Legality of Non-Profit Distribution?

Hello,

I, along with 6 of my friends, are working on a Pokémon Fan-game with no profit (i.e. we will not earn anything).

My question is, if we make our game using Blender and the free Unreal Engine, can I distribute the game, again, without profit.

If we don’t make profit, we will not have to pay the 5% right?

According to the agreement, I understand that I can distribute only the .exe file but I cannot distribute the actual fragmented file, which others can open in Unreal and access the code.

Though, the agreement is quite ambiguous so I just wanted to make sure.

Will I be able to distribute the .exe of our Pokémon Fan-Game if we are earning no profit whatsoever?

Thanks.

Correct, you only owe royalties on your revenue, so if you do not make any revenue, you will not owe any royalties.