Exhibit 10.5


 


SPONSOR WARRANTS PURCHASE AGREEMENT


 


THIS SPONSOR WARRANTS
PURCHASE AGREEMENT, dated as of March 15, 2021 (as it may from time to time be amended, this “Agreement”), is
entered into by and between Waldencast Acquisition Corp., a Cayman Islands exempted company (the “Company”),
and Waldencast Long-Term Capital LLC, a Cayman Islands limited liability company (the “Purchaser”).


 


WHEREAS:


 


The Company intends to
consummate an initial public offering of the Company’s units (the “Public Offering”), each unit consisting
of one Class A ordinary share of the Company, par value $0.0001 per share (each, an “Ordinary Share”), and one-third
of one redeemable warrant;


 


Each whole warrant entitles
the holder to purchase one Ordinary Share at an exercise price of $11.50 per Ordinary Share; and


 


The Purchaser has agreed
to purchase an aggregate of 5,333,333 warrants (or up to 5,933,333 warrants depending on the extent to which the underwriters in
the Public Offering exercise their over-allotment option) (the “Sponsor Warrants”), each Sponsor Warrant entitling
the holder to purchase one Ordinary Share at an exercise price of $11.50 per Ordinary Share.


 


NOW THEREFORE, in consideration
of the mutual promises contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties to this Agreement hereby, intending legally to be bound, agree as follows:


 


AGREEMENT


 


Section 1. Authorization,
Purchase and Sale; Terms of the Sponsor Warrants.


 


A. Authorization
of the Sponsor Warrants. The Company has duly authorized the issuance and sale of the Sponsor Warrants to the Purchaser.


 


B. Purchase
and Sale of the Sponsor Warrants.


 


(i) On the date of
the consummation of the Public Offering or on such earlier time and date as may be mutually agreed by the Purchaser and the Company
(the “Closing Date”), the Company shall issue and sell to the Purchaser, and the Purchaser shall purchase from
the Company, 5,333,333 Sponsor Warrants at a price of $1.50 per warrant for an aggregate purchase price of $8,000,000 (the “Purchase
Price”), which shall be paid by wire transfer of immediately available funds to the Company at least one business day
prior to the Closing Date in accordance with the Company’s wiring instructions. On the Closing Date, following the payment
by the Purchaser of the Purchase Price by wire transfer of immediately available funds to the Company, the Company, at its option,
shall deliver a certificate evidencing the Sponsor Warrants purchased by the Purchaser on such date duly registered in the Purchaser’s
name to the Purchaser or effect such delivery in book-entry form.


 






     


     


    

 


(ii) On the date of
any closing of the over-allotment option in connection with the Public Offering (each such date, an “Over-allotment Closing
Date,” and each Over-allotment Closing Date (if any) and the Initial Closing Date being sometimes referred to herein
as a “Closing Date”), the Company shall issue and sell to the Purchaser, and the Purchaser shall purchase from
the Company, up to an aggregate of 600,000 Sponsor Warrants, in the same proportion as the amount of the option that is then so
exercised, at a price of $1.50 per warrant for an aggregate purchase price of up to $900,000 (if the over-allotment option in connection
with the Public Offering is exercised in full) (the “Over-allotment Purchase Price”), which shall be paid by
wire transfer of immediately available funds to the Company at least one day prior to such Over-allotment Closing Date in accordance
with the Company’s wiring instructions. On the Over-allotment Closing Date, following the payment by the Purchaser of the
Over-allotment Purchase Price by wire transfer of immediately available funds to the Company, the Company, at its option, shall
deliver a certificate evidencing the Sponsor Warrants purchased by the Purchaser on such date duly registered in the Purchaser’s
name to the Purchaser, or effect such delivery in book-entry form.


 


C. Terms
of the Sponsor Warrants.


 


(i) Each Sponsor Warrant
shall have the terms set forth in a Warrant Agreement to be entered into by the Company and a warrant agent, in connection with
the Public Offering (a “Warrant Agreement”).


 


(ii) At the time of,
or prior to, the closing of the Public Offering, the Company and the Purchaser shall enter into a registration rights agreement
(the “Registration Rights Agreement”) pursuant to which the Company will grant certain registration rights to
the Purchaser relating to the Sponsor Warrants and the Ordinary Shares underlying the Sponsor Warrants.


 


Section 2. Representations
and Warranties of the Company. As a material inducement to the Purchaser to enter into this Agreement and purchase the Sponsor
Warrants, the Company hereby represents and warrants to the Purchaser (which representations and warranties shall survive the Closing
Date) that:


 


A. Organization
and Corporate Power. The Company is an exempted company duly incorporated, validly existing and in good standing under the
laws of the Cayman Islands and is qualified to do business in every jurisdiction in which the failure to so qualify would reasonably
be expected to have a material adverse effect on the financial condition, operating results or assets of the Company. The Company
possesses all requisite corporate power and authority necessary to carry out the transactions contemplated by this Agreement and
the Warrant Agreement.


 


B. Authorization;
No Breach.


 


(i) The execution,
delivery and performance of this Agreement and the Sponsor Warrants have been duly authorized by the Company as of the Closing
Date. This Agreement constitutes the valid and binding obligation of the Company, enforceable in accordance with its terms. Upon
issuance in accordance with, and payment pursuant to, the terms of the Warrant Agreement and this Agreement, the Sponsor Warrants
will constitute valid and binding obligations of the Company, enforceable in accordance with their terms as of the Closing Date.


 






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(ii) The execution
and delivery by the Company of this Agreement and the Sponsor Warrants, the issuance and sale of the Sponsor Warrants, the issuance
of the Ordinary Shares upon exercise of the Sponsor Warrants and the fulfillment, of and compliance with, the respective terms
hereof and thereof by the Company, do not and will not as of the Closing Date (a) conflict with or result in a breach of the terms,
conditions or provisions of, (b) constitute a default under, (c) result in the creation of any lien, security interest, charge
or encumbrance upon the Company’s share capital or assets under, (d) result in a violation of, or (e) require any authorization,
consent, approval, exemption or other action by or notice or declaration to, or filing with, any court or administrative or governmental
body or agency pursuant to, the amended and restated memorandum and articles of association of the Company (in effect on the date
hereof or as may be amended prior to completion of the contemplated Public Offering), or any material law, statute, rule or regulation
to which the Company is subject, or any agreement, order, judgment or decree to which the Company is subject, except for any filings
required after the date hereof under federal or state securities laws.


 


C. Title
to Securities. Upon issuance in accordance with, and payment pursuant to, and registration in the register of members of the
Company, the terms hereof and the Warrant Agreement, the Ordinary Shares issuable upon exercise of the Sponsor Warrants will be
duly and validly issued, fully paid and nonassessable. Upon issuance in accordance with, and payment pursuant to, the terms hereof
and the Warrant Agreement, the Purchaser will have good title to the Sponsor Warrants and the Ordinary Shares issuable upon exercise
of such Sponsor Warrants, free and clear of all liens, claims and encumbrances of any kind, other than (i) transfer restrictions
hereunder and under the other agreements contemplated hereby, (ii) transfer restrictions under federal and state securities
laws, and (iii) liens, claims or encumbrances imposed due to the actions of the Purchaser.


 


D. Governmental
Consents. No permit, consent, approval or authorization of, or declaration to or filing with, any governmental authority is
required in connection with the execution, delivery and performance by the Company of this Agreement or the consummation by the
Company of any other transactions contemplated hereby.


 


Section 3. Representations
and Warranties of the Purchaser. As a material inducement to the Company to enter into this Agreement and issue and sell the
Sponsor Warrants to the Purchaser, the Purchaser hereby represents and warrants to the Company (which representations and warranties
shall survive the Closing Date) that:


 


A. Organization
and Requisite Authority. The Purchaser possesses all requisite power and authority necessary to carry out the transactions
contemplated by this Agreement.


 


B. Authorization;
No Breach.


 


(i) This Agreement
constitutes a valid and binding obligation of the Purchaser, enforceable in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other laws of general applicability relating to or affecting creditors’
rights and to general equitable principles (whether considered in a proceeding in equity or law).


 






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(ii) The execution
and delivery by the Purchaser of this Agreement and the fulfillment of and compliance with the terms hereof by the Purchaser does
not and shall not as of the Closing Date conflict with or result in a breach by the Purchaser of the terms, conditions or provisions
of any agreement, instrument, order, judgment or decree to which the Purchaser is subject.


 


C. Investment
Representations.


 


(i) The Purchaser is
acquiring the Sponsor Warrants and, upon exercise of the Sponsor Warrants, the Ordinary Shares issuable upon such exercise (collectively,
the “Securities”), for the Purchaser’s own account, for investment purposes only and not with a view towards,
or for resale in connection with, any public sale or distribution thereof.


 


(ii) The Purchaser
is an “accredited investor” as such term is defined in Rule 501(a)(3) of Regulation D under the Securities Act
of 1933, as amended (the “Securities Act”), and the Purchaser has not experienced a disqualifying event as enumerated
pursuant to Rule 506(d) of Regulation D under the Securities Act.


 


(iii) The Purchaser
understands that the Securities are being offered and will be sold to it in reliance on specific exemptions from the registration
requirements of the United States federal and state securities laws and that the Company is relying upon the truth and accuracy
of, and the Purchaser’s compliance with, the representations and warranties of the Purchaser set forth herein in order to
determine the availability of such exemptions and the eligibility of the Purchaser to acquire such Securities.


 


(iv) The Purchaser
decided to enter into this Agreement not as a result of any general solicitation or general advertising within the meaning of Rule
502(c) of Regulation D under the Securities Act.


 


(v) The Purchaser has
been furnished with all materials relating to the business, finances and operations of the Company and materials relating to the
offer and sale of the Securities which have been requested by the Purchaser. The Purchaser has been afforded the opportunity to
ask questions of the executive officers and directors of the Company. The Purchaser understands that its investment in the Securities
involves a high degree of risk and it has sought such accounting, legal and tax advice as it has considered necessary to make an
informed investment decision with respect to the acquisition of the Securities.


 


(vi) The Purchaser
understands that no United States federal or state agency or any other government or governmental agency has passed on or made
any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities by the Purchaser
nor have such authorities passed upon or endorsed the merits of the offering of the Securities.


 


(vii) The Purchaser
understands that: (a) the Securities have not been and are not being registered under the Securities Act or any state securities
laws, and may not be offered for sale, sold, assigned or transferred unless (1) in a registered transaction or (2) sold in reliance
on an exemption therefrom; (b) except as specifically set forth in the Registration Rights Agreement, neither the Company nor any
other person is under any obligation to register the Securities under the Securities Act or any state securities laws or to comply
with the terms and conditions of any exemption thereunder; and (c) Rule 144 adopted pursuant to the Securities Act will not be
available for resale transactions of Securities prior to a Business Combination and may not be available for resale transactions
of Securities after a Business Combination.


 






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(viii) The Purchaser
has such knowledge and experience in financial and business matters, knows of the high degree of risk associated with investments
in the securities of companies in the development stage such as the Company, is capable of evaluating the merits and risks of an
investment in the Securities and is able to bear the economic risk of an investment in the Securities in the amount contemplated
hereunder for an indefinite period of time. The Purchaser has adequate means of providing for its current financial needs and contingencies
and will have no current or anticipated future needs for liquidity which would be jeopardized by the investment in the Securities.
The Purchaser can afford a complete loss of its investments in the Securities.


 


(ix) The Purchaser
understands that the Sponsor Warrants shall bear the legend substantially in the form set forth in the Warrant Agreement.


 


Section 4. Conditions
of the Purchaser’s Obligations. The obligations of the Purchaser to purchase and pay for the Sponsor Warrants are subject
to the fulfillment, on or before the Closing Date, of each of the following conditions:


 


A. Representations
and Warranties. The representations and warranties of the Company contained in Section 2 shall be true and correct at and as
of the Closing Date as though then made.


 


B. Performance.
The Company shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before the Closing Date.


 


C. No
Injunction. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby, which prohibits the consummation of any of the transactions
contemplated by this Agreement or the Warrant Agreement.


 


D. Warrant
Agreement. The Company shall have entered into a Warrant Agreement with a warrant agent on terms satisfactory to the Purchaser.


 


Section 5. Conditions
of the Company’s Obligations. The obligations of the Company to the Purchaser under this Agreement are subject to the
fulfillment, on or before the Closing Date, of each of the following conditions:


 


A. Representations
and Warranties. The representations and warranties of the Purchaser contained in Section 3 shall be true and correct at and
as of the Closing Date as though then made.


 


B. Performance.
The Purchaser shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by the Purchaser on or before the Closing Date.


 






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C. No
Injunction. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby, which prohibits the consummation of any of the transactions
contemplated by this Agreement or the Warrant Agreement.


 


D. Warrant
Agreement. The Company shall have entered into a Warrant Agreement with a warrant agent on terms satisfactory to the Company.


 


Section 6. Termination.
This Agreement may be terminated at any time after June 30, 2021 upon the election by either the Company or the Purchaser upon
written notice to the other party if the closing of the Public Offering does not occur prior to such date.


 


Section 7. Survival
of Representations and Warranties. All of the representations and warranties contained herein shall survive the Closing Date.


 


Section 8. Definitions.
Terms used but not otherwise defined in this Agreement shall have the meaning assigned to such terms in the registration statement
on Form S-1 the Company has filed with the Securities and Exchange Commission (the “SEC”), under the Securities
Act.


 


Section 9. Miscellaneous.


 


A. Successors
and Assigns. Except as otherwise expressly provided herein, all covenants and agreements contained in this Agreement by or
on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors of the parties hereto whether
so expressed or not. Notwithstanding the foregoing or anything to the contrary herein, the parties may not assign this Agreement,
other than assignments by the Purchaser to affiliates thereof.


 


B. Severability.
Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.


 


C. Counterparts.
This Agreement may be executed simultaneously in two or more counterparts, none of which need contain the signatures of more than
one party, but all such counterparts taken together shall constitute one and the same agreement.


 


D. Descriptive
Headings; Interpretation. The descriptive headings of this Agreement are inserted for convenience only and do not constitute
a substantive part of this Agreement. The use of the word “including” in this Agreement shall be by way of example
rather than by limitation.


 


E. Governing
Law. This Agreement shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall
be construed in accordance with the internal laws of the State of New York.


 


F. Amendments.
This Agreement may not be amended, modified or waived as to any particular provision, except by a written instrument executed by
all parties hereto.


 


[Signature page follows]


 




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IN WITNESS WHEREOF, the parties hereto have executed
this Agreement to be effective as of the date first set forth above.


 


	 	COMPANY:
	 	 	 
	 	WALDENCAST ACQUISITION CORP.
	 	 	 
	 	By:	/s/ Michel Brousset
	 	Name:	Michel Brousset
	 	Title:	Chief Executive Officer
	 	 	 
	 	PURCHASER:
	 	 	 
	 	WALDENCAST LONG-TERM
    CAPITAL LLC
	 	 	 
	 	By:	/s/ Michel Brousset
	 	Name:	Michel Brousset
	 	Title:	Chief Executive Officer


 


[Signature page to Sponsor Warrants Purchase
Agreement]