Common use of Expenses; Distributions Clause in Contracts

Expenses; Distributions. Subject to Section 4.8, the gross cash receipts of the JV for a fiscal quarter from all sources, including, without limitation, cash from operations, JV Financings, or other sources, less reserves for returns and inventory obsolescence, shall be used: first, to pay Third Party Expenses incurred in such or prior fiscal quarters; second, to distribute the sum of the Capital Expenditure Distribution Amounts for such or prior fiscal quarters to the Member that incurred such Capital Expenditures; and, third, to pay to the Members the Reimbursable Expenses incurred by each in such or prior fiscal quarters; provided, that to the extent that the JV fails to pay the full amount of the sum of the Capital Expenditure Distribution Amounts, the unpaid balance of such amounts will be carried forward and become payable as an additional Capital Expenditure Distribution Amount in the next succeeding fiscal quarter; and provided further, that to the extent that the JV fails to pay the full amount of the Reimbursable Expenses incurred in such fiscal quarter: (i) the payments to a Party for Reimbursable Expenses will be made in proportion to the relative amounts of Reimbursable Expenses owed to each in such fiscal quarter, and (ii) any remaining amounts of Reimbursable Expenses will be carried forward and become payable as an additional Reimbursable Expense in the next succeeding fiscal quarter. Subject to Section 4.8, any amount remaining after the payments (and after reserves for returns and inventory obsolescence) provided for in the preceding sentence will be distributed to the Members (the “Net Distributions”) in accordance with the distribution set forth in the following table (the “Distribution Allocation”): Teknik Digital Arts, Inc. 50 % Powergrid Fitness, Inc. 50 %

Expenses; Distributions. Subject to Section 4.8, the gross cash receipts of the JV for a fiscal quarter from all sources, including, without limitation, cash from operations, JV Financings, or other sources, less reserves for returns and inventory obsolescence, shall be used: first, to pay Third Party Expenses incurred in such or prior fiscal quarters; second, to distribute the sum of the Capital Expenditure Distribution Amounts for such or prior fiscal quarters to the Member that incurred such Capital Expenditures; and, third, to pay to the Members the Reimbursable Expenses incurred by each in such or prior fiscal quarters; provided, that to the extent that the JV fails to pay the full amount of the sum of the Capital Expenditure Distribution Amounts, the unpaid balance of such amounts will be carried forward and become payable as an additional Capital Expenditure Distribution Amount in the next succeeding fiscal quarter; and provided further, that to the extent that the JV fails to pay the full amount of the Reimbursable Expenses incurred in such fiscal quarter: (i) the payments to a Party for Reimbursable Expenses will be made in proportion to the relative amounts of Reimbursable Expenses owed to each in such fiscal quarter, and (ii) any remaining amounts of Reimbursable Expenses will be carried forward and become payable as an additional Reimbursable Expense in the next succeeding fiscal quarter. Subject to Section 4.8, any amount remaining after the payments (and after reserves for returns and inventory obsolescence) provided for in the preceding sentence will be distributed to the Members (the “Net Distributions”) in accordance with the distribution set forth in the following table (the “Distribution Allocation”): Distributions attributable to Video Games published Distributions attributable pursuant to the to Video Games published Name Next Action Star License pursuant to all other titles Teknik Digital Arts, Inc. 50 % Powergrid Fitness60 % Playentertainment, Inc. L.L.P. 50 % 40 %

Expenses; Distributions. Subject to Section 4.8, the gross cash receipts of the JV for a fiscal quarter from all sources, including, without limitation, cash from operations, JV Financings, or other sources, less reserves for returns and inventory obsolescence, shall be used: first, to pay Third Party Expenses incurred in such or prior fiscal quarters; second, to distribute the sum of the Capital Expenditure Distribution Amounts for such or prior fiscal quarters to the Member that incurred such Capital Expenditures; and, third, to pay to the Members the Reimbursable Expenses incurred by each in such or prior fiscal quarters; provided, that to the extent that the JV fails to pay the full amount of the sum of the Capital Expenditure Distribution Amounts, the unpaid balance of such amounts will be carried forward and become payable as an additional Capital Expenditure Distribution Amount in the next succeeding fiscal quarter; and provided further, that to the extent that the JV fails to pay the full amount of the Reimbursable Expenses incurred in such fiscal quarter: (i) the payments to a Party for Reimbursable Expenses will be made in proportion to the relative amounts of Reimbursable Expenses owed to each in such fiscal quarter, and (ii) any remaining amounts of Reimbursable Expenses will be carried forward and become payable as an additional Reimbursable Expense in the next succeeding fiscal quarter. Subject to Section 4.8, any amount remaining after the payments (and after reserves for returns and inventory obsolescence) provided for in the preceding sentence will be distributed to the Members (the “"Net Distributions”") in accordance with the distribution set forth in the following table (the “"Distribution Allocation”"): Distributions attributable to Video Games published pursuant to the Name License ---- ------- Teknik Digital ArtsArts Inc. 50% Pep Pad, Inc. 50 % Powergrid Fitness, Inc. 50 LLC 50%