The
Company will reserve and set apart and have available for issuance at all times, free from preemptive or other preferential rights, the number of shares of authorized but unissued Series B
Preferred Stock (or if such Series B Preferred Stock has been converted pursuant to Article IV, Section B(3)(a)(ii) of the Certificate, Common Stock) deliverable upon the
exercise of this Warrant. 

        11.2    Will Not Amend
Certificate.    The Company will not amend its Certificate of Incorporation to eliminate as an authorized class of capital stock that class denominated
as "Series B Preferred Stock" on the date hereof, unless all outstanding Series B Preferred Stock is converted to Common Stock pursuant to the Certificate. 

        11.3    Will Bind Successors.    This
Warrant shall be binding upon any corporation or other person or entity succeeding to the Company by merger, consolidation or acquisition of all or substantially all of the Company's assets. 

SECTION 12.    Intentionally deleted.    

SECTION 13.    Notices.    Any notice or other document required or permitted to be given or delivered
to the Holder shall be delivered at, or sent by certified or registered mail to, the Holder at Transamerica Technology Finance Division, 76 Batterson Park Road, Farmington, Connecticut 06032,
Attention: Assistant Vice President, Lease Administration, with a copy to the Lender at Riverway II, West Office Tower, 9399 West Higgins Road, Rosemont, Illinois 60018, Attention: Legal Department or 

6

 

to
such other address as shall have been furnished to the Company in writing by the Holder. Any notice or other document required or permitted to be given or delivered to the Company shall be
delivered at, or sent by certified or registered mail to, the Company at NuVasive, Inc., 10065 Old Grove Road, San Diego, California 92131, Attention: President or to such other address as
shall have been furnished in writing to the Holder by the Company. Any notice so addressed and mailed by registered or certified mail shall be deemed to be given when so mailed. Any notice so
addressed and otherwise delivered shall be deemed to be given when actually received by the addressee. 

SECTION 14.    No Rights as Stockholder; Limitation of Liability.    This Warrant shall not entitle the
Holder to any of the rights of a shareholder of the Company except upon exercise in accordance with the terms hereof. No provision hereof, in the absence of affirmative action by the Holder to
purchase shares of Series B Preferred Stock, and no mere enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the Warrant Price
hereunder or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of the Company. 

SECTION 15.    Law Governing.    THE VALIDITY, INTERPRETATION, AND ENFORCEMENT OF THIS WARRANT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF. 

SECTION 16.    Miscellaneous.    

        (a)   This
Warrant and any provision hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by both parties (or any respective
predecessor in interest thereof). The headings in this Warrant are for purposes of reference only and shall not affect the meaning or construction of any of the provisions hereof 

        (b)   All
capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Loan and Security Agreement. 

SECTION 17.    Representations of Holder.    

        (1)    Investment
Representation.    Holder is aware that the Warrant and the Warrant Shares to be purchased hereunder have not been registered under the Securities Act,
or qualified under any state securities or "blue sky" laws. Such Warrant and Warrant Shares are being acquired by it for investment purposes only and not for sale or with a view to distribution of all
or any part of such Warrant or Warrant Shares. 

        (2)    Access to Information.    Holder
has had an opportunity to ask questions and receive answers from the Company regarding the business, financial affairs and other aspects of the Company, and it has further had the opportunity to
obtain any information (to the extent the Company possesses or can acquire such information without unreasonable effort or expense) which it deems necessary to evaluate its investment or to verify the
accuracy of information otherwise provided to it. 

        (3)    Investment Experience.    Holder
is experienced in evaluating and investing in companies such as the Company, is capable of evaluating the merits and risks of its investment in the Warrant and the Warrant Shares, is able to bear the
economic risk of the investment and is prepared to hold the Warrant and/or the Warrant Shares for an indefinite period of time. Holder is an "accredited investor," within the meaning of
Regulation D under the Securities Act. 

        (4)    Restricted Securities.    Holder
understands that the Warrant and the Warrant Shares when purchased hereunder will be characterized as "restricted securities" under the federal securities laws inasmuch as they are being acquired from
the Company in a transaction not involving a public offering, and that under such laws and applicable regulations such securities may be resold without registration under the Securities Act only in
certain limited circumstances and that otherwise such securities must be held indefinitely. In this connection, Holder represents that it is familiar with Rule 144 under the Securities Act, as
presently in effect, and the conditions which must be met in order for that Rule to be available for resale of restricted securities, and understands the resale limitations imposed by the Securities
Act. 

7

 

        IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized officer this    day of June, 2000. 

	[CORPORATE SEAL]	 	NUVASIVE, INC.
	

 	
 	

By:	

/s/  STEVEN MCGOWAN      

	 	 	Title:	Chief Financial Officer

	
ACKNOWLEDGED AND AGREED	

 
	

TBCC FUNDING TRUST II	

 
	

By:	

/s/ illegible
	

 
	Title:	Vice President
	 

8

  

 
 

FORM OF NOTICE OF EXERCISE    
    
    [To be signed only upon exercise of the Warrant]    
    
    TO BE EXECUTED BY THE REGISTERED HOLDER
  TO EXERCISE THE WITHIN WARRANT    
    

        The undersigned hereby exercises the right to purchase            shares of Series B Preferred Stock which the
undersigned is entitled to purchase by
the terms of the within Warrant according to the conditions thereof, and herewith 

[check
one] 

	 	 	o	 	makes payment of $            therefor; or
	

 	
 	

o	
 	

directs the Company to issue        shares, and to withhold shares in lieu of payment of the Warrant Price, as described in Section 2.1 of the Warrant.

All
shares to be issued pursuant hereto shall be issued in the name of and the initial address of such person to be entered on the books of the Company shall be: 

        The
shares are to be issued in certificates of the following denominations: 

	

 	
 	

 [Type Name of Holder]
	

 	
 	

By:	
 	

	

 	
 	

Title:	
 	

	

Dated:	
 	

	
 	

 

9

 
 
 

FORM OF ASSIGNMENT
  (ENTIRE)    
    
    [To be signed only upon transfer of entire Warrant]    
    
    TO BE EXECUTED BY THE REGISTERED HOLDER    
    TO TRANSFER THE WITHIN WARRANT    

        FOR VALUE RECEIVED                        hereby sells, assigns and transfers
unto                        all rights of the
undersigned under and pursuant to the within Warrant, and the undersigned does hereby irrevocably constitute and
appoint                        Attorney to transfer the said Warrant on the books of the
Company, with full power of substitution. 

	

 	
 	

 [Type Name of Holder]
	

 	
 	

By:	
 	

	

 	
 	

Title:	
 	

	

Dated:	
 	

	
 	

 

NOTICE  

        The signature to the foregoing Assignment must correspond to the name as written upon the face of the within Warrant in every particular, without alteration or
enlargement or any change whatsoever. 

10

 
 
 

FORM OF ASSIGNMENT
  (PARTIAL)    
    
    [To be signed only upon partial transfer of Warrant]    
    
    TO BE EXECUTED BY THE REGISTERED HOLDER    
    TO TRANSFER THE WITHIN WARRANT    

        FOR VALUE RECEIVED                        hereby sells, assigns
and transfers unto                        (i) the rights of the undersigned to
purchase            
shares of Series B Preferred Stock under and pursuant to the within Warrant, and (ii) on a non-exclusive basis, all other rights of the undersigned under and pursuant to the
within Warrant, it being understood that the undersigned shall retain, severally (and not jointly) with the transferee(s) named herein, all rights assigned on such non-exclusive basis. The
undersigned does hereby irrevocably constitute and appoint                        Attorney to transfer the said Warrant on the
books of the Company, with full power of substitution. 

	 	 	 	 	 
	 	 	
 [Type Name of Holder]
	

 	
 	

By:	
 	

	

 	
 	

Title:	
 	

	

Dated:	
 	

	
 	

 

NOTICE  

        The signature to the foregoing Assignment must correspond to the name as written upon the face of the within Warrant in every particular, without alteration or
enlargement or any change whatsoever. 

11

QuickLinks

EXHIBIT 10.4

No. STOCK SUBSCRIPTION WARRANT To Purchase Series B Preferred Stock of NUVASIVE, INC. (the "Company") DATE OF INITIAL ISSUANCE: June 27, 2000

FORM OF NOTICE OF EXERCISE [To be signed only upon exercise of the Warrant] TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THE WITHIN WARRANT

FORM OF ASSIGNMENT (ENTIRE) [To be signed only upon transfer of entire Warrant] TO BE EXECUTED BY THE REGISTERED HOLDER TO TRANSFER THE WITHIN WARRANT

FORM OF ASSIGNMENT (PARTIAL) [To be signed only upon partial transfer of Warrant] TO BE EXECUTED BY THE REGISTERED HOLDER TO TRANSFER THE WITHIN WARRANTQuickLinks
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EXHIBIT 10.5    
    

 
 

FORM OF WARRANT    

        THIS
WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS. THEY
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO AN EXEMPTION UNDER SUCH ACT. 

	CW-    	 	Void after
	 	 	                        , 2006

 
 

WARRANT
  of
  NUVASIVE, INC.    
    

        THIS CERTIFIES THAT, for value received,                        ,
together with his, her or its successors and assigns (the "Holder") is entitled to subscribe for and
purchase, on the terms hereof, shares of "Next Stock" (as
defined below), of Nuvasive, Inc., a Delaware corporation (the "Company"), subject to the following terms and conditions: 

        1.    Convertible Promissory Note and Warrant Agreement.    

        This
Warrant ("Warrant") is issued pursuant to that certain Convertible Promissory Note and Warrant Agreement
dated                        , 2001 (the "Agreement") by and among the Company, the
Holder and other Investors (as defined in the Agreement). Pursuant to the Agreement, the Company also issued the Holder that certain Convertible Promissory Note dated            , 2001 (the
"Note"). The Note and the other convertible promissory notes issued pursuant to the Agreement are collectively referred to as the "Notes." 

        2.    Exercise of Warrant.    

        The
terms and conditions upon which this Warrant may be exercised, and the Next Stock (as defined below) covered hereby may be purchased, are as follows: 

        2.1    Term.    

        Subject
to the terms hereof, this Warrant may be exercised at any time, or from time to time, in whole or in part (the "Exercise Date"), after the earlier of (i) the date of the
closing of the Company's Next Qualified Equity Financing (as defined below) or (ii) July 31, 2001; provided, however, that in no event may this Warrant be exercised later than
5:00 p.m. (Pacific Time) on the earlier of (a) the close of business on                        , 2006, (b) (i) the
closing of the acquisition of the Company by another entity by means of
a transaction or series of related transactions or (ii) the closing of the sale of all or substantially all of the assets of the Company, unless the Company's stockholders of record prior to
such acquisition or sale shall hold at least fifty percent (50%) of the voting power of the acquiring or surviving entity immediately after such acquisition or sale, or (c) the initial
underwritten public offering of the Company's Common Stock (the "Exercise Period"). At least ten (10) business days prior to the occurrence of an event specified in (b) or (c) of
this Section 2.1, the Company shall send to the Holder notice of such event and that the Holder's rights under this Warrant shall terminate upon the occurrence of such event; provided, that if
the Company sends such notice less than ten (10) days prior to the occurrence of such event, the Holder's right to exercise this Warrant shall be extended for a period of ten (10) days
after the date the Holder receives such notice, after which time the Holder's 

 

rights
under this Warrant shall terminate. The notice required by this paragraph may be waived by the Holder. 

        2.2    Next Qualified Equity Financing.    

        The
term Next Qualified Equity Financing shall mean the next equity financing involving the receipt by the Company of at least Three Million Dollars ($3,000,000) (excluding amounts
received on conversion of the Notes) which is completed before July 31, 2001. Notwithstanding the foregoing, the Next Qualified Equity Financing shall not include an equity financing that is
made in connection with either (i) any arrangement between the Company and any third party for any research or development involving the Company (including, without limitation, any arrangement
that includes provision for research support, product development and/or testing support), (ii) any rights to commercialize any products resulting from the research or development programs of
the Company (including, without limitation, rights to develop, make, use and/or sell any such products), or (iii) any other non-monetary consideration. 

        2.3    Next Stock.    

        The
term "Next Stock" shall mean the Company's Preferred Stock issued in the Next Qualified Equity Financing. However, if there is no Next Qualified Equity Financing before
July 31, 2001, Next Stock shall refer to the Company's Series C Preferred Stock which shall have all rights allocated to Series C Preferred Stock as described in the Company's
Certificate of Incorporation, as amended. 

        2.4    Number of Shares.    

        This
Warrant may be exercised for the number of shares of Next Stock equal to: 

	 	 	X =	 	A × B	 	×	 	Y
	 	 	 	 	C	 	 	 	31

	

 	
 	

A =	
 	

5.0%
	

 	
 	

B =	
 	

Original principal amount of Note.
	

 	
 	

C =	
 	

The per share price at which the Next Stock was sold in the Next Qualified Equity Financing, or if no Next Qualified Equity Financing takes place by July 31, 2001, then $3.00.
	

 	
 	

X =	
 	

The number of shares of Next Stock that may be purchased by Holder pursuant to this Warrant.
	

 	
 	

Y =	
 	

The total number of days elapsed from                        , 2001 to and including the earlier of (i) the date of the
closing of the Next Qualified Equity Financing; (ii) the date of the Company's repayment of all principal and interest due under the Note; or (iii) July 31, 2001.

        2.5    Exercise Price.    

        This
Warrant shall be exercisable into the number of shares of Next Stock specified in Section 2.4 above. If a Next Qualified Equity Financing occurs, the "Exercise Price" shall
equal the price per share at which Next Stock was sold in the Next Qualified Equity Financing; provided, however, if no Next Qualified Equity Financing occurs, then the "Exercise Price" shall be three
dollars ($3.00) per share. 

        2.6    Method of Exercise.    

        The
exercise of the purchase rights evidenced by this Warrant shall be effected by (a) the surrender of the Warrant, together with a duly executed copy of the form of subscription
attached hereto as Schedule A, to the Company at its principal offices and (b) the delivery of the purchase price 

2

 

by
check or bank draft payable to the Company's order or by wire transfer of same day funds to the Company's account for the number of shares for which the purchase rights hereunder are being
exercised or any other form of consideration approved by the Company's Board of Directors. Each exercise of this Warrant shall be deemed to have been effected immediately prior to the close of
business on the day on which this Warrant shall have been surrendered to the Company as provided herein or at such later date as may be specified in the executed form of subscription, and at such
time, the person or persons in whose name or names any certificate or certificates for shares of Next Stock shall be issuable upon such exercise, as provided herein, shall be deemed to have become the
holder or holders of record thereof. 

        2.7    Net Issue Exercise.    

        In
lieu of exercising this Warrant by paying the Exercise Price in cash or by check, Holder may elect to receive shares equal to the value of this Warrant (or the portion thereof being
canceled) by surrender of this Warrant at the principal office of the Company together with the Notice of Cashless Exercise annexed hereto as  Schedule B duly completed and executed in which event
the Company shall issue to Holder a number of shares of Next Stock computed using the
following formula: 

	 	 	X=	 	(Y)(A-B)

A

	

 	
 	

Where	
 	

X =	
 	

The number of shares of Next Stock to be issued to Holder.
	

 	
 	

 	
 	

Y =	
 	

The number of shares of Next Stock purchasable under this Warrant.
	

 	
 	

 	
 	

A =	
 	

The fair market value of one share of Next Stock.
	

 	
 	

 	
 	

B =	
 	

Exercise Price (as adjusted to the date of such calculations).

For
purposes of this Section, the fair market value of one share of Next Stock shall be the fair market value of such share (or the underlying shares of Common Stock into which it is convertible) as
determined in good faith by the Board of Directors of the Company. 

        3.    Adjustments to Exercise Price.    

        The
number and kind of shares of Next Stock issuable upon the exercise of this Warrant and the exercise price hereunder shall be subject to adjustment from time to time upon the
happening of certain events, as follows: 

        3.1    Splits and Subdivisions.    

        If
the Company should at any time or from time to time fix a record date for the effectuation of a split or subdivision of the outstanding shares of Next Stock or the determination of
the holders of Next Stock entitled to receive a dividend or other distribution payable in additional shares of Next Stock or other securities or rights convertible into, or entitling the holder
thereof to receive directly or indirectly, additional shares of Next Stock (hereinafter referred to as the "Next Stock Equivalents") without payment of any consideration by such holder for the
additional shares of Next Stock or Next Stock Equivalents, then, as of such record date (or the date of such distribution, split or subdivision if no record date is fixed), the purchase price shall be
appropriately decreased and the number of shares of Next Stock which this Warrant is exercisable for, if any, shall be appropriately increased in proportion to such increase of outstanding shares. 

        3.2    Combination of Shares.    

        If
the number of shares of Next Stock outstanding at any time after the date hereof is decreased by a combination of the outstanding shares of Next Stock, the purchase price shall be
appropriately increased and the number of shares of Next Stock which this Warrant is exercisable for, if any, shall be appropriately decreased in proportion to such decrease in outstanding shares. 

3

 

        3.3    Merger, Consolidation or Sale of Assets.    

        If
at any time or from time to time there shall be a capital reorganization of the Company's Stock (other than a subdivision, combination, reclassification or exchange of shares provided
for elsewhere in this Section 3) or a merger or consolidation of the Company with or into another corporation, or the sale of all or substantially all of the Company's assets and properties to
any other person or entity, then as a part of such reorganization, merger, consolidation or sale, provision shall be made so that the Holder shall thereafter be entitled to receive upon the exercise
of this Warrant, the number of shares of stock or other securities or property of the Company, or of the successor corporation resulting from such reorganization, merger, consolidation or sale, to
which a holder of the number of shares of Next Stock (or any shares of stock or other securities which may be) issuable upon the exercise of this Warrant would have received if this Warrant had been
exercised immediately prior to such reorganization, merger, consolidation or sale. 

        3.4    Adjustments for Other Distributions.    

        In
the event the Company shall declare a distribution payable in securities of other persons, evidences of indebtedness issued by the Company or other persons, assets (excluding cash
dividends) or options or rights not referred to in Section 3.1, then, in each such case for the purpose of this Section 3.4, upon exercise of this Warrant the Holder shall be entitled to
a proportionate share of any such distribution as though such Holder was the holder of the number of shares of Next Stock of the Company into which this Warrant may be exercised as of the record date
fixed for the determination of the holders of Next Stock of the Company entitled to receive such distribution. 

        3.5    Reclassification or Reorganization.    

        If
the Next Stock (or any shares of stock or other securities which may be) issuable upon the exercise of this Warrant shall be changed into the same or different number of shares of any
class or classes of stock, whether by capital reorganization, reclassification or otherwise (other than a subdivision or combination of shares or stock dividend provided for in Sections 3.1, 3.2 and
3.4 above, or a reorganization, merger, consolidation or sale of assets provided for in Section 3.3 above), then and in each such event the Holder shall be entitled to receive upon the exercise
of this Warrant the kind and amount of shares of stock and other securities and property receivable upon such reorganization, reclassification or other change, to which a holder of the number of
shares of Next Stock (or any shares of stock or other securities which may be) issuable upon the exercise of this Warrant would have received if this Warrant had been exercised immediately prior to
such reorganization, reclassification or other change, all subject to further adjustment as provided herein. 

        3.6    Notice of Adjustments and Record Dates.    

        The
Company shall promptly notify the Holder in writing of each adjustment or readjustment of the exercise price hereunder and the number of shares of Next Stock issuable upon the
exercise of this Warrant. Such notice shall state the adjustment or readjustment and show in reasonable detail the facts on which that adjustment or readjustment is based. In the event of any taking
by the Company of a record of the holders of Next Stock for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, the Company shall notify the
Holder in writing of such record date at least twenty (20) days prior to the date specified therein. 

        3.7    No Impairment.    

        The
Company shall not avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but shall at all times in good faith
assist in the carrying out of all the provisions of this Warrant. Without limiting the generality of the foregoing, the Company (a) shall at all times following the beginning of the Exercise
Period reserve and keep available a number of its authorized shares of Next Stock, free from all preemptive rights therein, 

4

 

which
shall be sufficient to permit the exercise of this Warrant and (b) shall take all such action as may be necessary or appropriate in order that all shares of Next Stock as may be issued
pursuant to the exercise of this Warrant shall, upon issuance, be duly and validly issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issue thereof. 

        4.    Replacement of the Warrant.    

        On
receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of any such loss, theft or
destruction of this Warrant, on delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, on surrender and cancellation of
the Warrant, the Company at its expense shall execute and deliver to the Holder, in lieu thereof, a new Warrant of like tenor. 

        5.    Investment Intent.    

        Unless
a current registration statement under the Securities Act of 1933, as amended, shall be in effect with respect to the securities to be issued upon exercise of this Warrant, the
Holder, by accepting this Warrant, covenants and agrees that, at the time of exercise hereof, and at the time of any proposed transfer of any securities acquired upon exercise hereof, the Holder shall
deliver to the Company a written statement that the securities acquired by the Holder upon exercise hereof are for the account of the Holder for investment and are not acquired with a view to, or for
sale in connection with, any distribution thereof (or any portion thereof) and are being acquired with no present intention (at any such time) of offering or distributing such securities (or any
portion thereof). 

        6.    No Rights or Liability as a Stockholder.    

        This
Warrant does not entitle the Holder hereof to any voting rights or other rights as a stockholder of the Company. No provisions hereof, in the absence of affirmative action by the
Holder to purchase Next Stock, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder as a stockholder of the Company. 

        7.    Miscellaneous.    

        7.1    Transfer of Warrant.    

        This
Warrant shall not be transferable or assignable in any manner and no interest shall be pledged or otherwise encumbered by Holder without the express written consent of the Company,
and any such attempted disposition of this Warrant or any portion hereof shall be of no force or effect. 

        7.2    Titles and Subtitles.    

        The
titles and subtitles used in this Warrant are for convenience only and are not to be considered in construing or interpreting this Warrant. 

        7.3    Notices.    

        Any
notice required or permitted under this Warrant shall be given in writing and in accordance with Section 5.3 of the Agreement (for purposes of which, the term "Investors"
shall mean Holder hereunder), except as otherwise expressly provided in this Warrant. 

        7.4    Attorneys' Fees.    

        If
any action at law or in equity is necessary to enforce or interpret the terms of this Warrant, the prevailing party shall be entitled to reasonable attorneys' fees, costs and
disbursements in addition to any other relief to which such party may be entitled. 

5

 

        7.5    Amendments and Waivers.    

        This
Warrant is issued by the Company pursuant to the Agreement. Any term of this Warrant may be amended and the observance of any term of this Warrant may be waived (either generally or
in a particular instance and either retroactively or prospectively), with the written consent of the Company and the holders of Warrants representing together the right to purchase at least a majority
of all of the Next Stock of the Company subject to purchase pursuant to all of the Warrants; provided, however, that any amendments made to this Warrant must be made to each of the Warrants. Any
amendment or waiver effected in accordance with this Section 7.5 shall be binding upon the Holder of this Warrant (and of any securities into which this Warrant is convertible), each future
holder of all such securities, and the Company. 

        7.6    Severability.    

        If
one or more provisions of this Warrant are held to be unenforceable under applicable law, such provision shall be excluded from this Warrant and the balance of the Warrant shall be
interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms. 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK] 

6

 

        7.7    Governing Law.    

        This
Warrant shall be governed by and construed and enforced in accordance with the laws of the State of California, without giving effect to its conflicts of laws principles. 

	Date:            , 2001	 	NUVASIVE, INC.,

a Delaware corporation
	

 	
 	

By:	

 Alexis V. Lukianov, President

7

 
 

SCHEDULE A    
    
    FORM OF SUBSCRIPTION    
    
    (TO BE SIGNED ONLY ON EXERCISE OF WARRANT)    
    

To:
NUVASIVE, INC. 

        The
undersigned, the holder of the Warrant attached hereto, hereby irrevocably elects to exercise the purchase rights represented by such Warrant for, and to purchase thereunder,
                        * shares
of                        Stock of Nuvasive, Inc., and herewith makes payment of
$                        and requests that the certificates for such shares be issued in the name of,
and delivered to                        , whose address
is                        , and whose social security number/taxpayer identification number
is                        . 

Dated:                        

	 	 	
 (Signature must conform in all respects to name of the Holder as specified on the face of the Warrant)
	

 	
 	

 (Print Name)
	

Address:	
 	

	 	 	

	 	 	

*
Insert here the number of shares as to which the Warrant is being exercised. 

 
 

SCHEDULE B    
    
    NOTICE OF CASHLESS EXERCISE    
    

To:
NUVASIVE, INC. 

        (1)   The
undersigned hereby elects to acquire in a cashless exercise                        shares of the Next Stock (as defined in the
attached Warrant) of Nuvasive, Inc.
pursuant to the terms of Section 2.7 of the attached Warrant. 

        (2)   Please
issue a certificate or certificates representing said shares of Next Stock in the name of the undersigned or in such other name as is specified below: 

	

 	
 	

 	
 	

 
	

 	
 	

	

 	
 	

By:	
 	

	

 	
 	

Name:	
 	

 
 

SCHEDULE OF WARRANT HOLDERS    
    

Kleiner
Perkins Caufiled & Byers VIII, L.P.

KPCB VIII Founders Fund

Domain Partners IV, L.P.

DPIV Associates, L.P.

Enterprise Partners Annex Fund IV, L.P.

Enterprise Partners Annex Fund IV-A, L.P. 

QuickLinks

EXHIBIT 10.5

FORM OF WARRANT

WARRANT of NUVASIVE, INC.

SCHEDULE A FORM OF SUBSCRIPTION (TO BE SIGNED ONLY ON EXERCISE OF WARRANT)

SCHEDULE B NOTICE OF CASHLESS EXERCISE

SCHEDULE OF WARRANT HOLDERS

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