Exhibit 10.16 


 


Crackle Holdings, L.P.



Treatment of Unvested Class A Nonvoting Units 


 


, 2021


 


As you know, Crackle Holdings GP LLC (the “General
Partner”), being the general partner of Crackle Holdings, L.P. (the “Partnership”), has begun the process
of an initial public offering (if consummated, the “IPO”) and, in connection therewith, has selected Snap One Holdings
Corp. (f/k/a Crackle Corp.), a direct wholly-owned subsidiary of the Partnership (the “Company”), for purposes of undertaking
the IPO. In connection with the IPO, and pursuant to the terms of the Partnership Agreement (as defined below) to which you are party,
the General Partner will cause the Partnership to exchange your unvested Class A Nonvoting Units (the “Unvested Units”)
for unvested shares of common stock of the Company (“shares of Restricted Stock”) if and when the IPO occurs (the “Exchange”).
Terms used but not otherwise defined herein shall have the meanings ascribed to them in the Amended and Restated Limited Partnership Agreement
of the Partnership, dated as of August 4, 2017 (as amended, restated, supplemented or otherwise modified from time to time, the “Partnership
Agreement”).


 


What will you receive? You will receive shares of Restricted
Stock in exchange for your Unvested Units. These shares of Restricted Stock will be stock of the same class of shares that will become
publicly traded following the IPO and will be subject to restrictions on transfer and vesting as described below. As is the case with
your Class A Nonvoting Units of the Partnership (the “Restricted Units”), the shares of Restricted Stock will not be
registered under the Securities Act of 1933, as amended (the “Securities Act”), and accordingly, even once the shares
of Restricted Stock have vested, they may not be sold or transferred except pursuant to an effective registration statement under the
Securities Act or pursuant to an applicable exemption therefrom (such as Rule 144 under the Securities Act, for example).


 


The number of shares of Restricted Stock you will receive will be determined
taking into account the aggregate value of your Unvested Units immediately prior to the Exchange, based on the distribution priorities
and terms applicable to the various classes of units of the Partnership, in each case, calculated by the General Partner pursuant to and
in accordance with the Partnership Agreement, and the price at which shares of Common Stock of the Company are initially offered to the
public in connection with the IPO (the “IPO Price”). The number of shares of Restricted Stock you receive in exchange
for your Unvested Units will each be rounded up or down to the nearest whole Share, and any fractional Shares will be settled in cash
by the Company at a later date. Your shares will be held at an account in your name with the transfer agent in book-entry form.


 


You will also receive cash equal to $ per Unvested Unit in lieu of
participation in the tax receivables agreement that will be entered into between the Company and certain Partnership unitholders in connection
with the IPO (the “Additional Payment”). You will receive the Additional Payments payable with respect to your Unvested
Units at the same time as the Exchange.


 


When can you sell your Shares of Restricted Stock? The shares
of Restricted Stock generally cannot be sold until the date that is the later of (i) the date on which such shares of Restricted Stock
vest and (ii) one hundred and eighty (180) days following the closing date of the IPO, subject to the Company’s then effective insider
trading policy.


 


What vesting conditions will apply to the Shares of Restricted Stock?


 


The shares of Restricted Stock you receive in exchange
for your Unvested Units will be subject to the vesting terms that apply to such Unvested Units,
as further described in the attached Exchange Acknowledgement and Agreement.


 






     


     


    

 


What must you do now? To facilitate the IPO process and the
Exchange of your Unvested Units, you must execute the attached Exchange Acknowledgement and Agreement. We strongly encourage you to
read these documents, and, if you have questions, consult with your own legal, financial, and tax advisors about the consequences of the
Exchange. 


 


After you execute the Exchange Acknowledgement and Agreement, please
send signed copies of the agreement(s) to              no later than                 , 2021.


 


U.S. Federal Income Tax Treatment of the Exchange. The Company
intends to take the position that the Exchange should not result in taxable income to you for U.S. federal income tax purposes, except
with respect to any cash received in connection with the Exchange, as described below. The Exchange is expected to be treated, for U.S.
federal income tax purposes, as a distribution to you of shares of Common Stock of the Company by the Partnership in redemption of your
Unvested Units. Accordingly, your tax basis and holding period, if any, in your Unvested Units should carry over to your shares of Restricted
Stock, except that your basis will be reduced by the amount of cash received at the time of the Exchange or with respect to which a section
83(b) election is made, as described below, and your subsequent disposition of such shares (after vesting) should generally result in
a capital gain (or loss) in an amount equal to the difference between the amount you realize on the disposition and your tax basis in
the shares of Restricted Stock that are disposed of. Long-term capital gains recognized by individuals are generally eligible for reduced
rates of taxation. Furthermore, the deductibility of capital losses is subject to limitations. The foregoing assumes you will make an
election as required in the Exchange Acknowledgement and Agreement under section 83(b) of the Internal Revenue Code with respect to the
shares of Restricted Stock and that the shares of Restricted Stock you receive in the Exchange are of equivalent value to your Unvested
Units.


 


U.S. Federal Income Tax Treatment of the Additional Payments.
Any cash you receive at the time of the Exchange pursuant to this agreement is expected to be taxable income to you as capital gain to
the extent the cash received exceeds your outside basis in your Partnership interest. Your basis in the shares of Restricted Stock you
receive in the Exchange will be reduced by the amount of such cash.


 


The shares of Restricted Stock you receive in the Exchange will
be in exchange for, and will supersede in all respects, the Unvested Units, which will be cancelled and cease to exist immediately upon
the Exchange. Except as expressly set forth in the Exchange Acknowledgement and Agreement, your rights and obligations under your Award
Agreement(s), the Partnership Agreement and any other documents or agreements with respect to the Unvested Units or the Partnership will
terminate immediately following the Exchange.


 


We look forward to beginning this new, exciting chapter as a public
company.


 


Sincerely,


 


John Heyman





 






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EXCHANGE ACKNOWLEDGEMENT AND AGREEMENT


 


This Exchange Acknowledgement
and Agreement (this “Agreement”) is made effective as of           , 2021 (the “Effective Date”), by and among
Crackle Holdings, L.P., a Delaware limited partnership (the “Partnership”), Crackle Holdings GP LLC, a Delaware limited
liability company and the general partner of the Partnership (the “General Partner”), Snap One Holdings Corp. (f/k/a
Crackle Corp.), a Delaware corporation and direct wholly-owned subsidiary of the Partnership (the “Company”), and the
unitholder identified on the signature page attached hereto (“Unitholder”). Capitalized terms used but not otherwise
defined herein shall have the meanings ascribed to them in the Partnership Agreement (as defined below).


 


WHEREAS, Unitholder holds a
number of unvested Class A Nonvoting Units of the Partnership (the “Exchanged Units”), in each case as specified in
the Equity Schedule set forth on the signature page hereto, which Exchanged Units are subject to the Amended and Restated Limited Partnership
Agreement of the Partnership, dated as of August 4, 2017 (as amended, restated, supplemented or otherwise modified from time to time,
the “Partnership Agreement”), and one or more Restricted Class A Nonvoting Unit Award Agreements, including any exhibits
attached thereto (collectively, the “Award Agreements”);


 


WHEREAS, in connection with
the initial public offering of the Company (the “IPO”), the General Partner will cause all of the Exchanged Units to
be exchanged for unvested shares of common stock, par value $0.01, of the Company (the “shares of Restricted Stock”),
effective immediately after the execution and delivery by the Company of the underwriting agreement relating to the IPO (the “Exchange
and, the date of such Exchange, the “Exchange Time”), upon the terms and subject to the conditions set forth herein
and as otherwise determined by the General Partner;


 


WHEREAS, prior to the IPO, the
Company and the Partnership will enter into a tax receivable agreement (the “Tax Receivable Agreement”) whereby the
Company will agree to make payments with respect a portion of the tax savings of the Company as a result of certain pre-IPO tax attributes;


 


WHEREAS, the Partnership will
distribute its rights under the Tax Receivable Agreement to certain unitholders, and a cash payment to other holders, including the Unitholder,
equal to the fair market value of the Unitholder’s pro rata interest in the Tax Receivable Agreement in lieu of rights under the
Tax Receivable Agreement; and


 


WHEREAS, at the Exchange Time,
pursuant to the Exchange, the Exchanged Units will be redeemed and will be cancelled and cease to exist and, in exchange therefor, Unitholder
shall receive a number of shares of Restricted Stock determined by the General Partner, based on the price at which Shares are initially
offered to the public in connection with the IPO (the “IPO Price”), as described herein and subject to the terms and
conditions hereof, including, Appendix A attached hereto.


 


NOW THEREFORE, in consideration
of the mutual covenants hereinafter set forth, the parties hereto acknowledge and agree as follows:


 


1.        Exchange
of Exchanged Units. 


 


(a)       Subject
to the terms and conditions set forth herein and effective as of the Exchange Time, the General Partner will cause the Exchanged Units
to be redeemed and cancelled in exchange for a number of shares of Restricted Stock, as determined in accordance with the Partnership
Agreement. Once the IPO Price is conclusively determined, the actual number of shares of Restricted Stock to be received will be determined
and the Company will communicate such final number to the Unitholder.


 









     


     


    

 


(b)       Unitholder
shall receive cash equal to $             per Exchanged Unit (the “Additional Payment”). Additional Payments shall be distributed
to the Unitholder by the Partnership to the Unitholder on or prior to the closing date of the IPO.


 


(c)       Effective
as of the Exchange, the shares of Restricted Stock shall be subject to the terms of Appendix A attached hereto.


 


(d)       Unitholder
shall provide the Company with a copy of a completed election under Section 83(b) of the Internal Revenue Code of 1986, as amended, and
the regulations promulgated thereunder in the form of Exhibit A attached hereto, with respect to the shares of Restricted Stock.
Unitholder shall timely (within 30 days of the Exchange Time) file (via certified mail, return receipt requested) such election(s) with
the Internal Revenue Service, and thereafter shall certify to the Company that Unitholder has made such timely filing(s) and furnish a
copy of such filing(s) to the Company. Unitholder should consult his or her tax advisor regarding the consequences of a Section 83(b)
election, as well as the receipt, vesting, holding and sale of the shares of Restricted Stock.


 


(e)       Unitholder
acknowledges that the shares of Restricted Stock have not been registered under the Securities Act of 1933, as amended (the “Securities
Act”), and accordingly, may not be sold or transferred except pursuant to an effective registration statement under the Securities
Act or pursuant to an applicable exemption therefrom, and subject to the Company’s then effective insider trading policy.


 


3.        Book
Entry. The Company shall recognize Unitholder’s ownership of shares of Restricted Stock through uncertificated book entry.


 


4.        Rights
as a Stockholder. Unitholder shall be the record owner of the shares of Restricted Stock until or unless such shares of Restricted
Stock are forfeited pursuant to the terms of this Agreement, and as record owner shall be entitled to all rights of a common stockholder
of the Company, including, without limitation, voting rights with respect to the shares of Restricted Stock and rights to dividends or
other distributions, subject to Section 6 below.


 


5.        Book
Entry Notations. To the extent applicable, all book entries representing the shares of Restricted Stock delivered to Unitholder as
contemplated by Section 3 above shall be subject to the rules, regulations, and other requirements of the Securities and Exchange Commission,
any stock exchange upon which such Shares are listed, and any applicable Federal or state laws, and the Company may cause notations to
be made next to the book entry to make appropriate reference to such restrictions. Any such book entry notations may include a description
of the restrictions set forth in Appendix A attached hereto and herein, including Sections 1 and 6 hereof.


 


6.        Transfer
Restrictions. The shares of Restricted Stock are subject to the restrictions and obligations set forth in the Snap One Holdings Corp.
Stockholders Agreement to be entered into by the Company and the other parties thereto on the date of the Exchange (the “Stockholders
Agreement”) and Appendix A attached hereto.


 


7.        No
Right to Continued Service. Neither this Agreement nor Unitholder’s receipt of the Shares hereunder shall be construed as giving
the Unitholder the right to be retained as member of the board of directors of the Company or any affiliate thereof.


 


8.
        Cooperation. Unitholder acknowledges that the IPO constitutes an Initial Public
Offering, the Company constitutes the IPO Corporation and the Exchange constitutes an IPO Conversion, in each case, pursuant to the
Partnership Agreement and acknowledges that Unitholder has obligations to cooperate with the General Partner and take all actions
required or reasonably requested by the General Partner in connection with the consummation of the IPO Conversion under the
Partnership Agreement. Without limiting the foregoing, Unitholder further agrees to cooperate with the General Partner, the
Partnership, the Company and their respective affiliates in taking any actions reasonably requested, necessary or advisable to
consummate the transactions contemplated by this Agreement.


 






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9.        Notices.
Any notice necessary under this Agreement shall be addressed to the General Partner, the Partnership or the Company in care of its Secretary
at its principal executive office and to Unitholder at the address appearing in the personnel records of the Company for such Unitholder
or to either party at such other address as either party hereto may hereafter designate in writing to the other. Any such notice shall
be deemed effective upon receipt thereof by the addressee.


 


10.       Choice
of Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware applicable
to contracts made and performed wholly within the State of Delaware, without giving effect to the conflict of laws provisions thereof.


 


11.       Amendment.
Prior to the consummation of the IPO, the General Partner and, after consummation of the IPO, the Company, may waive any conditions or
rights under, amend any terms of, or alter, suspend, discontinue, cancel or terminate this Agreement, but no such waiver, amendment, alteration,
suspension, discontinuance, cancellation or termination shall materially adversely affect the rights of Unitholder hereunder without the
consent of Unitholder.


 


12.       Electronic
Delivery and Acceptance. The Company may, in its sole discretion, decide to deliver any documents related to the shares of Restricted
Stock by electronic means. The Unitholder hereby consents to receive such documents by electronic delivery and agrees to participate in
the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.


 


13.       Entire
Agreement. This Agreement constitutes the entire agreement of the parties hereto in respect of the subject matter contained herein
and supersede all prior agreements and understandings of the parties, oral and written, with respect to such subject matter.


 


14.       Binding
Effect. This Agreement shall be binding upon the heirs, executors, administrators and successors of the parties hereto.


 


15.       Other
Rights. Unitholder acknowledges that, upon consummation of the Exchange, Unitholder will no longer hold any unvested Restricted Units
of the Partnership and will have no surviving rights under the Partnership Agreement or any other governing documents of the Partnership
or any other agreements related to ownership of any such unvested Restricted Units, other than as expressly set forth herein.


 


[Signature page follows]


 






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IN WITNESS WHEREOF, Unitholder
acknowledges and accepts the terms of this Agreement.


 





	 	Unitholder
	 	 
	 	 
	 	Name:



 


Equity Schedule:


 


	Class of Units	Number of Unvested Units at IPO
	Class A Nonvoting  Units	 


 









     


     


    

 


Agreement acknowledged and confirmed:


 


	 	Crackle Holdings, L.P.
	 	 
	 	 
	 	By:
	 	Name:
	 	Its
	 	 
	 	Crackle Holdings GP LLC 
	 	 
	 	 
	 	By:
	 	Name:
	 	Its
	 	 
	 	Snap One Holdings Corp.
	 	 
	 	 
	 	By:
	 	Name:
	 	Its




 






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APPENDIX A 

to the 

Exchange Acknowledgement
and Agreement


 


TERMS AND CONDITIONS


 


1.        General.
Capitalized terms not otherwise defined herein shall have the meaning set forth in the Company’s 2021 Stock Incentive Plan. However,
the term “Company” as used in this Appendix A with reference to service shall include the Company and its Subsidiaries.


 


2.        Vesting.
Upon receipt, shares of Restricted Stock shall initially be unvested and shall continue to vest pursuant to the same time-vesting conditions
as were applicable to the Unvested Units to which the shares of Restricted Stock relate. However, for purposes of such vesting conditions,
 “Sponsor Exit” shall mean the first to occur of (x) the date on which the H&F Stockholders (as defined in the Stockholders
Agreement) or any of their investment fund Affiliates hold (collectively) less than 20% of the outstanding shares of Common Stock of the
Company on a fully diluted basis or (y) a Change in Control.


 


3.        Treatment
of Shares of Restricted Stock Upon Termination. In the event of the Unitholder’s termination of service with the Company (“Termination”)
(i) by reason of Unitholder’s death or Disability or (ii) by the Company without Cause (each, a “Good Leaver Termination”),
any then-unvested shares of Restricted Stock shall immediately vest upon such Termination; provided that if the Unitholder is terminated
by the Company without Cause prior to the first anniversary of the date of grant of the Unvested Units to which the shares of Restricted
Stock relate (such grant date, the “Original Grant Date”), a pro-rata portion of such shares Restricted Stock shall
vest, with such portion equal to the total number of such shares of Restricted Stock, multiplied by a fraction, the numerator of which
is the number of days that have elapsed since the Original Grant Date and the denominator of which is 1,096 and any remaining unvested
shares of Restricted Stock shall be forfeited. In the event of the Unitholder’s Termination for any reason other than a Good Leaver
Termination, any then-unvested shares of Restricted Stock shall be immediately forfeited, and, in addition, in the event of a Termination
for Cause any vested (and unvested) shares of Restricted Stock shall be immediately forfeited for no consideration.


 


4.        Non-Transferability.
The shares of Restricted Stock are not transferable by the Unitholder while the shares of Restricted Stock are unvested (such period,
the “Restricted Period”), unless such transfer is specifically required pursuant to a domestic relations order or by
Applicable Law or if otherwise permitted by the board of directors of the Company. During the Restricted Period, no impermissible assignment
or transfer of the shares of Restricted Stock, or of the rights represented thereby, whether voluntary or involuntary, by operation of
law or otherwise, shall vest in the assignee or transferee any interest or right herein whatsoever, but immediately upon such assignment
or transfer the shares of Restricted Stock shall be forfeited to the Company.


 


5.        Imposition
of Other Requirements. The Company reserves the right to impose other requirements on the shares of Restricted Stock, to the extent
the Company determines it is necessary or advisable for legal or administrative reasons, and to require the Unitholder to sign any additional
agreements or undertakings that may be necessary to accomplish the foregoing.


 









     


     


    

 


SECTION 83(b) ELECTION FORM


 


, 2021


 


CERTIFIED MAIL 


RETURN RECEIPT REQUESTED


 


Internal Revenue Service Center


 


Re: Election Under §83(b) of the Internal Revenue Code


 


Dear Sir or Madam:


 


The undersigned hereby elects
under Section 83(b) of the Internal Revenue Code to include in the taxpayer’s gross income for the taxable year in which the property
described below was transferred, the excess (if any), of the fair market value of such property at the time of its transfer, over the
amount (if any) paid for such property. Pursuant to Treas. Reg. § 1.83-2(e), the following information is submitted:


 


	 	1.	Name of taxpayer: _________________




 


		2.	Address of taxpayer: _________________



 


		3.	Social Security Number: _________________



 


		4.	Property with respect to which the election is being made:            shares of Common Stock of Snap One Holdings
Corp.



 


		5.	Date Interest Acquired:           , 2021



 


		6.	Taxable Year for which election is being made: calendar year 2021



 


		7.	Nature of the restriction or restrictions to which the property is subject: While the shares of Common
Stock described in Paragraph 4 are held by the undersigned, such shares remain subject to vesting based upon the continued performance
of substantial services and/or applicable performance conditions.



 


		8.	Fair Market Value of the property at the time of transfer/acquisition, determined without regard to any
lapse restrictions and in accordance with Revenue Procedure 93-27: $



 


		9.	Amount paid for the property: $



 


Pursuant to Treas. Reg. § 1.83-2(e), a copy
of this election has been furnished to the person for whom the undersigned’s services are performed.


 





	Very truly yours,	 
	 	 
	 	 
	[Name]