Exhibit
4.4


 


WARRANT
AGREEMENT


between


PONO
CAPITAL THREE, INC.


and


CONTINENTAL
STOCK TRANSFER & TRUST COMPANY


 


This
Warrant Agreement (this “Agreement”), is made as of [ ], 2023, between Pono Capital Three, Inc., a Cayman Islands
exempted company with registration number [ ] (the “Company”), and Continental Stock Transfer & Trust Company,
a limited purpose trust company, as warrant agent (in such capacity, the “Warrant Agent”).


 


WHEREAS,
the Company is engaged in an initial public offering (the “Public Offering”) of units of the Company’s
equity securities, each such unit comprised of Class A ordinary share of the Company, par value $0.0001 per share (“Ordinary
Share”), and one redeemable Public Warrant (as defined below) (the “Public Units”) and, in connection
therewith, has determined to issue and deliver up to 10,000,000 warrants (or up to 11,500,000 warrants if the Over-allotment Option (as
defined below) is exercised in full) to public investors in the Offering (the “Public Warrants”). Each whole
Warrant entitles the holder thereof to purchase one Ordinary Share for $11.50 per share, subject to adjustment as described herein; and


 


WHEREAS,
on [ ], 2023 the Company entered into that certain Placement Unit Purchase Agreement with Mehana Capital LLC, a Delaware limited liability
company (the “Sponsor”), pursuant to which the Sponsor agreed to purchase an aggregate of 571,375 private placement
units (or up to 634,375 private placement units if the underwriters in the Offering exercise their Over-allotment Option in full) simultaneously
with the closing of the Offering (and the closing the Over-allotment Option, if applicable) (the “Private Placement Units”
and, together with the Public Units, the “Units”) at a purchase price of $10.00 per Unit, and, in connection
therewith, will issue and deliver up to an aggregate of 571,375 warrants (or up to 634,375 warrants if the Over-allotment Option is exercised
in full) underlying such Private Placement Units bearing the legend set forth in Exhibit B hereto (“Private Placement
Warrants”); and


 


WHEREAS,
in order to finance the Company’s transaction costs in connection with an intended initial Business Combination (as defined below),
the Sponsor or an affiliate of the Sponsor or certain of the Company’s executive officers and directors may, but are not obligated
to, loan to the Company funds as the Company may require, of which up to $1,500,000 of such loans may be convertible into up to an additional
150,000 Units at a price of $10.00 per Unit, and, in connection therewith, will issue and deliver up to an aggregate of 150,000 warrants
(the “Working Capital Warrants”); and


 


WHEREAS,
in order to extend the period of time the Company has to consummate a Business Combination (defined below) as described in the Prospectus
(defined below), the Sponsor or its affiliates or designees may, but are not obligated to, loan the Company up to $330,000, or up to
$379,500 if the underwriters’ over-allotment option is exercised in full ($0.033 per unit in either case), as the Company may require
to extend the period in which the Company must complete its initial business combination nine times, for an additional month (for a total
of up to 18 months to complete a business combination), which loans may be convertible into up to an additional 297,000 units, or 341,550
units if underwriters’ over-allotment option is exercised in full, at a price of $10.00 per unit, and, in connection therewith,
will issue and deliver up to an aggregate of 297,000 warrants, or 341,550 warrants if underwriters’ over-allotment option is exercised
in full (the “Extension Warrants”); and


 


WHEREAS,
following consummation of the Offering, the Company may issue additional warrants (“Post IPO Warrants,” and,
together with the Private Placement Warrants, the Working Capital Warrants, the Extension Warrants and the Public Warrants, the “Warrants”)
in connection with, or following the consummation by the Company of, a Business Combination (defined below); and


 


WHEREAS,
the Company has filed with the Securities and Exchange Commission (the “Commission”) a registration statement
on Form S-1, File No. 333-[ ] (the “Registration Statement”) and prospectus (the “Prospectus”),
for the registration, under the Securities Act of 1933, as amended (the “Securities Act”), of the Public Units,
and the Public Warrants and the Ordinary Shares included in the Public Units; and


 



    	 



    	 



    

 





WHEREAS,
the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with
the issuance, registration, transfer, exchange, redemption and exercise of the Warrants; and


WHEREAS,
the Company desires to provide for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised,
and the respective rights, limitation of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants; and


 


WHEREAS,
all acts and things have been done and performed which are necessary to make the Warrants, when executed on behalf of the Company and
countersigned by or on behalf of the Warrant Agent (if a physical certificate is issued), as provided herein, the valid, binding and
legal obligations of the Company, and to authorize the execution and delivery of this Agreement.


 


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


 


1.
Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company for the Warrants,
and the Warrant Agent hereby accepts such appointment and agrees to perform the same in accordance with the terms and conditions set
forth in this Agreement.


 


2.
Warrants.


 


2.1
Form of Warrant. Each Warrant shall initially be issued in registered form only, and, if a physical certificate is issued, shall
be in substantially the form of Exhibit A hereto, the provisions of which are incorporated herein and shall be signed by, or bear
the facsimile signature of, the Chairman of the Board of Directors or Chief Executive Officer and the Chief Financial Officer, Treasurer,
Secretary or Assistant Secretary of the Company and shall bear a facsimile of the Company’s seal. In the event the person whose
facsimile signature has been placed upon any Warrant shall have ceased to serve in the capacity in which such person signed the Warrant
before such Warrant is issued, it may be issued with the same effect as if he or she had not ceased to be such at the date of issuance.


 


2.2
Uncertificated Warrants. Notwithstanding anything herein to the contrary, any Warrant, or portion thereof, may be issued as part
of, and be represented by, a Unit, and any Warrant may be issued in uncertificated or book-entry form through the Warrant Agent and/or
the facilities of The Depository Trust Company or other book-entry depositary system, in each case as determined by the Board of Directors
of the Company or by an authorized committee thereof. Any Warrant so issued shall have the same terms, force and effect as a certificated
Warrant that has been duly countersigned by the Warrant Agent in accordance with the terms of this Agreement.


 


2.3
Effect of Countersignature. If a physical certificate is issued, unless and until countersigned by the Warrant Agent pursuant
to this Agreement, a Warrant represented by such physical certificate shall be invalid and of no effect and may not be exercised by the
holder thereof.


 


2.4
Registration.


 


2.4.1
Warrant Register. The Warrant Agent shall maintain books (the “Warrant Register”), for the registration
of original issuance and the registration of transfer of the Warrants. Upon the initial issuance of the Warrants in book entry form,
the Warrant Agent shall issue and register the Warrants in the names of the respective holders thereof in such denominations and otherwise
in accordance with instructions delivered to the Warrant Agent by the Company. Ownership of beneficial interests in the Public Warrants
shall be shown on, and the transfer of such ownership shall be effected through, records maintained by institutions that have accounts
with the Depository Trust Company (the “Depositary”) (such institution, with respect to a Warrant in its account,
a “Participant”).


 


If
the Depositary subsequently ceases to make its book-entry settlement system available for the Public Warrants, the Company may instruct
the Warrant Agent regarding making other arrangements for book-entry settlement. In the event that the Public Warrants are not eligible
for, or it is no longer necessary to have the Public Warrants available in, book-entry form, the Warrant Agent shall provide written
instructions to the Depositary to deliver to the Warrant Agent for cancellation each book-entry Public Warrant, and the Company shall
instruct the Warrant Agent to deliver to the Depositary definitive certificates in physical form evidencing such Warrants which shall
be in the form annexed hereto as Exhibit A.


 






    	 



    	 



    

  


Physical
certificates, if issued, shall be signed by, or bear the facsimile signature of, the Chairman of the Board, Chief Executive Officer,
Chief Financial Officer, Secretary or other principal officer of the Company. In the event the person whose facsimile signature has been
placed upon any Warrant shall have ceased to serve in the capacity in which such person signed the Warrant before such Warrant is issued,
it may be issued with the same effect as if he or she had not ceased to be such at the date of issuance.


 


2.4.2
Registered Holder. Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant Agent may
deem and treat the person in whose name such Warrant is registered in the Warrant Register (the “Registered Holder”)
as the absolute owner of such Warrant and of each Warrant represented thereby (notwithstanding any notation of ownership or other writing
on any physical certificate made by anyone other than the Company or the Warrant Agent), for the purpose of any exercise thereof, and
for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.


 


2.5
Detachability of Warrants. The Ordinary Shares and the Public Warrants comprising the Public Units shall begin separate trading
on the 52nd day following the date of the Prospectus or, if such 52nd day is not on a day, other than a Saturday, Sunday or federal holiday,
on which banks in New York City are generally open for normal business (a “Business Day”), then on the immediately
succeeding Business Day following such date, or earlier (the “Detachment Date”) with the consent of EF Hutton,
division of Benchmark Investments, LLC, (“EF Hutton”), as the representative of the several underwriters for
the Offering, but in no event shall the Ordinary Shares and the Public Warrants comprising the Public Units be separately traded until
(A) the Company has filed a current report on Form 8-K with the Commission containing an audited balance sheet reflecting the receipt
by the Company of the gross proceeds of the Offering, including the proceeds received by the Company from the exercise by the underwriters
of their right to purchase additional Public Units in the Offering (the “Over-allotment Option”), if the Over-allotment
Option is exercised prior to the filing of the Form 8-K, and (B) the Company issues a press release and files with the Commission a current
report on Form 8-K announcing when such separate trading shall begin. If the Over-allotment Option is exercised following the filing
of a current report on Form 8-K pursuant to (A) above, a second or amended current report on Form 8-K will be filed to provide updated
financial information to reflect the exercise of the Over-allotment Option.


 


2.6
Fractional Warrants. The Company shall not issue fractional Warrants. If, upon the detachment of Public Warrants from Public Units
or otherwise, a holder of Warrants would be entitled to receive a fractional Warrant, the Company shall round down to the nearest whole
number of Warrants to be issued to such holder.


 


2.7
Private Placement Warrants, Working Capital Warrants, and Extension Warrants Attributes. The Private Placement Warrants, Working
Capital Warrants, and Extension Warrants will be issued in the same form as the Public Warrants.


 


2.8
Post IPO Warrants. The Post IPO Warrants may only be issued in connection with, or following the consummation by the Company of,
a Business Combination. The Post IPO Warrants, when and if issued, shall have the same terms and be in the same form as the Public Warrants
except as may be agreed upon by the Company.


 


3.
Terms and Exercise of Warrants.


 


3.1
Warrant Price. Each Warrant shall, when countersigned by the Warrant Agent (if a physical certificate is issued), entitle the
Registered Holder thereof, subject to the provisions of such Warrant and of this Agreement, to purchase from the Company the number of
Ordinary Shares stated therein, at the price of $11.50 per share, subject to the adjustments provided in Section 4 hereof and
in the last sentence of this Section 3.1. The term “Warrant Price” as used in this Agreement shall mean
the price per share at which the Ordinary Shares may be purchased at the time a Warrant is exercised. The Company in its sole discretion
may lower the Warrant Price at any time prior to the Expiration Date (as defined below) for a period of not less than twenty (20) Business
Days, provided, that the Company shall provide at least twenty (20) days prior written notice of such reduction to Registered Holders
of the Warrants and, provided further that any such reduction shall be applied consistently to all of the Warrants.


 



    	 



    	 



    

 





3.2
Duration of Warrants. A Warrant may be exercised only during the period (the “Exercise Period”) commencing
on the later of: (i) Thirty (30) days after the date on which the Company completes a merger, capital share exchange, asset acquisition,
share purchase, reorganization or similar business combination, involving the Company and one or more businesses (a “Business
Combination”), and (ii) the date that is twelve (12) months from the effective date of the Registration Statement, and
terminating at 5:00 p.m., New York City time on the earlier to occur of: (w) the date that is five (5) years after the date on which
the Company completes its Business Combination, (x) the liquidation of the Company in accordance with the Company’s amended and
restated memorandum and articles of association, as amended from time to time, if the Company fails to complete a Business Combination,
or (y) the Redemption Date (as defined below) as provided in Section 6.2 hereof (the “Expiration Date”);
provided, however, that the exercise of any Warrant shall be subject to the satisfaction of any applicable conditions, as set forth in
subsection 3.3.2 below with respect to an effective registration statement. Except with respect to the right to receive the Redemption
Price (as defined below), in the event of a redemption (as set forth in Section 6 hereof), each outstanding Warrant not exercised
on or before the Expiration Date shall become void, and all rights thereunder and all rights in respect thereof under this Agreement
shall cease at 5:00 p.m. New York City time on the Expiration Date. The Company in its sole discretion may extend the duration of the
Warrants by delaying the Expiration Date; provided, that the Company shall provide at least twenty (20) days prior written notice of
any such extension to Registered Holders of the Warrants and, provided further that any such extension shall be applied consistently
to all of the Warrants.


 


3.3
Exercise of Warrants.


 


3.3.1
Payment. Subject to the provisions of the Warrant and this Agreement, a Warrant may be exercised by the Registered Holder thereof
by delivering to the Warrant Agent at its corporate trust department (i) the Definitive Warrant Certificate evidencing the Warrants to
be exercised, or, in the case of a Warrant represented by a book-entry, the Warrants to be exercised (the “Book-Entry Warrants”)
on the records of the Depositary to an account of the Warrant Agent at the Depositary designated for such purposes in writing by the
Warrant Agent to the Depositary from time to time, (ii) an election to purchase (“Election to Purchase”) any
Ordinary Shares pursuant to the exercise of a Warrant, properly completed and executed by the Registered Holder on the reverse of the
Definitive Warrant Certificate or, in the case of a Book-Entry Warrant, properly delivered by the Participant in accordance with the
Depositary’s procedures, and (iii) the payment in full of the Warrant Price for each Ordinary Share as to which the Warrant is
exercised and any and all applicable taxes due in connection with the exercise of the Warrant, the exchange of the Warrant for the Ordinary
Shares and the issuance of such Ordinary Shares , as follows:


 


(a)
in lawful money of the United States, in good certified check or good bank draft payable to the order of the Warrant Agent;


 


(b)
in the event of a redemption pursuant to Section 6 hereof in which the Company’s board of directors (the “Board”)
has elected to require all holders of the Warrants to exercise such Warrants on a “cashless basis,” by surrendering the Warrants
for that number of Ordinary Shares equal to the quotient obtained by dividing (x) the product of the number of Ordinary Shares underlying
the Warrants, multiplied by the excess of the “Fair Market Value,” as defined in this subsection 3.3.1(b), over the
Warrant Price by (y) the Fair Market Value. Solely for purposes of this subsection 3.3.1(b) and Section 6.2, the “Fair
Market Value” shall mean the average last reported sale price of the Ordinary Shares for the ten (10) trading days ending
on the third trading day prior to the date on which the notice of redemption is sent to the holders of the Warrants, pursuant to Section
6 hereof; or


 



    	 



    	 



    

 





(c)
as provided in Section 7.4 hereof.


 


3.3.2
Issuance of Ordinary Shares on Exercise. As soon as practicable after the exercise of any Warrant and the clearance of the funds
in payment of the Warrant Price (if payment is pursuant to subsection 3.3.1(a)), the Company shall issue to the Registered Holder
of such Warrant a book-entry position or certificate, as applicable, for the number of full Ordinary Shares to which he, she or it is
entitled, registered in such name or names as may be directed by him, her or it, and if such Warrant shall not have been exercised in
full, a new book-entry position or countersigned Warrant, as applicable, for the number of Ordinary Shares as to which such Warrant shall
not have been exercised. Notwithstanding the foregoing, in no event will the Company be required to net cash settle the Warrant exercise.
No Warrant shall be exercisable for cash and the Company shall not be obligated to deliver any Ordinary Shares pursuant to the exercise
of a Warrant and shall have no obligation to settle such Warrant exercise unless a registration statement under the Securities Act with
respect to the Ordinary Shares underlying the Public Warrants is then effective and a prospectus relating thereto is current, subject
to the Company’s satisfying its obligations under Section 7.4. No Warrant shall be exercisable and the Company shall not
be obligated to issue Ordinary Shares upon exercise of a Warrant unless the Ordinary Shares issuable upon such Warrant exercise has been
registered, qualified or deemed to be exempt from registration or qualification under the securities laws of the state of residence of
the Registered Holder of the Warrants. In the event that the conditions in the two immediately preceding sentences are not satisfied
with respect to a Warrant, the holder of such Warrant shall not be entitled to exercise such Warrant and such Warrant may have no value
and expire worthless, in which case the purchaser of a Unit containing such Public Warrants shall have paid the full purchase price for
the Unit solely for the Ordinary Shares underlying such Unit. The Company may require holders of Public Warrants to settle the Warrant
on a “cashless basis” pursuant to Section 7.4. If, by reason of any exercise of warrants on a “cashless basis”,
the holder of any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in Ordinary Shares,
the Company shall round down to the nearest whole number, the number of Ordinary Shares to be issued to such holder.


 


3.3.3
Valid Issuance. All Ordinary Shares issued upon the proper exercise of a Warrant in conformity with this Agreement shall be validly
issued, fully paid and non-assessable.


 


3.3.4
Date of Issuance. Each person in whose name any book-entry position or certificate, as applicable, for Ordinary Shares is issued
shall for all purposes be deemed to have become the holder of record of such Ordinary Shares on the date on which the Warrant, or book-entry
position representing such Warrant, was surrendered and payment of the Warrant Price was made, irrespective of the date of delivery of
such certificate in the case of a certificated Warrant, except that, if the date of such surrender and payment is a date when the share
transfer books of the Company or book-entry system of the Warrant Agent are closed, such person shall be deemed to have become the holder
of such Ordinary Shares at the close of business on the next succeeding date on which the share transfer books or book-entry system are
open.


 


3.3.5
Maximum Percentage. A holder of a Warrant may notify the Company in writing in the event it elects to be subject to the provisions
contained in this subsection 3.3.5; however, no holder of a Warrant shall be subject to this subsection 3.3.5 unless he,
she or it makes such election. If the election is made by a holder, the Warrant Agent shall not effect the exercise of the holder’s
Warrant, and such holder shall not have the right to exercise such Warrant, to the extent that after giving effect to such exercise,
such person and any of its affiliates or any other person subject to aggregation with such person for purposes of the “beneficial
ownership” test under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
or any “group” (within the meaning of Section 13 of the Exchange Act) of which such person is or may be deemed to be a part,
would beneficially own (within the meaning of Section 13 of the Exchange Act) (or to the extent that for any reason the equivalent calculation
under Section 16 of the Exchange Act and the rules and regulations thereunder would result in a higher ownership percentage, such higher
percentage would be) in excess of 4.9% or 9.8% (as specified by the holder) (the “Maximum Percentage”) of the
Ordinary Shares outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number
of shares of Ordinary Shares beneficially owned by such person and its affiliates or any such other person or group shall include the
number of Ordinary Shares issuable upon exercise of the Warrant with respect to which the determination of such sentence is being made,
but shall exclude Ordinary Shares that would be issuable upon (x) exercise of the remaining, unexercised portion of the Warrant beneficially
owned by such person and its affiliates and (y) exercise or conversion of the unexercised or unconverted portion of any other securities
of the Company beneficially owned by such person and its affiliates (including, without limitation, any convertible notes or convertible
preferred shares or warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein. Except
as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section
13(d) of the Exchange Act. For purposes of the Warrant, in determining the number of outstanding Ordinary Shares, the holder may rely
on the number of outstanding Ordinary Shares as reflected in (1) the Company’s most recent annual report on Form 10-K, quarterly
report on Form 10-Q, current report on Form 8-K or other public filing with the Commission as the case may be, (2) a more recent public
announcement by the Company or (3) any other notice by the Company or the Transfer Agent setting forth the number of Ordinary Shares
outstanding. For any reason at any time, upon the written request of the holder of the Warrant, the Company shall, within two (2) Business
Days, confirm orally and in writing to such holder the number of Ordinary Shares then outstanding. In any case, the number of outstanding
Ordinary Shares shall be determined after giving effect to the conversion or exercise of equity securities of the Company by the holder
and its affiliates since the date as of which such number of outstanding Ordinary Shares was reported. By written notice to the Company,
the holder of a Warrant may from time to time increase or decrease the Maximum Percentage applicable to such holder to any other percentage
specified in such notice; provided, however, that any such increase shall not be effective until the sixty-first (61st) day after such
notice is delivered to the Company.


 






    	 



    	 



    

 


4.
Adjustments.


 


4.1
Share Capitalizations.


 


4.1.1
Share Dividends. If after the date hereof, and subject to the provisions of Section 4.5 below, the number of issued and
outstanding Ordinary Shares is increased by a capitalization or share dividend of Ordinary Shares, or by a sub-division of Ordinary Shares
or other similar event, then, on the effective date of such share capitalization, sub-division or similar event, the number of Ordinary
Shares issuable on exercise of each Warrant shall be increased in proportion to such increase in the issued and outstanding Ordinary
Shares. A rights offering made to all or substantially all holders of Ordinary Shares entitling holders to purchase Ordinary Shares at
a price less than the “Historical Fair Market Value” (as defined below) shall be deemed a capitalization of
a number of Ordinary Shares equal to the product of (i) the number of Ordinary Shares actually sold in such rights offering (or issuable
under any other equity securities sold in such rights offering that are convertible into or exercisable for the Ordinary Shares) multiplied
by (ii) one (1) minus the quotient of (x) the price per share of Ordinary Shares paid in such rights offering divided by (y) the Historical
Fair Market Value. For purposes of this subsection 4.1.1, (i) if the rights offering is for securities convertible into or exercisable
for Ordinary Shares, in determining the price payable for Ordinary Shares, there shall be taken into account any consideration received
for such rights, as well as any additional amount payable upon exercise or conversion and (ii) “Historical Fair Market Value”
means the volume weighted average price of the Ordinary Shares during the ten (10) trading day period ending on the trading day prior
to the first date on which the Ordinary Shares trade on the applicable exchange or in the applicable market, regular way, without the
right to receive such rights. No Ordinary Shares shall be issued at less than their par value.


 


4.1.2
Extraordinary Dividends. If the Company, at any time while the Warrants are outstanding and unexpired, pays to all or substantially
all of the holders of the Ordinary Shares a dividend or make a distribution in cash, securities or other assets on account of such Ordinary
Shares k (or other shares into which the Warrants are convertible), other than (a) as described in subsection 4.1.1 above, (b)
Ordinary Cash Dividends (as defined below), (c) to satisfy the redemption rights of the holders of the Ordinary Shares in connection
with a proposed initial Business Combination, (d) to satisfy the redemption rights of the holders of the Ordinary Shares in connection
with a shareholder vote to amend the Company’s amended and restated memorandum and articles of association (i) to affect the substance
or timing of the Company’s obligation to provide for the redemption of Class A Ordinary Shares in connection with an initial Business
Combination or to redeem 100% of the Company’s public shares if the Company does not consummate its initial Business Combination
within the time period set forth in the Company’s amended and restated memorandum and articles of association or (ii) with respect
to any other provisions relating to shareholders’ rights or pre-initial business combination activity or (e) in connection with
the redemption of public shares upon the failure of the Company to complete its initial Business Combination and any subsequent distribution
of its assets upon its liquidation (any such non-excluded event being referred to herein as an “Extraordinary Dividend”),
then the Warrant Price shall be decreased, effective immediately after the effective date of such Extraordinary Dividend, by the amount
of cash and/or the fair market value (as determined by the Company’s board of directors (the “Board”),
in good faith) of any securities or other assets paid in respect of such Extraordinary Dividend. For purposes of this subsection 4.1.2,
“Ordinary Cash Dividends” means any cash dividend or cash distribution which, when combined on a per share
basis, with the per share amounts of all other cash dividends and cash distributions paid on the Ordinary Shares during the 365-day period
ending on the date of declaration of such dividend or distribution to the extent it does not exceed $0.50 (which amount shall be adjusted
to appropriately reflect any of the events referred to in other subsections of this Section 4 and excluding cash dividends or
cash distributions that resulted in an adjustment to the Warrant Price or to the number of Ordinary Shares issuable on exercise of each
Warrant).


 


4.2
Aggregation of Shares. If after the date hereof, and subject to the provisions of Section 4.6 hereof, the number of outstanding
Ordinary Shares is decreased by a consolidation, combination, reverse share split or reclassification of Ordinary Shares or other similar
event, then, on the effective date of such consolidation, combination, reverse share split, reclassification or similar event, the number
of Ordinary Shares issuable on exercise of each Warrant shall be decreased in proportion to such decrease in outstanding Ordinary Shares.


 



    	 



    	 



    

 





4.3
Adjustments in Exercise Price. Whenever the number of Ordinary Shares purchasable upon the exercise of the Warrants is adjusted,
as provided in subsection 4.1.1 or Section 4.2 above, the Warrant Price shall be adjusted (to the nearest cent) by multiplying
such Warrant Price immediately prior to such adjustment by a fraction (x) the numerator of which shall be the number of Ordinary Shares
purchasable upon the exercise of the Warrants immediately prior to such adjustment, and (y) the denominator of which shall be the number
of Ordinary Shares so purchasable immediately thereafter.


 


4.4
Replacement of Securities upon Reorganization, etc. In case of any reclassification or reorganization of the issued and outstanding
Ordinary Shares (other than a change covered by Section 4.1 or Section 4.2 hereof or that solely affects the par value
of such Ordinary Shares), or in the case of any merger or consolidation of the Company with or into another entity (other than a consolidation
or merger in which the Company is the continuing corporation and that does not result in any reclassification or reorganization of the
issued and outstanding Ordinary Shares ), or in the case of any sale or conveyance to another corporation or entity of the assets or
other property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the Registered
Holder of the Warrants shall thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified
in the Warrants and in lieu of the Ordinary Shares of the Company immediately theretofore purchasable and receivable upon the exercise
of the rights represented thereby, the kind and amount of shares or stock or other securities or property (including cash) receivable
upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that
the holder of the Warrants would have received if such holder had exercised his, her or its Warrant(s) immediately prior to such event;
and if any reclassification or reorganization also results in a change in Ordinary Shares covered by Section 4.1 or Section
4.2, then such adjustment shall be made pursuant to Sections 4.1, 4.2, 4.3 and this Section 4.4. The
provisions of this Section 4.4 shall similarly apply to successive reclassifications, reorganizations, mergers or consolidations,
sales or other transfers. In no event shall the Warrant Price be reduced to less than the par value per share issuable upon exercise
of such Warrant.


 


4.5
Issuance in Connection with a Business Combination. If (x) the Company issues additional Ordinary Shares or securities convertible
into or exercisable or exchangeable for Ordinary Shares for capital raising purposes in connection with the closing of its initial Business
Combination at an issue price or effective issue price of less than $9.20 per share (as adjusted for share splits, share dividends, rights
issuances, subdivisions, reorganizations, recapitalizations and the like), with such issue price or effective issue price to be determined
in good faith by the Board (and in the case of any such issuance to the initial shareholders (as defined in the Prospectus) or their
affiliates, without taking into account any founder shares held by such shareholders or their affiliates, as applicable, prior to such
issuance) (the “New Issuance Price”), (y) the aggregate gross proceeds from such issuances represent more than
60% of the total equity proceeds, and interest thereon, available for the funding of its initial business combination on the date of
the consummation of its initial business combination (net of redemptions), and (z) the volume weighted average trading price of Ordinary
Shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial business
combination (such price, the “Market Value”) is below $9.20 per share (as adjusted for share splits, share
dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like), then the Warrant Price shall be adjusted
(to the nearest cent) to be equal to 115% of the greater of the Market Value and the New Issuance Price and the Redemption Trigger Price
(as defined below) will be adjusted (to the nearest cent) to 180% of the greater of the Market Value and the New Issuance Price.


 


4.6
Notices of Changes in Warrant. Upon every adjustment of the Warrant Price or the number of shares issuable upon exercise of a
Warrant, the Company shall give written notice thereof to the Warrant Agent, which notice shall state the Warrant Price resulting from
such adjustment and the increase or decrease, if any, in the number of shares purchasable at such price upon the exercise of a Warrant,
setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. Upon the occurrence
of any event specified in Sections 4.1, 4.2, 4.3, 4.4 or 4.5, the Company shall give written notice
of the occurrence of such event to each holder of a Warrant, at the last address set forth for such holder in the Warrant Register, of
the record date or the effective date of the event. Failure to give such notice, or any defect therein, shall not affect the legality
or validity of such event.


 


4.7
No Fractional Shares. Notwithstanding any provision contained in this Agreement to the contrary, the Company shall not issue fractional
Ordinary Shares upon the exercise of Warrants. If, by reason of any adjustment made pursuant to this Section 4, the holder of
any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share, the Company shall, upon
such exercise, round down to the nearest whole number the number of Ordinary Shares to be issued to such holder.


 






    	 



    	 



    

  


4.8
Form of Warrant. The form of Warrant need not be changed because of any adjustment pursuant to this Section 4, and Warrants
issued after such adjustment may state the same Warrant Price and the same number of Ordinary Shares as is stated in the Warrants initially
issued pursuant to this Agreement; provided, however, that the Company may at any time in its sole discretion make any change in the
form of Warrant that the Company may deem appropriate and that does not affect the substance thereof, and any Warrant thereafter issued
or countersigned, whether in exchange or substitution for an outstanding Warrant or otherwise, may be in the form as so changed.


 


4.9
  Other Events. In case any event shall occur affecting the Company as to which none of the provisions of preceding subsections
of this Section 4 are strictly applicable, but which would require an adjustment to the terms of the Warrants in order to (i)
avoid an adverse impact on the Warrants and (ii) effectuate the intent and purpose of this Section 4, then, in each such case,
the Company shall appoint a firm of independent public accountants, investment banking or other appraisal firm of recognized national
standing, which shall give its opinion as to whether or not any adjustment to the rights represented by the Warrants is necessary to
effectuate the intent and purpose of this Section 4 and, if they determine that an adjustment is necessary, the terms of such
adjustment. The Company shall adjust the terms of the Warrants in a manner that is consistent with any adjustment recommended in such
opinion.


 


4.10
  No Adjustment. For the avoidance of doubt, no adjustment shall be made to the terms of the Warrants solely as a result
of an adjustment to the conversion ratio of the Class B ordinary shares into Ordinary Shares or the conversion of the shares of Class
B ordinary shares into Ordinary Shares, in each case, pursuant to the Company’s Amended and Restated Memorandum and Articles of
Association, as further amended from time to time.


5.
Transfer and Exchange of Warrants.


 


5.1
Registration of Transfer. The Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant upon the
Warrant Register, upon surrender of such Warrant for transfer, in the case of certificated warrants, properly endorsed with signatures
properly guaranteed and accompanied by appropriate instructions for transfer. Upon any such transfer, a new Warrant representing an equal
aggregate number of Warrants shall be issued and the old Warrant shall be cancelled by the Warrant Agent. In the case of certificated
warrants, the Warrants so cancelled shall be delivered by the Warrant Agent to the Company from time to time upon request.


 


5.2
Procedure for Surrender of Warrants. Warrants may be surrendered to the Warrant Agent, either in certificated form or book entry
position together with a written request for exchange or transfer, and thereupon the Warrant Agent shall issue in exchange therefor one
or more new Warrants as requested by the Registered Holder of the Warrants so surrendered, representing an equal aggregate number of
Warrants; provided, however, that in the event that a Warrant surrendered for transfer bears a restrictive legend (as in the case of
the Private Placement Warrants, the Working Capital Warrants, and the Extension Warrants), the Warrant Agent shall not cancel such Warrant
and issue new Warrants in exchange thereof until the Warrant Agent has received an opinion of counsel for the Company stating that such
transfer may be made and indicating whether the new Warrants must also bear a restrictive legend.


 


5.3
Fractional Warrants. The Warrant Agent shall not be required to affect any registration of transfer or exchange which shall result
in the issuance of a warrant certificate or book-entry position for a fraction of a warrant, except as part of the Units.


 


5.4
Service Charges. No service charge shall be made for any exchange or registration of transfer of Warrants.


 


5.5.
Warrant Execution and Countersignature. If a physical certificate is issued, the Warrant Agent is hereby authorized to countersign
and to deliver, in accordance with the terms of this Agreement, the Warrants required to be issued, pursuant to the provisions of this
Section 5, and the Company, whenever required by the Warrant Agent, shall supply the Warrant Agent with Warrants duly executed
on behalf of the Company for such purpose.


 


5.6
Transfer Prior to Detachment. Prior to the Detachment Date, the Public Warrants may be transferred or exchanged only together
with the Unit in which such Warrant is included, and only for the purpose of effecting, or in conjunction with, a transfer or exchange
of such Unit. Furthermore, each transfer of a Unit on the register relating to such Units shall operate also to transfer the Warrants
included in such Unit. Notwithstanding the foregoing, the provisions of this Section 5.6 shall have no effect on any transfer
of Warrants on and after the Detachment Date.


 



    	 



    	 



    

 





6.
Redemption.


 


6.1
Redemption of Warrants for Cash. Not less than all of the outstanding Warrants may be redeemed, at the option of the Company,
at any time while they are exercisable and prior to their expiration, at the office of the Warrant Agent, upon notice to the Registered
Holders of the Warrants, as described in Section 6.2 below, at the price (the “Redemption Price”) of
$0.01 per Warrant, provided that the last reported sales price of the Ordinary Shares reported has been at least $18.00 per share (subject
to adjustment in compliance with Section 4 hereof) (the “Redemption Trigger Price”), on each of twenty
(20) trading days within the thirty (30) trading-day period ending on the third day prior to the date on which notice of the redemption
is given and provided that there is an effective registration statement covering the Ordinary Shares issuable upon exercise of the Warrants,
and a current prospectus relating thereto, available throughout the 30-day Redemption Period (as defined in Section 6.2 below)
or the Company has elected to require the exercise of the Warrants on a “cashless basis” pursuant to subsection 3.3.1.


 


6.2
Date Fixed for, and Notice of, Redemption; Redemption Price; Reference Value. In the event that the Company elects to redeem the
Warrants pursuant to Section 6.1, the Company shall fix a date for the redemption (the “Redemption Date”).
Notice of redemption shall be mailed by first class mail, postage prepaid, by the Company not less than thirty (30) days prior to the
Redemption Date (the “30-day Redemption Period”) to the Registered Holders of the Warrants to be redeemed at
their last addresses as they shall appear on the registration books. Any notice mailed in the manner herein provided shall be conclusively
presumed to have been duly given whether or not the Registered Holder received such notice. As used in this Agreement, (a) “Redemption
Price” shall mean the price per Warrant at which any Warrants are redeemed pursuant to Section 6.1.


 


6.3
Exercise after Notice of Redemption. The Warrants may be exercised, for cash (or on a “cashless basis” in accordance
with subsection 3.3.1(b) of this Agreement) at any time after notice of redemption shall have been given by the Company pursuant
to Section 6.2 hereof and prior to the Redemption Date. In the event that the Company determines to require all holders of Warrants
to exercise their Warrants on a “cashless basis” pursuant to subsection 3.3.1, the notice of redemption shall contain
the information necessary to calculate the number of Ordinary Shares to be received upon exercise of the Warrants, including the “Fair
Market Value” (as such term is defined in subsection 3.3.1(b) hereof) in such case. On and after the Redemption Date, the
record holder of the Warrants shall have no further rights except to receive, upon surrender of the Warrants, the Redemption Price.


 


7.
Other Provisions Relating to Rights of Holders of Warrants.


 


7.1
No Rights as Shareholder. A Warrant does not entitle the Registered Holder thereof to any of the rights of a shareholder of the
Company, including, without limitation, the right to receive dividends, or other distributions, exercise any preemptive rights to vote
or to consent or to receive notice as a shareholder in respect of the meetings of shareholders or the election of directors of the Company
or any other matter.


 


7.2
Lost, Stolen, Mutilated, or Destroyed Warrants. If any Warrant is lost, stolen, mutilated, or destroyed, the Company and the Warrant
Agent may on such terms as to indemnity or otherwise as they may in their discretion impose (which shall, in the case of a mutilated
Warrant, include the surrender thereof), issue a new Warrant of like denomination, tenor, and date as the Warrant so lost, stolen, mutilated,
or destroyed. Any such new Warrant shall constitute a substitute contractual obligation of the Company, whether or not the allegedly
lost, stolen, mutilated, or destroyed Warrant shall be at any time enforceable by anyone.


 


7.3
Reservation of Ordinary Shares. The Company shall at all times reserve and keep available a number of its authorized but unissued
Ordinary Shares that shall be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this Agreement.


 



    	 



    	 



    

 





7.4
Registration of Ordinary Shares; Cashless Exercise at Company’s Option.


 


7.4.1.
Registration of the Ordinary Shares. The Company agrees that as soon as practicable, but in no event later than twenty (20) Business
Days after the closing of its initial Business Combination, it shall use its commercially reasonable efforts to file with the Commission
a registration statement for the registration, under the Securities Act, of the Ordinary Shares issuable upon exercise of the Warrants.
The Company shall use its commercially reasonable efforts to cause the same to become effective within sixty (60) Business Days following
the closing of its initial Business Combination and to maintain the effectiveness of such registration statement, and a current prospectus
relating thereto, until the expiration or redemption of the Warrants in accordance with the provisions of this Agreement. If any such
registration statement has not been declared effective by the sixtieth (60th) Business Day following the closing of the Business
Combination, holders of the Warrants shall have the right, during the period beginning on the sixty-first (61st) Business Day
after the closing of the Business Combination and ending upon such registration statement being declared effective by the Commission,
and during any other period when the Company shall fail to have maintained an effective registration statement covering the issuance
of the Ordinary Shares issuable upon exercise of the Warrants, to exercise such Warrants on a “cashless basis,” by exchanging
the Warrants (in accordance with Section 3(a)(9) of the Securities Act or another exemption) for that number of Ordinary Shares equal
to the lesser of the quotient obtained by dividing (x) the product of the number of Ordinary Shares k underlying the Warrants, multiplied
by the excess of the “Fair Market Value” (as defined below) over the Warrant Price by (y) the Fair Market Value. Solely for
purposes of this subsection 7.4.1, “Fair Market Value” shall mean the volume-weighted average price
of the Ordinary Shares as reported during the ten (10) trading day period ending on the trading day prior to the date that notice of
exercise is received by the Warrant Agent from the holder of such Warrants or its securities broker or intermediary. The date that notice
of “cashless exercise” is received by the Warrant Agent shall be conclusively determined by the Warrant Agent. In connection
with the “cashless exercise” of a Warrant, the Company shall, upon request, provide the Warrant Agent with an opinion of
counsel for the Company (which shall be an outside law firm with securities law experience) stating that (i) the exercise of the Warrants
on a “cashless basis” in accordance with this subsection 7.4.1 is not required to be registered under the Securities
Act and (ii) the Ordinary Shares issued upon such exercise shall be freely tradable under United States federal securities laws by anyone
who is not an affiliate (as such term is defined in Rule 144 under the Securities Act) of the Company and, accordingly, shall not be
required to bear a restrictive legend. Except as provided in subsection 7.4.2, for the avoidance of doubt, unless and until all
of the Warrants have been exercised or have expired, the Company shall continue to be obligated to comply with its registration obligations
under the first three sentences of this subsection 7.4.1.


 


7.4.2.
Cashless Exercise at Company’s Option. If the Ordinary Shares are at the time of any exercise of a Public Warrant not listed
on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of
the Securities Act (or any successor rule), the Company may, at its option, (i) require holders of Public Warrants who exercise Public
Warrants to exercise such Public Warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act
(or any successor rule) as described in subsection 7.4.1 and (ii) in the event the Company so elects, the Company shall not be
required to file or maintain in effect a registration statement for the registration, under the Securities Act, of the Ordinary Shares
issuable upon exercise of the Warrants, notwithstanding anything in this Agreement to the contrary. If the Company does not elect at
the time of exercise to require a holder of Public Warrants who exercises Public Warrants to exercise such Public Warrants on a “cashless
basis,” it agrees to use its best efforts to register or qualify for sale the Ordinary Shares issuable upon exercise of the Public
Warrant under the blue sky laws of the state of residence in those states in which the Public Warrants were initially offered by the
Company of the exercising Public Warrant holder to the extent an exemption is not available.


 


8.
Concerning the Warrant Agent and Other Matters.


 


8.1
Payment of Taxes. The Company shall from time to time promptly pay all taxes and charges that may be imposed upon the Company
or the Warrant Agent in respect of the issuance or delivery of the Ordinary Shares upon the exercise of the Warrants, but the Company
shall not be obligated to pay any transfer taxes in respect of the Warrants or such Ordinary Shares.


 



    	 



    	 



    

 





8.2
Resignation, Consolidation, or Merger of Warrant Agent.


 


8.2.1
Appointment of Successor Warrant Agent. The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and
be discharged from all further duties and liabilities hereunder after giving sixty (60) days’ notice in writing to the Company.
If the office of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint in writing
a successor Warrant Agent in place of the Warrant Agent. If the Company shall fail to make such appointment within a period of thirty
(30) days after it has been notified in writing of such resignation or incapacity by the Warrant Agent or by the holder of a Warrant
(who shall, with such notice, submit his, her or its Warrant for inspection by the Company), then the holder of any Warrant may apply
to the Supreme Court of the State of New York for the County of New York for the appointment of a successor Warrant Agent at the Company’s
cost. Any successor Warrant Agent, whether appointed by the Company or by such court, shall be a corporation organized and existing under
the laws of the State of New York, in good standing and having its principal office in the Borough of Manhattan, City and State of New
York, and authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal or state
authority. After appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties,
and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any further
act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and deliver, at the
expense of the Company, an instrument transferring to such successor Warrant Agent all the authority, powers, and rights of such predecessor
Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company shall make, execute, acknowledge, and deliver any
and all instruments in writing for more fully and effectually vesting in and confirming to such successor Warrant Agent all such authority,
powers, rights, immunities, duties, and obligations.


 


8.2.2
Notice of Successor Warrant Agent. In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof
to the predecessor Warrant Agent and the Transfer Agent for the Ordinary Shares not later than the effective date of any such appointment.


 


8.2.3
Merger or Consolidation of Warrant Agent. Any corporation into which the Warrant Agent may be merged or with which it may be consolidated
or any corporation resulting from any merger or consolidation to which the Warrant Agent shall be a party shall be the successor Warrant
Agent under this Agreement without any further act.


 


8.3
Fees and Expenses of Warrant Agent.


 


8.3.1
Remuneration. The Company agrees to pay the Warrant Agent reasonable remuneration for its services as such Warrant Agent hereunder
and shall, pursuant to its obligations under this Agreement, reimburse the Warrant Agent upon demand for all expenditures that the Warrant
Agent may reasonably incur in the execution of its duties hereunder.


 


8.3.2.
Further Assurances. The Company agrees to perform, execute, acknowledge, and deliver or cause to be performed, executed, acknowledged,
and delivered all such further and other acts, instruments, and assurances as may reasonably be required by the Warrant Agent for the
carrying out or performing of the provisions of this Agreement.


 


8.4
Liability of Warrant Agent.


 


8.4.1.
Reliance on Company Statement. Whenever in the performance of its duties under this Agreement, the Warrant Agent shall deem it
necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved
and established by a statement signed by the Chief Executive Officer, the Chief Financial Officer, Secretary or Chairman of the Board
of the Company and delivered to the Warrant Agent. The Warrant Agent may rely upon such statement for any action taken or suffered in
good faith by it pursuant to the provisions of this Agreement.


 


8.4.2.
Indemnity. The Warrant Agent shall be liable hereunder only for its own gross negligence, willful misconduct or bad faith. The
Company agrees to indemnify the Warrant Agent and save it harmless against any and all liabilities, including judgments, costs and reasonable
counsel fees, for anything done or omitted by the Warrant Agent in the execution of this Agreement, except as a result of the Warrant
Agent’s gross negligence, willful misconduct or bad faith.


 



    	 



    	 



    

 





8.4.3
Exclusions. The Warrant Agent shall have no responsibility with respect to the validity of this Agreement or with respect to the
validity or execution of any Warrant (except its countersignature thereof). The Warrant Agent shall not be responsible for any breach
by the Company of any covenant or condition contained in this Agreement or in any Warrant. The Warrant Agent shall not be responsible
to make any adjustments required under the provisions of Section 4 hereof or responsible for the manner, method, or amount of
any such adjustment or the ascertaining of the existence of facts that would require any such adjustment; nor shall it by any act hereunder
be deemed to make any representation or warranty as to the authorization or reservation of any Ordinary Shares to be issued pursuant
to this Agreement or any Warrant or as to whether any Ordinary Shares shall, when issued, be valid and fully paid and non-assessable.


 


8.4.4.
Acceptance of Agency. The Warrant Agent hereby accepts the agency established by this Agreement and agrees to perform the same
upon the terms and conditions herein set forth and among other things, shall account promptly to the Company with respect to Warrants
exercised and concurrently account for, and pay to the Company, all monies received by the Warrant Agent for the purchase of Ordinary
Shares through the exercise of the Warrants.


 


8.4.5
Waiver. The Warrant Agent has no right of set-off or any other right, title, interest or claim of any kind (“Claim”)
in, or to any distribution of, the Trust Account (as defined in that certain Investment Management Trust Agreement, dated as of the date
hereof, by and between the Company and the Warrant Agent as trustee thereunder) and hereby agrees not to seek recourse, reimbursement,
payment or satisfaction for any Claim against the Trust Account for any reason whatsoever. The Warrant Agent hereby waives any and all
Claims against the Trust Account and any and all rights to seek access to the Trust Account.


 


9.
Miscellaneous Provisions.


 


9.1
Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall
bind and inure to the benefit of their respective successors and assigns.


 


9.2
Notices. Any notice, statement or demand authorized by this Agreement to be given or made by the Warrant Agent or by the holder
of any Warrant to or on the Company shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified
mail or private courier service within five (5) days after deposit of such notice, postage prepaid, addressed (until another address
is filed in writing by the Company with the Warrant Agent), as follows:


 


Pono
Capital Three, Inc.


643
Ilalo Street


Honolulu,
Hawaii 96813


Attn.:
Davin Kazama, Chief Executive Officer


 


Any
notice, statement or demand authorized by this Agreement to be given or made by the holder of any Warrant or by the Company to or on
the Warrant Agent shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private
courier service within five (5) days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing
by the Warrant Agent with the Company), as follows:


 


Continental
Stock Transfer & Trust Company


1
State Street, 30th Floor


New
York, NY 10004


Attn:
Compliance Department


 


9.3
Applicable Law and Exclusive Forum. The validity, interpretation, and performance of this Agreement and of the Warrants shall
be governed in all respects by the laws of the State of New York, without giving effect to conflicts of law principles that would result
in the application of the substantive laws of another jurisdiction. The Company hereby agrees that any action, proceeding or claim against
it arising out of or relating in any way to this Agreement shall be brought and enforced in the courts of the City of New York, County
of New York, State of New York or the United States District Court for the Southern District of New York, and irrevocably submits to
such jurisdiction, which jurisdiction shall be exclusive, forum for any such action, proceeding or claim. The Company hereby waives any
objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Notwithstanding the foregoing, the provisions
of this paragraph will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for
which the federal district courts of the United States of America are the sole and exclusive forum.


 






    	 



    	 



    

 


Any
person or entity purchasing or otherwise acquiring any interest in the Warrants shall be deemed to have notice of and to have consented
to the forum provisions in this Section 9.3. If any action, the subject matter of which is within the scope the forum provisions
above, is filed in a court other than a court located within the State of New York or the United States District Court for the Southern
District of New York (a “foreign action”) in the name of any warrant holder, such warrant holder shall be deemed
to have consented to: (x) the personal jurisdiction of the state and federal courts located within the State of New York or the United
States District Court for the Southern District of New York in connection with any action brought in any such court to enforce the forum
provisions (an “enforcement action”), and (y) having service of process made upon such warrant holder in any
such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.


 


9.4
Persons Having Rights under this Agreement. Nothing in this Agreement shall be construed to confer upon, or give to, any person
or corporation other than the parties hereto and the Registered Holders of the Warrants any right, remedy, or claim under or by reason
of this Agreement or of any covenant, condition, stipulation, promise, or agreement hereof. All covenants, conditions, stipulations,
promises, and agreements contained in this Agreement shall be for the sole and exclusive benefit of the parties hereto and their successors
and assigns and of the Registered Holders of the Warrants.


 


9.5
Examination of the Warrant Agreement. A copy of this Agreement shall be available at all reasonable times at the office of the
Warrant Agent in the Borough of Manhattan, City and State of New York, for inspection by the Registered Holder of any Warrant. The Warrant
Agent may require any such holder to submit such holder’s Warrant for inspection by the Warrant Agent.


 


9.6
Counterparts. This Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts
shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.


 


9.7
Effect of Headings. The section headings herein are for convenience only and are not part of this Agreement and shall not affect
the interpretation thereof.


 


9.8
Amendments. This Agreement may be amended by the parties hereto without the consent of any Registered Holder for the purpose of
curing any ambiguity, or curing, correcting or supplementing any defective provision contained herein or adding or changing any other
provisions with respect to matters or questions arising under this Agreement as the parties may deem necessary or desirable and that
the parties deem shall not adversely affect the interest of the Registered Holders. All other modifications or amendments, including
any amendment to increase the Warrant Price or shorten the Exercise Period, shall require the vote or written consent of the Registered
Holders of 50% of the then-outstanding Public Warrants and, solely with respect to any amendment to the terms of the Private Placement
Warrants, the Working Capital Warrants, the Extension Warrants or the Post-IPO Warrants or any provision of this Agreement with respect
to the Private Placement Warrants, the Working Capital Warrants, or the Extension Warrants, 50% of the number of the then outstanding
Private Placement Warrants, Working Capital Warrants, or Extension Warrants, as applicable. Notwithstanding the foregoing, the Company
may lower the Warrant Price or extend the duration of the Exercise Period pursuant to Sections 3.1 and 3.2, respectively,
without the consent of the Registered Holders.


 


9.9
Severability. This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof
shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any
such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision
as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.


 


Exhibit
A — Form of Warrant Certificate


Exhibit
B — Legend — Private Placement Warrants, Working Capital Warrants, and Extension Warrants


 




    	 



    	 



    

 


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


 


	 	PONO CAPITAL THREE, INC.
	 	 	 
	 	By:	 
	 	Name:	 Davin Kazama
	 	Title:	Chief
Executive Officer

    



 





	 	CONTINENTAL STOCK TRANSFER & TRUST COMPANY,
	 	as Warrant Agent
	 	 	 
	 	By:	 
	 	Name:	
	 	Title:	Vice President

    



 









[signature
page to Warrant Agreement]


 




    	 



    	 



    

 


EXHIBIT
A


 


Form
of Warrant Certificate


[FACE]


Number


Warrants


THIS
WARRANT SHALL BE VOID IF NOT EXERCISED PRIOR TO

THE EXPIRATION OF THE EXERCISE PERIOD PROVIDED FOR

IN THE WARRANT AGREEMENT DESCRIBED BELOW


 


Pono
Capital Three, Inc.


Incorporated
Under the Laws of the Cayman Islands


 


CUSIP
73245C113


Warrant
Certificate


 


This
Warrant Certificate certifies that [__], or registered assigns, is the registered holder of [__] warrant(s) (the “Warrants”
and each, a “Warrant”) to purchase Class A ordinary shares, $0.0001 par value (“Ordinary Shares”),
of Pono Capital Three, Inc., a Cayman Islands exempted company (the “Company”). Each whole Warrant entitles
the holder, upon exercise during the period set forth in the Warrant Agreement referred to below, to receive from the Company that number
of fully paid and nonassessable Ordinary Shares as set forth below, at the exercise price (the “Exercise Price”)
as determined pursuant to the Warrant Agreement, payable in lawful money (or through “cashless exercise” as
provided for in the Warrant Agreement) of the United States of America upon surrender of this Warrant Certificate and payment of the
Exercise Price at the office or agency of the Warrant Agent referred to below, subject to the conditions set forth herein and in the
Warrant Agreement. Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the
Warrant Agreement.


 


Each
whole Warrant is initially exercisable for one fully paid and non-assessable Ordinary Shares. Fractional shares shall not be issued upon
exercise of any Warrant. If, upon the exercise of Warrants, a holder would be entitled to receive a fractional interest in an Ordinary
Share, the Company shall, upon exercise, round down to the nearest whole number the number of Ordinary Shares to be issued to the Warrant
holder. The number of Ordinary Shares issuable upon exercise of the Warrants is subject to adjustment upon the occurrence of certain
events as set forth in the Warrant Agreement.


 


The
initial Exercise Price per Ordinary Share for any Warrant is equal to $11.50 per share. The Exercise Price is subject to adjustment upon
the occurrence of certain events as set forth in the Warrant Agreement.


 


Subject
to the conditions set forth in the Warrant Agreement, the Warrants may be exercised only during the Exercise Period and to the extent
not exercised by the end of such Exercise Period, such Warrants shall become void. The Warrants may be redeemed, subject to certain conditions,
as set forth in the Warrant Agreement.


 


Reference
is hereby made to the further provisions of this Warrant Certificate set forth on the reverse hereof and such further provisions shall
for all purposes have the same effect as though fully set forth at this place.


 


This
Warrant Certificate shall not be valid unless countersigned by the Warrant Agent, as such term is used in the Warrant Agreement. This
Warrant Certificate shall be governed by and construed in accordance with the internal laws of the State of New York.


 




    	 



    	 



    

 





[Form
of Warrant Certificate]





[Reverse]


 


The
Warrants evidenced by this Warrant Certificate are part of a duly authorized issue of Warrants entitling the holder on exercise to receive
[__] Ordinary Shares and are issued or to be issued pursuant to a Warrant Agreement dated as of [ ], 2023 (the “Warrant Agreement”),
duly executed and delivered by the Company to Continental Stock Transfer & Trust Company, a limited purpose trust company, as warrant
agent (the “Warrant Agent”), which Warrant Agreement is hereby incorporated by reference in and made a part
of this instrument and is hereby referred to for a description of the rights, limitation of rights, obligations, duties and immunities
thereunder of the Warrant Agent, the Company and the holders (the words “holders” or “holder”
meaning the Registered Holders or Registered Holder, respectively) of the Warrants. A copy of the Warrant Agreement may be obtained by
the holder hereof upon written request to the Company. Defined terms used in this Warrant Certificate but not defined herein shall have
the meanings given to them in the Warrant Agreement.


 


Warrants
may be exercised at any time during the Exercise Period set forth in the Warrant Agreement. The holder of Warrants evidenced by this
Warrant Certificate may exercise them by surrendering this Warrant Certificate, with the form of Election to Purchase set forth hereon
properly completed and executed, together with payment of the Exercise Price as specified in the Warrant Agreement (or through “cashless
exercise” as provided for in the Warrant Agreement) at the principal corporate trust office of the Warrant Agent. In the event
that upon any exercise of Warrants evidenced hereby the number of Warrants exercised shall be less than the total number of Warrants
evidenced hereby, there shall be issued to the holder hereof or his, her or its assignee, a new Warrant Certificate evidencing the number
of Warrants not exercised.


 


Notwithstanding
anything else in this Warrant Certificate or the Warrant Agreement, no Warrant may be exercised unless at the time of exercise (i) a
registration statement covering the issuance of the Ordinary Shares to be issued upon exercise is effective under the Securities Act
and (ii) a prospectus thereunder relating to the Ordinary Shares is current, except through “cashless exercise” as provided
for in the Warrant Agreement.


 


The
Warrant Agreement provides that upon the occurrence of certain events the number of Ordinary Shares issuable upon exercise of the Warrants
set forth on the face hereof may, subject to certain conditions, be adjusted. If, upon exercise of a Warrant, the holder thereof would
be entitled to receive a fractional interest in an Ordinary Share, the Company shall, upon exercise, round down to the nearest whole
number of Ordinary Shares to be issued to the holder of the Warrant.


 


Warrant
Certificates, when surrendered at the principal corporate trust office of the Warrant Agent by the Registered Holder thereof in person
or by legal representative or attorney duly authorized in writing, may be exchanged, in the manner and subject to the limitations provided
in the Warrant Agreement, but without payment of any service charge, for another Warrant Certificate or Warrant Certificates of like
tenor evidencing in the aggregate a like number of Warrants.


 


Upon
due presentation for registration of transfer of this Warrant Certificate at the office of the Warrant Agent a new Warrant Certificate
or Warrant Certificates of like tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee(s)
in exchange for this Warrant Certificate, subject to the limitations provided in the Warrant Agreement, without charge except for any
tax or other governmental charge imposed in connection therewith.


 


The
Company and the Warrant Agent may deem and treat the Registered Holder(s) hereof as the absolute owner(s) of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, of any distribution
to the holder(s) hereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to
the contrary. Neither the Warrants nor this Warrant Certificate entitles any holder hereof to any rights of a shareholder of the Company.


 




    	 



    	 



    

 


Election
to Purchase


 


(To
Be Executed Upon Exercise of Warrant)


 


The
undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, to receive [  ] Ordinary Shares
and herewith tenders payment for such Ordinary Shares to the order of Pono Capital Three, Inc. (the “Company”)
in the amount of $[  ] in accordance with the terms hereof. The undersigned requests that a certificate for such Ordinary Shares be registered
in the name of [  ], whose address is [  ] and that such Ordinary Shares be delivered to [  ] whose address is [  ]. If said [  ] number of
Ordinary Shares is less than all of the Ordinary Shares purchasable hereunder, the undersigned requests that a new Warrant Certificate
representing the remaining balance of such Ordinary Shares be registered in the name of [  ], whose address is [  ] and that such Warrant
Certificate be delivered to [  ], whose address is [  ].


 


In
the event that the Warrant is to be exercised on a “cashless” basis pursuant to Section 7.4 of the Warrant Agreement,
the number of Ordinary Shares that this Warrant is exercisable for shall be determined in accordance with Section 7.4 of the Warrant
Agreement.


 


In
the event that the Warrant may be exercised, to the extent allowed by the Warrant Agreement, through cashless exercise (i) the number
of Ordinary Shares that this Warrant is exercisable for would be determined in accordance with the relevant section of the Warrant Agreement
which allows for such cashless exercise and (ii) the holder hereof shall complete the following: The undersigned hereby irrevocably elects
to exercise the right, represented by this Warrant Certificate, through the cashless exercise provisions of the Warrant Agreement, to
receive Ordinary Shares. If said number of shares is less than all of the Ordinary Shares purchasable hereunder (after giving effect
to the cashless exercise), the undersigned requests that a new Warrant Certificate representing the remaining balance of such Ordinary
Shares be registered in the name of [ ], whose address is [ ] and that such Warrant Certificate be delivered to [  ], whose address is
[ ].


 


(Signature
Page Follows)


 


Date:
[__], 20[__]


	 	(Signature)

     

	 	 

     

	 	 

     

	 	 
	 	 

     

	 	 
	 	 
	 	(Address)

     

	 	 
	 	(Tax
    Identification Number)


Signature
Guaranteed:


 


 


	 	 


THE
SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT
UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15 UNDER THE SECURITIES EXCHANGE
ACT OF 1934, AS AMENDED).


 




    	 



    	 



    

 


EXHIBIT
B


 


PRIVATE
PLACEMENT WARRANTS WORKING CAPITAL WARRANTS, AND EXTENSION WARRANTS LEGEND


 


“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAWS, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND ANY APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE. IN ADDITION, SUBJECT TO ANY ADDITIONAL LIMITATIONS
ON TRANSFER DESCRIBED IN THE LETTER AGREEMENT BY AND AMONG PONO CAPITAL THREE, INC. (THE “COMPANY”), MEHANA
CAPITAL LLC AND THE OTHER PARTIES THERETO, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD OR TRANSFERRED PRIOR TO THE
DATE THAT IS THIRTY (30) DAYS AFTER THE DATE UPON WHICH THE COMPANY COMPLETES ITS INITIAL BUSINESS COMBINATION (AS DEFINED IN SECTION
3 OF THE WARRANT AGREEMENT REFERRED TO HEREIN).


 


SECURITIES
EVIDENCED BY THIS CERTIFICATE AND CLASS A ORDINARY SHARES OF THE COMPANY ISSUED UPON EXERCISE OF SUCH SECURITIES SHALL BE ENTITLED TO
REGISTRATION RIGHTS UNDER A REGISTRATION RIGHTS AGREEMENT TO BE EXECUTED BY THE COMPANY.”


 


No.
Warrants