Exhibit
10.1


 


INVESTMENT
MANAGEMENT TRUST AGREEMENT


 


This
Investment Management Trust Agreement (the “Agreement”) is made effective as of [   ], 2023 by and between Pono
Capital Three, Inc., a Cayman Islands exempted company with registration number [   ] (the “Company”), and Continental
Stock Transfer & Trust Company, LLC, a New York corporation (the “Trustee”).


 


WHEREAS,
the Company’s registration statement on Form S-1, No. 333-[           ] (the “Registration Statement”) and prospectus
(the “Prospectus”) for the initial public offering of the Company’s units (the “Units”),
each of which consists of one of the Company’s Class A ordinary shares, par value $0.0001 per share (the “Ordinary
Shares”) and one redeemable warrant, with each warrant entitling the holder thereof to purchase one Ordinary Share (such
initial public offering hereinafter referred to as the “Offering”), has been declared effective as of the date
hereof by the U.S. Securities and Exchange Commission; and


 


WHEREAS,
the Company has entered into an Underwriting Agreement (the “Underwriting Agreement”) with EF Hutton, division
of Benchmark Investments, LLC, as representative (the “Representative”) of the several underwriters (the “Underwriters”);
and


 


WHEREAS,
as described in the Prospectus, $102,500,000 of the gross proceeds of the Offering and sale of the Private Placement Units (as defined
in the Underwriting Agreement) (or $117,875,000 if the Underwriters’ over-allotment option is exercised in full), plus any amounts
to be deposited in connection with an Extension (as defined below), will be delivered to the Trustee to be deposited and held in a segregated
trust account located at all times in the United States (the “Trust Account”) for the benefit of the Company
and the holders of the Ordinary Shares included in the Units issued in the Offering as hereinafter provided (the amount to be delivered
to the Trustee (and any interest subsequently earned thereon) is referred to herein as the “Property,” the
shareholders for whose benefit the Trustee shall hold the Property will be referred to as the “Public Shareholders,”
and the Public Shareholders and the Company will be referred to together as the “Beneficiaries”); and


 


WHEREAS,
pursuant to the Underwriting Agreement, a portion of the Property equal to $3,500,000, or $4,025,000 if the Underwriters’ over-allotment
option is exercised in full, is attributable to deferred underwriting discounts and commissions that will be payable by the Company to
the Underwriters upon and concurrently with the consummation of the Business Combination (as defined below) (the “Deferred
Discount”); and


 


WHEREAS,
if a Business Combination is not consummated within the initial 9-month period following the closing of the Offering, the Company may
extend such period by nine one-month periods (an “Extension”), up to a maximum of 18 months in the aggregate,
subject to the Company’s sponsor Mehana Capital LLC (the “Sponsor”) or its affiliates or designees depositing
$330,000 (or $379,500 if the Underwriters’ over-allotment option is exercised in full, or in any case, $0.033 per Unit) for such
Extension into the Trust Account no later than five days prior the 9-month anniversary of the Offering or such later date as extended
(each, an “Applicable Deadline” for each one month Extension), as applicable, in exchange for which the Sponsor
will receive non-interest bearing, unsecured promissory notes; and


 


WHEREAS,
the Company and the Trustee desire to enter into this Agreement to set forth the terms and conditions pursuant to which the Trustee shall
hold the Property.


 


NOW
THEREFORE, IT IS AGREED:


 


1.
Agreements and Covenants of Trustee. The Trustee hereby agrees and covenants to:


 


(a)
Hold the Property in trust for the Beneficiaries in accordance with the terms of this Agreement in the Trust Account established by the
Trustee in the United States at Morgan Stanley Wealth Management. (or at another U.S. chartered commercial bank with consolidated assets
of $100 billion or more), and at a brokerage institution selected by the Trustee that is reasonably satisfactory to the Company;


 




    	 



     


    




 


(b)
Manage, supervise and administer the Trust Account subject to the terms and conditions set forth herein;


 


(c)
In a timely manner, upon the written instruction of the Company, invest and reinvest the Property in United States government securities
within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended, having a maturity of 185 days or less, or in
money market funds meeting the conditions of paragraphs (d)(1), (d)(2), (d)(3) and (d)(4) of Rule 2a-7 promulgated under the Investment
Company Act of 1940, as amended (or any successor rule), which invest only in direct U.S. government treasury obligations, as determined
by the Company; the Trustee may not invest in any other securities or assets, it being understood that the Trust Account will earn no
interest while account funds are uninvested awaiting the Company’s instructions hereunder; while account funds are invested or
uninvested, the Trustee may earn bank credits or other consideration;


 


(d)
Collect and receive, when due, all interest or other income arising from the Property, which shall become part of the “Property,”
as such term is used herein;


 


(e)
Promptly notify the Company and the Representative of all communications received by the Trustee with respect to any Property requiring
action by the Company;


 


(f)
Supply any necessary information or documents as may be requested by the Company (or its authorized agents) in connection with the Company’s
preparation of the tax returns relating to assets held in the Trust Account;


 


(g)
Participate in any plan or proceeding for protecting or enforcing any right or interest arising from the Property if, as and when instructed
by the Company to do so;


 


(h)
Render to the Company monthly written statements of the activities of, and amounts in, the Trust Account reflecting all receipts and
disbursements of the Trust Account;


 


(i)
Commence liquidation of the Trust Account only after and promptly after (x) receipt of, and only in accordance with, the terms of a letter
from the Company (“Termination Letter”) in a form substantially similar to that attached hereto as either Exhibit
A or Exhibit B, as applicable, signed on behalf of the Company by its Chief Executive Officer, its Chief Financial Officer, its Secretary
or its Chairman of the board of directors of the Company (the “Board”) or other authorized officer of the Company, and, in
the case of Exhibit A, acknowledged and agreed to by the Representative, and complete the liquidation of the Trust Account and distribute
the Property in the Trust Account, including interest not previously released to the Company to pay its taxes, only as directed in the
Termination Letter and the other documents referred to therein, or (y) upon the date which is the later of (i) 9 months after the closing
of the offering (or up to 18 months after the closing of the offering if the Company extends the period of time to consummate a Business
Combination as described in more detail in the Prospectus) or (ii) such later date as may be approved by the Company’s shareholders
in accordance with the Company’s amended and restated memorandum and articles of association, if a Termination Letter has not been
received by the Trustee prior to such date, in which case the Trust Account shall be liquidated in accordance with the procedures set
forth in the Termination Letter attached as Exhibit B and the Property in the Trust Account, including interest (net of taxes payable,
less up to $100,000 of interest that may be released to the Company to pay dissolution expenses) shall be distributed to the Public Shareholders
of record as of such date; provided, however, that in the event the Trustee receives a Termination Letter in a form substantially similar
to Exhibit B hereto, or if the Trustee begins to liquidate the Property because it has received no such Termination Letter by the date
specified in clause (y) of this Section 1(i), the Trustee shall keep the Trust Account open until twelve (12) months following the date
the Property has been distributed to the Public Shareholders;


 


(j)
Upon written request from the Company, which may be given from time to time in a form substantially similar to that attached hereto as
Exhibit C, withdraw from the Trust Account and distribute to the Company the amount of interest earned on the Property requested by the
Company to cover any tax obligation owed by the Company as a result of assets of the Company or interest or other income earned on the
Property, which amount shall be delivered directly to the Company by electronic funds transfer or other method of prompt payment, and
the Company shall forward such payment to the relevant taxing authority; provided, however, that to the extent there is not sufficient
cash in the Trust Account to pay such tax obligation, the Trustee shall liquidate such assets held in the Trust Account as shall be designated
by the Company in writing to make such distribution so long as there is no reduction in the principal amount per share initially deposited
in the Trust Account. The written request of the Company in the form of Exhibit C referenced above shall constitute presumptive evidence
that the Company is entitled to said funds, and the Trustee shall have no responsibility to look beyond said request (it being acknowledged
and agreed that any such amount in excess of interest income earned on the Property shall not be payable from the Trust Account);


 




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(k)
Upon receipt of an extension letter (“Extension Letter”) substantially similar to Exhibit D hereto at least
five business days prior to the Applicable Deadline, signed on behalf of the Company by an executive officer, and receipt of the dollar
amount specified in the Extension Letter on or prior to the Applicable Deadline, the Trustee shall follow the instructions set forth
in the Extension Letter.


 


(l)
Upon written request from the Company, which may be given from time to time in a form substantially similar to that attached hereto as
Exhibit E, the Trustee shall distribute to the Public Shareholders of record as of such date the amount requested by the Company to be
used to redeem Ordinary Share from Public Shareholders properly submitted in connection with a shareholder vote to approve an amendment
to the Company’s amended and restated memorandum and articles of association (a) to modify the substance or timing of the Company’s
obligation to redeem 100% of the Ordinary Share included in the Units sold in the Offering if the Company has not consummated an initial
Business Combination within such time as is described in the Company’s amended and restated memorandum and articles of association
or (b) with respect to any other provisions relating to shareholders’ rights or pre-initial Business Combination activity. The
written request of the Company referenced above shall constitute presumptive evidence that the Company is entitled to distribute said
funds, and the Trustee shall have no responsibility to look beyond said request; and


 


(m)
Not make any withdrawals or distributions from the Trust Account other than pursuant to Section 1(i), (j) or (l) above.


 


2.
Agreements and Covenants of the Company. The Company hereby agrees and covenants to:


 


(a)
Give all instructions to the Trustee hereunder in writing, signed by the Company’s Chairman of the Board, Chief Executive Officer,
Chief Financial Officer or Secretary. In addition, except with respect to its duties under Sections 1(i), 1(j) and 1(l) hereof, the Trustee
shall be entitled to rely on, and shall be protected in relying on, any verbal or telephonic advice or instruction which it, in good
faith and with reasonable care, believes to be given by any one of the persons authorized above to give written instructions, provided
that the Company shall promptly confirm such instructions in writing;


 


(b)
Subject to Section 4 hereof, hold the Trustee harmless and indemnify the Trustee from and against any and all expenses, including reasonable
counsel fees and disbursements, or losses suffered by the Trustee in connection with any action taken by it hereunder and in connection
with any action, suit or other proceeding brought against the Trustee involving any claim, or in connection with any claim or demand,
which in any way arises out of or relates to this Agreement, the services of the Trustee hereunder, or the Property or any interest earned
on the Property, except for expenses and losses resulting from the Trustee’s gross negligence, fraud or willful misconduct. Promptly
after the receipt by the Trustee of notice of demand or claim or the commencement of any action, suit or proceeding, pursuant to which
the Trustee intends to seek indemnification under this Section 2(b), it shall notify the Company in writing of such claim (hereinafter
referred to as the “Indemnified Claim”). The Trustee shall have the right to conduct and manage the defense
against such Indemnified Claim; provided that the Trustee shall obtain the consent of the Company with respect to the selection of counsel,
which consent shall not be unreasonably withheld or delayed. The Trustee may not agree to settle any Indemnified Claim without the prior
written consent of the Company, which such consent shall not be unreasonably withheld or delayed. The Company may participate in such
action with its own counsel;


 


(c)
Pay the Trustee the fees set forth on Schedule A hereto, including an initial acceptance fee, annual administration fee, and transaction
processing fee which fees shall be subject to modification by the parties from time to time. It is expressly understood that the Property
shall not be used to pay such fees unless and until the consummation of the Business Combination (as defined below). The Company shall
pay the Trustee the initial acceptance fee and the first annual administration fee at the consummation of the Offering. The Company shall
not be responsible for any other fees or charges of the Trustee except as set forth in this Section 2(c), Schedule A and as may be provided
in Section 2(b) hereof;


 




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(d)
In connection with any vote of the Company’s shareholders regarding a merger, capital share exchange, asset acquisition, share
purchase, reorganization or similar business combination involving the Company and one or more businesses (the “Business
Combination”), provide to the Trustee an affidavit or certificate of the inspector of elections for the shareholder meeting
verifying the vote of such shareholders regarding such Business Combination;


 


(e)
Provide the Representative with a copy of any Termination Letter(s) and/or any other correspondence that is sent to the Trustee with
respect to any proposed withdrawal from the Trust Account promptly after it issues the same;


 


(f)
Instruct the Trustee to make only those distributions that are permitted under this Agreement, and refrain from instructing the Trustee
to make any distributions that are not permitted under this Agreement;


 


(g)
Within four (4) business days after the Underwriters exercise the over-allotment option (or any unexercised portion thereof) or such
over-allotment option expires, provide the Trustee with a notice in writing of the total amount of the Deferred Discount, which shall
in no event be less than $3,500,000;


 


(h)
Promptly following an Applicable Deadline, disclose whether or not the term the Company has to consummate a Business Combination has
been extended; and


 


(i)
Unless otherwise agreed between the Company and the Representative, ensure that any Instruction Letter (as defined in Exhibit A) delivered
in connection with a Termination Letter in the form of Exhibit A expressly provides that the Deferred Discount is paid directly to the
account or accounts directed by the Representative on behalf of the Underwriters prior to any transfer of the funds held in the Trust
Account to the Company or any other person.


 


3.
Limitations of Liability. The Trustee shall have no responsibility or liability to:


 


(a)
Imply obligations, perform duties, inquire or otherwise be subject to the provisions of any agreement or document other than this Agreement
and that which is expressly set forth herein;


 


(b)
Take any action with respect to the Property, other than as directed in Section 1 hereof, and the Trustee shall have no liability to
any third party except for liability arising out of the Trustee’s gross negligence, fraud or willful misconduct;


 


(c)
Institute any proceeding for the collection of any principal and income arising from, or institute, appear in or defend any proceeding
of any kind with respect to, any of the Property unless and until it shall have received instructions from the Company given as provided
herein to do so and the Company shall have advanced or guaranteed to it funds sufficient to pay any expenses incident thereto;


 


(d)
Refund any depreciation in principal of any Property;


 


(e)
Assume that the authority of any person designated by the Company to give instructions hereunder shall not be continuing unless provided
otherwise in such designation, or unless the Company shall have delivered a written revocation of such authority to the Trustee;


 




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(f)
The other parties hereto or to anyone else for any action taken or omitted by it, or any action suffered by it to be taken or omitted,
in good faith and in the Trustee’s reasonable best judgment, except for the Trustee’s gross negligence, fraud or willful
misconduct. The Trustee may rely conclusively and shall be protected in acting upon any order, notice, demand, certificate, opinion or
advice of counsel (including counsel chosen by the Trustee, which counsel may be the Company’s counsel), statement, instrument,
report or other paper or document (not only as to its due execution and the validity and effectiveness of its provisions, but also as
to the truth and acceptability of any information therein contained) which the Trustee believes, in good faith and with reasonable care,
to be genuine and to be signed or presented by the proper person or persons. The Trustee shall not be bound by any notice or demand,
or any waiver, modification, termination or rescission of this Agreement or any of the terms hereof, unless evidenced by a written instrument
delivered to the Trustee, signed by the proper party or parties and, if the duties or rights of the Trustee are affected, unless it shall
give its prior written consent thereto;


 


(g)
Verify the accuracy of the information contained in the Registration Statement;


 


(h)
Provide any assurance that any Business Combination entered into by the Company or any other action taken by the Company is as contemplated
by the Registration Statement;


 


(i)
File information returns with respect to the Trust Account with any local, state or federal taxing authority or provide periodic written
statements to the Company documenting the taxes payable by the Company, if any, relating to any interest income earned on the Property;


 


(j)
Prepare, execute and file tax reports, income or other tax returns and pay any taxes with respect to any income generated by, and activities
relating to, the Trust Account, regardless of whether such tax is payable by the Trust Account or the Company, including, but not limited
to, franchise and income tax obligations, except pursuant to Section 1(j) hereof; or


 


(k)
Verify calculations, qualify or otherwise approve the Company’s written requests for distributions pursuant to Sections 1(i), 1(j)
and 1(l) hereof.


 


4.
Trust Account Waiver. The Trustee has no right of set-off or any right, title, interest or claim of any kind (“Claim”)
to, or to any monies in, the Trust Account, and hereby irrevocably waives any Claim to, or to any monies in, the Trust Account that it
may have now or in the future. In the event the Trustee has any Claim against the Company under this Agreement, including, without limitation,
under Section 2(b) or Section 2(c) hereof, the Trustee shall pursue such Claim solely against the Company and its assets outside the
Trust Account and not against the Property or any monies in the Trust Account.


 


5.
Termination. This Agreement shall terminate as follows:


 


(a)
If the Trustee gives written notice to the Company that it desires to resign under this Agreement, the Company shall use its reasonable
efforts to locate a successor trustee, pending which the Trustee shall continue to act in accordance with this Agreement. At such time
that the Company notifies the Trustee that a successor trustee has been appointed and has agreed to become subject to the terms of this
Agreement, the Trustee shall transfer the management of the Trust Account to the successor trustee, including but not limited to the
transfer of copies of the reports and statements relating to the Trust Account, whereupon this Agreement shall terminate; provided, however,
that in the event that the Company does not locate a successor trustee within ninety (90) days of receipt of the resignation notice from
the Trustee, the Trustee may submit an application to have the Property deposited with any court in the State of New York or with the
United States District Court for the Southern District of New York and upon such deposit, the Trustee shall be immune from any liability
whatsoever; or


 


(b)
At such time that the Trustee has completed the liquidation of the Trust Account and its obligations in accordance with the provisions
of Section 1(i) hereof and distributed the Property in accordance with the provisions of the Termination Letter, this Agreement shall
terminate except with respect to Section 2(b).


 


6.
Miscellaneous.


 


(a)
The Company and the Trustee each acknowledge that the Trustee will follow the security procedures set forth below with respect to funds
transferred from the Trust Account. The Company and the Trustee will each restrict access to confidential information relating to such
security procedures to authorized persons. Each party must notify the other party immediately if it has reason to believe unauthorized
persons may have obtained access to such confidential information, or of any change in its authorized personnel. In executing funds transfers,
the Trustee shall rely upon all information supplied to it by the Company, including, account names, account numbers, and all other identifying
information relating to a Beneficiary, Beneficiary’s bank or intermediary bank. Except for any liability arising out of the Trustee’s
gross negligence, fraud or willful misconduct, the Trustee shall not be liable for any loss, liability or expense resulting from any
error in the information or transmission of the funds.


 




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(b)
This Agreement shall be governed by and construed and enforced in accordance with 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. This Agreement may
be executed in several original or facsimile counterparts, each one of which shall constitute an original, and together shall constitute
but one instrument.


 


(c)
This Agreement contains the entire agreement and understanding of the parties hereto with respect to the subject matter hereof. This
Agreement or any provision hereof may only be changed, amended or modified (other than to correct a typographical error) by a writing
signed by each of the parties hereto.


 


(d)
This Agreement or any provision hereof may only be changed, amended or modified pursuant to Section 6(c) hereof with the Consent of the
Shareholders, it being the specific intention of the parties hereto that each of the Company’s shareholders is, and shall be, a
third-party beneficiary of this Section 6(d) with the same right and power to enforce this Section 6(d) as the other parties hereto.
For purposes of this Section 6(d), the “Consent of the Shareholders” means receipt by the Trustee of a certificate from the
inspector of elections of the shareholder meeting certifying that either (i) the Company’s shareholders of record as of a record
date who hold sixty-five percent (65%) or more of all then outstanding Ordinary Share and Class B ordinary shares, par value $0.0001
per share, of the Company voting together as a single class, have voted in favor of such change, amendment or modification, or (ii) the
Company’s shareholders of record as of the record date who hold sixty-five percent (65%) or more of all then outstanding Ordinary
Share and Class B ordinary shares, par value $0.0001 per share, of the Company voting together as a single class, have delivered to such
entity a signed writing approving such change, amendment or modification. No such amendment will affect any Public Shareholder who has
otherwise indicated his election to redeem his Ordinary Share in connection with a shareholder vote sought to amend this Agreement. Except
for any liability arising out of the Trustee’s gross negligence, fraud or willful misconduct, the Trustee may rely conclusively
on the certification from the inspector or elections referenced above and shall be relieved of all liability to any party for executing
the proposed amendment in reliance thereon.


 


(e)
The parties hereto consent to the jurisdiction and venue of any state or federal court located in the City of New York, State of New
York, for purposes of resolving any disputes hereunder. AS TO ANY CLAIM, CROSS-CLAIM OR COUNTERCLAIM IN ANY WAY RELATING TO THIS AGREEMENT,
EACH PARTY WAIVES THE RIGHT TO TRIAL BY JURY.


 


(f)
Any notice, consent or request to be given in connection with any of the terms or provisions of this Agreement shall be in writing and
shall be sent by express mail or similar private courier service, by certified mail (return receipt requested), by hand delivery or by
facsimile or email transmission:


 


if
to the Trustee, to:


 


Continental
Stock Transfer & Trust Company


1
State Street, 30th Floor


New
York, NY 10004


Attn:
Francis Wolf and Celeste Gonzalez


Email:
fwolf@continentalstock.com


Email:
cgonzalez@continentalstock.com


 


if
to the Company, to:


 


Pono
Capital Three, Inc.





643
Ilalo Street


Honolulu,
Hawaii 96813


Telephone:
(808) 892-6611


Attn.:
Davin Kazama, Chief Executive Officer


 




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in
each case, with copies to:


 


Nelson
Mullins Riley & Scarborough LLP





101
Constitution Ave., N.W., Suite 900


Washington,
D.C. 20001


Attn.:
Andrew M. Tucker, Esq.


Telephone
No.: (202) 689-2800


Email:
andy.tucker@nelsonmullins.com


 


and


 


EF
Hutton, division of Benchmark Investments, LLC





590
Madison Avenue, 39th Floor


New
York, NY 10022


Attn.:
Legal Department


and


 


Kirkland
& Ellis LLP


601
Lexington Avenue


New
York, NY 10022


	Attn.:	Christian
    O. Nagler, Esq.
	 	Peter
    S. Seligson, Esq.


Telephone
No.: (212) 446-4800


	Email:	cnagler@kirkland.com
	 	peter.seligson@kirkland.com


 


(g)
Each of the Company and the Trustee hereby represents that it has the full right and power and has been duly authorized to enter into
this Agreement and to perform its respective obligations as contemplated hereunder. The Trustee acknowledges and agrees that it shall
not make any claims or proceed against the Trust Account, including by way of set-off, and shall not be entitled to any funds in the
Trust Account under any circumstance.


 


(h)
This Agreement is the joint product of the Trustee and the Company and each provision hereof has been subject to the mutual consultation,
negotiation and agreement of such parties and shall not be construed for or against any party hereto.


 


(i)
This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts
shall together constitute one and the same instrument. Delivery of a signed counterpart of this Agreement by facsimile or electronic
transmission shall constitute valid and sufficient delivery thereof.


 


(j)
Each of the Company and the Trustee hereby acknowledges and agrees that the Representative, on behalf of the Underwriters, is a third-party
beneficiary of this Agreement.


 


(k)
Except as specified herein, no party to this Agreement may assign its rights or delegate its obligations hereunder to any other person
or entity without the written consent of the other party.


 


[Signature
Page Follows]


 




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IN
WITNESS WHEREOF, the parties have duly executed this Investment Management Trust Agreement as of the date first written above.


 








	 	Continental
    Stock Transfer & Trust Company, as Trustee
	 	 	 
	 	By:	 
	 	Name:	Francis
    Wolf
	 	Title:	Vice
    President








 


	 	Pono
    Capital Three, Inc.
	 	 	 
	 	By:	 
	 	Name:	Davin
    Kazama
	 	Title:	Chief
    Executive Officer


 




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SCHEDULE
A


 


	Fee
    Item	 	Time
    and method of payment	 	Amount	 
	Initial
    set-up fee	 	Initial
    closing of Offering by wire transfer.	 	$	3,500.00	 
	 	 	 	 	 	 	 
	Trustee
    administration fee	 	Payable
    annually. First year fee payable at initial closing of Offering by wire transfer thereafter by wire transfer or check.	 	$	10,000.00	 
	 	 	 	 	 	 	 
	Transaction
    processing fee for disbursements to Company under Sections 1(i), 1(j) and 1(l)	 	Billed
    to Company following disbursement made to Company under Section 1	 	$

                                  
	250.00

                                                                          per
                                            item presented
	 
	 	 	 	 	 	 	 
	Paying
    Agent services as required pursuant to Section 1(i) and 1(l)	 	Billed
    to Company upon delivery of service pursuant to Section 1(i) and 1(l)	 	 	Prevailing
                                            rates	 



 




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EXHIBIT
A


 


[Letterhead
of Company]


 


[Insert
date]


 


Continental
Stock Transfer & Trust Company


1
State Street, 30th Floor


New
York, New York 10004


Attn:
Francis Wolf & Celeste Gonzalez


 


Re:
Trust Account Termination Letter


 


Dear
Mr. Wolf and Ms. Gonzalez:


 


Pursuant
to Section 1(i) of the Investment Management Trust Agreement between Pono Capital Three, Inc. (the “Company”) and Continental
Stock Transfer & Trust Company (the “Trustee”), dated as of [   ], 2023 (the “Trust Agreement”), this is to
advise you that the Company has entered into an agreement with [insert name] (the “Target Business”) to consummate a business
combination with Target Business (the “Business Combination”) on or about [insert date]. The Company shall notify you at
least seventy-two (72) hours in advance of the actual date of the consummation of the Business Combination (or such shorter time period
as you may agree) (the “Consummation Date”). Capitalized terms used but not defined herein shall have the meanings set forth
in the Trust Agreement.


 


In
accordance with the terms of the Trust Agreement, we hereby authorize you to commence to liquidate all of the assets of the Trust Account
and to transfer the proceeds into a segregated account held by you on behalf of the Beneficiaries to the effect that, on the Consummation
Date, all of the funds held in the Trust Account will be immediately available for transfer to the account or accounts that the Company
shall direct on the Consummation Date (including as directed to it by the Representative on behalf of the Underwriters (with respect
to the Deferred Discount)). It is acknowledged and agreed that while the funds are on deposit in the trust operating account at J.P.
Morgan Chase Bank, N.A., awaiting distribution, the Company will not earn any interest or dividends.


 


On
the Consummation Date (i) counsel for the Company shall deliver to you written notification that the Business Combination has been consummated,
or will be consummated concurrently with your transfer of funds to the accounts as directed by the Company (the “Notification”)
and (ii) the Company shall deliver to you a certification by the Chief Executive Officer of the vote with an affidavit which verifies
that the Business Combination has been approved by a vote of the Company’s shareholders, if a vote is held and (b) a joint written
instruction signed by the Company and the Representative with respect to the transfer of the funds held in the Trust Account, including
payment of the Deferred Discount to the Representative from the Trust Account (the “Instruction Letter”). You are hereby
directed and authorized to transfer the funds held in the Trust Account immediately upon your receipt of the Notification and the Instruction
Letter, in accordance with the terms of the Instruction Letter. In the event that certain deposits held in the Trust Account may not
be liquidated by the Consummation Date without penalty, you will notify the Company in writing of the same and the Company shall direct
you as to whether such funds should remain in the Trust Account and be distributed after the Consummation Date to the Company. Upon the
distribution of all the funds, net of any payments necessary for reasonable unreimbursed expenses related to liquidating the Trust Account,
your obligations under the Trust Agreement shall be terminated.


 


In
the event that the Business Combination is not consummated on the Consummation Date described in the notice thereof and we have not notified
you on or before the original Consummation Date of a new Consummation Date, then upon receipt by the Trustee of written instructions
from the Company, the funds held in the Trust Account shall be reinvested as provided in Section 1(c) of the Trust Agreement on the business
day immediately following the Consummation Date as set forth in such written instruction as soon thereafter as possible.











 


	 	Very
    truly yours,
	 	 	 
	 	Pono
    Capital Three, Inc.
	 	 	 
	 	By:	 
	 	Name:	Davin
    Kazama
	 	Title:	Chief
    Executive Officer


 


	cc:	EF
    Hutton, division of Benchmark Investments, LLC


 




    	 



     


    

 


EXHIBIT
B


 


[Letterhead
of Company]


 


[Insert
date]


 


Continental
Stock Transfer & Trust Company


1
State Street, 30th Floor


New
York, New York 10004


Attn:
Francis Wolf & Celeste Gonzalez


 


Re:
Trust Account Termination Letter


 


Dear
Mr. Wolf and Ms. Gonzalez:


 


Pursuant
to Section 1(i) of the Investment Management Trust Agreement between Pono Capital Three, Inc. (the “Company”) and Continental
Stock Transfer & Trust Company (the “Trustee”), dated as of [   ], 2023 (the “Trust Agreement”), this is to
advise you that the Company has been unable to effect a business combination with a Target Business within the time frame specified in
the Company’s Amended and Restated Memorandum and Articles of Association, as described in the Company’s Prospectus relating
to the Offering. Capitalized terms used but not defined herein shall have the meanings set forth in the Trust Agreement.


 


In
accordance with the terms of the Trust Agreement, we hereby authorize you to liquidate all of the assets in the Trust Account and to
transfer the total proceeds into a segregated account held by you on behalf of the Beneficiaries to await distribution to the Public
Shareholders. The Company has selected [            ](1) as the effective date for the purpose of determining when the Public Shareholders will
be entitled to receive their share of the liquidation proceeds. You agree to be the Paying Agent of record and, in your separate capacity
as Paying Agent, agree to distribute said funds directly to the Company’s Public Shareholders in accordance with the terms of the
Trust Agreement and the Amended and Restated Memorandum and Articles of Association of the Company. Upon the distribution of all the
funds, net of any payments necessary for reasonable unreimbursed expenses related to liquidating the Trust Account, your obligations
under the Trust Agreement shall be terminated, except to the extent otherwise provided in Section 1(i) of the Trust Agreement.


 


(1)
9 months from the closing of the Offering (or up to18 months after the closing of the offering if we extend the period of time to consummate
a business combination as described in more detail in the Prospectus) or at a later date, if extended.


 


	 	Very
    truly yours,
	 	 	 
	 	Pono
    Capital Three, Inc.
	 	 	 
	 	By:	 
	 	Name:	Davin
    Kazama
	 	Title:	Chief
    Executive Officer


 


	cc:	EF
    Hutton, division of Benchmark Investments, LLC


 




    	 



     


    

 





EXHIBIT
C


 


[Letterhead
of Company]


 


[Insert
date]


 


Continental
Stock Transfer & Trust Company


1
State Street, 30th Floor


New
York, New York 10004


Attn:
Francis Wolf & Celeste Gonzalez


 


Re:
Trust Account Tax Payment Withdrawal Instruction


 


Dear
Mr. Wolf and Ms. Gonzalez:


 


Pursuant
to Section 1(j) of the Investment Management Trust Agreement between Pono Capital Three, Inc. (the “Company”) and Continental
Stock Transfer & Trust Company (the “Trustee”), dated as of [    ], 2023 (the “Trust Agreement”), the Company
hereby requests that you deliver to the Company $[           ] of the interest income earned on the Property as of the date hereof. Capitalized
terms used but not defined herein shall have the meanings set forth in the Trust Agreement.


 


The
Company needs such funds to pay for the tax obligations as set forth on the attached tax return or tax statement. In accordance with
the terms of the Trust Agreement, you are hereby directed and authorized to transfer (via wire transfer) such funds promptly upon your
receipt of this letter to the Company’s operating account at:


 


[WIRE
INSTRUCTION INFORMATION]


 





	 	Very
    truly yours,
	 	 	 
	 	Pono
    Capital Three, Inc.
	 	 	 
	 	By:	 
	 	Name:	Davin
    Kazama
	 	Title:	Chief
    Executive Officer


 


	cc:	EF
    Hutton, division of Benchmark Investments, LLC


 




    	 



     


    

 


EXHIBIT
D


 


[Letterhead
of Company]


 


[Insert
date]


 


Continental
Stock Transfer & Trust Company


1
State Street, 30th Floor


New
York, New York 10004


Attn:
Francis Wolf & Celeste Gonzalez


 


Re:
Trust Account Extension Letter


 


Dear
Mr. Mr. Wolf and Ms. Gonzalez:


 


Pursuant
to Section 1(k) of the Investment Management Trust Agreement between Pono Capital Three, Inc. (“Company”) and Continental
Stock Transfer & Trust Company, LLC, dated as of [    ], 2023 (“Trust Agreement”), this is to advise you
that the Company is extending the time available in order to consummate a Business Combination with the Target Businesses for an additional
one (1) month, from _______ to _________ (the “Extension”).


 


This
Extension Letter shall serve as the notice required with respect to Extension prior to the Applicable Deadline. Capitalized words used
herein and not otherwise defined shall have the meanings ascribed to them in the Trust Agreement.


 


In
accordance with the terms of the Trust Agreement, we hereby authorize you to deposit $330,000 (or $379,500 if the underwriters’
over-allotment option was exercised in full, or in any case, $0.033 per Unit), which will be wired to you, into the Trust Account investments
upon receipt.


 








	 	Very
    truly yours,
	 	 	 
	 	Pono
    Capital Three, Inc.
	 	 	 
	 	By:	 
	 	Name:	Davin
    Kazama
	 	Title:	Chief
    Executive Officer


 


	cc:	EF
    Hutton, division of Benchmark Investments, LLC


 




    	 



     


    




 


EXHIBIT
E


 


[Letterhead
of Company]


 


[Insert
date]


 


Continental
Stock Transfer & Trust Company


1
State Street, 30th Floor


New
York, New York 10004


Attn:
Francis Wolf & Celeste Gonzalez


 


Re:
Trust Account Shareholder Redemption Withdrawal Instruction


 


Dear
Mr. Wolf and Ms. Gonzalez:


 


Pursuant
to Section 1(k) of the Investment Management Trust Agreement between Pono Capital Three, Inc. (the “Company”) and Continental
Stock Transfer & Trust Company (the “Trustee”), dated as of [     ], 2023 (the “Trust Agreement”), the Company
hereby requests that you deliver to the redeeming Public Shareholders of the Company $[   ] of the principal and interest income earned
on the Property as of the date hereof into a segregated account held by you on behalf of the Beneficiaries. Capitalized terms used but
not defined herein shall have the meanings set forth in the Trust Agreement.


 


The
Company needs such funds to pay its Public Shareholders who have properly elected to have their Ordinary Share redeemed by the Company
in connection with a shareholder vote to approve an amendment to the Company’s amended and restated memorandum and articles of
association that would affect the substance or timing of the Company’s obligation to redeem 100% of its public Ordinary Share if
the Company has not consummated an initial Business Combination within such time as is described in the Company’s amended and restated
memorandum and articles of association or with respect to any other provisions relating to shareholders’ rights or pre-initial
Business Combination activity. As such, you are hereby directed and authorized to transfer (via wire transfer) such funds promptly upon
your receipt of this letter into a segregated account held by you on behalf of the Beneficiaries.


 











	 	Very
    truly yours,
	 	 	 
	 	Pono
    Capital Three, Inc.
	 	 	 
	 	By:	 
	 	Name:	Davin
    Kazama
	 	Title:	Chief
    Executive Officer


 


	cc:	EF
    Hutton, division of Benchmark Investments, LLC