diff --git a/src/engine/TheAbstractionEngine.ts b/src/engine/TheAbstractionEngine.ts
index 09419ff..d7dd28b 100644
--- a/src/engine/TheAbstractionEngine.ts
+++ b/src/engine/TheAbstractionEngine.ts
@@ -2,7 +2,6 @@ import { Game } from ".";
 import { Miscellaneous, loadAssets } from "./config";
 import {
   Player,
-  FunctionBox,
   Wall,
   LambdaFactory,
   Key,
@@ -14,8 +13,8 @@ import {
   FacingDirection,
   Input,
   Render,
-  LambdaFactory as LambdaFactorySpawnSystem,
   Collision,
+  GridSpawner,
 } from "./systems";
 
 export class TheAbstractionEngine {
@@ -47,7 +46,7 @@ export class TheAbstractionEngine {
           height: Miscellaneous.GRID_CELL_HEIGHT,
         },
       ),
-      new LambdaFactorySpawnSystem(),
+      new GridSpawner(),
       new Collision(),
       new Render(this.ctx),
     ].forEach((system) => this.game.addSystem(system));
diff --git a/src/engine/components/ComponentNames.ts b/src/engine/components/ComponentNames.ts
index 1f41d18..a9f0c15 100644
--- a/src/engine/components/ComponentNames.ts
+++ b/src/engine/components/ComponentNames.ts
@@ -8,6 +8,7 @@ export namespace ComponentNames {
   export const Interactable = "Interactable";
   export const Pushable = "Pushable";
   export const Colliding = "Colliding";
-  export const LambdaSpawn = "LambdaSpawn";
+  export const GridSpawn = "GridSpawn";
   export const Text = "Text";
+  export const LambdaTerm = "LambdaTerm";
 }
diff --git a/src/engine/components/GridSpawn.ts b/src/engine/components/GridSpawn.ts
new file mode 100644
index 0000000..d2ec898
--- /dev/null
+++ b/src/engine/components/GridSpawn.ts
@@ -0,0 +1,30 @@
+import { Component, ComponentNames } from ".";
+import { Entity } from "../entities";
+import { Direction } from "../interfaces";
+
+export class GridSpawn extends Component {
+  public direction: Direction;
+  public spawnsLeft: number;
+  public spawner: () => Entity;
+
+  constructor(
+    spawnsLeft: number,
+    spawner: () => Entity,
+    direction = Direction.NONE,
+  ) {
+    super(ComponentNames.GridSpawn);
+
+    this.spawnsLeft = spawnsLeft;
+    this.direction = direction;
+    this.spawner = spawner;
+  }
+
+  public spawnEntity(direction: Direction): Entity | undefined {
+    if (this.spawnsLeft === 0) {
+      return;
+    }
+
+    this.direction = direction;
+    this.spawnsLeft -= 1;
+  }
+}
diff --git a/src/engine/components/LambdaSpawn.ts b/src/engine/components/LambdaSpawn.ts
deleted file mode 100644
index c45092a..0000000
--- a/src/engine/components/LambdaSpawn.ts
+++ /dev/null
@@ -1,29 +0,0 @@
-import { Component, ComponentNames } from ".";
-import { Direction } from "../interfaces";
-
-export class LambdaSpawn extends Component {
-  public direction: Direction | null;
-  public spawnsLeft: number;
-  public code: string = "";
-
-  constructor(
-    spawnsLeft: number,
-    code: string,
-    direction: Direction | null = null,
-  ) {
-    super(ComponentNames.LambdaSpawn);
-
-    this.spawnsLeft = spawnsLeft;
-    this.direction = direction;
-    this.code = code;
-  }
-
-  public spawn(direction: Direction) {
-    if (this.spawnsLeft <= 0) {
-      return;
-    }
-
-    this.direction = direction;
-    this.spawnsLeft -= 1;
-  }
-}
diff --git a/src/engine/components/LambdaTerm.ts b/src/engine/components/LambdaTerm.ts
new file mode 100644
index 0000000..63e9889
--- /dev/null
+++ b/src/engine/components/LambdaTerm.ts
@@ -0,0 +1,11 @@
+import { Component, ComponentNames } from ".";
+
+export class LambdaTerm extends Component {
+  public code: string;
+
+  constructor(code: string) {
+    super(ComponentNames.LambdaTerm);
+
+    this.code = code;
+  }
+}
diff --git a/src/engine/components/index.ts b/src/engine/components/index.ts
index 104ba2d..a7a3cf1 100644
--- a/src/engine/components/index.ts
+++ b/src/engine/components/index.ts
@@ -9,5 +9,6 @@ export * from "./Highlight";
 export * from "./Interactable";
 export * from "./Pushable";
 export * from "./Colliding";
-export * from "./LambdaSpawn";
+export * from "./GridSpawn";
 export * from "./Text";
+export * from "./LambdaTerm";
diff --git a/src/engine/entities/EntityNames.ts b/src/engine/entities/EntityNames.ts
index 7fc69c6..3f6d26f 100644
--- a/src/engine/entities/EntityNames.ts
+++ b/src/engine/entities/EntityNames.ts
@@ -6,4 +6,5 @@ export namespace EntityNames {
   export const Key = "Key";
   export const LockedDoor = "LockedDoor";
   export const Curry = "Curry";
+  export const FunctionApplication = "FunctionApplication";
 }
diff --git a/src/engine/entities/FunctionApplication.ts b/src/engine/entities/FunctionApplication.ts
new file mode 100644
index 0000000..31e3490
--- /dev/null
+++ b/src/engine/entities/FunctionApplication.ts
@@ -0,0 +1,7 @@
+import { Entity, EntityNames } from ".";
+
+export class FunctionApplication extends Entity {
+  constructor() {
+    super(EntityNames.FunctionApplication);
+  }
+}
diff --git a/src/engine/entities/FunctionBox.ts b/src/engine/entities/FunctionBox.ts
index e51eb2b..92f1908 100644
--- a/src/engine/entities/FunctionBox.ts
+++ b/src/engine/entities/FunctionBox.ts
@@ -12,6 +12,7 @@ import {
   Grid,
   Highlight,
   Interactable,
+  LambdaTerm,
   Pushable,
   Sprite,
 } from "../components";
@@ -23,13 +24,9 @@ export class FunctionBox extends Entity {
     Sprites.FUNCTION_BOX,
   ) as SpriteSpec;
 
-  private code: string;
-
   constructor(gridPosition: Coord2D, code: string) {
     super(EntityNames.FunctionBox);
 
-    this.code = code;
-
     this.addComponent(
       new BoundingBox(
         {
@@ -61,20 +58,19 @@ export class FunctionBox extends Entity {
       ),
     );
 
-    this.addComponent(
-      new Highlight(
-        (_direction) => this.onHighlight(),
-        () => this.onUnhighlight(),
-      ),
-    );
-  }
+    this.addComponent(new LambdaTerm(code));
 
-  private onUnhighlight() {
+    this.addComponent(makeLambdaTermHighlightComponent(this));
+  }
+}
+
+export const makeLambdaTermHighlightComponent = (entity: Entity) => {
+  const onUnhighlight = () => {
     closeModal();
-    this.removeComponent(ComponentNames.Interactable);
-  }
+    entity.removeComponent(ComponentNames.Interactable);
+  };
 
-  private onHighlight() {
+  const onHighlight = () => {
     let modalOpen = false;
     const interaction = () => {
       if (modalOpen) {
@@ -82,10 +78,14 @@ export class FunctionBox extends Entity {
         closeModal();
         return;
       }
-      modalOpen = true;
+
+      const code = entity.getComponent<LambdaTerm>(
+        ComponentNames.LambdaTerm,
+      )!.code;
       openModal(
-        `<div style="text-align:center"><p>${this.code}</p> <br> <button id="close">Close</button></div>`,
+        `<div style="text-align:center"><p>${code}</p> <br> <button id="close">Close</button></div>`,
       );
+      modalOpen = true;
 
       document.getElementById("close")!.addEventListener("click", () => {
         closeModal();
@@ -93,6 +93,8 @@ export class FunctionBox extends Entity {
       });
     };
 
-    this.addComponent(new Interactable(interaction));
-  }
-}
+    entity.addComponent(new Interactable(interaction));
+  };
+
+  return new Highlight(onHighlight, onUnhighlight);
+};
diff --git a/src/engine/entities/LambdaFactory.ts b/src/engine/entities/LambdaFactory.ts
index 1c897eb..a0f5749 100644
--- a/src/engine/entities/LambdaFactory.ts
+++ b/src/engine/entities/LambdaFactory.ts
@@ -5,15 +5,15 @@ import {
   SpriteSpec,
   Sprites,
 } from "../config";
-import { Entity, EntityNames } from ".";
+import { Entity, EntityNames, FunctionBox } from ".";
 import {
   BoundingBox,
   Colliding,
   ComponentNames,
   Grid,
+  GridSpawn,
   Highlight,
   Interactable,
-  LambdaSpawn,
   Sprite,
   Text,
 } from "../components";
@@ -75,11 +75,13 @@ export class LambdaFactory extends Entity {
 
   private codeEditorState: CodeEditorState | null;
   private spawns: number;
+  private code: string;
 
   constructor(gridPosition: Coord2D, code: string, spawns: number) {
     super(EntityNames.LambdaFactory);
 
     this.spawns = spawns;
+    this.code = code;
     this.codeEditorState = null;
 
     this.addComponent(
@@ -100,7 +102,12 @@ export class LambdaFactory extends Entity {
 
     this.addComponent(new Colliding());
 
-    this.addComponent(new LambdaSpawn(this.spawns, code));
+    this.addComponent(
+      new GridSpawn(
+        this.spawns,
+        () => new FunctionBox({ x: 0, y: 0 }, this.code),
+      ),
+    );
 
     this.addComponent(new Grid(gridPosition));
 
@@ -131,8 +138,8 @@ export class LambdaFactory extends Entity {
   }
 
   private spawnNewLambda(direction: Direction) {
-    const spawner = this.getComponent<LambdaSpawn>(ComponentNames.LambdaSpawn);
-    spawner.spawn(direction);
+    const spawner = this.getComponent<GridSpawn>(ComponentNames.GridSpawn);
+    spawner.spawnEntity(direction);
 
     const text = this.getComponent<Text>(ComponentNames.Text);
     text.text = spawner.spawnsLeft.toString();
@@ -144,9 +151,8 @@ export class LambdaFactory extends Entity {
       "<div class='code'><div id='code'></div><br><p id='syntax-error' class='error'></p><button id='close-modal'>Save</button></div>";
     openModal(modalContent);
 
-    const { code } = this.getComponent<LambdaSpawn>(ComponentNames.LambdaSpawn);
     const startState = EditorState.create({
-      doc: code,
+      doc: this.code,
       extensions: [
         basicSetup,
         keymap.of(defaultKeymap),
@@ -236,9 +242,7 @@ export class LambdaFactory extends Entity {
       return;
     }
 
-    const spawner = this.getComponent<LambdaSpawn>(ComponentNames.LambdaSpawn);
-    spawner.code = text;
-    this.addComponent(spawner);
+    this.code = text;
 
     view.destroy();
     editorElement.innerHTML = "";
diff --git a/src/engine/systems/GridSpawner.ts b/src/engine/systems/GridSpawner.ts
new file mode 100644
index 0000000..c566444
--- /dev/null
+++ b/src/engine/systems/GridSpawner.ts
@@ -0,0 +1,39 @@
+import { System, SystemNames } from ".";
+import { Game } from "..";
+import { ComponentNames, Grid, GridSpawn } from "../components";
+import { Direction } from "../interfaces";
+
+export class GridSpawner extends System {
+  constructor() {
+    super(SystemNames.GridSpawner);
+  }
+
+  public update(_dt: number, game: Game) {
+    game.forEachEntityWithComponent(ComponentNames.GridSpawn, (entity) => {
+      const spawn = entity.getComponent<GridSpawn>(ComponentNames.GridSpawn)!;
+      const hasGrid = entity.hasComponent(SystemNames.Grid);
+
+      if (spawn.direction === Direction.NONE || !hasGrid) {
+        return;
+      }
+
+      const grid = entity.getComponent<Grid>(SystemNames.Grid)!;
+
+      const direction = spawn.direction;
+      const spawned = spawn.spawner();
+      if (!spawned) {
+        return;
+      }
+      spawn.direction = Direction.NONE;
+      entity.addComponent(spawn);
+
+      const spawnedGrid = spawned.getComponent<Grid>(SystemNames.Grid)!;
+      spawnedGrid.gridPosition = grid.gridPosition;
+      spawnedGrid.movingDirection = direction;
+      spawned.addComponent(spawnedGrid);
+
+      game.addEntity(spawned);
+      entity.addComponent(spawned);
+    });
+  }
+}
diff --git a/src/engine/systems/LambdaFactory.ts b/src/engine/systems/Spawner.ts
similarity index 69%
rename from src/engine/systems/LambdaFactory.ts
rename to src/engine/systems/Spawner.ts
index 1263eae..6a4d382 100644
--- a/src/engine/systems/LambdaFactory.ts
+++ b/src/engine/systems/Spawner.ts
@@ -1,17 +1,17 @@
 import { System, SystemNames } from ".";
 import { Game } from "..";
-import { ComponentNames, Grid, LambdaSpawn } from "../components";
+import { ComponentNames, Grid, GridSpawn } from "../components";
 import { FunctionBox } from "../entities";
 
-export class LambdaFactory extends System {
+export class GridSpawner extends System {
   constructor() {
-    super(SystemNames.LambdaFactory);
+    super(SystemNames.GridSpawner);
   }
 
   public update(_dt: number, game: Game) {
-    game.forEachEntityWithComponent(ComponentNames.LambdaSpawn, (entity) => {
-      const lambdaSpawn = entity.getComponent<LambdaSpawn>(
-        ComponentNames.LambdaSpawn,
+    game.forEachEntityWithComponent(ComponentNames.GridSpawn, (entity) => {
+      const lambdaSpawn = entity.getComponent<GridSpawn>(
+        ComponentNames.GridSpawn,
       )!;
       const hasGrid = entity.hasComponent(SystemNames.Grid);
 
diff --git a/src/engine/systems/SystemNames.ts b/src/engine/systems/SystemNames.ts
index c96dc48..555746c 100644
--- a/src/engine/systems/SystemNames.ts
+++ b/src/engine/systems/SystemNames.ts
@@ -3,6 +3,6 @@ export namespace SystemNames {
   export const Input = "Input";
   export const FacingDirection = "FacingDirection";
   export const Grid = "Grid";
-  export const LambdaFactory = "LambdaFactory";
+  export const GridSpawner = "GridSpawner";
   export const Collision = "Collision";
 }
diff --git a/src/engine/systems/index.ts b/src/engine/systems/index.ts
index 6ee5392..34b369c 100644
--- a/src/engine/systems/index.ts
+++ b/src/engine/systems/index.ts
@@ -4,5 +4,5 @@ export * from "./Render";
 export * from "./Input";
 export * from "./FacingDirection";
 export * from "./Grid";
-export * from "./LambdaFactory";
+export * from "./GridSpawner";
 export * from "./Collision";